THE Western Australian Government has begun exclusive lease negotiations with commodities trader Cargill Australia for a parcel of land next to the CBH Kwinana Grain Terminal as the companies develop a plan for a world-class canola crush plant.

The project would service both the domestic and export oil and meal market, utilise locally grown canola and expand WA’s processing capacity for canola oil, as well as supplying the emerging domestic and overseas biofuels market, the government says.

The WA Government and Cargill will now work together to negotiate a lease agreement for the site over coming months, while Cargill continues discussions with CBH Group and other parties on the project.

Cargill Australia MD Zsolt Kocza said the company had been in discussions with several parties regarding the potential crush plant facility in Kwinana, including CBH Group over how their existing supply chain may be able to support accumulation and export connections for the plant.

CBH Group chief executive Ben Macnamara welcomed the opportunity to develop a canola crushing plant to be located next to one of CBH’s critical supply chain assets, the Kwinana Grain Terminal.

“In line with our purpose to create sustainable value for WA grain growers, we’re open to considering opportunities that provide growers with market optionality that utilises our supply chain,” Mr Macnamara said. “We’re looking forward to continuing discussions with Cargill to assess this opportunity.”

The Australian Financial Review reported the plan could dovetail with BP’s $1 billion proposal to convert its former oil import terminal at Kwinana into a biofuel production hub.