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Danakali to kick-off EPCM process at Colluli Sulphate of Potash Project

Colluli Mining Share Company (CMSC) has issued a Notice to Proceed to DRA Global, the preferred provider of EPCM services at the Eritrean SOP project.

Danakali Ltd - Danakali to kick-off EPCM process at Colluli Sulphate of Potash Project
Colluli project director Tony Harrington on site in Eritrea

Danakali Ltd (ASX:DNK) (LSE:DNK) is beginning the Engineering, Procurement and Construction Management (EPCM) process at the Colluli Sulphate of Potash Project in Eritrea.

Project operator Colluli Mining Share Company (CMSC) has issued a Notice to Proceed to DRA Global, the preferred provider of EPCM services.

This is an interim agreement that allows DRA and CMSC to begin the EPCM process with CMSC’s board resolving to implement phases I and II.

Early activities

Activities during these phases include DRA reviewing the Colluli Front End Engineering Design (FEED),  mobilisation of the CMSC Owner’s Team and finalising geotechnical test work.

The mobilisation process includes project director Tony Harrington and personnel from Turner & Townsend, a multi-national professional services company.

“Ready and eager”

Harrington said: “I am very pleased we will be formalising our partnership with DRA after over a year of quality and positive interactions with their team.

“With the majority of project funding committed, the CMSC Owner’s Team is ready and eager to collaborate with DRA and commence work immediately.

“This is the moment our personnel and other stakeholders in Eritrea have been waiting for.”

Danakali has estimated a 2.25-year timeline from the start of project execution to production.

FEED update

The FEED update to be undertaken by DRA includes:

  • Re-estimate of capital and definition of schedule;
  • Optimisation reviews;
  • Develop further information required to complete detailed engineering; and
  • Develop early works scope and issue tender enquiries.

Another early EPCM task is the purchase of critical equipment and this includes the reverse osmosis equipment necessary for early work activities.

Phased approach

The purpose of DNK’s phased EPCM approach is to ensure CMSC achieves technical, commercial, financial and nameplate requirements that satisfy the economic model, funding criteria and the expectations of all stakeholders.

DRA is a high-quality, multi-disciplinary global project management and engineering group with strong African experience and EPCM delivery capability.

The scope of DRA’s contract includes:

  • All aspects of design, project management, procurement, construction management and supervision;
  • Commissioning of the complete process plant and associated infrastructure; and
  • Awarding and overseeing major contracts such as early works, earthworks, structural, mechanical, piping, electrical and instrumentation works, laboratory and permanent camp.

Quick facts: Danakali Ltd

Price: 0.33 AUD

Market: ASX
Market Cap: $105.18 m

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