Incitec Pivot hit by acid production shortfall

Fertiliser and explosives group Incitec Pivot is facing a reduction in fertiliser output from its Phosphate Hill plant in Queensland even as it moves to complete the sale of its Waggaman plant in the United States.

In a FY23 update the company told investors that the supply of sulphuric acid to Phosphate Hill from its operations in Mt Isa would be affected by the faster than expected degradation of a drying tower at the company’s Mt Isa site.

Incitec Pivot said maintenance work on the tower brought forward to FY23 would take three weeks, reducing the supply of acid and hence ammonium phosphate production by around 30kmt.

The EBIT cost to the company would be between $13 and $15 million including the cost of repairs.

Phosphate Hill’s fertiliser production will be between 870kmt to 880kmt for FY23.

Meanwhile Incitec Pivot continues to wait on US anti-trust regulatory review processes over the sale of its trouble-plagued Waggaman, Louisiana ammonia plant to CF Industries Holdings.

The company has been forced to close the plant on numerous occasions due to equipment failures and hurricane damage with lost production and repair costs exceeding $100 million.

In the update Incitec Pivot also confirmed it was pursuing a potential sale of its fertilisers business.

“The sale process is progressing in line with normal expectations for a transaction of this size and complexity..

“Discussions are confidential and incomplete and there is no certainty that any agreement will be reached.”

Further reading:
Incitec Pivot sells troubled Waggaman plant
Incitec Pivot Waggaman plant faces new downtime

Picture: Incitec Pivot/Phosphate Hill