SoP Projects Granted Major Project Status
A REMOTE Sulphate of Potash (SoP) agriculture fertiliser processing plant due to begin production next year was one of two Western Australian mining activities granted major project status by the Federal government.
Major project status for the Beyondie SoP project initiated by Kalium Lakes Ltd (KLL) at a chain of salt lakes in the Little Sandy Desert, 160 kilometres south east of Newman, is formal recognition of its national strategic significance through contributions to economic growth, employment and regional Australia.
The Australian Vanadium Project, which will develop an open pit mine and plant 43 kilometres south of Meekatharra to convert vanadium into specialty steel alloys and energy-storing batteries, was the second project awarded major project status.
Resources and Northern Australia Minister Senator Matt Canavan and Industry, Science and Technology Minister Karen Andrews jointly announced the major project status.
They said the Beyondie project would establish Australia’s first commercial supply of premium SoP fertiliser which will replace imported fertiliser.
“Our government sees the incredible economic potential these projects offer, not just for the regional areas where they’re located, but for Australia more broadly,” Ms Andrews said.
“These products are rare and in high demand and these projects will generate millions for our economy, create jobs in regional areas and bring important permanent infrastructure investment.”
Mr Canavan pointed out the Beyondie project has already been backed with a $74 million loan through the Northern Australia Infrastructure Facility.
The Beyondie project will create up to 80 jobs during construction and employ about 50 full-time workers over the 30-year minimum projected life of the mine.
It was already bringing important infrastructure to the region with construction of a Royal Flying Doctor Service-standard airstrip, upgraded roads, improved communications and a 78km gas pipeline, the ministers said.
As previously reported in Farm Weekly, KLL plans to pump hypersaline brine from an ancient river bed called a paleochannel beneath a string of up to 14 salt lakes, evaporate moisture in a series of solar evaporation ponds and harvest a mix of salts which will be processed in a natural gas-fired plant to separate out different elements.
A KLL presentation to a Fertiliser Australia industry conference last month showed it was on target to begin producing three SoP fertiliser products from next year.
According to the presentation, KLL plans to begin producing a standard SoP product which will contain more than 51 per cent potassium oxide and less than 1pc chlorine at a rate of 25,000-35,000 tonnes per annum from the fourth quarter.
It plans to begin producing a granular SoP product with the same potassium oxide and chlorine levels at a rate of 50,000-60,000tpa from the first quarter 2021.
This will be followed by a soluble SoP fertiliser containing more than 52pc potassium oxide and less than 0.5pc chlorine produced at a rate of 10,000-20,000tpa from 2022.
KLL plans to be one of the lowest cost SoP producers in the world with a predicted initial operating production cost of US$208/t of SoP free on board (FOB) for export at its projected start up rate of 90,000tpa.
Once production ramps up to 180,000tpa the operating production cost is expected to drop to US$178/t FOB.
The average international cost of SoP last year was US$500/t FOB in Europe in a global market worth US$3-4 billion annually and with demand for SoP growing at 100,000-200,000tpa, KLL said.
It has a 10-year off-take agreement with Germany-based international fertiliser producer and distributor K+S which will market all of the Beyondie projects’ start-up production in Australia and overseas.
K+S imports and markets about half of the SoP sold in Australia and New Zealand.
“Receiving major project status from the Australian Federal government emphasises the importance of our project to the Australian agricultural industry,” said KLL managing director Brett Hazelden.
“Currently there is no production of Sulphate of Potash in Australia, with all of this nation’s requirements being met by product imported from the northern hemisphere,” Mr Hazelden said.
“The development of the Beyondie Sulphate of Potash Project will greatly enhance the ongoing security of potash supply for Australian farmers.”
KLL is one of a number of WA companies looking to capitalise on international demand for SoP fertiliser because of crop yield performance, low salt content and potential to reduce crop water requirements.
They also hope to take market advantage of increasing environmental constraints on SoP producers in China, the main global suppliers which use a different chemical technique to produce it than what is proposed in Australia.
On Monday KLL’s closest competitor in terms of beginning commercial SoP production, Australian Potash Ltd (APC on the Australian Securities Exchange) announced it had signed a joint co-operation agreement with Geraldton port operator, the Mid West Ports Authority.
According to APC, the agreement enables it to negotiate terms for the export of SoP and importation of Muriate of Potash (MoP) through Geraldton port.
Another source of potash for crops, MoP is cheaper and more readily available than SoP, but the trade-off is it has a higher salt index making it less suited for use on marginal, salt-affected farm land.
APC plans to exploit brine from beneath Lake Wells, an extensive salt lake 500km north east of Kalgoorlie, for its SoP.
A recently completed definitive feasibility study for its Lake Wells project identified a road haul route via Laverton, Leonora, Sandstone and Mount Magnet to Geraldton as the best logistical option for getting bulk SoP to port for export.
APC is looking at an initial production cost of US$262/t of SoP and is talking to WA grain growers about a likely local bulk delivery price.
www.ferroalloynet.com
