Allana Potash finds High Potash Yields in Ethiopia
 A Toronto listed company Allana Potash (TSX: AAA) could become one of the largest potash producers in Africa thanks to a promising project in Ethiopia. Ethiopia is not the first country that comes to mind when thinking about business friendly countries in Africa; however, over the past decade the government has enacted policies to attract investment, helping it register one of the highest economic growth rates in the world (11%, expected to continue until 2014). In 2010, Ethiopia adopted new laws for the mining sector, exempting companies from custom duties and accelerated depreciation among other incentives. The government has also embarked on a series of infrastructure development projects aimed to attract foreign investors.
This is good news for Allana based, which is expected to start an economic feasibility study in what is one of Africa’s largest potash projects in Dallol in northern Ethiopia. Allana is well poised to take advantage of projected continued high demand for fertilizer as farmers around the world want to take advantage of higher crop prices though higher yields. A sustained period of word recession defying high economic growth in Africa suggests that farmers there will start to adopt more advanced agricultural techniques, requiring the use of potash based fertilizers. Allana’s progress has been on schedule and last week it announced the discovery of high sylvinite (potash ore) mineralization in three holes around the Musley deposit.
The Company has sent samples for analysis to Saskatoon, Canada and is preparing to begin water well drilling. So far, Allana expects the Dallol project to have 673 million tons of estimated and measured potash resources and it has published its minerals resource estimate in its SEDAR filed NI 43-101 compliant Technical Report: "Resource Report for the Danakil Potash Deposit, Afar State/Ethiopia" dated June 24, 2011. Committed lenders have invested some USD$ 600 million so far thanks to commitments by Liberty Metals & Mining Holdings and the International Finance Corporation (IFC, a member of the World Bank group), which exceeds the company’s initial debt financing projections. Allana should conclude the project debt financing for the project by late 2012 in order to begin construction in 2013. Initial production of about 1 million tons is expected to start in 2015, reaching peak levels in 2017.
Allana has also overcome another potential obstacle deriving from the fact that Ethiopia is landlocked. The tiny Republic of Djibouti, which occupies the ‘horn’ of Africa and borders Ethiopia is investing in the construction of a new port at Tadjoura thanks to development funds from Saudi Arabia. Allana will have its own terminal with unloading and storage facilities at the new port. The potash will be delivered to the port by truck along a new highway linking the Dallol project with the port, which is already under construction.
Posted by Alessandro Bruno at 04:06:12 PM in Blog, Editor, Alessandro Bruno
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