# Explosives and propellants: Economics

The profitable business of breaking rock for mines

Source page: https://www.materialinsights.org/energy/e_propellants/sg-econ/

What this tab covers Economics and financial structure: capital versus operating cost, levelised cost of storage, and how the asset earns money.

The business is industrial explosives for mining, a large and profitable market tied to commodity cycles, plus a small, specialised propellant supply chain for space and defence.

#### Capex versus opex
Mixed

Ammonium nitrate plants and licensed storage are capital intensive, and safety management is a large ongoing cost. Orica, a major commercial explosives supplier, recorded more than 6,500 work stoppages for major-hazard concerns in FY2025, up from 5,600 in FY2024. In space, moving satellites off hydrazine means requalifying thrusters, a slow and costly process for which no reliable public cost figure was found.^[6](https://eurospace.org/revised-common-position-of-the-european-space-industry-on-the-exemption-of-propellant-related-use-of-hydrazine/)^[8](https://a.storyblok.com/f/329380/x/4267224ba0/orica-annual-report-2025.pdf)
 Orica major-hazard stoppages more than 6,500 (FY2025) vs 5,600 (FY2024)^[8](https://a.storyblok.com/f/329380/x/4267224ba0/orica-annual-report-2025.pdf)

#### Levelised cost of storage (cost per useful work)
Mixed

No levelised storage cost applies, because the energy is used once. The relevant metric is cost per tonne of rock broken or per kilogram to orbit, and in both the propellant is a small share compared with labour, equipment or the launch vehicle. No reliable public figures were found for these shares.^[8](https://a.storyblok.com/f/329380/x/4267224ba0/orica-annual-report-2025.pdf)

#### Revenue stack and market participation
Mixed

Revenue comes from selling explosives, blasting services and technology to mines and quarries. Orica's FY2025 (year to 30 September 2025) revenue was AUD 8.14 billion, up 6%, and EBIT AUD 992 million, up 23%, with its blasting segment 86% of revenue. Demand follows mining activity, and the company reported lower thermal coal demand in Indonesia and the US, a sign that the energy transition shifts demand from coal toward metals mining.^[8](https://a.storyblok.com/f/329380/x/4267224ba0/orica-annual-report-2025.pdf)
 Orica revenue FY2025 AUD 8,144.5 m^[8](https://a.storyblok.com/f/329380/x/4267224ba0/orica-annual-report-2025.pdf) Orica EBIT FY2025 AUD 992.2 m^[8](https://a.storyblok.com/f/329380/x/4267224ba0/orica-annual-report-2025.pdf) Blasting share of revenue 86%^[8](https://a.storyblok.com/f/329380/x/4267224ba0/orica-annual-report-2025.pdf)

#### Sources

1. [Revised common position of the European space industry on the exemption of propellant-related use of hydrazine](https://eurospace.org/revised-common-position-of-the-european-space-industry-on-the-exemption-of-propellant-related-use-of-hydrazine/) Eurospace, 2020
2. [Orica Annual Report 2025](https://a.storyblok.com/f/329380/x/4267224ba0/orica-annual-report-2025.pdf) Orica Limited, 2025

## Other sections

- [Summary](https://www.materialinsights.org/energy/e_propellants/index.md)
- [Overview](https://www.materialinsights.org/energy/e_propellants/overview/index.md)
- [Correlation](https://www.materialinsights.org/energy/e_propellants/correlation/index.md)
- [Science and technology](https://www.materialinsights.org/energy/e_propellants/sg-sci/index.md)
- [Engineering and performance](https://www.materialinsights.org/energy/e_propellants/sg-eng/index.md)
- [Impact and additionality](https://www.materialinsights.org/energy/e_propellants/sg-impact/index.md)
- [What to track](https://www.materialinsights.org/energy/e_propellants/tracking/index.md)
- [Relationships](https://www.materialinsights.org/energy/e_propellants/links/index.md)