Indiana withdraws support for fertilizer plant

State officials have withdrawn economic incentives they had offered for a southwest Indiana fertilizer plant over concerns about whether its Pakistan-based owners are doing enough at their overseas operations to keep the potentially explosive material from being used against U.S. troops.

Gov. Mike Pence announced the move concerning Midwest Fertilizer Corp. on Friday. He put the Posey County project on hold in January pending an investigation.

The Indiana Finance Authority issued $1.3 billion in bonds in December for a nitrogen fertilizer plant that Midwest Fertilizer plans to build at the Port of Mount Vernon in southwestern Indiana's Posey County. Midwest Fertilizer Corp. is part of Lahore, Pakistan-based Fatima Group.

Fatima said it has a reformulated product that is less explosive, but U.S. officials have not yet tested it.

The IFA learned Jan. 14 about concerns that Fatima might not be cooperating with U.S. officials worried that fertilizer made in Pakistan ends up in improvised explosive devices in Afghanistan that have killed American troops.

Midwest Fertilizer said it'll continue with the project despite the withdrawal of state incentives. The company issued a statement Friday that said the Fatima Group has begun tracking its product and suspended sales of a chemical used in both fertilizer and explosives in some Pakistani provinces.

Midwest said it's still exploring options with local economic development officials. The plant is expected to create 300 permanent jobs, Midwest said.