Indigenous people in the Pilbara will assist in blowing holes in the ground at the Tom Price mines site, using oil which was once used to cook chips.
The Ashburton Aboriginal Corporation officially launched its subsidiary biodiesel production company, ASHOIL, this week.
The AAC began investigating alternative fuel sources to deal with the rising cost of diesel and the plant began operations in 2006.
ACC employees collect a minimum of 5000 litres of discarded cooking oil per week to convert into Biodiesel, which is easy to make, carbon neutral and much cheaper than diesel.
It costs about 80c to produce each litre of the product, which is then sold to customers for about $1.20.
Rio Tinto has now signed an agreement with ACC to supply up to 7000 litres a week for use in drilling and blasting at its Tom Price mine.
With the assistance of Rio Tinto, employees were taught how to manufacture the biodiesel they collected from messes and canteens in the Pilbara, using a mini production plant in Tom Price.
Janet Brown, the Ashburton Aboriginal Corporation chief executive said the enterprise has reduced reliance on diesel in the area and provided an alternative fuel source for the remote Aboriginal communities.
"It’s taking a waste and turning it into an asset – it’s a good thing," she said.
A four acre test plantation of Moringa tree seeds were planted in September, to do feed stock experiments and boost production, and are expected to be ready for harvest in mid-2011 with a possible yield of 8000 litres.
If early trials are successful, the company hopes to eventually produce half a million litres of sellable biodiesels a year and continue adding to the local community with employment and training.
The company has provided training for up to 40 Aboriginal WorkStart trainees who are heading to the mines each year.
"These are indigenous people who are backwards and forwards to remote indigenous communities and who now know how to convert used cooking oil into a fuel," she said