Kalium Lakes Preps for SOP Production

Kalium Lakes (ASX:KLL) has signed an offtake terms sheet with German fertilizer producer and distributor K+S (ETR:SDF) for sulphate of potash (SOP) from its Beyondie SOP project in Western Australia.

Under the agreement, Kalium Lakes is to supply 75,000 tonnes per year of SOP to K+S over a 10-year term. This will also account for 100-percent of stage 1 production from the Beyondie project. On the K+S side, the company will provide Kalium with expertise and technical support through the development stages.

“We welcome K+S as a long-term partner and look forward to working together to optimise the project given K+S’ extensive expertise in design, construction and operation of SOP facilities,” Kalium Lakes managing director Brett Hazelden said in a statement.

Kalium Lakes is striving to become Australia’s first SOP producer, and has been working on its Beyondie project for the last few years. The project, which has an estimated lifespan of over 23 years, is currently approaching the bankable feasibility study stage as the company works to secure financing for development. The company is aiming to see first production by the end of 2019 or beginning of 2020.

“We are delighted to have reached agreement with K+S who is one of the world’s pre-eminent SOP producers and distributors. This terms sheet brings the Beyondie SOP Project a step closer to becoming Australia’s first SOP producer, with the aim of supplying Australian and overseas farmers with a locally produced product,” Hazelden said.

SOP is used heavily in the agricultural space for products such as fruits, nuts, vegetables and cocoa, along with tobacco. It can be desirable over muriate of potash (MOP), as the price premium for SOP comparatively is close to 200 percent.

While Beyondie is Kalium’s flagship project, it’s also involved in a joint-venture with BC Iron Limited (ASX:BCI) called the Carnegie project. Carnegie is a potash exploration project located 220 kilometres northeast of Wiluna, a town in Western Australia, that is “highly prospective for hosting a large sub-surface brine deposit” that could become a SOP processing operation.

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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.