- Two Chinese engineering giants have made the final round of bidding for Basic Engineering contract to build the US$1.7-billion (ZAR31.5-billion) Hiryo coal-to-fertiliser industrial complex for sustainable chemicals producer SUISO in Kriel, Mpumalanga.
- The final decision is expected to be made this month by the African Export-Import Bank (Afreximbank), which was appointed by SUISO as the project’s sole lead arranger, financial adviser and debt syndicator in May 2025, and is debt funding US$1.2-billion of the total cost and 70/30 debt equity ration post FID (Final Investment Decision).
SUISO, which completed its Bankable Feasibility Study in February 2025, is now moving into detailed Basic Engineering, which takes 12 months. Construction is expected to commence in 2026, with the plant commissioned in 2030.
Both companies have extensive experience in the construction of the facilities that the Hiryo complex will entail:
- ECEC, which is listed on the Shenzhen Stock Exchange, is a subsidiary of the China National Chemical Engineering Co. that in 2022 ranked 20thin the world for international construction by revenue. It has completed over 2 200 projects in chemicals, power and green energy, and environmental protection
- 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
The Hiryo plant will sustainably produce 1.5-million tons of nitrogen-based fertilisers annually from coal, while simultaneously supporting South Africa’s just energy transition goals, especially in Mpumalanga, where coal mining supports over 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,” says Erskine. “Through this ‘defossilisation’ of coal, this recalibration of what is a deeply unsustainable energy source, we’re throwing a lifeline to Mpumalanga.
“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.”
With Kriel Eskom power station closing in 2030, this project will have a labour pool for the 1 500 Eskom employees who would otherwise be without a job.
Apart from preserving mining jobs (but the coal will instead be used sustainably), the Hiryo plant will create 4 000 jobs during the construction phase – 40% of construction will entail local content – transitioning to 981 permanent positions once it is fully operational in 2030.
“If you own a mine producing poor-quality coal, you’re in trouble at current API#4 coal export prices,” says Erskine. “But you can gasify poor coal and turn that into more than 30 other syngas products, and you can do it sustainably. We’re about to become a showcase for the rest of the world.”
At Hiryo’s full capacity, SUISO will produce 210 000 normal cubic metres of synthetic gas a year, which will be used to produce its key products: 737 000 tons of blue ammonia, 837 000 tons of urea, 518 254 tons of ammonia nitrate fertiliser, and 234 000 tons of zero-sulphur blue methanol, compliant with South Africa’s upcoming 2027 Fuel Act.
SUISO adds that fertiliser production will replace 1.2-million tons of imported urea fertiliser annually, serving as an import substitution. 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 circa billion people living in sub-Saharan Africa.
The Hiryo development also aligns with a United Nations projection that global food production must grow by 60% in the next 25 years to meet the demands of a growing population.
Sustainable industry
SUISO’s commitment extends beyond fertiliser production to include land rehabilitation, biodiversity restoration and sustainable practices. Wet flue gas desulphurisation technology will repurpose emissions into gypsum and ammonium carbonate, further reducing waste.
Most importantly, however, SUISO is integrating advanced carbon capture technology into the plant; captured carbon will be stored more than 750m underground, where it will react with a saline aquifer to form solid rock.
Supporting SUISO’s bid for carbon neutrality will be a 15-year power purchase agreement with a sustainable energy provider, substantially lowering the Hiryo plant’s reliance on fossil-fuel power for its operations.
Author: Bryan Groenendaal
