Morocco’s phosphate giant OCP SA is seeking foreign investors to help finance its fertiliser operations as the Iran war disrupts global sulphur supplies, drives up production costs and puts pressure on the state-owned company’s finances.
- OCP SA, Morocco's leading phosphate producer, is courting foreign investors for its new fertiliser hub in Mzinda to offset soaring sulphur costs.
- Skyrocketing sulphur prices have hindered the Mzinda project's progress.
- The crisis has forced OCP—Morocco's largest company—to warn of potential dividend suspension and report financial losses.
- OCP may open up its lucrative chemicals unit and uranium-extraction subsidiary to outside investors, expanding opportunities beyond traditional fertilisers.
OCP has opened talks with local and international investors about a potential equity investment in Mzinda, its new fertiliser hub in central Morocco, which is scheduled to begin production next year, according to a person familiar with the discussions.
The project has slowed as surging sulphur prices increase development costs, forcing OCP to seek additional funding to pay contractors and suppliers, the person said.
The price spike is linked to supply disruptions caused by the Iran war, which have affected shipping through the Strait of Hormuz, a critical route for global energy and commodity trade. Sulphur, a key raw material used to produce phosphoric acid for phosphate fertilisers, has become more expensive, adding to OCP’s operating costs.
OCP, Morocco’s largest company by sales, reported a first-half loss last month and warned it could suspend dividend payments this year. The company is not seeking fresh equity from the Moroccan government, which owns nearly 95% of the business.
Assets open to investors
Beyond Mzinda, OCP is considering bringing foreign investors into OCP Speciality Products and Solutions (SPS), its chemicals business, which generated about $1 billion in revenue last year.
SPS produces purified phosphoric acid used in electric vehicle batteries, among other products. OCP may also invite investors into Uranext, an SPS subsidiary that extracts uranium from phosphate deposits.
OCP controls more than two-thirds of the world’s phosphate rock reserves, making its financial and operational decisions significant for global fertiliser supply.
Cutting costs and securing supplies
OCP has responded to the sulphur shortage by bringing forward maintenance, reducing production in May and June, and increasing triple superphosphate output. This fertiliser requires less sulphur and no ammonia.
The company is also seeking alternative sulphur supplies from Spain, Canada, Kazakhstan and the US Gulf Coast while exploring equipment to recover sulphur from locally mined pyrites.
OCP aims to produce 1 million tonnes of sulphur in 2027, potentially increasing output to 4 million tonnes by 2030. It is also pursuing long-term shipping contracts that could save up to 2 billion dirhams ($203 million) annually as it works to reduce costs and strengthen its finances.
In August, Business Insider Africa reported that the company was 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.