Wesfarmers subsidiary CSBP has announced that it will proceed with a $200 million expansion of its ammonium nitrate plant at Kwinana, despite a 33 per cent increase in costs from earlier estimates.The decision follows a project approval in September by the Minister for the Environment under the Environmental Protection Act.Under the plan, construction of a new facility will begin early next year, with commissioning scheduled for mid-2007. New capacity at the plant will be raised to 470,000 tonnes per annum.Wesfarmers managing director Richard Goyder said the expansion was a significant part of the company's record capital expenditure budget for the current financial year of more than $900 million and will add to the group's existing involvement in the ammonium nitrate markets in Western Australia and Queensland."The decision to proceed comes after a detailed feasibility study over the past 19 months and negotiation of long term off-take agreements for explosive grade ammonium nitrate with major mining and industry customers who will account for more than half the increased output," said Mr Goyder in a statement."There is currently a shortage of supply of this product in WA and we expect that the increased production capacity will meet current and projected demand over the next 10 years," he said.CSBP managing director Keith Gordon said the remaining additional product from the new facility would be used to produce a range of liquid fertilisers that were currently imported.
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