Doha – Platts, part of S&P Global Commodity Insights, has proposed major changes to its FOB Morocco phosphate rock assessment methodology. The modifications will take effect on July 3. The initiative specifically targets better alignment with Morocco’s phosphate market structure.
Under Moroccan Mining Code (law No. 33-13), state-owned OCP maintains exclusive legal rights to extract, process and sell all phosphate rock in the country. OCP operates primarily through quarterly supply contracts with its international buyers.
The core of Platts’ proposal shifts the assessment basis completely. The new published price would exclusively represent quarterly contract prices established between OCP and its verified customers. Importantly, spot market transactions would no longer factor into the price assessment.
The name change reflects this fundamental shift in methodology. The assessment will be renamed from “Phosphate Rock FOB Morocco, 68-72 BPL” to “Phosphate Rock FOB Morocco CP, 68-72 BPL” – with “CP” explicitly indicating “Contract Price.”
In practical terms, Platts would directly collect and verify contract prices agreed between OCP and its various buyers. These prices would be published without additional analysis or editorial adjustments from Platts.
This marks a departure from present practice. Currently, Platts assesses prices based on its market analysis of both quarterly contracts and spot deals to determine a representative tradable value.
For continuity, the revised price assessment will maintain its existing publication channels and database code (FPRMA04). Market participants can submit feedback on this proposal until June 3
Morocco: A phosphate powerhouse
Morocco holds a dominant position in global phosphate markets. The North African country possesses approximately 70% of the world’s phosphate rock reserves, according to recent reports. This places the nation far ahead of any competitors in terms of resources.
Morocco’s phosphate reserves exceed 50,000 million tons, dramatically surpassing China’s 3.2 billion tons, despite China being the world’s largest producer. The strategic mineral is primarily found in regions like Khouribga, Oued Eddahab-Lagouira, and Youssoufia.
While China leads global production with 90 million tons in 2023, Morocco ranks second with 35 million tons. The country is the world’s leading exporter of raw phosphate and fourth largest exporter of fertilizers. In 2021, Morocco supplied 54% of all fertilizers in Africa.
Phosphate is a sedimentary rock formed millions of years ago through the accumulation of organic matter at the bottom of oceans. The largest global deposits are found in Morocco, which is also among the world leaders in phosphate extraction.
The country benefits from its strategic location with access to both the Atlantic Ocean and Mediterranean Sea. Its advanced port infrastructure, including the Tanger Med Port (Africa’s largest), enhances export capabilities. Morocco also possesses important reserves of other valuable minerals including lead, zinc, silver, copper, and gold.
The Moroccan government has implemented significant reforms to modernize the mining sector, including the Mining Law 33-13 of 2015 and the Morocco Mining Plan 2021-2030. These reforms aim to improve institutional efficiency and ensure environmental sustainability of mining activities.
Essential resource with global impact
Phosphate serves crucial roles across multiple industries. It is the natural source of phosphorus, which provides approximately one-quarter of plants’ nutrient requirements for growth and development.
The rock is processed to produce one of the three most commonly used macronutrients in fertilizers, alongside nitrogen and potassium. Phosphate can also be transformed into phosphoric acid used in food, cosmetics, and electronics.
The mineral is critical to global food security, serving as a key ingredient in the production of essential agricultural fertilizers. It also plays a vital role in manufacturing iron and lithium phosphate, a key component in lithium-ion batteries used in electric vehicles (EVs) and energy storage systems.
Mining contributes 10% of Morocco’s GDP, with phosphate accounting for 90% of this sector. Exports of phosphate and derivatives reported a 34% decline in 2023, reaching MAD 76 billion ($7.6 billion), primarily due to falling international fertilizer prices.
With substantial investments in fertilizer production and the development of the Jorf Industrial Accelerator Zone, created specifically for EV battery production, Morocco is positioning itself as a key player in green technology markets.
This industrial zone has initial investments of $2.3 billion and promises to generate thousands of jobs while attracting international investments.
