Historic Australia-India R&D Collaboration Agreement Signed
Wow. What an eventful couple of weeks!
It's taken a while to get to this point, but last week we achieved a world-first, signing the long-awaited agreement for our India project.
We had the honour of India's High Commissioner, His Excellency Dr Gondane attending and congratulating the parties on reaching such a historic agreement.
His Excellency (below right with ECT's Ashley Moore, left and Glenn Fozard, centre) commented on how rare it was to see Australian companies succeed to this degree in India and offered his complete support to ensure the success of the project.
Here's NLC's release.
Unfortunately, some shareholders were confused by the title of the agreement, suggesting that somehow, for some reason the content or intent of the agreement had changed from that described over the past 18 months and outlined in our announcement on 17 May.
We received a flurry of calls and emails from concerned shareholders pointing out that these 'confused' people were spreading false rumours online. So, in addition to Wednesday's announcement of this significant milestone, we issued a clarification statement last Thursday to set things straight.
Nevertheless, a shareholder had already raised their concern via the ASX who promptly passed on the questions to us.
We subsequently provided further clarification via the ASX.
The take away; the agreement was delivered in line with previously announced descriptions and it's all systems go.
Following the signing ceremony, the parties launched straight into the review of the draft sub-agreements which are progressing well and the parties are targeting completion by the end of July.
And while we delivered on the fundamentals, the apparent lack of Ministerial support (and the media that typically attracts) for our announcement has not gone unnoticed.
So, why no Australian government or mainstream media presence?
The short answer; given the political machinations within and between the political parties at present, the political dynamics meant a risk of becoming a political 'football', so we were better off holding an India-focused signing ceremony.
We could go into details about these political machinations but that may be taken as criticism by politicians, and it's not in shareholders' interests to alienate Members of Parliament. And without Ministers present, journalists naturally chase stories that include Ministers.
Suffice to say, on Thursday 31 May, our Chairman Glenn Fozard, along with members of the Indian delegation, attended meetings at Parliament House for 'private' briefings.
Meanwhile, our partners are as enthusiastic and supportive as ever, speaking bullishly about India's innate need to apply technologies like Coldry and Matmor as they seek to build their nation in coming decades.
NLC's Director (Projects & Planning) P. Selvakumar stated, “We want to use our lignite for alternative purposes. We want to dry the lignite. Coldry is a good technology for transforming lignite. When discussing lignite use with NMDC, we saw the opportunity to work together to achieve iron ore reduction as well, adding higher value to our resource through new applications.
“We look forward to a successful project for the betterment of India.”
NMDC's Director (Technical) Narendra K. Nanda added "We are standing here on this auspicious day to sign this agreement to build the pilot plant. If the pilot plant is successful, it can be taken to commercial scale.”
“We wish the project great success for all companies and both countries.”
Director Nanda (above with ECT Chief Scientist, Keith Henley-Smith, visiting ECT's Bacchus Marsh R&D facility) further commented, "NLCIL and NMDC are delighted to be in Australia for this important occasion, meeting with ECT, Indian High Commissioner Dr Gondane, and the Australia India Business Council. Today members of my delegation are meeting with senior government representatives in Canberra, meanwhile, I have had the opportunity to visit the test facility for Coldry and Matmor at Bacchus Marsh. I am happy to say the facilities are excellent and represent the essential work necessary to support the successful execution of the pilot plant project.”
“ECT have shared with me today much of the positive feedback on the signing event yesterday, together with some of the concerns expressed by shareholders regarding the MOU title, however this does not change the commitment or intent of NLCIL, NDMC and ECT to move quickly to achieve Financial Close and begin site works as soon as possible.”
Keep in mind that India is ramping up mining capacity, aiming to produce 100 million tonnes a year of iron ore. The issue? India's iron ore is relatively soft, producing 30% fines. Previously the Chinese bought the fines from India and upgraded them to feed their own steel plants. The Chinese have stopped buying due to changing economics. At present, there are an estimated 150 million tonnes of stockpiled fines in India. This stockpile will grow as mining increases.
