Beyond the resource curse: how Morocco built an industrial system around phosphate how Morocco built an industrial system around phosphate. By Rob Smoot The "resource curse" is one of development economics' most durable ideas. Since Sachs and Warner's work in the 1990s, economists have warned that mineral wealth can do more harm than good. It can crowd out manufacturing, distort public spending, and leave economies at the mercy of commodity cycles. The usual prescription is better management of the money that resources generate: stronger fiscal rules, sovereign wealth funds, or limits on a country's rate of extraction. Morocco's phosphate industry points to a different solution. Morocco holds the world's largest phosphate reserves. Historically centered on phosphate-rock extraction and exports, OCP began moving downstream decades ago. Over the past two decades, however, that industrial transformation has accelerated dramatically. OCP is now the center of an integrated industrial system spanning mining, fertilizer manufacturing, logistics, scientific research, and even water supply. In August, Morocco's OCP Group and CHS Inc., America's largest farmer-owned cooperative, announced a proposed joint venture involving investment of up to $450 million to build a phosphate fertilizer production facility in Louisiana - the first new U.S. phosphate fertilizer facility since 1984. From rescue to reinvention. The transformation was not inevitable. When OCP published financial accounts for the first time in 2006, they revealed a company in trouble. Revenue was under 17 billion dirhams, shareholder equity was negative by around 16 billion dirhams, and an unfunded pension obligation was dragging on the balance sheet. This prompted reforms that went far beyond fixing the books. Rather than simply extracting phosphate and exporting it, Morocco set out to build a manufacturing base around it. Two decades and several commodity cycles later, the numbers tell part of the story. OCP's revenue reached $12.27 billion in 2025, up from roughly $2 billion twenty years earlier, with an EBITDA margin of 38%. But the more interesting change is what happens to the rock once it leaves the ground. Turning rock into fertilizer, pipelines and ports. Rather than primarily shipping raw phosphate as the main output of its industrial program, OCP converts much of it into phosphoric acid and fertilizer, moving it through pipelines, ports, processing plants, and related infrastructure the company built itself. Ultimately, this was more than a decision to add profitable businesses around mining. With the state's direction, OCP was able to coordinate complementary investments that a conventional mining company might have had little incentive to make individually. A fertilizer plant, slurry pipeline, port infrastructure, research facilities, and water systems each serve different parts of the operation, but their value increases when they function together. OCP's long-term approach and its relationship with the state encouraged these investments as components of a single, enduring industrial strategy. The economic significance of this model lies not simply in the number of assets OCP controls, but in the way those assets reinforce one another. Processing capacity creates demand for reliable logistics; logistics become more valuable when connected to ports and export infrastructure; and research capabilities allow the company to adapt production to changing regulatory and market conditions. Taken together, these investments reduce the disadvantages of operating as a supplier of a single raw commodity and increase the share of value that can be created inside the country. The slurry pipeline connecting the Khouribga mines to the Jorf Lasfar processing complex illustrates this logic. Commissioned in 2014 and stretching roughly 235 kilometers, the pipeline moves phosphate in slurry form directly from the mines to the coast, cutting transport costs, water use, and emissions compared with road haulage. This kind of integration gives OCP options that a pure exporter lacks. When demand for one product weakens, the company can shift its product mix. In the first nine months of 2025, for instance, OCP increased production of triple superphosphate, which made up around 30% of fertilizer export sales, while scaling back sales of raw phosphoric acid in favor of downstream fertilizer. Integration does not insulate OCP from exposure to global fertilizer prices or to imported inputs such as sulfur and ammonia. But it gives the company more ways to respond when those prices move. Bringing research home. A less visible part of OCP's strategy was building scientific capacity inside Morocco rather than relying on outside expertise. In 2014, OCP established Mohammed VI Polytechnic University in Benguerir, dedicated partly to research on phosphate. That investment paid off when the European Union tightened limits on cadmium in fertilizer, a naturally occurring contaminant in sedimentary phosphate rock. The EU's cap of 60 mg/kg P[2]O[5], adopted in 2019 and applied from 2022, could have posed a serious problem for Moroccan exports. Instead, after roughly €60 million in research spending, OCP developed "decadmiation" technology that it says brings cadmium levels below 20 mg/kg, well under the EU threshold. A regulation that might have been a constraint became, in effect, an engineering problem Morocco could solve on its own terms. Making water part of the plan. Vertical integration cannot solve everything. Morocco is one of the world's most water-stressed countries, and phosphate processing uses large volumes of water, much of it far from the coast. In a conventional mining setup, this would pit industry directly against farmers and households. OCP chose instead to build its own water supply and diversify its water sources. The company committed to running its mining and industrial operations entirely on desalinated seawater and treated wastewater; by 2025, it said it had reached that goal with respect to the Benguerir mine. A 203-kilometer pipeline now carries desalinated water from Jorf Lasfar inland to Khouribga, with capacity to supply not just OCP's operations but also nearby cities and farms. A private company would have little reason to build water infrastructure for its neighbors. A state-linked one, embedded in a national development strategy, does. As of 2025, for example, OCP's subsidiary OCP Green Water announced that it had secured the drinking water supply of Safi, El Jadida, and southern Casablanca. This also illustrates a broader point about industrial policy. Infrastructure built initially to solve a production constraint can acquire value beyond the company that financed it. Water systems, transport links and research institutions can become part of a wider economic platform when they also serve cities, suppliers, workers and other industries. That does not make such investments