Hoeganaes, a wholly-owned subsidiary of GKN plc, reported that it had implemented a full operational and safety review of all manufacturing areas, supported by two independent organizations, to ensure that the cause of the incident was fully understood and that appropriate measures were taken to prevent a recurrence. The Company was also co-operating with the relevant authorities (US Chemical Safety Board and Tennessee OSHA) to establish the cause and although investigations were continuing, initial indications suggested a hydrogen gas leak.

Production at the Gallatin facility was suspended following the incident. Limited production was due to recommence the week of June 20, with the plant being brought back into full production over the next several weeks as the safety reviews and any necessary remedial works from the incident were completed. In the meantime, to ensure continuity of supply, customer orders were being met from a combination of powder inventory and shipping of product from the Company’s other operations as well as product sourced from other metal powder producers. Hoeganaes said it was working closely with customers to ensure as little disruption as possible to their operations until activities at Gallatin returned to normal. The Company was grateful for support received from Höganäs of Sweden and Rio Tinto Metal Powders (QMP), which underscored the sense of responsibility shared by competitors for supporting the health of the entire PM industry.

GKN estimated the additional costs arising from plant closure as well as shipping, purchasing and remedial work would lead to an exceptional one-off charge to profits spread over June and July of around 30 million pounds, prior to any potential recovery from insurance claims.

Sources: Hoeganaes Corp and GKN plc news releases of 13/16 June.