Dyno Nobel considers closing Phosphate Hill fertiliser plant because of rising gas prices

The future of a tiny outback Queensland town hangs in the balance as a global giant looks to shutter its factory, costing the jobs of 500.

Phosphate Hill fertiliser plant risks closure and 500 jobs.

Up to 500 jobs are on the line as global explosives giant Dyson Nobel considers closing its largest fertiliser plant, Phosphate Hill in northern Queensland, while it continues to try and find a buyer.

The company – formerly known as Incitec Pivot – said rising gas prices has meant that it has to find an extra $40m to $80m a year to keep the plant going.

Dyson Nobel is talking to prospective buyers and it is understood they have given themselves until September to sell the manufacturing plant and mine.

The plant is 140km northwest of Mount Isa and is close to the small town called The Monument, which exists for the workers of the phosphate mine

Mt Isa Mayor Peta McRae said if the plant did close, as well as the immediate 500 jobs, it would also impact on volumes of the 1000km rail line and Townsville Port as well as companies like Glencore, which have third party logistics agreements with the plant operator Incitec Pivot Limited (IPL).

Mount Isa City Council Mayor Peta MacRae.

“We’re really encouraged to know that they have someone looking at it,” she said.

“A lot of the workers are fly-in-fly-out but obviously Mt Isa is its closest service centre and if it closed it would obviously affect our local economy.”

Ms McRae said gas prices were “such an issue” for Mt Isa.

“We have the most expensive power in the world and when it comes to people doing their financial due diligence to new projects it’s always a factor,” she said.

The Phosphate Hill mine and manufacturing plan is a major producer of ammonium phosphate fertiliser. Gas for the plant – which has been operating for decades – is currently supplied under a long-term supply agreement with PWC, which sources its gas primarily from Eni Australia’s Blacktip gas field in the Northern Territory.

Dyno Nobel said a comprehensive request for proposal to source alternative or complementary solutions to the PWC contract for long-term, economical gas is being assessed.

It said while supply under the PWC contract remains variable, it is currently forecast to continue for the majority of the second half of 2025.

Queensland Minister for Natural Resources and Mines Dale Last said his department has completed a comprehensive analysis of the Phosphate Hill operations.

“Based on this analysis I am satisfied that Phosphate Hill is a viable and valuable ongoing operation,” he said.

“It is my expectation that IPL operates Phosphate Hill accordingly and treats its dedicated workforce and suppliers with the respect deserving of their continued support.”

Phosphate Hill fertiliser plant, 140km north west of Mt Isa.

Far north Queensland federal MP Bob Katter said it was a “disaster” and called for a gas reservation scheme to ensure a price competitive power supply.

He said Australia was paying more than triple for its gas compared to the US fertiliser industry.

“We sold all of our gas reserves in the ‘90s,” Mr Katter said.

“What we need is a small amount of our gas production to be set aside and made available at a competitive price of $US5 a unit.”

Mr Katter said he had organised a delegation to meet with Federal resources Minister Madeleine King to lobby for the gas reservation scheme.

Member for Kennedy Bob Katter. Picture: Evan Morgan

Australian Worker union Queensland branch secretary Stacey Schinnerl said they were monitoring the situation.

“Just as our union has done many times in the past we will work strategically with management to protect jobs and provide ongoing security to workers at this site,” she said.

“Long term, however, there’s no doubt we need further major reform if we want Australian industry to survive and thrive.

“A reservation scheme that covers all east coast demand would shore up thousands of local jobs and still allow the vast majority of the gas Australia produces to be exported.”

Originally published as Dyno Nobel considers closing Phosphate Hill fertiliser plant because of rising gas prices