ICL, a global manufacturer of products that fulfill essential needs in the agriculture, processed food and engineered materials markets, announced that it completed the acquisition of 100 percent of Allana Potash Corp., a Canadian mining company engaged in the development of potash assets in Ethiopia. The closing follows the approval by Allana's security holders and Ontario's Supreme Court of Justice of ICL's offer to acquire Allana. ICL paid C$137 million for 83.78% of Allana's outstanding shares that it did not already own. In 2014, ICL acquired 16.22% of Allana for an aggregate of C$25 million.
Allana holds a concession to mine potash at the Danakhil mine in Ethiopia's Afar National Regional State, as well as the knowhow that has been accumulated in recent years. The project is estimated to yield up to one million tonnes of muriate of potash ("MOP") per year for 25 years, based on a feasibility study conducted by Allana and completed in February 2013.
ICL's purchase of Allana will enable ICL to fully control and accelerate the development of the Danakhil mining project, and it will now initiate a process to assess the technical and operational feasibility of the project, including logistics, infrastructure and production needs, the optimal process for developing the Danakhil deposit and maximizing the potential of the concession area and securing project financing. ICL is considering expanding the scope of the project's production capacity and evaluating the possibility of producing sulphate of phosphate ("SOP") as well as MOP.
ICL believes that the Ethiopian government recognizes the long-term infrastructure, agricultural and economic benefits that will result from the development of a large-scale mining operation in the country, including its contribution to the country's overall GDP, foreign currency inflow and tax base, and, specifically, to the creation of direct and indirect employment in the Afar region. The Ethiopian government's provision of natural resources and infrastructure, including water, electricity and roads, is a prerequisite to ICL's development of a large-scale mining project in the Afar region.
During the past year, ICL has intensified its efforts to create a market for potash in Africa, primarily by sponsoring a potash awareness program - "Potash for Growth" - in conjunction with Ethiopia's Ministry of Agriculture and its Agriculture Transformation Agency. The program includes the creation of hundreds of potash demonstration plots in Ethiopia.
Commenting on the closing, ICL President & CEO Stefan Borgas, said, "We are delighted to complete our acquisition of Allana Potash and appreciate the strong support of Allana's Board, management team and shareholders in conducting the process expeditiously. Our purchase of Allana is in line with ICL's "Next Step Forward" strategy to broaden our sources of raw materials globally and to focus on high growth, emerging markets. Allana gives us a major mining concession in Africa, as well as a talented on-the-ground team with whom we intend to pursue our development of potash resources in Ethiopia. We are excited about the potential of establishing a strong potash platform in the Afar region that will enable us to serve rapidly growing fertilizer markets throughout Ethiopia and Africa, at large, as well as our growing customer base in Asian markets, and which will complement our existing potash operations in Israel, Spain and the UK. We are encouraged by the initial support of our activities by the Ethiopian government, which we trust will be translated into the assistance that we require to fully develop Ethiopia's natural resources for the benefit of Ethiopia, its farmers and its people, as well as for ICL."