SEVERO-KRASNOBORSKOYE, VOSTOCHNO-KRASNOBORSKOYE DEPOSITS,
POLESSKY DISTRICT, KALININGRAD REGION, RUSSIAN FEDERATION


PROJECT
Polyhalite Ore Deposit Development and Manufacture of Fertilizers

Sulphate-Potassium Fertilizers
SOP
BACKGROUND INFORMATION

This is a project for the development of a large-scale deposit as proved by the company (the reserves exceeding 600 million tons) of polyhalite ore, with the purpose of manufacturing high-grade mineral fertilizers: SOP (potassium sulfate). SOP production capacity is 1 million tons; ore mining capacity is 7.5 million tons. Elaboration grade: Class 4 AACE, estimation accuracy: +30%-30%.

SOP is an export oriented product containing potassium and sulfur. It enjoys high demand on the markets of China, India, Brazil, and EU Countries, and it enables to significantly improve the efficiency of agriculture, especially pertaining to citrus cultures, coffee, potato family, and tobacco. It is traded at the level of more than EUR 450 per ton, as compared with the price of potassium chloride (MOP) of EUR 180 – EUR 250 per ton.

The mine field is located 55 kilometers away from Kaliningrad and the nearest port. The ore reserves of straight product К2О amount to 64 million tons, as well as the reserves of MgO amounting to 29 million tons, while estimated reserves in further mine exploration are about 250 million tons of K2O.

Polyhalite ore contains four useful elements: Potassium, calcium, sulfur, and magnesium. In order to produce the end product – SOP – the ore is mined using shaft method from the depth of 900 meters, and potassium sulfate must be recovered from the ore. The ore contains around 10% of K2O; SOP contains about 50%, so for 1 million tons of product it is necessary to mine 5.5 million tons of ore, taking losses into account.

The technology developed for ore milling and ore treatment is based on milling, torrefaction, dissolution, water flushing, evaporization and drying/solidification, and no hazardous waste is generated.
What has been done:
- Geological exploration, ore reserves have been explored and proven in the amount of more than 600 million tons, mining license has been secured;
- Feasibility study of provisional mining parameters has been conducted; efficient conversion-free technology for ore treatment has been developed; it provides for SOP production margin of 44%;
- Project in the geology and technology at Scoping level has been completed by the established company K-UTEC AG Salt Technologies (Germany);
- Project feasibility study has been conducted based on the German data;
- Project evaluation has been conducted by the international consulting company PwC;
- Interest in the product on the part of distributors in EU countries, China, and India has been secured;
- Specialized market players have expressed preliminary interest in taking part in the project.

The first stage of the project has been in progress for 7 years.

What is planned:
- Additional in-mine exploration;
- Refinement of the industrial technology; fundraising, funding; design development, construction of mining and processing plant and mine;
- Finally, contracting, production of polyhalite ore and manufacture of the end products using the ore.

The planned future period of the project is 9 years.
KEY FEATURES

- Special economic zone with tax benefits (Kaliningrad Region).
- Outspoken competitive advantages in terms of logistics (proximity to rail road and a seaport);
- Average (900 m) depth of ore occurrence with a thick polyhalite layer with the thickness of about 60 meters. Chemical composition of polyhalite allows for SOP isolation without conversion and without application of acids, which reduces the cost of production;
- Compounds in the mineral, as well as the technology eliminates the need for discarding after SOP recovery, rather it can be further treated with step-by-step recovery of additional marketable products;
- Advanced processing provides for high product yield per one ton of feedstock;
- As a result of advanced ore processing it is possible to produce potassium sulfate (SOP) and magnesium sulphate, sulphate of potash magnesia, sulpomag, gypsum plaster, as well as polysulphate (analog of POLY4, a relatively new, efficient and progressive type of fertilizers featuring extended action and containing potassium, calcium, magnesium, and sulfur yet in source quantities); several scenarios have been developed for the project with different product lines.
- In case of diversification of the product range it is possible to achieve 63% profit margin.
UNIQUENESS OF THE PROJECT
- Significant ore reserves enough to deliver raw materials for approximately 100 years of production;
- High profit margins due to advanced processing of source materials;
- High sustainability of the project due to a wide range of marketable products;
- Waste backfill technology which preserves the ecosystem of the Baltic states;
- Highly positive financial result completion of the project.
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