Colluli Potash Definitive Feasibility Study (DFS) Complete

Development News
Colluli Potash Definitive Feasibility Study completed
Colluli Potash DFS results are now out. It exceeds previous expectations and once again demonstrates Colluli is one of the most attractive potash projects in the world

By Danakali Ltd.,

Danakali Limited (Danakali, ASX: DNK) is pleased to announce the results of the Definitive Feasibility Study (DFS) for the Colluli Potash Project (Colluli, or the Project), located in Eritrea, East Africa. The Project is 100% owned by the Colluli Mining Share Company (CMSC), a 50:50 joint venture between Danakali and the Eritrean National Mining Corporation (ENAMCO).

Key outcomes of the DFS include a reduction in Phase I development capital by over 30% to US$298m resulting in a market leading capital intensity of US $702/t sulphate of potash (SOP) and an accelerated Phase-I payback period of 3.5 years.

The Colluli operation will apply open pit mining methods to take full advantage of its shallow mineralisation, which commences at just 16m. This depth of mineralisation makes Colluli the shallowest known evaporite deposit globally. 

The DFS utilises a modular development approach which mitigates risk while enhancing fundability and economic return. Phase-I is expected to produce approximately 425,000 tpa (tons per annum) of premium SOP product with commissioning currently targeted for Q4 2018. Phase-II, commencing production in year 6, will increase total SOP production to 850,000 tpa at an additional capital cost of US$175m. Phases-I and II are designed to create a platform for growth and generate cash flows to fund subsequent expansions which have not been included in the DFS.

Colluli is located proximate to the key potash markets of the future. Demand for fertiliser is driven by population growth which directly translates to food demand. Almost 95% of the population growth over the next three decades will occur in Africa, India and South East Asia.

Danakali’s Managing Director, Paul Donaldson said: “We are very happy with the DFS outcomes for Colluli. It confirms a robust, low capital intensity, low operating cost project with attractive economic returns and a high level of expandability.

“The DFS also confirms that Colluli is one of the most attractive potash projects in the world. The 1.1 billion tonne ore reserve that underpins the project, in combination with the suite of potassium salts and proximity to coast and future markets, makes Colluli positively unique. We believe that over the decades to come, Colluli has the potential to grow to an ultimate capacity of 4 to 5 million tonnes per annum of potash products. Rock salt, magnesium chloride and magnesium sulphate within the resource also represent significant project upside.

“We are looking forward to working with our Joint Venture partners over the upcoming months to advance the approvals process and secure the funding for the project development.”


  • Colluli Definitive Feasibility Study (DFS) results exceed expectations and PFS results
  • DFS confirms low capex, high margin, long life project
  • Phase I development capital reduced by over 30% to US$298m
  • Capital payback period of 3.5 years
  • Project post tax NPV of US$860m and IRR of 29%
  • Colluli in the bottom quartile of the mine gate cost curve
  • 1.1 billion tonnes ore reserve, with expected 200+ year mine life
  • Preliminary funding discussions underway with offtakers, strategic partners and financiers
  • Mining license application process to be initiated in Q1 2016
  • Commissioning targeted for Q4 2018
  • DFS demonstrates Colluli is one of the most attractive potash projects in the world

ENAMCO Director, Berhane Habtemariam said:

“We are very pleased that the DFS has been successfully completed and confirms a very attractive project. Colluli has all the makings of a world class project which will play an important role in developing future skills for our maturing mining industry. We look forward to continuing our collaboration with Danakali as we move towards funding, mining licence application and project development.”

Colluli DFS Results

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