Allana Potash could consider expanding potash mining operations at the Danakhil potash project in Ethiopia with a larger production facility in an upcoming feasibility study, Farhad Abasov, president and CEO of Allana Potash, said.  

The company was planning a production of 1million tonnes of potash a year, according to Abasov who said that it could increase its production goals.

The company declared yesterday a much anticipated resource expansion and upgrade which confirmed the substantial size of its potash beds. From a previous 100 million tonne inferred resource, Allana cracked out a 673 million tonne measured and indicated resource at 18.65 percent potassium chloride (KCl) with a further 596 million tonnes at 19.96 percent KCl in the inferred category. Abasov noted that the resources would form the basis of a feasibility study slated for later this year.

Abasov said that talks were underway with partners for off-take and financing agreements covering its Danakhil potash project.

In 2009 Allana had signed on China Minerals United (CMU) as strategic investor with both agreeing to negotiate a 20 percent off take agreement in return for 35 percent or about 280 million dollar portion of Danakhil's construction costs. But the CMU deals has not been finalised yet.

The potash mineralization in the Danakil Depression is well known, with mining carried out sporadically from the early 1900s. Other mining corporations in the basin include BHP Billiton and India's Sainik Coal Mining, which is planning to start mining at the Musley deposit.

Source: Mineweb