Aim-listed potash development company Emmerson has said the results of an in-depth scoping study on a new and innovative processing route at its wholly-owned Khemisset potash project, in Morocco, will significantly reduce its environmental impact and enhance its economic returns.
The scoping study sets out a novel proprietary processing method named the Khemisset Multi-Mineral Process (KMP), which 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.
The KMP offers environmental benefits by eliminating the need for deep well injection (DWI) and reducing water consumption by about 50%.
In addition, the processing method creates two new slow-release fertiliser products, struvite and vivianite, while also increasing the recovery rate of muriate of potash (MoP) from 85% to about 91%.
Struvite and vivianite command a price premium as multinutrient, slow-release fertiliser products, which reduce phosphate runoff and enable less frequent application by farmers, Emmerson noted.
Emmerson said the KMP has significant value as intellectual property with additional potential licensing revenues. The company currently has a patent pending.
The company stated that the new financial estimates for the project, which have been updated from the feasibility study announced in June 2020, both for the production process as originally designed and incorporating the KMP, show substantially improved project economics.
The KMP increases the post-tax net present value (NPV) by 120% to $2.2-billion and a post-tax internal rate of return (IRR) of 40%. Without the KMP, the NPV would be $1-billion and the IRR 26%.
Yearly earnings before interest, taxes, depreciation and amortisation are set at $440-million a year with the KMP and $258-million without it.
The total project capital expenditure (capex) on the project has not changed as much. When incorporating the KMP, capex is estimated to be $525-million, slightly down from $539-million for the original design.
However, Emmerson said the new cost would be even less were it not reflective of industry-wide cost inflation since 2020.
Emmerson noted that the all-in sustaining cost of $163/t positioned the project at the lower end of the cost curve and would deliver robust returns across a range of potash price assumptions.
The company is still awaiting notification from the Commission Ministérielle de Pilotage, to whom the Khemisset environmental approval was referred in July last year.
"The KMP 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,” Emmerson CEO Graham Clarke said on February 1.
He added that it also formed part of the optimisation work that Emmerson had committed to do in discussions with water authorities in the first half of last year.
“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),” Clarke explained
Struvite and vivianite are multinutrient fertilisers containing phosphate, nitrogen, magnesium and iron. 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.
"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 regard to the ESIA approval, we believe that the Moroccan authorities are continuing to assess the company's application,” Clarke said.