Korea Zinc's Ark gets Australian funding for hydrogen project

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MELBOURNE, Nov 8 (Reuters) - An arm of Korea Zinc has won nearly A$21 million ($16 million) in funding from the Australian government and Queensland state to start producing green hydrogen for fuel cell trucks at the company's zinc refinery in the state.

The South Korean company's Ark Energy H2 unit, a clean energy company based in Australia, will use the funds to set up a 1 megawatt electrolyser to be powered by the solar farm at the company's Sun Metals zinc refinery to produce green hydrogen.

The hydrogen will be used to fuel five new 140-tonne fuel cell electric trucks, due from Hyzon Motors (HYZN.O) in December 2022, to transport zinc from the refinery to the port of Townsville, the Australian Renewable Energy Agency (ARENA) said.

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"Ark's first-of-a-kind deployment is a great opportunity to highlight the potential of ultra-heavy fuel cell electric trucks in Australia," ARENA CEO Darren Miller said in a statement.

Promoting hydrogen production is one of the Australian government's top priorities in its plan to achieve net zero carbon emissions by 2050. Hydrogen is seen as a promising clean energy source for hard-to-abate sectors such as heavy transport.

The government's goal is to bring down the production cost of hydrogen to less than A$2 per kilogram to make it competitive with fossil fuels.

Australia's Clean Energy Finance Corp has agreed to provide A$12.5 million in debt financing for Ark's project, while the Queensland government has awarded a A$5 million grant and ARENA a A$3 million grant.

Separately, ARENA said it would provide half the funding for a A$3 million feasibility study led by Macquarie Group's (MQG.AX) Green Investment Group and the Port of Newcastle into the development of a 40 megawatt hydrogen hub at the port in New South Wales state - the world's biggest coal export port.

($1 = 1.3517 Australian dollars)

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Reporting by Sonali Paul; Editing by Himani Sarkar

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