This problem is significant for India. These fines are a sunk cost for the miners, an environmental burden that takes up valuable swathes of land. For ECT, these stockpiles represent a stranded 'above ground ore body' ready to be liberated.
The integrated Coldry-Matmor technology, following successful scale up, will be a cost-effective solution to this incredible challenge. This is the driver for our project in India, simultaneously delivering a solution to support India's growth ambitions and environmental commitments.
Take a read of the two recent announcements below and have a scroll further down for links to recent media coverage.
We anticipate that, as we step through financial close and commence project activity we'll have opportunities to build the tangibility and awareness of this unique story, establishing 'newsworthiness' and attracting local media attention.
As always, if you have a question, please don't hesitate to email us at [email protected] or call us on +613 9849 6203.
Historic Australia-India R&D Collaboration Agreement Signed
Wednesday 30 May 2018: Environmental Clean Technologies Limited (ASX: ESI) (ECT or Company) is pleased to announce the signing of the Project Agreement with NLC India Limited (NLCIL) and NMDC Limited (NMDC) for the largest-ever joint R&D collaboration between Australia and India.
Key points:
• Project Agreement signed today in Canberra in the presence of India’s High Commissioner, Dr Gondane
• Australia and India join forces to develop ECT’s low emission iron and steel process via an integrated Coldry-Mamtor plant to be built in India
• The Project aims to jointly develop an integrated Coldry-Matmor pilot plant in India
• Delegation to visit Parliament House on Thursday 31 May 2018 to meet available Ministers
Further to recent announcements in the lead up to today’s Signing Ceremony, senior executives and Directors from NLCIL, NMDC and ECT executed the Project Agreement in the presence of His Excellency, Dr A.M. Gondane and representatives from the Australia India Business Council.
The ceremony, led by ECT Chairman Mr Glenn Fozard, featured speeches by the Mr P. Selvakumar, Director (Projects & Planning) at NLCIL, Dr Narendra K. Nanda, Director (Technical) at NMDC and Mr Ashley Moore, Chairman-Managing Director of ECT India.
Mr Fozard commented “We’ve spent the past four years building the relationship and crafting the process with NLCIL and NMDC in India with the aim of taking our two technologies – Coldry and Matmor – through the scale up process and, if successful on to commercial deployment.
“Today marks a significant milestone on the journey which, all going to plan, will see the commissioning of our Coldry-Matmor pilot plant in India by the end of 2019.”
During the ceremony NLCIL’s Director of Projects and Planning Mr Selvakumar noted, “We want to use our lignite for alternative purposes. We want to dry the lignite. Coldry is a good technology for transforming lignite. When discussing lignite use with NMDC, we saw the opportunity to work together to achieve iron ore reduction as well, adding higher value to our resource through new applications.”
“We look forward to a successful project for the betterment of India.”
Dr Nanda, Director (Technical) of NMDC added, “We are standing here on this auspicious day to sign this agreement to build the pilot plant. If the pilot plant is successful, it can be taken to commercial scale.”
“We wish the project great success for all companies and both countries.”
His Excellency, Dr. Gondane (below, second from right) was quick to add his support to the collaboration, noting the importance of the project to addressing the challenges faced by India.
Photo (from left): Mr Ashley Moore (Chairman-Managing Director, ECT India), Mr P. Selvakumar (Director Projects & Planning, NLCIL), Mr Glenn Fozard (Chairman, ECT), Dr Gondane (High Commissioner for India in Australia) and Dr Narendra K. Nanda (Director – Technical, NMDC).
Next Steps
The Project Agreement sets out the agreed terms for detailed sub-agreements. These include a Master Technology Licence Agreement, Tripartite Collaboration Agreement and NLCIL, NMDC and ECT Services Agreements.
Following execution of the detailed sub-agreements the commencement of project works will be funded and able to commence.
The parties are on track to deliver these agreements by the end of August and look forward to providing further updates as activities progress.
