30 May 2011 – White Energy Company Limited (ASX:WEC; OTCQX:WECFY) (White Energy) – As previously advised in the March 2011 quarterly report, White Energy, through its 51% owned Indonesian subsidiary company PT Kaltim Supacoal (“KSC”), is proceeding to upgrade certain aspects of its binderless coal briquette plant at Tabang, Indonesia. Following completion of the engineering modification works, the plant is expected to ramp-up to full production capacity of one million tonnes per annum by the end of 2011, making it the world’s largest coal briquetting plant to upgrade sub-bituminous coal.
To date the Tabang coal upgrading plant has delivered on certain milestones including:
• producing upgraded coal with an energy content of approximately 5,900 kcals/kg GAR, which represents a significant increase on the feedstock coal with an average energy content of 4,300 kcals/kg GAR ;
• successful stockpiling of approximately 15,000 tonnes of briquetted coal for over 6 months without issues related to moisture re-absorption ;
• first sales of upgraded coal product through PT Bayan Resources Tbk;
• reliable operation of the 10 megawatt coal-fired power station adjacent to the coal upgrading plant.
The engineering modification works are expected to be completed by September 2011 and are focused on three main areas of plant improvement:
1. Coal Drying – the coal drying column is in the process of being lengthened to achieve optimum coal drying conditions. This modification will not only enable the moisture content in the upgraded coal to be reduced to 6%-7% at the briquetter and hence produce a better quality briquette, but will also provide greater flexibility in running the plant at varying operating capacities.
2. Dust Extraction – the current dust extraction system which collects the fine dust generated through the briquetting process is undersized and has limited overall plant operating capacity to 25%-30% thus far. KSC is currently in the process of fabricating a much larger dust extraction system to retrofit at the plant, which will enable the plant to run at its design capacity of one million tonnes per annum.
3. Briquette Handling and Stockpiling – the upgraded coal briquette cooling tower is being relocated and approximately 400 metres of additional product conveyors will be installed at the site. This will allow the upgraded coal briquettes to be cooled down to ambient temperature prior to stockpiling.
Design and fabrication works for the lengthened drying column are now complete with all equipment due to arrive on site by the end of May 2011. The plant will stop production to allow for the erection of the drying column to be completed by the end of June 2011. This key modification is expected to substantially reduce pre-briquetting coal moisture from approximately 35% to 6%-7% on a consistent basis. Test work on this coal shows that the best briquettes are produced at this moisture level. Other minor upgrading works will be carried out on the power station during the June shutdown.
Design, procurement and fabrication of equipment to complete the modifications to the dust extraction and briquette handling/stockpiling systems is well advanced with the necessary equipment being delivered from Australia and Indonesia. Once all this equipment is on site, which is currently expected by the end of August 2011, a further shutdown of up to one month will be necessary to complete the installation of these remaining modifications.
Brian Flannery, CEO of White Energy, said; “The plant operations to date have demonstrated that we can produce significantly upgraded coal from the sub-bituminous feedstock, and the coal does not reabsorb moisture after several months in stockpile. The plant modifications are an expected process of refinement towards getting the plant operating at its design capacity of one million tonnes of coal briquettes per annum.
“Most importantly, these works will confirm the module design for further plants to be expedited in Indonesia and the United States.”