British mining company Emmerson PLC announced on Monday the withdrawal of the first tranche of up to $11 million after struggling to obtain an environmental impact study for its potash production project in the Khemisset region due to an investment dispute with the Moroccan government.
The funding will be used to support legal costs related to the dispute, although the company has previously expressed hope for an amicable resolution.
The British mining firm was granted a potash mining license in Khemisset back in 2021, but it has not been able to start operations because Moroccan authorities have not yet approved its environmental impact assessment.
Hespress was unable to obtain detailed information from the Regional Investment Center (CRI) of Rabat-Salé-Kénitra about the situation or how the project reached this deadlock.
Hespress has also reached out to a source at the CRI in Rabat-Salé-Kénitra for information on why the company had not received an environmental impact study. Despite a full day of waiting, no details were provided, with the source stating that the relevant authorities would follow up, which didn’t happen.
Under Law No. 12.03 on Environmental Impact Studies, these studies include “a detailed overview of the site’s initial state, covering its biological, physical, and human aspects. They also outline key project details, such as its stages, manufacturing processes, types and quantities of raw materials, and energy resources used, while assessing its positive, negative, and harmful effects on the biological, physical, and human environment.”
Emmerson said, “it has granted certain securities and charges over its assets to the funding counterparty for the amounts it has drawn down.”
The company said this is “considered ordinary course for litigation funding arrangements,” and it will not be enforced so long as it meets its obligations under the agreement.
It highlighted that “the initial drawdown covers all legal costs to date and means its legal team can complete the next steps in the dispute process.”
On January 2nd, Emmerson signed a financing agreement to secure the $11 million and appointed the U.S. law firm Boies Schiller Flexner as its legal counsel. The company plans to use this funding primarily for its dispute with the Moroccan government under the bilateral investment treaty between the UK and Morocco, which has been in effect since February 14, 2002.
Back in November of last year, Emmerson officially notified the Moroccan government of the investment dispute, claiming that the conflict arose due to various breaches by the government and its representatives of the agreement on the promotion and protection of investment between Morocco and the United Kingdom.
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