ADDIS ABABA (Reuters) – Trade and Industry Minister of Ethiopia plans to develop its vast coal reserves in the west of the country for fertilizer and power generation, at an estimated cost of $730 million.

Girma Birru said his ministry had signed an agreement with state-owned China National Complete Plant Import & Export Corporation (COMPLANT) to develop the coal reserve.

No other details were given of the accord. The firm had earlier conducted a feasibility study of the project.

Ethiopia imports up to 400,000 tonnes of fertiliser annually but the escalating international price of urea, used in the manufacture of fertiliser, is becoming prohibitive for the government.

“The study indicated that the reserve has a potential to produce between 300,000 tonnes of urea, 20,000 tonnes of methanol and 90 megawatts of electric power,” he told reporters.

An environmental assessment study is also being conducted in the thickly forested Yayu region, some 500 kms (312 miles) west of Addis Ababa, he said. (Reporting by Tsegaye Tadesse; Editing by Wangui Kanina)