Wesfarmers highlights fertilizer supply risks, ammonia price surge, and capacity expansion plans
Wesfarmers used its 2026 Strategy Briefing Day to outline growth plans across its Chemicals, Energy & Fertilisers (WesCEF) division, highlighting fertilizer market disruptions, rising ammonia prices, and a pipeline of capacity expansion projects expected to support earnings growth from fiscal 2027 onward. The company said its fertilizer business, operated through CSBP, has been responding to global supply disruptions while benefiting from higher ammonia prices linked to conflict in the Middle East.
WesCEF Managing Director Aaron Hood said the division’s strategy is centered on operational excellence, customer relationships, major growth projects, and the development of its Mt Holland lithium operation. The business remains a leading supplier of fertilizers, ammonium nitrate, sodium cyanide, liquefied petroleum gas, and natural gas in Western Australia. WesCEF is the state’s largest fertilizer producer and ammonium nitrate manufacturer.
The company said ammonia prices have risen sharply following the escalation of conflict in the Middle East, creating challenges for fertilizer supply chains. CSBP has responded by sourcing alternative supplies for growers affected by upstream cancellations and increasing production at its manufacturing facilities despite disruptions from a local supplier outage. WesCEF noted that approximately half of CSBP’s ammonia requirements are imported. While higher ammonia costs can pressure fertilizer markets, the company said higher prices also increase earnings on manufactured ammonia-based products, with most of the benefit expected to be reflected in fiscal first-quarter 2027 results because of contract timing.
Alongside developments in the fertilizer market, WesCEF is advancing several industrial expansion projects. The company completed debottlenecking work at its Nitric Acid Ammonium Nitrate (NAAN3) facility during the first half of fiscal 2026, increasing ammonium nitrate production capacity by approximately 40,000 metric tons annually to about 865,000 metric tons per year. Management said there is potential for a further 80,000 metric tons of capacity growth.
WesCEF also completed the first phase of an expansion at Australian Gold Reagents, increasing sodium cyanide capacity by roughly 35,000 metric tons annually to 130,000 metric tons per year, positioning the operation among the world’s largest sodium cyanide producers. The company expects benefits from both the sodium cyanide and ammonium nitrate expansions to become increasingly visible from fiscal 2027.
The Mt Holland lithium project remains another major growth driver. WesCEF said the mine and concentrator achieved nameplate spodumene production during fiscal 2026, while the refinery produced its first lithium hydroxide. The company is progressing plans to double the concentrator nameplate capacity to approximately 760,000 metric tons annually and expects to make a final investment decision during the first half of fiscal 2027.
Key takeaways from WesCEF’s strategy update
WesCEF said fertilizer markets have been affected by disruptions to key product supplies and by sharply higher ammonia prices following conflict in the Middle East. CSBP has been seeking alternative supply sources and increasing local manufacturing to support growers.
Ammonia is a key raw material used in nitrogen fertilizer production. WesCEF imports about 50% of CSBP’s ammonia requirements, making ammonia pricing an important factor in fertilizer costs and earnings. The company said higher ammonia prices should support earnings on manufactured fertilizer volumes, although benefits will appear with a lag due to contract timing.
The company completed debottlenecking work at its NAAN3 facility, increasing ammonium nitrate capacity by approximately 40,000 metric tons annually to around 865,000 metric tons per year. Management also identified potential for an additional 80,000 metric tons of future capacity growth.
Australian Gold Reagents completed the first phase of a project that increased sodium cyanide production capacity by approximately 35,000 metric tons annually to 130,000 metric tons. The expansion strengthens WesCEF’s position in supplying Australia’s mining sector and positions the facility among the largest sodium cyanide producers globally.
WesCEF views lithium as a major long-term growth platform. The Mt Holland project achieved nameplate spodumene production in fiscal 2026 and produced its first lithium hydroxide. The company is evaluating an expansion that would double concentrator capacity and lower production costs while increasing recoverable lithium volumes.
According to management, priorities include ramping up the Mt Holland lithium refinery, realizing benefits from expanded ammonium nitrate and sodium cyanide capacity, advancing additional growth projects, and continuing progress toward decarbonization targets.
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