Mines run low on Orica explosives

IMPACT: The orica shutdown has affected supply of explosives to Hunter mines.
IMPACT: The orica shutdown has affected supply of explosives to Hunter mines.

THE Hunter coal boom is in danger of being stopped by the closure of Orica’s Kooragang Island plant.

Orica supplies most of the explosive used in the open-cut mines that produce more than two-thirds of the Hunter’s coal, worth more than $10billion a year.

Security restrictions on stockpiling ammonium nitrate mean supply was already tight before Orica’s troubles began on August 8.

The Kooragang plant stopped production entirely on November 9 and coal sources say the industry has just three or four weeks of explosives left.

One of two similar plants in Queensland is down for maintenance and that state’s mines are working overtime to make up for flood losses.

A spokesman for Orica’s main rival in the Hunter, Dyno, said it was also hit because it obtained much of its product from Orica.

The Hunter’s biggest mining company, Coal & Allied, said yesterday that the Orica shutdown had already cost it production.

The Minerals Council of NSW confirmed the concern and said mines were trying to concentrate on work that did not require explosives.

Coal & Allied says there was no threat to jobs ‘‘at this point’’ but the eventual outcome would depend on how long the Kooragang plant was shut.

Premier Barry O’Farrell acknowledged the impact on the coal industry but said public safety remained his number one priority.

“While the NSW Government recognises there are some impacts on industry, it is up to Orica to do the work required to convince the relevant authorities that it can operate safely,’’ Mr O’Farrell said through a spokesperson.

Orica spokeswoman Nicole Ekert confirmed that the company had ‘‘shortfalls in supply’’ and was working with its customers to ‘‘manage their requirements’’.

‘‘We have been drawing on local and global resources and have sourced some shipments of ammonium nitrate that will supply a percentage of requirements,’’ Ms Ekert said.

‘‘Locally and globally, the supply of ammonium nitrate is very tight and while we continue to work to find alternatives, we anticipate continued constrained supply for the main products we supply to the mining industry until the Kooragang plant resumes.’’

The government said the plant would not reopen until it was satisfied that Orica could operate it safely.

Environment Protection Authority executive Greg Sullivan said the government’s Orica start-up committee was meeting again today.