Yallourn fly ash could be trucked into a Tramway Road, Hazlewood North magnesium smelter to produce 40,000 tonnes of magnesium a year, according to a plan by Latrobe Magnesium.
The publicly-listed company is in the midst of finalising a supply agreement with Yallourn Power Station owner EnergyAustralia to take about 400,000 tonnes of fly ash a year and convert it into magnesium.
Latrobe Magnesium chief executive David Peterson said they planned to hold community consultation sessions by the end of the month to discuss the $54 million project.
Mr Peterson said the company had the option to purchase or lease a brownfields site at 320 Tramway Road for construction to start in December.
It would begin by producing 3000 tonnes of magnesium before scaling up to between 30 and 40 tonnes a year and then provide 370 new jobs and about 240 construction jobs.
Mr Peterson said he estimated the project would contribute $30 million a year to the local economy.
He said they had just completed a feasibility study and would tick off some final engineering details, EPA approvals and funding arrangements once the supply agreement was signed.
“We are in the negotiation process for an ash supply agreement, but we are confident of Yallourn’s support and we are hopeful this will be finalised by the end of September,” Mr Peterson said.
Mr Peterson said he was hopeful that Yallourn could supply 10 years’ worth of ash, which would be enough for about 15 to 20 years of production.
“We have a contingency plan in case Yallourn closed early to ensure 40,000 tonnes for 20 years, and we have other material we can put through if it closes early, or the ash is not available,” Mr Peterson said.
“At the end of the life at Yallourn, we will look to rehabilitate the landfill where we take the ash from.”
Mr Peterson said they had initially looked at using Hazelwood fly ash but the deal fell through, and they went into talks with EnergyAustralia.
He said the Yallourn fly ash would be dampened to reduce dust and transported in covered trucks to the Tramway Road site, but they were also looking at piping it in a slurry to reduce truck movements.
The material would be treated in a wet form to eliminate any risk of it becoming airborne and the factory would also be fitted with dust bag systems.
Mr Peterson said the factory would generate 60 per cent less CO2 than the industry average.
China produces about 85 per cent of the world’s magnesium and Mr Peterson said the Morwell plant would mean Australia could export magnesium into Japan and the USA, mainly for car manufacturing.
Latrobe Valley fly ash ponds had recently come under scrutiny from Environmental Justice Australia for being prone to groundwater contamination and poorly regulated.
EJA lawyer Bronya Lipski said it was too early to determine any potential benefits and risks to the Latrobe Valley.
She said the local community needed to be informed about the type and volume of any pollution generated from the smelter, any pollution controls and what world’s best practice techniques they intended to use.
“This potentially has environmental benefits given the current lax requirements imposed on Yallourn by the EPA regarding coal ash, by removing ash from where it can leach into both surface water and groundwater,” she said.
“If the ash can be used, then it provides an excellent opportunity for the EPA to require EnergyAustralia to convert its coal ash processes to dry, and start comprehensively cleaning up the current ash dumps to prevent ongoing groundwater contamination.”