• Sunday, February 25, 2024
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BusinessDay

Yara plans $2.5bn gas-based fertiliser plant in Africa

Yara International ASA, the largest publicly traded nitrogen-fertiliser seller, said it plans to build a $2.5bn plant in West or East Africa once gas projects come on-stream towards the end of the decade.

Yara has held initial talks with governments in countries such as Tanzania, Angola, Ghana, Nigeria and Mozambique about building a “considerable and world-class” urea factory to produce for African and foreign markets, Joergen Ole Haslestad, its chief executive officer said in an interview yesterday in, Addis Ababa.

“We would very much like to participate in greenfield fertiliser production developments,” he said. “This is probably three to four years down the road before it will materialise.”

Mozambique may become the world’s third-largest gas producer in 2018 after companies such as Eni SpA of Italy and Woodlands, Texas-based Anadarko Petroleum Corp. begin output from reserves estimated at 250trn cubic feet. Tanzania, which has the biggest reserves in east Africa after Mozambique with 46.5trn cubic feet, expects that figure to exceed 100trn cubic feet within the next two to three years, Energy Minister Sospeter Muhongo said in February.

“Obviously the west part of Africa is good for Latin America where have big operations,” Haslestad said about the export possibilities from the planned fertiliser plant. “So we can take advantage of that.”

Yara, based in Oslo, plans to add to its existing seven African bagging and warehousing facilities by opening a $20m unit close to the harbour in Dar es Salaam, Tanzania’s commercial capital, in October. It plans a similar venture in Ghana once the economic situation improves in that country, Haslestad said.

Ghana has turned to the IMF for help in rescuing its currency, which has lost 37 percent against the dollar this year.

A decision on whether to proceed with potash extraction at Yara’s majority-owned project in northeast Ethiopia will probably be made early next year, he said. Production of sulphate of potash for export could then begin three years later from what would be a $1bn project, according to Haslestad.

“There will be resources enough for having mining operations there for the next 30 to 40 years,” he said.

The company expects to see sales grow “gradually” in Africa, which is the world’s fastest-growing fertiliser market, he said.