automatically efficient or easy to replicate, but it helps explain why the boundaries between corporate investment and national development policy can become unusually close in resource-based economies. A different way to think about resource wealth. OCP's experience suggests that resource policy is not only about managing the money that flows from extraction. It is also about how a country organizes production around the resource itself. The distinction matters because the long-term development effect of a natural resource depends not only on how much revenue it generates, but also on the economic relationships formed around it. A resource sector that remains largely isolated from domestic manufacturing, infrastructure and knowledge creation can produce very different outcomes from one that becomes connected to a broader industrial system. Morocco's experience therefore shifts part of the debate from the management of resource income to the organization of productive capacity. None of this means OCP is a template that other resource economies can simply copy, or that industrial integration is a guaranteed cure for the resource curse. In this case, Morocco was willing to coordinate investment across mining, manufacturing, research, and infrastructure over two decades - a rare combination. However, the OCP case study does suggest a genuine alternative to the usual policy debate around resource extraction and value creation. Instead of asking only how to stop resource wealth from causing harm, governments might also ask how a resource can become the foundation of an industrial economy, reaping social and economic benefits for society at large. Robert Smoot is a lawyer and scholar of natural resource law. He is writing a book of first impression on the legal history of the conflict between the United States federal government and the State of Alaska over natural resources, including oil and gas. A former fisherman in Alaska and intern at the U.S. Department of the Interior and the Natural Resources Section of the Alaska Department of Law, Smoot has extensive knowledge of issues surrounding water, fisheries, and the maritime industry. He attended COP29 in Azerbaijan as a Research and Independent Non-Governmental Organization (RINGO) delegate. Smoot also lived in Morocco as an expatriate, where he developed a special interest in the country's natural resource development. Photo: OCP Group. View of OCP operations in Jorf Lasfar, Morocco.

Green fertilizers and hydrogen can reset EU-Morocco ties. The recent crisis at Ceuta, the Spanish city that borders Morocco on the North African coast, is more than a migration story. It is also a reminder of the economic gap across the Mediterranean. The images should prompt a broader question: Does Europe want a relationship centered on fences, patrols and short-term migration deals, or one built around shared economic interests? Rather than retreating from cooperation, Brussels should use the Pact for the Mediterranean to build in the areas where European and Moroccan interests genuinely overlap: investments in fertilizers and green hydrogen. Common ground. Fertilizers are a good place to start: They are essential to food security, and high energy prices have weakened European production while deepening the continent's dependence on external suppliers, including Russia. Morocco is already a major supplier to Europe, accounting for 19% of European Union fertilizer imports in the third quarter of 2025. It also holds around 68% of the world's reserve of phosphate, the mineral at the base of most fertilizer production. Yet some of these reserves lie in Western Sahara, a disputed territory where a subsidiary of the state-owned OCP Group operates, adding political and legal sensitivity to the sector. A second vulnerability runs through Morocco's fertilizer industry and concerns energy supply. Phosphate-based fertilizers require ammonia, which the country still largely imports in carbon-intensive form. In 2024, Saudi Arabia and Qatar together accounted for roughly one-third of Morocco's ammonia imports by value, exposing the industry to geopolitical tensions and disruptions in the Strait of Hormuz. Rabat could reduce this dependency by drawing on its solar and wind resources to produce green hydrogen, then converting it into green ammonia for fertilizer production. European policymakers have already devoted considerable attention to green hydrogen in Morocco, and Global Gateway includes plans for large-scale green ammonia production. The next step is to connect these efforts more directly to Morocco's fertilizer industry. This could create more value than exporting hydrogen to Europe. Hydrogen remains difficult and expensive to transport over long distances, so converting it into ammonia or using it directly in fertilizer production is the more practical route. That approach could help decarbonize a strategic Moroccan industry while giving Europe a more resilient supply of lower-carbon fertilizers. Yet, such diversification should complement, not replace, efforts to strengthen Europe's own fertilizer production. Rerouting the EU-Morocco relationship. Green ammonia is no silver bullet. On its own, it will not resolve Morocco's unemployment problem or halt migration to Europe. Large-scale hydrogen production would place additional pressure on water in a country already facing severe water stress. OCP has also drawn criticism over pollution and the effects of its operations on local communities. At the same time, European-backed projects involving Western Sahara need to respect the territory's distinct legal status and the legal requirements concerning Sahrawi consent and tangible benefits, without prejudging its final status. The European Court of Justice has annulled EU-Morocco trade arrangements applying to the territory where these conditions were not met. Nevertheless, the approach is worth pursuing. It would be a smart use of the EU's external spending: supporting Rabat's sustainable industrial development while advancing European strategic interests in food security, energy resilience and supply-chain diversification. As the EU negotiates the proposed €200 billion Global Europe Instrument for 2028-2034, this is the balance it should seek. Development cooperation can contribute to Europe's strategic objectives, but it will remain credible only if it stays anchored in its development purpose and responds to partner-country priorities. Brussels should resist treating migration tensions as a reason to narrow its relationship with Morocco. The more constructive path is to invest where the two sides' interests genuinely overlap. Green fertilizers offer one opportunity: a partnership built on mutual value rather than short-term crisis management. Every Friday its editorial team goes behind the headlines to offer insight and analysis on the key stories driving the EU agenda. Subscribe for free here.

