yes,denglish..anyone who missed the article here it is..latest media reports suggest deal going thru. Blood's private company AEC is also running the Manystars CTL project in the US..don't see him selling his holdings in MKY just yet..
Chinese may back fertiliser deal
ALLAN BLOOD
Mathew Murphy
July 14, 2009
CHINA is within weeks of signing a $US1.2 billion ($A1.5 billion) deal that would transform Victorian brown coal into fertiliser but would, more importantly, send a signal that it is still willing to do business in Australia.
As relations between China and Australia continue to be strained due to the detention of Rio Tinto executive Stern Hu, BusinessDay has learned that Chinese sovereign funds are in the final stages of talks to provide the bulk of the funding for a $US2 billion coal-to-urea project in Victoria's Latrobe Valley.
The Chinese investment could help thaw relations between the two countries, which have been frosty since Rio walked away from a $19.5 billion tie-up with Chinalco.
The project will turn brown coal into gas, which is mixed with different elements to produce ammonia. The liquid is mixed with carbon dioxide, cooled and granulated to produce urea fertiliser. While some coal-to-urea projects operate in China, this will be the first time Australia has used the technology, having previously used gas as the supply source.
Australian farmers use 1.4 million tonnes of urea a year of which a million tonnes is imported at a cost of $US300 million. New Zealand imports 400,000 tonnes.
Latrobe Fertilisers is behind the project. Its chairman Allan Blood told BusinessDay the locally produced urea would be cheaper by $US120 a tonne compared with the imported version.
Mr Blood said the Chinese were "very interested" in backing the project, which would produce 1.4 million tonnes of urea, of which notional off-take agreements have already been reached here and in New Zealand.
"We have been approached by a few of the Chinese sovereign investment funds. I am hopeful that in the next four to six weeks we will have some documentary matters signed to go forward subject to comprehensive due diligence," he said.
"The low operating cost of the project has not gone away. Nor has the fact that Australia imports most of its urea from the Middle East. Nor has the fact that all of the transport and market infrastructure, particularly storage and handling, is already in place and is still there and available to us."
Mr Blood is confident of receiving the remainder of the funding from local investors and is hopeful the project would receive all approvals, including from the Foreign Investment Review Board if the Chinese do invest, within 15 months. He factors in a further two years and nine months for construction before starting up in 2013.
The company has already signed a contract to receive 3 million tonnes of coal a year for a minimum of 30 years from Loy Yang A in the Latrobe Valley, which is where the coal-to-urea plant will be located.
But despite already securing supply for his project, Mr Blood called on the Victorian Government to immediately release coal for developments that planned on using coal, such as the Exergen clean coal project set to deliver $1 billion to the economy.
"Access to coal is a real issue and it is something that the Government needs to address and should be addressed very quickly because it is going to hold up potential new projects," he said.
"The Government must allocate coal on a use-it-or-lose-it basis. The Monash project, which Anglo American and Shell have pulled out of, has all that coal converted to a mining lease and they can sit on it and that is wrong."
To read the Victorian Government's plan for brown coal, go to tinyurl.com/mphu9a
- Forums
- ASX - By Stock
- there is actions
MKY
mky resources ltd
yes,denglish..anyone who missed the article here it is..latest...
-
- There are more pages in this discussion • 6 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)