Australian Company Proposes $3b Fertiliser Plant for Southland

An Australian company is proposing a $3 billion plant near Invercargill that would turn Southland's brown coal reserves into fertiliser.

Victorian Hydrogen wants to build the facility 30km northeast of the city, processing lignite into 1.5 million tonnes of urea fertiliser annually.

The project could make New Zealand self-sufficient in fertiliser production. Most urea fertiliser is currently imported, despite New Zealand producing some locally.

Executive director Allan Blood said the technology was proven and already being used in a new plant commissioned in Zambia in late 2025. The company plans to seek fast-track consenting approval and won't need to acquire farms.

Blood said environmental management would be central to the project's design, with the company committed to reducing greenhouse gas impacts.

A similar lignite-to-gas project was investigated by former state-owned Solid Energy but dropped in 2013.

Invercargill mayor Tom Campbell welcomed the proposal but urged caution.

"The project is at a relatively early stage, and no-one should be popping champagne corks yet, but I see it as a very exciting prospect," Campbell said.

He highlighted eastern Southland's 7 billion tonnes of near-surface lignite, with at least 1 billion tonnes economically recoverable.

"At the volume expected to be produced (1.5 million tonnes per annum) the revenue would be around $1billion per annum which is about the same as the value of aluminium produced by Tiwai so it is a very significant project for the region and will bring a lot of jobs," Campbell said.

The mayor noted lignite is difficult to transport and store, limiting its current use to domestic heating and industrial boilers.

"The developers have a lot of hoops to jump through before this can become a reality, but I'm optimistic," Campbell said.