In anticipation of significant milestones, Aim- and ASX-listed potash developer Kore Potash and Shanghai Electric Power Company (Sepco) are gearing up for crucial developments at the Kola project, in Congo-Brazzaville.
Sepco is aiming to complete all engineering design tasks at Kola by December.
Following this, in January 2024, an engineering, procurement and construction (EPC) contract offer will be extended to Kore, marking a pivotal moment in the project timeline.
This progress follows a comprehensive agreement initiated on August 8 between Kore and Sepco. Under the terms of this agreement, Sepco, supported by its parent company PowerChina, embarked on essential additional engineering design works for the Kola project.
These efforts encompass various critical areas, such as the underground mine, mineral processing jetty, transshipment operations, energy transportation and storage, as well as conveyor systems and materials handling.
PowerChina committed to cover costs exceeding $10-million, capping Kore's contribution at $5-million. An initial payment of $1-million, made in August, kickstarted the project's financial aspects.
Subsequent payments, contingent on Kore's fundraising efforts and Sepco's delivery of the EPC contract, are planned between October 25 this year and 12 months from the contract signing date.
Sepco's engagement has been comprehensive, with personnel having been stationed in Congo-Brazzaville for six months, fostering partnerships and conducting vital site visits at Kola.
Moreover, Kore says, a dedicated team is mobilised, focusing on gathering essential data regarding service corridors, conveyor routes and geomechanical specifics related to the processing plant and infrastructure areas.
These endeavours align with Sepco's commitment to presenting an EPC contract to Kore in January.
Notably, the ongoing works include elements that could potentially streamline construction timelines, underscoring PowerChina and Sepco's strategic approach to the project's success.
Kore is also actively collaborating with the Summit Consortium to secure financing for the complete construction expenses of the Kola project, which is intended to rely on a combination of royalties and debt finance.
The consortium expressed satisfaction with the outcomes of the study, aligning with their requirements and bolstering the ongoing financing discussions, the developer notes in an October 12 update to shareholders.
The parties involved in the consortium have reiterated their strong interest in funding Kola and are “eagerly anticipating the finalisation of the EPC contract terms”.
The detailed financing proposal covering the entire construction cost of Kola will be presented to Kore within six weeks of finalising the EPC terms.
In terms of relations with the Congo-Brazzaville government, the Minister of Mines has conveyed support for Kore’s Kola and Dougou projects through a formal letter.
While acknowledging some unmet development objectives outlined in the Mining Convention, the Minister assured unwavering moral and security support to overcome remaining challenges in financing Kola, Kore points out.
Kore says the Minister had reaffirmed the validity of the company's mining tenement titles and the operating agreement, emphasising the government's confidence in Kore.
Kore confirms that it remains focused on completing the financing of the Kola project and that it will “continue exploring what strategic options are available for the Dougou extension potash project”.
