A groundbreaking ceremony held on Monday marked the start of construction of the $52.5 million, 50 million gallon (189.2 million litres) per year facility that will use soybean oil as its feedstock.

The Beatrice biodiesel plant will use the second-generation solid catalyst technology supplied by French Institute of Petroleum subsidiary Axens North America.

The Perth-based company said the Beatrice biodiesel plant would be the largest plant constructed to date in the United States and would be a replica of a plant that was currently operated in France by the largest producer of biodiesel in Europe.

Alberici Constructors of St Louis, Missouri has been appointed the construction manager on the project.

Steve Dodd of Burlington Northern Santa Fe Railroad collaborated with project developers to ensure the facility had proper access to rail services in the region.

Australian Ethanol subsidiary Beatrice Biodiesel has secured contracts for the supply of soybean oil and offtake of all 50 million gallons of the biodiesel product under a partnership with Fortune 500 company CHS.

Australian Ethanol announced last week that the plant would be fully funded by a $US60 million ($A78.6 million) project financing package, comprising a senior debt facility of $30 million and a convertible note facility of $30 million with US-based energy and resource investment group Amaranth.

The project is expected to be completed in the third quarter of 2007.