Nitric acid: production costs?

Global production of nitric acid is 60MTpa, in a $25bn pa market, spanning c500 production facilities. c80% of the world’s nitric acid is used to make ammonium nitrate, for fertilizers and explosives in the mining sector. This data-file is a breakdown of nitric acid production costs, based on evaluating the energy economics, capex and other operating costs.

A nitric acid price of $350/ton is needed to generate a 10% IRR in our base case model, assuming a plant costing $500/Tpa in capex. Economics can be stress-tested in the data-file.

The largest input costs is ammonia, which is progressively oxidized using the Ostwald process, a high-temperature catalytic oxidation reaction, using a platinum-rhodium catalyst, at low-medium pressures (further details in the notes tab). Unfortunately, this means nitric acid prices will spike to $600/ton in a gas crisis or times of severe gas shortages.

CO2 intensity is estimated at 1.8 tons/ton, but can realistically vary from 1 to 4 tons/ton. The process itself is not energy intensive. We estimate that the electricity consumption per ton of nitric acid is below 25 kWh/ton (you can compare all of our economic models).

However, one-third of the CO2 intensity is inherited from ammonia inputs. And most significantly, the production process can emit anywhere from 0.1 kg/ton to 10 kg/ton of N2O, a powerful greenhouse gas, which a 298x higher global warming potential (GWP) than CO2.

Companies in the nitric acid value chain are mentioned in the ‘notes’ tab. It may be interesting to explore companies such as Clariant, Johnson Matthey and BASF for their catalyst technologies (Clariant is marketing a post-processing catalyst that can break down 95% of the N2O).

There are also specialist manufacturers of blasting explosives for the mining industry, such as Dyno Nobel and Orica, further down in the value chain; adding to our recent work into specialist mining equipment companies.

Please download our nitric acid production costs model, in order stress test capex, opex, and other cost lines.

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