Environmental Clean Technologies Limited (ECT) (ASX:ESI) is pleased to provide the following update on the various options it is progressing in the commercialisation of its Coldry (Black Coal Equivalent (BCE)) technology and its plans to undertake preparatory work for the establishment of a large scale Coldry production plant to be located at the Loy Yang Power Station in Victoria’s Latrobe Valley.
- Leading international engineering firm ARUP will be engaged to commence the Design for Tender (DFT) for the proposed, initial production plant located in the Latrobe Valley. This DFT will be timed to dovetail with the Datang 2,000 tonne Coldry test burn in China
- Rights Issue to fund advancement of Coldry process technology
- The ARUP DFT will support development of a Guaranteed Maximum Price for Construction proposal
As a follow up to the 5th July Coldry Technology Update, after termination of the Joint Venture Agreement with TinCom on 31st May, ECT is keen to keep shareholders informed on the various options it is progressing with respect to the commercial deployment of the Coldry Technology. These options include;
- Ongoing discussion and negotiation with numerous coal producers, coal trading companies and coal consumers, in several countries, regarding agreements with those companies to produce Coldry under a licencing arrangement.
- Introducing a new party to replace TinCom in the previously referred to Victorian Coldry Project.
- Negotiating large scale coal off-take agreements with several black coal consumers, including China Datang, after successful test burns of Coldry in power stations owned or operated by these companies. If ECT is successful in negotiating substantial Coldry off-take agreements, it is expected that sufficient interest will be developed in the investment community for funding to be available to construct a Coldry production facility.
In parallel with the above referenced test burn by China Datang, and with our continuing efforts to secure off-take agreements and other sales commitments, ECT will seek to raise capital for completion of the first phase of a program to develop full engineering specifications for the proposed Coldry production facility. This is referred to as the Design for Tender (DFT).
The DFT, which will cost approximately $3.6 million, is to be delivered in three phases by ARUP. Phase ‘A’ will cost $1 million and will conclude towards the end of 2011 or early 2012, allowing results from the scheduled test burn for China Datang (announced 25th May, 2011) of 2,000 tonnes of Coldry BCE in one of its black coal-fired power stations, to be incorporated in the remaining design program. The Company is hopeful a successful test burn will enable ECT to secure a Coldry Off-take Sale Agreement with Datang to export Coldry BCE product to China.
While seeking to minimise shareholder dilution, in order to fund production of the ‘Test Burn’ tonnage and delivery of it to China, to complete Phase ‘A’ of the DFT and to provide other, necessary working capital, ECT will seek to raise approximately $3.5 million via a non-renounceable Rights Issue to shareholders. Further details will be provided in coming weeks.
Following the test burn, and subject to acceptance of the results by Datang, ECT will seek further funds to complete the DFT. When the DFT is completed, ECT will have the necessary engineering data for development of a Guaranteed Maximum Price (GMP) contract for construction of the project. The GMP together with a Coldry off-take Sales Agreement, will underpin project financing activities for the construction of the proposed 2 million tonne per annum Coldry production plant at Loy Yang.
ECT Chief Executive, Kos Galtos said “by funding our own Design for Tender, we are in control of the project and have the opportunity to generate better returns for shareholders from the first commercial deployment of Coldry technology, while also gaining the necessary data to move forward with opportunities in China, India, Indonesia, Poland and other key markets”
“Preparations for the Datang test burn are providing us with substantial production and shipping data that will be invaluable in optimising our plant design and establishing our Coldry product’s credentials in the world’s largest coal market” Mr. Galtos said.
“We are confident in the commerciality of the Coldry technology and look forward to completing the engineering design and construction pricing required to attract the necessary investment to construct the Victorian Coldry plant and, in so doing, generate financial returns for our shareholders,” he said.
For Further Information Contact:
Kos Galtos – Chief Executive +61 3 9909 7684 or [email protected]
Download (PDF): Shareholder Update – Victorian Coldry Project