Israel Chemicals Ltd. (ICL) is acquiring all of the shares of Allana Potash that it does not already own in a friendly transaction valued at about C$137 million. Prior to announcing the agreement, ICL owned 16.36% of Allana’s shares. Allana is developing the Danakhil potash project in Ethiopia (E&MJ, April 2015, p. 18).
Allana has reported positive results from a feasibility study of production of 1 million mt/y of muriate of potash (MOP) and from a preliminary economic assessment of production of 1 million mt/y of sulphate of potash (SOP) at Danakhil. ICL’s purchase of its current interest in Allana in 2014 included an off-take agreement giving it the right to purchase 1 million mt/y of potash produced at the Danakhil mine.
ICL currently produces potash at mines in Israel, Spain, and the United Kingdom and in 2014 sold more than 5 million mt of potash to external customers worldwide. The company’s announcement of its agreed transaction with Allana stated that the acquisition is in line with a corporate strategy to broaden its sources of raw materials while reducing its production costs and focusing on high-growth emerging markets. Following the acquisition, ICL expects to accelerate pre-construction engineering design work on the Danakhil project while it secures financing for the project.