IRD launches Cape Hardy Green Hydrogen bid process

Earlier today, our Wise-Owl long-term iron ore investment Iron Road (ASX:IRD) announced that it had launched the bid process for development of its Cape Hardy site as a green hydrogen hub/ industrial precinct in South Australia.

IRD fully owns the 1,200 hectare greenfield site at Cape Hardy.

Fourteen green hydrogen proponents -primarily comprising globally significant players in the power generation and emerging energy transition sectors - are expected to participate, up from the shortlist of 10 parties expressing interest in July.

The launch follows re-registration of an amended multi-commodity Indigenous Land Use Agreement (ILUA) with Australia’s National Native Title Tribunal. This essentially incorporates green hydrogen and green ammonia to the previous agreement, which focused on iron ore and other mineral exports. This provides certainty to long-term broadened commercial terms for the green hydrogen proponents, paving the launch of the competitive Expressions of Interest process now underway.

We anticipate that the close for the expressions of interest phase will occur during 4Q 2022, with commercial terms and partners likely determined in 1H2023.

We primarily invested in IRD for its Central Eyre Iron Project (CEIP) - among the few development ready, substantial high-grade iron ore projects globally - with Cape Hardy as the logical logistical channel for export. That said, we like that the company also has this port opportunity within its asset base, with an active pathway to commercialisation.

We consider that Cape Hardy has strong government backing, noting that the Federal Government has tipped in a $25m grant commitment to assist with development.

As per our Investment Memo, the next key milestone we’d like to see IRD deliver remains securing a partner to greenlight development.