Isle of Man-based Emmerson Plc, developer of the potash and salt Khemisset Mine project in northern Morocco, has signed nonbinding offtake Memoranda of Understanding (MOU) with Switzerland-based companies Keytrade AG and Hexagon Group AG.
The offtake deal with Keytrade is for the sale of a minimum of 245,000 mt/y of potash for a period of 10 years. With Hexagon, the offtake deal is also for a minimum of 245,000 mt/y of potash plus a minimum of 500,000 mt/y of salt product, both for a period of 10 years.
The MOUs account for some 65% of targeted annual potash production of 800,000 mt at Khemisset and 50% of the targeted 1 million mt/y of salt production. The operation is expected to have a 19-year mine life.
The MOUs set out the key terms for subsequent formal bankable offtake agreements, and importantly, contemplate “take or pay” provisions, said Emmerson in a Nov. 21 statement announcing the agreements.
The company expects the prices for the potash and salt to be derived from the market or as quoted in independent expert reports, averaged to a monthly price in the month prior to bill of lading, and after deducting a marketing fee.
The MOUs envisage that all the potash and salt products sold with be delivered on an FOB (currently Casablanca) basis, unless otherwise agreed by the parties.
Emmerson said the MOUs are non-exclusive, and it will continue to participate in ongoing offtake talks with other parties for the remaining production capacity from Khemisset.
The company is now funded to complete basic engineering work, remaining permitting, and project financing processes through to a construction decision for the Khemisset project. In September, it said it expected to make the construction decision and to realize the finalization of project financing in second-half 2023 (GM Sept. 30, p. 32).
Final environmental permits have still to be secured for the project.