$500m potash fertilizer project pilot next year

MINING BOOST: Gulf of Potassium Mining LLC to add value to Sultanate’s mineral resources

Plans for the establishment of a major potassium-based fertilizer project in the Sultanate have been firmed up with the founding of a new company to oversee the implementation of this ambitious venture.

Gulf of Potassium Mining LLC, a subsidiary of Gulf Mining Group — one of the largest privately owned mining corporations based in the Sultanate, is looking to invest between $300-500 million in the development of a Sulphate of Potash (SOP) project utilising abundant potassium chloride deposits discovered in Umm al Samim in the western part of the country.

SOP, according to Thomas Sinclair (pictured), Managing Director of Gulf Mining Group, is a premium quality fertilizer product used the world over primarily in the cultivation of high value crops like fruits, vegetables, nuts, coffee, tea and tobacco. Its two main ingredients — potassium and sulphur — give SOP a competitive edge over the more commonly available Muriate of Potash (MOP) type of fertilizer in world markets, he said.

Speaking at the 2nd Mining Investment Middle East & Central Asia Conference, which opened at the Sheraton Hotel Oman yesterday, Sinclair said the proposed project envisages a production capacity of around 500,000 tonnes per annum (tpa) of Sulphate of Potash (SOP), rising to 1 million tpa in the next phase of its development.

Potassium chloride — the primary raw material for the venture — is proposed to be sourced from massive deposits lying just metres below the desert in Umm al Samim close to the Sultanate’s border with Saudi Arabia. Reserves are estimated in excess of 40 million tonnes, although this figure could rise exponentially if further studies are undertaken in the surrounding area.

Sulphur, another key ingredient in the manufacture of SOP, is proposed to be sourced from local producers, notably Petroleum Development Oman (PDO). Its giant integrated project at Yibal Khuff is expected to produce 85,000 tpa of sulphur, which will go some way in meeting the SOP project’s annual sulphur requirement of 205,000 tonnes, said Sinclair.

Adding to the viability of the project is its proximity to the massive gas production infrastructure of BP Oman in Block 61, which recently came on stream, the Managing Director explained. The project area also overlaps Oman Oil E&P’s Block 60 concession, as well as PDO’s Block 6 licence, he said, noting that access and availability of sour gas will add to the competitive appeal of the venture.

Importantly, the project will also contribute to significant In-Country Value (ICV) generation for the Omani economy. In addition to the potential for 500 direct jobs and over 1,000 indirect employment opportunities, the SOP venture will also generate sizeable export revenues for the nation.

Additionally, the project will result in substantial quantities of byproducts in the form of potassium chloride, magnesium chloride, hydrochloric acid and potable water — products that are proposed to be marketed to drilling companies operating in the Sultanate or sold abroad, Sinclair explained.

Pilot production is proposed to commence next year, with full-scale commercial production set for 2022.