Background
The agreement sees the commencement of the next stage of development for ECT’s two proprietary technologies:
• Matmor is the world’s first and only lignite (brown coal)-based primary iron making technology capable of replacing metallurgical coal and high-grade lump iron ore with lower-cost alternative raw materials thanks to its unique, hydrogen-based chemistry and furnace design.
• Coldry is a unique, zero-emission, lignite upgrading technology capable of producing a solid fuel for use in power generation, industrial thermal applications and as a feedstock to higher-value downstream products such as hydrocarbon liquids, gas, fertiliser, chemicals, chars, activated carbon, hydrogen and steelmaking via the Matmor technology. Coldry solid fuel is significantly less CO2 intensive than lignite.
The project entails two phases, commencing with an AUD 35 million R&D phase funded by the Indian partners, which aims to scale-up ECT’s Matmor and Coldry technologies to deliver an integrated pilot plant capable of producing ~2 tonnes of metal per hour.
Following successful R&D outcomes, phase two involves commercial expansion, targeting an integrated steel making facility with a proposed capacity of 500,000 tonnes per annum and an estimated cost of AUD 300 million.
The partners will then assess opportunities for global commercial expansion based on market assessment at that time.
India Project Agreement Clarification
Thursday 31 May 2018: Environmental Clean Technologies Limited (ASX:ESI) (ECT or Company) is pleased to provide the following clarification to yesterday’s announcement regarding the signing of its historic agreement with two prominent Indian government enterprises, NLC India Limited (NLCIL) and NMDC Limited (NMDC).
Yesterday’s announcement (above) confirmed the signing of the Project Agreement for the execution of the largest ever joint research & development (R&D) project between Australia and India.
This clarification stems from shareholder questions relating to the title of the agreement.
The Company previously titled the agreement as the Master Project Agreement (MPA) to reflect its function, content and intent. Further details on the MPA were announced on 17 May 2018 outlining the commercial terms.
The confusion on the part of some shareholders appears to stem from the use of the title Memorandum of Understanding (MOU) in the final document. These shareholders have drawn the conclusion that the content, intent or substance of the agreement may have also changed.
This is understandable but incorrect.
To clarify:
Indian Public Sector Undertakings (PSUs) undertaking significant collaboration projects are required to follow naming conventions which essentially allow for two types of legal titles: Memorandum of Understanding (MOU) or Memorandum of Agreement (MOA).
Whilst the parties had reached agreement on the key commercial terms for the project to proceed on 17 May 2018, the administrative process for final document endorsement required alignment of the agreement title to the PSU naming conventions which resulted in the Master Project Agreement being re-titled as an MOU and the sub-agreements will be re-titled as an MOA.
These titles, whilst intended to clearly identify the key differences in staged or nested agreements, do not, by the mere fact of changing the title, change the material terms of the agreement and does not make it any less an agreement indicating the firm commitment of the parties to proceed to financial close.
Under Australian nomenclature, the MPA may be described as a Heads of Agreement, as it outlines the key terms of the sub-agreements, largely in commercial language.
However, the subtleties of Australian naming conventions do not resonate with Indian PSU conventions, and given that changing the title had no material bearing on the terms of the agreement, ECT had no hesitation in accommodating the requirement by the Boards of NMDC and NLCIL to change the title of the agreement for finalising and signing.
ECT also reinforces the timeframes in which the parties seek to complete and sign the sub-agreements and thus, reach financial close.
Initially, the parties had targeted 30 June 2018 and subsequently revised guidance in the Company’s 17 May 2018 announcement to 31 July 2018.
ECT Chairman Glenn Fozard commented “Our announcement yesterday mentioned August as the target for financial close, which understandably caused some investors to wonder if there is a risk of timeline slippage.
“Whilst all parties reaffirmed their target date yesterday for financial close by 31 July 2018, we are reminded that NLCIL and NMDC are large companies and have strict protocols for such contracting processes and additional time may be needed to enable adequate notice and review periods for each of the PSU Boards.
The completion and signing of yesterday’s project agreement is a material achievement in progressing this first-of-a-kind project through to financial close and onto the construction phase.
