Colluli Potash Project

 

Colluli Potash Project - Plan View

South Boulder Mines Limited (ASX: STB) was awarded exploration licences for the Colluli tenements in 2009. Exploration drilling commenced in 2010, and since that time over 95 holes have been drilled and over 1 billion tonnes of potassium bearing salts suitable for the production of potash fertiliser have been identified.The Colluli resource consists of three potassium bearing salts; sylvinite, carnallitite and kainitite. The original development path contemplated for the project considered a 1 million tonne per annum potassium chloride production process utilising sylvinite only. An extensive review conducted in 2013 demonstrated a significant improvement in economics could be realised by processing all of the potassium bearing salts in the resource due to a substantial reduction in mine strip ratio and overall mining costs.

Original Study (ESS1) Revised Study
Waste:Ore 14:1 2.5:1
Waste:Product 58:1 12:1
Mining cost ($/tonne product) 195 75
Product Potassium Chloride Potassium Sulphate
Long Term Product Price 450 562

 *Long term price based on market analysis conducted for STB by Integer. Long term price premium applied to potassium sulphate.

A pre-feasibility study was initiated in 2014 for the production of potassium sulphate from the resource using all potassium bearing salts. Potassium sulphate is a specialty fertiliser suitable for high value foods such as fruits, vegetables, nuts and coffee. It contains sulphur, which is used as a plant nutrient and achieves a price premium relative to the more common potassium chloride.

Colluli’s Composition

The Colluli resource comprises three potassium bearing salts. All are suitable for the production of potash fertiliser. The three salts are:

1. Sylvinite – sylvinite is the most commonly used mineral for the production of potassium chloride. Potassium chloride, also known as Muriate of potash or MOP, is primarily produced from evaporite deposits in Canada, Russia and Belarus. These deposits are quite deep, with depths of over 1000m in Canada and to 300 to 500m in Eastern Europe. These deposits are typically mined using conventional underground mining methods, however, conventional mining is not suitable at depths deeper than 1,200m. Solution mining involves injecting heated solution into the resource, dissolving the valuable salts and pumping them to surface for subsequent processing. Sylvinite is a combination of two salts; sylvite (KCl) and halite (NaCl). Processing sylvinite is relatively simple.  The mined material is crushed to a size where sufficient liberation of potassium chloride and halite particles occur. The liberated materials are then selectively separated in flotation units. Halite is typically transported to a tailings storage facility and sylvite is dried and sold as potassium chloride (Muriate of Potash) fertiliser.

 

2. Carnallitite – carnallitite is the combination of carnallite and halite. Carnallite rich brines are currently recovered from the Dead Sea to produce potassium chloride (MOP). Carnallite is a hydrated potassium magnesium chloride with formula KMg.Cl3.6(H2O). Carnallite occurs with a sequence of potassium and magnesium evaporite minerals; sylvite, kainite, Polyhalite and kieserite. Carnallite is an uncommon double chloride mineral that only forms under specific environmental conditions in an evaporating sea or sedimentary basin. It is mined for both potassium and magnesium and occurs in the evaporite deposits of Carlsbad, New Mexico, Utah, United States, and the Williston Basin in Saskatchewan, Canada. Israel and Jordon produce potash from the Dead Sea by using evaporation pans to concentrate the brine until carnallite precipitates. The carnallite is dredged form the pans and processed to remove the magnesium chloride from the potassium chloride.

 

3. Kainitite – kainitite is the combination of kainite and halite. Kainite consists of potassium chloride and magnesium sulphate. Kainite exists in salt form in appreciable amounts in only three regions of the world; the Dallol Basin, Ukraine and Italy. Kainite was essentially depleted from the German Strassfurt mines with the salt being primarily used as a direct application fertiliser. With cessation of kainite mining in both the Ukraine and Italy, the Dallol Basin remains the last unexploited major deposit with kainite in solid form. Kainite is the key salt used for low temperature, high potassium yield production of potassium sulphate. It decomposes to an intermediate salt known as schoenite, and then reacts with potassium chloride under ambient conditions to produce potassium sulphate. In key potassium sulphate producing operations, Kainite is formed by evaporation of kainite rich brines. This increases footprint size and renders production rates subject to ambient conditions. Kainite can produce potassium sulphate or potassium chloride depending on the production process chosen. Kainite makes up over 60% of the Colluli resource and is seen as the key differentiating mineral species. The shallow mineralisation makes it easily extractable. Kainite is difficult to solution mine due to its solubility.