FYISHARES in Australian Renewable Fuels jumped 19.5 per cent...

FYI

SHARES in Australian Renewable Fuels jumped 19.5 per cent yesterday after the company announced an agreement to supply Caltex Australia with up to 10 million litres of biofuel per year.

The company's plants in Largs Bay, South Australia and Picton, Western Australia will contribute 5 million litres each for an initial two years.

Chief executive John Lillywhite said the deal would also satisfy the target in the South Australian Government's strategic plan to establish a biofuels industry to meet the state's requirements and increase the use of biofuels in the fuel supply chain.

Mr Lillywhite said talks to use the Largs Bay plant's full 45 million litre per year capacity were ongoing.

"In terms of the capacity of the Adelaide plant we're in negotiations with other companies to take the plant output right to capacity," Mr Lillywhite said.

"We expect to do that, hopefully during the current quarter -- the third quarter of this calendar year . . . it's a good breakthrough for the biodiesel industry to get a contract with a major fuel company and distributor."

Australian Renewable Fuels shares closed at 49, up 8. Caltex stock was up 10 at $26.50.