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PhosCo (ASX:PHO) has confirmed its execution of an MOU with the government of Tunisia as its Gassaat permit is approved.
The company’s Gassaat play is a phosphate project to produce fertiliser, a product which the company’s Gasaat scoping study notes has no modern substitute.
Now, Tunisia’s Consultative Committee of Mines (CCM) has approved PhosCo’s 100% owned Gasaat exploration permit.
But perhaps of more noteworthiness is the MOU it’s inked with Tunisia’s government – alongside the European Bank for Reconstruction and Development (EBRD), effectively a European Union bank. The European Investment Bank (EIB) is a part owner alongside the EU itself and 73 other countries, according to its website.
The MOU was described by PhosCo as a first for Tunisia’s government, which has an interest in seeing the company assist in developing the country’s Northern Phosphate Basin.
(The company did note on Tuesday a ‘formal grant’ is pending from the country’s Ministry of National Defence.)
This isn’t the first historical footnote moment for PhosCo in Tunisia – it last month saw the CCM approve its close-by Sekarna play, which was the first 100% foreign investor owned permit to be awarded, according to the company.
“The Gassaat permit is pivotal in realising our vision for a regional phosphate processing hub. The MOU formalises our excellent relationship with EBRD and the Tunisian Government, establishing a collaborative framework,” PhosCo MD Taz Aldaoud said.
“We’re particularly mindful of the critical role phosphate plays in addressing global food security concerns. This project not only aligns with that crucial need but also emphasises our commitment to positive community impact.”
So why fertiliser?
While momentum fell off earlier this year, phosphate was being described by some as a ‘megatrend’ in relatively recent history.
Already oil-rich Norway rattled the cage earlier this year when a mammoth phosphate discovery was struck by Norge Mining so large some believe it could meet demand for the next century.
At any rate, that’s neither here nor there for PhosCo, a company which has only just resumed trading today after issuing a trading halt and suspension in the last week. Shares in the thinly traded microcap were flat on Tuesday.
But like copper in the grand energy transition narrative, there’s one there too for fertiliser, too. The global population continues to rise as arable land continues to fall globally, meaning that higher-powered fertilisers will be needed to yield larger volumes of produce from increasingly smaller areas of land.
The UN Convention to Combat Desertification wrote in 2023 that 100Mha of “healthy land” is lost each year globally. This is not a new phenomenon: Researchers were saying the same thing back in 2015.
While agricultural land has expanded, typically across the Global South, since the 1990’s, it’s far from true to say all that land is used to crow crops that humans consume – and therein lies the problem that underpins the phosphate value proposition.
PHO last traded at 4cps.
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