White Energy updates E. Kalimantan coal upgrading project
Friday, April 30 2010 - 07:33 AM WIB
Joint Venture with PT Bayan Resources (WEC 51%)
KSC?s strategy is to focus on producing upgraded energy coal suitable for sale whilst continuing to prudently ramp-up production rates at the plant. As advised previously, when ramping-up production rates earlier in the year, problems were encountered with the coal injection system, drying column and dust extraction system. These issues combined to limit production rates and slightly impact the extent of the energy increase in the resultant upgraded coal.
During the relevant quarter, significant work was done on addressing the engineering issues referred to above. We are pleased to report that:
a) Coal Injection System ? before effecting any major modification work, it was decided to test the crushed coal injection lines to establish whether the length of the lines was having an impact on relative flow capacities. Tests to date have indicated that the length of two of the lines was indeed causing problems with throughput rates. With very minimum capital expenditure, this issue has now been largely addressed with the result that screw rates have been substantially improved. Although test work is still ongoing the results to date are encouraging;
b) Drying Column ? the length of the drying column has been increased with a view to ensuring that any variations encountered in the moisture content of the feedstock coal can be effectively dealt with in the drying process; and
c) Dust Extraction System ? before effecting any major modification work, it was decided to install a de-dusting vibrating screen typically found in coal operations to separate dust from the upgraded product. This vibrating screen was installed in March and has now been successfully trialed for almost a month facilitating the production of upgraded energy product which is now being stockpiled. We propose to continue to trial the vibrating screen through to the end of May when a cost benefit analysis will be done to determine whether the existing installed solution is adequate or whether it is preferable to undertake a more significant upgrade of the existing dust extraction system.
As mentioned, we are currently testing the handling and stability of the upgraded energy coal produced and are in the process of monitoring and collecting data from the stockpiles of the upgraded coal. As regards coal quality, the calorific value of the upgraded energy coal being produced to date is approximately 5,800 kcals/kg - representing an energy increase of approximately 25% over the feedstock coal, Albeit at an energy level which can be readily sold, the upgraded coal is not yet being processed to its maximum level of robustness nor are we achieving optimum increases to the energy content (approximately 6,100+ kcals/kg ). As we achieve more sustained and consistent throughput over the next quarter, and as we continue to ramp-up production capacity, we expect to see corresponding increases in product energy content and quality.
KSC is continuing to make progress with its sales and marketing initiatives. KSC is due to sell test burn quantities of its upgraded coal (in cargo sizes 5,000-8,000 tonnes) to customers as soon as possible following necessary Maritime Organisation certification and completion of appropriate stockpiling, handling and transportation tests. Discussions with potential customers are well underway in this regard.(end of excerpt)