Orica (a global leader in mining and infrastructure services) has reached a Final Investment Decision to build a commercial-scale green hydrogen production facility at its existing ammonia manufacturing site on Kooragang Island in New South Wales, marking a significant step in the explosives and chemicals manufacturer's effort to reduce its reliance on natural gas feedstock.

What the Facility Will Produce

The Hunter Valley Hydrogen Hub, as Orica has named the project, will use recycled water and renewable electricity to generate renewable hydrogen, which will then feed into ammonia production at the Kooragang Island site.

The facility is designed to produce 4,700 tonnes of renewable hydrogen per annum, a volume Orica says is sufficient to yield approximately 26,600 tonnes of low-carbon ammonia each year.

The company has stated that the hydrogen output will reduce its natural gas feedstock demand by approximately 7.5 per cent. The facility will be constructed by specialised contractors using technology that Orica describes as well established and already deployed at scale internationally.

Construction Timeline and First Production Target

Orica has scheduled construction to commence in 2026, with first production targeted for early 2029. The project therefore spans roughly three years of capital works before it enters an operational phase.

The announcement was made on 1 July 2026, the same day Orica confirmed the Final Investment Decision, meaning construction mobilisation is expected to begin within the current calendar year.

Capital Expenditure Breakdown

Total capital expenditure related to the construction of the Hunter Valley Hydrogen Hub is expected to fall in the range of USD 245 million to USD 283 million across the period from 2026 to 2029. Orica has stated that this figure is net of Government capital funding, meaning the gross project cost before public contributions would be higher than the stated range.

For the 2026 financial year specifically, net capital expenditure on the project is expected to be in the range of USD 25 million to USD 37 million. Orica has been explicit that this spending is incremental to its existing business capital expenditure, which the company expects to run broadly in line with 2025 levels.

Orica's 2025 capital expenditure was USD 460 million, providing a baseline against which investors can measure the additional commitment the hydrogen hub represents.

Government and Agency Support

The project has secured backing from both the Australian Federal Government and the New South Wales State Government, as well as from the Australian Renewable Energy Agency, known as ARENA.

Orica did not specify in its announcement the dollar value of the government capital contributions, though the net-of-funding framing of the capital expenditure range implies those contributions are material to the project's economics.

Integration With Existing Infrastructure

A central feature of the Hunter Valley Hydrogen Hub is its integration with Orica's existing ammonia manufacturing facility at Kooragang Island. Rather than constructing a standalone hydrogen production site, Orica is embedding the new facility within an operational industrial complex, a design approach that allows the hydrogen output to flow directly into the ammonia production process already running on the same site.

Kooragang Island, located in the Hunter Valley region of New South Wales, is already home to one of Orica's key manufacturing operations. The company's decision to site the hydrogen hub there means construction will take place within an established industrial footprint rather than on greenfield land.

Context Within Orica's Operations

Orica is listed on the Australian Securities Exchange under the ticker ORI. The company's core business involves the manufacture and supply of commercial explosives and blasting systems, primarily for the mining industry, with ammonia being a key input in the production of ammonium nitrate-based explosives.

The Hunter Valley Hydrogen Hub therefore sits at the intersection of Orica's industrial chemistry operations and a broader shift in how those operations are powered and supplied.

By substituting renewable hydrogen for a portion of the natural gas currently used as feedstock in ammonia production, Orica is targeting a reduction in the carbon intensity of its manufacturing process rather than its end products.

The 7.5 per cent reduction in natural gas feedstock demand that Orica attributes to the project represents one measurable outcome at the Kooragang Island site. The company has not stated in this announcement what proportion of its total ammonia requirements the 26,600 tonnes of low-carbon ammonia output would represent, nor has it disclosed what emissions reduction in absolute terms it expects the facility to deliver.

Further Project Information

Orica has directed stakeholders seeking additional detail to a project factsheet available at orica.com/hydrogen. The company has not indicated in the announcement whether further updates on contractor appointments, procurement timelines, or financing arrangements will be released ahead of construction commencing later in 2026.

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