Project Economics

  • The project will enjoy an operating cost in the lowest 10% of plants in the world.
  • It has an Energy Supply Agreement that delivers its coal at circa A$1.30 per GJ. There are between 25-28 GJ of energy required to produce one tonne of urea.
  • Natural gas, the alternate form of gas to produce urea, currently has an Australian cost of between A$8-A$10 per GJ in Australia.
  • The project has a 50 year long term Coal Supply Agreement and has its coal price fixed for the first 20 years with cost of living inflation as the only adjustment. There is no linkage to an energy pricing basket of oil, gas or electricity prices.
  • The project’s two key products also enjoy a significant logistics cost advantage. All imported urea must be stored at the port of embarkation dock side, loaded, shipped, unloaded, stored at the port of receipt, and then transported to regional depots or the farmgate destination. With the Latrobe Project a portion of the agricultural urea will be picked up by farmers at our factory gate and the rest transported in a one stop logistics trucking movement. AdBlue will be transported as a concentrate and reconstituted at each capital city where the buyer has existing plants to do this.
  • The EBITDA operating cost of the project is A$172 per tonne whilst the current local farmgate price is A$400 per tonne. The current global urea price is at the bottom of a price cycle due to low international gas prices and some over supply from China. Three tonnes of AdBlue are produced from one tonne of urea and will also sell for circa $400 per tonne each.
  • The Latrobe operating cost is lower than China’s due to both lower coal and electricity costs.