Mining explosives and fertiliser manufacturer Incitec Pivot says Australia’s lack of energy policy is hurting the country’s investment environment.
The AFR reports company MD and CEO James Fazzino said Australia’s energy policy is “a train wreck” and is one of the reasons behind the manufacturer’s decision to develop an $850 million ammonia plan in Louisiana rather than Australia.
“The state of Louisiana is open for business. They continue to ring us every month and ask, ‘What else can we do’ because they are about employing people in Louisiana,” he said.
In December the company revealed its gas bill at the Phosphate Hill fertiliser plant in Queensland will rise by $50 million a year in 2015-16.
“Phosphate Hill is the story of Australian manufacturing,” Fazzino said. “The high Australian dollar, high cost of doing business, and we’ve taken a large hit on gas at that plant.”
Despite new LNG projects ramping up around Australia, energy prices are expected to rise as the resources are exported to international markets. Gas shortages have also been flagged for New South Wales, in particular from 2016 onwards. There’s more on that here.
Fazzino said while exporting gas is a good thing for the economy there needs to be enough filtering back into industry in Australia to promote value add operations.
At its investor day this month Incitec revealed it is currently dealing with falling demand from the mining sector for its explosives as well as a drop off in sales for its fertilisers as farmers battle the drought.
There’s more here.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.