Business
5 November, 2025
Dyno Nobel 'holding a region to ransom' over Phosphate Hill
Threats to close down the fertiliser plant have not gone down well with two of the region's leaders.
A battle is brewing over the future of one of North West Queensland’s most important industrial assets, with community leaders accusing Dyno Nobel of corporate recklessness and political gamesmanship as it threatens to shut the Phosphate Hill fertiliser plant.
The company stunned the region on October 1 when it announced that if Phosphate Hill was not sold by March next year, it would be shut six months later in September 2026.
The statement was dropped just days before the government brokered a deal to keep Glencore’s copper smelter alive – a move that secured the acid supply vital to Phosphate Hill’s operations.
The threats to close the mine and plant fly in the face of what is a massively profitable enterprise for Dyno Nobel.
The company will release its 2024-25 full-year results next Monday, but based on its own update to shareholders, the Phosphate Hill operations are expected to post a profit "in the range of $225 million to $235 million".
The closure threat infuriated local leaders who say the decision-making from Dyno Nobel’s city boardrooms shows a dangerous disregard for regional Queensland.
Cloncurry mayor Greg Campbell said the fertiliser operation was “too big not to get the attention and respect it deserves”, describing it as one of the pillars of the entire North West economy.
“Phosphate Hill produces about a million tonnes of fertiliser a year and remains one of the biggest customers of the Port of Townsville,” he said.
“It’s one of the largest ratepayers in the (Cloncurry Shire) and underpins a huge part of the rail freight. The majority of Aurizon staff based in Cloncurry are there because of Phosphate Hill.”
Cr Campbell said about 50 train drivers relied directly on the operation and warned its closure would cripple the already fragile Mount Isa-Townsville rail corridor.
“If the major user drops off, the cost for everyone else doubles,” he said.
“That’s when you get a death spiral – higher prices forcing more freight onto the road.”
North West Weekly made repeated attempts to get an on-the-record interview with Dyno Nobel, including company CEO Mauro Neves de Moraes.
This masthead was instead offered a "background" briefing, where the company spent 20 minutes trying to justify its position.
However, it has said publicly that two things were preventing a buyer of Phosphate Hill: the long-term security of the Mount Isa copper smelter, and the lack of a secure gas supply at an affordable price.
North West Weekly understands that a potential buyer has made an offer to Dyno Nobel, despite the company not making the disclosure to the Australian Stock Exchange.
Cr Campbell said it was “nonsensical” that Dyno Nobel would consider mothballing a profitable plant while making public demands for intervention on gas prices.
“They’re still making money even at record gas prices,” he said.
“That shows the strength of the business. If someone is willing to take on the environmental and future liabilities, surely it makes sense to sell it – even for a dollar – rather than close it.”
Dyno Nobel, formerly known locally as Incitec Pivot, once built its reputation on fertiliser.
Yet, in a stunning reversal, the company has decided to walk away from fertiliser and focus solely on explosives – even as it banks hundreds of millions in annual profit from Phosphate Hill.
Cr Campbell said the strategy “defies common sense”.
“It seems like a naive decision just to want to focus on one commodity or one product,” he said.
“I’m not sure why, when it’s such a good business. Fertiliser prices aren’t great, not terrible – yet it’s still working. And if we’re going to have to feed more people globally, then surely we’re going to need more fertiliser, not less.”
The mayor said the facility was unique in its complexity – “a massive chemistry set as well as a mining operation” – and had decades of resource life left.
“The acid side has been shored up for a couple of years thanks to the governments and Glencore,” Cr Campbell said.
“But the gas price has been cruel. They were supposed to have a connection through the Northern Territory gas fields, but that hasn’t come off, so they’ve been forced onto the spot market at punishing rates.”
Despite those pressures, Cr Campbell said the plant continued to perform strongly and remained critical to regional freight and export networks.
“This project isn’t too big to fail, but it’s far too important to ignore,” he said.
