Emmerson PLC, the Moroccan focused potash development company, is delighted to announce the results of an in-depth scoping study on a new, innovative processing route (the “Scoping Study”) at its 100% owned Khemisset Potash Project (“Khemisset” or the “Project”), which significantly reduces the Project’s environmental impact and enhances its economic returns.
 
Highlights

Khemisset Multi-mineral Process

• The Scoping Study sets out a ground-breaking proprietary processing method named the Khemisset Multi-mineral Process (“KMP”)
• KMP involves the treatment of brine to remove magnesium and iron chlorides through the addition of phosphate and ammonia, allowing the residual brine to be recycled in the plant
• KMP offers significant environmental benefits by eliminating the need for deep well injection (“DWI”) and reducing water consumption by approximately 50%
• KMP creates two new slow-release fertiliser products, struvite and vivianite, while also increasing the recovery rate of Muriate of Potash (“MOP”) from 85% to approximately 91%
• Struvite and vivianite command a price premium as multi-nutrient, slow-release fertiliser products, which reduce phosphate run-off and enable less frequent application by farmers
• KMP delivers a further substantial boost to the Project’s economics, increasing the post-tax NPV₈ by 120% to US$2.2 billion and delivering an exceptional post-tax IRR of 40% 
• KMP has significant value as intellectual property with additional potential licencing revenues. The Company currently has a patent pending

 
Financial Updates

• Financial estimates for the Project updated from the feasibility study announced in June 2020 (the “2020 Feasibility Study”), both for the production process as originally designed (“Original Design”), and incorporating the KMP (the Project, including the KMP, being the “KMP Process Solution”)
• KMP substantially improves the Project economics:
  • Post-tax NPV₈ of US$2.2 billion (Original Design without KMP updated to NPV₈ US$1.0 billion)
  • Post-tax IRR of 40% (Original Design IRR updated to 26%)
  • Annual EBITDA US$440 million per annum (Original Design US$258 million)
• Total Project capex (incorporating KMP) now estimated to be US$525 million (Original Design capex US$539 million), reflecting industry-wide cost inflation since 2020
• All-in sustaining cost of US$163 per tonne (“/t”) positions the Project at the lower end of the cost curve and delivers robust returns across a range of potash price assumptions

 
Environmental Approval

• The Company is still awaiting notification from the Commission Ministérielle de Pilotage (‘’Ministerial Committee’’ or the ‘’Committee’’), to whom the Khemisset environmental approval was referred in July 2023

Chief Executive Officer, Graham Clarke, said:“The Khemisset Multi-mineral Process is an exciting, innovative development that represents a major improvement both environmentally and economically.
“The KMP arose from our team continuously exploring ways to minimise impact on the environment, particularly when it comes to water; we are always striving to protect this critical resource. It also forms part of the optimisation work that we had committed to do in discussions with water authorities in H1 2023. The KMP addresses these issues, while also delivering significant economic upside through the production of new fertiliser products to complement Khemisset’s potash.
“The KMP transforms the environmental credentials of the Project by eliminating the requirement for the disposal of brines through DWI and significantly reducing process water consumption, both important points for the Moroccan authorities and local communities. We believe it further strengthens the case for approving our Environmental and Social Impact Assessment (“ESIA”).
“Struvite and vivianite are multi-nutrient fertilisers containing phosphate, nitrogen, magnesium, and iron respectively. Their lower solubility means the nutrients are released over a longer period, and are less prone to being washed away by rain. This means that application rates can be less frequent, and phosphate run-offs that cause eutrophication of streams and lakes are significantly reduced.
“As part of our Scoping Study, we have updated our economic estimates for the Project, both based on the Original Design and the new KMP. Cost inflation since 2020 has inevitably resulted in an increase in capex of approximately 31% for the Original Design. In the case of the KMP, the elimination of DWI reduces this increase to 28%.
“More significantly, the addition of new revenue sources delivers considerable economic benefits, with the IRR of 40% for the Project including the KMP considerably higher than most potash projects in development.
“The KMP process sets a new benchmark for the industry. The Company is excited by the results of the study and is eager to progress the findings.
“With regards to the ESIA approval, we believe that the Moroccan authorities are continuing to assess the Company’s application. We will provide further updates on all matters, including any formal notifications regarding the ESIA, in due course.”

KMP Presentation
A presentation, outlining the KMP, is available on the Company’s website, on the following page:
www.emmersonplc.com/investors/corporate-documents