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PERTH, Nov 16 AAP

November 16 2012, 6:01PM

Site preparation has begun for a $775 million technical ammonium nitrate (TAN) plant in Western Australia's Pilbara region.

TAN is the main raw material used in the production of explosives for the mining sector.

The project is a joint venture between Australian explosives maker Orica, US-based energy giant Apache and Norwegian chemical company Yara International, which operates the adjacent Burrup fertilisers plant.

The TAN project was delayed in May last year after Yara could not convince Burrup's founder, Pankaj Oswal, to back it.

Construction of the TAN plant, which has an expected lifespan of more than 20 years, is expected to start in March 2013.

"This project is a high value-adding investment, taking offshore gas that has been converted into ammonia and manufacturing into TAN," WA Resources Minister Norman Moore said.

"Apache supplies natural gas to Yara Pilbara Fertilisers Pty Ltd from the Harriet gas field off Western Australia's coast and the existing facility will, in turn, supply ammonium feedstock to the TAN plant."