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 P₂O₅, 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.
About the author
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.
