Name of the Project
Elandsfontein phosphate project.

Location
Saldanha Bay, in the Western Cape, South Africa.

Project Owner/s
The Elandsfontein project is held by Kropz (70%), African Rainbow Capital, or ARC (25%), and a smaller empowerment partnership (5%). Ubuntu Botho Investments forms part of the ARC structure.

Project Description
The Elandsfontein deposit is the biggest sedimentary phosphate deposit in South Africa.

The phosphate mineralisation is contained in the Varswater formation, with the phosphate occurring in phosphatised shell fragments and phosphorite pellets. The remainder of the deposit consists of silica sand and calcium oxide.

The project has an initial mine life of about 14 years and can deliver one-million tonnes a year of phosphate rock concentrate at steady state.

The processing plant will produce a final saleable concentrate to the expected specification of 68% bone phosphate of lime and about 31% phosphorus oxide using a flotation configuration of direct flotation, followed by a reverse flotation circuit.

Potential Job Creation
Not stated. 

Net Present Value/Internal Rate of Return
Not stated.

Capital Expenditure
Kropz has spent $120-million to bring its Elandsfontein phosphates mining and processing project into production and requires an additional $16-million to cover its augmentation.

Planned Start/End Date
First phosphate rock ore exports from Elandsfontein are expected in the first quarter of 2022.

Latest Developments
Kropz has entered into a new conditional convertible equity facility of up to R177-million, or $11-million, with its major shareholder ARC Fund, pending shareholder approval at a general meeting on May 30, 2022.

The funds will be used to progress the Elandsfontein phosphate project to first revenues from bulk concentrate sales, which is expected late in the second quarter of the year.

The new loan will be offset against a prior R25-million, or $1.6-million, bridge loan facility entered into between the companies in April to meet cash requirements, leaving R152-million for drawdown over the term.

Kropz also has a R200-million facility with ARC Fund, from February 2021, which was fully drawn down as of April 2021.

The new loan will be payable in cash or in the form of conversion into ordinary shares over the next five years.

Kropz has been experiencing cash shortfalls, owing to slower-than-expected progress in the ramp-up of operations at Elandsfontein, resulting in delays in the production of sufficient phosphate rock concentrate required for the first bulk sales.

In turn, a delay in commissioning the project, largely owing to the need to re-engineer parts of the fine flotation circuit proposed by the vendor, has been further exacerbated by unpredicted ore variability and a lack of operator experience.

Key Contracts, Suppliers and Consultants
DRA (engineering, procurement and construction management); Minopex (processing plant operation); and VDM Transport.

Contact Details for Project Information
Kropz, tel +27 21 930 0927 or email info@kropz.com.