Fertiliser and explosives major Orica is shoring up alternative supply of ammonia amid two plant outages, after Yara’s Pilbara operation was forced offline due to damage.
Orica said it was actively managing the potential impact of one of its suppliers' ammonia plant outage in Western Australia, after Yara Pilbara confirmed it's plant was damaged and now offline.
The global operator also told the market it was hit by an unplanned outage at its own Kooragang Island ammonia production plant in NSW.
Over the weekend, Yara confirmed production of ammonia and technical ammonium nitrate from its Pilbara operation would be curtailed for two months due to damage from a power outage.
Yara’s Pilbara plant produces 850,000 metric tonnes of ammonia per annum, making it one of the world’s largest production sites of the ingredient in urea fertiliser.
Orica and Yara are joint venture partners in a neighbouring technical ammonium nitrate plant, where a sixth of ammonia production is converted into explosives used by the mining industry.
On Tuesday, Orica said it was working to secure alternative supply from its own stockpiles and from other ammonia suppliers globally.
“Orica is actively managing the potential impact of this event by working to secure alternative supply from current inventory and its diversified global manufacturing and supply network,” it said.
“Our priority is to minimise the impact on our customers and to maintain supply.”
Orica told the market it has suffered an unplanned outage at its Kooragang Island plant, which produces about 360,000 tonnes of ammonia per annum.
“At the same time there is an unplanned outage at our Kooragang Island ammonia plant in NSW which is expected to be resolved shortly,” Orica said.
“A material financial impact from these interruptions is not expected.
“Orica will continue to actively manage and monitor the situation and will provide an update should there be a material change.”
The double outages come at a time when global fertiliser markets are constrained due to the conflict in the Middle East, which has entered its fourth week.
About a fourth of the world’s trade of ammonia has been blocked as a result of the Iran War’s impact on the Strait of Hormuz.
