(Alliance News) - Potash developer Emmerson PLC expects the cost of power supply to be over USD10 million at a Moroccan project, it said Monday.
Emmerson's flagship asset is the 100%-owned Khemisset project in northern Morocco, which it believes is a potentially "world-class" potash mine. Potash is used to make fertiliser.
Emmerson has been looking into cost estimates for securing electricity and gas supply to the project, as part of a feasibility study. This is ahead of schedule, and is forecast to be published early in the second quarter of 2020 rather than at the end of the first half of the year.
The company believes the total cost of sourcing power would be around USD10.6 million, which it said is around 87% lower than the average Canadian potash mine development.
Hayden Locke, Emmerson's chief executive, said: "Morocco has invested heavily in electrical generation and transmission capacity throughout the country and has developed an attractive renewable energy framework.
"As a result, the project is within close proximity to several very high voltage power lines with confirmed capacity for a mine the scale of Khemisset. Morocco's forward-thinking legislation, to promote renewable energy development, provides additional benefits to the project including tariff reductions, while reducing the overall carbon footprint of the mine."
"Through continued discussions with our gas supply partner, it has reiterated its willingness to fund, design, build and maintain the gas storage infrastructure required for processing the potash ore, saving Khemisset considerable capital expenditure," Locke continued.
"The feasibility study continues to track well ahead of schedule, and we are confident it will be delivered towards the front end of the second quarter of 2020 rather than the end of first-half 2020 as previously advised."
Shares were 4.1% lower on Monday afternoon in London at a price of 4.41 pence each.
By George Collard; georgecollard@alliancenews.com
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Emmerson (EML)