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Emmerson’s potash in Morocco important for Africa

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Potash is a critical ingredient that improves crop yield, increase resistance to plant disease and heighten water retention. Image credit: Gabriel Jimenez from Unsplash

Emmerson’s potash in Morocco important for Africa

Although potash is an essential element in fertiliser and demand for the product is at an all-time high, London based Emmerson’s Khemisset mine in Morocco will be the first large producing potash mine in Africa. Emmerson announced its first offtake agreements recently.

Current farming methods in Africa continues to strip potassium out of the soil faster than it is replaced with fertiliser. Potash is the common name given to a group of minerals and chemicals that contain potassium (chemical symbol K), which is a basic nutrient for plants and an important ingredient in fertiliser. Most potash is produced as potassium chloride (KCl).

According to a study by the Newcastle University in the UK, African farmers are replacing just 10% of the potassium being removed with each harvest, creating “a recipe for disaster.”

The study states that potash is plentiful in the Northern Hemisphere, where producers in Canada, Belarus, and Russia dominate the world market.

“Three countries thus produce more than 70% world’s potash, with little or no production in Africa, South Asia, and Australasia. Potash shortages affect parts of the Southern Hemisphere from Africa, to Brazil, to India and China.”

Demand for potash is high because there is not enough potash going onto the land. According to some estimates the world’s production of potash would have to double to meet current demand.

Potash is one of three main fertilisers needed for farming. The others are nitrogen and phosphorus. About 95% of the worlds potash in used on farms to fertilise the soil. Potash is a critical ingredient that improves crop yield, increase resistance to plant disease and heighten water retention.

In addition, potash is a component of feed supplements used to grow livestock and enhance milk production.   

Emmerson signs MOU (Emmerson’s potash in Morocco important for Africa)

Moroccan-focussed Emmerson’s signing of a Memorandum of Understanding (MOU) relating to the offtake of potash and salt, to be produced at its Khemisset mine in Morocco, is thus an important announcement in the African fertiliser fraternity.

The MOU was signed with Keytrade, a global fertiliser trading company, and the diversified commodity trader Hexagon Group. The agreement with Keytrade includes the sale of a minimum of 245,000 metric tonnes per year of Muriate of Potash (MOP) for a period of ten years, and with Hexagon for the sale of a minimum of 245,000 metric tonnes per year of MPO and a minimum of 500,000 metric tonnes per year of salt products (NaCI), both for a period of ten years.

According to Graham Clarke, CEO of Emmerson, the prices for MOP (minimum of 60% K2O) and NaCl are expected to be derived from the market or as quoted in independent expert reports, such as Argus Research, averaged to form a monthly price in the month prior to bill of lading, and after deducting a marketing fee.

Importantly, the MOUs contemplate “take or pay” provisions whereby the off-takers will market the product to end users and compensate the company for any quantities not taken by end users or otherwise sold by the off-takers.

The MOUs envisage that all MOP and salt products sold will be delivered Free On Board (currently Casablanca, Morocco), unless otherwise agreed by the parties.

“We continue our process of advancing towards construction readiness at Khemisset.  These MOUs are an important milestone in this process and will account for more than 65% of MOP production and 50% of salt production.

Underpinning a significant proportion of future potash and salt sales on a take or pay basis is a strong endorsement for the project, de-risking the development for debt and other financiers.

They are also a clear signal of the critical importance of potash in the context of international food security, and we look forward to advancing further negotiations as we continue to lay the foundations for establishing Africa’s first commercial potash mine,” says Clarke.

Emmerson’s potash in Morocco important for Africa

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Emmerson’s potash in Morocco important for Africa

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