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Emmerson's Moroccan potash project may qualify for government funding

Emmerson PLC could receive incentives from the Moroccan government that could contribute up to 10% of the total expenditure of its Khemisset potash project.

The Moroccan government's incentives program includes contributions of up to 5% of total investment for external infrastructure, up to 20% of land acquisition cost and up to 20% of employee approved training costs.

The company said Dec. 10 that it could receive up to US$40 million from the government in the form of direct subsidies.

Emmerson may also receive further tax concessions including a reduced corporate tax rate of 17.5% from 31%, a three-year value-added tax exemption on equipment and plant purchases, and an exemption of import tax duties on plant, equipment and mining machinery.

A preliminary economic assessment considering sulfate of potash production at the Khemisset project outlined an after-tax net present value of US$411 million, at a 10% discount rate, with a 52.1% internal rate of return over an initial 20-year mine life.

Initial capital costs were estimated at US$119 million, including a US$28 million contingency, with the payback period pegged at under two years.

The total posttax NPV across Emmerson's project portfolio now stands at over US$1.8 billion, including US$1.14 billion for the Khemisset potash project.