Fertilizer manufacture ICL is eyeing the potential for a large new phosphates project in Namibia, joining a spree of nutrient producers turning their attention to Africa.
The Israeli company has inked a deal with the Namibia-based LLNP, which is owned by the international investment company Leviev group.
LLNP holds permits and exploration rights over phosphate deposits estimated at around 1bn tonnes.
The announcement marks the latest in a slew of African fertilizer deals.
The memorandum of understanding will see the company's explore the feasibility of a phosphates and downstream production business in Namibia.
The project would create capacity for fertilizer-grade phosphoric acid, white phosphoric acid, bulk fertilizers, and specialty fertilizers
"The cost of extracting the phosphate is anticipated to be very competitive compared to competitors, which, in turn, is expected to enable downstream production to deliver best cost of goods," ICL said.
ICL shares in Tel Aviv were up 0.5% at 18.72 shekels in afternoon deals.
Last week, the Norwegian nitrates group Yara International announced a pair of African transactions.
Yara agreed to acquire Greenbelt Fertilizers, which operates in Zambia, Malawi and Mozambique, for $51m.
Greenbelt owns three plants for the production of blended fertilizer products.
Yara saw continued fertilize demand growth in Zambia and neighbouring countries, citing the rapid expansion of the agricultural sector, and low current rates of fertilizer application.
And last week, the company also sold of 25% of the shares in its Dallol business, for a value of $51.25m, as the business moves closer to starting potash extraction.
The Dallol business, of which Yara retains a controlling state, operates in Danakil depression in North-Eastern Ethiopia.
Yara said that a feasibility study in the region had "confirmed reserves and the technical viability for an annual production of 600,000 metric tonnes sulphate of potash over a 23-year period."
The business aims to begin mining by 2018.
Also last week, African Potash, a mineral exploration company, announced a deal with the South African investment firm Beryl Holdings.
African Potash will take over operational control of Beryl's main fertiliser trading activities in southern and eastern Africa.
Shares in African potash jumped by 19% on the news.
By William Clarke