Environmental Clean Technologies

Environmental Clean Technologies (ECT), a company headquartered in Melbourne, rather pretentiously claims on its website that it "is in the business of commercialising and selling disruptive technologies that have game-changing potential within the energy and resources sector capable of delivering significant environmental and commercial benefits."

ECT's primary focus is on commercialising technologies based on the use of brown coal both for power generation and metallurgical applications. ECT has the patent on the Coldry process for pelletising brown coal for use in power generation plants. ECT also the worldwide rights "to commercialise Matmor", a process that uses Coldry-produced pellets in a special metallurgical furnace. The company has the option to buy the intellectual property rights to Matmor "on agreed terms, at any time before 2014".

Corporate background
ECT was previously known as Environmental Solutions International, a company which was placed into receivership on November 18 2004 and the following day was placed into voluntary administration which lasted from November 19 2004 to December 15, 2005. The company's secured creditor was the Commonwealth Bank.

A month after emerging from voluntary administration, ESI as it then entered into a "strategic relationship" with Australian Native Landscapes which was described as "a company specialising in the handling of biosolids on a large scale for use in horticulture and agriculture." The following month ESI, as it was still known, enetered into an agreement to buy Asia Pacific Coal and Steel. This deal, which was completed in May 2006, brought with it the patented dewatering technology "which the company believes will provide an economical solution to its aggressive program to roll out transportable Enersludge units which can be applied in cooperation with contract holders or waste management authorities".

Of more significance was that with the takeover of Asia Pacific Coal and Steel ESI had bought the rights to the Coldry brown coal pelletising technology for power generation and the Matmor technology for using brown coal in metallurgical industries. With its rights to these technologies, in May 2006 ESI entered into an agreement with Victorian Coal Resources to develop brown coal deposits in the Gippsland basin. The matching of the technology with the "vast amounts of Victorian brown coal held by VCR", ESI stated, has the "opportunity for an entire new export market".

Brown coal pelletising plans
Environmental Clean Technologies is proceeding to commercicalise the Victorian brown coal resource for the export markey by using the 'Coldry' technology to pelletise and dray brown coal. ECT claims on its website that "when applied to lignite and some sub-bituminous coals, the mechanically simple Coldry process produces a feedstock in the form of densified pellets that are stable, easily stored, can be transported and are of similar energy value to many black coals, whilst significantly reducing CO2 emissions compared to its original brown coal form."

ECT also claims that the Coldry pellets "can be used in local black coal fired power plants and transported to remote black coal fired power plants", used as part of the fuel mix in lignite-fired power stations "for emissions reduction of 5%-15%, without modification to the plant" or used as athe sole fuel in "significantly upgraded lignite plants".

ECT claims that the technology opens up substantial new opportunities for brown coal beyond mine-mouth power stations. They claim that the use of the technology can lead to a "re-valuation of brown coal reserves", open up opportunities to export pelletised brown coal "providing a new revenue stream for existing brown coal mines currently only supplying mine-mouth power stations" and create an "Opportunity to diversify into new product streams – CTL, Urea etc"

ECT state that they aim to expand Coldry production from 2 million tonnes per annum to 20 million tonnes a year over the next decade.

In the "Green Credentials" section of its website, ECT candidly state "some may dismiss any attempt to label any form of fossil fuel as ‘Green’. We agree! There is no such thing as clean coal. However there is ‘cleaner’ coal." In a bid to bolster its credentials, ECT is also mildly critical of Carbon Capture and Storage technology. "In theory, it’s a great idea to tackle the problem on the way to renewables. However, in practice it is years off commercialisation and will likely cost between US$54 and US$136 a tonne ... CCS is a ‘back-end’ solution. Coldry is a front end solution. Coldry can reduce CO2 emissions as a front-end solution by between 5% and 50% at a cost per tonne significantly less than CCS. It makes economic sense to avoid the emissions using Coldry rather than capture and store them."

Protests over Vietnam deal
In November 2008 ECT announced that it had signed a letter of intent with "Victoria Capital, to supply 20M tonnes of Coldry to the company over the next 20 years" and that it aimed to finalise the contract by the end of the month. The company stated that the "first step" in the project was to build a 150,000 tonnes per annum plant and "work towards up-scaling this plant in increments over the next eight years." The construction of the initial production plant, it stated, "will start in 2009 with completion expected by the end of 2010." In a media release ECT Chief Executive Kos Galtos stated that the second phase of the project would be the construction of a second 2.5 million tonnes per annum plant "by the end of 2012". "After this, we will increase our capacity in 5M tpa chunks until production reaches 20M tpa by around 2016," he said.

ECT also stated at the time that the company's finance partner for the project as Phillip Capital. As for coal supply, Galtos signalled that there was still uncertainty about the source. "The challenge for ECT will be securing enough lignite locally; however, discussions to date indicate we could source lignite from overseas in order to keep our strategic growth objectives on track," he said.

Subsequently, in February 2009 ECT announced that it had signed a heads of agreement with the Vietnamese coal broking company Thang Long Investment Company (Tincom) for the development of a Coldry pellet plant in Victoria. ECT stated that under the agreement ECT would "contribute access to the Coldry IP, plant designs and expertise, and TL shall be responsible for contributing all required capital in exchange for exclusive rights to sell the Coldry pellets to its client base, mostly in southern China. TL has also committed to fund all required financial feasibility studies."

