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Government subsidies available for Khemisset potash project

Published by
World Fertilizer,


Emmerson Plc has received confirmation that direct cash subsidies and further tax concessions are available to it, via negotiation, under a formal investment convention agreed with the Moroccan Government for its 100% owned Khemisset Potash Project in Northern Morocco.

Highlights

  • Moroccan Government incentives could contribute up to 10% of the project's total CAPEX.
  • - Covers several potential areas including investment in external infrastructure, land acquisition and training costs.
    - Potential for up to US$40 million provided by the Government in the form of direct subsidies.
  • The project is eligible for several additional fiscal concessions and tax breaks, which are expected to enhance its post-tax cash margins.
  • Emmerson will also benefit from invaluable formal support from Government agencies in all project implementation processes in Morocco.
  • Negotiations with the Government for an investment convention to start once the full feasibility study is complete by the end of 1H20.
  • Formal convention to be signed pursuant to obtaining a mining licence.

Hayden Locke, CEO of Emmerson, commented: "As we progress in delivering the technical de-risking milestones for Khemisset, we have initiated discussions with Moroccan Government bodies to gain an understanding of the policies in place, which will support the Project's development. Based on initial discussions, we have concluded that the Project is eligible for an investment convention with the Moroccan Government; this provides for potential Government contributions towards up to 10% of total Project capital expenditure in the form of subsidies and additional tax concessions.

"These incentives are expected to further enhance the already outstanding economics of the Project. They follow the recent Preliminary Economic Assessment for our Sulphate of Potash project, which will also lift margins significantly, taking the average potential EBITDA across our portfolio of assets to over US$300 million per annum and the total post tax NPV10 to in excess of US$1.8 billion.

"We continue to examine various options to optimise the industry leading capital cost Khemisset Potash Project's potential as we advance it towards completion of full feasibility, which we are confident will be delivered in the first half of 2020."

Read the article online at: https://www.worldfertilizer.com/potash/10122019/government-subsidies-available-for-khemisset-potash-project/

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