Mengo Potash Project, Kouilou, Congo
The Mengo potash mine is a greenfield project being developed in the Kouilou province of the Republic of Congo.
Canadian company MagMinerals Potasses Congo (MPC) owns and manages the potash project, in which MagMinerals Potash Corp. (MagMinerals) holds a 90% interest, while the Republic of Congo holds the remaining 10%. MagMinerals is a fully-owned division of MagIndustries.
MagIndustries signed a 25-year potash investment agreement (PIA) with the ROC government for the development of Mengo potash mine in December 2008. Pre-construction works of the project commenced in March 2013, and the ground-breaking ceremony was conducted on 17 July 2013.
First production was scheduled for 2018, but the development has become uncertain with the company having defaulted in filing its audited annual financial statements for the 2014 fiscal, resulting in its securities to be delisted from the Toronto Stock Exchange.
MagIndustries is also facing allegations of bribing officials in the Congo for businesses related to its subsidiaries, which resulted in a number of resignations at board and senior management level.
No announcement has been made on the status of the project, however, that suggests any delays in completion or otherwise as a result of the events.
The mine would produce 600,000 tonnes per annum (tpa) of potash for the first two years and increase production to 1.2Mtpa during the remaining 26 years of mine life, when it begins operations.
Mengo potash project location, geology and mineralisation
Considered as one of the world's biggest undeveloped potash deposits, the Mengo mine is a part of the 136km² Mengo Mining Permit and is located close to the port city of Pointe-Noire, Congo.
The mine is located within the Congo coastal basin of Aptian age, stretching from Equatorial Guinea in the North to Angola in the South. The basin comprises a number of evaporate cycles, which have resulted in deposition of variable amounts of potash in the form of carnallitite.
Carnallitite is a magnesium-potassium-chloride mineral or a double-salt, while the carnallitite rock occurs in multiple, horizontal horizons ranging in thickness from 0.5m to 25m with an average content of roughly 70% carnallite.
The carnallitite rock consists of an interlayering of Carnallite-rich layers and Halite (NaCl) along with minor amounts of Anhydrite (CaSO4) and clay.
The Mengo project area hosts four potentially economic extractable carnallitite horizons with depths ranging from 500m to 1,000m below the surface.
The Horizon 1 Carnallitite is 19.1m-thick and contains 17.0% potassium chloride (KCl) as Carnallite, while the Horizon 2 is 12.5m-thick and contains 11.7% KCl. The Horizon 3 and 4 Carnallitites have a thickness of 9.6m and 25.1m, and contain 23.9% and 17.9% KCl as Carnallite respectively.
Mengo mine reserves
The proven and probable reserves at Mengo potash mine are estimated to be 33.77Mt of KCl or potash.
Mining and processing of ore at Mengo
Solution mining method, involving dual well caverns, is proposed to mine the carnallitite reserves at the Mengo potash project.
The method involves drilling of a large-diameter hole to the bottom of the deepest carnallite layer at a depth of approximately 900m. Heated water will be pumped into the well to dissolve the carnallite. The cavern formed by the dissolution will expand through the layer of the highly soluble carnallite.
A second adjacent extraction well will then be connected to the first one, forming a dual well cavern with a diameter of approximately 100m. The dissolved salts will be extracted, and the injection and extraction well pipes will be raised from the bottom carnallite layer to the next layers.
The saturated salt brine will be pumped up and processed at the proposed potash processing plant, which is envisaged to produce 1.2Mtpa of muriate of potash (MOP) product of K60 quality.
The processing concept will include the continuous addition of carnallite to the incoming brine, resulting in the precipitation of halite and sylvite.
Solid slurry will undergo hot leaching and KCl crystallisation methods to create a K60 product, which will be transported to the port site, where it will be dried and compacted to a marketable product.
Off-take of potash from the Mengo mine
MagMinerals entered a potash marketing agreement with Ameropa, a company based in Switzerland, for the sale of the entire potash produced at the Mengo plant.
Mengo potash project financing
MagIndustries entered a project development framework (PDF) with the China National Complete Plant Import & Export Company (COMPLANT) for developing the potash project in January 2010.
As part the PDF, COMPLANT was engaged as the engineering, procurement and construction (EPC) contractor. COMPLANT will also provide a secured construction loan of up to $1.2bn, repayable over a minimum term of ten years. In addition, COMPLANT or its nominee will have an option to acquire a 50.1% interest in MPC, exercisable over the 12 months from the effective date of the EPC contract.
China Development Bank (CDB) entered an agreement with MagMinerals Potash to act as the lead-arranger for a $740m syndication loan for the project. CDB will also finance up to $370m as part of the agreement.
Infrastructure facilities at Mengo potash mine
Water for the Mengo plant site will be sourced from the Loémé River, located approximately 16km from the plant site.
ENI Congo will supply natural gas for the project through a 28km pipeline, under a contract signed with MPC.
Power supply for the mine will be provided through a thermal power plant being set up at the plant site. The power plant will use a combination of gas-fired boilers and steam turbine generator units to provide steam and power for the project.
Key players involved
MagIndustries engaged East China Engineering Science and Technology (ECEC) as the general contractor for the Mengo potash project on 18 March 2013. ECEC subcontracted China Wuyi for the civil engineering works.
Changsha Design & Research Institute of the Ministry of Chemical Industry China was awarded the engineering and design contract for the project. The contractual scope includes the full design, engineering services and procurement assistance associated with the project construction.
As part of the Mengo project, MagIndustries awarded the port facility design contract to China Shipbuilding NDRI Engineering (NDRI). NDRI is responsible for designing the facilities for the operation of a potash export terminal in the New Port area of Point-Noire, including a jetty and trestle, a 150,000t storage facility and other ancillary facilities.
ChangSha Huaxing Construction Supervision was awarded the construction engineering supervision contract for the Mengo project, while BNP Paribas was engaged by MagMinerals as the financial adviser to establish a debt financing package.
SNC Lavalin prepared the final feasibility study for the potash mine, which was assisted by Consolidated Contractors International Company.
South Africa's Engineering and Projects Company (E+PC) was engaged to provide engineering services, while HPD was engaged to provide the design and key equipment for a brine concentration system and a multi-stage crystallisation system.