Israel Chemicals (ICL) has entered into a strategic alliance with Canada’s Allana Potash for the development of a new mine in northeast Ethiopia. There have been reports of a possible deal between the two companies for several months.
Under the terms of the agreement, ICL will invest $23 million in Allana and will hold approximately 16 percent of the company, and has an option to increase its stake up to 37 percent based on warrants that are part of the units it is purchasing. Allana is traded on the Toronto Stock Exchange.
ICL said it will support Allana and provide technical assistance in the development and operation of the Danakhil potash project in the Dallor region of Ethiopia. A feasibility study indicates that the mine will produce one million mt of potash within five years. ICL also said that the alliance includes an off take agreement between the parties whereby ICL will purchase and market the output of the mine.
ICL currently produces 5 million mt/y of potash from facilities in Israel, Spain, and Britain.