Amp Energy today announced the deal with Iron Road, which includes the $15.5 million purchase of 630 hectares of Iron Road’s 1207-hectare Cape Hardy Industrial Port Precinct on the Eyre Peninsula.

Iron Road is also entitled to $22.5 million of payments during project development, and royalties on hydrogen produced at the site capped at $426 million.

The company will develop the Cape Hardy Advanced Fuels Precinct (CHAFP) on the land, where it plans to create an electrolyser with eventually 10GW capacity.

Amp Energy said it estimates that during the establishment of the electrolyser up to 4000 jobs will be directly created, with 6000 indirect jobs expected during the development of the first gigawatt of capacity.

The agreement, subject to shareholder approval, includes a $2.5 million deposit to Iron Road, and $4.5 million of project development payments payable in 2024.

Iron Road will be entitled to up to $2.775 million annually in royalties per GW of contracted electrolyser capacity.

Iron Road will remain the owner of land in Cape Hardy which holds common user infrastructure, with the remainder of the precinct to accommodate the recently announced Northern Water desalination plant, facilities for Iron Road’s Central Eyre Iron Project, and “complementary green iron manufacturing opportunities”.

Following the Northern Water 89.55-hectare option to purchase and this Amp Energy deal, Iron Road will retain control and ownership of approximately 487 hectares of land at the Cape Hardy Industrial Port Precinct.

Iron Road CEO Larry Ingle said the deal demonstrated “the unique characteristics and value proposition of our Cape Hardy Industrial Port Precinct”.

“For more than a decade, Iron Road has advanced our strategic Cape Hardy asset and we are delighted to be playing an integral role in South Australia’s copper growth and its hydrogen and magnetite/green iron strategies,” Ingle said.

Iron Road said the selection of Amp Energy as a single developer for Cape Hardy’s green hydrogen hub opportunity was “taken to reduce planning and development complexity”.

AMP Energy president and co-founder Paul Ezekiel said there was “growing demand for Advanced Fuels both in Australia and abroad”.

“The Cape Hardy Advanced Fuels Precinct will allow for large-scale production of these fuels that will be critical to the energy transition and achieving net zero targets,” he said.

Development of the Cape Hardy precinct have been ongoing by Iron Road since 2012, with planning, engineering, feasibility studies, terrestrial and marine studies and engagement with the Barngarla Traditional Owners all taking place.

Amp Energy has been discussing the deal with Iron Road and the state government for two years.

Trade and Investment Minister Joe Szakacs said the state government “recognises the strategic importance of the Cape Hardy Advanced Fuels Precinct attracting investment into the state…as there is an increasing flight to quality for hydrogen projects worldwide”.

Under the agreement, Australia’s first purpose-built advanced fuels export terminal will be delivered to Cape Hardy.