Indiana pulls nitrogen plant funding over fears about explosives

18 May 2013 00:01  [Source: ICIS news]

HOUSTON (ICIS)--Indiana officials on Friday announced the state is withdraw financial support for a proposed nitrogen plant over concerns that part of the foreign ownership is not cooperating with US officials in their attempts to keep fertilizer products from becoming improvised explosives used against US soldiers overseas.

Governor Mike Pence and state economic officials decided after careful review that Indiana was not going to continue with assisting the project with the lucrative incentives primarily based on information received from the US Department of Defense.

The federal government said that a segment of the proposed ownership group had been “less than cooperative” in efforts to reduce the presence and creation of explosive devices that have caused numerous deaths and injuries in the battlefields.

In December 2012 the Indiana Finance Authority issued $1.3bn (€1.0bn) in bonds for the construction by Midwest Fertilizer of a nitrogen facility west of Evansville, Indiana that upon completion had expected to cost $1.8bn and create 300 permanent jobs. The plant was to supply agricultural markets within the Midwest.

No details of production capacity or time for operations to start have been revealed.

The company has a 48% ownership stake from the Fatima Group, which is a fertilizer manufacturer based in Lahore, Pakistan. The rest of the ownership is a consortium of international investors.

Earlier this year the state agency learned about the report on Fatima and put the financial pledge on hold while officials investigated further.

The company said it has told authorities that its fertilizer offerings have been reformulated to make them less likely to detonate and thereby reduce its ability to be converted into homemade bombs. But the governor's office said US officials have not been able to test the new version in order to validate those claims.

Pence said that while economic development in the state is important, the issue of protecting US troops takes a higher priority for himself and his administration.

“Without assurances from our Defense Department that the materials, which have been misused by the enemy in Afghanistan, will be permanently removed from production by Fatima Group in Pakistan, I cannot in good conscience tell our soldiers and their families that this deal should move forward,” said Pence.

Midwest Fertilizer said later on Friday that it will continue to pursue options for the project despite the state’s withdrawing of incentives. It added that it has taken the step of suspending within Pakistan the sales of calcium ammonium nitrate that have previously been linked to the explosives.

“Midwest Fertilizer is optimistic that working together with the Posey County Economic Development Partnership and the Economic Development Coalition of Southwest Indiana that a joint effort will be successful,” the company said. “The new fertilizer is more inert, less explosive and therefore less susceptible to misuse by insurgents and terrorists.”

($1 = €0.78)

By: Mark Milam
+1 713 525 2653

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