What does the company do?
The company has been led by chief executive Graham Clarke since the start of July 2020.
Clarke, who has 26 years’ experience in underground potash mining, brings a wealth of experience in building and operating teams to deliver large, complex projects in the fertiliser industry.
Details on the Khemisset potash project
The feasibility study valued the Khemisset project at US$1.4bn on a post-tax net present value basis, and estimated an internal rate of return of 38.5% over an initial 19-year mine life.
This initial mine life is based on a mine plan that so far addresses only 43% of the total mineral resource, which comprises a total of 537mln tonnes with an average grade of 9.24% K2O.
Khemisset’s pre-production capital cost for potash production only is estimated at US$387mln.
Significantly, that marks the project among the lowest-cost projects in the fertiliser space and puts it at less than half of the global peer average for capital intensity.
The future economics estimate underlying profits (EBITDA) above US$300mln per year, which suggests less than 2.6-year capital payback.
For an additional US$24mln of capital, a salt plant could be added to the project to produce de-icing salt for sale into the US east coast market.
This envisages peak production at 810,000 tonnes per year for Khemisset as a whole, producing agriculture sales grade (k60) muriate of potash (MOP) plus 1mln tonnes a year of de-icing salt.
The average steady-state production rate is anticipated at 735,000 tonnes per year of K60 MOP and 1mln tonnes of de-icing salt.
What’s been happening
In January 2021 Emmerson PLC received a mining licence for Khemisset.
The licence provides the company with the exclusive right to develop and mine the potash deposit in the Khemisset basin, ahead of the anticipated initiation of construction by the end of 2021.
The grant of the licence follows a successful application process including the submission of a proven, JORC compliant, resource estimate and the confirmed technical and economic viability of the project, which was satisfied by the feasibility study.
This study highlighted Khemisset’s outstanding attributes, including industry leading capital and operating costs and delivered an initial mine life of 19 years, based on less than 50% of the global resource base for the project.
Emmerson’s interim results in September showed that it made a £315,000 loss in the first half of 2020 and ended June with £793,000 of cash and equivalents in the bank.
From the chief exeutive
“This is another major milestone in the development of what is to become the first large scale potash mine in Africa. We are grateful to the Ministry that provided considerable support, greatly assisting us throughout the application process,” said chief executive Graham Clarke.
“By producing up to 800,000 tonnes of potash per year, for export or domestic consumption, Khemisset is forecast to deliver considerable economic benefits to our stakeholders including an anticipated 1% increase to the national tax revenues of Morocco. At the local level, the benefit to our stakeholders is even more important, with an estimated 40% increase to the local area GDP.”