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Yara, Orica and Apache form JV to build ammonium nitrate plant

23 May 2012

Yara International has entered into an agreement with Orica and Apache to form a joint venture (JV) to build an $800m ammonium nitrate plant on the Burrup Peninsula in Pilbara, Western Australia.

Spanish-based general contractor Tecnicas Reunidas will carry out engineering and procurement work, while Yara will manage construction and ongoing operations for the ammonium nitrate plant.

Yara and Orica will each have a 45% stake in the ammonium nitrate JV, while Apache will take the remaining 10%.

Construction of the 330,000t per annum ammonium nitrate plant is expected be completed by the end of 2015.

The parties have also agreed to form a distribution and marketing JV to distribute ammonium nitrate and associated civil explosives products and services to mining customers in the Pilbara region.

The distribution and marketing JV will be owned in the same proportions as the project JV, but will be managed by Orica.

Orica managing director and CEO Ian Smith said, "Together with our partners, we have a clear vision for servicing the fast growing Pilbara iron ore market, which is being strongly embraced by our customers in the region."

Orica will pay approximately $110m for its 45% stake, to be split between Yara and Apache upon commencement of construction.