Yara joint venture with Orica and Apache to set up TAN plant in Burrup peninsula

21 May 2012

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Norwegian company Yara  International has agreed to form joint ventures with  Australia's Orica and US oil and gas giant Apache to set up a 330,000 MT ammonium nitrate (TAN) plant on the Burrup peninsula in Australia and distribute ammonium nitrate and other explosive products to mining customers in the Pilbara region.

Jørgen Ole Haslestad, president and chief executive officer, Yara, said, it was an important and value creating project for Yara that confirmed Yara's dedication and ambition to be among the leading suppliers of TAN globally. He added, together with its partners, Yara looked forward to servicing the fast-growing Pilbara iron ore market.

Orica's managing director and CEO Ian Smith said this was an extremely important project for Orica.  He added, together with its partners, it had a clear vision for servicing the fast growing Pilbara iron ore market, which was being strongly embraced by its customers in the region.

The joint venture's shareholding would be 45 each per cent by Yara  and Orica, with the remaining 10 per cent with Apache. Construction. The plant scheduled for completion by 2015, is estimated to have a capital cost of approximately $800 million excluding capitalised interest. Tecnicas Reunidas would be the engineering, procurement and construction contractor under a fixed price, turnkey contract, with Yara managing the construction and ongoing operation of the ammonium nitrate plant.

The parties have also agreed to form a distribution and marketing joint venture for the distribution of all ammonium nitrate and associated products and services to mining customers in the Pilbara region. The ownership of the proposed joint venture would be in the same proportions as the ammonium nitrate plant joint venture, but it would be managed by Orica.

On  commencement of construction, Orica would pay around $ 110 million for the 45-per cent stake.

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