Dr Narendra K. Nanda, Director technical NMDC commented “NLCIL and NMDC are delighted to be in Australia for this important occasion, meeting with ECT, Indian High Commissioner Dr Gondane, and the Australia India Business Council. Today members of my delegation are meeting with senior government representatives in Canberra, meanwhile, I have had the opportunity to visit the test facility for Coldry and Matmor at Bacchus Marsh. I am happy to say the facilities are excellent and represent the essential work necessary to support the successful execution of the pilot plant project.”
“ECT have shared with me today much of the positive feedback on the signing event yesterday, together with some of the concerns expressed by shareholders regarding the MOU title, however this does not change the commitment or intent of NLCIL, NDMC and ECT to move quickly to achieve Financial Close and begin site works as soon as possible”
With the full support of NLCIL and NMDC the Company will continue to maintain focus and effort toward the timely completion of the sub-agreements in parallel with ongoing engineering preparatory activity and will continue to provide shareholders with guidance and updates on progress.
ECT in the news
International Mining
World first Coldry and Matmor plant for power generation and steel making
17 May 2018: Environmental Clean Technologies Ltd announces the commercial terms of the Master Project Agreement (MPA) ahead of the scheduled signing ceremony in Canberra on May 24 2018. This refers to the world’s first Australian-designed Coldry and Matmor plant for power generation and steel making.
Read more >
Small Caps
Indian Government to ink largest Australian R&D agreement with Environmental Clean Technologies
17 May 2018: Environmental Clean Technologies will sign a research and development agreement which allows two public Indian entities to develop a plant in India based on the company’s proprietary Coldry and Matmor technologies.
Read more >
The Economic Times
NMDC, NLC to ink MoU with Aussie firm ECT for R&D project
23 May 2018: NMDCNSE 0.25 % and NLC India Limited may sign an MoU with Australia-based Environmental Clean Technologies Limited for setting up an R&D facility involving an investment of AUD 35 million (USD 26.29 million) in Tamil Nadu, on May 30 in Canberra.
Read more >
The Hindu Business Line
NLC, NMDC to sign MoU with Australian firm for steel production
23 May 2018: In a few days, SK Acharya, Chairman and Managing Director of the public sector lignite mining-cum-power production company NLC, will fly to Australia to sign an agreement with Environmental Clean Technologies Ltd (ECT), an Australian company. The agreement will effectively lay the foundation for NLC to enter into steel production in a few years.
Read more >
Business Television India
NMDC, NLC TO INK PACT WITH AUSSIE ECT FOR USD 26 MN R&D PROJECT
23 May 2018: Hyderabad: NMDC Limited and NLC India Limited (formerly Neyveli Lignite Corporation) may invest over USD 26 million for setting up an R&D facility for developing innovative technologies in iron and steel making.
Read more >
Association for Iron and Steel Technology
Indian, Australian Companies to Enter Development Agreement for New Steel Plant
25 May 2018: Australia’s Environmental Clean Technologies Ltd., a company trying to commercialize an ironmaking process based on lignite, is preparing to sign an agreement with India to develop a pilot plant.
Read more >
Money Control
NMDC, NLC sign pact with Australian firm for R&D
30 May 2018: State-owned National Mineral Development Corporation and NLC India Ltd today signed a pact with Environmental Clean Technologies Ltd, Australia, for setting up a research and development facility in Tamil Nadu.
Read more >
Manufacturers Monthly
Aussie company’s innovative coal and iron-making technologies move forward
31 May 2018: Environmental Clean Technologies (ECT), a Melbourne-based company focusing on commercialisation of new coal and iron-making technologies, has signed an agreement with India’s national lignite and iron ore authorities, to help scale up and commercialise ECT’s technologies.
Read more >
Coal Zoom
Indian, Australian Companies to Sign Agreement for Potential Steel Plant in India
30 May 2018: India's National Mineral Development Corporation (NMDC), NLC India Limited (NLC), and Australia's Environmental Clean Technologies will sign an agreement Wednesday in Canberra that could lead to a new steel plant at Tamil Nadu.
