Deepak Fert drops plan for technical ammonium nitrate plant in South Australia

Deepak Fertilisers and Petrochemicals Corporation Ltd (DFPCL) has abandoned its plan to invest $350 million for setting up a technical ammonium nitrate (TAN) plant in South Australia, an Australian minister said today.

Deepak Fertilisers has decided not to go ahead with the proposed TAN pant at Port Bonython near Whyalla, South Australia's minister for mining Tom Koutsantonis has said.

As per initial feasibility studies, the project was to be set up over an area of 310 hectares at Port Bonython. However, DFPCL later developed cold feet and cited several reasons for not proceeding with the project, Koutsantonis, who also holds the manufacturing, innovation and trade portfolio, said.

The main reasons cited by Deepak Fertilisers for abandoning the proposal are the huge costs involved in rehabilitating a former military testing ground, extending power and gas supplies to the site and the additional capital expenditure needed to create transport infrastructure to the Port Bonython jetty, Koutsantonis said in an official statement.

DFPCL was also concerned with the delay in the expansion of BHP Billiton's Olympic Dam uranium-copper mine, Koutsantonis said.

While DFPCL's decision is disappointing, the minister said it would continue to work with the company to explore other options for setting up an ammonium nitrate plant.

''While the decision not to proceed with this proposed plant at Port Bonython is disappointing, we will continue to work with Deepak to explore other financially feasible options,'' the minister said.

He said DFPCL has also informed the state government of its intention to continue to explore other possible options for an ammonium nitrate plant in South Australia.

''The department for manufacturing, innovation, trade, resources and energy will continue to work with the company to determine other options that can overcome the obstacles identified by the current feasibility study,'' he added.

Deepak Fertilisers and Petrochemicals Corporation Ltd had reported total operational income of Rs634.13 crore, a 34 per cent growth from the Rs473.87 crore income reported in the corresponding quarter of the previous financial year (Q1 FY12).

Profit before tax stood at Rs63.16 crore, against Rs87.90 crore and profit after tax was lower at Rs45.50 crore against Rs63.93 crore in the corresponding period for Q1 FY12.