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ENVIRONMENTAL CLEAN TECHNOLOGIES LIMITED. — Capital/Financing Update 2012
Jun 14, 2012
64819_rns_2012-06-14_0f2b99b9-61da-4b8d-bbfe-eead12b8bdf2.pdf
Capital/Financing Update
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Shareholder Update June 2012
Capital
Raising
DFT
Phase
1
complete
EL
5119
The
‘Monash’
transaction
is
Arup
have
completed
phase
1
ECT
enters
the
resource
expected
to
conclude
in
coming
of
the
DFT,
delivering
development
sphere
with
its
weeks,
paving
the
way
for
outcomes
in
line
with
acquisition
of
an
interest
in
completion
of
the
DFT,
and
expectations
and
paving
the
exploration
licence
EL5119
future
project
funding
way
for
phases
2
&
3
Page 2 Page 4 Page 5
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Welcome
Dear
Shareholders,
This
is
an
important
period
for
your
company
as
we implement
strategies
to
commercialise
our
valuable
Coldry and Matmor technologies while evaluating other commercial
opportunities.
We
have
recently
achieved
several
important
milestones that
we
believe
will
be
critical
to
the
future
of
your company:
-
Confirmation
of
Monash
Capital
joint
venture
company ‘IMFAMA’s’
investments
in
ECT
shares
and
projects -
Completion
of
Phase
1
of
the
Design
For
Tender
(DFT) Program -
Sealing
of
the
Australian
Coldry
Patent -
Acquisition
of
Coal
Exploration
Arrangements
in Victoria
via
EL
5119
The
ECT
board
has
a
policy
of
communicating
with
and informing
shareholders
of
significant
developments
and has
developed
this
Shareholder
Update
as
one
means
of updating
you.
It
is
envisaged
these
will
be
provided quarterly.
We
welcome
your
feedback
on
this
communication
and
we look
forward
to
providing
a
further
update
in
coming months.
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In this issue…
Page
Topic
-
2 Cornerstone
investor progress
update -
3 Capital
management -
4 DFT
-
5 EL5119
-
5 Coldry
commercial
demo -
6 Vic
Gov
Coal
Tender -
6 IP
Update -
7 Asian
opportunity -
7 Energy
forums -
9 Market
perspectives
Michael Davies Executive
Chairman
and
Managing
Director
1. IMFAMA set to become cornerstone investor
I
wish
to
report
to
shareholders
that
documents received
yesterday
from
Monash
Capital
Group (Monash)
confirm
the
imminent
completion
of
their financing
commitment
to
ECT.
Monash
has
advised
ECT,
and
ECT
has
sighted documentary
evidence
to
confirm,
that
a
formal banking
process
is
in
place,
which
will
provide
for
the share
placement
monies,
the
provision
of
funding
for the
construction
and
operation
of
the
Coldry Demonstration
Facility
and
funding
for
the
Matmor Pilot
Plant
development.
It
is
expected
that
the
funds
will
be
made
available
to ECT
within
the
next
two
weeks.
Shares
from
the
placement
approved
by
shareholders at
the
recent
Extraordinary
Meeting
(EGM)
will
be issued
to
IMFAMA
Pty
Ltd,
which
is
a
company
jointly owned
by
Monash
and
Indigenous
Monetary
Fund Australia
(IMFA).
On
completion
of
the
transaction, IMFAMA
will
become
the
largest
holder
of
the Company’s
issued
capital
and
a
major
strategic investor.
As
described
in
the
Notice
of
Meeting
for
the
EGM, funds
received
from
the
placement
will
enable completion
of
Phases
two
and
three
of
the
Design
For Tender
(DFT)
program
as
well
as
providing
working capital.
Shareholders
will
appreciate
the
necessity
to
complete the
DFT
in
order
to
have
the
engineering
detail required
to
cost
the
construction
of
a
2
million
tonne per
annum
(mtpa)
Coldry
production
facility.
It
has
been
agreed
in-‐principle
with
Monash
that following
IMFAMA
becoming
a
substantial shareholder,
that
ECT
will
offer
participation
in
joint ventures
to
globally
commercialise
the
Coldry
and Matmor
technologies,
and
other
appropriate commercial
opportunities
as
they
emerge.
The
information
received
by
Monash
further reinforces
ECT’s
financial
future
through
the
funding of
the
Coldry
Demonstration
Plant
and
the
funding
of the
Matmor
commercialisation
program.
