Omnia to add nitric acid and AN capacity

Sasolburg, South Africa-Omnia Holdings has announced a R1.4bn (US$176 million) capital investment in the construction of a world class nitric acid and ammonium nitrate plant and associated facilities in South Africa. The company says this is the first nitric acid plant of its kind to be built in South Africa since 1984. “We are seeing significant growth in South and Southern Africa’s mining sector, which is driving increased demand for Omnia’s explosives via our BME division, as well as increased appetite for Omnia Fertilizer products in response to the need for solutions to food security, and energy/resource supply constraints,” said Rod Humphris, Omnia Group managing director. “The growth in both agricultural and mining markets has been driven by international demand and development trends, which are set to continue. We have been building the market for ten years, and this investment will enable Omnia to meet increased demand in both explosives and fertilizers, allowing us to leverage supply side synergies between these businesses and ensure security of raw material supply by building world class capacity at home.” Omnia said the new plant will be built next to its existing nitric acid plant in Sasolburg, which is currently running at capacity. Omnia is sourcing the plant technology and licenses, as well as engineering design and critical component supplies, from Uhde GmbH of Germany. The plant will produce 1,000 mt/d, which equates to 140 percent of the existing plant’s capacity. Omnia has set out to raise shareholder capital of R1bn (US$126 million) to partially fund the expansion through a fully subscribed rights offer. Certain existing shareholders have committed to following their rights and to applying for additional shares in the rights offer, which, combined with further institutions supporting the capital raising, has secured R1bn of equity capital up front for Omnia. The remaining funding requirement for the project will be covered through a combination of internally generated funds and long-term project financing.