The privately owned Leichhardt Industrials has ticked another box on its path to filling a looming gap in the global supply of high-grade chemical salt.
The Resource Capital Funds-backed company this week completed a pre-feasibility study on its $280 million Eramurra salt project, 55km south-west of Karratha.
Leichhardt sees Eramurra as a 2.2 million tonnes a year producer of chemical salt, about half the scale of BCI Minerals’ proposed 4Mtpa Mardi salt project to the south-west, which will also comprise a 100,000tpa sulphate of potash component.
German giant K+S is another company looking to muscle in on established salt players in the Pilbara, which include Rio Tinto’s Dampier Salt and Japan’s Mitsui.
The trio are expecting asupply shortage in the global chemical salt market, which research firm Roskill predicts could blow out to 20Mt a year by 2027, driven by growth in demand from Asia and primarily China. Industrial salt is used to produce chlorine and caustic soda for PVC, polyester, plastic, paper, rubber, glass, dyes and other industrial products.
Australia is already the world’s biggest exporter of industrial salt, given its proximity to the booming Asian markets and that the Pilbara is one of the best places in the world to produce the commodity.
Besides having abundant access to sea water, the Pilbara coast is very hot and extremely dry with high evaporation rates, making it ideal for salt production.
The salt is produced by pumping sea water into evaporation ponds, with nearly all the energy required derived from sun and wind.
Leichhardt managing director John Canaris noted almost no new salt projects were due to come online anywhere in the next few years and bringing on fresh capacity took time. “We’ve passed through a kind of ‘peak-salt’ with growth in demand already surpassing supply capacity,” Mr Canaris said.
“This situation is being echoed by independent overseas commodities forecasters who have published projected market shortfalls equivalent to at least double Australia’s current production, by the time Eramurra is in first production.”
Leichhardt is tapping the expertise of German industrial minerals advisers ConSalt, which is also a significant shareholder.
The company hopes to export its product through port facilities it plans to build at Cape Preston East.
In January, Leichhardt began the process of securing environmental approval for Eramurra.
Its next step is a bankable feasibility study for Eramurra, with a view to the project being in production in 2025.
Leichhardt boasts former Anaconda Nickel geologist Richard Monti, a friend of Andrew Forrest, as a director, while former Dow Chemical boss Andrew Liveris is on the board of parent company Tracker Global.