Two Chinese engineering companies, East China Engineering Science and Technology (ECEC) and Sinopec Ningbo, have made the final round of bidding for a basic engineering contract to build the $1.7-billion, or R31.5-billion, Hiryo coal-to-fertiliser industrial complex in Kriel, Mpumalanga, for blue ammonia and sustainable chemicals producer SUISO.

The final decision is expected to be made this month by multilateral financial institution the African Export-Import Bank (Afreximbank), which was appointed by SUISO as the project’s sole lead arranger, financial adviser and debt syndicator.

Afreximbank is providing $1.2-billion of debt funding for the Hiryo project.

SUISO completed its bankable feasibility study on the project in February and is now moving into detailed basic engineering, which takes 12 months. Construction is expected to start in 2026, with the plant to be commissioned in 2030.

The Hiryo plant will sustainably produce 1.5-million tons of nitrogen-based fertilisers a year from coal, while simultaneously supporting South Africa’s just energy transition goals, especially in Mpumalanga, where coal mining supports more than 90 000 jobs.

“South Africa is the world’s seventh-largest coal producer and Mpumalanga’s coal reserves are of low quality, which means that, until now, this industry has faced a bleak future. This ‘defossilisation’ and recalibration of coal as a deeply unsustainable energy source is a lifeline to Mpumalanga,” says SUISO founder Paul Erskine.

Mines that produce poor-quality coal are in trouble at current coal export prices. However, poor-quality coal can be gasified and sustainably turned into more than 30 other synthesis gas products.

“We have a responsibility to our labour force to re-engineer coal and reinvent ourselves for a sustainable future without leaving Mpumalanga’s communities behind, which is the essence of the just energy transition in South Africa,” he says.

State-owned Eskom's Kriel power station is set to close in 2030. The Hiryo plant project will have a labour pool for the 1 500 Eskom employees who would otherwise be without a job, he highlights.

The Hiryo plant could help to preserve mining jobs, with the coal instead being used sustainably. The project is expected to create 4 000 jobs during the construction phase and 40% of construction will entail local content. Once in full operation, the plant will employ 981 people.

Further, at full capacity, SUISO's Hiryo plant will produce 210 000 normal cubic metres of synthesis gas a year, which will be used to produce its key products, including 737 000 t of blue ammonia, 837 000 t of urea, 518 254 t of ammonia nitrate fertiliser and 234 000 t of zero-sulphur blue methanol, which will be compliant with South Africa’s upcoming 2027 Fuel Act.

Additionally, SUISO’s fertiliser production will replace 1.2-million tons of imported urea fertiliser each year.

Farmers will, ultimately, pay affordable prices for fertiliser and enjoy more stable supply, which in turn supports better food pricing and greater food security for the estimated one-billion people living in sub-Saharan Africa, says Erskine.

Meanwhile, beyond fertiliser production, SUISO has committed to land rehabilitation, biodiversity restoration and sustainable practices.

Wet flue gas desulphurisation technology will repurpose emissions into gypsum and ammonium carbonate, further reducing waste, says Erskine.

Additionally, SUISO will integrate advanced carbon capture technology into the plant. The captured carbon will be stored more than 750 m underground, where it will react with a saline aquifer to form solid rock, he notes.

Similarly, as part of its goal for carbon-neutrality, it will enter into a 15-year power purchase agreement with a sustainable energy provider to substantially lower the Hiryo plant’s reliance on fossil fuel power for its operations.

Meanwhile, both of the engineering companies have extensive experience in the construction of the facilities that the Hiryo complex will entail.

Shenzhen-listed ECEC is a subsidiary of the China National Chemical Engineering company that ranked twentieth in the world for international construction by revenue in 2022. It has completed more than 2 200 projects in chemicals, power and green energy and environmental protection.

Similarly, Sinopec Group, which ranks sixth on the Fortune Global 500, has completed projects in the refinery and petrochemical, coal chemical, natural gas chemical, environmental engineering and renewable-energy industries.