Tunisia: Energy Ministry Warns Against Serious Situation of CPG, Promises to Act 'Vigorously'

Tunis/Tunisia — The Energy, Mines and Energy Transition Ministry warned on Friday against the seriousness of the situation of the Gafsa Phosphate Company (CPG) and its almost blocked production in July due to social sit-ins and protests.

In a press release issued on Thursday, the ministry called on social partners to acknowledge the seriousness of the situation,

The ministry called in a press release, on the social partners to realise the seriousness of the situation, promising to promising to "vigorously" enforce the law against "those provoking the cessation of production and transport."

"The situation of the CPG has become critical, especially with the almost-total blockage of phosphate production during July 2020," the ministry recalled, pointing out that the phosphate production has failed to exceed 36 thousand tonnes since the start of July 2020 and that transport of phosphate by rail has been totally interrupted.

The transport of phosphate by trucks is almost blocked due to sit-ins of job-seekers.

This situation has caused the drop in the level of inventories of the Tunisian Chemical Group (GCT) factories to their lowest levels, which could lead the GCT to completely stop its industrial units in two days, the same source specified.

According to the energy department, the CPG, in financial difficulties, has become unable to ensure the supply of the domestic market in grains necessary for the coming agricultural season, pay the wages of its workers and honour its commitments with its clients.

The CPG is suffering from a difficult financial situation that has worsened as it has been unable to meet its basic obligations, such as the payment of social security contributions due (34 million dinars) and the payment of taxes (36 million dinars). Its losses are estimated at 480 million dinars by the end of 2019.

The company's production rate fell to approximately 3.6 million tonnes of phosphates per year, compared to a production of between 8.1 and 8.3 million tonnes in 2010, with the company ranking 5th in the world in phosphate production and losing most of its traditional markets due to its inability to honour its contracts.

CPG Deputy Managing Director Rafaâ Ncib had told TAP on July 3, that the company is unable to meet the needs of the Tunisian Chemical Group and the Tunisian-Indian fertilizer company "TEFART," due to the record drop in production levels at a rate of 60% in 2010.

However, the cost of production has sharply risen to reach 197.6 dinars per one tonne by the end of 2019, against 48 dinars in 2010.

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