Read more >
Historic Australia-India R&D Collaboration Agreement Signed
Wow. What an eventful couple of weeks!
It's taken a while to get to this point, but last week we achieved a world-first, signing the long-awaited agreement for our India project.
We had the honour of India's High Commissioner, His Excellency Dr Gondane attending and congratulating the parties on reaching such a historic agreement.
His Excellency (below right with ECT's Ashley Moore, left and Glenn Fozard, centre) commented on how rare it was to see Australian companies succeed to this degree in India and offered his complete support to ensure the success of the project.
Here's NLC's release.
Unfortunately, some shareholders were confused by the title of the agreement, suggesting that somehow, for some reason the content or intent of the agreement had changed from that described over the past 18 months and outlined in our announcement on 17 May.
We received a flurry of calls and emails from concerned shareholders pointing out that these 'confused' people were spreading false rumours online. So, in addition to Wednesday's announcement of this significant milestone, we issued a clarification statement last Thursday to set things straight.
Nevertheless, a shareholder had already raised their concern via the ASX who promptly passed on the questions to us.
We subsequently provided further clarification via the ASX.
The take away; the agreement was delivered in line with previously announced descriptions and it's all systems go.
Following the signing ceremony, the parties launched straight into the review of the draft sub-agreements which are progressing well and the parties are targeting completion by the end of July.
And while we delivered on the fundamentals, the apparent lack of Ministerial support (and the media that typically attracts) for our announcement has not gone unnoticed.
So, why no Australian government or mainstream media presence?
The short answer; given the political machinations within and between the political parties at present, the political dynamics meant a risk of becoming a political 'football', so we were better off holding an India-focused signing ceremony.
We could go into details about these political machinations but that may be taken as criticism by politicians, and it's not in shareholders' interests to alienate Members of Parliament. And without Ministers present, journalists naturally chase stories that include Ministers.
Suffice to say, on Thursday 31 May, our Chairman Glenn Fozard, along with members of the Indian delegation, attended meetings at Parliament House for 'private' briefings.
Meanwhile, our partners are as enthusiastic and supportive as ever, speaking bullishly about India's innate need to apply technologies like Coldry and Matmor as they seek to build their nation in coming decades.
NLC's Director (Projects & Planning) P. Selvakumar stated, “We want to use our lignite for alternative purposes. We want to dry the lignite. Coldry is a good technology for transforming lignite. When discussing lignite use with NMDC, we saw the opportunity to work together to achieve iron ore reduction as well, adding higher value to our resource through new applications.
“We look forward to a successful project for the betterment of India.”
NMDC's Director (Technical) Narendra K. Nanda added "We are standing here on this auspicious day to sign this agreement to build the pilot plant. If the pilot plant is successful, it can be taken to commercial scale.”
“We wish the project great success for all companies and both countries.”
Director Nanda (above with ECT Chief Scientist, Keith Henley-Smith, visiting ECT's Bacchus Marsh R&D facility) further commented, "NLCIL and NMDC are delighted to be in Australia for this important occasion, meeting with ECT, Indian High Commissioner Dr Gondane, and the Australia India Business Council. Today members of my delegation are meeting with senior government representatives in Canberra, meanwhile, I have had the opportunity to visit the test facility for Coldry and Matmor at Bacchus Marsh. I am happy to say the facilities are excellent and represent the essential work necessary to support the successful execution of the pilot plant project.”
“ECT have shared with me today much of the positive feedback on the signing event yesterday, together with some of the concerns expressed by shareholders regarding the MOU title, however this does not change the commitment or intent of NLCIL, NDMC and ECT to move quickly to achieve Financial Close and begin site works as soon as possible.”
Keep in mind that India is ramping up mining capacity, aiming to produce 100 million tonnes a year of iron ore. The issue? India's iron ore is relatively soft, producing 30% fines. Previously the Chinese bought the fines from India and upgraded them to feed their own steel plants. The Chinese have stopped buying due to changing economics. At present, there are an estimated 150 million tonnes of stockpiled fines in India. This stockpile will grow as mining increases.
