Ann: Victoria Coldry , page-5

Latrobe Valley Coldry Project reaches binding agreement
Thursday, 17 June 2010: Melbourne technology commercialisation company
Environmental Clean Technologies (ASX: ESI) is set to sign an historic license agreement
with Vietnamese company Thang Luong Investment and Joint Stock Company (TinCom).
The deal follows the release of a detailed term sheet on May 6 2010. The license
agreement will be formally acknowledged by both parties at a ceremony on Friday 25 June
2010, and will fast track commercialisation of ECTs revolutionary brown coal dewatering
technology known as COLDRY.
Key Points:
 Binding Licence Agreement to be signed in the presence of a Vietnamese
trade delegation led by H.E. Vo Hong Phuc, Vietnams Minister for Planning
and Investment
 Largest trade deal between Vietnam and Victoria with exports forecast to
exceed $1.5Bn a year by early 2020s
 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
 Revenue to ECT of $10M a year increasing to $100M a year plus potential
dividend from 10% JV stake
This licence agreement is binding and sets in motion the staged rollout of our unique
Coldry technology on a commercial scale that leverages the value of Victorias world-class
lignite assets.
The project will commence with the funding of the special purpose vehicle (SPV), Victoria
Coldry Pty Ltd, which was established earlier this year and will enable the detailed, sitespecific
design and feasibility study to be undertaken by our engineers, Arup. This 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).
The signing ceremony will take place in Melbourne, between the respective Chairmen of
ECT and TinCom, Mr. Dave Woodall and Mr. Luoung Thang Van. ECT is pleased to
confirm a distinguished trade delegation from Vietnam led by H.E. Vo Hong Phuc, Minister
of Planning and Investment and accompanied by senior Vietnamese Government
representatives, will be present to witness what we understand to be the largest trade deal
between a Victorian and Vietnamese company.
This signing will be the culmination of almost two years work commenced in October 2008,
which has seen TinCom issued with a foreign investment licence, by Vietnams Ministry of
Planning and Investment, enabling equity investment of US$100 million.
ECT Chief Executive Kos Galtos said the project has broad implications for ECT, the State
of Victoria, the Gippsland region in particular as well as the environment.
ECT Benefits
 Stage 1: Production of 2 million metric tonnes per annum (Mmtpa) of Coldry BCE
pellets by 2013 will generate $10M per year revenue, based on A$5 per tonne
royalty.
 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, generating up to $100M a
year in royalty revenue to ECT.
 ECT has 10%, undilutable, free carry equity in the SPV, Victoria Coldry Pty Ltd
potentially delivering a dividend based revenue stream in addition to the royalty,
while bringing a multi-million dollar asset onto its balance sheet.
Victorian Benefits
 This project has the ability to trigger significant rail and port infrastructure upgrade
plans in order to meet export activity.
 The Government currently collects a royalty from brown coal miners on around 70
million metric tonnes per year of raw brown coal. At full capacity, the 20 Mmtpa
Coldry export plant will require 40 Mmtpa of raw brown coal, potentially increasing
royalties to the State by more than 50%.
Gippsland Benefits
 With an estimated 200 construction jobs lasting up to 10 years and 25 operational
jobs initially working up to 100 new positions, the project has the potential to boost
the local economy significantly.
Environmental Benefits
 The move toward renewable energy is steady, but slow. Coal fired power stations
being built today have a 25 year design life, which means they will need a supply of
coal for years to come. High quality black coal is becoming harder to source and
secure, driving energy consumers, particularly in emerging economies, to look
toward low rank coals that emit much more CO2 than black coal when burned to
generate electricity. By using low rank coals dewatered by Coldry technology (BCE
pellets), the CO2 emissions fall in line with black coal, significantly mitigating the
environmental impact.
 For every tonne of Coldry exported from Victoria, the Coldry plant will recover up to
1000 litres of water. This water is Class A and suitable for industrial applications
without costly treatment. By channelling this water to a collocated power station, the
Coldry plant can reduce the need for the power station to take water from the local
rivers by up to 20 billion litres a year, providing an environmental windfall for
Gippslands waterways.
ECT Chief Executive Mr Kos Galtos said the signing of the license agreement is an
important and historic milestone for the Company as it fast tracked commercialisation of its
Coldry technology.
It is an important achievement for ECT, as it creates substantial value for our
shareholders and delivers a whole new industry for the state Victoria, Mr Galtos said.
We are heralding a new era in brown coal technology as we establish innovative export
technologies that will not only capitalise on the worlds vast lignite resources, but also give
impetus to our home State to expand its existing port and rail infrastructure to meet this
new export demand.
Vietnam has defied the global financial crisis, growing at impressive rates. This rate of
growth is projected to continue for decades to come. Faced with fierce competition for
black coal, TinCom has recognised the value of applying the Coldry technology to lignite to
create a black coal equivalent feedstock to enhance its energy security while mitigating the
impact of brown coal on the environment.
The first Coldry production pellets are expected to be available for export by late 2013.
About the License Agreement
The License Agreement provides for the following:
 Exclusive right to construct Coldry export plants in Victoria, Australia and Vietnam in
addition to the non-exclusive right to construct plants in the rest of Australia and
Indonesia
 Exclusive right to market Coldry in Victoria for 5 years, with a trigger to extend for a
further 5 years upon plant expansion to 5 M mtpa be achieved within 5 years
 Exclusive rights to manage and market Coldry product imports into Vietnam
 Rights to build up to 100M mtpa of Coldry plant capacity globally to meet the rapidly
growing needs of Vietnams economy
 A free-carry equity stake of 10% for ECT.
For Further Information Contact:
Kos Galtos - Chief Executive +61 3 9684 0888 or [email protected]