LSE- and ASX-listed Danakali’s subsidiary Colluli Mining Share Company has made progress with the engineering, procurement, construction and management (EPCM) programme for the Colluli sulphate of potash project, in Eritrea.

The company has successfully executed Phase 1 of the EPCM programme, and has now moved to Phase 2.

Danakali said the delivery of Phase 1 was on schedule, on budget and in line with the front-end engineering design (FEED) of the project, taking Colluli closer to planned production in 2022.

Phases 1 and 2 of the EPCM programme involve mobilising the owner’s project team, finalising geotechnical work, buying critical equipment such as a reverse osmosis plant and investigating optimisation opportunities.

Phases 3 to 6 of the EPCM programme will entail finalisation of engineering design and development, finalisation of vendor packages, procurement, finalisation and award of site contracts, construction, commissioning and ramp-up.

The company expects delivery of the reverse osmosis plant by the third quarter of this year. The plant will be used to provide potable water and water for construction purposes prior to the commissioning of the main Anfile Bay Water Intake Area, which is currently being developed by consultancy DRA Global.

Danakali on Tuesday said it would host a site visit to Colluli for analysts and investors during the second quarter of the year, upon finalisation of Phase 2 of the EPCM programme.

"It has been a busy start to the year with a number of work streams being progressed. It is encouraging to see a collaborative team providing a strong professional approach, that is experienced and understands the importance of delivering a fit for purpose process plant with a shared objective to achieve the shortest path to revenue.

“The FEED pricing reconfirmation is under way, and we are pleased to have identified several optimisation and cost saving opportunities which we are incorporating in further planning. We have now started Phase 2 of the project development allowing us to further de-risk the development by greater definition of cost, schedule and design,” explained project director Tony Harrington.