Morocco's phosphate giant plans $450 million US fertiliser plant, America's first in more than 40 years. 29 August 2026 12:03 PM Morocco's OCP Group is preparing to build America's first new phosphate-fertiliser plant in more than four decades as part of a proposed investment worth up to $450 million. Morocco's OCP Group and American cooperative CHS plan to invest up to $450 million in a Louisiana fertiliser factory. Photo credit: USDA. * Morocco's OCP and American farmer-owned cooperative CHS plan to build a fertiliser plant in Louisiana. * The companies expect to invest up to $450 million in a facility producing more than one million tonnes annually. * It would be the first comparable US phosphate-fertiliser plant built since 1984. * The project still requires funding and regulatory approvals, and construction has not begun. Europe's Economy Is Gaining More Momentum, ECB's Kocher Says OCP North America and CHS, the largest farmer-owned cooperative in the United States, announced plans on 26 August to form a joint venture for the factory. The facility would be located at the Cornerstone Energy Park in Waggaman, Louisiana, close to the Mississippi River. It is expected to produce more than one million tonnes of phosphate-based fertiliser annually. If approved and completed, the companies say it would be the first plant of its kind built in the United States since 1984. Moroccan raw material, American production OCP Group would supply phosphoric acid to the Louisiana factory. The acid is produced from phosphate rock and is a central input in the manufacture of fertiliser used on crops including maize, wheat and soybeans. Finished products from the factory would be distributed through OCP North America and CHS's network of agricultural cooperatives, retailers and farmers. The structure would allow OCP to move further into manufacturing inside one of the world's largest agricultural markets instead of supplying only imported finished fertiliser. It would also connect Morocco's enormous phosphate resources directly to American manufacturing and food production. Morocco holds the world's largest known phosphate-rock reserves. OCP, which is controlled by the Moroccan state, has become one of the world's most influential suppliers of phosphate fertilisers. The proposed factory would produce more than one million tonnes of phosphate-based fertiliser annually.Scott Audette / REUTERS America imports 40% of what its farmers use The companies said the United States imports approximately 40% of the phosphate fertiliser required by its farmers. They estimate that the proposed Louisiana factory could reduce that import dependence by more than 48%. That figure is a company projection. It has not been independently tested, and the plant would still rely on phosphoric acid supplied by Morocco. The factory would therefore increase the amount of fertiliser manufactured on American soil without making the supply chain entirely domestic. Locating the plant near the Mississippi River would give it access to raw materials and allow finished fertiliser to be transported through one of America's most important agricultural logistics systems. The project also arrives as food-producing countries seek greater control over fertiliser supplies following disruptions caused by wars, sanctions, higher energy prices and export restrictions. Phosphate is one of the three principal nutrients used in commercial fertiliser, alongside nitrogen and potassium. Funding and approvals are still required OCP and CHS have not made a final investment decision. The project remains subject to funding, regulatory reviews, engineering work and other approvals. The companies have applied for possible support through the US Department of Agriculture's Fertilizer Investment and Expansion for Long-term Domestic Supply programme. Construction is expected to take up to 24 months after the necessary approvals are secured. The partners did not disclose how ownership of the proposed joint venture would be divided or how much each company would contribute to the investment. They also did not provide a firm opening date. Jobs and a deeper US presence The factory is expected to create approximately 500 construction jobs and 60 permanent positions. The companies estimate that its total economic effect could support 924 direct and service-related jobs. CHS generated revenue of $35.5 billion during its 2025 financial year and serves customers in 65 countries. Its local distribution network would give OCP access to American farmers without requiring the Moroccan company to construct an entirely new sales system. For OCP, the transaction could provide a template for moving closer to major customers while maintaining Morocco's role at the centre of the supply chain. For the United States, it offers additional production capacity at home, but with a critical African input. The result is not a retreat from fertiliser imports. It is a proposed reorganisation of them, with Moroccan phosphate processed into finished products inside America.