• Emmerson Plc launched the initial phase of arbitration against Morocco over the Khemisset potash project.
• The $525 million project stalled after Morocco rejected its environmental permit over water-use concerns.
• Emmerson wrote down the asset to zero in 2025 after previously estimating a net present value of $2.2 billion.

In a statement published on Thursday, January 22, UK-listed Emmerson Plc announced the launch of the initial phase of arbitration proceedings against Morocco. The move marks a new stage in a dispute over the Khemisset potash project, an asset with an estimated development cost of $525 million, whose future remains unresolved.

Origins of a dispute dating back to 2023

The dispute began in 2023 when Moroccan authorities rejected the environmental impact assessment for the Khemisset project. Authorities cited prolonged drought conditions and growing water scarcity, and they argued that the planned mine would consume excessive water resources.

In response, Emmerson revised its development plan and introduced a new mining process designed to cut water consumption by 50%. However, Moroccan authorities maintained their negative assessment and concluded that the project still failed to ensure sustainable water use.

The dispute escalated in April 2025 when Emmerson filed a request for arbitration with the International Centre for Settlement of Investment Disputes (ICSID), an institution affiliated with the World Bank.

In its latest update, Emmerson said an arbitral tribunal has now been constituted. The company also confirmed that a preliminary hearing took place in mid-December 2025 to establish the timetable for the initial arbitration phase. With the project blocked at a critical pre-construction stage, Emmerson plans to seek compensation for what it describes as “losses and damages.”

Emmerson argues that Morocco breached its obligations under the bilateral investment treaty with the United Kingdom regarding the promotion and protection of investments. Moroccan authorities have not issued any official communication on the case or the arbitration process so far.

What comes next?

Meanwhile, the Khemisset project has entered a new phase of uncertainty. Emmerson continues to present the asset as a future mine capable of producing up to 700,000 tonnes of muriate of potash annually, a key fertilizer input. The company plans a 19-year operating period supported by an initial capital investment of $525 million.

Potassium chloride

Despite unchanged technical parameters, the project’s valuation has already suffered from the prolonged standstill. In July 2025, Emmerson announced a full impairment charge of $21.1 million on Khemisset and stated that the asset now carries zero value on its balance sheet. The company previously estimated the project’s net present value at $2.2 billion.

To date, Moroccan authorities have not disclosed whether they defined acceptable water consumption thresholds alongside their environmental permit rejection. In addition, drought conditions have evolved since the dispute began. Earlier this month, Morocco’s Minister of Equipment and Water, Nizar Baraka, announced the end of a drought cycle that had affected the country for more than seven years, following a sharp rebound in rainfall nationwide.

It remains unclear whether this change could influence discussions within the ICSID proceedings between Emmerson and Rabat. For its part, Emmerson plans to submit its formal memorial detailing its claims against Morocco by the end of the first quarter of 2026. The next procedural phase will then allow Moroccan state representatives to respond to the allegations.

This article was initially published in French by Aurel Sèdjro Houenou

Adapted in English by Ange J. A. de BERRY QUENUM