Aspirant phosphate producer Kropz says it is looking to achieve steady-state production from its South African phosphate mining operation during 2020 and – with two new African phosphate assets acquired recently – is targeting to mine 3 Mt/a of rock phosphate from a 1 000 Mt resource within five years.
Listed on the AIM market of the London stock Exchange in November last year with 261 million shares in issue and a market cap of more than US$100 million, Kropz’ vision is to become a leading independent phosphate rock producer and to develop, over time, into an integrated mine-to-market plant nutrient company focused on sub-Saharan Africa.
The Elandsfontein processing plant.
At a recent media briefing in Johannesburg, CEO Ian Harebottle said the company’s value is underpinned by its pipeline of high-quality projects, in which US$170 million has been invested to date.
“We are leveraging current lows in the phosphate market and positioning ourselves to become one of the top 12 phosphate-producing companies globally,” Harebottle said.
“Why choose phosphate, and why target sub-Saharan Africa? Phosphate is essential to food production, the market is emerging from a low of more than 10 years, and growth will flow from world population expansion, increased food demand and reduced arable land.”
Kropz’ most developed asset, promising near-term cash flow, is Elandsfontein on South Africa’s West Coast, which will exploit the country’s largest sedimentary phosphate deposit. Some US$120 million has been invested in exploration, bulk sampling, feasibility studies and subsequent construction of a mine, mineral processing facility and associated infrastructure. Offtake agreements for its production of plus 1 Mt/a of >31 % phosphate (P2O5) rock concentrate have already been secured.
Harebottle says operating cost estimates suggest that Elandsfontein will be well placed to compete effectively with other phosphate rock producers. “Also, its close proximity to the deep-water port of Saldanha Bay enables it to target demand in both the Atlantic and Indian Ocean markets.”
Elandsfontein was commissioned in 2017 but – after a short period of operation – put on care and maintenance.
Of Kropz’ two most recent acquisitions, Harebottle says the Hinda phosphate project in the Republic of Congo holds prospects for medium-term growth and Aflao in Ghana, exploration upside.
Hinda, a sedimentary phosphate deposit and covering more than 260 km² of the Republic of Congo’s coastal basin, has a JORC-compliant mineral resource base of 675 Mt at a grade of 10 %, with 86 % in the measured and indicated categories.
While a 2015 definitive feasibility study targeted production of 4,1 Mt/a of phosphate concentrate with an unleveraged NPV of US$1,85 billion with an IRR of 38 %, Kropz believes a smaller-scaled project targeting production of 1-1,2 Mt/a can be developed initially for a significantly lower capital investment with similar returns. The plan is to develop a proposed single solution within 12 months, Harebottle says.
In Ghana, Kropz subsidiary First Gear Exploration (First Gear) is currently undertaking exploration work to confirm that neighbouring Togo’s HKK deposit extends into the Aflao area of Ghana’s Volta Region. A Mobile Metal Ion (MMI) geochemistry study showed that phosphate is present; the intention is to proceed with a detailed exploration programme to delineate a resource that will support a beneficiation plant and associated infrastructure.
In Togo, the Société Nouvelle des Phosphates du Togo’s (SNPT) Kpeme mine is the country’s single major producer. Kpeme’s production has averaged between 700 000 and 1,2 Mt/a of phosphate rock concentrate, high in P2O5, over the last five years.