Addis Ababa — An Indian company, Sainik, is to develop a potash mine in the Afar Regional State with a capital investment of 500 million dollars. The Council of Ministers last week approved the mineral development license that enables the company to extract the potash.

Potash is used to produce fertilizers. The potash deposit in north Afar, near the Dalol depression, is estimated at 160 million tonnes. Executives of Sainik and Senior officials of the Ministry of Mines and Energy (MME) have been negotiating for the past several months. The parties exhaustively discussed the details of the project proposal.

Infrastructure development and feasibility of the project were among the main agenda. Executives of Sainik and officials of MME reached an agreement a month ago. Officials of MME prepared the mineral development license and forwarded it to the Council of Ministers for endorsement. Accordingly, on November 16 the council approved the mineral development licence.

A senior official with MME told The Reporter that Sainik and MME would sign the mineral development agreement next week. "The company plans to invest 500 million dollars in the project. And this would make a great contribution to the foreign direct investment inflow," the official said.

Sainik plans to supply the potash to the international market. According to officials of MME, the demand for potash fertilizer in the local market was minimal.