SRBG to Buy Major Potash Mine in East Africa for $166 Million

Image source: China Visual

BEIJING, October 5 (TMTPOST)— Sichuan Road and Bridge Group Co. Ltd. (SRBG), China’s state-owned infrastructure construction firm, is planning to acquire a 50% stake in a major potash mine in East Africa from Australian fertilizer developer Danakali Ltd. (DNK) for $166 million in its latest push into the mining industry, the latter said in an announcement on Monday.

The potash company is called Colluli Mining Share Company (CMSC), which owns the Colluli potash project in the region. DNK and the local Eritrean National Mining Corporation (ENAMCO) each currently holds a 50% stake in the CMSC.

The deal is expected to be completed in the second quarter of 2023. After the transaction, SRBG will jointly promote the development of the Colluli project with ENAMCO in the future.

The SRBG primarily engages in infrastructure construction in the Chengdu-Chongqing economic circle. In the first half of the year, SRBG achieved revenue of 44.35 billion yuan ($6.23 billion), a year-over-year increase of 30.6%. The net profit attributable to the parent company was 3.659 billion yuan ($514 million), a year-over-year increase of 42%. Cash and cash equivalents reached 11.9 billion yuan ($1.67 billion), down 3.2% year on year.

During the 14th Five-Year Plan period (2021-2025), SRBG aims to diversify its business by entering the mining and clean energy sector in line with China’s goal of building a green, low-carbon system. The company has been building a green mining and lithium industry chain since 2020 through acquisitions and investments.

SRBG already has a copper project under development in Eritrea. In 2016, SRBG and the Eritrean government jointly invested in the Asmara copper project, which, according to China ENFI's calculations, has a total investment of US$599 million and contains 470,000 tons of copper metal, 1,123,000 tons of zinc, 25 tons of gold and 755.3 tons of silver.