SYDNEY, May 20 (Reuters) - Private equity group Quinbrook Infrastructure Partners said on Monday it would start work on a new iron ore mine and "green iron" processing facility in the state of Queensland which could cost as much as A$3.5 billion ($2.4 billion).
The proposal, announced at a ceremony attended by Treasurer Jim Chalmers, will mine magnetite iron in Queensland and then refine it into "green iron," so-called because the steel precursor is processed using hydrogen produced from clean energy sources instead of coal.
Quinbrook is in talks to source the green hydrogen from a facility Stanwell Corporation, a Queensland state-owned utility, is proposing to build nearby.
Quinbrook said planning approvals are underway and development would take several years. New mines take an average of 12 years to develop in Australia and Quinbrook said it must still test the quality and scale of the Eulogie deposit, located roughly 70 km (44 miles) west of the port of Gladstone.
A representative for Quinbrook did not immediately respond to questions from Reuters.
The project is an apparent coup for the government's flagship Future Made in Australia program, a A$22.7 billion suite of subsidies and incentives announced last week to lure manufacturing and minerals processing to the country.
"This is exactly the type of project the ‘Made in Australia’ and critical minerals policies ... are designed to support and the recent Federal budget announcements have given us and our partners the confidence to get on with it," Quinbrook Managing Partner David Scaysbrook said in a statement.
The statement did not specify how much Quinbrook or its partners expect to receive in tax credits or other support.
Australia has set aside billions to subsidise green hydrogen production and the Stanwell Corporation project has been shortlisted for government funding.
($1 = 1.4925 Australian dollars) (Reporting by Lewis Jackson; Editing by Christian Schmollinger)
