Capital Cost Estimate

Based on the inputs from the two major Chinese groups below and a study of the most recent urea plants just completed, being built, and about to be built, comprising 28 urea plants across the globe, the indicative capital cost of the project will be circa AU$810 million or US$607 million. It is the intended project strategy that the project be built in modular format in selected Chinese fabrication yards.

There will be strict adherence to a rigid QA/QC (Quality Assurance/Quality Control) program. The strategy will provide Chinese work ethic, Chinese labour costs, Chinese material costs, with direct fabrication supervision by the best international project management engineers, to Australian standards.

HUBEI YIHUA GROUP

  • Hubei Yihua Group is Asia and China’s largest urea producer and one of their associated companies holds 15% of the equity in Latrobe.
  • Hubei Yihua have 19 operating urea plants in China.
  • Hubei Yihua are very supportive of the Latrobe Project.
  • The most recent Hubei Yihua plant is the same size and capacity as the Latrobe plant, i.e. 300,000 tonnes of ammonia that will yield 520,000 tonnes of urea.
  • Hubei Yihua have provided the full breakdown of their capital costs that can be extrapolated for Australian conditions, labour costs and all other local factors.

WUHUAN ENGINEERING CO LTD

  • Wuhuan Engineering is the major engineering and EPC (Engineer, Procure and Construct) group in China with regard to urea fertiliser plants.
  • Wuhuan have built in excess of 60% of China’s urea plants over the last 50 years. China is the world’s largest producer.
  • The most recent urea plant built by Wuhuan is the same size and capacity as the Latrobe plant, i.e. 300,000 tonnes of ammonia that will yield 520,000 tonnes of urea. This is a different plant to that of Hubei Yihua. It also uses the Shell gasification equipment.
  • Wuhuan are one of Shell’s technical partners in China and have engineered/engineered and built 13 major chemical plants (including urea) with the Shell coal gasification process delivering the synthesis gas stream.
  • It was Shell who originally introduced Latrobe to Wuhuan.
  • Wuhuan have provided the full breakdown of their capital costs that can be extrapolated for Australian conditions, labour costs and all other local factors.