Bloomberg News

Australian EPA Charges Orica Over Gas Leak at Ammonia Plant

November 09, 2011

(Updates with ammonia spill in fourth paragraph.)

Nov. 9 (Bloomberg) -- Orica Ltd., the world’s biggest maker of industrial explosives, was charged with breaching Australian environmental law after gas leaked from its ammonia plant at Kooragang Island in the country’s most populous state.

The New South Wales Environmental Protection Authority charged the Melbourne-based company with failing to operate the plant in a proper and efficient manner and for not notifying the EPA promptly of the release, the agency said in an e-mailed statement today. A conviction on each charge carries a maximum penalty of A$1 million ($1 million), Katie Ritchie, a spokeswoman at the EPA, said by phone.

Traces of sodium chromate, containing hexavalent chromium, which the U.S. Department of Labor recognizes as a cancer- causing compound, were found in a neighborhood near the plant after the incident in August, Orica said on Aug. 17. The compound is the same pollutant that gained prominence from the Julia Roberts film “Erin Brockovich.”

New South Wales Fire and Rescue were called today to the plant, about 12 kilometers (7 miles) northwest of Newcastle, after ammonia spilled from a containment tank because of a buildup in pressure. Newcastle residents aren’t at risk and no evacuations are required, the fire department said in an e- mailed release.

The shares rose 2.9 percent to A$26.40 at the close of Sydney trading. The stock has gained 13 percent since the gas leak on Aug. 8, compared with the 9 percent increase in the benchmark S&P/ASX 200 index.

Full-Year Profit

Orica is to appear before the New South Wales Land and Environment Court on Feb. 3 to respond to the charges, the EPA said. Nicole Ekert, a spokeswoman at Orica, didn’t answer two telephone calls seeking comment.

“Orica has a duty of care to the people of Newcastle and the response from Orica immediately after the incident was not satisfactory,” Deputy Chief Executive of Environment Regulation Greg Sullivan said in the statement.

Following the gas discharge, the New South Wales government is introducing a series of environmental regulation changes to improve the industry’s performance and communities’ access to information, the EPA said, without elaborating.

Orica reported full-year net income of A$642.3 million on Nov. 7, beating the A$621 million mean estimate of eight analysts in a Bloomberg survey.

--Editors: Ryan Woo, Indranil Ghosh.

To contact the reporter on this story: Joe Schneider in Sydney at jschneider5@bloomberg.net

To contact the editors responsible for this story: Douglas Wong at dwong19@bloomberg.net.


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