Yara signs LoI for construction of Burrup TAN plant

25-Mar-2011 - Norway

Yara International ASA has signed a Letter of Intent (LoI) for the construction of a 330,000 ton p.a. technical ammonium nitrate (TAN) plant at Burrup, Australia. The total cost of the project is estimated at approximately USD 700 million.

Yara International ASA has signed a LoI with Técnicas Reunidas for the construction of a TAN plant on the Burrup Peninsula in Western Australia. The contract will be on a lump sum turnkey basis with an approximate value of USD 500 million. The LoI has been approved by the board of Yara International ASA and is subject to the approval of the board of Burrup Holdings Pty Ltd. Total projects costs are estimated at approximately USD 700 million.

The construction contract will after board approval by Burrup Holdings Pty Ltd be transferred to Burrup Nitrates, a planned 50/50 joint venture between Yara International ASA and Burrup Holdings Pty Ltd. As Yara has a 35% ownership in Burrup Holdings Pty Ltd, Yara will own 67.5% directly and indirectly of Burrup Nitrates.

The plant will be built adjacent to the Burrup Holdings Pty Ltd ammonia facility. The location of the new TAN plant will enable it to maximize synergies from competitive feedstock and utilities supplies.

The TAN plant would primarily supply the fast-growing iron ore mining operations in the Pilbara region of Australia. The plant's close proximity to the Pilbara region together with adjacent ammonia supply gives it a distinct advantage over other Australian ammonium nitrate suppliers. Yara has an agreement to market the entire output from the plant.

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