REG - Emmerson PLC - Notice of dispute with Moroccan Government

EmmersonAnnouncement

01/11/2024 07:00

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RNS Number : 5068K  Emmerson PLC  01 November 2024

Emmerson PLC / Ticker: EML / Index: AIM / Sector: Mining

1 November 2024

Emmerson PLC

("Emmerson" or the "Company")

 

STATEMENT REGARDING NOTICE OF DISPUTE WITH MOROCCAN GOVERNMENT

 

Emmerson, the Moroccan focused potash development company, provides an update
on its position with respect to its assets and investments in Morocco.

 

Emmerson has formally notified the Government of the Kingdom of Morocco
("Morocco" or "the Government") that there is an investment dispute between
Emmerson and the Government. The Company has engaged Boies Schiller Flexner
LLP as its litigation counsel and is examining various funding avenues for an
investment dispute.

 

The dispute arises out of various breaches, by the Government and its Agents,
of the Agreement between the Government of the United Kingdom of Great Britain
and Northern Ireland and the Government of the Kingdom of Morocco for the
Promotion and Protection of Investments, which was signed on 30 October 1990
and entered into force on 14 February 2002 (the "BIT").

 

The BIT provides that Emmerson may submit its dispute for settlement by
arbitration to the International Centre for the Settlement of Investment
Disputes ("ICSID").

 

There is no requirement under the BIT to notify Morocco of Emmerson's
intention to submit a claim to arbitration and therefore, the Company has no
obligation to wait for any specific period of time before commencing
arbitration.

 

Nevertheless, before proceeding to arbitration, Emmerson has, in good faith
and in the spirit of cooperation, invited Morocco to engage in discussions
regarding cash compensation for the damages incurred because of Morocco's
breaches of the BIT, with a view to achieving an amicable resolution of the
dispute.

 

If such discussions with Morocco are unsuccessful, Emmerson intends to submit
a claim for arbitration under the BIT, seeking damages for the harm described
above, plus interest, costs, and any such further relief as the Tribunal may
deem appropriate in the circumstances.

 

The Company remains hopeful that its dispute with the Government can be
resolved amicably. The Company will consider any and all other actions
necessary to ensure its rights are preserved.

 

Emmerson has always conducted its business in Morocco to the highest
environmental and ethical standards, often well in excess of the local
regulatory requirements, adhering strictly to local laws. The Khemisset Potash
Project is one of the most strategically valuable fertiliser assets on the
African Continent, especially for Morocco, which currently imports significant
quantities of potash to its global fertiliser company, OCP.

With the implementation of its proprietary (and patent pending) KMP design,
the Company was targeting the production of potash alongside several
complementary fertiliser products that would have employed the lowest water
usage of any potash mine globally, with the elimination of waste brines
entirely, in order to create the world's most environmentally sustainable
potash mine.

 

Market Abuse Regulation (MAR) Disclosure

This announcement contains inside information for the purposes of
the UK Market Abuse Regulation and the Directors of the Company are
responsible for the release of this announcement.

 

About Boies Schiller Flexner LLP

 

Boies Schiller Flexner is a firm of internationally recognized trial lawyers,
crisis managers, and strategic advisers known for its creative and efficient
pursuit of successful outcomes for its clients. Boies Schiller Flexner has
served as lead counsel in multiple arbitrations in the mining industry
including the recent favourable awards for GreenX Metals in its arbitration
with Poland and subsidiaries of Indiana Resources in its dispute with
Tanzania.

 

 

**ENDS**

 

For further information, please visit  www.emmersonplc.com
(http://www.emmersonplc.com/)  , follow us on Twitter (@emmerson_plc), or
contact:

 

 Emmerson PLC                                                  +44 (0) 207 138 3204

 Graham Clarke / Hayden Locke

 Panmure Liberum Limited (Nominated Advisor and Joint Broker)  +44 (0)20 3100 2000

 Scott Mathieson / Matthew Hogg

 

Notes to Editors

Emmerson is focused on advancing the Khemisset project ("Khemisset" or the
"Project") in Morocco into a low cost, high margin supplier of potash, and the
first primary producer on the African continent. With an initial 19-year life
of mine, the development of Khemisset is expected to deliver long-term
investment and financial contributions to Morocco including the creation of
permanent employment, taxation, and a plethora of ancillary benefits. As a
UK-Moroccan partnership, the Company is committed to bringing in significant
international investment over the life of the mine.

 

Morocco is widely recognised as one of the leading phosphate producers
globally, ranking third in the world in terms of tonnes produced annually, and
the development of this mine is set to consolidate its position as the most
important fertiliser producer in Africa. The Project has a large JORC Resource
Estimate (2012) of 537Mt @ 9.24% K2O, with significant exploration potential,
and is perfectly located to support the expected growth of African fertiliser
consumption whilst also being located on the doorstep of European markets. The
need to feed the world's rapidly increasing population is driving demand for
potash and Khemisset is well placed to benefit from the opportunities this
presents. The Feasibility Study released in June 2020 indicated the Project
has the potential to be among the lowest capital cost development stage potash
projects in the world and also, as a result of its location, one of the
highest margin projects. Updated financial estimates published in February
2024 indicated a net present value of US$2.2 billion, with an internal rate of
return of approximately 40%.

 

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