Production Expansion at Yarwun Ammonium Nitrate Plant

29 October, 2004

Orica Limited today advised that it is examining the expansion of the production capacity of its Ammonium Nitrate (AN) plant located in Yarwun (Queensland), by approximately 300,000 tonnes per annum, during 2006 rather than the 120,000 tonnes previously advised to the Australian Stock Exchange in July 2004.

This expansion is in addition to the 25,000 tonne uprate scheduled for completion in March 2005. Following the 300,000 tonne expansion, total AN production at Yarwun will be 595,000 tonnes per annum.

The expansion is now estimated to cost around $110M compared to the previous estimate of between $90M and $100M. By installing more efficient nitric acid capacity at Yarwun, Orica will be able to realise significant increased AN production in an extremely cost effective manner in order to meet increased market demand, particularly in the Queensland metallurgical coal producing regions. The production configuration at Yarwun enables Orica to bring on incremental AN capacity as the market demands.

Orica Managing Director and CEO, Malcolm Broomhead, said that the further upgrade demonstrates the continued strength of the Bowen Basin (Queensland) coal markets, provides Asian and North West Shelf supply opportunities and meets Orica’s investment criteria.

In August 2004, Orica completed a production expansion of 110,000 tonnes at its Kooragang Island facility following increased market demand in Australia and South East Asia. This additional capacity is now sold out.