Highfield Resources secures contract to develop Muga potash project

Highfield Resources has finalized a €48mn ($52.48mn) contract with the joint venture EPOS-TUNELAN for the construction of the declines and essential underground infrastructure at the Muga-Vipasca potash project in Spain. The announcement follows the completion of an updated feasibility study in November, and represents a significant fraction of the phase 1 capital expenditure and the overall contract construction budget.

The CEO of Highfield, Ignacio Salazar, described the contract as a major milestone, saying that it will enable the team to soon begin constructing the main facility at Muga. The initiation of construction is pending the completion of funding and a Final Investment Decision (FID), with works expected to commence in the current semester.

The strategic contracting approach for Muga-Vipasca involves an owner-managed model, with declines and underground mining infrastructure executed by EPOS-TUNELAN. The choice of this joint venture takes advantage of EPOS’s extensive international experience and TUNELAN’s deep understanding of local Spanish construction standards and practices. The 26-month construction timeline aligns with the project’s overall schedule, and stipulates local employment for the construction teams.

The contract encompasses the construction of two parallel declines to access the potash deposit, the crosscuts, the bypass galleries for ventilation, and the necessary surface and underground facilities for operations. This includes water management systems, conveyor belts for ore transfer, and rooms for electrical and backfill transfer.

The design and engineering expertise is provided by Systra-Subterra, with continued technical support during construction. Negotiations are also underway to procure suitable equipment for both construction and mining operations, with a focus on sourcing roadheaders, trucks, loaders, and bolters.

The Muga potash project looks poised to become a source of critical fertilizers, and will benefit from its strategic location within the western European market.