Multinational company that makes fertilisers and explosives chemicals, Incitec Pivot (ASX:IPL) will cease suppling ammonium nitrate prill to BHP Iron Ore (ASX:BHP) after its contract ends.
It comes as BHP Iron Ore told Incitec Pivot it will no longer be its contracted supplier when its contract expires on 28 November 2019.
The company says there won’t be an impact this or next financial year (FY18 or FY19).
However, there will be a one off maximum impact of about $10 million in FY20 and $25 million in FY21 on its Net Profit After Tax (NPAT). Beyond FY21 there will be minimal impact.
Shares in Incitec Pivot (ASX:IPL) are trading about 2.8 per cent lower to $3.87.