Emmerson raises cash for Moroccan potash project

• by Reuters
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LONDON (Reuters) – Emmerson has raised 6 million pounds by issuing 200 million new shares to develop a potash project in Morocco and on Monday the company resumes trade on the London Stock Market.

Potash prices collapsed two years ago but have begun to recover after the crash led to mine closures, limiting supply.

Emmerson said its share issue had initially aimed to raise 4 million pounds but was oversubscribed.

The project’s advantages, it said, include shallow, cheap-to-exploit resources and a location in Morocco, where demand for potash is expected to climb, and access to Europe and other major markets is straightforward.

“From a transport perspective, we have an unassailable competitive advantage,” CEO Hayden Locke told Reuters.

He said the project is in the late stages of development and $20 million has already been spent on it, meaning it could be producing four years from now.

By then, Locke is expecting potash prices to have rallied and predicts escalating demand based on population trends.

“Global food security goals cannot be achieved without the significant use of fertilisers,” he said.

Shares have been suspended since October when Emmerson became 100 percent owner of the Khemisset Potash Project in northern Morocco. Trading will resume at 8 a.m. (0700 GMT).

The economics of potash can be challenging even for the biggest players.

The world’s biggest listed miner BHP is considering selling a stake in its Canadian potash mine, which analysts say would help share the development risk of a very deep deposit.

($1 = 0.7524 pounds)

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