Incitec Pivot (IPL) will hold onto its fertiliser business, including the Phosphate Hill manufacturing site in North West Queensland, following a strategic review.
The company said today it had ceased talks with potential buyers for the business.
“The impact of the COVID-19 pandemic on market conditions has created extraordinary uncertainty,” managing director and chief executive officer Jeanne Johns said.
“The IPL Board has concluded that it is in our shareholders’ best interests that we continue to capture the synergies in global nitrogen manufacturing and run the industry leading businesses of Incitec Pivot Fertilisers and Dyno Nobel to deliver quality products and services for our customers in the agricultural and resources sectors.
“During this period of disruption, we have worked closely with our customers, farmers, and Federal and State governments to ensure the fertiliser supply chain remains robust, to provide essential nutrients for farmers to provide food for Australians.
“Recent widespread rainfall across eastern Australia has created significant demand by farmers for fertiliser. The business is also well-placed to benefit from any future improvement in global fertiliser prices.”
The company kicked off a strategic review in September last year after reporting that its fertiliser business made a loss of almost $80 million in the previous 12 months.
The Phosphate Hill mine and ammonium phosphate fertiliser manufacturing operation, 150km south of Mount Isa, is a cornerstone asset in the fertilser business.
A rail outage between Mount Isa and Townsville in early 2019 cost $115 million – chiefly through lost opportunity for sales – and a reactor failure at the site last year cost the company a further $20 million.
IPL said today that the COVID-19 crisis had not had a significant impact on its operations to date.
The level at which its operations continued to run reflected the fundamental importance of the agricultural and resource sectors it served, it said.