Morocco and Emmerson move closer to arbitration worth $2.2 billion concerning the shelved Potash project in the United States.

In a significant development, mining company Emmerson has filed a formal request for arbitration against Morocco at the International Centre for Settlement of Investment Disputes (ICSID). The dispute revolves around Emmerson's Khemisset potash project, located approximately 90 kilometers northeast of Rabat.

Emmerson has promoted the Khemisset project as one of the lowest-capital-cost developments globally and a potential anchor for Morocco in the international fertilizer market. The project, with an estimated resources of 311 million metric tons at an average grade of 10.2 percent potassium oxide, was expected to produce over 700,000 metric tons of potash annually over a 19-year mine life.

However, the project's development was effectively halted due to the commission's conclusion that the project's expected water consumption could not be reconciled with local resources. This conclusion, according to Emmerson, constitutes unlawful interference with its rights under the 1990 Morocco-UK bilateral investment treaty.

The miner is seeking compensation valued at US$2.2 billion, equivalent to the project's assessed worth. The alleged reasons for the arbitration include expropriation and violation of investor protections by Morocco.

In response, Morocco has appointed Professor Zachary Douglas as its arbitrator in the ongoing legal battle. Hicham Naciri has been named as Morocco's counsel for the arbitration.

Emmerson, on the other hand, has nominated Stanimir A. Alexandrov as its arbitrator. The company has also highlighted backing from a group of investors with prior arbitration experience, including GreenX Metals (ASX:GRX, LSE:GRX), which was involved in a case against Poland.

The three member tribunal for the arbitration requires only a jointly accepted president before hearings can begin. The president of the tribunal for the dispute between Morocco and Emmerson is Professor Zachary Douglas, KC.

The Khemisset dispute promises to be a significant test of Morocco's commitment to upholding investor protections and fostering a favourable environment for foreign investment in the country's burgeoning mining sector.