Ann: Scoping Study for the Colluli Potash Project, page-5

re: Ann: Scoping Study for the Colluli Potash... Sam,
You will find that Allana Potash cost estimates are highly optimistic as they assume that their potash will be transported by rail to Djibouti port. This rail link depends on finance and to certain extent whether BHP discovers potash as well. BHP holds a large block of undrilled ground just to the southeast of the Allana’s lease. Some recent media reports have suggested that India may provide $300M to assist in development of this rail line, but it could take at least 6 (and very likely much longer) before this rail line is actually built. In the meantime, Allana is proposing to truck their potash 700km to Djibouti. With trucking costs being typically in the range of $0.07 - $0.09/tonne/km it means that their transport costs would add about $50/tonne. STB in comparison has trucking distance of just 75km.