A three year feasibility study will be undertaken for a $350 million explosives factory at Port Bonython, in South Australia.
The plant, which will produce technical ammonium nitrate (TAN), has been put forward by Indian firm Deepak Fertilisers, according to AAP.
South Australian industry minister Tom Koutsantonis said if the plant is approved it will provide serious benefits for the State’s mining industry.
Koutsantonis said the development will create around 400 jobs during construction, and provide 80 jobs once the plant is running.
"There is also a greater benefit to the state and a flow-on effect to the mining industry which would no longer have to purchase its TAN from interstate as is the case at the moment," he said.
Another TAN manufacturing plant has also been given the go ahead in Western Australia.
The West Australian plant is being built by Burrup Fertilisers and will produce around 330 000 of TAN every year.