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Billionaire mining magnate Andrew Forrest is planning a massive factory to build equipment to produce green hydrogen in a key Australian coal hub.

Fortescue Metals Group Ltd.’s energy unit will build a plant with initial capacity to make two gigawatts of electrolyzers a year in Gladstone in Queensland, home to one of the world’s largest coal-export terminals. Construction will start in February with manufacturing targeted to begin in early 2023, the company said in a Sunday statement.

The initial capacity would make the plant among the largest in the world and vault Australia into early competition with China as a leading producer of the equipment. When paired with renewable energy, electrolyzers can make hydrogen that can be stored and transported and eventually converted into carbon-free energy for power or transportation.

“This initiative is a critical step in Fortescue’s transition from a highly successful pure play iron ore producer, to an even more successful green renewables and resources powerhouse,” Forrest said.

Investment by Fortescue Future Industries, initially $83 million and potentially rising to $650 million, is part of a boom for the equipment, which runs an electric current through water to separate it into hydrogen and oxygen. About 16 gigawatts of manufacturing capacity could come online by 2024, according to BloombergNEF, likely leaving the market over-saturated.

Chinese solar manufacturers have been leading that surge, with Longi Green Energy Technology Co. and Sungrow Power Supply Co. expected to commission a combined 2.5 gigawatts of manufacturing capacity by the end of 2022, BNEF said in a July report.

Fortescue will also carry out a study with fertilizer supplier Incitec Pivot Ltd. on the feasibility of converting an ammonia production facility in Brisbane from natural gas to green hydrogen, the company said in a separate Monday statement.

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