31 January 2007
GIANT AND MAJOR JAPANESE TRADING HOUSE IN JV AGREEMENT
White Energy Company Limited (White Energy (ASX: WEC)) today announced a joint venture has been signed with the Adaro Group one of Indonesia’s largest coal companies, and Itochu Corporation (Itochu), a major Japanese trading house.
Under the joint venture agreement, a wholly owned subsidiary of White Energy, Binderless Coal Briquetting Company Pty Ltd (BCBC), will design, build and operate processing plants used to undertake White Energy’s coal upgrading process at Adaro’s coal mines in East Kalimantan.
The formation of the joint venture will be subject to the parties completing a financial and technical feasibility, with the aim of a processing plant being built with the capacity to produce 1,000,000 tonnes of upgraded coal per year, with the intention to increase plant capacity to 8,000,000 tonnes of upgraded coal per year.
The joint venture with the Adaro Group and Itochu represents White Energy’s second major joint venture transaction in the last few months. The Company is currently in negotiations on other similar transactions regarding the commercialisation of White Energy’s technology and hopes to make further announcements shortly.
Managing Director of White Energy, Mr John Atkinson said; “Today’s agreement with two global players in the coal industry is a strong endorsement of our coal upgrading technology. Ongoing strategic partnering with industry participants will be a key platform to commercialising White Energy’s coal technology worldwide. This is particularly evident in Asia where there is significant demand for a low ash, low sulphur coal solution which White Energy’s process provides.
Prior to the signing of the joint venture a detailed coal analysis and testing program was undertaken, with the results showing that Adaro coal is significantly enhanced from White Energy’s technology. Post testing, Adaro’s coal had a higher energy content, combined with lower ash and sulphur levels, which is very attractive to the Japanese Utilities who are major buyers of Indonesian coal.”
The Adaro Group has extensive experience with the mining and selling of coal and control significant coal mines and related infrastructure assets in Indonesia.
Itochu is a major Japanese based trading house with extensive trading expertise with power generation companies and coal mining groups globally with specific emphasis on Japan and Indonesia.
The Adaro Group, Itochu and BCBC will utilise White Energy’s coal upgrading process in relation to coal sourced in Indonesia from Adaro’s deposits in order to sell the upgraded coal to third party offtakers, which may include Japanese utilities.
BCBC will hold a majority 51 percent interest in the venture and the Adaro Group and Itochu will hold 29 and 20 percent respectively. In addition, BCBC will take the lead role in the construction and ongoing operation of the plant.
White Energy is the exclusive worldwide license holder of the binderless coal briquetting process that enhances relatively poor quality coal to significantly increase its energy efficiency. The process has two major benefits: it results in substantial transportation and operational cost savings and it creates environmental credits by reducing emissions.
Competitive, independently verified technology – the White Coal Technology was developed by CSIRO in conjunction with TraDet Inc, K.R. Komarek Inc and The Griffin Coal Mining Company Pty Ltd. Independent tests, by both expert engineers and coal producers, have proven the process to be more cost and operationally efficient than competing technologies.
About the Adaro Group:
The Adaro Group commenced coal mining in 1991 and have independently confirmed reserve and resources of 3,146 million tonnes. The Adaro Group has production capacity of 40 million tonnes per year.
About Itochu Corporation:
Itochu is a major Japanese trading and investment company with offices in more than 70 countries. Itochu generates annual revenues of approximately US$100 billion which places it among the world’s largest corporations. With operations coving a broad spectrum of industries including Energy, Metals, Minerals, Textiles and Machinery, Itochu has extensive relationships in Japan and globally with power generation companies and coal mining groups.
For further information contact:
White Energy Company Limited.
Tel: + 61 2 92511311