By Souhail Karam
By Souhail Karam
March 22, 2012 (Reuters)
Office Cherifien des Phosphates (OCP) plans to raise its output of fertilisers by 2020 to 10 million tonnes, from 3.6 million, as Morocco’s top export earner bets on a rapid increase in global demand, company sources said on Thursday.
The state-owned phosphate monopoly also plans to raise mining capacity to 55 million tonnes by 2020 from 28 million tonnes of phosphate rock currently, the sources told Reuters.
OCP aims to complete 65 percent of the planned increases in fertiliser and phosphate mining capacity by 2015, the sources said.
“This expansion plan aims to boost OCP’s role in the Moroccan economy and respond to a speeding increase in global demand for fertilisers,” one of the sources said.
Phosphate demand is expected to increase steadily, driven by rising world population, changing diets and the need to improve agriculture yields in Africa and other developing regions.
King Mohammed on Wednesday launched works for some of the expansion projects which include the new Halassa mine at OCP’s main Khouribga mining site, which will add 6.7 million tonnes to its annual phosphate output capacity from 2013 at a total cost of $240 million.
By 2013, OCP will also add two new phosphate rock washers with a processing capacity of 19.2 million tonnes per year at a total cost of around $710 million.
One of the two washers will be connected to a slurry pipeline that will take the rock to its chemical complex Jorf Lasfar on the Atlantic Coast. This would help OCP reduce its emissions of carbon dioxide by a third, or 900,000 tonnes, the sources said.
The expansion plan will allow OCP to reduce production costs by between 30 and 40 percent in comparable terms, the sources said.
The North African country’s $97-billion economy desperately needs to increase export revenue: The current account deficit soared to its highest level since the 1980s in 2011 due mainly to higher energy and food import bills and growing competition for iits exports, phosphates excluded.
OCP says it already controls around 45 percent of the world market for lime phosphate and over 30 percent of global phosphate exports. It has used its market clout to boost global phosphate prices, OCP officials and foreign traders said.
Compared to their level in 2010, OCP’s exports grew 34.8 percent in value to 48.4 billion dirhams ($5.73 billion) in 2011 while the volume of exports fell 4.4 percent to 15.4 million tonnes, official data shows.
The value of its phosphate rock exports rose 40 percent in value to 12.6 billion dirhams while exported volumes fell 8 percent to 9.42 million tonnes.
Unlike many commodities whose price is determined on futures exchanges, phosphate transactions are mostly negotiated directly between producers and industrial users.
($1 = 8.4509 Moroccan dirhams)
(Reporting By Souhail Karam; Editing by Anthony Barker)