Multimillion dollar Phosphate plant on cards

NAMIBIA could soon be a major player in both the mining of marine rock phosphate and manufacturing of downstream fertilizer products following the launch of a US$ 500 million (N$3.5 billion) marine rock phosphate exploration and mining project by LL Namibia Phosphates (Pty) Ltd (LLNP).

The project which is currently in its prefeasibility study could yield the answer for the agriculture sector through producing phosphate fertilizer and has potential to add to the country’s Gross Domestic Product (GDP).

Phosphate is an essential component in the manufacture of fertilizer products and is one of the world’s most sought after minerals resources needed by most countries to drive their agricultural sector.

Phosphate rock is used to produce fertilizer products for agriculture. As a result of the high prices in 2008 and the recession, fertilizer sales were far below agricultural requirements. This will result in below average crop production in an ever increasing market demand for food. By 2015 farmers have to double crop output per hectare in order to maintain food production/capita as world population increases. Over a forecast period to 2021, strong crop prices and a trend towards more balanced fertilizer applications, are expected to boost phosphate rock demand at an annual rate of about 2.3%. There are no alternative sources of phosphate nutrient other than to mine.

World phosphate rock reserves are at 15 billion tons. This puts Namibia in the top league of countries with major reserves.

The deposit of LLNP is 185 km north of the port of Lüderitz in 180 to 300 m water depth. The highest % P2O5 is in the top 1.5 m of sediment. The in situ (raw) deposit in the mine area has a P2O5 content of 18 - 20%. Since Samicor has already established logistical facilities in Luderitz for its marine diamond mining activities, the town will be used as the centre for the phosphate operations.

Says Director of LLNP, Kombadayedu Kapwanga, “The deposit has a loose sandy consistency and the phosphate pellets are 0.7 to 0.1 mm diameter. The small grain size and unconsolidated nature makes the material easy to mine as there is no overburden material to remove during mining.”

LLNP with a world leader in marine engineering have designed the mining tool to mine the rock phosphate offshore which will be transported to the onshore plant for further processing. Since large vessels will be utilized for the transport of mined material and for export of final products, the Luderitz harbor is too shallow and LLNP has to construct its own jetty for the operation.

The Phosphate project will require more than 120 000 square metres of land which is accessible to the sea and LLNP has since signed a sales agreement for the land the Luderitz Town Council. The Luderitz Town Council and Namport are collaborating to make sure that the project does not face logistical problems during the implementation stage.

Research carried out by LLNP has since proven that the targeted offshore phosphate mining area has potential deposits amounting to approximately 1.26 billion tons of unconsolidated phosphate ore. According to the research, the deposit size of the targeted area will supply raw materials for more than 300 years and the available sea front will provide reasonable space for expansion of the project with minimum dependence on the local infrastructure.

Since sulfuric acid will be used in the process, LLNP will import sulfur for the sulfuric acid production plant. This process will produce steam which will be utilized to generate enough electricity for the entire operation with the rest to be fed into the national grid. The other advantage is that sea water will be utilized in the process and therefore the project will not put a major burden to the fresh water resource of Luderitz.

LLNP is a wholly owned subsidiary of Sakawe Mining Corporation (Samicor) whose main funder is the Leviev Group of Companies (LGC). Other shareholders of Samicor are Namibian BEE entities, the Namibian government, Namibia Youth Service and Samicor employees. Samicor is a Namibian diversified company with interests in diamond mining, diamond polishing, agriculture and construction, among others.

Initially the project will mine 1.2 million ton per annum of material which will be converted to 300 million ton per annum of 100% P2O5 and the end product is 550 million ton of phosphoric acid per annum.

The Phosphate project will utilise green technology that is environmentally friendly by required global and local standards as there are no harmful effluents and the main waste product will be pure gypsum. This can be used to establish other related industries like plaster boards, says Kapwanga.

He adds that the shareholders of the multimillion dollar venture are looking at beneficiating rock phosphate offshore and onshore with the latest green technologies meeting the highest standards.

“We are currently busy with the prefeasibility study now and we hope to get the intended results within the short period of time to come. However most of the exploration has been completed and we are only waiting for the infill details,” says Kapwanga.

Since the project will go all the way from mining to the manufacturing of end products, it answers Government’s call for local value addition in order to create local employment.

Kapwanga says progress for the much anticipated project is moving within the required pace and the country will be looking to improve both the local market supply and also fill in the gap available globally in the exportation of the phosphate.

Kapwanga says that the project is expected to move swiftly and all shareholders including Government are convinced with the results of exploration which has guaranteed continued access of the phosphate resources in the future.

A mining licence has already been granted by the Minister of Mines and Energy Isak Katali for a period of 25 years. This shows the keen interest of the Government to see the success of the project.

He adds that the project will also not be affected by Government’s move to declare strategic minerals as industrial minerals because the Government has already shareholding in the company, which will be transferred to Epangelo Mining in due course.

The Government has been on the forefront calling for local participation in the mining sector which is by far the country’s largest foreign currency earner and biggest contributor to the GDP.

The mining sector in Namibia contributes close 40% of the country’s foreign currency earning and according to the chamber of mines 2010 alone the mining sector injected N$ 18 billion into Namibian coffers. PF