No mention of a gunpowder factory is in the Richmond or Petersburg newspapers for the period.
The Confederate navy powder-works was located in Columbia, SC. Under the direction of P. Baudry Garesche of St. Louis, who had worked as an assistant to his father in the DuPont works in Delaware.
It is possible that some small scale manufacturing of gunpowder, or recovery of wet gunpowder, went on in Petersburg.