IPL forecasts higher Phosphate Hill output in FY25

: Fertilizers
24/11/19

Australian chemicals and fertilizer producer Incitec Pivot (IPL) has forecasted higher output from its Phosphate Hill mine over the next financial year in its annual report.

IPL forecasts there will be 790,000-860,000t of DAP/MAP output from its Phosphate Hill site located in northeast Queensland, Australia, up from 739,500t of output in FY24. IPL plans to conduct repairs and other work to increase site reliability over the next financial year.

Owing to these planned outages, production at Phosphate Hill is expected to be lower in the first half of the financial year, with 40-45pc of total volumes expected during that time.

IPL highlighted that Phosphate Hill's production is vulnerable to circumstances outside its control, such as equipment breakdowns, energy or water disruptions and severe weather events.

IPL also mentioned its reliance on Glencore's nearby Mount Isa Mines copper smelter staying open. Sulphuric acid is a by-product of copper smelting. Should the smelter close, sulphuric acid supply in the region would fall and with it being a major raw material required to produce DAP/MAP, Phosphate Hill would be negatively impacted. This could also impact phosphate production at Agriflex's Ardmore phosphate project in Queensland.

Glencore recently announced it expects the operation of the smelter to continue to 2030 pending capital approvals. IPL is continuing to work on alternative sources to mitigate the loss of sulphuric acid supply in case of Glencore's potential closure or reduced production.

The annual report also said IPL continues to use a mix of gas supply sources, including gas supplied under a contract with Power and Water Corporation (PWC), and top-up gas from Northern Territory and east coast suppliers. The diversity of gas supply ensured Phosphate Hill production was not affected by the reduction of contracted gas supply from PWC.

A further update on Phosphate Hill supply will be made mid-2025 and a "strategic review" of the site is expected to be completed no later than September 2025.

By Tom Woodlock

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