By Robb M. Stewart

MELBOURNE, Australia--Industrial-chemicals producer Incitec Pivot Ltd. (IPL.AU) warned Wednesday of a financial hit in the coming years after being dropped as the supplier of ammonium nitrate to BHP Billiton Ltd.'s (BHP.AU) iron-ore operations in Western Australia.

Incitec said it had been notified that when the current supply contract expires in late November 2019, it will cease to supply the miner with ammonium nitrate prill, an ingredient for explosives.

While no financial impact is expected for the 2018 and 2019 financial years, the company said that the loss of the volumes is estimated to result in an up to 10 million Australian dollars (US$7.6 million) hit in fiscal 2020 and A$25 million the year after, and minimal impact beyond that.

Incitec added it may be able to mitigate the cost to some extend through other commercial arrangements.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

December 05, 2017 17:48 ET (22:48 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.
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