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Australian potash hopefuls face 'deceptively simple' task as techniques debated

Western Australia's sulfate of potash hopefuls looking to take advantage of the "quiet revolution" occurring in farms globally face a "deceptively simple" task to develop their projects but are at odds as to whether bores or trenches, or both, are more economic.

There are multiple juniors in the state vying for the potentially lucrative global sulfate of potash industry whose 2018 global market was around 7 million tonnes per annum which, at US$500/tonne, is worth about US$3.5 billion, Salt Lake Potash Ltd. then-CEO Matthew Syme told the 2018 Diggers and Dealers conference in Kalgoorlie, Western Australia.

Australian Potash Ltd. Exploration Manager Chris Shaw told S&P Global Market Intelligence that bore fields benefit both in terms of cost and longevity.

"You drill the bores once, and then just need to maintain the pumps; whereas with a trench you need to dig one, drain it and five years later dig another one, and keep it open for that time, which has geotechnical considerations," he said.

The company's consulting hydrogeologist Duncan Storey also told S&P Global Market Intelligence that it is "very difficult to excavate the trench deeper than 6 meters, as the water flows horizontally, so you're effectively skimming the top 6 meters of the resource, and that's all you can take."

Thus the resource is constrained to the top 6 meters of the brine body to be exploited, whereas at Australian Potash's Lake Wells project the bores go 170 meters deep so all that can be extracted, which he said "makes a huge difference to the resource."

He said an average trench can extract 4 to 5 liters per second per kilometer of trench, whereas one of Australian Potash's production bores will produce 12 to 15 liters per second.

"Then once the bore is drilled you can effectively put the pump in and leave it in until you've extracted all the brine. If you do trenching then every time there's a rainfall event the lake surface floods the trench and the grade dilutes, so the bore is much more reliable in that sense," Storey said.

Best of both worlds

While Kalium Lakes Ltd. Corporate Affairs Manager Gareth Widger agreed that brine produced from bores is not subject to the effects of lake flooding which may cause either downtime in operations or temporary reduction in grade, production bores also typically yield lower flow rates than trenches.

This means more pump stations to deliver the same volumes of brine compared to trenches, in which case trench pumping potentially has lower capex and opex, provided that the lake surface where the trench has been constructed has a coarse soil composition that allows for fast extraction of brines.

"For Kalium Lakes, having a mix of both bore field and trenches allows for the best of both worlds, where although some brine supply may be pumped cheaper from the trenches it may become unreliable during a flood event, while the borefield may provide capacity to continue production during times of extreme flooding," he told S&P Global Market Intelligence.

"It's important to note that these economics are not the same for all projects and it comes back to the size of the drainable resource and how fast it can be extracted."

He said if a lake surface has lots of clay, extraction rates will be much lower for trenches than the extraction rates Kalium Lakes experienced at Beyondie, which increases the capital and operating costs for extracting brine from trenches compared to a borefield as it will need significantly larger and longer trench excavations to extract the same flow rates.

"On the flip side, if bores need to be drilled much deeper than the 40 meters to 70 meters we currently have at Beyondie, the capital and operating costs for these will also be higher," Widger said.

"One of the key issues associated with trenches is the environmental impact of extracting brine from the surface aquifer, as most, if not all, of those lakes have a small plant species called tecticornia that lives on the lake fringes, some species of which are protected and may result in approval conditions that cause a significant reduction and/or delays in extraction of drainable brines from lake surfaces using trenches."

"Brine extracted from the lower paleo channels through production bores will not affect these plants and potentially allow for an easier [shorter and cheaper] approvals pathway."

Reward Minerals Ltd. CEO Greg Cochran told S&P Global Market Intelligence that the whole concept for potash brines is "deceptively simple, because it's not simple; it just sounds simple."

"So whether you're trenching or pumping from deeper wells — which in our case in the future maybe pumping from wells into our trenches — monitoring and managing the system is not easy," he said.