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2
2. Capital Management
The
Capital
Management
Committee
has
supported the
Board’s
strategic
capital
efforts
over
the
past
nine months
to
achieve
the
following:
-
Non-‐Renounceable
Rights
Issue
announced
in August
2011
and
closed
on
23
December
2011 delivered
$2.2m
of
the
anticipated
$3.8m. Though
this
was
$1.6m
short
of
target,
it
was considered
to
be
a
reasonable
outcome
given
the volatility
of
both
the
markets
and
the
company’s performance
in
the
preceding
six
months. -
As
announced
on
10
January
2012,
the
company secured
commitments
for
an
additional
$1.1m comprising
two
separate
share
placements
of $695,000
and
$405,000.
The
initial
placement was
made
pursuant
to
the
15%
“head
room”, with
the
second
placement
subject
to shareholder
approval
at
the
Extraordinary General
Meeting.
As
advised,
the
$405,000 placement
was
subsequently
withdrawn
as Director’s
considered
the
terms
and
conditions
to be
mismatched
to
market. -
Consistent
with
a
November
2011
Board resolution
to
meet
the
balance
of
the
La
Jolla Cove
Converting
Loan
facility
with
cash,
a
facility was
negotiated
with
Menzies
Security
on
terms and
conditions
as
announced
to
the
market
on
28 February -
These
funds
were
used
to
pre-‐pay the
balance
of
the
La
Jolla
facility.
In
total, $743,000
of
cash
was
used
to
satisfy
the
La
Jolla Cove
convertible
note. -
On
15
March
ECT
advised
that
a
placement
with Monash
Capital
Group
for
300
million
shares
and 300
million
ESIO
options
for
$4.0m
had
been finalised.
This
placement
was
approved
by shareholders
at
the
recent
General
Meeting
and provided
Monash
Capital
nominee
IMFAMA
with approximately
16%
of
the
company’s
issued capital.
ECT’s
Board
has
approved
a
capital
program
for
the balance
of
2012
that
includes:
-
Responsible
budgeting
and
conservation
of
cash-‐ on-‐hand -
Delivery
of
Phases
2
&
3
of
the
Design
for
Tender Program -
Advancing
Matmor
technology
and commercialisation -
Plans
to
acquire
further
interests
in
coal resources
and
the
development
of
Exploration Licence
EL5119 -
A
series
of
shareholder
briefings
in
Q3
There
has
been
considerable
discussion
about
the use
of
equity
and
the
subsequent
effects
of
dilution. As
investors
recognise,
in
the
absence
of
income, Boards
have
a
choice
of
debt
or
equity
to
fund
the activities
of
the
business.
In
choosing
the
issuance
of equity,
the
“degree
of
dilution”
is
an
issue
all
Boards grapple
with.
We
are
committed
to
achieving
an appropriate
balance
and
have
delivered
a
capital management
program
that
has
exceeded
its
capital target
by
40%,
with
a
corresponding
2.6%
increase
in equity
against
plan.
In
addition,
the
Board
has ensured
that
the
program
has
been
delivered
at
a cost
of
less
than
5%
of
total
funds
raised.
The
company
wishes
to
acknowledge
the
efforts
of its
advisory
team
from
Greenard
Willing,
led
by Glenn
Fozard.
As
shareholders
will
appreciate,
capital markets
have
been
extremely
volatile,
with
investor confidence
battered
by
global
events,
including
the turmoil
in
Europe.
Accordingly,
the
successful completion
of
the
capital
management
program
over the
past
nine
months
is
the
result
of
a
good
plan, well
executed
and
solidly
backed
by
you,
our committed
shareholders.
For
that,
we
thank
you!
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3
3. Status of the Design for Tender Package
Arup
has
completed
Phase
1
of
the
Design
For
Tender Program
and
has
finalised
all
detail
in
a
series
of
reports documenting
works
completed,
analyses
made,
designs developed,
and
the
expected
operational
outcomes. Furthermore,
Arup
has
also
begun
Phases
2
and
3
of
the DFT
and
will
run
these
stages
in
tandem
where
possible.
Works
undertaken
during
Phase
1
included
the
process engineering
components,
as
well
as
preliminary
structural designs.
At
the
core
of
this
work
was
“options” development.
This
involves
taking
those
process components,
as
executed
in
ECT’s
Coldry
Pilot
Plant,
and developing
a
series
of
options
where
they
can
be completed
at
large
scale.
