ORICA says it is easier and cheaper to store ammonium nitrate used in explosives on a ship than to expand its warehouse capacity and obtain the necessary dangerous goods licences.
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Orica general manager for Australia and Asia, James Bonnor, was commenting on the latest controversy to affect the company.
Orica is back in the headlines after using a flag of convenience ship, the MCP Kopenhagen, as a temporary warehouse for 3000 tonnes of ammonium nitrate made on Kooragang Island.
Hear part of yesterday's press conference by clicking below
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Pictures by Dean Osland
The ship left the port at the weekend and is sitting about five kilometres off Caves Beach. It is expected back in port in the next seven to 10 days to unload its cargo, which will then be trucked to Hunter Valley coalmines.
Mr Bonnor said the 3000-tonne cargo was part of a "contingency plan" to cover for the partial shutdown of its Kooragang Island plant for a few weeks this month.
Asked why Orica did not have enough licensed capacity to store the Kopenhagen material on land, Mr Bonnor said the company tried to minimise its storage needs with "just in time" supply methods.
Mr Bonnor said the Kooragang plant produced about 400,000 tonnes of ammonium nitrate a year and was licensed to store 9000 tonnes at a time.
Its planned conversion of the Rosemount winery at Denman would give it capacity to store another 2000 tonnes.
Mr Bonnor said Orica had not asked the state government for approval to store more potentially explosive material as an alternative to storing it at sea. Nor did it think of telling the public it was using a ship as storage because it did not consider the process out of the ordinary.
The Australian Maritime Safety Authority, which inspected the Kopenhagen, said "a dangerous goods inspection was completed, at which all requirements for safely carrying ammonium nitrate were satisfied".
