New Brunswick has picked a site for what could become Canada’s largest explosives factory since World War II, closing out a monthslong contest among provinces for the project.
Belledune, a small port community on New Brunswick’s Baie des Chaleurs coast in the province’s north, is the winner. The province has committed 1,500 acres of Crown land there to Nalagx Corp., under a July 30 letter from Natural Resources Minister John Herron, who cited the community’s road, rail and port access and called the project a positive step for the regional economy.
The site had remained an open question as recently as March, when New Brunswick was still just one of several provinces in the running.
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The letter stops short of a final transfer, describing the arrangement instead as a possible future lease. Nalagx won’t get the land outright unless it lines up a “credible operating partner” by year’s end.
Nalagx’s original partner, France’s state-controlled Eurenco, is no longer part of the project. Nalagx and Eurenco signed a letter of intent last year, but the partnership fell apart once the two sides decided their approaches didn’t align.
Chief financial officer Jared Mintz said the company instead needs an operator with a North American focus, and that Eurenco could still end up buying Nalagx’s output rather than helping build the plant.
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The company now expects the plant’s total value to climb toward $2 billion in later phases, as the company broadens what it manufactures and adds fabrication capacity beyond the initial buildout, well above the $1-billion figure the two companies cited when they first announced the Eurenco plan.
The jobs estimate has held steady at 500 direct positions throughout.
For financing, Mintz pointed to three tracks — equity investors, commercial lenders, and a potential backstop from Export Development Canada, the federal agency that finances exports. New Brunswick tax credits and federal support, including the Canadian Defence Industry Resilience Program, are also in the mix.
They have raised roughly $100 million of the $200 million in private equity the company needs for this phase, with later stages requiring more.
The Belledune plant would make propellants and explosives for 155mm artillery shells and other munitions that NATO militaries have struggled to keep in stock as the war in Ukraine drains allied shell reserves, along with explosives for civilian mining use.
Nalagx had previously targeted 2029 for the plant’s first production, though that timeline’s status is unclear now that Eurenco is out of the picture.
