HOUSTON (ICIS)--Penrice Soda Holdings, the Australian soda ash producer which quit producing last year in favor of buying product from the US, was placed under financial oversight on Friday as it struggles to pay down debt.
At stake for US soda ash producers may be more than 225,000 tonnes of soda ash sales, amounting to more than $45 million in 2013, with the prospect of a similar amount – or more – in 2014 should the company close or US producers otherwise lose the contract.
News of the Penrice development was published in Friday editions of the Brisbane Courier Mail.
The administration process is similar to bankruptcy proceedings in the US. The administrators, McGrathNichol, will determine whether the company can be restructured to continue as an ongoing operation or sold to meet all or some portion of its debt obligations, the Courier Mail reported.
It was not clear on Friday whether contracts can be nullified if the administrators view the company as incapable of continuing.
Penrice shut down its 340,000 tonne/year nameplate capacity soda ash production facilities in July 2013 and began distributing soda ash it received from the American Natural Soda Ash Corp. (ANSAC), an export marketing consortium that represents OCI Wyoming, Tata North America (Soda Ash) and FMC Wyoming Corp.
The US shipped 29,100 tonnes of soda ash to Australia during the first five months of 2013, according to figures from the US Geological Survey (USGS). But ANSAC shipped another 198,000 tonnes during the last seven months of the year after Penrice shut down, according to USGS figures.
Total 2013 exports to Australia hit 227,000 tonnes for 2013 compared to 35,600 tonnes in 2012, according to USGS historical data.
Penrice is estimated to have actual production capacity of about 310,000/tonnes year, according to the USGS.
The US exported at total of 6.11m tonnes of natural soda ash during 2013, according to the USGS.
Besides Tata, OCI and FMC, other major US soda ash producers include Solvay Soda Ash and Searles Valley Minerals.