AMID the fanfare of the announcement of its $873.1 million net profit, Wesfarmers also announced some of its expansion plans for the coming year.
Among these is a $45 million Air Liquide plant to service HiSmelt.
That plant is due to be completed in October.
However, potentially the largest of Wesfarmers’ expansion moves in its WA operations appears to be the doubling of its ammonium nitrate production at a cost of between $130 million and $140 million.
Wesfarmers subsidiary CSBP has commenced a feasibility study into doubling the ammonium nitrate production capacity at its Kwinana complex.
The study is expected to be completed within 12 months.
It wants to increase its overall ammonium nitrate capacity to about 470,000 tonnes a year.
This will involve the construction of a duplicate nitric acid plant, a second ammonium nitrate plant and a new prilling tower.
CSBP managing director Keith Gordon said the company had to respond to increasing demand for ammonium nitrate.
A large proportion of that ammonium nitrate is being demanded by the mining industry and there is also a need for it in CSBP’s own Flexi-N liquid fertiliser.
"On its own, the forecast demand for explosive grade ammonium nitrate from the mining sector does not justify investing capital in a duplication," Mr Gordon said.
"However, the rapid growth in demand for Flexi-N, represented by a 20-fold increase in sales over the past five years, will help to underwrite the investment.
"Flexi-N has become a major component of our fertiliser offer and the unprecedented growth has outstripped our production capacity.
"Our aim is to manufacture 100 per cent of the State’s explosive grade ammonium nitrate and Flexi-N requirements."
One possible cloud on this plan could be the move afoot to regulate the use of farm fertilisers because they use ammonium nitrate.
The fear is that the fertiliser can be misused to create explosives.
Ironically, it is understood that these moves are not aimed at the ammonium nitrate market for the mining industry – where it is used as an explosive.
Murrin Murrin’s new mine fleet
Kerry Stokes’ Westrac Equipment and Hitachi Construction Machinery Australia have won contracts totalling $144 million to supply and maintain a new mine fleet for Minara Resources’ Murrin Murrin operations.
The existing mine fleet is scheduled to be retired next year and the new fleet comprising 26 pieces of equipment will be delivered to the site over the next 12 months.
Westrac and Hitachi have established arrangements for the provision of fleet maintenane services to Murrin Murrin over the next six years.
The initial acquisition cost of the new fleet is $52 million and will be financed externally. Minara’s share of the cost is 60 per cent.
Finance negotiations are said to be at an advanced stage.
Minara managing director Peter Johnston said the contracts came at a time when the mine was expanding its production capacity in order to maintain supply due to the improving performance of the plant.
The mine is also moving into new areas.
Orchid strengthens Tibetan position
Australian investment company Orchid Capital’s 100 per cent subsidiary Orchid resources has signed an additional memorandum of understanding with the China Tibet Institute of Geology Survey to further review the CTIGS database of mineral prospects, giving ORL priority over future developments in the region.
Under the agreement ORL will work with specialists from CTIGS to jointly determine exploration prospects that will show the greatest economic potential. The program is expected to start later this month.
ORL recently became one of the first companies to sign a cooperative joint venture contract with CTIGS to explore for gold in a 2,000 square kilometre region of western China.
Exploration efforts are currently focused on six targets that have been identified at the Nagarze Project.
Arafura’s benefit
The Burnside Joint Venture’s purchase of the Union Reefs Gold Project from Anglo Gold Ashanti Australia has given a boost to Arafura Resources’ planned mine.
The Union Reefs plant is located within easy trucking distance of Arafura’s planned gold mine at Mt Morter and the nearby promising Frances Creek high grade gold vein system.
Arafura has lodged a Notice of Intent with the Northern Territory Mines Department to commence mining the Mt Porter ore body and is awaiting permit approvals.