Incitec Pivot Ltd. (IPL) reported on Jan. 15 that its subsidiary, Dyno Nobel Asia Pacific (DNAP), has signed a non-binding Memorandum of Understanding (MOU) with Saudi Chemical Company Ltd. (SCCL) and a Saudi investment firm to pursue the development and operation of a 300,000 mt/y technical ammonium nitrate (TAN) plant in Ras Al Khair on Saudi Arabia’s East Coast.
Under the MOU, which was signed last month, IPL said Dyno Nobel will support the Front-End Engineering Design (FEED) and project services for the TAN production facility, which if built will be Saudi Arabia’s first such plant. The potential project includes a 440,000 mt/y nitric acid unit.
The potential partnership would supply TAN and nitric acid to Saudi regional mining and industrial users and enable Dyno Nobel to supply TAN to its international mining customer bases, IPL said in a Jan. 15 media statement. IPL did not disclose the identity of the Saudi investment company.
DNAP President Greg Hayne said the project provides significant potential for the development of the Middle East’s mining industry and also aligns with DNAP’s long-term strategy to grow its global footprint and further expand its manufacturing operations and sales in the broader Europe, Middle East, and Africa (EMEA) region.
SCCL’s parent, Saudi Chemical Company Holding, said in a statement that the MOU has a duration of six months, during which preliminary studies and the financial model of the project will be reverified. It added that the preliminary designs will be made by a specialized engineering company to make a final assessment of the feasibility of the project.
In February 2023, SCCL, in partnership with an unnamed local company, secured a gas allocation letter from Saudi’s Ministry of Energy to establish a facility for the production of nitric acid and TAN (GM March 3, 2023). SCCL is a leading manufacturer of civil and military explosives in Saudi Arabia and is one of five companies owned by Saudi Chemical Company Holding.
It is unclear if DNAP’s agreement with SCCL is running in parallel with a joint-venture deal IPL announced in November 2022 with Saudi’s Modern Chemicals Co. (MCC) to develop a TAN production facility at Ras Al Khair, or if that partnership has been abandoned (GM Nov. 4, 2022). MCC is reportedly developing a 350,000 mt/y Low Density Ammonium Nitrate (LDAN) project in Ras Al Khair Industrial City.
IPL’s then Managing Director and CEO Jeanne Johns had told investors and analysts at a company earnings call on Nov. 15, 2022, that the negotiation process for the jv was still underway (GM Nov. 18, 2022). IPL this week did not respond to a request for more information.
Orica Mining Services Portugal, a subsidiary of rival Australian explosives manufacturing group Orica Ltd., in January 2023 inked a nonbinding MOU with Saudi Chemical Company Holding for technical cooperation to localize the production of AN and nitric acid (GM Jan. 20, 2023). Under that MOU, which had a six-month term, a project to localize the AN and nitric acid industry was proposed.