Fertiliser hopeful Kropz (KRPZ) has gone back to the drawing board for the Elandsfontein mine restart in South Africa and taken a $49m (£40m) impairment hit on the decision.
The company only listed in London in November on the back of its plan to re-open the 74 per cent-owned mine. In a June update Kropz said production would be delayed until the end of 2020 and cost $20m more than the initially-forecast $16m startup cost. It initially said the mine could open again by the end of 2019, at a rate of 1.2 million tonnes a year of 31 per cent-purity phosphate rock concentrate. The share price is now down 78 per cent since the IPO, to 9.5p.
The problem at Elandsfontein now is the grade of the phosphate product, which is too low to make a profit at current prices. The company also said the orebody was “complex” and grade variability was a challenge.
The added time and cost of further test work and the weak market have led to the $49m impairment, which is about half the carried value of the company's property, plant and equipment assets as of December 31.
The company did not give a new forecast for production, saying more test work was needed to determine a commissioning timetable and cost.
