In Coega, on South Africa’s eastern coast, a $5.8 billion green ammonia project is set to produce 1 million tonnes per year by late 2029. Led by UK-based Hive Energy and local partner BuiltAfrica, the project targets a production cost of $650 per tonne, compared to an estimated $760 on global markets. This price advantage could prove crucial as the global green ammonia sector takes shape, with cost competitiveness being the primary lever for securing the first long-term supply agreements.

Leveraging existing industrial infrastructure

Unlike some competitors starting from scratch, the Coega project benefits from existing infrastructure, including an operational desalination plant and abundant solar and wind resources. By building on these existing assets, Hive Energy aims to minimize delays and cost overruns, offering buyers in Europe, Japan, and South Korea a credible, deliverable, and cost-efficient solution.

South Africa’s green ammonia ambitions face stiff competition from other African countries aggressively positioning themselves in the same market. In Morocco, energy giant TotalEnergies is backing the Chbika project, designed to combine 1 GW of renewable energy with an annual ammonia output of 200,000 tonnes in the Guelmim-Oued Noun region, near Western Sahara. The project enjoys strong political support from France and could help Morocco become a strategic partner for the EU Green Deal. Further south, Namibia is pursuing the much larger Hyphen project, targeting 2 million tonnes annually, with investments estimated at $10 billion.

Located in the protected Tsau//Khaeb National Park, the project has already secured Memorandums of Understanding (MoUs) with European buyers for 750,000 tonnes per year, partly routed through the Port of Rotterdam. However, Hyphen faces significant hurdles, including scarce water resources, logistical challenges due to its remote location, and criticism from local activists citing transparency issues in the project’s awarding process.

A strategic opening for South Africa

Amid these competing megaprojects, South Africa is leveraging three key strengths: Industrial Stability: The Coega Special Economic Zone (SEZ) provides a mature industrial framework ; reliable infrastructure : access to operational port facilities at Ngqura ; market-driven financing: unlike rivals relying on heavy state subsidies, South Africa’s model is grounded in commercial feasibility. Recently, the project crossed a major milestone with the approval of a 1,430 MW solar PV park, which will supply around 40% of the project’s electricity needs. The remainder will be provided by wind energy and PEM (Proton Exchange Membrane) technology supported by South Africa’s platinum group metals (PGM) mining sector, helping address renewable intermittency challenges. The initiative is spearheaded by Thulani Gcabashe, Chairman of Hive Hydrogen South Africa, who sees Coega’s combination of renewable resources, port access, and industrial expertise as a winning formula for export markets, particularly Europe and East Asia.

With the European Union aiming to import 10 million tonnes of renewable hydrogen annually by 2030, African producers are racing to secure market share. However, only those able to deliver on cost competitiveness, supply reliability, and a clear regulatory framework will emerge as leaders in this future-facing industry. South Africa’s gamble on low-cost green ammonia production could well prove a masterstroke, provided the ambitious $650 per tonne target remains achievable over time, especially against deep-pocketed rivals with broader geopolitical backing.