Incitec Pivot to close Gibson Island plant due to natural gas costs

By Stuart Condie

SYDNEY – Fertilizer manufacturer Incitec Pivot Ltd. will close its Gibson Island manufacturing plant at the end of 2022, citing the rising cost of natural gas.

The ASX-listed company said on Monday it would cost A $ 83.5 million ($ 61.8 million) to shut down the plant, including layoffs and dismantling. It will write down the value of assets by A $ 102.5 million, but could generate up to A $ 45 million from the sale of land, depending on future use of the site.

Incitec Pivot said it had been unable to secure a long-term economically viable gas supply to the plant on Australia’s east coast. Nevertheless, it will conduct a feasibility study on the industrial scale production of green ammonia at the facility.

“It is disappointing for our staff and Australian manufacturing that we have not been able to come to an appropriate gas supply commercial agreement,” said Jeanne Johns, Managing Director of Incitec Pivot. The company said it would instead source the products from overseas.

Its subsidiary Dyno Nobel Asia Pacific will procure around 20,000 metric tonnes of ammonium nitrate from elsewhere, at a cost of between 5 and 10 million Australian dollars per year.

Write to Stuart Condie at stuart.condie@wsj.com

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