Moroccan Potash Hopeful Wins London. Now It Has to Build Mine

CASABLANCA (Capital Markets in Africa) – Potash developer Emmerson Plc staged a strong return on the London Stock Exchange — its shares surging 62 percent on the first day of being re-admitted as the miner set its sights on a deal with Moroccan fertilizer giant Office Cherifien des Phosphates.

The Isle of Man-based Emmerson, which is building the Khemisset potash mine in northern Morocco, was re-admitted to the LSE after raising 6 million pounds ($8 million) from the sale of 200 million new shares. On Monday, the shares traded at 3.65 pence, compared with the offering price of 3 pence each.

Emmerson is banking on Khemisset to attract the interest of OCP, the world’s largest phosphate rock producer, to ensure solid returns after its absence from the bourse, Chief Executive Officer Hayden Locke said in an interview.

“OCP is the clear potential customer for us,” Locke said. “They control the phosphates. What they don’t control is the K,” he said, referring to the symbol for potash.

OCP has a “good relationship” with Abu Dhabi National Oil Corp., the state oil producer which has access to nitrogen, he said, adding that Emmerson plans to start output at Khemisset in mid-2022 with production reaching 700,000 to 1 million metric tons a year over 20 years.

Potash, phosphate rock and nitrogen are the three nutrients that are crucial for the health of crops. The market is dominated by just a handful of companies and a reduction of mine capacity helped to support prices last year.

Emmerson will invest $200 million to $300 million on the Khemisset mine project after construction begins, Locke said.

Source: Bloomberg Business News