Morocco Mining Report Q4 2008

The Kingdom of Morocco, with coasts on the Atlantic as well as the Mediterranean, is home to over 90 mining companies producing 20 different mineral products. The economically vital mining sector is dominated by phosphates, which account for 92% of mineral production. Other metals and minerals - including lead, zinc, copper, iron, fluorine, silver, manganese, cobalt, antimony and salt - are also beginning to grow in significance. Silver is produced in substantial amounts and is primarily sourced from the Imiter mine located in the Oriental Anti Atlas. Morocco also hosts cobalt at the Bou Azzer deposit, which is the world's only primary cobalt deposit.

The Office National des Hydrocarbures et des Mines (ONHYM) is the primary agency responsible for the exploration and promotion of national mineral resources. The other major state-owned organisation governing the mining industry is the Bureau de Recherches et de Participations Minires (BRPM), which is responsible for the development of most minerals found in Morocco. All mineral resources are the property of the state, which issues permits and licences for the exploration and exploitation of the resources. The current mining legislation in Morocco is based on the Mining Law (1951) and is enforced through executive orders and the Directorate of Mines. Under the law, a mining company may set up a tax-exempt reserve fund of up to 50% of the fiscal profits for exploration and development investment.

Driven by high international prices and rising external mineral demand, the Moroccan mining sector is raring to go. Government policy has been to open up the mining sector to investments by both minor and major mining companies. Steps have been taken to privatise selected state-owned mining assets and launch reform programmes within the mining sector to boost its competitiveness. However, phosphate production remains a state monopoly, managed by the state-owned Office Chrifien des Phosphates (OCP). Although Morocco is considered both economically and politically stable, it still needs to bring about reforms in its tax structure and reduce trade bureaucracy in order to witness significant growth in its industries.

The boom in the construction industry has led to an increase in Moroccan rebar production. In July 2008, Univers Acier, the Casablanca-based rebar manufacturer reported that it would be using an investment of US$150mn to expand its capacity to 1m tonnes per annum (tpa). The expanded facilities are expected to be completed by 2009 or 2010. In September 2008, it was also reported that Italian company Di Grandi was in talks to build a new rebar mill south-west of Casablanca with a US$161mn investment.

Rebar manufacturer Socit Nationale de Siderurgie (Sonasid) reported that its net profit for the first half of 2008 had risen by 73% year-on-year (y-o-y), to US$103mn.

The Kingdom of Morocco, with coasts on the Atlantic as well as the Mediterranean, is home to over 90 mining companies producing 20 different mineral products. The economically vital mining sector is dominated by phosphates, which account for 92% of mineral production. Other metals and minerals - including lead, zinc, copper, iron, fluorine, silver, manganese, cobalt, antimony and salt - are also beginning to grow in significance. Silver is produced in substantial amounts and is primarily sourced from the Imiter mine located in the Oriental Anti Atlas. Morocco also hosts cobalt at the Bou Azzer deposit, which is the world's only primary cobalt deposit.

The Office National des Hydrocarbures et des Mines (ONHYM) is the primary agency responsible for the exploration and promotion of national mineral resources. The other major state-owned organisation governing the mining industry is the Bureau de Recherches et de Participations Minires (BRPM), which is responsible for the development of most minerals found in Morocco. All mineral resources are the property of the state, which issues permits and licences for the exploration and exploitation of the resources. The current mining legislation in Morocco is based on the Mining Law (1951) and is enforced through executive orders and the Directorate of Mines. Under the law, a mining company may set up a tax-exempt reserve fund of up to 50% of the fiscal profits for exploration and development investment.

Driven by high international prices and rising external mineral demand, the Moroccan mining sector is raring to go. Government policy has been to open up the mining sector to investments by both minor and major mining companies. Steps have been taken to privatise selected state-owned mining assets and launch reform programmes within the mining sector to boost its competitiveness. However, phosphate production remains a state monopoly, managed by the state-owned Office Chrifien des Phosphates (OCP). Although Morocco is considered both economically and politically stable, it still needs to bring about reforms in its tax structure and reduce trade bureaucracy in order to witness significant growth in its industries.

The boom in the construction industry has led to an increase in Moroccan rebar production. In July 2008, Univers Acier, the Casablanca-based rebar manufacturer reported that it would be using an investment of US$150mn to expand its capacity to 1m tonnes per annum (tpa). The expanded facilities are expected to be completed by 2009 or 2010. In September 2008, it was also reported that Italian company Di Grandi was in talks to build a new rebar mill south-west of Casablanca with a US$161mn investment.

Rebar manufacturer Socit Nationale de Siderurgie (Sonasid) reported that its net profit for the first half of 2008 had risen by 73% year-on-year (y-o-y), to US$103mn.