Saipem and CHEC Land Algeria’s Big Phosphate Contracts
ALGERIA · MINING
Key Facts
—The contracts: Sonatrach and the Algerian Fertilizers Company signed two engineering, procurement and construction contracts on 12 August.
—Who won them: Italy’s Saipem takes the processing and production facilities; China Harbour Engineering Company takes the port works at Annaba.
—Extraction capacity: The Bled El Hadba site is designed to extract 5.5 million tonnes of raw phosphate a year.
—Concentrate output: Total production capacity is 3.2 million tonnes a year of phosphate concentrate.
—The fertiliser: Downstream plants at Oued El Keberit are to make 2.4 million tonnes of phosphate fertiliser and 570,000 tonnes of urea a year.
—The timetable: Enriched phosphate production is targeted for the first quarter of 2027 and fertiliser for the fourth, according to the hydrocarbons minister. Saipem values its part at about €500 million (roughly US$577 million); the port contract value was not disclosed.
Algeria has signed the engineering contracts for its integrated phosphate project, awarding the processing plants to Saipem and the port works to China Harbour Engineering Company. The Algeria phosphate scheme is designed to extract 5.5 million tonnes of raw ore a year and turn much of it into fertiliser.
What was signed, and by whom
Sonatrach and the Algerian Fertilizers Company signed two engineering, procurement and construction contracts on 12 August in Algiers. One went to the Italian company Saipem, the other to China Harbour Engineering Company.
An EPC contract, as these deals are known, makes one contractor responsible for designing, supplying and building a plant. Saipem describes its own signature as a limited notice to proceed, an early-works step that lets design and procurement begin while the full contract is finalised.
Saipem takes the construction of fertiliser processing and production facilities at Bled El Hadba in Bir El Ater province and at Oued El Keberit in Souk Ahras province. It values its part at about €500 million, roughly US$577 million; the value of CHEC’s port contract at Annaba was not disclosed.
Minister of State and Hydrocarbons Minister Mohamed Arkab presided over the signing at Sonatrach headquarters, with Interior and Transport Minister Saïd Sayoud also present. The ambassadors of Italy and China attended as well.
The scale of the Algeria phosphate project
The Bled El Hadba site is designed for extraction of 5.5 million tonnes of raw phosphate a year. That is the mining capacity rather than the saleable output.
Total production capacity is 3.2 million tonnes a year of phosphate concentrate. Downstream, the plants are to produce 2.4 million tonnes of phosphate fertiliser and 570,000 tonnes of urea annually.
Intermediate products include sulphuric acid, phosphoric acid and ammonia. The Annaba port works are dedicated to exporting surplus fertiliser production.
Why fertiliser, and why now
Phosphate matters because it is one of three nutrients no crop can do without, and unlike nitrogen it cannot be synthesised from air. Supply is concentrated in a handful of countries.
Algeria has substantial deposits in the Tebessa region but has never converted them into significant fertiliser exports. The stated aim is to meet growing domestic agricultural demand while generating volumes for export.
Hydrocarbons minister Mohamed Arkab said an accelerated approach targets enriched phosphate production in the first quarter of 2027, with fertilisers following in the fourth quarter. Saipem’s contract is described as a fast-track model.
Algeria has spent a decade trying to build industry beyond hydrocarbons, with limited success. Phosphate is the most plausible candidate because the resource is already in the ground.
The Latin American read-through
Brazil is the world’s largest fertiliser importer and buys the great majority of what it uses from abroad. Its dependence became a national policy question after supply disruptions in recent years.
A new Mediterranean supplier with 2.4 million tonnes a year of phosphate fertiliser capacity is therefore directly relevant to Brazilian agriculture. Freight from Annaba to Brazilian ports compares favourably with several existing routes.
Argentina and Colombia face the same import exposure on a smaller scale. Any addition to global phosphate supply eases a market that has repeatedly proved vulnerable to shocks.
The Chinese role, and what it signals
The port contract going to China Harbour Engineering Company continues a familiar pattern, in which Chinese firms build the logistics that move African raw materials. The processing technology comes from Europe.
That division of labour, European plant and Chinese infrastructure, has become common across North African industrial projects. It reflects both pricing and the willingness of Chinese contractors to work on tight schedules.
The wider joint venture behind Algerian phosphate development has included Chinese partners for several years alongside the Algerian state groups Asmidal and Manal. This is an extension of that arrangement rather than a departure.
What has not been established
CHEC’s contract value was not published, and the overall project investment figure has been reported elsewhere at around US$7 billion without official confirmation in this announcement. Reserve figures for Bled El Hadba vary widely across sources.
Some accounts put the deposit at around 800 million tonnes, while Algerian state media has cited about 1.2 billion tonnes. No reserve figure appears in the Sonatrach statement at all.
President Abdelmadjid Tebboune has separately said the integrated project would raise national phosphate production from 2.5 million to 10.5 million tonnes a year. That is a national target rather than the first-phase mine capacity, and the two should not be confused.
No export destination markets were named. The port works imply seaborne trade, but no buyers have been announced.
Signed contracts are a real milestone, and more than this project has previously achieved. Construction schedules in the sector nonetheless slip routinely, and the 2027 targets are ambitious.
Frequently asked questions
Who won the Algeria phosphate project contracts?
Saipem of Italy won the contract for fertiliser processing and production facilities, valued at about €500 million. China Harbour Engineering Company won the port facilities at Annaba, for an undisclosed sum.
How much phosphate will Bled El Hadba produce?
The site is designed to extract 5.5 million tonnes of raw phosphate a year, with total production capacity of 3.2 million tonnes of phosphate concentrate.
When will production start?
Algeria’s hydrocarbons minister said enriched phosphate output is targeted for the first quarter of 2027, with fertiliser production in the fourth quarter of that year.
What will the fertiliser plants make?
They are designed to produce 2.4 million tonnes of phosphate fertiliser and 570,000 tonnes of urea a year, with surplus exported through Annaba.
Connected Coverage
The regional benchmark is Morocco, whose phosphate reached a US port for the first time in five years. Algiers has been spending heavily under a record 2026 budget, with more on our Northern Africa desk.
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