Mackay Potash Project
The Mackay Potash Project is forecast to be the world’s lowest cost producer of Sulphate of Potash (SOP). The project demonstrates outstanding Definitive Feasibility Study (DFS) economics with a post-tax NPV8 real of US$655 million and IRR of 21%, based upon a total cash cost of US$159 per tonne FOB and a flat SOP price of US$500 per tonne FOB (Wyndham Port).
The Mackay Potash Project comprises the four key elements of a bulk commodity project being the mine, processing plant, integrated logistics chain and port facility.
Lake Mackay is located in Western Australia, 941 kilometres by road south of Wyndham Port. It is the world’s largest undeveloped SOP bearing salt lake with a total drainable Mineral Resource of 123 million tonnes of sulphate of potash (ASX announcement 20 January 2020) and an Ore Reserve of 20 million tonnes (ASX announcement 21 July 2020).
The DFS results were released on 21 July 2020 and demonstrated a world-class project with premium SOP product quality, first quartile cash costs of US$159 per tonne FOB, globally significant scale and ESG friendly standing. Production capacity is designed to be 450,000 tonnes per annum of SOP, over an initial 40 year mine life. The project also offers excellent potential to expand further to meet the expected growth in seaborne demand for SOP. For the DFS announcement please click here.
The project will extract SOP rich brines from a network of shallow trenches where the brine will flow into a series of evaporation ponds. The evaporation ponds will concentrate the brine and precipitate SOP bearing salts which will be wet harvested and processed into a high-quality SOP fertiliser. This environmentally friendly processing method and a high level of renewable energy penetration in the project will minimise environmental impact and ensure a small carbon footprint.
Based on the outstanding economic returns and robust technical feasibility demonstrated by the DFS, as well as strong stakeholder support, the project is now advancing through the next phase. The following key activities are the current focus for the project:
• Off-take agreements;
• Project funding and strategic partnerships;
• Front End Engineering and Design and associated work programs;
• Execution planning and contracting;
• Environmental approvals; and
• Mining tenements and secondary approvals.