Yara International is proceeding with plans to construct a $US700 million ammonium nitrate plant at the Burrup peninsula, despite the past few months' issues with joint venture partner Burrup Holdings.
Norway-based Yara announced today it had signed a letter of intent with Spanish engneering and construction group, Tecnicas Reunidas, to construct the 330,000 tonnes per annum ammonium nitrate plant, but the project remained subject to Burrup Holdings' approval.
The construction contract, worth approximately $US500 million according to Yara, would be transferred to Burrup Nitrates if approved by the Burrup Holdings board.
Burrup Nitrates is a planned 50/50 joint venture between Yara and Burrup Holdings, which is currently in receivership.
Taking into account Yara's 35 per cent shareholding in Burrup Holdings, it will own 67.5 per cent directly and indirectly of Burrup Nitrates.
Yara's move to proceed with the plant may be designed to get in ahead of rival producer, Wesfarmers' subsidiary CSBP, which has been evalutaing a 250,000 tonnes pa expansion of its existing ammonia nitrate plant at Kwinana.
In addition, Incitec Pivot, through its wholly-owned subsidiary Dampier Nitrogen Pty Ltd, has been proceeding with a public environmental review of a 350,000 tonnes pa ammonium nitrate project to be built on the Burrup Peninsula.
The new Yara plant will be built alongside Burrup Holdings' existing ammonia facility.
"The TAN plant would primarily supply the fast growing iron ore mining operations in the Pilbara," a statement released by Yara said.
"The plant's close proximity to the Pilbara region together with adjacent ammonia supply gives it a distinct advantage over other Australian ammonium nitrate suppliers.
"Yara has an agreement to market the entire output from the plant."
Yara and Burrup Holdings' biggest shareholder, Pankaj Oswal have been at loggerheads over Burrup's financial dealings and off-take arrangements for months.
In November, Yara gained access to Burrup Holdings' financial accounts after taking it to the Federal Court.
ANZ Bank appointed receivers to Burrup Holdings in December after it was unable to broker a settlement between Yara and Mr Oswal.
