The Moranbah project involves the construction of a 330,000 tonnes-per-year, fully-integrated AN complex comprising ammonia, nitric acid and ammonium nitrate plants.

The project had been abandoned by Dyno Nobel in December 2007 but has been reactivated following the acquisition of Dyno by Incitec.

Mechanical completion is targeted for the first quarter of 2010 and beneficial operation for the first quarter of 2011.

Incitec Pivot managing director, Julian Segal, said the project would exceed the company's financial criteria of 15pc internal rate of return and delivers an 18pc return on net assets in the fourth year of operation.

"This investment will expand Incitec Pivot's core nitrogen manufacturing capability based on a world-scale manufacturing plant at the bottom of the cost curve in its market and builds a strong position in the eastern Australian commercial explosives market," Mr Segal said.