Article Details

Source: Business Spectator

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Summary

Chairman of cleaner coal technology company White Energy, John McGuigan, tells Business Spectator’s Isabelle Oderberg:

  • Why a deal with US giant Peabody Energy will be transformational for the company
  • The group continues to be headquartered in Australia, because this is where technology was developed, despite its three biggest markets being the US, Indonesia and China
  • Its two major US deals, with Peabody and Buckskin represent 28 million tonnes a year

Isabelle Oderberg: I was wondering if you could just give me a broad overview of how this deal is going to be somewhat transformational for White Energy in terms of its operations?

John McGuigan: Yeah, sure. Well Isabelle, we’ve had an office established in the United States for maybe going on 18 months now and we’ve seen for some considerable time before that, the huge potential for White Energy in the US, but specifically in the Powder River Basin. It’s a massive area of sub-bituminous coal. It currently produces and sells something in excess of 450 million tons of coal per annum and we see it as a real sweet spot for our business and an opportunity that now Peabody has recognised that, in a sense, we can be somewhat transformational in developing a new product out of the Powder River Basin.

We have been working with one of the other coal producers in the Powder River Basin, Buckskin, for some considerable time and we in fact have an arrangement with them to build a one million tonne per annum plant on the Buckskin mine taking that to eight million tonnes per annum and our technology and its potential led to discussions taking place, probably over the last 12 months almost with Peabody, who actually approached White Energy with a view of wanting to know more about our technology and how it worked and how it might apply in the Powder River Basin.

So we have, as you’d understand on a deal of this magnitude, been communicating with Peabody for some considerable time testing a variety of coals that Peabody produces in the Powder River Basin and working through the details of the technology and that has led to the announcement of yesterday. Clearly from our perspective an announcement with the world’s largest coal producer to go to 20 million tonnes per annum is sort of a hallmark event for us but I think interestingly as Peabody have indicated, they very much share our view that the technology will unlock significant value in the reserves in the Powder River Basin.