This problem is significant for India. These fines are a sunk cost for the miners, an environmental burden that takes up valuable swathes of land. For ECT, these stockpiles represent a stranded 'above ground ore body' ready to be liberated.
The integrated Coldry-Matmor technology, following successful scale up, will be a cost-effective solution to this incredible challenge. This is the driver for our project in India, simultaneously delivering a solution to support India's growth ambitions and environmental commitments.
Take a read of the two recent announcements below and have a scroll further down for links to recent media coverage.
We anticipate that, as we step through financial close and commence project activity we'll have opportunities to build the tangibility and awareness of this unique story, establishing 'newsworthiness' and attracting local media attention.
As always, if you have a question, please don't hesitate to email us at [email protected] or call us on +613 9849 6203.
Historic Australia-India R&D Collaboration Agreement Signed
Wednesday 30 May 2018: Environmental Clean Technologies Limited (ASX: ESI) (ECT or Company) is pleased to announce the signing of the Project Agreement with NLC India Limited (NLCIL) and NMDC Limited (NMDC) for the largest-ever joint R&D collaboration between Australia and India.
Key points:
• Project Agreement signed today in Canberra in the presence of India’s High Commissioner, Dr Gondane
• Australia and India join forces to develop ECT’s low emission iron and steel process via an integrated Coldry-Mamtor plant to be built in India
• The Project aims to jointly develop an integrated Coldry-Matmor pilot plant in India
• Delegation to visit Parliament House on Thursday 31 May 2018 to meet available Ministers
Further to recent announcements in the lead up to today’s Signing Ceremony, senior executives and Directors from NLCIL, NMDC and ECT executed the Project Agreement in the presence of His Excellency, Dr A.M. Gondane and representatives from the Australia India Business Council.
The ceremony, led by ECT Chairman Mr Glenn Fozard, featured speeches by the Mr P. Selvakumar, Director (Projects & Planning) at NLCIL, Dr Narendra K. Nanda, Director (Technical) at NMDC and Mr Ashley Moore, Chairman-Managing Director of ECT India.
Mr Fozard commented “We’ve spent the past four years building the relationship and crafting the process with NLCIL and NMDC in India with the aim of taking our two technologies – Coldry and Matmor – through the scale up process and, if successful on to commercial deployment.
“Today marks a significant milestone on the journey which, all going to plan, will see the commissioning of our Coldry-Matmor pilot plant in India by the end of 2019.”
During the ceremony NLCIL’s Director of Projects and Planning Mr Selvakumar noted, “We want to use our lignite for alternative purposes. We want to dry the lignite. Coldry is a good technology for transforming lignite. When discussing lignite use with NMDC, we saw the opportunity to work together to achieve iron ore reduction as well, adding higher value to our resource through new applications.”
“We look forward to a successful project for the betterment of India.”
Dr Nanda, Director (Technical) of NMDC added, “We are standing here on this auspicious day to sign this agreement to build the pilot plant. If the pilot plant is successful, it can be taken to commercial scale.”
“We wish the project great success for all companies and both countries.”
His Excellency, Dr. Gondane (below, second from right) was quick to add his support to the collaboration, noting the importance of the project to addressing the challenges faced by India.
Photo (from left): Mr Ashley Moore (Chairman-Managing Director, ECT India), Mr P. Selvakumar (Director Projects & Planning, NLCIL), Mr Glenn Fozard (Chairman, ECT), Dr Gondane (High Commissioner for India in Australia) and Dr Narendra K. Nanda (Director – Technical, NMDC).
Next Steps
The Project Agreement sets out the agreed terms for detailed sub-agreements. These include a Master Technology Licence Agreement, Tripartite Collaboration Agreement and NLCIL, NMDC and ECT Services Agreements.
Following execution of the detailed sub-agreements the commencement of project works will be funded and able to commence.
The parties are on track to deliver these agreements by the end of August and look forward to providing further updates as activities progress.
