Allana Potash Corp. announced the commencement of technical cooperation activities with ICL pursuant to Allana's previously reported strategic alliance with ICL. Senior technical and development teams from both companies have begun to define priorities for a development program to advance the Danakhil Potash Project.
As part of the activities, programs will be launched in Ethiopia and Djibouti in late March focused on hydrology and water supply design, solution mining and evaporation pond operations procedures and output, as well as on production transportation logistics and product staging/storage strategy refinements. These activities will be aligned with the project lenders due diligence program.
Farhad Abasov, President and CEO of Allana, commented, "We reviewed, and have been impressed by ICL's excellent operations at its Dead Sea Works (DSW) facility in Israel and at Israel's Ashdod port. Our assessment of ICL's operations further validates our opinion that ICL will be an optimal partner for Allana. In our joint technical discussions, Allana and ICL identified significant similarities in our facilities and operations, and it is clear that we can replicate ICL's operations." Mr. Abasov continued, "We look forward to the next stage of our cooperation during which ICL's experts will advise Allana in connection with its pre-construction work programs to refine our operating procedures for water extraction, solution brine management and transport facility and operations design, among other elements. ICL's technical assistance, as well as its take-or-pay off-take and significant equity investment in Allana, significantly contributes to de-risking the project and will facilitate Allana's construction and production activities."
ICL is one of the world's largest producers of fertilizers, supplying over five million tons of potash annually from production facilities located in a number of countries, primarily from solar evaporation ponds at ICL's DSW facility. The DSW operation employs relatively low-concentration potassium chloride brines from the Dead Sea, produced in over 100 km2 of evaporation ponds with an annual average daylong temperature of around 26 degrees C, to process its solid crystal raw material. Allana will benefit from ICL's 60-plus years of technical expertise at its Danakhil operations which, in contrast, will employ approximately 10-fold higher potassium concentration brines from its solution wells, crystallized in 6 km2 of solar evaporation ponds with an annual average daylong temperature of over 35 degrees C.
DSW's operations also utilize in-house and contractor-operated trucking fleets to transport 1.5 to 2 million tons of potash annually to ICL's storage and shipping terminal facilities at Ashdod and Eilat ports which are located 150 and 200 kilometers, respectively, from DSW's facilities at the Dead Sea. These logistical capabilities are directly applicable to Allana's operational plans to truck one million tons of potash 570 kilometers to Allana's potash terminal located at the Tadjoura port in Djibouti.
Nissim Adar, President and CEO of ICL Fertilizers, observed, "Our strategic alliance with Allana to develop potash supply for Ethiopia and Africa - the market with the highest growth potential in the fertilizer world - is moving forward at a fast pace. We are pleased that Allana's entrepreneurial approach fits well with ICL's expertise and experience and we look forward to our joint technical teams driving this project to a successful completion as quickly as possible guided by a continual focus on safety, quality, cost-control and sustainability issues. Once in production, Danakhil is expected to become one of the world's lowest cash cost potash projects."
The Project secured environmental approvals in May 2013 and its Mining License in October 2013, and, having gained the cooperation of several major development financing institutions and export credit agencies in mid-2013, the Company continues to proceed with its project financing activities. ICL has also committed to purchase production of the Project up to 1Mtpa with a take-or-pay commitment on a minimum of 80% of output from the Project.