Officials representing the two sides display signed agreements on the potassium exploration project.

Laos to become 4th country in the world in potassium exports

SINO-AGRI POTASH CO., LTD. reported that Laos will be at the top level in the world in the near future after the company recently signed a potassium exploration agreement with the government.
The agreement authorises the company to continue exploring a 48.52 square kilometre site for potassium, and was signed in the presence of leading officials from the Prime Minister’s Office, Ministry of Planning and Investment, Ministry of Energy and Mines, Khammuan province, and Chinese representatives including General Manager Tong Yongheng.
The 48.52 square kilometre potassium ore project is located in Nonglom village, Nongbok district, Khammuan province, and has been incorporated into the company’s resource map. The potassium chloride resources controlled by parent company Asia-Potash International are expected to exceed one billion tons.
A grand opening ceremony for the 48.52 square kilometre potassium ore exploration project was held at the village with over 200 participants, including the Governor of Khammuan province, Director of the provincial Department of Energy and Mines, Nongbok district Governor and other leading officials from central and local government departments, as well as representatives of SINO-AGRI POTASH CO., LTD.
Multiple Rounds of Competition Highlight the Company’s Strength and Asia-Potash Speed
Located in Nonglom Village, Khammuan province and adjacent to the company’s Dongbounenoy mining operation, the 48.52 square kilometre potassium site is one of the two precious potassium ore resources owned by the Lao government in the Savannakhet basin, Khammuan province.

SINO-AGRI POTASH CO., LTD. submitted an application for ownership of the 48.52 square kilometre potassium site in Nonglom village, Khammuan province, in April 2022, and became the ultimate winner after six months of fierce competition with seven enterprises.
On October 27, the company received a notice from the Ministry of Planning and Investment about preparations for negotiations on the exploration agreement, and reached a consensus on this agreement with representatives of related ministries and sectors as well as Khammuan province on November 4.
On November 25, the Prime Minister authorised the Ministry of Planning and Investment to sign an exploration agreement with the company.
On November 27, the company completed the related costs of US$10 million in advance with mineral rights fee and pre-paid resource tax, which can be deducted in the mining phase, and formally signed an exploration agreement with the Ministry of Planning and Investment on November 28.
At the opening ceremony for exploration, the leaders of SINO-AGRI POTASH CO., LTD. said that the first 1 million ton potash project was completed and put into operation in just 17 months. This compared favourably with a construction period of over five to seven years by international counterparts, with SINO-AGRI POTASH CO., LTD. and the government of Laos creating side by side the “Asia-Potash Speed” and “Miracle of Laos”.
At present, the second and third projects to produce one million tons of potash fertiliser are under construction, and are expected to be achieved in line with expectations. The fourth and fifth projects to produce one million tons of potash fertiliser are also under construction after being approved by the Lao government.
Before the Lao government awarded the company 48.52 square kilometre site to mine potassium ore, the Company started exploration preparation work in advance, and increased 37 exploration drilling standards that met the exploration stage to more than 46 exploration drilling standards used for the first mining area in the mining stage. At present, over 23 drilling rigs have been gathered. It is expected that each drilling rig can complete one drilling hole in 25 days and finish all field exploration work in about 50 days.

