Australia’s Origin to exit Hunter Valley Hydrogen Hub

Market: Emissions, Fertilizers, Hydrogen
03/10/24

Australian utility and upstream firm Origin Energy has decided not to proceed with its planned hydrogen development project, the Hunter Valley Hydrogen Hub (HVHH), in Australia's New South Wales.

The decision to withdraw from the proposed 55MW HVHH and halt all hydrogen opportunities was made because of continuing uncertainty about the pace and timing of hydrogen market development, Origin said.

The firm said the capital-intensive project, intended to progressively replace gas as a feedstock in a nearby ammonia manufacturing plant, carried substantial risks.

Origin Energy had an initial agreement with Australian chemicals and explosives company Orica to take 80pc of the green hydrogen produced from the hub for Orica's 360,000 t/yr ammonia facility on Kooragang Island, near the city of Newcastle. Origin Energy and Orica in 2022 said they will study plans to develop the HHVH in Hunter Valley region of NSW, which is Australia's largest thermal coal-producing area.

"It has become clear that the hydrogen market is developing more slowly than anticipated, and there remain risks and both input cost and technology advancements to overcome. The combination of these factors mean we are unable to see a current pathway to take a final investment decision on the project," said chief executive Frank Calabria on 3 October.

Origin had planned to make a final investment decision on the project by late 2024.

The hub, which was estimated to cost A$207.6mn ($143mn), had been allocated A$115mn in state and federal funding and was shortlisted for production credits under Canberra's Hydrogen Headstart programme.

In July, Origin described the pace of development in the hydrogen industry as "slower than it had anticipated 12 months ago", said. The company expressed hopes that improved electrolysis efficiency would reduce the rising costs of production.

The decision is a significant setback for Australia's green hydrogen ambitions, following the July decision by Australian miner and energy company Fortescue to postpone its target of 15mn t/yr green hydrogen output by 2030.

By Tom Major

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03/10/24

Indonesia’s Ni expansion via HPAL could face challenges

Singapore, 3 October (Argus) — Indonesia is expected to continue expanding its nickel production in the coming years, especially through increasing its high-pressure acid-leaching (HPAL) capacity, but the lack of readily available sulphuric acid and proper management of the tailings waste could pose challenges to this plan. Production is expected to rise despite an anticipated surplus in the supply of nickel in the market. Sulphuric acid is used in the HPAL process to separate nickel and cobalt from nickel ore to produce mixed hydroxide precipitate (MHP), which is the feedstock for the downstream processing of nickel sulphate, cathode and battery. Indonesia is expected to produce 325,000-345,000t of MHP this year, up from around 269,000t of in 2023, according to market sources. But with several MHP projects planned to come online in the next few years, MHP output for the next three years is projected to treble to 800,000-900,000t, according to the country's deputy minister for the co-ordinating ministry for maritime and investment affairs Septian Hario Seto on 2 October at a metal event in London. As this would require a lot more nickel ore and sulphuric acid, there are concerns that the availability of limonite ore could deplete as fast as the saprolite ore supply, which is mainly used for nickel pig iron and matte production. There were also discussions that the Indonesian government will convene with nickel market participants to discuss about the supply situation of limonite ore. There are currently four HPAL facilities operating in Indonesia. This includes Huayou's Huayue and Huafei projects , GEM's QMB project and Lygend's HPAL project. Others were also concerned that the availability of sulphuric acid could be a limiting factor to Indonesia's rapid expansion of HPAL production, as sulphuric acid demand from Indonesian HPAL projects is expected to reach 7.12mn t in 2025, almost 40pc increase from this year's demand at 5.17mn t, according to Argus estimates. Indonesia has been importing sulphuric acid from mainly China and South Korea to meet the growing demand for its production units at Obi Island and Sulawesi. But a ramp-up in sulphur-burning operations has pushed several MHP producers like Halmahera Persada Lygend to switch to buying lower-cost sulphur instead. For most sulphur burners, 1t of sulphur produces around 3t of sulphuric acid. The startup of Freeport McMoran's Manyar smelter in Java integrated industrial and port estate in East Java's Gresik, coupled with mining firm Amman Mineral Nusa Tenggara's (AMNT) copper smelter in the West Sumbawa regency of Nusa Tenggara province, is also expected to alleviate some supply concerns, with the two expected to add at least 3mn t/yr of acid capacity by the end of 2025. Proper disposal of tailings waste could pose another challenge to Indonesia's planned HPAL expansion, particularly with increasing scrutiny on the environmental, social and governance (ESG) standards by Indonesia's mining industry. The HPAL process generates a large volume of tailings, with energy consultancy Wood Mackenzie estimating an output of 1.4-1.6t of waste from every 1t of nickel produced through HPAL. There are three common ways to dispose tailings waste – tailings dam, deep sea tailings and dry stacking. Dry stacking is more widely used because it is considered as the more sustainable option. But dry stacking also comes with its own environmental and biodiversity risks, as Indonesia's seasonal wet weather and seismic activity of the site could be a problem for waste storage. To ensure a smooth expansion in HPAL production, it is crucial for Indonesia to find ways to secure the necessary sulphuric acid supplies and to adopt appropriate methods for tailings waste disposal. By Sheih Li Wong and Deon Ngee Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Offers total 2.57mn t of urea in RCF tender: Update 2

03/10/24

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03/10/24

Offers total 2.57mn t of urea in RCF tender: Update 2

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California adds oilseed limits as vote nears: Update

02/10/24

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02/10/24

California adds oilseed limits as vote nears: Update

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Tampa molten sulphur price rises for 4Q

02/10/24

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02/10/24

Tampa molten sulphur price rises for 4Q

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California eyes more oilseed limits as LCFS vote nears

02/10/24

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02/10/24

California eyes more oilseed limits as LCFS vote nears

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