Orica Limited : Orica Provides Information on Ammonia Release

ORICA PROVIDES INFORMATION ON AMMONIA RELEASE

12 November 2011

Orica is today providing more information regarding the discharge of ammonia vapour from its Kooragang Island site on Wednesday 9 November 2011.

Graeme Liebelt, Managing Director and CEO said, "We are obviously bitterly disappointed about the release of ammonia from Kooragang Island on 9 November. We have been working very hard since the incident on 8 August to rebuild the trust of the community and to address technical issues on the site.

"We recognise that this further release from Kooragang Island has caused real concern in the community and I can assure the people of Newcastle that we are making every effort to ensure that our Kooragang Island site operates safely now and into the future.

"We agree the ongoing incidents on the site are not acceptable and following thorough reviews, we will take steps to ensure they cannot be repeated," said Mr Liebelt.

The release of ammonia vapour on 9 November occurred as part of safety procedures via a relief valve on the No.1 Ammonia Feed Tank attached to the No.1 Nitric Acid Plant. This feed tank is a storage tank of approximately 20 tonnes capacity. It is similar in appearance to the large gas storage tanks found in petrol stations.  The tank is used to supply ammonia to the No.1 Nitric Acid Plant.

On Wednesday, the tank in question experienced increases in internal pressure which triggered the opening of its relief valve. The opening of the relief valve is part of the safety mechanisms put in place to ensure there is no excessive pressure within the tank. The ammonia released through the relief valve was vented through a 55 metre high stack. As ammonia vapour is lighter than air, under normal operations, the height of the stack facilitates dissipation of the ammonia vapour into the atmosphere.

Orica believes that on Wednesday 9 November, ambient atmospheric conditions were such that some ammonia vapour drifted to ground at the Australian Rail Track Corporation facility in nearby Mayfield. Orica is currently investigating the circumstances that led to this. When an ammonia odour was detected at the Rail Track facility, its representatives then notified NSW Fire and Rescue.

The ammonium nitrate plant at Kooragang Island was shut down by Orica on the evening of 9 November in response to the ammonia discharge. Orica has been issued with a prevention notice from the NSW Environment Protection Authority (EPA) and is working closely with the authorities to meet their requirements.

As required by the EPA's prevention notice, Orica has appointed an approved independent engineer to investigate the cause of the discharge and the suitability of safety and other systems to prevent any further discharge.

The ammonia plant, which was shut down on 8 August, supplies products into the manufacture of ammonium nitrate and into the agriculture, water supply, food, dairy and medical sectors. The ammonium nitrate plant which was shut down on 9 November provides critical ingredients for the manufacture of explosives for use in the mining and infrastructure sectors.

There are approximately 300 workers at Orica's Kooragang Island site, who are currently being deployed on a range of other jobs including preparing for potential plant restarts, training and other maintenance activities around the site. Orica will endeavour to avoid staff stand downs wherever possible.