Liberty Metals & Mining Holdings LLC, a subsidiary of Boston-based Liberty Mutual Insurance (LMM) has acquired 25 percent of the shares in Yara Dallol BV (Yara Dallol) for $51.25 million. Yara’s share of the proceeds is $35.4 million.
On Feb. 13, Yara confirmed the feasibility of extracting potash in the Danakil depression in North-Eastern Ethiopia. Following this transaction Yara will hold 51.8 percent of the shares, LMM 25 percent and XLR Capital Ltd. 23.2 percent 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 mt sulfate 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 $740 million and cash cost at $167/mt delivered (fob) Djibouti, among the lowest in the industry.