The Danakil Potash Project is located in the Afar Region of northeastern Ethiopia, approximately 600 km north-northeast of the capital city of Addis Ababa. The Afar Region is part of the Danakil Depression, an extensive evaporite basin located below sea level with a length of approximately 200 km and a width of 50 km to 80 km. The basin structure runs roughly parallel to the Red Sea and extends into Djibouti as well as into Eritrea. This desert area is characterized by a flat surface that is interrupted by only a few hills known as Mount Dallol, Black Mountain and Ashe Ale.
The Danakil Depression is among the hottest places on Earth. In the summer, daytime temperatures can reach up to ~50°C and in the winter they are consistently in the high 30°Cs. It is also one of the lowest places on the planet since much of the Danakil Depression lies up to 128 meters below sea level. Precipitation is rare and the extreme conditions and the presence of salt at the surface ensure there are limited permanent settlements within the region. Therefore, few environmental or social issues which would complicate or delay development of the Danakil Potash Project are anticipated. These climatic conditions (hot and very little rain) are conducive for low-cost solar evaporation.
The Danakil Depression has long been known to contain near surface potash mineralisation, with nearly 100 years of potash exploration history in the area. Circum’s Danakil property covers 365 square kilometers and consists of potash horizons (sylvinite, carnallite and kainitite) that range from widths of 4.1 meters to 47.3 meters in thickness and can be as shallow as 85 meters in depth. The average depth of the drilled deposit is in the range of 200 meters deep. This compares very favourably with deposits in Saskatchewan, Russia and Belarus, which are 500+ meters in depth, and those in Europe which can be up to 1,400 meters in depth.
The Danakil Depression area has seen new interest in recent years from several different groups including Circum. Israel Chemicals Ltd. (formerly Allana Potash Corp.) was previously developing the Danakhil Potash Project which is adjacent to Circum’s project area. In 2013, ICL completed a feasibility study outlining production of 1 million tonnes per year of muriate of potash (MOP) via solution mining/solar evaporation. In 2015, ICL completed a preliminary economic assessment on the potential for 1 million tonnes of sulfate of potash (SOP) as a separate mining operation from the MOP operation. However, in October 2016, ICL announced that the company was closing its Ethiopian operations due to a controversial tax assessment.
Yara International also plans to extract potash in the Danakil Depresssion. In February 2015, the company announced it had completed a feasibility study on annual production of 600,000 tonnes of SOP via solution mining/solar evaporation.
Across the border in Eritrea, Danakali Ltd. (formerly South Boulder Mines Limited) and the Eritrean National Mining Company are 50-50 joint venture partners of the Colluli Mining Share Company focused on the Colluli deposit. In November 2015, the company announced the results of its definitive feasibility study on the production of 425,000 tonnes per annum of SOP starting in the fourth quarter of 2018, increasing to 850,000 tonnes per annum in the sixth year.