Perdaman Chemicals pulls the trigger on controversial $6.3bn Burrup fertiliser plant

Vikas Rambal has spent much of the last decade trying to close funding for the controversial $6.3bn Perdaman urea plant in the Burrup Peninsula and now he has done it.

The $US4.2bn ($6.3bn) Perdaman urea plant on the Burrup Peninsula has finally closed its financing, with key contractors and buyers confirming on Friday the project will go ahead.

Perth-based businessman Vikas Rambal has spent much of the last decade trying to close funding for the 2.3 million tonne a year project.

On Friday construction major Webuild and ASX-listed Incitec Pivot – which agreed in 2021 to take the entire output from the plant in a 20 year offtake deal – both confirmed financing had been agreed and the plant would go ahead.

A spokesperson for Perdaman Chemicals and Fertilisers declined to comment on Friday.

But Incitec said its 2021 agreement with the company was “now unconditional, with Perdaman having obtained financing for construction of the new Karratha urea plant”.

In a separate statement Webuild said it had reached financial close, along with joint venture partner Saipem, on the $2.8bn contract to design and build the plant.

Webuild inherits the contract from its takeover of venerable Perth engineering company Clough, which collapsed last year.

Incitec managing director Jeanne Johns said the explosives major expected its offtake deal would eventually yield incremental earnings of about $45m a year when the play its fully operational in 2027.

She said Incitec expected to sell about half of the plant’s output to local buyers, with the remainder to go to export markets.

“The offtake agreement provides Incitec fertilisers with a competitive long-term domestic supply of urea for its Australian customers and to expand sales into growing global market,” she said.

Webuild said it expected to begin work on the plant “shortly”, with the company expecting to need up to 2000 workers to complete design, construction and commissioning of the plant.

But the plant’s presence on the sensitive Burrup Peninsula, and in particular its proximity to ancient Aboriginal art, has made it controversial.

Its financing came under threat last year when federal environment minister Tanya Plibersek called the project in for review over concerns over its potential impact on the area’s rock art.

But in August Ms Plibersek said she had decided not to block the project after consulting with Murujuga Aboriginal Corporation (MAC), which acts for five of the traditional owner groups that have cultural heritage on the Burrup.