The move is aimed at ending the company’s reliance on electricity for the manufacture of ammonia through electrolysis, an expensive technology to extract nitrogen from water, which is then used to manufacture ammonia.
CEO Gavin Sainsbury told analysts and journalists in the capital recently Sable Chemicals had reached an agreement with Zesa Holdings on a viable electricity tariff for 2012 that will ensure the company remains at a break-even level. He said Sable would move to full importation of ammonia by the end of 2012.
Sainsbury said the company had rolling stock capacity to import up to 3 000 metric tonnes of ammonia and would require a further 30 tanker cars to import 4 000 metric tonnes of the compound.
The company hopes to import 4 000 metric tonnes of ammonia, a figure representing about 40% of total plant capacity and plans to lift imports to near capacity until it shifts to producing ammonia by means of coal gas gasification in approximately five years’ time.
Coal gasification is a chemical process of breaking coal up into its chemical components — hydrogen, carbon monoxide and other gaseous compounds –– by exposing it to extremely hot steam and oxygen.
The project, still at pre-feasibility stage, is expected to start running in five years and should cut Sable’s electricity consumption to 30MW.
The hydrogen produced through gasification is reacted with nitrogen to produce ammonia. Part of the ammonia is piped to a nitric acid plant, which is then reacted with ammonia to produce liquid ammonium nitrate.
In its liquid form, ammonia is also sold to secondary fertiliser manufacturers –– Zimbabwe Fertiliser Company and Windmill –– which produce fertiliser compounds by mixing the ammonia with ingredients such as phosphorous and nitrogen.
The final product is then dried and pulled into solid granules, commonly known as top-dressing fertiliser. Sable’s capacity utilisation dropped from 37% to 34%, whilst production volumes were 8% below last year’s levels, owing largely to load shedding and power cuts.
The coal gas feasibility study was concluded in November 2011. According to the feasibility study, the project is technically and economically viable.
China is being considered as a source for a suitable Engineering Procurement & Construction (EPC) contractors as well as project finance, the company said.
Its Carbon Abatement (CDM) project initiated in 2009 is due to be commissioned in July 2013 and will allow the company to claim carbon credits.
Sainsbury said the group’s 22% interest in ZFC would be sold, saying the investment was no longer considered core to its ambitions in the chemicals industry but did not give a time frame of when the group would divest.
TA’s decision to import ammonia is similar to that of another manufacturing company –– Agricura –– which recently announced it would no longer be manufacturing chemicals, a development that will see the plant at Agricura being shut down and the company relying on imports.
Chemco Ltd owns Agricura.
High production costs, low capacity utilisation and outdated equipment have rendered local manufacturing companies uncompetitive.