Dyno Nobel (DXL), Commercial Explosives Maker, fell by 13% today after it announced it has suspended its Moranbah project in Queensland indefinitely because it no longer meets the group’s financial criteria.
Moranbah is an ammonium nitrate project which Dyno had previously described as a major platform to secure a stronger foothold in the regional Australian ammonium nitrate market.
"The company continued to face substantial delays in the project and difficulty in reliably forecasting the project costs in a tight Queensland construction market," said Dyno CEO Peter Richards.
Dyno said it had spent an estimated $280 million on the Moranbah project so far and would retain a team to consider alternative options for the project.
In August Dyno warned that the Moranbah Project would cost significantly more than the original estimate of $520 million and that production would be later than expected.
The plant at Moranbah in the Bowen Basin, which Dyno wanted to build to meet strong demand from key global mining companies in Australia, was to have a production capacity of 330,000 tonnes per annum of ammonium nitrate a year.
The project was expected to be completed in the first half of 2009.
The explosives company said it is investigating options to satisfy obligations to those customers that agreed to purchase ammonium nitrate from the proposed Moranbah facility.
"Dyno Nobel has retained a project team to consider alternative options for the project," the company added
Dyno Nobel had entered into a trading halt yesterday and came back on-line today, only to fall by 33 cents to close down at $2.19.