Investor News

Shareholder Update – India Activity

Environmental Clean Technologies Limited (ASX: ECT) (ECT or Company) provides the following update and clarification around current India activity.

Key points:

  • India project partner NLC India Limited (NLCIL) formally concludes the previous MOU with ECT
  • ECT continues to enjoy the support of, and work closely with, NLCIL in pursuing the development of its portfolio of technologies in India
  • Review of India project activity

NLCIL Formally Concludes India Project MoU

India project partner NLCIL recently (6 August 2019) lodged the following announcement with the National Stock Exchange (NSE India) and Bombay Stock Exchange (BSE India):

“We wish to inform you that the Board of Directors of the Company at their Meeting held on 06.08.2019, have decided not to pursue the setting up of pilot plant for Coldry Matmor integrated project on R&D collaborative mode as agreed between NLCIL & NMDC & ECT vide MoU signed on 30.05.2018, in view of ECT’s withdrawal of the MoU and subsequent NMDC’s decision not to go ahead with the proposal.”

This announcement by NLCIL is formal follow up to the previously announced rescission by ECT of the MOU with NMDC (announcement 26 June 2019).

ECT Chairman Glenn Fozard commented, “This formal notice is consistent with our ongoing discussions with NLCIL and paves the way for the parties to now move forward without ties to NMDC.”

“We’re canvassing potential iron ore and steel partners capable of providing raw materials and market expertise to support the deployment of a Coldry-Matmor integrated plant. Should we attract a suitable partner aligned with our commercialisation objectives, we are in an advanced position to implement the project thanks to the significant test work, engineering and contracting phases already completed.”

Next Steps

The Company’s Coldry technology provides the gateway solution to all of the subsequent ECT technology portfolio. In addition, it provides its own unique standalone solution as direct feedstock for a range of energy-intensive systems.

Coldry offers a cost-effective solution for significantly lower CO2 intensity than as-mined lignite. This coupled with India’s commitment under the Paris Climate Agreement to reducing its CO2 intensity will continue to drive the Company’s interest in developing its technology portfolio in the region.

Ongoing NLCIL relationship for technology development

Whilst Coldry may be used for electricity generation, NLCIL has demonstrated their particular interest in developing higher-value applications for its lignite resources by exploring opportunities for both vertical and horizontal diversification. As such, Coldry testing will focus on the higher value utility steam and heat market, the waste-to-energy (WTE) market and downstream processes such as hydrogen, char and fertiliser production.

ECT continues to enjoy the support of, and work closely with, NLCIL in pursuing the development of its portfolio of technologies in India.

Review of India Project Activity

Given the unexpected outcome in India over recent months, it’s appropriate to outline the path taken to ensure shareholders are clear on the facts.

The genesis of the tripartite Coldry-Matmor project in India with NLCIL stemmed from a suggestion by NMDC personnel in the second half of 2014, that the parties should collaborate.

Given the first-of-a-kind nature of the project, the parties agreed to adopt a collaborative approach early in the engagement. The aim was to advance the project while allowing flexibility to navigate the unknowns associated with developing a first-of-a-kind project.

The development followed three main phases:

  1. Initial testing of NMDC iron ore and NLCIL lignite
  2. Tripartite agreement (TPA) and techno-economic feasibility study (TEF)
  3. MOU for preparation of the Research Collaboration Agreement (RCA)

At NMDC’s 2014 AGM, then CMD, Narendra Kothari, commented via his AGM address, “Your company (NMDC) is planning to enter into an area of iron making R&D jointly with ECT, an ASX listed company in Melbourne, Australia, which has developed and patented…technology aimed at upgradation of low grade iron ore and millscale waste..”

Initial Testing

Initial testing was performed on a range of NMCD iron ore samples, combined with NLCIL lignite.

The test program, conducted at ECT’s R&D facility northwest of Melbourne, successfully produced samples that were sent to NMDC for testing, proving the Matmor process was capable of achieving a high level of metal oxide reduction and high iron purity.

Whilst the test results were specific to the Indian raw materials, they held significant value to the Company in the broader validation of its Matmor/Hydromor technology.

The positive results triggered agreement by the parties to advance to the next phase and informed the selection of the preferred candidate iron ore (Kumaraswamy slimes) for the proposed pilot plant.


Following the positive outcome of the initial testing the parties executed a tripartite collaboration agreement (TPA) in January 2016 which included the delivery of a techno-economic feasibility study (TEF) with the support of India-based pyrometallurgical engineering firm MN Dastur.

