South Australia’s state government has partnered with physical commodity trading group Trafigura to build a A$750m ($535m) hydrogen project, which will be integrated with the Nyrstar Port Pirie smelter.

Both parties have agreed to provide A$2.5m for the front-end engineering design to expedite the investments and jobs that the project will create at Port Pirie.

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The hydrogen project’s first phase will see the development of an 85MW electrolyser facility, which will produce hydrogen and oxygen by splitting water using clean electricity.

Oxygen generated by the facility will be used to meet around 20% of the Port Pirie smelter’s total requirements.

The project’s second phase would involve the creation of a 440MW electrolyser, which would supply enough oxygen to meet all the smelter’s needs.

South Australia Premier Steven Marshall said: “This A$750m 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.

“Projects like Trafigura’s, with the support of the South Australian and Federal Governments – will help South Australia achieve net 500% renewable energy compared to current grid demand by 2050, as detailed in Our Climate Change Action Plan.”

Trafigura general manager Tim Rogers said: “We welcome this commitment from the South Australian Government to accelerate this project and look forward to working closely with the South Australian and Federal Governments to bring this project to reality.

“By integrating green hydrogen production with the existing smelter and port, paired with South Australia’s world-class renewables, we think this project stands out from the pack globally.”

Last month, Maoneng secured development approval for its Gould Creek Battery Energy Storage System (BESS) project near Adelaide.

The 225MWp/450MWh facility will be located 22km from Adelaide’s central business district (CBD) area and power almost 40,000 homes at peak capacity.