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Nov 10, 2020

Phosphate Hill picks up the pace as IPL fortunes lift

Phosphate Hill picks up the pace as IPL fortunes lift

Phosphate Hill has hit a production rate equivalent to more than 1Mtpa ammonium phosphates in recent months as parent company Incitec Pivot reports an annual result that is back in black financially.

The company reported a statutory Net Profit After Tax (NPAT) of $123 million for the year to September 30, following on from a loss of almost $80 million the previous year.

Ammonium phosphates production at Phosphate Hill, 150km south of Mount Isa, increased to 979,000 tonnes during that period.

This was a 45 per cent lift on the previous year, mainly due to improved plant performance and efficiencies and without the extended interruptions in FY19 associated with the Queensland rail outage and the phosphoric acid reactor failure.

IPL reported that the plant had operated reliably at 93 per cent during the year to September 30, with greater than 1 million tonnes annual equivalent ammonium phosphates production during the second half of the year.

The Phosphate Hill plant received $8 million of benefits from a full
12 months of lower cost gas under the Northern Territory
gas supply agreement that commenced in January 2019, IPL said.

Incitec Pivot managing director and chief executive officer Jeanne Johns said while 2020 had been a challenging year on many fronts, IPL’s businesses had delivered a strong operating performance.

“Operating in two of the most attractive mining markets in the world, our explosives business (Dyno Nobel) has performed well,” she said.

“Our premium technology offering continues to underpin our strong margins in the US business and demand held up well in Australia where we serve some of the most sophisticated mining companies in the world.”

During the year the company took the decision to retain and invest in its fertilisers business following a strategic review.

“The business returned to profitability in the second half as improved demand in the last eight months supported a strong performance in our distribution business, helping offset the impact of very low commodity prices in the first half,” she said.

“Offering world-class agronomy expertise, the business is focusing on new value-add products and services including efficiency-enhanced coated
fertilisers and new soil-testing services for precision agriculture.

“Our businesses are well placed in the current COVID-19 environment. Our premium technology will continue to underpin the growth of our explosives business and there is significant upside in our fertilisers business when commodity prices recover.

“Our balance sheet has been significantly strengthened following the equity raising in the second half, increasing our financial resilience and providing financial flexibility to continue to deliver our strategic agenda.”

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