Morocco: The rising star of African Mining

• by Dr. Amit Tripathi

As soon as one mentions Morocco in the mining world, phosphate comes to mind. True, Morocco is one of world’s leading producers of high-quality phosphate. It has world’s largest phosphate resource base and produces about 15% of world’s supply. Phosphate exports are Morocco’s largest forex earner along with tourism. Large part of this phosphate is imported in India and used in the Indian fertilizer industry. Morocco’s contribution to Indian food security is therefore significant. Morocco is also a major producer of Silver and Lead and is Africa’s largest producer. Overall mining contributes to about 35% of exports and mining’s contribution to GDP of Morocco is steadily increasing and comparable to advanced mining jurisdictions (against a paltry 1.6% in India and declining).

The best kept secret of Moroccan geology are the extensive polymetallic deposits containing extremely high-grade silver, lead, zinc and copper. These deposits occur across the Anti Atlas and High Atlas mountain ranges of Morocco and mined by small scale miners. In India, many deposits are worked at around 5% combined cutoff grade (Pb% + Zn%). Moroccan small-scale miners typically mine 15% to 30% combined cutoff grade! Pockets of over 50% grade are also frequently found and less than 10% is often considered sub grade or waste! Thousands of such family owned small mines exist across morocco, from its eastern frontier with Algeria all the way up to the Atlantic coast. Tens of thousands of people find direct and indirect employment in this enterprise. Such amazing success, with mostly traditional exploration and mining methods, word of mouth and with little modern exploration methods applied is unique. Even with such extensive small-scale mining industry, processing and beneficiation facilities in Morocco are inadequate. Most miners being small scale do not have access to sufficient capital or technology for establishing flotation plants that can enable recovery of lower grades and therefore mineral potential stays underutilized. Some enterprising Moraccan companies have started building centralized processing plants to beneficiate the low-grade ores, but significant opportunities still exist in this space.

In such a perfect substrate, the Moroccan government has already started policy reforms and every step is taking Moroccan jurisdiction closer to global best practices. The Moroccan Government has set out a strategy for tripling the mining sector turnover by 2025 to $1.5B. As a part of this initiative a new mining law was enacted in 2016. The highlights of this law are:

• New mining title of exploration authorization, allowing investors to develop exploration programs over large areas.
  • Exploration license for three years, extendable.
  • Exclusive conversion to mining license of ten years, extendable indefinitely.
  • Rapid and exclusive progression from exploration to mining with secure title and tenure.
• Introducing an operating license for tailings and slagheaps, many of which are seen dotting the landscape in traditional mining areas.
• Express provisions relating to environmental impact assessments and the requirement for mine closure plans
• No restriction on the nationality of shareholders or directors of a company engaging in mining activities Morocco
• Simplifying procedures for foreign currency movement and repatriation
• No restrictions on sale, export or import of extracted or processed minerals
• Sale and leasing of mining rights

Smart global explorers have started taking notice of these positive changes. Canadian listed Ayagold who already runs the Zgounder silver mine in South Morocco producing over 4.7Moz (about 146 tonnes) of silver every year, has just raised about $20M for upgrading the mine and exploring several others of its concession in Morocco. Their properties also include the large Boumadine gold deposit and a few other polymetallic prospects. Similarly, the French company Auplata has increased its investment in the Moroccan listed company Touissit Cie Miniere (formerly CMT or Compagnie Minière de Touissit) and now controls over 37%.  CMT has over 35 mining permits and produces lead and zinc ores from its underground mines at Tighza. Expecting the mining policy to further become investor friendly, several junior exploration groups have started taking interest in Morocco. The trend is expected to further accelerate with progressive strengthening of silver and copper prices.

Traditionally, based on the earlier French protectorate period geological reports, it was believed that polymetallic mineralization only exists in the Anti Atlas Mountains (lower Atlas) of Morocco. Enterprising Moroccan prospectors, however, have also found high grade copper-lead-zinc-silver deposits in the High Atlas Mountains. These mountains, also famous for tourist trekking trails and dinosaur fossils, are host to several such polymetallic deposits containing silver-lead-zinc and copper. The High Atlas Mountains are predominantly composed of limestone, and the polymetallic deposits there formed when mineral bearing fluids of acidic nature mover up from the depths of earth. The acid in these fluids dissolved the limestone and created large pockets of high-grade metal. Several of these pockets are over 50% metal!

The Morocco’s Ministry of Energy and Mines has realized the low permeation of modern exploration and has started campaigns of aerogeophysical and airborne LIDAR surveys. Still a huge potential of making large and high-grade metal discoveries exists all along the Atlas axis in central Morocco.

In addition to progressively friendlier jurisdiction, Morocco is also blessed with good infrastructure. It is often said that Morocco is a slice of Europe in Africa. Excellent road network, even in mountain regions and availability of power and water makes Morocco a strong contender for attracting investment in the mineral sector.

Business opportunities:

Almost all mines in morocco are shallow and found with traditional methods. Most operate without a strong geological control and use traditional methods that are a century old. All the mines the author has visited have poor mineral conservation systems and none are able to fully realize the value of the mineral contained. In such a scenario and with progressively friendly laws, several business opportunities start emerging. The author has spent a good part of last two years in Morocco, travelling these areas and understanding these opportunities:

• Exploration: With use of modern technology in geology and geophysics it will be possible to explore several large polymetallic deposits.
• Mining: Acquisition of traditionally run mines or mining clusters and combining them into larger mechanized operations will lower the cost of production and allow lowering the cutoff grade. This will have a major impact on available resources.
• Processing: Large stockpiles of millions of tonnes exist in old mining areas. Traditional processing has been able to recover only the high grades and exceptionally large low-grade stockpiles can be re-processed with today’s efficient plants.
• Moroccan miners are often struggling for capital for operating and upscaling. Traditional Moroccan capital markets and banks still do not fully comprehend the rapid growth potential of exploration and mining. Hence excellent potential for financial sector.
• Copper is often found in Moroccan polymetallic deposits, however, none of the projects visited were able mine copper. This is mostly due to technological and capital availability issues and therefore copper does not figure in mine valuations although it is a significant part in many areas. As copper prices progressively strengthen, investors looking for polymetallic properties would have copper as a strong part of enhancing valuations.
• Not well known to outsiders, eastern Morocco has several Antimony deposits, some of which have been mined in small scale. Antimony is a niche metal but commands about three times the price of lead. Some of these mines are still in good shape and author has visited some of these.
• Other minerals extracted with increasing rate of production are barite, clays, cobalt, fluorspar, iron ore, salt, and talc. Significant opportunities exist in these minerals also.

Overall Morocco appears on the cusp of a mining boom. It is expected that COVID related global economic compression would increase the pace of reforms. Therefore, this would be a great time to look at the opportunities in this rising star of African mining.

the author is a Director of MPXG Exploration and has spent years exploring Morocco. He can be contacted on info@geoexplorationllc.com

This article was also published in the Financial Express on 7 Sept 2020 and can be accessed here https://www.financialexpress.com/world-news/morocco-the-rising-star-of-african-mining/2076820/