Australia lends $105 million to support its only DAP plant

en.Wedoany.com Reported - The Australian federal government and the Queensland government have provided a $160 million (approximately $105 million) loan to Mayfair to support and upgrade the Phosphate Hill plant. This plant is Australia's sole producer of diammonium phosphate (DAP) and monoammonium phosphate (MAP), and is currently under pressure from soaring sulfur costs.

Located about 140 kilometers southeast of Mount Isa, Queensland, the plant produces approximately 400,000 tonnes of DAP and 200,000 tonnes of MAP annually, employing around 540 workers. Dyno Nobel sold the facility to Brisbane-based investor Mayfair for a nominal A$1, with a deferred payment of up to A$100 million. Mayfair assumed economic risk from April 1, completing Dyno Nobel's exit from the fertilizer business.

Part of the loan is intended to help address rising sulfur costs. Australia imports 99% of its sulfur from Canada. Argus Media assessed sulfur prices at $1,150 per tonne (FOB Vancouver) on June 25, up 136% since late February, after the US-Iran war disrupted Gulf supplies. In the six months ending March 31, Phosphate Hill's output fell 9% year-on-year to 272,800 tonnes.

Ridley, an Australian agricultural company holding a product supply agreement for the plant, plans to renegotiate the offtake agreement with Mayfair. Amid global sulfur costs driving up phosphate production expenses, this funding helps keep a significant non-Gulf phosphate source online.