The race is on to satisfy accelerating

world demand for potash, and in

this Olympic year Allana Potash is

in gold medal position as its Dallol

Project in the Danakhil region of

Ethiopia has the finishing line in sight.

Potash is a generic name for a variety of

potassium salts, the most common being

potassium chloride (KCl), also known as

muriate of potash (MOP) and sulphate of

potash (K2SO4) or SOP. Around 95 percent

of global production is used in fertiliser to

improve water retention, yield, nutrient

value and disease resistance of food crops

such as fruit and vegetables, rice, wheat,

sugar, corn, soybeans, palm oil and cotton.

The world’s largest producer of potash,

by some distance, is Canada, with the

largest consumers being China, the

United States, Brazil and India. So why is

a Canadian exploration company putting

all its resources into developing a potash

operation in Ethiopia?

There are many answers to that question,

and they all combine to put Allana Potash in

a very strong position to supply the growing

fertiliser markets in China and India—with

Ethiopia’s location on the horn of Africa

being virtually next door, compared to

Canada or Russia.

First of all, there is an abundance of potash

in Ethiopia, where it was first mined in the

fourteenth century. “We secured some very

interesting drill results from a company

called Parsons and Co, an exploration

company that was operating in Ethiopia in

the 1960s,” said Richard Kelertas, senior vice

president, corporate development. “They

Allana Potash

“There’s enough there for a million

tons a year for thirty or forty years

had done well over a hundred drill holes in

the depression where we are operating and

the results looked extremely promising.”

Until relatively recently, he explained,

the principal method of mining for potash

was deep shaft, which was not particularly

suitable in this region of Ethiopia which

is subject to very hot temperatures, so the

property had been abandoned. The Dallol

Project, however, is perfect for solution

mining, a method which pumps brine into

drill holes to dissolve the potash, then pumps

the resulting solution to the surface where

it is transferred to evaporation ponds to dry

before final processing to remove the salt.

With the potash deposits being relatively

shallow and a hot climate that allows for

natural solar evaporation, Allana benefits

from minimal capital expenditure and low

operational costs into the bargain.

Another bonus is that at a time when

some governments have been revoking

promises they made to mining operators, the

Ethiopian government has been extremely

helpful. “When we first looked at it three or

four years ago, the infrastructure left a lot

to be desired,” said Kelertas. “But we had

assurances from the Ethiopian government

that they were going to upgrade the road

system, and they came through on that. All

things considered, low cost, low cap-ex, low

op-ex, and the fact that the resource was

quite substantial and shallow led us to go

ahead with exploration work a couple of

years ago. Most of our drilling has been

in the western areas on the salt plain,” he

continued, “and there’s enough there for a

million tons a year for thirty or forty years.”

The advantages of the climate are quite

significant. “This is one of the hottest places

in the world,” said Kelertas, “but that helps

us keep our op-ex costs very low. We do not

have to build expensive evaporators as you

do in cooler parts of the world. We’re using

solar evaporation ponds,

where the energy from the

sun evaporates the potash

brine. There are some

implications to operating

in a hot climate but

the advantages far outweigh

the disadvantages.”

The project’s desert

location has other

advantages, too, from an environmental

point of view. There’s no flora and fauna and

there is only a small indigenous population,

which is actively engaged in the development.

Concerns about sustainability in potash

mining are just the same as they are in any

mining operation, said Kelertas, especially

when open pit or deep shaft mines are

Potash salt and halite crystallization in pilot test evaporation ponds

Allana Potash

involved, but here’s where

solution mining scores again.

“With a solution mine, the

environmental footprint

is almost nil. It’s only the

plant facility, the pumping,

whatever energy you’re

going to use, the drill sites,

the well sites and the piping.

Other than that there’s no

excavation work, and no emissions to speak of.

Allana employs a lot of Ethiopians in its

exploration and development operations so

a small village has sprung up close to the

site, where temporary housing, a school, and

a medical clinic have been built. “Once we

start construction that village is going to

get a lot bigger, so we’ll be working closely

$8 00 Million

Total project cost