Phosphate discovered in north-east’
Petra | Dec 29,2011 | 23:14

AMMAN — Jordanian Geologists Association (JGA) President Bahjat Odwan on Wednesday said phosphate has been found in the north-eastern parts of the Kingdom with initial figures on reserves estimated at around 200 million tonnes, worth around $30 billion.

The findings are from a study conducted by the JGA on an a 250-dunum area, he said, adding that the phosphate deposits are near the surface, which makes them easier to mine and reduces extraction costs.

Gov’t urged to revisit phosphate exclusivity agreement – Jordan Times
Huge deposits discovered but no prospects for new investments, say unionist, official
Reported by Omar Obeidat | Dec 30,2011 | 23:42
A train transports phosphates from the Jordan Phosphate Mines Company to Aqaba in southern Jordan (File photo)

AMMAN –– Exclusivity rights granted toJordan’s sole phosphate producer hinder large-scale investments in the industry, experts said Thursday.

As large reserves of phosphate have been discovered recently in the Kingdom’s northeast, exclusivity rights given to the Jordan Phosphate Mines Company (JPMC) remain the key challenge for attracting investments that would pump hundreds of millions of dinars into the ailing economy, according to Jordanian Geologists Association (JGA) President Bahjat Odwan.

On Wednesday, Odwan announced that a study conducted by the JGA on a 250-dunum area found that large quantities of phosphate exist in the northeastern parts of the Kingdom, with initial figures on reserves estimated at around 200 million tonnes, worth around $30 billion.

He told The Jordan Times on Thursday that a company established by the association in partnership with another local firm has sought a permission from the Natural Resources Authority (NRA) to extract and mine the phosphate deposits in the area, adding that the reserves are near the surface, which makes them easier to mine at relatively low extraction costs.

“We are still awaiting a licence from the government to give the company the right to extract the product,” he said, calling on decision makers to open the door for investors by terminating the exclusivity agreement with the JPMC.

The JPMC currently has exploration and mining licences covering a total area of 52 square kilometres at the mines at Al Hassa and Al Abiad and 258 square kilometres at Shidiyeh in the south of the Kingdom.

But Odwan stressed that investors do not want to compete with the company where it operates, adding that other parts of Jordan are rich with the product, Jordan’s signature export item.

NRA Director General Mousa Zyoud acknowledged that the exclusivity rights of the JPMC have closed the door for new investments in the industry, making the issue more controversial and complicated.

Zyoud told The Jordan Times over the phone that although the NRA is responsible for granting licences, legal and legislative obstacles abound due to an agreement signed between the government and Brunei Investment Agency, Kamil Holdings, in 2006, granting the company the exclusive right to explore and extract phosphate across the Kingdom.

Under the agreement, Zyoud explained, any offers for new investments in phosphate mining have to be approved by Kamil Holdings, which owns 37 per cent of JPMC shares as it has the first right of refusal.

Indicating that the exclusivity agreement is at odds with the NRA Law, he added that after seven years of signing the agreement, the government has the right to review royalty fees, which is currently at $2 per tonne of phosphate.

Royalty fees used to be $11 per tonne in the past before being cut down to $5 per tonne and then to $2 per tonne, he said.

Revenues from phosphate to the treasury are calculated on the basis of 15 per cent of profits and 5 per cent of the profits of fertiliser factories of JPMC.

The solution to boost the mining sector, Zyoud said, is to allow new investors to enter the sector with a new royalty fee system and a new profit-sharing regime.

NRA has received applications from around eight Arab and local investors who are keen to explore and extract phosphate in the Kingdom, the authority’s director said.

Earlier this month, Prime Minister Awn Khasawneh told lawmakers that the government may repurchase assets in several formerly state-owned companies, including the phosphate company.