Mining company Highfield Resources Limited, specialised in the extraction and processing of potash, has reached an agreement with Yankuang Energy Group and a group of strategic investors that, in addition to boosting its business worldwide, will enable it to finance the first phase of its Muga project, located between the communities of Navarre and Aragón.

If the transaction proposed in the agreement is completed, the entry of the new partners will inject $220 million into Highfield's share capital, which is expected to be used to finance the Spanish project. In return, Highfield has agreed to acquire another potash mining and processing project in Canada from Yankuang Energy. This second operation would be undertaken through the acquisition of 100% of Yancoal Canada, a subsidiary of the Chinese group.

Majority shareholder
The operation of the two projects would add up to a production capacity of 3.8 million tonnes of potash per year, and  could make Highfield one of the world's top ten producers of this potassium-rich salt, which is used as a fertiliser. Once the deal is finalised, Yankuang Energy will become the majority shareholder of the Australian company.

Highfield has now completed the initial preparatory work on the Muga project and has received all the required permits and licences. Located some fifty kilometres from Pamplona (Navarre), it is divided between the Aragonese town of Undués de Lerda and the  town of Sangüesa in Navarre. The potash deposits cover an area of about 250 square kilometres.

Shallow mineralisation
The project has certain features that reduce extraction costs and make it particularly interesting for the company. These are shallow mineral deposits with no overlying aquifers, so there is no need to construct a shaft. The region does in addition have a high-quality and easily accessible infrastructure.

The chosen area is on the other hand an agricultural region that suffers from a clear deficit in potash supply, according to Highfield, which alluded to the invasion of the Ukraine to highlight the strategic value of the Muga project for both Spain and the European Union. The processing plant, for which it already has a construction licence, will be located in Navarre.

^{Photo: Highfield Resources}