Morocco-focused potash development company Emmerson undertook considerable work in the fourth quarter of 2022 to progress discussions with regard to the environmental approval of the Khemisset project, CEO Graham Clarke says in a corporate and operational activities update for the period, published on January 9.
At the end of the third quarter, the company announced that it had renewed its strategic investment for a further 12 months and had strengthened its balance sheet with the raising of a further $6.1-million, which will fund its planned activities in 2023 ahead of construction.
“A number of important issues that had held up progress have been resolved and discussions have moved onto the specifics of the project’s water management, which is a key area of concern in Morocco following low rainfall in recent years.
“Our proposals, including specific revisions, are robust and I am cautiously optimistic they will be accepted, but the timing of approvals is in the hands of the Moroccan authorities,” Clarke outlines.
Emmerson’s priority is to secure the necessary environmental approvals from the Moroccan authorities for Khemisset. As Khemisset will be the first potash mine in Morocco, the authorities have sought to ensure all aspects of the project comply with the highest standards.
Emmerson says it has always emphasised the economic benefits of the project to local communities, as well as the strategic importance of building a new source of potash in Morocco. These aspects have been widely acknowledged and the project has received significant support both in Morocco and in the UK, the company avers.
Over the course of 2022, Clarke says, Emmerson has been able to address a number of the wider issues relating to the project, in particular its potential impact on local and neighbouring communities and businesses. Discussions have progressed more specifically onto matters concerning the project's water management.
Foremost among these is the confirmation of the capacity to use recycled water from the Khemisset wastewater treatment plant, instead of drawing fresh water direct from the Ouljet Essoltane dam. This revision, developed in conjunction with Reminex, is said to considerably mitigate risks around water supply levels during dry periods.
Emmerson has also decided that a dry tailings system will be employed at Khemisset to reduce water consumption and essentially eliminate any risk of saline fluid outflow in the event of an extreme rainfall event.
The finer technical details of the above, and other specific areas, continue to be reviewed by the environmental and water agencies.
Clarke indicates that work in other areas has continued. The company’s technical workstreams, which include key elements relevant to water management such as sourcing water and tailings facilities, are nearing completion, and the company was also able to sign memoranda of understanding for about two-thirds of its potash production on a take or pay basis.
Discussions with financiers continue and Clarke posits that environmental approvals will unlock progress, particularly on the equity side.
Potash prices fell back in the fourth quarter from historic peaks but remain well above long-term averages, Emmerson notes.
Liberum Capital has been appointed as nominated adviser.
