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Orica looks to reboot Kooragang Island plant

ORICA hopes to have its Kooragang Island ammonia plant back up and running by the end of the year after being forced into an extended shutdown after a toxic gas leak in August.

ORICA hopes to have its Kooragang Island ammonia plant back up and running by the end of the year after being forced into an extended shutdown after a toxic gas leak in August.

The chemical and explosives supplier said the plant's inactivity - due to a leak of carcinogenic hexavalent chromium which sparked outrage from residents and environmental groups - had cost it $21 million so far.

But it did not stop the company posting a net profit of $642.3 million for the year to September, which surpassed consensus analyst forecasts of $621 million.

"The company is working with authorities and the community to rebuild confidence in its operations and we expect to restart the plant later this calendar year," the chief executive, Graeme Liebelt, said.

Orica's profit rose 3.8 per cent on last year, when excluding the effect of the demerger of the DuluxGroup paint business at the start of the financial year. Shares in Orica, the world's largest producer of explosives used in mining and construction, surged 4.57 per cent, closing at $25.41 yesterday.

Mr Liebelt said independent toxicology studies had concluded the leak, near Newcastle, posed no threat to human health and that design changes had been made to ensure there would be no repeat of the incident.

Mr Liebelt, who has brought forward his retirement date to March to accommodate the arrival of former Newcrest Mining boss Ian Smith, was upbeat about the company's prospects of profit growth next year, with strong explodemand for explosives from miners, and volatility in currency markets expected to settle down.

"I think we go into 2012 with reasonably good momentum," he said. "The key thing for us is that China continues to show reasonable growth."

Orica's performance was held back by a poor showing from its Minova underground mining chemicals business, which was hit by a price war in North America.

Minova's earnings fell 29 per cent on last year to $105 million.

AT A GLANCE

2011 Change

Revenue $6.18b -5.5%

Profit $642m -51.3%

EPS $1.74 -52.6%

Dividend 53? 54?


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