THE Green Triangle forestry sector is poised for continued growth with a national wood pellet company stepping up its feasibility studies into a proposed $125m world-scale wood pellet construction plant.
Altus Renewables is now in the final stage of a feasibility study into the construction of a 500,000 metric tonne (MT) per annum processing facility in the region.
The company is significantly upscaling its production capability after securing a long-term wood pellet agreement for the Japanese power generation market.
The project has the potential to see the Green Triangle, in particular the Mount Gambier district, become home to the nation’s largest wood pellet plant.
In a major step forward for the proposed Green Triangle project, Japanese company Mitsui will jointly conduct the feasibility study on the Green Triangle “greenfield” site.
It is understood the proposed plant would create around 300 jobs during the construction phase and more than 250 ongoing direct and indirect jobs.
The wood pellet industry is being fuelled by the burgeoning global renewable energy market.
This possible large-scale investment comes on the heels of a $90m looming expansion of the Timberlink Australia Tarpeena facility and a $20m upgrade of OneFortyOne Plantations’ Jubilee Highway sawmill.
Speculation is also gathering momentum the operator of another timber processing plant in the Mount Gambier district is on the cusp of announcing a major new redevelopment.
Altus Renewables managing director and chief executive officer Ian Sandeman said the agreement with Mitsui would allow the company to significantly upscale its production.
“Building on our Queensland operations, we are looking forward to further strengthening our relationship with Mitsui by exploring opportunities to build a world-scale operation in the Green Triangle region with the potential to be the biggest plant in Australia,” Mr Sandeman said.
While the company was still exploring sites in the Green Triangle, he revealed ideally it would be located close to Mount Gambier given its cluster of sawmills.
But he said the company needed to find a suitable greenfield site in the Green Triangle and was also considering sites in Western Victoria.
Mr Sandeman said the pellets would be exported out of the Port of Portland.
Describing the plans as significant, he said the proposed facility would take about two years to complete, bringing employment to the region.
“As part of our pre-feasibility work for our Green Triangle project, we have visited a number of international companies who have built and are operating 500,000 MT/year pellet plants,” Mr Sandeman said.
Altus and Mitsui aim to complete a feasibility study on the Green Triangle project by the first quarter of 2019.
The announcement comes as both parties have entered a new long-term wood pellet offtake agreement in relation to Altus’ Tuan wood pellet production facility located near Maryborough, Queensland.
The one million metric ton (MT), 10-year sale and purchase agreement will see the export of 100,000 MT of industrial wood pellets per annum from the Port of Bundaberg to the Japanese power generation market.
Industrial wood pellets are used at power stations, reducing their carbon emissions.
“The long-term offtake and financing agreement will enable us to substantially scale up and respond to growing market demand from the Japanese market,” Mr Sandeman said.
Altus Renewables services international pellet markets in Europe and Asia through the Port of Bundaberg.
Mitsui is one of the world’s most diversified trading, investment and services enterprises.
In the past 10 years, Mitsui group companies have invested about A$15b in Australia.
