Alliance News
By George Collard
Potash miner Emmerson PLC has identified a potentially “strong” economic case from selling de-icing salt from the Khemisset project, it said Tuesday.
The salt would be a by-product from Khemisset, which is primarily a project for potash, used in fertilizer. It is located in northern Morocco.
Emmerson expects the project could produce over 4.6 million tonnes a year of high-grade salt, with a conservative estimate suggesting 1 million tonnes a year of sales to the “large” US market.
This by-product business could add USD133 million to Khemisset’s post-tax net present value, which is currently an “already outstanding” USD1.14 billion.
Emmerson is in talks with “suitable groups” with knowledge of the market, and the next steps would be market studies, product specification reviews, and integrating a by-product business into the project’s design.
Chief Executive Hayden Locke said: “The preliminary economic assessment shows strong potential for a viable by-product business selling salt from Khemisset into the large US de-icing salt market.
“Based on historical received prices for incumbent producers, we see the potential for an additional USD25 million of post-tax cash flow, on average, during steady state operations assuming sales of 1 million tonnes of salt per annum, less than 25% of the total by-product produced.”
“The East Coast US de-icing salt market is currently supplied predominantly from Chile, Mexico, and Morocco and our analysis shows we have a strong transport and logistics advantage which will allow our salt sales to be competitive into this large market.”
“The company continues to rapidly advance the outstanding Khemisset potash, and we will continue to look at other value-adding opportunities as we move towards construction and production,” he added.
Emmerson shares were 2.3% higher on Tuesday in London at a price of 4.09 pence each.
By George Collard; georgecollard@alliancenews.com
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