ECT stated that that the preferred location for the proposed 2 mtpa plant is "in the La Trobe Valley, Victoria, but final selection will largely depend on the State’s willingness to substantially expand its rail and port infrastructure and the power industry’s preparedness to commit to provide lignite and heat in a timely manner." ECT also stated that the deal was "a successful outcome from our partnership program with Podium Energy, who provided the initial introduction and facilitated negotiations." In June 2009 Podium Energy were listed as the sixth largest shareholder in ECT with 1.78% stake in the company.

A few months later, ECT stated that Loy Yang Power had indicated its willingness to begin discussion on a Memorandum of Understanding "encompassing the provision of coal, services and a site package necessary to enable the project." Later that month ECT announced that it had entered into a "Coordination Agreement" with Tincom to establish a "Special Purpose Vehicle" to "invest funds into a feasibility study for the construction of a Coldry plant licensed to produce up to 100 million tonnes per annum of Coldry over the next five decades."

Despite the company's celebratory mood, the announcement foreshadowed that substantial hurdles remained as a feasibility study had yet to be undertaken. In a conference presentation, Ashley Moore, the Coldry Business Manager for Environmental Clean Technologies outlined that the June 2009 agreement provides TinCom with "the first right of refusal to construct and fund Coldry Plants in Victoria, Australia", "the non-exclusive right to construct and fund Coldry Plants in other Australian States" and "the right to purchase up to 100 MTPA of Coldry product."

Moore also stated that it was expected that the feasibility study and the detailed design works would be completed by the end of 2010 and that the project could supply Coldry pellets "at sub $US 40 per tonne".

In mid-June 2010 ECT announced a "signing ceremony" for the license agreement. ECT's announcement was long on hype but short on commitments. The deal, it claimed, was the "largest trade deal between Vietnam and Victoria with exports forecast to exceed $1.5Bn a year by early 2020’s", that "Stage 1 construction of 2 million metric tonne per annum Coldry plant targeted to conclude late 2013 for production early 2014, rolling out to 20 million metric tonnes per annum by 2020" and that "revenue to ECT of $10M a year increasing to $100M a year plus potential dividend from 10% JV stake".

However, none of that is guaranteed as the agreement is solely for Tincom to fund a feasibility study. Even though earlier statements by ECT had indicated that a decision on whether to proceed with the project would follow the results of the feasibility study, ECT boldy claimed that "this [the study] in turn is expected to result in the tendering, procurement and construction of Stage 1 of the flagship Coldry plant at Loy Yang power station by late 2013 at an estimated cost of around US$400M (to be confirmed during detailed design)."

While hyping the befits of the project, ECT also was putting the acid on the Victorian State government to underwrite infrastructure expansion to facilitate the project. "Stages 2, 3 & 4: will increase to 5, 10 then 20 Mmtpa by 2020, subject to the State of Victoria delivering rail and port infrastructure upgrades" the company stated.

In addition to the conditions of the agreement outlined by Moore in May, the June announcement also stated that Tincom would have "exclusive rights to manage and market Coldry product imports into Vietnam" and "rights to build up to 100M mtpa of Coldry plant capacity globally to meet the rapidly growing needs of Vietnams economy".

The federal Minister for Trade, Simon Crean, welcomed the signing. In a media release Crean claimed that the agreement was "about Australian technology being used to deliver a more environmentally sensitive energy solution to the people of Vietnam – a small but important contribution to the global effort to reduce carbon emissions." The federal government's support for the signing of the agreement, the first day after Julia Gillard had become Prime Minister, was condemned by environmental groups. Environment Victoria. "It’s a pretty bad first move for our new Prime Minister Julia Gillard, who only yesterday assured the community that her government would take climate change seriously. Yet there they were today ready to sign up for millions of tonnes of greenhouse pollution, increasing coal dependence in the developing world, and continued reliance on polluting coal in Victoria’s Latrobe Valley," stated Environment Victoria.

Other groups to condemn the signing were the Australian Conservation Foundation and Friends of the Earth.

Coldry Dreams Across the Globe
In his presentation to the CoalTech conference, Moore also sketched that ECT had hopes of Coldry deals spanning the globe. In January 2010, he stated, ECT had signed a "Joint Business Case development"Memorandum of Understanding with PGE Belchatow to "define the path forward for lignite drying" at the Belchatow power station which it described as "the largest Lignite Power Station in the world." He also flagged that ECT had its eye on the extensive but largely undeveloped liognite deposits of Indonesia too. Moore explained that ECT had entered into a "Heads of Agreement with Alexis Minerals International to produce Coldry BCE – production of 10 MTPA" and that an "Information Memorandum to be developed to attract funding for feasibility study in 2010." Rather optimistically Moore stated that ECT was "targeting at least 5 Coldry BCE Plants (3 MTPA) to be in operation by 2015 across key growth markets (China, India and Indonesia)."

Contact details
Environmental Clean Technologies Limited Level 8 530 Little Collins Street Melbourne, VIC, 3000 Australia Phone: +613 96840888 Email: info AT ectltd.com.au Website: http://www.ectltd.com.au/

Related Sourcewatch articles

 * Australia and coal

External articles

 * "Green groups angry at coal export plan", Sydney Morning Herald, June 25, 2010. (This is an AAP story).
 * "Anger over coal export deal", ABC News, June 25, 2010.
 * "Australian deal to sell brown coal to Vietnam", ABC Radio Australia, June 25, 2010.
 * "Crean jostled by coal protesters", NineMSN, June 25, 2010.
 * Adam Morton and Tom Arup, "Greens slam Gillard on brown coal export deal", The Age, June 26, 2010.