China Investment Corp (CIC), the country’s US$300 billion sovereign wealth fund, may finance an Ethiopian potash project being developed by China Mining United Fund (CMUF) and Canada’s Allana Potash Corp (AAA.CN), the Wall Street Journal reported. CIC is deciding whether to take a stake in the project or finance part of the construction costs, according to a senior official familiar with the situation. The Ethiopia venture is one of the largest potash projects in the world, with a projected capacity of around 200 million metric tons. An affiliate of CMUF, China Mineral United Management, would acquire 20% of the project’s total output and pay 35% of the construction costs, estimated at US$280 million. Allana Potash signed an agreement with China Mineral to place shares worth US$1.96 million to the fund. CIC’s potential involvement highlights the growing domestic demand for potash, which is used in fertilizers. China relies on imports for around 80% of its potash needs.
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