Allana Potash and Israel Chemical join Ethiopia fertility project

HOUSTON (ICIS)–Canadian fertilizer producer Allana Potash and company investor Israel Chemical (ICL) announced on Monday that the two companies will contribute $530,000 to a two-year program to map fertility levels in Ethiopia.

Under the direction of the Ethiopian Agricultural Transformation Agency (ATA), the project will map fertility levels of the African nation’s agricultural lands and include 600 field trials and demonstrations in 30 districts. The end goal is to support the development of fertilizer applications and to determine optimal nutrient levels for improved crop yields.

ICL will contribute $330,000 and Allana $200,000, with ATA providing an additional $60,000 on its own to the fertilizer research project, which will also develop an agricultural growth strategy and sponsor student training to develop expertise on the benefits of potassium fertilizers.

Allana CEO Farhad Abasov said agriculture is Ethiopia’s largest sector, with significant growth opportunities. As such, the producer is committed to the industry and related agriculture businesses.

“In conjunction with our partner, ICL, we plan to assist in the development and expansion of a thriving fertilizer market in Ethiopia and in much of east Africa. We believe that this region and the entire African continent represent immense market potential for all nutrient consumption, especially potash,” said Abasov.

The two producers have joined on the Danakhil project in Ethiopia with the agreement that ICL would take a $23m share in Allana, which is using the investment proceeds to further develop the Danakhil potash mine.

The Danakhil potash project comprises 312 square kilometers in northeastern Ethiopia. The company’s feasibility studies project that within a five-year period up to 1m tonnes per year of potash could be produced using solution mining and solar evaporation techniques.

With mines in Israel, Spain and the UK, ICL is the sixth largest potash producer and in 2013 sold over 5m tonnes of the crop nutrient. The producer holds approximately 16.38% of the issued and outstanding common shares of Allana on a non-diluted basis.

“With these ATA initiatives in full swing over the course of the next several months, Allana Potash and ICL will be able to supply potash for Africa as well as provide value to our respective companies’ shareholders as we develop these new markets,” said Yoram Cohen, ICL’s general manager for Africa.