LSE-listed Morocco-focused potash developer Emmerson is in the process of assessing a conceptual and staged development for its 100%-owned Khemisset potash project, aimed at reducing upfront capital costs and incorporating expansion options into the development plan of the project.

Emmerson recently received the mining licence for Khemisset, providing it with the exclusive right to develop and mine the potash deposit in the Khemisset basin ahead of the anticipated initiation of project construction by the end of the year.

The licence puts Emmerson in a position to start construction this year, finance permitting.

Building on a feasibility study, the company will complete a concept study examining the potential to develop Khemisset using a stage approach, reducing upfront capital costs and execution risk, while also planning out additional stages of expansion for the project to ensure that its economic value is fully developed.

The updated development strategy aims to fast-track salt sales expansion, sulphate of potash (SoP) development and muriate of potash (MoP) expansion using the total resource at Khemisset.

As such, Emmerson is looking to increase salt sales to four-million tonnes a year, incorporate SoP as part of the larger project development and increase MoP production by up to 50%.

The updated development strategy will also increase mine life.

The strategy will add potential benefits, including reduced financing and execution risk; operating cost, sales, marketing and logistics synergies; and increased diversification of product revenues.

Emmerson CEO Graham Clarke explains that Khemisset is a project of enormous potential and the company sees several opportunities to improve upon the mine plan presented in the 2020 feasibility study. “The most obvious is the potential to expand the project, given it is currently based on less than 50% of our total mineral resource estimate.”

He adds that Emmerson has also previously discussed the potential to increase its salt sales and its ongoing investigations into the global de-icing salt market. In this regard, Clarke says the US market, in particular, provides Emmerson a high level of confidence in its ability to upscale salt production significantly.

“We have previously presented a scoping study for an SoP project which indicated a project that could deliver an additional $70-million of earnings before interest, taxes, depreciation and amortisation for the company for low capital expenditure.”

The SoP market, and especially its target US sales market, Clarke says, continues to show strength in pricing, which drives a strategy to accelerate the development of that project, which provides increased cashflow generation, but also diversity of end-product.

Further, the capital cost benefits of the project lead the company to believe it can develop the project using a staged approach, which reduces upfront capital costs and equity requirements from the market and, therefore, dilution to Emmerson’s existing shareholders as the miner grows to full potential.

“With our mining licence in hand, we see 2021 as a pivotal year for our development as we aim to become the only potash producer in Africa and the only independent potash producer globally,” he enthuses.