Ethiopia At Work On Half a Billion Dollar Fertiliser Factory

The Ministry of Trade and Industry is undertaking a geological survey through a special project office to pave the way for the installation of Ethiopia's own fertiliser factory, estimated to cost 350,000 to 500,000 dollars, which will manufacture urea from coal.

The Coal Phosphate Fertiliser Complex Project Office, staffed with four geologists and 11 other members, has been carrying out a preliminary survey for the past three months in Yayu, Illubabor Zone of the Oromia Regional State. According to Kassaye Yeshitila, chief engineer of the Project, they have been getting positive signs of the presence of coal. The Office is now doing a geological survey to estimate the quantity and type of coal. Kassaye said that both surveys will cost 25 million to 30 million Br.

"One of the projects we eagerly expect will bring about a great change for this country is the sugar factory to be constructed in the Afar regional State," said a high ranking government official, "and the other one is this."

The government is at work to construct the sugar factory and start a sugar plantation for 700 million dollars. If the government's ambition to manufacture urea from the Yayu coal mine materialises, it could produce 300,000tn a year.

According to a study by the Ethiopian Economics Association in 1999/2000, 23pc of Ethiopia's arable land is cultivated by traditional methods. Annual figures from the Ministry of Agriculture and Rural Development show that the country imports 200,000tn of urea and 250,000tn of DAP fertiliser for this arable land. The country spends 60 million dollars for urea alone.

Kassaye said that a survey had been done three years ago, when the presence of coal was confirmed.

"It was planned then to erect a plant that would manufacture 110,000tn of urea per year," he said. "But then it was found that there was not much cost difference between manufacturing fertiliser and importing it."

The survey and its finding were then passed to the Ethiopian Electric Power Corporation (EEPCo) to be used in alternative energy projects. EEPCo said it is studying how to realise this project.

Urea can be produced from natural gas, petroleum, and coal.

"As the price of petroleum went up 200pc as of three years ago," Kassaye said, "so did the price of urea. This made the idea of producing fertiliser at home more convincing"

If the project is successful it could make fertiliser available to farmers at half the current price of about 300 Br a quintal.

Kassaye said that the preliminary study indicated the presence of 100 million tonnes of coal in Yayu, and that, according to him, enables the production of 300,000tn of urea a year. Kassaye said, "The turnkey cost of such a plant, including the acquisition and installation of machinery and infrastructure development, is between 350 million and half a billion dollars."

The project office is now studying the density of the rock structure in the area.

The office will soon begin to sink 300 to 500 wells in a six square kilometre area; samples of soil collected in this manner will be sent to a laboratory. This work has been contracted to the state owned Ethiopian Geological Survey (EGS), which will be paid 1,000 Br per metre for each well. EGS has already started the field work. If EGS does not go at the pace the government desires, the project office will consider hiring an additional contractor, according to Kassaye.

The next phase of the project will be a feasibility study to determine the amount and type of expense to sink into the manufacturing plant. The project office said that this study will take up to 10 million Br.

Kassaye said that it will be a year and half before the construction of the plant begins, according to the office's timetable.

A government official said that all the money will come from the government treasury.