The TEF, based on the initial test results, conservatively extrapolated the technical and economic data to commercial scale, establishing the business case for the investment by the parties in the research and development phase required to progress to the commercial phase.

The parties agreed the results of the TEF warranted moving forward with the R&D investment and the boards of the three companies agreed to establish an MOU aimed at advancing the development of the project, which was subsequently signed on 30 May 2018.


The MOU set the framework for the development of the various elements required to establish such a first-of-a-kind project, to be formalised in a Research Collaboration Agreement (RCA).

The parties subsequently negotiated and agreed in principle to the commercial terms, including the relevant share of project ownership and level of investment, informed by an independent assessment of ECT’s investment in the Coldry and Matmor technologies.

In parallel to the development of the RCA with NMDC and NLCIL, ECT worked with engineering firm MN Dastur to complete the basic engineering design of the integrated Coldry-Matmor pilot plant.

The Basic Engineering report was subsequently approved by all parties.

During November 2018 final compliance and legal review of the RCA was undertaken and the RCA was tabled for consideration at the relevant parties’ board meetings.

NLCIL approved the signing of the RCA subject to NMDC board approval, which at the time was deferred.

Between November 2018 and May 2019 ECT continued to work with NMDC to provide answers to questions from a newly appointed director of NMDC, reiterating the outcomes of the extensive work performed by the parties through the initial testing, TEF study and their independent external advisers as outlined above.

During this 6-month period, NMDC provided no feedback that suggested they had reservations about entering into the RCA and in fact, signed a number of MOU extension agreements through to the end of May 2019 on the basis that they simply needed more time to brief the new Director of Finance.

When ECT received no formal response to requests for an update following NMDC’s board meeting on 28 May 2019, Chairman Glenn Fozard attended the corporate offices in Hyderabad in late June, where the Director of Finance verbally advised that the decision to proceed was “put down” and that a formal response would be provided to the project partners. The phrase ‘put down’ was unusual and unclear, prompting ECT to consult with NLCIL to better understand NMDC’s position. NLCIL advised they too were unclear about the meaning and recommended that ECT should await a formal response. Finally, ECT discussed the matter with the Australian High Commission in Delhi and based on the feedback from NMDC and Indian Government officials, it became sufficiently clear that NMDC did not wish to proceed and this lead ECT to withdraw its offer to extend the MOU, clearing the path forward to look for an alternative partner, either in India or elsewhere.

As shareholders will glean from activity during this time, ECT worked closely with NMDC and NLCIL, navigating India’s challenging business and government processes, building consensus and achieving agreement. This included approvals over almost five years from two CMD’s at NMDC, three CMD’s at NLCIL, Ministry of Coal, Ministry of Steel and NITI Aayog as well as direct meetings with Hon. Minister Piyush Goyal and the Second Secretary for the Ministry of Steel, Ms. Rasika Chaube.

Following personnel changes at NMDC late last year and a review by the Government of India into the operational performance of NMDC, titled ‘Report No.5 of 2019 - Operational Performance of NMDC Limited, Union Government (Commercial), Ministry of Steel’, the engagement of NMDC shifted from highly active and overtly supportive to largely unresponsive.

Recent media articles in India included comments from NMDC which were provided in the form of an open letter to a journalist at the Hindu Business Line about the purported reasons for their decision to not proceed with the project. ECT has been clear that no comment will be made on the details and particulars of the project that remain subject to confidentiality requirements, despite NMDC’s comments including significant factual errors relating to the project and ECT in general, which formed the basis of the article.

Glenn Fozard commented, “We recognise that our shareholders have suffered materially from the delays in achieving financial close in the proposed India project that could not have been predicted. The journey has been long and complex, and despite our disappointment and frustrations we have achieved a number of key milestones including extensive R&D test work and data, engineering design assets and the commercial structure which are critical for advancement of Hydromor. Having formally concluded the previous MOU, the Company intends to move on directly with our other commercial projects and new opportunities that are present in both Australia and India.

“Thankfully our relationship with NLCIL and other key government and industry parties in India remain strong and supportive of ECT’s continued presence in the region. The efforts of the senior leadership team will be focused, through P.Selvakumar as our country head in India, to secure alternative projects and partners.

“We look forward to continuing to develop project opportunities in India and once we have quantified interest in specific projects, ECT personnel will return to meet with NLCIL and our other government and industry colleagues.”

For further information, contact:

Glenn Fozard – Chairman           [email protected]