Australian firm plans $3b fertiliser plant in Southland

Wednesday, 22 April 2026

An Australian firm has announced plans to build a $3 billion fertiliser plant in Southland.

With billions of tonnes of lignite lying dormant in the south, Victorian Hydrogen executive director Allan Blood said the urea plant would provide a reliable and environmentally conscious alternative to importing fertiliser.

Currently 500,000 tonnes of fertiliser was brought into New Zealand annually.

Having South Port in Bluff meant fertiliser produced in the region could easily be transported domestically and abroad, Blood said.

However, he stressed the project was still in its early stages. Victorian Hydrogen had been focusing on energy and logistics before tackling consents and approaching landowners.

Blood declined to specify the plant’s exact location until discussions with landowners were complete, but said it would be about 30 kilometres north-east of Invercargill.

He said he would present a plan that would make it financially viable for farmers to allow Victorian Hydrogen to mine in long, narrow strips affecting only a small portion of land at any one time.

“Land will be rehabilitated progressively, and any loss of productivity will be fully compensated by a multiple.”

Lignite, also called brown coal, was formed when peat was exposed to low heat and pressure.

Victorian Hydrogen used a process that converted lignite to syngas, which was then reacted with steam to produce hydrogen and combined with atmospheric nitrogen to produce ammonia.

This was then reacted with captured carbon dioxide from previous reactions to produce urea.

“The technology is well established globally,” Blood said. “The world’s latest urea plant, using technology identical to that we would use in Southland, was commissioned in Zambia in late 2025.”

Blood stressed environmental management would be central to the project’s design and the plant would produce its own power – and more to feed back into the grid.

The plant would eventually be able to produce additional products like AdBlue, a diesel exhaust additive to reduce emissions.

Victorian Hydrogen was exploring using CO₂ to make algae-based cattle feed, liquid fuels, construction materials, and inhibitor technologies to reduce nitrous oxide emissions.

Blood expected to receive geological reports shortly before engaging with farmers and applying for approvals under the fast-track regulatory process.

He anticipated it would take three years to have the project up and running.

“This project is about providing national self-sufficiency for the next 50 years plus, producing what farmers need in New Zealand, with world-class technology and robust environmental safeguards.”

Invercargill City Council Mayor Tom Campbell said it was a very exciting prospect for Southland.

“It will use Southland lignite in a way that hasn’t been thought of before,” he said.

The project would “make us more self-sufficient as a country and a region, and if you think about what’s happening around the world, that’s pretty important,” Campbell said.

The plant would harness a resource that would otherwise be sitting in the ground, unused, he said.

“If we can use that in a productive way, that would be fantastic for the region.”

Environment Southland’s (ES) general manager of strategy and regulation Hayley Fitchett said Blood had also met with ES leaders to provide a high-level outline of the plan.

“If resource consent applications are made to Environment Southland for a urea processing plant, we would consider key environmental aspects including groundwater or surface water abstraction as well as air and land discharges,” Fitchett said.

If an application was accepted to the Fast-Track consenting process, a panel would be appointed and ES would be asked to comment.

Blood also met with Southland District Council chief executive Cameron McIntosh who advised them to make sure they had done all their homework before submitting a consent application.