The Northern Australian Infrastructure Facility (NAIF) has approved a A$140m ($108.58m) loan to fund the development of Australian Potash’s A$208m ($158.5m) Lake Wells sulphate of potash (SoP) project in Yilgarn Craton, Western Australia.

With a 17-year tenor, the loan facility will be subject to commercial and project conditions precedent.

The investment decision by NAIF follows completion of a comprehensive process of due diligence involving the independent technical and market experts of the project.

Located approximately 500km north-east of Kalgoorlie, in Western Australia’s Eastern Goldfields, the Lake Wells Sulphate of Potash is estimated to hold 3.6 million tonnes (Mt) of proven and probable SOP reserves and about 18.1Mt of SoP in measured and indicated resources.

Australian Potash managing director and CEO Matt Shackleton said: “We are very pleased to advise the first major step in financing the development of Lake Wells, with the board of NAIF resolving to support this regionally important project that returns strong social and economic benefits.

“Approximately 30% by value of the construction engineering, procurement and construction contracts will be awarded to companies in Northern Australia, and 20% by value to Indigenous companies and joint ventures.

“Lake Wells is a substantially de-risked, technically sound, low cost and socially responsible project that will deliver a premium product for at least thirty years.”

Last month, Australian Potash secured full environmental approval for the Lake Wells SoP project from the Western Australian Government.

The company said that Western Australia Minister for Environment Stephen Dawson has conveyed to it the statement that a proposal could be implemented for the project.

Australian Potash said that all decision-making authorities have been advised that they can move ahead with issuing of the licenses and permits needed to start development.