Perdaman Industries (Chemicals & Fertilisers) Pty. Ltd. has secured a A$220-million loan (approximately US$142.6 million at current exchange rates) from the Australian Government’s Northern Australia Infrastructure Facility (NAIF) to support the development of its urea project near Karratha on the Burrup Peninsula in Western Australia.
Perdaman anticipates getting financing done “in four to eight weeks” for the A$4.5 billion project, with project approval expected before the end of this year, and production starting four years later, according to Perdaman Chair Vikas Rambal as cited in a Sept. 30 report by Australia’s The Age.
Minister for Resources and Northern Australia Madeleine King MP said the project will be “transformational” for Western Australia, according to a Sept. 30 statement on her website announcing the loan.
“Australia currently imports around 2.4 million mt/y of urea for agricultural use, and the Perdaman project will have the capacity to reduce imported volumes…,” she said.
Perdaman expects to produce up to 2.3 million mt/y of granular urea at the Karratha plant. In May 2021, the company signed a 20-year offtake deal with Incitec Fertilizers Pty Ltd., a wholly-owned subsidiary of Incitec Pivot Ltd. (IPL), for up to 2.3 million mt/y of granular urea from the proposed plant (GM May 7, 2021). Perdaman already has secured gas supplies from Woodside Energy Group’s Scarborough field for the project (GM Nov. 21, 2018).
The Karratha plant is expected to provide an A$8.5 billion public benefit, supporting a peak of more than 2,500 construction and operations jobs over its 40-year life, according to the minister.
NAIF’s latest investment builds on two previous loans from the facility worth A$255 million towards key infrastructure servicing the project. Last year, it committed A$160 million to the Pilbara Ports Authority for a new multi-user wharf and facilities at the Port of Dampier and A$95 million to the Western Australia Water Corp. for the expansion of the Burrup seawater supply and brine disposal scheme (GM Feb. 11, p. 34).
But the latest NAIF loan will only be released when all regulatory approvals and financing conditions have been met, with the announcement coming only a short time after Federal Environment Minister Tanya Pilbersek last month appointed an independent reporter to conduct a full cultural heritage assessment of existing and proposed industry on the Burrup Peninsula.
The review was requested by Murujuga traditional custodians, representing the five traditional owners of the land in Western Australia, who are campaigning against the project because they fear it will damage sacred rock art.
The minister’s apparent U-turn came just three weeks after she backed the project after being told it had the support of the Murujuga Aboriginal Corp. (GM Aug. 26, p. 30).
Pilbersek will decide upon receiving the report whether to grant long-term protection of the area under federal heritage laws. She had earlier rejected a separate application for a 60-day halt on work at the project by a separate Aboriginal activist group (GM Aug. 26, p. 30; March 18, p. 30).
According to Perdaman, the project is being “thoroughly assessed” and will have “minimal impact” on the rock art.
According to The Age report, the Perdaman plant initially will emit 650,000 mt of greenhouse gases a year. The West Australia government has required a gradual reduction in emissions to zero by 2050.