As demand for traditional coal-fired baseload power generation wanes WA's government has mapped out a plan for Collie to transition away from emissions-intensive industries over the next 10-15 years

As part of the Just Transition plan the government has pledged $80 million in grants programs, projects and initiatives to focus on economic development, job creation, investment attraction, infrastructure growth and sustainability to support the town's economic transition.

Thanks to a $2 million grant through the Collie Futures Industry Development Fund WA-based company International Graphite is to establish the processing and manufacturing plant in Collie's light industrial area.

The first stage of the project is tipped to create about 40 full-time jobs.

The plant will manufacture graphite products for new technologies including mobile phones, computers, high-pressure sealants, and fire-retardant building materials.

Collie-Preston MLA Jodie Hanns said the government had made a significant investment to attract International Graphite to Collie.

"This industry is a WA first, and it's happening right here," she said.

WA regional development minister Alannah MacTiernan said International Graphite chose Collie as a location based on existing regional industries and infrastructure, skilled local workforce, and ability to access overseas markets.

"We look forward to International Graphite progressing the development of the plant and creating more full-time jobs in Collie," she said.

Hanns said this was the reason for the Collie Futures Industry Development Fund, to position Collie to be a location of choice for new industries.