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Danakali seeks to raise US$322M to develop Colluli potash project in Eritrea

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Danakali seeks to raise US$322M to develop Colluli potash project in Eritrea

Fertilizer producer Danakali Ltd. is looking to raise US$322 million this year to develop its Colluli potash project in Eritrea, Reuters reported Sept. 7, citing industry sources.

The amount will be used to allow the project's first phase to start production in 2022 of 470,000 tonnes per year of low-chloride potassium sulfate, which commands a premium to the more common muriate of potash.

In June, the Australian miner's joint venture Colluli Mining Share Co. reached a binding take-or-pay off-take deal with EuroChem Trading GmbH for up to 100% of the module-one sulfate of potash production from Colluli. EuroChem can terminate the agreement if commercial production has not started by July 1, 2022.

According to the report, Danakali will bank on changing perceptions on Eritrea, an isolated African country mired in the bottom of the World Bank's rankings on ease of doing business and criticized for its human rights record, to attract investors.