Norwegian fertiliser maker Yara International is considering building a $2 billion plant in Mozambique and may seek partners to share the cost, the chief executive said.
Mozambique awarded Yara a project in January to make ammonia and urea from the country’s gas output, saying the firm could produce up to 1.3 million metric tons of fertilisers annually.
The fertiliser project has seen limited progress so far and has no construction timeframe but discussions on a development programme were continuing, Yara CEO Svein Tore Holsether told Reuters in an interview at a business summit in Oslo.
“The value of the project, if I use industry benchmarks, will be about $2 billion investment,” he said, adding that it was too early to say if Yara would develop the project alone.
“We are working on it and time will tell what the structure will be,” Holsether said.
If developed, Yara would be able to use between 80 million and 90 million cubic feet of natural gas per day to produce ammonia and urea. In addition to making fertilisers, the site would have a power plant with capacity of 50 megawatts (MW).
Mozambique wants to reduce fertiliser imports, which are now vital for its agricultural industry, and replace them with local products made from its natural gas resources.
Yara, which is seeking acquisitions outside Europe, has been considering assets in Africa, Holsether said without giving a timeframe for any purchase.
“Africa is going to be our largest market at some point. I am just looking at the fundamentals — land availability, climate, water — tick all the boxes on that. I do believe the fundamentals are in place,” he said.
Yara International already produces fertilisers in Libya and is building a terminal in Tanzania, according to its website. The company is also assessing the viability of a potash mining facility in Ethiopia, it said.
Editing by Terje Solsvik and Edmund Blair