A $750 million hydrogen production plant is planned for Port Pirie in South Australia's mid-north with the facility to be integrated with the existing Nyrstar smelter.
The state government and commodity trading group Trafigura have committed $2.5 million each for early engineering and design work with a view to starting production in 2023.
The first stage will involve construction of an 85-megawatt electrolyser, creating hydrogen and oxygen by splitting water using renewable energy.
The oxygen will be used to supply around 20 per cent of the smelter's needs and the hydrogen converted to ammonia for export and use by shipping, domestic transport and supporting the Port Pirie industrial precinct.
The second stage will increase the size of the electrolyser to 440-megawatt supplying the entire oxygen needs of the smelter, and producing large amounts of ammonia for export while maintaining supply to the domestic market.
"This project is part of the ongoing transformation of South Australia into a producer of green hydrogen of global significance based on our outstanding renewable energy resources," Premier Steven Marshall said.
"My government has dialled up the state's intention to lead the way by achieving net 100 per cent renewables by 2030 and a 50 per cent cut to emission by 2030.
Energy Minister Dan van Holst Pellekaan said the government's Hydrogen Action Plan would turn South Australia's world-class wind and solar energy resources into clean fuel to run shipping and trucking fleets, and power industry in Australia and overseas.
"Our vision is a renewable energy industrial precinct in the Spencer Gulf incorporating Port Pirie, Port Augusta, Whyalla and our world-class copper resources, to support jobs for generations to come," he said.
Trafigura General Manager Tim Rogers said by integrating green hydrogen production with the existing smelter and port, paired with SA's world-class renewable energy resources, the project "stands out from the pack globally".
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