Orica buys Axis Mining Technology to help search for critical minerals vital for reducing global decarbonisation

Axis’ gold and copper exposure also accelerated Orica’s broader commodity mix objectives, he said.

Orica’s shares went into a trading halt on Wednesday morning ahead of the $367 million Axis deal, which includes deferred earn out payment of up to $90 million for key staff remaining employed and earnings generated from October 2022 to the end of December 2024. Administration of the deal cost $18 million.

Mr Gandhi said the $232 million working capital raise would help Orica tackle “geopolitical uncertainties, inflation, supply chain disruptions” but he insists Orica’s forecast to turn a corner this year still holds strong.

Orica, the world’s largest provider of explosives, has increased its inventory holdings of ammonia nitrate and secured new suppliers, which in some instances have required shorter payment terms.

“There’s a lot of stuff going on that industry cannot control. So, I’m being a bit cautious here. It [the capital raise] has got nothing to do with the underlying business, the underlying business is very healthy.

“We are sticking to our forecast for this year. I feel very comfortable in the space I am in, despite all the challenges that the global economy is throwing at all of us. This is just being prudent and just building a buffer because inflation is eating into our working capital because the input costs are going up significantly.”

He said Orica was passing everything through to its customers but “we don’t know what the future holds for the industry. So, we are just being a little bit prudent.”

This deal comes four months later the company reported soaring sales volumes in the six months to May – although this was still insufficient to prevent it posting a half-year loss of $85 million.

Hinting that the company had turned the corner despite the half-year loss, Orica said sales revenue for the six-month period totaled $3.3 billion – up 25 per cent from the same period last year.

Orica has suffered a series of financial losses in recent years amid a tumultuous global economic and political environment that resulted in the company unveiling a new corporate strategy and appointing Mr. Gandhi as chief executive.

Orica attributed the bulk of the loss to an impairment charge of $80 million from the company’s withdrawal from Russia following its invasion of Ukraine. It also incurred restructuring costs.

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