Emmerson PLC (LON:EML) chief executive, Graham Clarke has outlined the company’s position in a letter to shareholders.
“Emmerson has continued to flourish safely,” he said in the letter. “Key milestones were achieved during 2020. The coming year is looking no less busy as we advance our exciting Khemisset potash project towards construction and production.”
The first half of 2020 was focused on the delivery of a feasibility study and its various workstreams to assess and select a “go-forward” case to take into more detailed engineering work.
The results of the study were announced June 1, 2020, and confirmed that Khemisset has the potential to be a world-class, low capital cost, high margin potash mine, which is a very rare asset in the global fertiliser industry.
“Throughout the year, we continued constructive discussions with several potential strategic partners, debt providers and anchor investors for the future development of the project,” continued Clarke.
“These discussions covered potential financing options as well as potential technical partnerships including engineering, procurement and construction contractors. Given its industry-leading low capital costs and strong margins regardless of the potash price, we believe Khemisset is one of the most strategically valuable potash projects globally.”
He added that the company’s vision remains in “being the first and leading potash producer in Africa”.
Africa is the continent expected to benefit most from increased food production in the medium term, both as an engine of export and to keep track with the needs of its fast-rising population.
In addition, a socio-economic study in August highlighted the benefits that the project will deliver on a local, regional, and national level. This suggests that once fully operational, the project will create 760 direct jobs, increase Moroccan mineral exports by 8% and generate up to US$63mln a year for the Moroccan government in taxes.
Now that 2021 has rolled around, it is full steam ahead, according to Clarke. The company is moving Khemisset towards “shovel ready” status with a view to commencing construction by the end of the fourth quarter of this year.
“To this end, we anticipate being granted our mining licence in the first half of 2021, along with the environmental permit. Furthermore, several workstreams are underway including operational capability build-out, additional technical work and project de-risking, front end engineering and design and financing, which we are confident to have in place by the third quarter of 2021.”