March 23, 2012

 

Morocco's OCP eyes 10 million tonnes fertiliser output by 2020

 

 

As Morocco's top export earner bets on a rapid increase in global demand, Office Cherifien des Phosphates (OCP) by 2020 plans to raise its fertiliser output to 10 million tonnes, from 3.6 million, company sources said on Thursday (Mar 22).

The state-owned phosphate monopoly also plans to raise mining capacity to 55 million tonnes by 2020 from 28 million tonnes of phosphate rock currently, the sources told Reuters.
 

OCP aims to complete 65% of the planned increases in fertiliser and phosphate mining capacity by 2015, the sources said.

 

"This expansion plan aims to boost OCP's role in the Moroccan economy and respond to a speeding increase in global demand for fertilisers," one of the sources said.

 

Phosphate demand is expected to increase steadily, driven by rising world population, changing diets and the need to improve agriculture yields in Africa and other developing regions.

 

King Mohammed on Wednesday launched works for some of the expansion projects which include the new Halassa mine at OCP's main Khouribga mining site, which will add 6.7 million tonnes to its annual phosphate output capacity from 2013 at a total cost of US$240 million.

 

By 2013, OCP will also add two new phosphate rock washers with a processing capacity of 19.2 million tonnes per year at a total cost of around US$710 million.

 

One of the two washers will be connected to a slurry pipeline that will take the rock to its chemical complex Jorf Lasfar on the Atlantic Coast. This would help OCP reduce its emissions of carbon dioxide by a third, or 900,000 tonnes, the sources said.

 

The expansion plan will allow OCP to reduce production costs by between 30-40% in comparable terms, the sources said.

 

The North African country's US$97-billion economy desperately needs to increase export revenue: The current account deficit soared to its highest level since the 1980s in 2011 due mainly to higher energy and food import bills and growing competition for its exports, phosphates excluded.

 

OCP says it already controls around 45% of the world market for lime phosphate and over 30% of global phosphate exports. It has used its market clout to boost global phosphate prices, OCP officials and foreign traders said.

 

Compared to their level in 2010, OCP's exports grew 34.8% in value to MAD48.4 billion (US$5.7 billion) in 2011 while the volume of exports fell 4.4% to 15.4 million tonnes, official data shows.

 

The value of its phosphate rock exports rose 40% in value to MAD12.6 billion (US$1.5 billion) while exported volumes fell 8% to 9.42 million tonnes. Unlike many commodities whose price is determined on futures exchanges, phosphate transactions are mostly negotiated directly between producers and industrial users.