CLOSURE WOULD BE CATASTROPHIC
Member for Traeger Robbie Katter has also taken aim at Dyno Nobel, accusing the company of “holding a region to ransom” while still generating strong profits.
“It’s hard to say anything in that value chain is more important than the other – whether it’s CopperString, the copper smelter, or the fertiliser plant,” the MP said.
“They’re of the highest importance to not just the North West but the entire value chain extending through to Townsville.”
He said the potential knock-on effect of a closure would be catastrophic.
“They’re close to 50 per cent of what’s left of usage on the rail,” Mr Katter said.
“Prices are already three to four times higher than the next-highest in Australia. If they drop off, it would be catastrophic for the viability of that line.”
The KAP leader and his father, federal Member for Kennedy Bob Katter, have campaigned for more than a decade for a domestic gas reserve policy.
The Traeger MP said the situation at Phosphate Hill highlighted how national energy policy had failed regional industry.
“We’ve been short-changed by selling our gas overseas for next to nothing,” he said.
“Western Australia and most of the developed world have gas reserve policies – we don’t. If the federal government is serious about reviving manufacturing, that’s precisely the sort of policy that will do it.”
Mr Katter said the North West, through a Special Economic Zone, could become “one of the best test cases for a policy-driven manufacturing rebirth in Australia” if governments were willing to act.
Mr Katter said allowing Dyno Nobel to close a profitable, strategic asset on the basis of not securing a buyer in the next four months would be unacceptable.
“When you say it like that, it starts to put it in the same category as when we shut down the copper mine in this city that others would have gladly operated,” he said.
“Our rules should reflect the fact that if you walk away from something like that, then the government should be entitled to pick it up or force you to sell it to someone else.”
Mr Katter accused Dyno Nobel of “artificially setting a price” and ignoring its social licence.
“You can’t just say, ‘I’m not going to sell it unless I get the price I want,’” he said.
“The market is the market. It’s only worth what someone’s willing to give you. You can’t set your price and then shut it down when it’s strategic like that. And if the laws don’t reflect that now, they should.”
Behind the scenes, state and federal officials are working to stabilise the situation.
The government intervention in the Mount Isa copper smelter has temporarily safeguarded half of the value chain.
Now attention has turned to gas supply and pricing – a problem both leaders say must be addressed urgently if manufacturing is to survive outside capital cities.
Cr Campbell said the company’s stance exposed a wider national dilemma.
“It just makes no sense that big multinationals can sell Australian gas to the world cheaper than what our companies can use it for here at home,” he said.
“If that’s what a free market looks like, then maybe it’s time to go back to a regulated system for gas – because if we want manufacturing in this country, we need access to our own resources at the right price.”
Both elected leaders believe the issue now goes beyond one company’s decision; it’s about whether governments are prepared to defend the industrial base that sustains the region from Mount Isa to Townsville.
'AN ACT OF ECONOMIC VANDALISM'
If Phosphate Hill shuts, more than 800 direct and contract jobs could vanish.
The ripple effect would hit Mount Isa’s acid plant, the Port of Townsville, and freight operations across the North West corridor.
Towns like Cloncurry, Julia Creek and Richmond would lose vital rail and service income, while hundreds of families could be forced to leave the region.
“It would unravel decades of progress in regional development,” Cr Campbell said.
“You don’t replace an operation like this. It’s not a mine you can restart in five years – it’s a vast industrial ecosystem that feeds Australian agriculture.”
Mr Katter agreed. “It’s not just another business,” he said.
“This is national infrastructure. It’s part of how we feed people, export product, and keep regional Queensland alive. Letting it close would be an act of economic vandalism.”
For now, Dyno Nobel’s executives remain silent ahead of their annual results, while potential buyers are believed to be circling.
Locals say what happens next will test the company’s social conscience – and the government’s political will.
“Phosphate Hill has proved it can make money in tough conditions,” Cr Campbell said.
“If there’s genuine commitment to regional Queensland, then the company, the government, and the investors should find a way to keep it going.”
