Africa Finance Corporation (AFC) has approved $150m of funding to Danakali for Colluli Potash Project in Danakil Depression region of Eritrea, East Africa.

The funding will be utilised for the development and construction of the project which is approximately 177km south-east of the capital city Asmara.

The project is a late-stage, low-cost sulphate of potash (SOP) deposit with an estimated reserves of 1.254bn tonnes of potassium bearing salts.

The project is owned by Colluli Mining Share Company, a 50:50 joint-venture between Eritrean National Mining company and STB Eritrea which is a subsidiary Danakali.

Danakali will be responsible for the development and operations of the project.

AFC president and CEO Samaila Zubairu said: “Eritrea is a post-conflict country that is in the process of rebuilding itself and its economy. Projects like Colluli create jobs, provide export earnings and tax revenues.

“AFC is keen to support such projects and the government’s efforts in achieving its aspirations of scaling up infrastructure investments to promote agriculture and industrialization for enhanced productivity and economic growth.”

The Colluli mine is estimated to have 200 years production life

The Colluli mine is expected to have a production life of about 200 years.

AFC said that the project will be of significant economic and financial benefit to the country, contributing up to 10% of the country’s gross domestic product by 2021.

The project includes the construction of evaporation ponds, a run-of-mine (ROM) pad, a sewage treatment plant, fuel storage tanks, and installation of communications facilities.

Eritrea information minister Yemane G. Meskel said: “AFC’s substantial investment will indeed be pivotal in the operations of the world-class Colluli Potash Project.

“It also constitutes a trailblazer for other investments in several prospective sectors in Eritrea in the new climate of peace and cooperation in the entire Horn of Africa region.”

Recently, AFC has signed a joint development agreement with Brahms subsidiary Brahms Oil Refineries to develop a small refining project in the west African country of Guinea.