Australia is planning tight controls on ammonium nitrate sales
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Australian anti-terror police are hunting for 3.5 tons of fertiliser stolen from a warehouse in the southern city of Adelaide.
There are fears the missing ammonium nitrate fertiliser could be used to build a bomb.
Reports of the theft coincide with a government admission that huge amounts of explosives and ammunition had been stolen from the military since 2001.
Ammonium nitrate-based explosives were used in the Bali and Oklahoma bombings.
Police said the theft came to light after a routine audit on a warehouse in Adelaide last month.
Attack fears
BBC correspondent Phil Mercer says ammonium nitrate is a substance widely used in farming that can create a powerful explosion after it is treated with gasoline.
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AMMONIUM NITRATE - THE FACTS
Millions of tons produced each year for use as fertiliser
Mining companies mix small amounts of explosive grade ammonium nitrate with fuel oil to create explosives
It is "not impossible" to make explosives with fertiliser grade
Used in several IRA bombings
Also used in the Bali and Oklahoma City bombings
Source: New Scientist
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The 2002 Bali bombings which killed 88 Australians were carried out using fertiliser bombs. Ammonium nitrate was also seized in recent anti-terror raids in the UK.
The Australian government has said it plans to bring in stringent security checks against anyone wishing to buy the chemical - including farmers.
A police spokeswoman said there was no indication yet that the missing fertiliser had ended up in criminal hands.
"However," she said, "it is important to establish the whereabouts of the material... in the overall efforts to combat crime and terrorism."
Opposition lawmakers have attacked the government over the weapons and explosives that have gone missing from the military arsenal.
"We've got a defence department losing substantial amounts of very dangerous materials," the Labor party's Chris Evans told the Weekend Australian newspaper.
Correspondents say there are fears that the government's strong support for the US-led invasion of Iraq might serve as a pretext for Islamic extremists seeking to attack the country.