Environmental Clean Technologies Limited (ASX: ECT) (ECT or Company) is pleased to confirm the following update on the Research Collaboration Agreement (RCA) for its India project.
- ECT Board approves the signing of the RCA
- India project partner NMDC Limited (NMDC) anticipated to hold board meeting before mid-March to consider approval of RCA for signing
- India project partner NLC India Limited (NLCIL) anticipated to confirm prior in-principle agreement to sign the RCA subject to NMDC Board approval and completion of ministerial requirements
- Partners formally committed to financial close by 31 March 2019, with MOU extension in place
The Company is pleased to confirm that as a result of this recent activity the ECT Board has approved the RCA and will distribute this to project partners NLCIL and NMDC for their concurrence.
Chief Operating Officer Jim Blackburn commented from Hyderabad, “We have been very happy with the discussions and review meetings conducted this week and advised our project partners of the formal process for the ECT board to review and approve the RCA for signing in its current form.
“Having received our board’s approval last night, we have today provided copies of the document to both NLCIL and NMDC for them to submit internally on the expectation that the key terms are now ‘frozen’ and as such there are no further material changes to be made. Further, we have restated our collective commitment to financial close by 31 March 2019, which entails the NMDC board approval of the project, subsequent signing of the RCA, and the establishment of the Project Control Committee.”
As a result of the meetings over the past several days, ECT convened an extraordinary board meeting yesterday evening where it considered and passed a resolution approving the signing of the RCA.
Having received the RCA document from ECT, and subject to NMDC board approval, the project partners, can then move ahead with signing of the agreement.
NMDC are yet to formally announced their March board meeting, which will consider approving the RCA for signing, however ECT understands a public release of the board meeting date will be forthcoming shortly.
NLCIL previously provided its approval of the RCA commercial terms late last year (14 November 2018) subject to NMDC’s approval and consultation with the Ministry of Coal and the Company anticipates approval of the RCA and completion of the consultation with their Ministry in the coming days.
ECT Chairman Glenn Fozard commented, “Earlier this month we outlined the pathway to financial close and I’m pleased to say that, with the progress this past week, the target date of 31 March remains our expectation”.
COO Jim Blackburn added, “Our partners have worked diligently to finalise the RCA, with much attention given to ensuring the detailed clauses reflected the commercial terms agreed last November.
“Specifically, the RCA is a unique agreement in that it paves the way for a first-of-a-kind project that covers both the initial research collaboration phase and sets the structure for transition to a commercial footing thereafter.”
The Company looks forward to providing further updates as activities proceed.
Background – India Project
On 30 May 2018, the Company signed an historic project agreement with two Government of India Public Sector Undertakings (PSUs), NLCIL and NMDC, for the largest ever (~AUD35 million) research and development (R&D) project between Australia and India.
The RCA will set the framework for the collaborative development of ECT’s unique resource upgrading technologies: Coldry (lignite drying) and Matmor (iron making), commencing with the preparation of the detailed sub-agreements, which are incorporated under the RCA, the terms of which were outlined on 19 November 2018.
Commencing with an ~AUD35 million R&D phase, the project aims to scale up ECT’s Matmor and Coldry technologies to deliver an integrated Coldry demonstration and Matmor pilot plant to validate their technical and economic feasibility.
Following successful phase one R&D outcomes, the project agreement provides the framework to proceed with a commercial-scale integrated steelmaking facility. The parties have previously contemplated the potential scope for the commercial phase via the techno-economic feasibility study completed in July 2016, which includes a notional capacity of 500,000 tonnes per annum steel output and an estimated AUD300 million capital investment.
For further information, contact:
Glenn Fozard – Chairman firstname.lastname@example.org