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LONDON - Emmerson PLC (AIM:EML) announced Monday it is pursuing international arbitration against the Kingdom (TADAWUL:4280) of Morocco, seeking compensation of US$2.2 billion after Moroccan authorities rejected the environmental permit for its Khemisset Potash Project.
The company has filed a Request for Arbitration with the International Centre for Settlement of Investment Disputes following what it describes as breaches of the UK-Morocco Bilateral Investment Treaty. The legal action comes after Emmerson’s Environmental and Social Impact Assessment received a second unfavorable recommendation in October 2024, despite the company’s efforts to address previously raised environmental concerns.
In January 2025, Emmerson secured US$11 million in litigation funding to pursue its claim. The company has appointed Boies Schiller Flexner LLP as legal counsel for the proceedings.
The rejection of the environmental permit led Emmerson to fully impair the Khemisset asset, resulting in a US$21.1 million write-down and contributing to an overall loss of US$25.7 million for 2024.
Earlier in 2024, Emmerson had developed a new processing methodology called the Khemisset Multi-mineral Process (KMP), which it claimed would reduce water consumption by 50% compared to previous plans and eliminate the need for waste brine disposal.
CEO Graham Clarke called the rejection "extremely disappointing" but expressed confidence in a successful outcome from the arbitration. The company has significantly reduced its operating costs while the legal process unfolds.
According to the company’s statement based on a press release, Emmerson is also exploring ways to commercialize its proprietary potash processing methodology while minimizing expenditure during the arbitration period.
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