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Tunisia · Europe · Geopolitics: the daily brief
Background

Phosphates

Tunisia is borrowing 110 million euros abroad to re-equip a phosphate industry that produces well under half its installed capacity. Parliament approved the state guarantee on 28 July 2026, after a bonus dispute had stopped work at four mining towns in May and residents of Metlaoui had closed the roads over water cuts in July.

Tunisia produced 8.1 million tonnes of phosphate in 2010 and 2.3 million the year after, on industry ministry figures. It never recovered: the EBRD counts 3.2 million tonnes of concentrate in 2024, against installed capacity above 8 million. Parliament has now cleared a state guarantee on a 110 million euro EBRD loan to the Gafsa mining company.
Phosphates

Phosphate rock is Tunisia's main mineral export, mined since 1897 by the state-owned Compagnie des phosphates de Gafsa, CPG. It runs ten open-pit mines and eight washing plants within 50 kilometres of Gafsa. About 80 percent of its concentrate goes to another state company, the Groupe chimique tunisien, GCT, which turns it into phosphoric acid and fertiliser. The EBRD calls CPG the main employer in the Gafsa region, where there is little other work.

The industry ministry recorded 8.131 million tonnes in 2010, 2.281 million in 2011 and 3.04 million in 2024. The US Geological Survey estimates 3.3 million tonnes for 2025. The EBRD's 3.2 million tonnes for 2024 counts concentrate, so the ministry, the USGS and the bank are not measuring quite the same thing. Samir Abdelhafidh, the economy minister, told parliament that phosphate is now about 0.5 percent of GDP and 3 percent of exports, against roughly 4 percent and 9 to 12 percent before 2011.

Parliament cleared the guarantee on 28 July 2026, by 58 votes to 13 with 9 abstentions. The EBRD lends CPG 110 million euros for mining machinery and for filter presses that recycle the water used to wash the ore. A separate 120 million dollars from the International Islamic Trade Finance Corporation buys sulphur and ammonia for GCT. Parliament voted that pair as bills 50 and 51 of 2026; they became laws 18 and 19. A decree of 1 June had put both companies under one chief executive, Omar Bouzouada.

Work stopped at Metlaoui, Redeyef, Moularès and Mdhilla in May 2026, after Eid and productivity bonuses came in at barely half previous years' levels and were paid without negotiation. The EBRD's board report, from September 2025, says the protests and strikes at CPG are mostly about expectations of jobs. In July, after several days of water cuts during a heatwave, residents of Metlaoui closed the roads into the town.

The EBRD's board report says CPG has no environmental and social management system, and that most tailings go into unengineered ponds or the environment. The bank asked its board for a derogation, judging existing operations unlikely to meet its standards fully during the loan. The filter presses are meant to raise water recycling to 90 percent, in a region where water extraction already exceeds natural recharge by up to 40 percent. The guarantee leaves the treasury liable, with public debt at 81 to 82 percent of GDP on Abdelhafidh's figures.

”the financings covered by bills 50 and 51 of 2026 are not intended for the modernisation of the Tunisian Chemical Group's means of production but for the import of raw materials needed to produce fertiliser”
Samir AbdelhafidhMinister of Economy and Planning

The numbers

Production before and after 2011
2010: 8.131 Mt, 2011: 2.281 Mt
8.131 million tonnes in 2010, 2.281 million tonnes in 2011 and 3.04 million tonnes in 2024, on industry ministry figures; USGS puts 2024 at 3.28 million tonnes and estimates 3.3 million for 2025
The EBRD loan to CPG
Up to €110m
Up to 110 million euros of sovereign loan, plus a 7 million euro technical cooperation package; project name CAPSA; board approval 9 September 2025; environmental category B
The parliamentary vote
58 to 13
58 votes in favour, 13 against, 9 abstentions, on bill 49 of 2026, in the plenary session of 28 July 2026
What the 230 million dollar figure actually contains
110 million euros from the EBRD for CPG, and 120 million dollars for GCT from the International Islamic Trade Finance Corporation; the headline adds euros and dollars together
The three phosphate laws
Law 17, promulgated at the end of July 2026, authorises the state to guarantee the 110 million euro EBRD loan to CPG, which comes with a 7 million euro grant. Laws 18 and 19, voted as bills 50 and 51 of 2026, cover the two GCT murabaha with the ITFC, of 70 and 50 million dollars
Water use in the mining basin
CPG extracts about 5.6 million cubic metres of water a year at 3 million tonnes of output, recycling 65 to 71 percent; the same report gives current fresh water extraction as 5.7 million cubic metres. Regional extraction already exceeds natural recharge by up to 40 percent. The project targets 90 percent recycling and 3 million cubic metres a year at 6 million tonnes of output
Water cuts in Metlaoui, July 2026
Residents closed the roads into Metlaoui on 11 July 2026 over repeated and prolonged drinking water cuts in a heatwave, saying the regional water utility had told them nothing and that the problem returns every summer
Phosphate's weight in the economy
About 0.5% of GDP
About 0.5 percent of GDP and 3 percent of exports today, against roughly 4 percent of GDP and 9 to 12 percent of exports before 2011, on the economy minister's figures given to parliament

What the comparison shows

Where they agree

Abdelhafidh, Bouzouada and El Majdi all say the two companies cannot fund their own recovery. Bouzouada told parliament's finance committee in July 2026 that CPG is in a structural crisis of falling output, accumulated losses, ageing equipment and social disruption, and Rehili, sixteen months earlier, called the sector's problems chronic and structural and its equipment old. Abdelhafidh says CPG's finances are too weak for it to borrow abroad without the state behind it, and El Majdi says the money has to come with real administrative, financial and governance reform.

