The state-owned utility needs to replace the generation capacity it will lose by closing down all its coal-fired power stations over the next four years.
After a big splash four years ago and little publicity since, Woodside has teamed up with Japanese partners to promote a smaller, later, and dirtier hydrogen plant.
The Australian Government will invest $US200 million ($307 million) in an Alcoa-run gallium plant in South West WA that will require fast track environmental approvals to meet schedule and likely lock in 20 years of jarrah forest mining.
The plant is part a deal between Australia and the United States to secure the supply of critical minerals signed by Prime Minister Anthony Albanese and President Donald Trump in Washington on Monday.
Under the framework agreement both nations will take measures within the next six months to provide at least $US1 billion in finance to projects that produce critical minerals, many of which now come mainly from China.
Alcoa, Australia and the US will form a special purpose vehicle (SPV) to take equity in a 100 tonnes a year gallium plant at Alcoa’s Wagerup alumina refinery together with a joint venture between the Japanese Government and Sojitz.
SPV members will take a share of production in proportion to their ownership of the plant which has not been disclosed.
China currently produces about 98 per cent of the 700 tonnes a year of gallium that is used crucial for high-speed semiconductors and LEDs and is also used in solar panels and high-performance electronic devices used by the military.
Trees must go for gallium
The gallium found in minute quantities in bauxite mined at Alcoa’s Willowdale mine in the Darling Scarp will be extracted when the ore is processed to make alumina.
Any potential investor in a complex processing plant needs assurance that feedstock will be available in the long term – normally at least two decades.
However, Alcoa’s mining at Willowdale and at its Huntly mine to the north that feeds the Pinjarra refinery is currently being assessed by WA’s independent Environmental Protection Authority (EPA).
The investors plan to make a final investment decision in 2026 and achieve first production the same year, according to a statement from Alcoa. That Australia’s unknown share will cost more than $300 million indicates the plant will have a reasonable degree of scale and complexity.
The targeted schedule is extremely ambitious to the point of being unrealistic but matches the political deal’s language that “new capacity to be made available in 2026.”
Just two months ago Alcoa had not decided whether to locate the plant at its Wagerup or Pinjarra refineries, the public environmental approval process has not started, and construction across the state is facing delays.
An Alcoa spokesman said the Wagerup refinery was chosen as there is room within its operational footprint for the significant clearing required for the gallium plant. The choice also makes sense as the 41-year-refinery is 12 years younger than the bigger Pinjarra refinery to the north.
The schedule implies a final investment decision very early in 2026, despite the immaturity of the technical work.
This would likely be before the EPA hands its recommendations on Alcoa’s mining to WA Environment Minister Matthew Swinbourn, who then makes a decision based on social and economic grounds, as well as the environment.
The strategic importance of Australia and its allies becoming less reliant on China for a vital manufacturing input together with a direct investment by Australia’s main military partner would hand Swinbourn ample national security and sovereign risk excuses to override concerns about the jarrah forest destroyed by bauxite mining.
The three Pacific allies will hope their investment in Alcoa’s gallium plant is more successful that an earlier attempt by French company Rhone Poulenc to extract the critical mineral from process liquids provided by Alcoa’s Pinjarra refinery.
The $50 million plant - a significant amount at the time - only operated from 1989 to 1991, and again briefly in 1996 and 1997. It was later purchased by GEO Specialty Chemicals that planned to restart the facility, but nothing happened.
That earlier plant produced gallium concentrate that was shipped to France for purification.
Rhone Poulenc wanted to build a two-stage plant in WA that first produced a rare earth hydroxide and then separated the rare earth.
However in 1988 the EPA rejected the second stage of processing as a byproduct would be radium-contaminated ammonium nitrate – a substance normally used as an explosive.
The environmental watchdog said storage of large quantities of ammonium nitrate could pollute the ground water and add significant quantiles of nitrogen to nearby Peel-Harvey inlet that was already suffering from excessive nutrients from farm fertilisers.
“There is no apparent environmentally acceptable method for the removal and disposal of radium contaminated ammonium nitrate,” the watchdog wrote.
Even the 1996 restart of the relatively simple processing plant had a myriad of environmental risks for the EPA to address. These included transporting low-level radioactive waste by road to a Goldfields disposal site and emissions of radioactive gases and dust from the plant.
An Alcoa spokesman said the company was investigating a different and more advanced technology for the next gallium plant in WA.
“Ion exchange technology is a safer, cleaner and more efficient process than some other gallium extraction methods,” he said.
Chemical processing plants of the scale Alcoa is considering generally require a comprehensive assessment by the EPA before the watchdog makes a recommendation to the WA environment minister.
Investors typically do not make a final investment decision until they know what conditions will be imposed by the environment minister.
If the aim to produce gallium before the end of 2026 is genuine, rather than a just a statement to appease political stakeholders who value urgent action, it cannot be achieved under current environmental approval processes.
However, the WA and Federal government are moving to expedite project approvals.
In September the Cook Government introduced to parliament a State Development Bill that would give the Coordinator General, a government-appointed bureaucrat, unprecedented powers to push through the system any project deemed a priority by the Premier.
Alternatively, existing Alcoa operations in WA come under legislated State Agreements, that, perhaps with amendment, could override regulatory check points.
This week’s deal with the US increases the momentum for change:
“The participants are taking measures to accelerate, streamline, or deregulate permitting timelines and processes, including to obtain permits for critical minerals and rare earths mining, separation, and processing within their respective domestic regulatory systems, consistent with applicable law,” the framework agreement states.
While Albanese’s meeting with Trump was reported to go well, largely due to the critical minerals agreement, challenges lie ahead to make the talk a reality.
Engineering studies must be robust enough to convince investors that the plant can be built on time and budget and reliably produce quality product – four achievements that recent processing plants in WA have fallen short of, sometimes on all four criteria.
Then a way needs to be found to bypass current environmental protection mechanisms.
After that, a reliable and competent construction contractor that can muster sufficient resources in an overheated market needs to be engaged.
I worked in oil & gas in commercial and engineering roles for 20 years. Since 2016, I have written for The West Australian, WAtoday, The Guardian and Boiling Cold, winning five WA Media Awards.
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Peter Milne
Peter Milne
