With large projects in the mining industry often facing challenges in terms of cost and time overruns, UK-headquartered Kore Potash chairperson David Hathorn confirms that the company’s contracting process has allowed for accelerated financing and efficient construction.

The company is developing the Kola potash project, in Congo-Brazzaville, in which it holds a 97% interest.

In the year ended December 31, 2024, Kore’s contractor PowerChina delivered an engineering, procurement and construction (EPC) proposal and final contract to the company, which entails a fixed price contract worth $1.9-billion.

This fixed price is of significant benefit to Kore as it minimises the risk of cost overruns for the company. The EPC also includes provisions for penalties in the event of delayed completion and noncompliance to performance metrics.

As part of the EPC obligations of PowerChina, the company will advance early works such as supplementary geological work and additional front-end engineering design work relating to the mining section shaft works.

PowerChina will also undertake beneficiation tests to identify opportunities to improve the plant design or adapt product specifications.

The beneficiation tests will be done on existing core samples to confirm the ore grade information provided by Kore previously.

As of March 31, the EPC remains subject to financial close. Kore plans to deliver a nonbinding financing term sheet in coming weeks and for the early works to be completed by PowerChina in June.

An optimised definitive feasibility study (DFS) on the Kola project, which was published in February this year as a precondition for the EPC contract finalisation, envisions a 23-year mine life based on proven and probable ore reserves and only 6% of the project’s inferred mineral resources.

Should more of the resource be upgraded to measured or indicated status, the mine life can be extended beyond 23 years.

“This past year has been one of marked progress for Kore, having achieved various important milestones related to the flagship Kola project.

“The Kola project is of global significance, as shown by the optimised DFS, and we believe the year ahead will be a transformative one for the company as we deliver financial close and start construction of the project,” Hathorn states.

The optimised DFS estimates a capital cost of $2.07-billion for the project, with construction envisioned to start on January 1, 2026, and to be completed within 43 months.

The project’s nameplate capacity of 2.2-million tonnes a year of muriate of potash will result in total production of 50-million tonnes over the 23-year life-of-mine. The average yearly earnings are expected to be $733-million.

As of December 31, Kore had $1.3-million of cash and successfully completed a $10-million fundraise, with a further $500 000 to be conditionally raised and subject to shareholders’ approval at a general meeting.

First production at Kola is earmarked for the first half of 2029.