Key
features
of
the
process
design
developed
were:
-
A
back-‐to-‐back
module
design,
dramatically
reducing
structural
steel
requirements -
An
integrated
air
plenum
&
packed
bed
dryer
design
to
reduce
separate
support
structure
needs -
Lowest
possible
energy
consumption
through
optimising
water
recovery,
while
retaining
the
power station
evaporative
loss
mitigation
ECT
is
extremely
pleased
with
the
work
done
to
date.
The
outcomes
continue
to
support
Coldry’s
commerciality and
instill
confidence
in
the
timeframes
set
to
deploy
the
first
Commercial
Demonstration
plant
at
Loy
Yang.
4
4. Acquisition of interest in coal exploration licence EL 5119
On
23
May
we
advised
we
had
entered
into
an
agreement
to
secure
an
interest
in
a
coal
exploration
licence
in Victoria
known
as
EL5119.
The
agreement
essentially
provides
access
to
an
area
of
approximately
33
sq.
kms
adjacent
to
the
existing
Exempt Zone
and
south
east
of
the
Hazelwood
power
station
and
mine.
Under
the
agreement
with
Mecrus,
ECT
will
meet
the
costs
of
all
exploration
work
required
to
prove
up
the reserves
of
lignite
located
within
EL
5119
up
to
“measured
reserve”
status
as
defined
in
The
Australasian
Code
for Reporting
of
Exploration
Results,
Mineral
Resources
and
Ore
Reserves
(the
“JORC
Code”).
It
is
estimated
the
expenditure
will
to
be
up
to
$1.0
million
over
a
two
to
three
year
period.
In
return,
ECT
will acquire
from
Mecrus
all
rights
in relation
to
the
in-‐ground
coal
that may
be
delineated
within
EL5119.
ECT
has
secured
these
rights
over EL5119
to
potentially
provide
an additional
lignite
resource
in
the Latrobe
Valley.
Such
a
resource would
complement commercialisation
of
the
Coldry technology
in
this
region
and
assist
in securing
partners
and
finance
for future
projects.
5. Coldry: Development of a commercial demonstration plant
As
a
lead-‐in
to
the
deployment
of
the
2
million
tonne
per
year
Coldry
plant
at
Loy
Yang,
ECT
has developed
a
proposal
seeking
investment
in
the
first
module
–
a
Commercial
Demonstration
plant.
–
of around
170,000
tonnes
per
annum
capacity.
ECT
intends
to
establish
a
Joint
Venture
(JV)
company
for
the
purposes
of
constructing
and
operating
this Commercial
Demonstration
facility.
After
proving
the
economics
of
Coldry
production
at
this
scale,
ECT will
expand
the
facility
progressively
to
increase
production
capacity
to
the
2
million
tonne
target.
The
final
production
capacity
of
the
expanded
production
facility
could
feasibly
extend
beyond
the
initial 2
million
tonnes
to
be
over
20
mtpa
as
the
various
sources
of
waste
energy
are
progressively
tapped. It
is
expected
that
the
cost
to
establish
the
initial
Commercial
Demonstration
facility
at
Loy
Yang,
together with
the
operating
expenses
over
the
first
12
months
of
operation,
will
be
around
$70m.
ECT
and
its
shareholders
want
to
attract
globally
recognised
resource
companies
and
globally
significant thermal
coal
consumers
as
investors
in
this
project.
Equity
investors
in
the
JV
will
be
entitled
to
a
share
of
production
from
the
facility
equal
to
the percentage
of
equity
held
by
the
investor.
ECT
will
offer
the
shareholders
in
the
JV
the
right
to
maintain
their
percentage
equity
share
in
an expanded
production
facility
(first
expansion
to
2
mtpa)
for
appropriate
financial
consideration.
The
capital
costs
to
construct
the
first,
single
module
Commercial
Demonstration
Plant
are
expected
to be
substantially
higher
than
subsequent
units
as
construction
and
manufacturing
efficiencies
become available,
including
the
sourcing
of
low
cost
pre-‐fabricated
structures
and
other
components
from overseas.
5
6. Victorian Government Allocation of Coal Reserves
The
Victorian
Government
has
begun
a
process
of assessing
the
level
of
interest
by
companies
in bidding
for
new
allocations
of
brown
coal
from
the State’s
vast
reserves.
ECT
welcomes
this
initiative
by the
Government,
particularly
as
it
recognises
a
need to
dovetail
these
resource
allocations
with
the utilisation
of
technologies,
which
increase
the
value of
the
resource
and
mitigate
environmental
impacts.
Currently,
Victoria
has
an
estimated
430
billion tonnes
of
brown
coal,
of
which
more
than
30
billion tonnes
could
be
economically
developed
from
the Latrobe
Valley
alone.
