14/09/2010

Announcement Details

ASX URL: http://www.asx.com.au/asx/research/companyInfo.do?by=asxCode&asxCode=wec#headlines

Summary

  • Kentucky-based Jefferson Riverport Coal Upgrading Project (“JRP”) receives regulatory air permit
  • JRP to receive US$8.4 million in local and state tax rebates and credits over 25 years
  • JRP expected to be profitable in first full year of operation, with initial capacity of 250,000 tonnes per annum, with potential expansion to 500,000 tonnes per annum
  • Strong endorsement of technology and multiple expressions of interest in test burn agreements for JRP product
  • Construction to begin in late 2010 – early 2011, expected production by end of 2011
  • Fast-tracks U.S. production, and secures platform for White Energy to demonstrate product in U.S. market

Sydney, Australia – 14 September 2010 – White Energy Company Limited (“White Energy”) (ASX: WEC, OTCQX: WECFY) today announced that it has been granted final approval from the Louisville Metro Air Pollution Control District to build a Coal Upgrading facility located in Louisville, Kentucky, to be called the Jefferson Riverport Project (“JRP”).

In addition, White Energy has been approved by the Kentucky Economic Development Finance Authority (“KEDFA”) to receive up to $US8.4 million in economic incentives in the form of tax rebates and credits over a 25-year term under the Commonwealth of Kentucky’s Incentives for Energy Independence Act (“IEIA”) Tax Incentive Program.

Based on these two significant milestones, White Energy is now in a position to advance its plans for a Coal Upgrading project in Louisville. Final feasibility work can now be completed and a Board decision on whether the Company will proceed with the Riverport project is expected in the next two months.

The proposed Jefferson Riverport Project would be built with an initial capacity of 250,000 tonnes per annum, with the intent to expand capacity to 500,000 tonnes per annum within the first two years of operation. The scale of the project accelerates the time to completion and ideally means that White Energy could have a Coal Upgrading facility operating in the U.S. by the end of 2011.

“We are delighted the project has received local regulatory approvals, while the decision to award US$8.4 million in tax incentives over the life of the project underscores the future economic and environmental value of upgraded coal to the state of Kentucky,” said White Energy Company Managing Director John Atkinson.

“This permit gives White Energy a clear and faster path to build our first U.S. based coal upgrading facility, and demonstrates to the U.S. market the significant value of our technology in providing cleaner, more efficient and costcompetitive energy,” Mr Atkinson said.

The project would be located at the Jefferson Riverport, a coal terminal on the Ohio River, leased to a private operator by the City of Louisville. Jefferson Riverport offers several unique advantages for White Energy’s proposed Coal Upgrading project. It has a robust transportation infrastructure with access to both barge and rail transportation. Louisville is also ideally located from a demand perspective with a number of coal fired power plants located within a 50 mile radius of the proposed Coal Upgrading facility who require high energy, low sulfur, low ash coal. It is envisaged that the White Energy’s Coal Upgrading plant will also look to process Kentucky waste coal fines, potentially unlocking the residual energy value of an existing waste by-product.

The Jefferson Riverport Project represents an important step to broader deployment of White Energy’s Coal Upgrading technology in the U.S. The project would provide an early demonstration of the technology to U.S. utilities, investors and strategic partners and provide an opportunity to perfect the Americanized version of the base plant design. These factors would enhance the opportunities for the previously announced projects with Peabody Energy and Buckskin Mining, and ensure greater certainty with respect to plant construction costs for the larger, Wyoming plants. This project would also help facilitate off-take and other commercial arrangements, and significantly improve the financing options available for the Wyoming projects.

White Energy’s Jefferson Riverport Project has been received with enthusiasm by utilities, coal producers and transportation providers. White Energy is in discussions to secure initial, test burn off-take agreements for its upgraded coal with several utilities in the Midwestern U.S. and is in final negotiations with other strategic partners to provide feedstock and transportation services on attractive terms.

“The Jefferson Riverport Project is an opportunity to significantly accelerate our business in the U.S,” said Judy Tanselle, President of White Energy’s North American operations. “The potential for our unique Coal Upgrading technology to help build the bridge to cleaner, more efficient and highly cost-competitive coal solutions in the U.S., through broad deployment in existing facilities is now very real. White Energy appreciates the support and collaboration of key players in the development of the Jefferson Riverport project, including the City of Louisville, the Commonwealth of Kentucky, and numerous strategic partners that have offered inducements to help ensure this project becomes a reality”.

Pending White Energy Board approval for the the Jefferson Riverport Project, it is estimated the plant may eventually produce 500,000 tonnes of upgraded coal annually – enough to power approximately 160,000 homes. It is also estimated the project will create up to 120 full-time jobs during construction and 17 permanent full-time positions once the plant is operational. Given Kentucky’s leadership in the coal and energy industries, White Energy expects that its
resourcing needs for the project would be met largely within the Commonwealth of Kentucky.