ENVIRONMENTAL CLEAN TECHNOLOGIES LIMITED. — Capital/Financing Update 2009

Jan 18, 2009

Environmental Clean Technologies Limited

Clarification: 16 January 2009 Announcements

Monday, 19 January 2009: Environmental Clean Technologies Limited (ASX:ESI) wishes to clarify announcements made to the ASX on Friday 16 January 2009.

ESI believes that, as a result of the prevailing adverse economic conditions, one of ESI’s major shareholders has been obliged to dispose of their investment in ESI in the period since Christmas 2008. This has had a negative affect on the trading price of ESI’s shares.

ESI also believes that, over the same period, Pacific Capital Value Limited (PCVF), the provider of ESI’s Zero Coupon Convertible Note funding facility has sold a substantial amount of the 10M shares provided to it via the Share Lending Agreement required as part of the ZCCN, at prices below 3 cents. ESI does not wish to allege or assert in any way that the reason PCVF has done so has been to relieve itself of its obligations to subscribe for convertible notes.

In this environment, ESI’s volume weighted average share price (VWAP) has fallen below the A$0.03 threshold in the Subscription Agreement, below which PCVF is not obliged to subscribe for convertible notes. As a result the second tranche of the convertible notes that was due to be subscribed for on or before 18 January 2009 has been postponed.

In these circumstances ESI’s Board and Management determined it prudent to make a placement of shares and options on Friday 16 January 2009, to raise A$220,000 to strengthen the cash position of the company, and also to bring forward the announcement of its intention to provide shareholders with the opportunity to participate on the same terms as the placement in a Share Purchase Plan (SPP). In addition to giving shareholders the opportunity to participate in the raising, the SPP will support the raising of funds for the acquisition of the Coldry Intellectual Property, for which negotiations are now rapidly reaching conclusion.

Further, ESI wishes to emphasise that PCVF may still subscribe to the tranche 2 convertible notes at a later date and that, so long as the A$0.03 VWAP is maintained for a period of 30 days PCVF will be obliged to subscribe for a further 3 tranches of convertible notes, for a total price of $1.5M, by 18 June 2009.

PCVF’s funding commitment is in addition to ESI’s ongoing access to the existing equity line that is in place with Fortrend.

The Board and Management of ESI affirm their confidence in the company and in the commerciality of the technologies that it is commercialising, and expect to make further announcements regarding the SPP and the acquisition of the Coldry technology later this week.

For further information contact;

Chairman Dave Woodall +61 3 9684 0888. Chief Executive Kos Galtos +61 3 9684 0888.

Coldry Process

The world’s first economic method for dewatering brown coal, creating a high energy pellet with significantly reduced CO2 emissions compared to brown coal, while being suitable for export as a black coal substitute.

Matmor Process A one-step method for producing low-carbon iron from inexpensive, abundant brown coals and metal bearing media such as mill scale, nickel tailings and low grade iron ore.

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