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Rabat – Global mining company, Emmerson Plc, secured a strategic investment of up to MAD 423 million ($46.75 million) to support the development of a potash plant near Khemisset, 94km away from Rabat.
London Stock Exchange indicated in a press release that the main investor in the Khemisset Potash Project is Global Sustainable Minerals Pte Ltd, a Singapore-based investment vehicle backed by a significant Southeast Asian investor.
The investment consists of an immediate direct investment in shares of MAD 61 million ($6.75 million), and a loan of MAD 362 million ($40 million) convertible into shares.
The financing will allow Emmerson to accelerate pre-construction activities in Khemisset and prepare to begin the full construction in 2022.
A general meeting of shareholders will be held on December 6 to approve the terms of the convertible loan note and the issue of conversion shares and warrants.
With Morocco’s position as an emerging regional leader and a gateway to Africa, the Potash Project will bring substantial social and economic benefits to the region of Khemisset.
Graham Clarke, CEO of Emmerson, highlighted that Moroccan stakeholders are showing constant support “as we move the project into the execution phase and develop it for the benefit of all of our stakeholders.”
The company plans to invest more than $500 million over the project’s first 19 years to create over 2,000 jobs and establish a long-term beneficial partnership with Morocco, Clarke noted.
The mine could possibly generate 1 million tonnes of de-icing salt and up to 735,000 tonnes of muriate of potash.
As salt is a by-product of potash production at the Khemisset Project, its operational costs are relatively low.
The company aims to be a very competitive producer in the US market on a delivered cost basis.
Global Sustainable Minerals Pte Ltd highlighted Morocco’s dynamism, the quality of its infrastructure, and its position as “a global leader in fertiliser that is playing a growing role in the development of African agriculture.”
The Khemisset project initially aims to take advantage of the expected strong growth in demand for potash fertilizers on the African continent.
Tangier and Casablanca’s ports location means that the project will receive a premium netback price compared to existing potash producers.
The plant is considered Africa’s largest potash project and has the potential to be among the world’s least expensive potash processing projects.
Golder Associates completed a feasibility study on the project, stressing that Morocco comes with an “incredible low pre-production capital cost of MAD 3.5 billion ($387 million), less than half of its global peer average capital intensity.”
