Emmerson (LON: EML) shares are down 35% today. EML shares are down on the really very simple basis that if you can't gain access to a mining permit then you'll not be able to go mining. Well, not in anywhere with even the facade of the rule of law that is. And that's what Emmerson's problem is, gaining access to the mining permit:” The Environmental and Social Impact Assessment (''ESIA'') approval process remains the key priority for the Company,..(...)...Following a recent evaluation meeting, the Commission Régionale Unifiée d'Investissement ("CRUI"), the regional investment authority, was unable to approve the application, and consequently the Company has exercised its right to refer approval to the Ministerial Committee, which is chaired by the Head of Government and includes several Government ministers. The Company believes the measures taken to address all concerns raised, combined with the project's significant economic benefits and contribution towards addressing food security, are compelling and underline its strategic importance to the Kingdom of Morocco. On this basis, the Company remains confident it will receive approval for its proposals.”
Well, yes, we'd all hope so, because without this permit the very idea of a mine is a total dead duck. The background idea is great of course. Emmerson wants to go mining for potash, the world definitively needs more potash as population grows and farming mechanises in the previously poor parts of the world. So, great, there's a market for the production over time. But there is that step of getting the mining permit in the way.
Emmerson share price from London Stock Exchange
We have to admit to being a bit out of touch with modern commercial mores these days. Back a century this would have been solved by sending a gunboat to shell the King's Palace. Agreed, that's a bit out of order these days. But within our own working lifetime in mining this would have been solved by taking the inspector off for a walk and asking how much he'd like a lovely new car or the like. That's entirely illegal these days of course.
So, the course of action here is going to be to push it up the system into the central government. Where the Ambassador can have a word in the correct ear which is today's equivalent of the gunboat. Well, maybe at least. But Emmerson needs to hope that it does get solved because without a mining permit you can't go mining.