On the one hand, the series of acceleration is to adjust the conventional construction period including a 2-year exploration period and 1-year feasibility study and environmental impact assessment period to include a 1-year exploration period and 1-year feasibility study and environmental impact assessment period in order to strictly implement the exploration agreement signed between the company and the government.
On the other hand, it is also to strive to achieve the practical operation period including 6 months of exploration and a 6-month feasibility study and environmental impact assessment to advance exploration work by one year.
Essentially, it is the trust and expectation that enterprises have given back to all levels of government of Laos, and can promote the solution of difficulties in the development of the mining industry in Laos, set an example for the development of the mining industry in Laos, and help the current and future economic and social development of Laos.
It is estimated that in addition to the benefits brought by the fixed asset investment during the construction period, the potash project of 1 million tons can also generate annual tax revenue of US$30 million for Laos during the operation period and create jobs for a large number of people.
Khammuan Governor Mr Vanxay Phongsavanh warmly congratulated the official start of exploration and development of the 48.52 km2 potash project, and gave an enthusiastic speech.
“After several rounds of discussion and analysis by the government of Laos, SINO-AGRI POTASH CO., LTD., relying on its outstanding comprehensive strength, has won the bid after defeating many other bidders, which is a recognition of achievements made by the Company in various fields,” he said.
Mr Vanxay said he believed that in order to accelerate the development and construction phase of the project, SINO-AGRI POTASH CO., LTD. will, in accordance with the relevant provisions of exploration agreement, complete project components such as exploration, the feasibility study and the environmental impact assessment within the time limit, thus making full use of the economic value of potash resources in Khammuan province, promoting the economic development of the surrounding area, and improving the livelihoods and well-being of local residents.
He also highly praised the pragmatic and efficient attitude of SINO-AGRI POTASH CO., LTD., with whom the Khammuan authorities are willing to join hands to realise mutual benefits and win-win progress.
To create favorable external conditions for the development of the project, Mr Vanxay has instructed government officials at all levels in Khammuan province to actively improve coordination and support in relation to the project and to properly handle the practical challenges during project construction, so as to ensure the project progresses as planned.
Team Awarded after Obtaining Resources at Low Cost
Potassium ore resources in Laos are mainly distributed in the Vientiane Basin and Khammuan Khorat Basin-Savannakhet Basin. Because of the complicated geological conditions in the Vientiane Basin and the difficulty in mining potash, so far there is no one company that has realised potash production.
On the contrary, potassium ore in the Khammuan Khorat Basin-Savannakhet Basin has no mining obstacles for Tachyhydrite, and the company and Lao Kaiyuan Mining Sole Company Limited have realised the mass production of potash fertiliser.
Therefore, the estimate of potassium ore deposits in the basin has risen sharply.
The estimate of the 35 square kilometre potassium ore mine acquired by the company amounts to over RMB 2.9 billion, and the estimate of the 179.8 km potassium ore mine reaches nearly RMB 5 billion.
As early as 2010, the potassium ore resources of Khammuan Khorat Basin-Savannakhet Basin were divided by shareholders: SINO-AGRI Group and other shareholders, Lao Kaiyuan Mining Sole Company Limited and Vietnam National Chemical Group (Vinachem).
In March this year, the executives of Asia-Potash International got to know that due to long-term non-exploitation (exploration), the 173km potassium ore mine in the hands of Vinachem was taken back by the government of Laos. Of this, a 50km potassium ore mine had been acquired by one company, and there were two resource areas, namely, 48.5km in Khammuan and 74.5km in Savannakhet.
Many investors from various countries began to apply for bidding. Upon this the Company management was instructed to get one or two blocks of potassium ore resources, so that the potassium ore resources controlled by the listed company could reach more than 1 billion tons, thus laying a solid foundation for the Company’s large-scale mining and production. Meanwhile, the resource acquisition cost can be reduced as much as possible.
Upon receiving the instruction, Tong Yongheng, General Manager of the Company, took command personally, and led a team of twelve elites. He then submitted 48.52 square kilometre and 74.5 square kilometre potassium ore rights applications to Khammuan and Savannakhet provinces respectively, worked out the exploration and mining plans of the two blocks of potassium ore mines in detail, submitted many reports to the relevant departments of the two provinces, invited the leaders and relevant departments of the two provinces to visit the Company on the spot, demonstrated the scale and strength of the Company, and tried to give professional solutions to the problems raised.
In addition, the team offered suggestions to the leaders of the two provinces, pointing out that the local economic development of Laos should be based on the mining and development of rich mineral resources, that valuable mineral resources should be developed by investors with development technology and financial strength like the Company, and that only in this way can the deep processing of resources be carried out and the whole industrial chain be built.
What they saw and heard was highly recognised by the leaders of the two provinces, so the application was quickly approved by said provinces, and submitted to the relevant Lao ministries.
At the explaining meeting attended by related ministries and commissions, the team leaders of the Company talked about a lot vigorously, and argued that some competitors raised the bidding conditions, increased the uncertainty of future mining and affected the long-term interests of the Lao government.
Then, as a result, some competitors’ strategy of raising bidding conditions came to a failure, and the bidding cost of the Company was controlled at a quite low level.
In this agreement, it is specified that the company will pay US$10 million, of which US$4 million is the prepaid resource tax, which can be deducted in the mining stage. In fact, the acquisition cost of the 48.52 km potassium ore mine is only US$6 million, plus the detailed exploration cost of RMB20 million, and the comprehensive cost is more than RMB60 million, which is over 40 percent of the cost of the listed company to purchase the 35 square kilometre potassium ore mine.
On this basis, it can be concluded that this team saved the company nearly RMB3 billion.
Therefore, Asia-Potash International decided to spend RMB3 million to reward the meritorious team headed by General Manager Tong Yongheng, hoping that they would make further efforts to create more value for the Company and enrich the Company resources continuously.
It is reported that the application for the mining rights to 74.5 square kilometres of potassium ore in Savannakhet has been submitted to the relevant ministries and commissions of Laos, and it is currently in the process of examination and approval. They are expecting more good news!

By Times Reporters
 (Latest Update December 6, 2022)