Nauru in phosphate revival helped by Incitec Pivot Ltd
The tiny Pacific island of Nauru is teaming up with an Australian company to try to revive its once bustling phosphate industry.
Fertiliser group Incitec Pivot Ltd will provide materials and engineering expertise to a new company set up by the Nauruan government to operate the phosphate rock operations, at an expected cost of $6 million.
The company, which will refurbish the island's phosphate rock mining and processing plant, said it will recover its investment through the supply of rock over approximately two years.
The agreement is dependent on the moorings at Nauru being repaired to allow ships to load the phosphate, a chemical built up mainly from the droppings of millions of birds that called the island home for centuries.
Nauru's phosphate helped its 12,000 people become some of the wealthiest in the world, but turned the 21sq.km island into a moonscape.
Economic mismanagement, coupled with the depletion of phosphates, drove it to the brink of collapse in a riches to rags saga.
Incitec chief executive Julian Segal said the new commercial arrangement will benefit both the Nauruans and Incitec Pivot.
"Nauru benefits by getting the phosphate operations re-established so that the country can earn revenue by selling rock at a global parity price," he said.
"And we could save on freight costs because Nauru is much closer than alternative sources in north west Africa or China."
Segal said the rock would be used to manufacture fertiliser at Incitec Pivot's plants in Victoria and New South Wales with the freight savings helping to underpin its competitive market position.
Rock is likely to be available from the refurbished operations in the first quarter of 2006.
Nauru's commerce, industry and resources minister Frederick Pitcher said his country's phosphate industry stood to gain immensely from both the capital investment and expertise of Incitec Pivot.
"Our government is committed to working closely with Incitec Pivot in revitalising our flailing phosphate industry," Pitcher said.
"And it is our hope that Nauru will be in a position in the not-too-distant future to regain its name in the market place as a reliable supplier of high-quality phosphate".
This year the phosphate industry workforce on Nauru was cut by half or about 800 people.
And last year its government was forced to sell five of its property assets in Australia to pay off a $240 million debt to GE Capital Corp.
Source: AAP NewsWire
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