Phosphate Hill is Australia’s last remaining largescale fertiliser producer. Source: Townsville Enterprise
DYNO NOBEL, formerly Incitec Pivot, has announced it has entered into a binding agreement with a subsidiary of Queensland-based company, Mayfair Australia Corporation, for the sale of Phosphate Hill.
The explosives business had previously stated that it would close the mine and processing facilities if it was not sold by March 31 as part of Dyno Nobel’s push to exit the fertiliser industry.
Headquartered in Brisbane, Mayfair invests in operating and development-stage projects across bulk commodities, metals, and critical minerals.
It has an established portfolio of resources and energy investments in Qld, and its management team has participated in a number of significant transactions in Qld’s resources sector in recent years, including an investment in the Bowen Basin’s Ensham Mine.
The company has also recently acquired a minority interest in the Gladstone Power Station, a 1680MW electricity generation asset in Central Qld.
Mayfair’s website lists its chairman as mining engineer and coal and metal mining manager Robert Hammond and managing director and chief executive officer as John Canavan, listed as having 15 years’ experience within the energy and resources sector.
Both men were connected to Peabody Energy Australia, a coal mining, production, and exploration company, Mr Hammond as group executive, managing director and chief operating officer, and Mr Canavan as director mergers and acquisitions.
Grain Central understand John Canavan is a brother to Qld Senator Matt Canavan.
Dyno Nobel’s CEO and managing director Mauro Neves said the transaction secures ongoing employment for Phosphate Hill’s 540 or so staff and contractors.
“The sale of Phosphate Hill to Mayfair is an important milestone that concludes our separation from the fertilisers business,” Mr Neves said.
“We have always been committed to achieving a responsible transfer of ownership of Phosphate Hill that protects the interests of our shareholders, our people, our customers, and the North-West Queensland community.
“I am very pleased that our talented teams in Phosphate Hill, Mount Isa and Townsville will continue to provide Australian farmers with a secure domestic source of fertilisers supply.”
Dyno Nobel will provide approximately $80 million of inventory at completion to support the continuity of operations.
Mayfair will assume responsibility for all operational and environmental liabilities associated with Phosphate Hill from completion, providing Dyno Nobel with a clean separation from the asset.
Conditional sale
The transaction is expected to complete in Q3 FY26, subject to satisfaction of a limited set of conditions precedent, including reaching an acceptable agreement between Dyno Nobel, Mayfair and the Qld Government, the Australian Competition and Consumer Commission and other relevant regulatory approvals.
Consistent with commentary in the company’s FY25 results, if the transaction does not complete, Dyno Nobel will progress an orderly closure of Phosphate Hill by 30 September 2026.
Under the terms of the agreement, the ASX announcement said there is nominal consideration of $1 as the purchase price, and up to $100M will be payable to Dyno Nobel, subject to conditions and the meeting of performance hurdles.
Subject to completion occurring, Mayfair will assume the economic risk and benefit of Phosphate Hill from April 1.
Dyno Nobel will provide $125.9M of funding to support the future rehabilitation and remediation of Phosphate Hill, to reflect the Estimated Remediation Cost for Phosphate Hill.
Phosphate Hill financial year to date unaudited earnings before interest and taxes to the end of February was about $33 million.
The figure impacted by flooding in northern Qld, supply chain interruptions from extended closures of the rail line, and ongoing interruption to the supply of metallurgical gas to the Mount Isa plant.
Increased sulphur burn rates have also coincided with a spike in global sulphur pricing, which has increased operational costs.
In mid-2024 Dyno Nobel announced it was in advanced talked with Indonesian Government-backed fertiliser company PT Pupuk Kalimantan Timur for the potential sale of its fertiliser business.
This included the distribution business and Gibson Island site, which have since been sold to Ridley and Goodman Group respectively.
The negotiations ended later that year, a development welcomed by grains industry representatives who had feared the sale could shift more product offshore and affect fertiliser supplies.
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