The largest potash fertilizer project in Africa, led by Chinese capital, has officially commenced operations in the Republic of the Congo. Located in Mengge Village, near the port city of Pointe-Noire, the project represents a major investment of over $1.3 billion. It is developed by Meg Mine Potash Congo (MPC), with participation from China Spring Holdings Group and Canada’s McGill Mining Co., Ltd. The project involves the construction of a 1.2 million tons per year potassium chloride facility, including brine extraction, processing, granulation, packaging, thermal power, office areas, and port infrastructure.
Wang Fuliang, deputy general manager of MPC, highlighted that the project benefits from government support from both China and the Republic of the Congo, including tax incentives and tariff reductions. It is expected to create nearly 1,000 direct jobs for locals, contributing to economic diversification in the region.
Pierre Oba, the Minister of Mines and Geology of the Republic of the Congo, emphasized that the project is a key industrial initiative for the country and Central Africa, aiming to boost youth employment and increase local income.
Donghua Technology, an A-share listed company, signed a general contract with MAG Corporation and its Congolese subsidiary in Beijing. The contract includes 38 systems or projects, with a total value of approximately $521.85 million (about RMB 3.2 billion). The project timeline spans 36 months, with the goal of completing the plant by late 2015. The contract price includes a fixed portion and a performance-based component, which could influence Donghua’s revenue from 2013 to 2016.
Interestingly, this is not the first time a Chinese firm has partnered with MAG on a similar potash project. In 2010, Zhongcheng Company had signed a deal with MAG for a 1.2 million ton potash plant in the Republic of the Congo, but the project was later abandoned due to complications involving TSC’s acquisition of MAG shares.
Two years later, MAG partnered with Donghua Technology on a larger-scale project, which exceeds the previous $1.2 billion deal. While this is a significant overseas contract for Chinese firms, it has also raised questions about whether the deal is overpriced. At the time, Donghua was cautious, noting that the agreement was still informal and carried considerable uncertainty.
Once completed, the Mengge potash project is expected to generate annual sales exceeding $500 million, making it a major player in the African fertilizer market.
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