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"He has changed a lot of the rules, released a lot of permits"

Emmerson's Hayden Locke on the risk environment for miners in Morocco

Mining Journal

Emmerson chief executive Hayden Locke is an experienced mining executive and former mining private equity investor, straddling both the technical and commercial aspects of project development.

He was head of corporate at Papillon Resources (sold to B2Gold for US$600 million) and Highfield Resources. He studied engineering and commerce before completing a degree in geology.

The current king of Morocco, Mohammed VI, is slowing transforming the mining framework to attract foreign investment, according to Morocco-focused Emmerson's chief executive, Hayden Locke.

"I'd describe the mining industry in Morocco as nascent - it's certainly in its early stages of its development," he told Mining Journal.

Locke said the focus had previously been on oil and gas to alleviate the energy security concern and then manufacturing but, in the past five years, attentions had turned toward foreign investment into mining.

"[The king] has instituted a new mining code [and] cut a lot of the red tape that has historically hamstrung the mining industry," he said. "He has changed a lot of the rules, released a lot of permits that were held my local Moroccan groups that didn't have the financial or technical capability to move them forward.

"We're seeing a marked shift in the attitude in Morocco toward attracting foreign investment and we're very much the beneficiary of that."

Locke said the bureaucracy was "still a bureaucracy" there was "still some ambiguity in the mining code, which needs to be worked through" but "there is a process, it's well understood, and the bureaucrats are willing to speak to you when you need to ask questions about the next step in the process".

Emmerson delivered a scoping study for its Khemisset potash development in Morocco in November last year, which outlined an 800,000t per annum muriate of potash operation, with an NPV (10% discount; post-tax) of $795 million and an IRR of 30%. Work has started on the full feasibility study, which was expected in the first half of next year.

On the energy security concern, Locke said the relatively high cost of gas coming in from Algeria and Libya was factored in to current scoping numbers for Khemisset and so any improvement in the situation would have a direct impact on the project's future operating cost.

Morocco was one of the three best-rated Africa jurisdictions in the 2018 Investment Risk Index, which is published as part of the Mining Journal World Risk Report (feat. MineHutte ratings). Along with Cote d'Ivoire and Madagascar, it rated as a BBB.