Agrimin’s Mackay Exit Highlights Risks in Australian Potash Development

Strategic Review Uncovers Market and Cost Challenges

Agrimin Limited (ASX, AMN) has announced the conclusion of its strategic review of the Mackay Potash Project, a major undertaking initiated earlier this year. The review was prompted by a tough capital markets environment for Australian sulphate of potash (SOP) projects, which has dampened investor appetite and raised questions about the project's viability.

Despite securing environmental approval from the Western Australian government in January 2025, Agrimin faced a protracted approvals process and significant inflationary pressures on mining development costs. These factors, combined with recent failures of other SOP projects in the region, have made it difficult to attract funding from both conventional and strategic investors.

No External Funding Offers and High Holding Costs

During the review, Agrimin engaged extensively with key stakeholders but received no offers to purchase or fund the project’s advancement. This absence of external interest leaves the company with the burden of ongoing tenement rents and shire rates, which are notably high given the project's vast brine-hosted mineral tenement package spanning over 3,000 square kilometers.

These holding costs, coupled with the uncertain medium- to long-term outlook for evaporative SOP projects, led the Board to conclude that continuing to allocate capital to Mackay is not in the best interests of shareholders. As a result, Agrimin plans to withdraw from the project by surrendering several exploration licenses and withdrawing its Mineral Resource and Ore Reserve statements.

Commitment to Environmental and Native Title Obligations

While stepping back from the project, Agrimin has committed to maintaining full compliance with environmental and native title obligations. Rehabilitation activities are ongoing in consultation with native title holders, and the company will initiate discussions to responsibly conclude the Native Title Mining Agreement related to the project. Deferred tenement rents are scheduled to be settled in January 2026.

Shifting Focus to New Mineral Opportunities

Looking ahead, Agrimin is pivoting its exploration efforts towards non-potash minerals in the West Arunta region of Western Australia. The company intends to retain portions of its current exploration licenses that cover untested strike extensions near WA1 Resources Ltd’s Luni niobium deposit. Recent geophysical surveys by the Geological Survey of Western Australia are expected to enhance the quality of magnetic data available for these areas.

Additionally, Agrimin is exploring potential new tenure acquisitions in other promising mineral provinces across Australia, leveraging its strong track record and operational capabilities in remote exploration. The company remains well-funded with $2.3 million in cash as of September 30, 2025, following a successful equity raising earlier this year.

Beyond exploration, Agrimin continues to hold significant investments in related companies, including a 40% interest in Niobium Holdings Pty Ltd and substantial shareholdings in WA1 Resources Ltd and Tali Resources Ltd.

With the Mackay Potash Project now behind it, Agrimin’s strategic recalibration signals a cautious but focused approach to navigating the evolving mining landscape in Australia.