TAN plant formally opens

A chemical plant making an ingredient for explosives in the Pilbara is an example of Western Australia’s economic diversity, according to Premier Colin Barnett, who predicted manufacturing would undergo growth in the state despite its years of lagging on the east coast.

Speaking at the opening of Yara Pilbara Holdings' technical ammonium nitrate plant, Mr Barnett said it had long been a dream of state governments to secure more value adding industry in the Pilbara.

The plant is 55 per cent owned by Norwegian fertiliser producer Yara International and 45 per cent owned by Australian-based Orica, and will begin production later this year.

The facility, which cost more than US$800 million, is undergoing commissioning, and was built beside the existing Yara liquid ammonia plant on the Burrup Peninsula.

Both use gas from the North West Shelf Venture, also nearby.

Mr Barnett said industry on the east coast would be quite jealous of the state's domestic gas reservation scheme, through which exporters are obliged to committ a level of production into the local market.

That system would benefit the plant owners through lower prices.

Value added by the plant would be up to 10 or 12 times raw material input prices, he said.

Orica chief executive Alberto Calderon predicted the plant, in which his company also has a stake, would be at 70 per cent capacity within 18 months, though it would take time to wind up to full 330,000 tonne per annum production.

The company was very confident in the long term role of Western Australia as a cornerstone in its business, with Mr Calderón saying this plant was a 30 year investment.

Mining companies, which would buy the nitrate for explosives, were nearby too, driving demand.

Mr Calderon said the importance of the state to its strategy was highlighted recently when its regional head office was moved to Perth.

It now employs about 250 people in WA.