Incitec loses con­tracts

The Australian Mining Review - - NEWS: THE CONTRACTORS - EL­IZ­A­BETH FABRI

IN­DUS­TRIAL chem­i­cals com­pany Incitec Pivot has missed out on two con­tract re­newals to sup­ply ex­plo­sives and ser­vices to Roy Hill and BHP Iron Ore op­er­a­tions.

In Jan­uary the com­pany no­ti­fied the ASX it will cease to be Roy Hill’s con­tracted sup­plier on 9 Feb­ru­ary, less than a month af­ter it an­nounced BHP would not ex­tend its con­tract to sup­ply ni­trate prill be­yond 28 Novem­ber 2019.

The Roy Hill con­tract loss was es­ti­mated to have a one off im­pact on Net Profit Af­ter Tax (NPAT) of about $5 mil­lion in FY18, $16m in FY19, $22m in FY20, $18m in FY21, $20m in FY22, and min­i­mal im­pact be­yond.

In ad­di­tion, the BHP con­tract ter­mi­na­tion was es­ti­mated to have a $10m hit in FY20 and $25m im­pact in FY21.

“These NPAT im­pacts are es­ti­mated on the ba­sis of ex­pected in­put costs, and may be able to be mit­i­gated to some ex­tent by other com­mer­cial ar­range­ments,” Incitec Pivot stated.

Me­dia spec­u­la­tion has pegged Orica as a pos­si­ble re­place­ment con­trac­tor for both BHP and Roy Hill.

On 29 Jan­uary, Incitec went pub­lic with an ex­ec­u­tive team re­struc­ture as Incitec Pivot Fer­tilis­ers (IPF) pres­i­dent and Asia Pa­cific pres­i­dent of Dyno No­bel Asia Pa­cific (DNAP) Si­mon Atkin­son de­parted the com­pany.

“As a con­se­quence of Mr Atkin­son’s de­par­ture, IPL has taken the op­por­tu­nity to re­assess the struc­ture of its ex­ec­u­tive team,” Incitec said.

“This re­assess­ment has re­sulted in the lead­er­ship of the DNAP and IPF busi­nesses be­ing sep­a­rated.”

Greg Hayne will as­sume the role of DNAP pres­i­dent, and James Crough has been ap­pointed IPF pres­i­dent in an in­terim ca­pac­ity.

Two new ex­ec­u­tive roles have also been cre­ated; Robert Roun­sley has been ap­pointed chief tech­nol­ogy de­vel­op­ment of­fi­cer and will lead IPL’s global tech­nol­ogy group for both the ex­plo­sives and fer­tilis­ers busi­nesses, and the new role of ex­ec­u­tive com­mer­cial of­fi­cer will be taken up by Seth Hobby.

“These changes will en­able each busi­ness to con­tinue to ef­fec­tively serve their cus­tomer base, fo­cus on tech­nol­ogy and in­no­va­tion, and im­prove our agility in re­spond­ing to mar­ket changes,” IPL manag­ing di­rec­tor and chief ex­ec­u­tive Jeanne Johns said.

Im­age: Roy Hill.

Incitec Pivot’s Roy Hill con­tract ends on 9 Feb­ru­ary.

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