Incitec Pivot is weighing-up the benefits of building an acid manufacturing plant at Phosphate Hill in Queensland.
The chemical manufacturer makes chemicals and explosives for the mining market, and fertilisers for the agriculture industry.
The new plant would extract sulphur dioxide from copper smelter to use as acid for explosives, reported The North West Star.
The new plant would fill the void created when Xstrata closes its copper smelter plant in 2016, the report said.
"Hopefully by the end of the year we’ll decide whether we will pursue that," said the company’s Phosphate Hill and Mount Isa operations manager Gerrish Burstow – quoted by The North West Star.
"We’re currently looking at a couple of alternatives."
The plant is estimated to costs around $400 million, and could create about 400 jobs.