Clean Coal inks deals with coal producers
Friday, March 16 2012 - 01:42 AM WIB
US based clean coal technology provider Clean Coal Technologies, Inc. (CCTI) reported on Thursday that it and Indian firm Jindal Steel and Power Ltd. have agreed to enter into a Technology License Agreement (TLA) to replace the earlier signed Joint Venture Agreement in January, 2012.
?The decision to enter into the TLA was arrived at jointly and is beneficial for both companies as it allows Jindal to focus on its core business model in Indonesia of supplying dry, high-quality coal to their steel and power businesses in India while allowing CCTI to focus on the development and marketing of its technology to third parties,? the company said.
Under the TLA, CCTI will receive an on-going royalty fee on all processed coal from Jindal majority-owned mines in the ASEAN region. In addition, Jindal will pay CCTI a one-time license fee immediately upon the signing of a pilot plant construction contract. The amount of the royalty fee and license fee are awaiting committee approval by Jindal and will be announced shortly, the company said.
For its ASEAN region joint venture initiative, CCTI has instead entered into a binding terms of agreement for a joint venture with the Archean Group to develop, deploy and market CCTI?s Pristine M technology throughout the ASEAN region. It is anticipated that the JV will be owned 55% by Archean and 45% by CCTI, the company said.
In exchange for a 55% ownership interest in the JV, Archean has committed to contribute US$4 million. Of this amount $2 million will be used to fund the construction of a 1:10-scale pilot plant in Oklahoma. The remaining $2 million is a one-time license fee that will be payable to CCTI upon successful commissioning of the pilot plant.
Construction of the pilot plant in Oklahoma will commence immediately upon execution of the EPC Contract and receipt of a down payment. It is expected that the EPC Contract will be formalized this month and construction of the pilot plant will begin in April with construction scheduled to be completed within 16 to 24 weeks. Under the deal Archean will pay a $1 per ton ongoing royalty fee for all coal processed from its mines but will be exempted for the first two million tons of coal produced.
In exchange for its 45% ownership interest in the JV, CCTI will contribute a 25-year exclusive license to develop, market and deploy its Pristine M technology, covering the ASEAN countries, including Indonesia, the Philippines, Cambodia, Vietnam, Malaysia, Brunei, Thailand, Laos and Myanmar.
In addition to providing certain funding for the JV, Archean has also agreed to purchase a 6.7% stake in CCTI for $2 million.
?We are delighted to have signed this agreement with Archean and agreed to restructure our transaction with Jindal. The result is that CCTI will have a larger stake in the ASEAN region joint venture, two commercial projects in Indonesia immediately to follow the successful deployment of the Pilot Plant,? the company said.
?The Archean Group has an enormous marketing footprint in Asia, the Middle East and Africa. At present, it owns estimated reserves of 800 million tons of coal in Indonesia and is currently exporting 2.5 million tons per annum to China and 1.5 million tons per annum to India. Plans are in place to ramp up Indonesian production and exports to 10 million tons per annum by 2013. Their global trading and marketing network will be invaluable for introducing CCTI?s Pristine M technology around the world,? it added.
Archean Group is a diversified Indian conglomerate which owns several thermal coal-mining concessions that are under various stages of operations across in Indonesia with combined estimated reserves in excess of 800 million tons.
CCTI owns a patented process technology to design and build plants, which convert coal into a cleaner burning fuel source. The Company claims that its patented end product ?PRISTINE?? coal is significantly more efficient, less polluting, more cost effective, and provides more heat than untreated dirty coal. The principal elements of this pre combustion technology are based on well-proven, off the shelf components and equipment. Its clean coal technology reduces some 90% of chemical pollutants from coal, including Mercury, thereby resolving emission issues affecting coal-fired power plants.
Editing by David Mustakim