Kore Potash plc, the potash development company with 97% ownership of the Kola and DX Potash Projects in the Sintoukola Basin, located in the Republic of Congo (ROC), has announced that a final engineering, procurement and construction contract (EPC) for the Kola Project with PowerChina International Group Ltd has been signed in Brazzaville in the presence of the Minister of Mines, ROC on 19 November 2024.
Upon the release of this announcement on the Australian Securities Exchange (ASX) and the JSE Ltd (JSE), the ASX suspension and the JSE halt of trading in the securities of Kore Potash as announced on 11 November 2024, will be lifted.
Highlights:
The EPC is a fixed-price contract, with a price of US$1.929 billion.
- The fixed price element is critical in that it minimises the cost overrun risks to the Company.
- Of the total US$1.929 billion, approximately US$708.9 million is allocated to build transportation links and utility pipelines, which will make the Kola Project self-reliant without the need for state infrastructure. The Company believe this will be a critical advantage compared to other potash projects around the world.
Construction period is 43 months.
- The EPC includes provisions for penalties in the event of delayed completion and bonuses in the event of early completion as detailed further below.
Entry into the EPC reaffirms the Board’s aim for Kore Potash to become one of the lowest cost producers in the global agricultural market to Brazil and high-growth markets in Africa.
Andre Baya, CEO of Kore Potash, said: “The entry into this EPC contract marks a significant milestone for the Kola potash project. By signing this fixed-price construction contract with one of the largest international engineering groups, the company has minimised risks associated with cost and time overruns typical in large mining projects. The company also believes this structure will facilitate accelerated financing and a relatively straightforward construction process, leading us to profitable production.
We now look forward to working with all our stakeholders in taking this mining project to the next level and unlocking its full potential, in accordance with the indicative timeline described above.
I would like to take this opportunity to thank the Government of the ROC, and especially His Excellency the Minister of Mines, as well as the local communities where we operate, for their continued trust and support as we progress Kola into the next stages of its development.”