Liberty Metals & Mining Holdings, LLC, a subsidiary of Boston-based Liberty Mutual Insurance (“LMM”) has acquired 25% of the shares in Yara Dallol B.V. (“Yara Dallol”) for USD 51.25 million. Yara’s share of the proceeds is USD 35.4 million.
Reference is made to the press release on 13 February 2015, confirming the feasibility of extracting potash in the Danakil depression in North-Eastern Ethiopia. Following this transaction Yara will hold 51.8% of the shares, LMM 25% and XLR Capital Limited 23.2% in Yara Dallol.
“The Dallol project will support Yara’s strategy for further development of premium fertilizer for high-value crops, and this transaction underlines the attractiveness of the project. We are pleased to join forces with a dedicated investor like LMM, and look forward to develop the project further with our partners,” said Svein Tore Holsether, President and CEO of Yara.
The feasibility study confirmed reserves and the technical viability for an annual production of 600,000 metric tonnes sulphate of potash (SOP) over a 23-year period. Yara Dallol has additional resources to either expand annual production or increase the life of the project, as new market segments for SOP are developed.
Yara Dallol aims to begin mining activities by the end of 2018. The independent feasibility study estimated the capital expenditure of the project at USD 740 million and cash cost at USD 167 per metric tonne delivered (fob) Djibouti, among the lowest in the industry.
Closing is expected before the end of 2015, and the final investment decision for the project is planned for mid-2016.
[yara.com]