Background
The agreement sees the commencement of the next stage of development for ECT’s two proprietary technologies:
• Matmor is the world’s first and only lignite (brown coal)-based primary iron making technology capable of replacing metallurgical coal and high-grade lump iron ore with lower-cost alternative raw materials thanks to its unique, hydrogen-based chemistry and furnace design.
• Coldry is a unique, zero-emission, lignite upgrading technology capable of producing a solid fuel for use in power generation, industrial thermal applications and as a feedstock to higher-value downstream products such as hydrocarbon liquids, gas, fertiliser, chemicals, chars, activated carbon, hydrogen and steelmaking via the Matmor technology. Coldry solid fuel is significantly less CO2 intensive than lignite.
The project entails two phases, commencing with an AUD 35 million R&D phase funded by the Indian partners, which aims to scale-up ECT’s Matmor and Coldry technologies to deliver an integrated pilot plant capable of producing ~2 tonnes of metal per hour.
Following successful R&D outcomes, phase two involves commercial expansion, targeting an integrated steel making facility with a proposed capacity of 500,000 tonnes per annum and an estimated cost of AUD 300 million.
The partners will then assess opportunities for global commercial expansion based on market assessment at that time.
India Project Agreement Clarification
Thursday 31 May 2018: Environmental Clean Technologies Limited (ASX:ESI) (ECT or Company) is pleased to provide the following clarification to yesterday’s announcement regarding the signing of its historic agreement with two prominent Indian government enterprises, NLC India Limited (NLCIL) and NMDC Limited (NMDC).
Yesterday’s announcement (above) confirmed the signing of the Project Agreement for the execution of the largest ever joint research & development (R&D) project between Australia and India.
This clarification stems from shareholder questions relating to the title of the agreement.
The Company previously titled the agreement as the Master Project Agreement (MPA) to reflect its function, content and intent. Further details on the MPA were announced on 17 May 2018 outlining the commercial terms.
The confusion on the part of some shareholders appears to stem from the use of the title Memorandum of Understanding (MOU) in the final document. These shareholders have drawn the conclusion that the content, intent or substance of the agreement may have also changed.
This is understandable but incorrect.
To clarify:
Indian Public Sector Undertakings (PSUs) undertaking significant collaboration projects are required to follow naming conventions which essentially allow for two types of legal titles: Memorandum of Understanding (MOU) or Memorandum of Agreement (MOA).
Whilst the parties had reached agreement on the key commercial terms for the project to proceed on 17 May 2018, the administrative process for final document endorsement required alignment of the agreement title to the PSU naming conventions which resulted in the Master Project Agreement being re-titled as an MOU and the sub-agreements will be re-titled as an MOA.
These titles, whilst intended to clearly identify the key differences in staged or nested agreements, do not, by the mere fact of changing the title, change the material terms of the agreement and does not make it any less an agreement indicating the firm commitment of the parties to proceed to financial close.
Under Australian nomenclature, the MPA may be described as a Heads of Agreement, as it outlines the key terms of the sub-agreements, largely in commercial language.
However, the subtleties of Australian naming conventions do not resonate with Indian PSU conventions, and given that changing the title had no material bearing on the terms of the agreement, ECT had no hesitation in accommodating the requirement by the Boards of NMDC and NLCIL to change the title of the agreement for finalising and signing.
ECT also reinforces the timeframes in which the parties seek to complete and sign the sub-agreements and thus, reach financial close.
Initially, the parties had targeted 30 June 2018 and subsequently revised guidance in the Company’s 17 May 2018 announcement to 31 July 2018.
ECT Chairman Glenn Fozard commented “Our announcement yesterday mentioned August as the target for financial close, which understandably caused some investors to wonder if there is a risk of timeline slippage.
“Whilst all parties reaffirmed their target date yesterday for financial close by 31 July 2018, we are reminded that NLCIL and NMDC are large companies and have strict protocols for such contracting processes and additional time may be needed to enable adequate notice and review periods for each of the PSU Boards.
The completion and signing of yesterday’s project agreement is a material achievement in progressing this first-of-a-kind project through to financial close and onto the construction phase.
