The U.S. military leader whose words of warning convinced Indiana officials to table a planned deal with a Pakistani company now says he’s encouraged by steps the company is taking to address U.S. security concerns.

But Gov. Mike Pence’s office says the state’s support for the deal — a proposed fertilizer plant in Posey County — remains on hold.

The Pakistani company, Fatima Group, has plans to build a nitrogen fertilizer plant at the Port of Mount Vernon. It plans to do so through Midwest Fertilizer Corp., an entity formed for the purposes of the project.

In December, the Indiana Finance Authority issued $1.3 billion in bonds to help finance the project. According to the terms of the bond deal, Midwest Fertilizer Corp. is not able to receive bond proceeds until July 1 at the earliest.

Fertilizer can be used as an ingredient in homemade explosives. Fatima officials have met with the U.S. military officials over concerns that Fatima’s fertilizer has been smuggled into Afghanistan for use in improvised explosive devices, or IEDs.

The U.S. military officer leading the efforts to reduce IED threats in Afghanistan is Lt. Gen. Michael Barbero.

At a congressional hearing in December, Barbero testified that Pakistani fertilizer producers had been “less than cooperative” with helping stem the flow of fertilizer into Afghanistan.

Pence announced Feb. 1 that he had suspended state support for the project after learning of Barbero’s concerns.

In a statement released Friday, Barbero said relations with Fatima have improved since December.

“While I stand by my (December) testimony, in recent weeks I’ve seen positive developments in discussions with the Fatima Group, the Pakistan-based producers of calcium ammonium nitrate,” Barbero said in the statement.

Notably, Fatima will seek a way to reformulate its product to make it less effective as an ingredient in explosives, Barbero said. The company will work with the U.S. military to test and validate the new formulation, Barbero said.

“If successful, this development would represent a significant step forward in curbing the use of homemade explosives and preventing the misuse of ammonium nitrate-based fertilizers,” Barbero said.

Barbero also said Fatima Group had confirmed to him in writing that it has suspended sales of calcium ammonium nitrate fertilizer products in two Pakistani provinces that border Afghanistan.

State-level support for the project, though, is still on ice.

“During his recent trip to Washington, D.C., Gov. Pence met with Lt. Gen. Barbero regarding the proposed fertilizer plant in Posey County. Despite recent positive developments the project is still on hold, and we continue to evaluate whether the State of Indiana should move forward on the deal,” said Christy Denault, Pence’s communications director.

Denault said the governor will remain in contact with both Barbero and follow up with the Fatima Group, but he has no set timeline for making a decision on the issue.

“We just need the right assurances, and the right assurances are more important than the timeline,” she said. “While economic development is important, we have an obligation to protect those who serve.”

The governor does not have a list of specific assurances he is seeking, Denault said.

Denault also noted that companies can decide to make investments in Indiana without state-level incentives.

Pence has said he learned shortly after his Jan. 14 inauguration about Barbero’s remarks. Immediately after that, Pence said, he instructed the Indiana Economic Development Corp. to halt the fertilizer project pending further investigation.

Pence is the board chairman of the IEDC.

On Jan. 15 the IEDC sent a letter to Fatima Group outlining the state’s concerns. According to that letter, the IEDC had offered an incentives package to Midwest Fertilizer Corp., but in light of Barbero’s remarks the agency “has paused our role in the project” while the security concerns were resolved.

IEDC spokeswoman Katelyn Hancock said her agency would defer to the governor’s statement in the matter.

Reached via email Tuesday, Fatima Group representative Ausaf Qureshi referred a Courier & Press inquiry to Thomas Campbell, whom Qureshi referred to as Fatima’s U.S. adviser. Campbell could not be reached for comment.

© 2020, All rights reserved.