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Copyright © AllSource Analysis Inc. 2017
The Heart of Morocco’s
Phosphate Extraction Khouribga, Morocco
June 26th, 2017
PHOSPHATE EXTRACTION CHANNEL
Overview
Office Cherifien des Phosphates (OCP) of Morocco is in the midst of a dramatic expansion in phosphate production
capacity which has propelled it into the position of the world’s largest producer. This comes at a time when growth in
global production capacity is set to outpace growth in demand. Imagery since 2014 shows the commissioning of the
new Beni Amir washing station (see Figure 2 and 3) near the al-Halassa and Sidi Chennane mines, and the
accompanying activity at the mine sites as more raw phosphate rock is extracted. However, imagery from 2017
shows that construction has not yet begun on another washing station, planned at Ouled Fares (see Figure 1), which
was mentioned in OCP’s most recent annual report from 2015.
Background
In 2017, the 95% state-owned OCP added 5.5 million metric tons per year of production capacity at the Beni Amir
washing facility, bringing the total capacity across the company up to 12 million metric tons per year. This expansion
allowed the privately-held OCP to overtake the Mosaic Company of the United States to become the world’s leading
producer of phosphates, and contributed to the long slide of Mosaic’s stock price down to $23 per share from over
$50 in 2015. Meanwhile, Mosaic has purchased the indebted Vale mining company and looks to be refocusing on
the Brazilian market, according to Erik Volkman of Investopedia. In 2014, OCP raised over a billion dollars by issuing
10 and 30-year bonds, and plans to double output by 2025 with an eye on the African market.
Phosphates are the principal ingredient in fertilizers, along with sulfur and potash (potassium), and demand for
fertilizer is expected to rise by four million metric tons by 2020 to mirror global population growth and food demand.
By increasing production capacity so drastically in the middle of current global overcapacity, OCP is taking a
calculated risk: fertilizer prices could fall even lower than they already are, affecting profitability in the wake of a
difficult first half of 2016 for OCP in which net profits fell by almost a quarter. The payoff to such a risk is capturing
market share as firms in the United States and China are slimming down production.
OCP itself is one of the crown jewels of the Moroccan economy and is the country’s largest employer with upwards
of 20,000 workers. The company accounts for more than a fifth of Morocco’s national export revenue, and owns
more than three-quarters of all phosphate reserves in the world.
Outside of the observed expansion of production capacity, OCP’s broader strategy entails creating demand for their
products in African countries where the application of fertilizers to agricultural lands can be increased. African
markets represent a large opportunity in the fertilizer market where profits can come from encouraging further
application of fertilizers to improve crop yields, rather than simply increased efficiency on the production side. A
study completed by OCP shows that Ethiopian farmers use 57kg of fertilizer per hectare of wheat and 37kg per
hectare of corn, whereas their counterparts in Europe use 150kg and 300kg of fertilizer per hectare respectively.
These figures suggest that the current market of around 500,000 million metric tons of imports per year has
considerable room to grow.
Location
Khouribga, Morocco
Coordinates:
32.663188°, -6.763284°
Date of Report:
June 26th, 2017
Date of Imagery:
June 23rd, 2017
The Heart of Morocco’s Phosphate Extraction
Copyright © AllSource Analysis Inc. 2017
Khouribga
Copyright © AllSource Analysis Inc. 2017
Figure 2. Beni Amir washing plant under construction, February 9, 2014.
Two floatation
ponds under
construction
The Heart of Morocco’s Phosphate Extraction
February 9th, 2014
Two large
storage tanks
hold phosphate
slurry before it is
piped to the head
station 13km
away
Four lanes hold
solid phosphate
before crushing
and hydration into
slurry
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