Investment Holdings Secures Potash Concession In Danakil

Sizable deposits promise boost for fertilizer production plans

Ethiopian Investment Holdings (EIH) has secured a massive potash mining site in the Afar Regional State, bolstering plans to erect a world-class fertilizer production plant in partnership with Nigerian multinational Dangote Industries Limited, The Reporter has learned.

The Reporter has confirmed that EIH has secured the rights to a 365 square kilometer potash reserve on the north-eastern border tip of Dalul Woreda, Afar. Around 200 kilometers from Assab, the site could potentially hold a massive volume of potash, which is a crucial component for the production of artificial fertilizers, according to the Ministry of Mines.

“Seismic data confirms continuity of the potash layers throughout the rest of the area. This suggests an overall resource potential size of 11 to 12 billion tons of potash bearing salt beds, making the Danakil depression potentially one of the world’s largest undeveloped potash mineral deposits,” reads a Ministry document.

EIH placed an application for a commercial-scale mining license from the Ministry of Mines in July 2025, one month before the government’s investment arm signed a shareholders’ agreement to develop, construct, and operate a large urea fertilizer production complex in Gode, Somali Regional State.

Under the partnership structure, EIH will hold a 40 percent equity stake while Dangote Group will maintain 60 percent ownership of what promises to be one of the largest industrial investments in Ethiopian history.

This week, the Council of Ministers approved a commercial-scale potash mining license but minutes from the Office of the Prime Minister did not specify the name of the company holding the license, nor where the potash site is located.

“The Council has discussed production permits for fertilizer and potash mining license draft agreements. The Council has approved them, to improve Ethiopia’s forex generation, job creation, and save the substantial amount of forex Ethiopia has been spending to import fertilizer, and provide fertilizer for our farmers timely,” read the minutes.

August’s agreement between EIH and Dangote outlines ambitious plans to jointly finance, own, construct, and operate one of the world’s largest single-site urea fertilizer production complexes with combined capacity of up to three million metric tons of ammonia-based fertilizers each year. The project is estimated to cost upwards of two billion dollars.

Natural gas, a crucial component of fertilizer production, will be sourced from the nearby Calub and Hilala gas fields, and experts suggest EIH’s new potash concession is also part of the plans.

Potash mining has previously been the subject of controversy in Ethiopia.

Before the government reclaimed the potash mining sites in the Danakil Depression, a Canadian company named Allana Potash held a controversial concession in the same location for several years. Allana, which was accused of tax evasion, was eventually sold to Israel Chemicals Ltd (ICL) in 2015.

Nejib Ababiya, Ethiopian born Canadian and cofounder of Allana potash Afar, refuted the wrongdoings at the time.

In 2016, ICL abandoned the project, which included plans to export potash via the ports of Tadjourah and Assab, and began seeking international arbitration for the compensation.

Representatives of EIH did not respond to The Reporter’s requests for comment.