Centrex (ASX:CXM) inks agreement towards mining phosphate-rich Banaba Island

• Centrex (CXM) inks a first-stage agreement with a Pacific government entity to work towards recommencing phosphate mining on Banaba island
• Banaba island’s nearest neighbour is Nauru, more than two hundred kilometres away
• Historically the island saw 21Mt of phosphate mined between 1900 and 1980
• Centrex’s Agriflex became the first-ever Australian company to ship phosphate to Asia earlier this year
• Shares last traded at 11 cents

Centrex (CXM) has taken steps toward a mining agreement with the government of Kiribati, initiating an early-stage accord to commence mining operations on Banaba Island.

The company, through its subsidiary Agriflex, is already engaged in phosphate exportation. Earlier this year, it executed its inaugural shipment of Australian phosphate to Asia, supplying a South Korean buyer.

Banaba island is part of the Micronesia region and governed by the Republic of Kiribati, however, today’s agreement is inked with the ratified Rabi Council of Leaders, based in Fiji.

Historically, the island – some six square kilometres in size and some 250 kilometres from Nauru – was once a phosphate mining hotspot. The Australian and British governments historically took an interest in the island.

For 80 years from 1900 to 1979 mining activities continued on Banaba, producing overall an estimated 21 million tonnes of phosphate at grades of 38 per cent.

While the company does not expect to immediately begin pouring cash into the Banaba island prospect, favouring instead its flagship QLD-based Ardmore phosphate project.

However, Centrex remains interested in remnant phosphate deposits still present on the island. Two main types of phosphate mineralisation remain extractable on the island.

“Historically, Banaba was one of the highest-grade phosphate deposits mined in the world … the potential return to mining on Banaba, ironically, provides a much- needed catalyst for its potential rehabilitation and this is why the Rabi Council of Leaders has agreed to Centrex’s proposal,” CXM Managing Director Robert Mencel said.

“Our objective is to demonstrate that significant remnant phosphate remains on Banaba that can be economically mined to satisfy increasing global demand for high-grade phosphate.”

Mr Mencel has formerly led the Republic of Nauru’s RONPHOS corporation, which gives the C-Suite considerable past exposure and knowledge regarding phosphate mining in the Pacific context.

He also highlighted a history of undesirable mining practices on the island and reiterated the company’s focus on ESG objectives.

As part of the agreement signed today, Centrex will prioritise local workforces and allow environmental monitors to regularly assess any potential works. The company’s next step is to ink a deal with the Republic of Kiribati to allow future activities on the island.

CXM shares last traded at 11 cents.