July 19 (Bloomberg) -- MagIndustries Corp. asked China Development Bank for $1 billion in financing for what the company says is one of the world’s largest undeveloped potash projects located in the Republic of Congo.
The Mengo deposit, about 15 kilometers (9.3 miles) northeast of the port city of Point-Noire, is expected to produce 1.2 million metric tons of the fertilizer annually and cost $1.36 billion.
“The Mengo potash project aims to create a production base for world-class fertilizer,” said Longbo Chen, chief executive officer of the Toronto-based company, according to a statement distributed by Congo’s Mines Ministry yesterday. East China Engineering Science and Technology Co., the general contractor on the project, is expected to finish construction of the production plant by 2015, Chen said.
MagIndustries, whose controlling shareholder is Evergreen Group of Shanghai, announced the partnership with ECEC on July 10. Mengo is 90 percent owned by MagIndustries’ subsidiary, MagMinerals Potasses Congo SA, and 10 percent by the government.
“What was at first a dream now constitutes a reality, thanks to the will expressed by the Congolese and Chinese governments,” said Simon Liang, chairman of MagIndustries and Evergreen, according to the Mines Ministry statement.
The plant will produce agricultural-grade potash fertilizers for markets in Asia, South America, South Africa and Europe, MagIndustries’ website says. Potash is used by farmers to boost crop resistance to drought and strengthen plant root systems.
“This is a major, structural industrial project for the country and sub-region whose realization will contribute to the improvement of the living conditions of the population,” Mines Minister Pierre Oba said, according to the statement.
Congo Republic relies on crude oil to generate 69 percent of its gross domestic product, according to the U.S. Geological Survey. The country produces diamonds and gold, and has deposits of iron ore, copper and zinc, according to its website.
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