A big Chinese firm, COMPLANT, has been given a contract to study the potential reserve of a coal mine in south Ethiopia to produce urea fertilizer, the management said on Sunday.
The contract was signed between the China National Complete Plant Import & Export Corporation (COMPLANT) and the project office for coal phosphate fertilizer under the Ministry of Trade and Industry on Sunday, said Xu Wanhua, chief representative of COMPLANT's Ethiopia office.
The coal mine is located at Yayu, Oromia state. Ethiopia has had a long-standing interest in developing coal reserves at this coal mine to build a fertilizer manufacturing plant.
Ethiopia imports close to 200,000 tons of urea fertilizer a year and spent over 60 million U.S. dollars last year.
According to forecasts made by the Ministry of Trade and Industry, Ethiopia may spend over 75 million dollars this year, as the cost of a ton of urea in the world market has inflated to 370 dollars.
Alarmed by the skyrocketing price of fertilizer in the world market, the office of the prime minister has ordered fresh surveys to be conducted at the Yayu coal mine.
COMPLANT has therefore been hired to complete the job in one year and determine whether the coal reserve at Yayu could help manufacture 300,000 tons of fertilizer a year. It will also examine the mineral content of the coal and make a forecast as to how many years the reserve could last as a raw material source.
If successful, as anticipated, the surveys, made by COMPLANT, will proceed with the construction of a manufacturing plant at a projected cost of up to 300 million dollars.
Official sources said the design and supervision work of the plant will also been given to COMPLANT.