Potash is not a household name when it comes to mining in Australia. It has, however, started to emerge on the radar.
Ask a Canadian miner, or perhaps a Russian, and their familiarity with potash will be much more extensive than their Australian counterparts.
The two expansive Northern Hemisphere countries produced around 42 per cent of global potash production in 2016 with a combined 16.5 million tonnes, according to the United States Geological Survey (USGS).
Australia, on the other hand, doesn’t produce a single tonne of the key ingredient used in agricultural fertilisers.
That is, despite Australia consuming around 400,000 tonnes of fertiliser in agriculture from its various imported sources.
Australia is proving that there is potential to produce potash here in the coming years.
A number of junior miners have been advancing sulphate of potash (SOP) projects in Western Australia to reach this goal.
One of the most advanced of these companies, Kalium Lakes, delivered the first bankable feasibility study (BFS) for an Australian potash project in September at its Beyondie site in the Pilbara.
Kalium Lakes plans to develop Beyondie into Australia’s first potash mine by 2020 (subject to it making a final investment decision).
Managing director Brett Hazelden, a metallurgist with a history in hard rock mining, describes the progress at Beyondie as an “interesting learning curve”.
“Not just for us but also the general population (in Australia),” he says. “When we started this at the end of 2014 no one knew what sulphate of potash was let alone brine mining.”
Beyondie is regarded as Australia’s highest-grade SOP brine deposit and has a proved reserve of 1.65 million tonnes.
The BFS proposes to develop Beyondie into an SOP operation that produces 164,000 tonnes per annum over a two-stage process.
Kalium Lakes plans to initially spend $159 million on an 82,000 tonne per annum operation, before ramping up to 164,000 tonnes by investing an additional $125 million.
“We might seem small at 82,000 tonnes at the start but that has been a deliberate strategy. We could have gone to 300,000 or 400,000 tonnes but we didn’t think you could finance a half a million dollar potash project here,” Hazelden says.
“It is much easier to finance something that is in the $150–$160 million mark.”
Hazelden says Kalium Lakes will eventually look at increasing production to beyond the phase two target over the project’s estimated 30-year mine life.
Kalium Lakes’ feasibility studies have gradually attracted the attention of financiers, particularly in Germany. The company had previously found securing funding for the project challenging due to potash’s obscurity in Australia.
“It hasn’t been done in Australia before so we needed to demonstrate that you can get the water out of the ground and get the salts to produce in the manner that we have said,” Hazelden says.
“By taking people to the site – investors or banks – as soon as they get up there then understand it.
“It is pretty simple. It is effectively the dewatering of a mine without having an open pit or an underground.”
The proposed production process has five main steps, starting with brine pumping where it is extracted from basal sands using submersible bores, as well as pumping of trenches from an upper aquifer.
Brine is then pumped into solar evaporation ponds where calcium, sodium, potassium and magnesium mixed salts sequentially precipitates in separate ponds.
The mixed potassium salts that crystallise from the solar evaporation ponds are then ready to be mechanically harvested and stockpiled.
Mixed potassium salts are fed into a purification plant facility where they are converted into schoenite through a conversion and recycling process and are then separated from halite via flotation.
A shoenite slurry undergoes thermal decomposition into SOP, which after drying and compaction in a purification plant, is ready to be used and sold.
Kalium Lakes plans to target the local marketplace with its product, despite surging demand for potash in China and throughout Asia.
“Generally we are looking to capture Australia, New Zealand and a little bit of South East Asia as our main markets,” Hazelden says.
Kalium Lakes has an offtake agreement with leading German fertiliser company K+S for 100 per cent of production from stage one of the Beyondie operation.
Keeping with the German trend, Kalium Lakes’ extensive pilot purification plant trials have taken place in the European nation with K-UTEC.
Kalium Lakes’ progress towards securing funding for the project has been through the German Government’s IMC for the Export Credit Agency (ECA) scheme.
Despite Kalium Lakes being one of many emerging ASX-listed potash-focused juniors, Hazelden doesn’t expect there to be rapid increase in supply here.
“Most of the others are looking to go into China, which is an interesting place to sell into because of the price mechanisms they have,” Hazelden says.
“It is (also) still a learning curve here. No one here has a lot of understanding of potash in general; it has been an education for not just ourselves but for everyone else.
“We’ve also had to educate the JORC committees by getting people in from where there is a brine code. That has helped people to understand what look for in these types of deposits.”
Even if the Beyondie project doesn’t ignite a flurry of new potash operations, at least Kalium Lakes is proving it is possible in Australia.
This article also appears in the December edition of Australian Mining.