Poland's PGZ is in talks on explosives production in Canada, deputy CEO says

By Karol Badohal

WARSAW, Sept 18 (Reuters) - Polish state-owned defence group PGZ is in government-level talks on a project to begin Canadian production of trinitrotoluene, or TNT, an explosive used in bombs and artillery shells, a PGZ executive said on Friday.

Following Russia's 2022 invasion of Ukraine, some Western countries have said they would seek to reestablish production of TNT, which was largely phased out after the Cold War due to falling demand and environmental hazards.

Poland is already Europe's biggest TNT producer and analysts say it is the main external supplier to the U.S. Army. The country's proximity to Russia and Ukraine has made it seek to increase production.

"The Canadian (project) is currently in the discussion phase. For the time being, it does not yet have secured financing nor a specific location, but talks are underway," PGZ Deputy Chief Executive Arkadiusz Bak told Reuters.

He said the government-level talks would need to be finalised "as quickly as possible", although they would take months more. After that, implementation of the project, provided the talks succeed, could take about 2 years.

The Polish-Canadian discussions also include cooperation on production of nitrocellulose, used in gunpowder and other ammunition propellants. Another explosive, hexogen, could also be produced alongside TNT in Canada, Bak said.

He said Canada would be the primary market for the project's TNT production, with opportunities for export as well as re-export to Poland, to secure an additional source of supply.

Bak declined to specify the potential volume of TNT production in Canada, which does not yet produce TNT, but said it would likely be close to that of a similar project in Britain and less than Polish production.

PGZ subsidiary Nitro-Chem said in March it was also aiming to double its TNT production in Poland to 20,000 metric tons annually by building a new line within 3 to 4 years.