Under the Western Australian Government’s 2022-2023 state budget, Agrimin’s (ASX: AMN) Mackay project will receive a boost, with funding allocated to sealing the road the company plans to use to truck potash from the project in the state’s north.
The state budget provides $100 million in funding to the section of the unsealed Tanami Road that Agrimin plans to use and adds to the $400 million allocated in the federal government’s budget.
It is expected the $500 million in funding from both governments will seal the Tanami Road and improve safety, accessibility, and flood resilience for communities and industries in WA’s northeast.
Agrimin chief executive officer Mark Savich said the company welcomed the funding announcement from the WA and federal governments.
“This funding will support the development of Agrimin’s world-class and long-life Mackay potash project, as well as create lasting job opportunities for several of WA’s most remote communities.”
Mackay potash project
Agrimin’s strategy at Mackay is to become a world-leading supplier to international markets of sulphate of potash (SOP) fertiliser.
The project is situated on Lake Mackay, which Agrimin says is the largest undeveloped potash-bearing salt lake in the world.
Lake Mackay contains “significant volumes of brine” which has dissolved potassium and sulphur, which can generate a high-grade water-soluble SOP fertiliser for high value crops such as fruit and vegetables.
Agrimin noted its SOP is certified and able to be used in organic food production.
Mackay comprises nine exploration licences and covers 3,000 square kilometres in WA. A further four exploration licences are under application in the Northern Territory and span 1,200sq km.
The project is “rapidly advancing” towards a final investment decision, with 70% of the planned SOP production committed under offtake agreements.
Front end engineering design works are continuing along with project funding discussions and securing mining and environmental approvals.
In March, Agrimin pointed out SOP was attracting US$720 per tonne in China, and US$860/t in northwest Europe – up substantially on the definitive feasibility study price of US$500/t.
Cash costs to produce, truck and ship the SOP from Wyndham Port were estimated at US$159/t.