Where they split

Bouzouada's presentation puts the shortage of water for washing the ore and the state of transport at the top of what holds the sector back. Abdelhafidh puts it in terms of equipment and governance: the loan modernises CPG's machinery and water systems, and its terms are acceptable given the company's finances. Helal says what stopped the mines in May 2026 was pay: bonuses cut to barely half and imposed without negotiation. Rehili, speaking in March 2025, set CPG's need of 50,000 cubic metres of water a day for washing against the 11,000 the basin's two treatment plants can supply. That is not the same measure as the EBRD's 5.6 million cubic metres a year, which is what CPG takes from the ground, with 65 to 71 percent of the water used in washing recycled.

What nobody is saying

No one in the debate has reconciled the two production levels on the table: the 6 million tonnes a year the EBRD's water plans assume, and the 9.4 million tonnes CPG targets for 2035. The board report says that even once the filter presses are installed, CPG will still draw 3 million cubic metres of fresh water a year at 6 million tonnes. Nobody has put a figure on what 9.4 million would take from aquifers already drawn down faster than they refill. The financial highlights section of the EBRD board report is redacted, so the fullest public account of CPG's finances stops where the balance sheet would begin.

Who says what

Samir Abdelhafidh, Minister of Economy and Planning

Told parliament the loan belongs to a programme to restore CPG's production rhythm through new equipment and better water treatment, and that the company's finances were too weak for it to look for foreign money on its own. He put repayment at ten years with three years' grace, called the terms acceptable given the situation, and said CPG had not borrowed since 2014. He insists the Islamic trade financing is a different thing: it buys raw materials for GCT, not new plant. Better governance, he says, is imperative across all public enterprises. The companies stay in public hands, he says, and structural reform may go as far as merging them.

”les financements faisant l'objet des projets de loi n° 50 et n° 51 de l'année 2026, ne sont pas destinés à la modernisation des moyens de production du Groupe Chimique Tunisien (GCT) mais à l'importation de matières premières nécessaires à la production d'engrais”the financings covered by bills 50 and 51 of 2026 are not intended for the modernisation of the Tunisian Chemical Group's means of production but for the import of raw materials needed to produce fertiliser
Omar Bouzouada, Chief executive of the Gafsa Phosphate Company and the Tunisian Chemical Group, appointed by decree on 1 June 2026

CPG and GCT gave the finance committee of the National Council of Regions and Districts an integrated strategy costing about 2.7 billion dinars, aiming at 5 million tonnes of commercial phosphate in 2028 and 9.4 million in 2035. The presentation named the shortage of water for washing the ore and transport problems, including rail, as the main obstacles, and Bouzouada said the parties involved are working with the prime minister's office to remove them. On 21 July 2026 he told parliament's finance committee that CPG is in a structural crisis of falling production, accumulated losses, ageing equipment and social disruption, and that the recovery plan needs five to seven years.

Mohamed El Majdi, Member of parliament, industry, energy and mines committee

Backs the decision to put CPG and GCT under one chief executive, calling it among the government's best moves, but says it settles nothing on its own. The sector's problems are deep and accumulated, he says, and getting out of them takes money together with real change in administration, finances and governance, not a new appointment at the top.

”الدمج الإداري بين الشركتين يعد من أفضل القرارات التي اتخذتها الحكومة”the administrative merger of the two companies is among the best decisions the government has taken
Rym Helal, Secretary general of the General Federation of Mines, affiliated to the UGTT trade union confederation

Says the Eid and productivity bonuses behind the May 2026 stoppages were barely half what workers had been paid in previous years, and were handed out unilaterally, with no negotiation with the unions beforehand. She warns that the social climate in the mining basin is getting worse, and asks who is behind what she calls a drive to stoke tension in Gafsa.

Hussein Rehili, Researcher on development and water resource management

Treats water as the binding constraint on any production target. Speaking on Mosaïque FM in March 2025 about the government's 2025 to 2030 phosphate programme, he said the Gafsa mining basin has two wastewater treatment plants with a combined 11,000 cubic metres a day, while CPG needs 50,000 a day to wash the ore. He called the target the government had announced at the time, 14 million tonnes within five years, unrealistic given the age of CPG's and GCT's equipment. He proposed supplying the washing plants from the Skhira seawater desalination plant and moving the ore by pipeline, and said the state must stop using CPG to meet the region's demand for jobs and wages.

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