Page 49 - pd282-May20-mag-web_Neat

AFRIcA

remain fragile for as long as anyone can out of the market they will do it because interest in us or they are going to give up
imagine, Kore’s plan to progress a pro- they have big balance sheets and know market share to us and that is not some-
ject that is fundable hasn’t changed. the business really well,” Sampson said. thing they would want to do.”
“There aren’t too many hurdles in the “The challenge is how does a small A DFS on Kola alone was released in
way of development now; it is funding company get a potash project going be- early 2019, with a preproduction capital
and equity capital markets’ appetite to cause most of them need big capital, but cost of $US2.1 billion estimated for a 33-
fund this,” Sampson said. we have a project that we can bring into year 2.2 mtpa MoP project.
“Total capital costs should be under production with small capital.” Therefore, the 400,000 tpa DX MoP
$300 million, that is imminently finance- Sampson believed M&A in the potash project is just the starter for Kore.
able. We have multiple groups talking to sector will also continue, however, he Growing demand for MoP and a coun-
us about offtake and we have lenders wasn’t sure where Kore sat in discus- try looking to lessen its dependence on
that want to loan us money; they are just sions. oil revenues, means government sup-
waiting for us to finish the PFS. There is “I am not sure what the trigger is for port is there for Kore to help deliver
a solid plan on how we are go- much needed employment and
ing to finance this thing, we just cash into Congo’s economy
need equity capital markets to survived by 5 million people.
be open, that is really it.” On the global stage, Samp-
A surge in potash prices son believes Sintoukola will of-
would also help after they fer diversification in the market
have copped a hammering in- and help alleviate the reliance
line with the global economic on the heavyweight northern
downturn. hemisphere potash producers.
However, a rebound in prices “There is about 70 mpta of
is simply explained. potash [MoP] traded and this
“Farmers can’t go too long is different to the West Aus-
without putting potassium into tralia SoP companies looking
the ground or their [crop] quality at a market of about only 1
and yield will drop. If they skip mtpa. Our market is 70 mtpa
a season it hurts them the very and made up of the same type
next season. The demand for of companies in Canada, Rus-
potash is growing as global pop- sia, Germany… they are all the
ulation is growing and it [MoP] same,” Sampson said.
has been pretty steady growth “In Canada, they are going
of 2-3% per annum in a big mar- 1.5km underground and trans-
ketplace,” Sampson said. porting it 1,700km by railway
The CAGR of a big sec- Kore is listed on three exchanges – the ASX,JSE and AIM line to a port and then out to
tor has compelled the likes of – with the company intent on exiting one this year the target markets. One of the
Anglo American plc to enter a biggest markets is Brazil and
one of the markets growing
from a small base, but on a stiff growth
The demand for potash is growing as global curve is Africa.
population is growing and it [MoP] has been
Brad Sampson
pretty steady growth of 2-3% per annum in a big
marketplace.

market controlled by a select few play- companies to look at us. Some people
ers. are concerned about the Congo risk,
A company like Anglo American has which I get because there is not really
the clout to muscle in for a share of a mining industry in the Congo yet,” he
the potash market, but there remains a said.
question mark on a junior’s capability to “The Government risk factor will just
impact the sector. go away eventually. I think for now the “We are right here in Africa, our potash
“You might not see it in Australia be- big strategics will sit and watch us until is shallow, high grade, it is cheaper at the
cause you see the juniors tinkering with they can see we are absolutely going to mine gate for them anyway and because
potash, but the space is dominated by go into production. As we start to dem- of the transport costs it is cheap to deliver
majors. The guys that operate in the onstrate or companies start to see our to customers and no-one else can com-
space like the Mosaic Company are not financing, marketing and overall strategy pete. That is what got me excited and this
actually that afraid of BHP [Ltd]; if they on how everything is going to work, the project deserves to be built,” he said.
need to go to a price war to keep BHP big guys are going to have to show some
– Mark Andrews

aUSTRaLIa’S PaYDIRT MaY 2020 Page 49