Yes production was subsidised by the Moroccan government. This was to ensure control of the RP market when they were able to produce very cheaply because they were skimming the top of the resource. This has been depleted as I understand so costs are now more in line with other producers. OCP was run by the government, it is now a private company, so making profits is a priority. The government is apparently struggling and can no longer subsidise. This is one of the major reasons for the spike in RP price. In other words it was kept down artificially.
There has been talk from OCP of expansion. This is to ccst billions. They may be rethinking this strategy as the were making these statements with RP price much much higher than they are now (and money was being raked in).
Interesting that no-one here can really respond to what the average costs are for producers and whether there is enough margin to sustain lower rp prices.
AEV Price at posting:
49.9¢ Sentiment: None Disclosure: Held
