Orica takes $48M loss

AUSTRALIA’S largest mining, equipment, technology and services player Orica has taken a A$48 million loss, due largely to technical issues at its Burrup technical ammonium nitrate plant in northern Western Australia.

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Orica CEO Alberto Calderon

That is despite sales revenue growing 7% to $5.4 billion for the year ending September 30.

Earnings before interest, tax, depreciation and amortisation were down 1% to $885 million.

Net profit after tax but before individually significant items was down 16% to $324.2 million.

Production problems at the Burrup plant already cost Orica a contract with Fortescue Metals Group and also cost the company $26 million, including costs to bring in ammonium nitrate from elsewhere to meet supply commitments.

To put the plant's loss into context, Orica has won an additional 40,000t in AN supply from BHP in the Pilbara. It will likely have to source those tons from its Yarwun plant. It costs Orica $200 per tonne to transport AN to the Pilbara from Yarwun. That is an...