Orica confirm Burrup ammonium nitrate plant to go ahead

Orica has announced that it will now form a joint venture with Apache and Yara to build an ammonium nitrate plant in Western Australia.

Orica has announced that it will now form a joint venture with Apache and Yara to build an ammonium nitrate plant in Western Australia.

Earlier this year the parties came together for the proposed explosives plant.

Yara will be the operator of the plant while Orica will manage sales and distribution.

The parties are aiming to begin construction by the middle of the year.

Yara had previously sought to construct an ammonium nitrate plant in the region through a joint venture with Burrup Nitrates.

However joint venture partner Burrup attempted to block the plant, with owner Pankaj Oswal stating that "Yara has attempted to railroad me into agreeing to commence the development of the TAN plant immediately on terms proposed by Yara without consultation with me and based on inaccurate, out-of-date and inadequate information.

"I am especially disappointed because I have made plain my view that Yara is seeking to lock the Burrup TAN plant in on its terms in order to make my BHL shares less attractive to other buyers."

According to the West, he declined to add further detail as to why he will not move forward on the plant’s construction.

The joint venture group has now also formed a distribution and marketing joint venture to distribute all ammonium nitrate and associated products and services to miners in the Pilbara.

While this operation will be divided in the same proportion as the joint venture (45% Orica, 45% Yara, and 10% Apache), it will be run by Orica.

In addition to this, Orica will also pay US$110 million once construction of the plant begins.

Orica's new CEO Ian Smith said "this is an extremely important project for Orica".

Demand for industrial grade ammonium nitrate in the Pilbara is expected to exceed 10% per annum over the medium term, Orica says.

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