KAILUA-KONA » The shell of a macadamia nut is extremely hard and has no obvious practical use.

But a new Big Island venture hopes to crack that problem by converting tons of macadamia nut shells into granular activated carbon for air and water filters, and even a type of bio-fuel.

The company, Big Island Carbon, plans to break ground next month on construction of a $20 million plant in Kaie Hana Industrial Park at Kawaihae.

Chief Executive Officer Rick Vidgen said his company has signed a 55-year lease with the Department of Hawaiian Home Lands for the 13-acre lot near Kawaihae Harbor.

“;We have worked long and hard to bring Big Island Carbon's plant to reality,”; Vidgen said. “;The plant will help to diversify the island's economy, create new high tech jobs, support agriculture, and be green in the process.”;

Currently, macadamia nut shells are burned or trucked to landfills. Nut farmers now spend $5 a ton to dispose of the material, but Vidgen said he plans to buy the shells for $10 per ton.

The shells have properties—they are dense and contain small pores—that could be put to good use as filtering material. But first, they have to be processed.

Vidgen's facility will crush and burn them in a special, airless process that results in a type of charcoal that weighs 10 to 15 percent of the shells' original weight. Next, the charcoal passes through a $2.5 million custom-built kiln that will produce granular-activated charcoal that can be used in air and water filtration systems.

The company also has been approached about using the activated carbon in a nylon suit worn by emergency personnel who respond to chemical releases, Vidgen said.

Pharmaceutical, environmental, military and other buyers already are showing interest in the product, he added.

The manufacturing process also will produce an oil that can fuel the plant's furnaces and may later be sold for other applications, Vidgen said.

Vidgen, who envisioned his project more than a decade ago when he was president of a macadamia nut farm, said the plant will be one of the first to convert macadamia nut shells. An Australian venture failed, and mom-and-pop coconut-shell operations are common in the Philippines, Sri Lanka and Thailand, he said.

Denham Capital, an energy-focused private equity firm, is the major investor in Vidgen's firm, a company spokesman said.

The plant is expected to be built in 10 months and create 100 construction jobs, Vidgen said, and the company will work with the Department of Hawaiian Home Lands on job training for some of the plant's skilled positions.

The plant is expected to employ 30 full-time workers. Unlike many other job centers on the island, Vidgen's plant in Kawaihae will be near the homes of many workers.

The project fits into the state's efforts to reduce its dependency on foreign oil and the agency's energy policy, which includes facilitating the use of renewable energy resources, said Micah Kane, chairman of the Hawaiian Homes Commission and director of the department.