Two Algerian public groups and two Chinese companies are joining forces to exploit phosphate in Algeria. The parties this week signed an agreement for the creation of a mining company.
A mega project worth nearly seven billion dollars that had previously been the subject of an Algerian-Chinese agreement in November 2018.
The “shareholders’ pact for the creation of an Algerian-Chinese company for the Integrated Phosphates Project (PPI)” was signed in Algiers, the Sonatrach group said in a press release. This is a record amount for an investment in North Africa. By putting 7 billion dollars on the table, the partners intend to carry out the megaproject of exploitation and transformation of phosphate in the east of Algeria.
Two Algerian companies are taking part. Asmidal, a subsidiary of the public oil giant Sonatrach, and the Algerian mining company Manal. They are associated with the Chinese companies Wuhuan and Tian’an. The distribution of the capital of the new company called Algerian Chinese Fertilizers Company (ACFC) will be “56% of shares for the Algerian part and 44% for the Chinese part”, specifies the press release.
Strategic raw material
With “an investment of around seven billion dollars, the PPI is the first integrated project in Algeria in the field of mining and fertilizer production”, added Sonatrach. Investors thus hope to benefit from the rise in the price of phosphate and its derivatives. The price of this essential raw material for global agriculture has indeed returned to its levels of the early 2010s.
Neighboring Morocco is also a historic producer of phosphate and alone supplies 20% of the world market. On the other hand, in Tunisia, where the sector has long fed the coffers of the State, exploitation is struggling to regain its pre-2011 levels due to incessant social unrest.
The Algerian-Chinese project also provides for the development and exploitation of the Bled El-Hadba phosphate deposit in the Tébessa region (630 km east of Algiers). It also includes the chemical transformation of phosphates and the manufacture of fertilizers in two other localities. The agreement also provides for port facilities dedicated to the port of Annaba.
Nearly 30,000 term jobs
“After the completion of the project, the company will eventually produce 5.4 million tons of fertilizer per year. The project will induce considerable socio-economic growth in the eastern region of the country. In particular through the creation of approximately 12,000 jobs during the construction phase. And, in the long term, in the operating phase, approximately 6,000 direct jobs and 24,000 indirect jobs,” Sonatrach pointed out.
The first agreement on this project was signed in November 2018 between Sonatrach and the Chinese company Citic. The latter was initially to hold 49% against 51% for the Algerian part.
