30 September 2008Dear Shareholder, I trust you have been keeping...

30 September 2008

Dear Shareholder,

I trust you have been keeping abreast of the many announcements made by Environmental Clean Technologies since our last update in July.
If you’ve missed our ASX announcements, web postings and shareholder communications, this letter re-caps the past eight weeks’ activities.
Thank you to all who attended our General Meeting held at Deloitte’s Melbourne office last week. It was very pleasing to see about 40 interested shareholders make time in their busy schedule to attend on a Wednesday afternoon.
Thank you also to the hundreds who completed their proxy form. Every vote counted towards Pacific Capital Investment Management’s (PCIM) $10M zero coupon convertible note being approved by you, our shareholders.
We now have the approval for the funds to start a recruitment drive to find the best people to fill the roles of Coldry Business Manager and later a Product Manager for this business unit. We also now have the approval for the working capital necessary to put in motion the fundraising for the building of our much anticipated 150,000 t.p.a Coldry commercial demonstration plant.
At this General Meeting new Board member Dennis Brockenshire was formally appointed by a shareholder vote and I thank you all for the confidence you placed in me by appointing me to you board as well.
Last month, ECT strategic partner ARUP presented its pre-feasibility report for the Coldry commercial demonstration plant. The good news is this reputable world leading engineering firm ARUP agrees with us – our brown coal technology is commercially viable and potentially more than two years ahead of any competitor.
Having now defined the critical design parameters, major cost drivers and improvement opportunities for the project, Arup and construction partner McConnell Dowell will now actively undertake further optimisation of design and construction cost estimates of +/- 10% and construction could commence as soon as next year.
Our Chief Executive Kos Galtos continues to engage in commercial discussions for offtake sales at both a local and global level.
From his numerous discussions with major international brown coal users and potential customers for black coal substitute Kos reports that further refinement of Coldry plant designs will enhance ECT’s world-wide opportunity, through wider deployability and more rapid construction.
Speaking of global discussions, Kos is in contact with global management consulting firm SAHA International, which proposes to commence a detailed market scoping study into the value that potential bulk water purchasers within the Gippsland region may place on water produced from ECT’s proprietary Coldry process.
This study will prove the benefits associated with selling this water to non-metropolitan urban water authorities, power plants, industrial users or to the Government (as environmental flows). Subsequent to this scoping study SAHA International may assist ECT in monetising the value of this water by advising on entering into formal contract negotiations with preferred counterparties.
Our Matmor technology also had some wins in the past few months. We tested Mongolian sub-bituminous coal using Matmor technology which proved successful, giving us added confidence to offer our low-cost steel and iron making process to countries like China and India that have billions of tonnes of the otherwise unviable resource.

The recent test was done as part of the company’s ongoing bench testing program by combining 1.5kg of Mongolian sub-bituminous coal (30% moisture & 20% ash) with 3kg of Tasmanian Savage River magnetite (63.5%Fe) and 0.5kg limestone. The result was 90% recovery of the metal on the first attempt yielding a 1kg sample with 0.3% carbon and 0.03% sulphur.

The next major piece of communication from Environmental Clean Technologies will be our 2007-08 Annual Report. If you wish to receive a hard copy of this report please complete the attached form, otherwise we plan to continue to be environmentally friendly and provide our annual report via email or through our website. If you have not already registered for electronic communications from ECT please send your email address to [email protected]

Your email address will only be used for communications by ECT Ltd and will not be passed to outside parties. If you wish to remove yourself from the email list simply reply with the subject “Remove from list” and we will contact you only through Australia Post.
In closing, thank you for your continued support.

Yours sincerely,

Dave Woodall