Orica Receives Permission To Restart Explosives Plant

An Australian explosives plant crucial to the global supply of the thermal coal used in electricity generation will likely restart shortly after the government of New South Wales state lifted a closure order on parts of the site, its operator Orica Ltd. (ORI.AU) said Tuesday.

The Kooragang Island ammonium nitrate plant has been shuttered since Nov. 9, when a leak of ammonia gas drifted across the Hunter River and caused two rail workers to be hospitalized.

The plant supplies around 85% of the explosives used in the Hunter Valley coal industry supplying Newcastle, the world's biggest coal export harbor. Miners in the district, including Xstrata PLC (XTA.LN), last month launched reviews of their operations due to concerns that supplies of the explosive would run low and harm their ability to keep producing.

"Orica has demonstrated to the Environment Protection Agency and other regulatory bodies that it has satisfactorily addressed the issues that caused the Nov. 9 ammonia vapor incident," the company said in a statement.

In a separate announcement, NSW Environment Minister Robyn Parker said that a separate part of the plant will remain closed. The closed facility was involved in an Aug. 8 leak of the carcinogen hexavalent chromium which drifted across a residential suburb of Newcastle.

-By David Fickling, Dow Jones Newswires; [phone]; [e-mail]