Home / Finance & Economy / Phosphate: Can Algeria Worry Morocco?

Phosphate: Can Algeria Worry Morocco?

Algeria wants to increase its phosphate production from 1 to 10 million tons per year by 2022 and to position itself as one of the world’s leading phosphate exporters. Should Morocco fear competition?

Algeria, the third largest oil producer in Africa, has been heavily involved in the development of its domestic phosphate production. The ambition is significant: to increase the national production level of phosphates from 1 to 10 million tons per year, and thus occupy the fifth largest phosphate producer in the world, behind OCP, third.

To translate this ambition into a project, Sonatrach, the first African oil group and twelth in the world, as well as two other Algerian public companies, Asmidal (fertilizer marketing) and Manal (mining holding company), concluded in Tebessa (East of Algeria), a partnership agreement with two Chinese companies. It is Wengfu, a company specializing in phosphorus extraction and fertilizer production, and CITIC (China International Trust and Investment Corporation), a public investment fund company of the People’s Republic of China, already committed in several construction and engineering projects in Algeria.

Under the agreement, a phosphate extraction and processing complex will be created by mobilizing a 6 Billion Dollars investment volume, the Algerian News Agency (APS) reported.

A pride for Algeria

“The phosphate processing plant is the first major and important industrial project that Algeria has been launching for nearly a decade and whose output will transform the eastern region of the country and consolidate the national economy”, welcomed the Algerian Prime Minister Ahmed Ouyahia at the signing ceremony of the partnership.

In detail, this project, of which the Algerian side holds 51%, against 49% for the Chinese part, will concern the exploitation of phosphate extracted from the Bled El Hadba mine in Tabessa, with an area of ​​2,045 hectares and with a capacity of 500 million tonnes (almost 22% of the country’s reserves). It will also focus on “the valorization of this natural resource through the production of fertilizers, ammonia, silicon and other materials used in different economic activities”, explained the Algerian Minister of Industry and Mines, Youcef Yousfi, to APS.

As soon as it starts operating in 2022, this industrial complex will enable “the extraction of 6 million tons per year of high quality phosphate from Bled El Hadba, the production of 3 million tons of phosphoric acid at Oued Kebrit (Skikda) and the realization of an accompanying unit for the recovery of fluorinated discharges from the phosphoric acid production units, which will produce 60,000 tonnes of anhydrous hydrofluoric acid (AHF) and 57,000 tonnes of silicon. It will also cover the production of 1.2 million tonnes/year of ammonia and 4 million tonnes of fertilizer”, says Youcef Yousfi.

Through this project, Algeria plans to create 3,000 direct jobs, and 14,000 temporary jobs, to increase its national phosphate production and export large quantities of fertilizer, guaranteeing revenues “of nearly $ 2 Billion a year, Ahmed Ouyahia said.

Competition for OCP?

Should the OCP fear Algerian competition? In the opinion of a senior official at the Office Cherifien des Phosphates, the answer is negative. OCP does not have to fear Algerian competition, because Morocco has the largest phosphate reserve in the world, but also an effective presence in all major world markets. The Algerian project, while theoretically promising, will not be able to do much against OCP. In addition, it is necessary to wait until 2022 to evaluate the capacity of Algeria to concretize its project and to achieve its objectives. The real competition for OCP will come mainly from the Saudi mining company Maaden which is preparing to increase its production of ammonium phosphate to 9 million tons per year.

According to the 2017 OCP Group Annual Report, the Group has a portfolio of high quality and varied resources and reserves among the largest in the world, up to 50 Billion tonnes, more than 71% of reserves worldwide (against 2.2 Billion tonnes for Algeria). In 2017, OCP production in phosphate rock exceeded 32 Million tonnes, of which one-third for export, representing 37% of world market share, according to preliminary statistics from the International Association of the fertilizer industry (IFA). In the case of phosphoric acid, the Group produces 5.7 Million tonnes annually

Check Also

Morocco, 3rd best destination in the world for foreign direct investment

Morocco is one of the countries that receive the most foreign direct investment (FDI) in …

Leave a Reply