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Toronto – Morocco’s market share in phosphate production will steadily increase in the years leading up to 2021 as China sees its share slow, stated a report released on Wednesday from BMI Research, a Fitch Group company.
Although China will continue to dominate the industry globally, it will see an unspecified portion its market share lost to Morocco due to the Kingdom’s “strong pipeline of projects and the largest global reserves.”
According to the report, “Forecasts from the International Fertiliser Industry Association (IFA) suggest that phosphate rock and phosphoric acid production will grow by about 10 percent and 12 percent respectively between 2016 and 2021, with large capacity additions in Morocco and Saudi Arabia.”
Morocco currently account for 73.5 percent of the world’s 68 billion tonne total phosphate reserves. The report adds that the “IFA claims that between 2017 and 2021 the fertiliser industry will invest close to USD110bn in more than 65 new production units of phosphate, potash and nitrogen, increasing global capacity by 90 million tonnes of products.”
Over this same period, BMI predicts that China will continue to lose ground due to “unprofitable operations and more stringent environmental regulations consolidating the industry.
Two of China’s four largest phosphate producers, Yuntianhua Group and Hubei Yihua Group, forecasted that “their 2016 losses are expected to total USD465mn and USD160mn, respectively.” At the same time, the Chinese government reported that “70% of domestic producers were unpro?table in 2016.”
US phosphate production will remain largely unchanged leading up to 2021, despite a predicted increase at the end of 2017, due to a decrease in the cost of raw materials.
The Moroccan Story
Phosphate production in Morocco accounts for 90 percent of the domestic mining industry activity. The kingdom possesses over 50 billion tonnes in proven phosphate reserves, with only 30 percent of the country having been surveyed. Consequently, the report highlights there is room for enormous potential.
The largest player in the game is Office Cherifien Des Phosphates (OCP). It owns three main Phosphate rock deposits, in at Khouribga, Ghantour and Boucraa. The Khouribga site is the biggest producer, offering 18 billion tonnes per year.
In March, OCP announced a USD 370 million investment to develop the world’s largest phosphate pre-treatment plant at Oulad Fares. In addition to this, OCP announced it would use USD 1.8 billion to finance two new projects in the Beni-Mellal-Khenifra region. The result of these projects is expected to represent an increase in production at Khouribga, causing an output of 38 million tonnes by 2025.
These projects, combined with Morocco’s aggressive strategy of economic expansion into Sub-Saharan Africa guarantee a healthy boost in Morocco’s market share of the global phosphate industry.
