Last week, ECT Managing Director Ashley Moore presented at the ‘CEO Sessions’ at the ASX Auditorium in Sydney.
The presentation, available by clicking here (opens a new window to the FNN website), focused on the Company’s recent technology development agreement in India, highlighting the significant growth opportunities in that market in the context of Coldry and Matmor’s positioning across the energy and resource sector.
In addition to the presentation was a brief interview (and associated transcript), available below:
Environmental Clean Technologies Limited (ASX:ESI) or as we call it ECT, is a commercialisation and development company. We take new technologies along a disciplined pathway and bring them to market, for licensing, or capital contribution, or operations and maintenance revenues in the end. We focus in the energy and resource sectors, specifically with two technologies. One, which is called Coldry, a low rank coal upgrading technology and Matmor, which is an alternative to blast furnace crude steel production.
Essentially, we take low grade or low value resource and bring them up the value curve. For the Coldry technology, we take very high moisture, low rank coals. We remove the water from it, creating a much more energy intense fuel that can be used in the lowest value instance power generation, but much more efficient power generation. Or right up through further coal conversion technologies into fuels, or very important chemicals like urea and synthetic natural gases, and so on.
In the instance of Matmor, again it’s taking low value resources and bringing them up the value curve. But there’s an additional layer in Matmor, in that it’s a conversion technology in itself. So you take low value lignites in this case, or high moisture coals. You take low-grade iron ores and you convert them into highly valuable crude steel, as an alternative to blast furnace. You do so at much lower cost. You do so at much more beneficial impact on the environment. So that CO2 generated per tonne of steel, is significantly reduced and very importantly, less capital in the build process.
Firstly to introduce those two companies, NLC Limited (BOM:513683) basically owns or controls almost the entirety of the lignite resources in India. And NMDC Limited (BOM:526371) is the largest iron ore miner in the country. They’re both federal government owned companies. They have a slice of them listed on the Indian stock markets as well. The agreement we have in place with those two companies is a tri-party collaboration agreement.
So we are going to work together to take the two technologies ETC has, take them through a disciplined process of pilot and demonstration, for the two technologies respectively. And then on through commercialisation and deployment in India. We’re at the beginning of that pathway and we’re in the process now of doing the, it’s called the techno economic feasibility. But basically, painting a picture of when deployed at commercial scale, these technologies will create this much value, ticking the boxes in terms of the diligence required to invest in the R&D upfront.
In essence, because we’re a pre-revenue company, we focus very very carefully on getting the most efficiency out of the dollars we spend. We have to raise those from shareholders, so we’re very very careful with how we spend them. The key highlight is that we achieved all of our commercialisation objectives, and did so at a reduced cost. Something like a 20 per cent reduction in our cash cost spend. So that was a pretty significant highlight.
Obviously we’ve got our cash resources that we have available at the moment. We have a debt line available to us for $1 million that we can draw on, as and when we choose. We also have a series of listed options in the market. Those are in the money, or close to in the money; depending on what series you look at. And in total, there’s about $23 million worth of conversion funds that we could draw in, through the exercise of those options. So there’s a range of tools that we can draw on for our capital requirements. Plus there’s also, being a listed company, we can have placements as and when required, with the right kind of parties.
In 12 month’s time, I’d like to see most of our activities being focused on the construction activities in India. As I mentioned, the tri-party collaboration agreement we’ve got with NLC and NMDC, we expect to move into those final stages pre-construction, in the second half of this year. So in 12 month’s time, I’d like to see us knee-deep in concrete and steel, setting up the plant in India.