A THIRD Western Australian company has begun work on a salt lake bore field and evaporation ponds, aimed to produce Sulphate of Potash (SoP) fertiliser for local and global markets from 2023.
Australian Potash (APC on Australian Securities Exchange listings) has started constructing a permanent workers' village at Lake Wells, 160 kilometres north-east of Laverton, with drill rigs on the lake starting a planned borefield which will supply potassium-rich brine as the core ingredient of its premium, soluble, bagged K-Brite SoP fertiliser.
As well, earthmoving machines have begun construction of the initial production crystalliser ponds, APC told the ASX in an update this month.
APC claims to have Australia's biggest measured SoP resource of about 18.1 million tonnes and is proposing to produce 170,000t of K-Brite a year for at least 30 years, with the project expected to deliver $547 million in economic benefits to the Goldfields region in that time.
The fertiliser project will create up to 200 jobs during construction and 120 during operations - expected to start in the second half of 2023.
The initial work on production facilities comes after extensive investigation and trials stretching back to 2014, including the first local production of 98 per cent pure SoP from Lake Wells trial harvest salts and promising results from an in-paddock comparison with imported Muriate of Potash (MoP) fertiliser during the 2019 cropping season.
APC managing director and chief executive officer Matt Shackleton said it was exciting to see the project taking shape after years of planning and approvals.
"It's great to see so much activity on site as we build the Lake Wells village, with the construction camp, wet and dry mess, fresh and wastewater treatment facilities commissioned and operational, while drill rigs are on site developing the western borefield," Mr Shackleton said.
The initial production works are part funded by the second tranche, settled early this month, of a two-part securities issue aiming to raise $10m.
APC's largest shareholder, prospector and mining investor Mark Creasy, through his Yandal Investments Pty Ltd vehicle, had taken $800,000 in securities in the $1.3m second tranche issue to maintain his majority shareholding at 7.8pc of the company.
"Tranche 2 of the May placement has now settled, demonstrating very strong support for the company from our largest shareholder, Mark Creasy," Mr Shackleton said.
Maturing 2019 options are also expected to raise a further $6.1m for APC next month if all are converted to ordinary shares.
Mr Shackleton said a $140m loan from the Northern Australia Infrastructure Facility (NAIF) and conditional approval from Export Finance Australia (EFA) for an additional $45m loan facility enabled the company to continue to design and procure infrastructure, including processing and bagging plant.
"The NAIF and EFA funding is a huge vote of confidence in the ability of this project to deliver and will support us in our bid to become one of the leading producers in WA's burgeoning SoP industry," Mr Shackleton said.
"SoP is an essential premium potassium fertiliser that the agricultural industry needs worldwide to feed our growing population.
"We are committed to delivering a quality product which will enable farmers to make the best use of their land to grow top quality produce to support the health of the world's population."
Mr Shackleton said the situation with major potash fertiliser exporter Belarus being "slapped with western sanctions due to political instability", highlighted the importance of investing in a local industry.
"Not only do we have world-class resources and the best environmental practices in the world, but we also have low sovereign risk which will ensure Australia is a reliable producer for worldwide markets," he said.
APC, which is proposing to produce at least 44pc of its Lake Wells power from solar and wind generation, has off-take agreements covering K-Brite distribution throughout Australia, India and South East Asia, China, Europe and the United States of America.
Local companies SO4 at Lake Way near Wiluna and Kalium Lakes (KLL) with its Beyondie project 160 kilometres south east of Newman, are set to produce Australia's first SoP fertilisers later this year, with potential to replace existing SoP imports and open up a new global export industry.
SO4 this month told the ASX commercial production was due to start within "coming weeks", while KLL has confirmed it is on track to begin commercial production in September.