Dr Narendra K. Nanda, Director technical NMDC commented “NLCIL and NMDC are delighted to be in Australia for this important occasion, meeting with ECT, Indian High Commissioner Dr Gondane, and the Australia India Business Council. Today members of my delegation are meeting with senior government representatives in Canberra, meanwhile, I have had the opportunity to visit the test facility for Coldry and Matmor at Bacchus Marsh. I am happy to say the facilities are excellent and represent the essential work necessary to support the successful execution of the pilot plant project.”
“ECT have shared with me today much of the positive feedback on the signing event yesterday, together with some of the concerns expressed by shareholders regarding the MOU title, however this does not change the commitment or intent of NLCIL, NDMC and ECT to move quickly to achieve Financial Close and begin site works as soon as possible”
With the full support of NLCIL and NMDC the Company will continue to maintain focus and effort toward the timely completion of the sub-agreements in parallel with ongoing engineering preparatory activity and will continue to provide shareholders with guidance and updates on progress.
ECT in the news
International Mining
World first Coldry and Matmor plant for power generation and steel making
17 May 2018: Environmental Clean Technologies Ltd announces the commercial terms of the Master Project Agreement (MPA) ahead of the scheduled signing ceremony in Canberra on May 24 2018. This refers to the world’s first Australian-designed Coldry and Matmor plant for power generation and steel making.
Read more >
Small Caps
Indian Government to ink largest Australian R&D agreement with Environmental Clean Technologies
17 May 2018: Environmental Clean Technologies will sign a research and development agreement which allows two public Indian entities to develop a plant in India based on the company’s proprietary Coldry and Matmor technologies.
Read more >
The Economic Times
NMDC, NLC to ink MoU with Aussie firm ECT for R&D project
23 May 2018: NMDCNSE 0.25 % and NLC India Limited may sign an MoU with Australia-based Environmental Clean Technologies Limited for setting up an R&D facility involving an investment of AUD 35 million (USD 26.29 million) in Tamil Nadu, on May 30 in Canberra.
Read more >
The Hindu Business Line
NLC, NMDC to sign MoU with Australian firm for steel production
23 May 2018: In a few days, SK Acharya, Chairman and Managing Director of the public sector lignite mining-cum-power production company NLC, will fly to Australia to sign an agreement with Environmental Clean Technologies Ltd (ECT), an Australian company. The agreement will effectively lay the foundation for NLC to enter into steel production in a few years.
Read more >
Business Television India
NMDC, NLC TO INK PACT WITH AUSSIE ECT FOR USD 26 MN R&D PROJECT
23 May 2018: Hyderabad: NMDC Limited and NLC India Limited (formerly Neyveli Lignite Corporation) may invest over USD 26 million for setting up an R&D facility for developing innovative technologies in iron and steel making.
Read more >
Association for Iron and Steel Technology
Indian, Australian Companies to Enter Development Agreement for New Steel Plant
25 May 2018: Australia’s Environmental Clean Technologies Ltd., a company trying to commercialize an ironmaking process based on lignite, is preparing to sign an agreement with India to develop a pilot plant.
Read more >
Money Control
NMDC, NLC sign pact with Australian firm for R&D
30 May 2018: State-owned National Mineral Development Corporation and NLC India Ltd today signed a pact with Environmental Clean Technologies Ltd, Australia, for setting up a research and development facility in Tamil Nadu.
Read more >
Manufacturers Monthly
Aussie company’s innovative coal and iron-making technologies move forward
31 May 2018: Environmental Clean Technologies (ECT), a Melbourne-based company focusing on commercialisation of new coal and iron-making technologies, has signed an agreement with India’s national lignite and iron ore authorities, to help scale up and commercialise ECT’s technologies.
Read more >
Coal Zoom
Indian, Australian Companies to Sign Agreement for Potential Steel Plant in India
30 May 2018: India's National Mineral Development Corporation (NMDC), NLC India Limited (NLC), and Australia's Environmental Clean Technologies will sign an agreement Wednesday in Canberra that could lead to a new steel plant at Tamil Nadu.
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