Australian Potash has another off-take partner lined up for product from its Lake Wells project in Western Australia.
The company this week signed its second non-binding memorandum of understanding (MoU) for the supply of sulphate of potash (SoP) with Hubei Agricultural Means of Production Group (Hubei-Agri).
The agreement, which adds to the maiden MoU with Sino-Agri Holdings, involves sales of up to 100,000 tonnes per annum (tpa) of SoP.
Australian Potash executive chairman Matt Shackleton said the company had been successful in executing the MoU through the network it was beginning to develop within the mainland Chinese potash industry.
“We have also begun expanding our network in China to consider areas such as equipment design and procurement,” Shackleton explained.
“We will shortly commence our feasibility program and are aiming to optimise capital expenditure estimates through a close engagement with potential suppliers.”
Australian Potash’s scoping study for Lake Wells outlined the development of a two-staged operation, with stage 1 producing about 150,000tpa SoP.
Stage 2 would see production double to 300,000tpa SoP, with production to double by the sixth year of operation.
As the feasibility study progresses and technical parameters are optimised, Australian Potash plans to maintain dialogue with the off-take partners, it stated in an ASX announcement.
The company added that early engagement would facilitate product trials, optimise product specification and ultimately seek to progress the commercial agreements.
Hubei-Agri is one of China’s largest fertiliser distributors and importers.