Orica prepares for end of thermal coal with $559m software firm buy

“The reason for that is pretty simple: global coal blasting is going to reduce after 20 years. As soon as we see thermal coal starting to pare down, we will see the energy intensity in blasting starting to come down.”

Orica has already cut its exposure to thermal coal, cutting the number of customers in the sector over five years from 30 per cent to under 14 per cent of its total client list, Mr Gandhi said on Wednesday. During that time, Orica has increased its exposure to miners digging up copper, nickel and lithium, commodities vital for conducting and storing green electricity.

Angus Melbourne, Orica’s chief technical officer, said Terra Insights complemented the company’s existing services – including Ground Probe and Axis Mining technology – by helping monitor infrastructure and assist with building mines as they become “deeper and steeper”.

Orica operates at more than 400 mine sites across the globe.

“Terra Insights provides sensors that you put into the ground or measure things like water pressure, tilt, rotation, load, vibration,” Mr Melbourne said. “Those measurements are very important for mining infrastructure as well as civil infrastructure.

“Some of the tunnelling work in the Nordics and in Japan, needs blasting and quite often there will be a vibration and the need to monitor the effect of that blasting on infrastructure in cities.”

Prominent catastrophes and structural failures are driving awareness from companies to proactively monitor and mitigate failure risks in ageing infrastructure, Mr Gandhi said.

Terra’s earnings contribution in this financial year are expected to be largely offset by integration costs; increased net financing costs and incremental amortisation. Still, shares in Melbourne-headquartered Orica dropped 2.35 per cent to $16.24 following its disclosure of the purchase. That was despite Mr Gandhi reiterating positive momentum in the second half of the last financial year had continued in the first two months of the new year.

He added that Orica was still in the market for chemical companies but would not be drawn on whether there was a specific target. “We always want to have a seat at the table. If there’s a chemical acquisition with the right value, it’s accretive to our strategy, we’ll take a look at it,” he said.