About
65
million
tonnes
of brown
coal
is
mined
in
the
Latrobe
Valley
for domestic
use
each
year,
but
none
is
exported.
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----- Start of picture text -----
Moisture Level
Brown Coal v. Coldry
100
80
60
Moisture
40
Dry
Maner
20
0
Brown
Coal
Coldry
Percentage
----- End of picture text -----
In
its
raw
form
lignite
cannot
be
economically
exported
due
to
its
high
moisture
content
(more
than
half
is
water) and
its
propensity
to
self-‐combust.
Coldry
provides
an
economic
solution
to
this
dilemma.
As
such,
ECT
is
keen
to
explore
the
coal
allocation
opportunities
as
they
emerge
and
believes
the
ability
of
Coldry to
dewater
raw
lignite
from
60%
moisture
to
less
than
14%
moisture
forms
a
sound
basis
for
a
premium
export product
in
addition
to
a
high
quality
feedstock
for
downstream
value
added
process
such
as
coal-‐to-‐gas.
We
consider
that
consortium
based
approach,
which
can
demonstrate
the
following,
will
have
the
best
chance
of success
in
being
awarded
suitable
coal
allocations:
-
Leverage
the
high
commercial
value
of
Victoria’s
vast
lignite
(brown
coal)
reserves -
Attract
new
investment
in
long-‐life
projects -
Generate
substantial
new,
permanent
employment
==> picture [272 x 341] intentionally omitted <==
- Improve
the
historically
‘low-‐value’,
high
CO2 intensity
brown
coal,
through
the
application
of new
technologies
We
will
keep
shareholders
informed
of
any
outcomes from
the
Governments
process
that
may
impact
the Company.
7. Status of Coldry Intellectual Property
Our
Coldry
patent
in
Australia
has
been
sealed,
and
was formally
advertised
as
such
in
the
Official
Journal
of
Patents on
12
April
2012.
Patents
have
been
issued
in
China,
USA,
New
Zealand,
and now
in
Australia.
Applications
are
progressing
in
Europe,
Canada,
Brazil
and India.
In
addition
to
patent
protection
in
jurisdictions
that
feature significant
brown
coal
reserves
and
a
robust
legal
system,
ECT employs
detailed
legal
agreements
as
part
of
a
broad
IP protection
strategy.
6
8. Korea Western Power/K-‐Coal/Sojitz Announcement
Korea
Western
Power
Co.
Ltd
(KOWEPO),
part
of
Korea
Electric
Power
Co
(KEPCO)
has
announced
the development
of
an
integrated
coal
project
in
East
Kalimantan,
Indonesia
with
project
partners
Sojitz
Ltd
of Japan
and
K-‐Coal
Co.
Ltd
of
Korea.
K-‐Coal
is
ECT’s
sales
and
marketing
affiliate
for
North
Asia,
based
in
Busan
South
Korea.
The
Memorandum
Of
Understanding
(MOU)
signed
on
16
May
2012,
outlines
a
plan
for
the
joint development
of
a
coal
mine,
coal
processing
facility
and
coal-‐loading
terminal
in
East
Kalimantan.
The processed
coal
will
be
exported
to
Korea
for
use
by
KOWEPO
at
its
power
stations
in
the
western
part
of Korea,
including
the
Taean
#9
and
#10
power
stations,
which
are
scheduled
for
commissioning
during
2016.
KOWEPO
notes
that
it
is
working
with
K-‐Coal
to
utilise
low
rank
coal
upgrading
technology
at
the
processing facility
to
produce
a
higher
value,
stable
coal
product
for
export
to
Korea.
K-‐Coal
has
advised
ECT
that
it
is
promoting
Coldry
technology
to
KOWEPO
for
the
project.
9. Recent Energy Related Forums
As
part
of
our
ongoing
marketing
strategies,
we
are
ensuring
ECT
is
prominent
at
appropriate
global
forums where
new
energy
solutions
and
technologies
are
highlighted
to
the
international
energy
community.
Clean Tech Forum, USA March 2012
ECT
Chief
Operating
Officer
Ashley
Moore
recently
presented
at
the
10th
Annual
CleanTech
Forum
in
San Francisco.
The
event
headline
was
“The
Power
of
Global
Partnerships”
and
our
presentation
was
focused
on
bridging
the gap
between
the
“holy
grail”
of
renewable
energy
solutions
and
achievable,
cost
effective
energy
supply.
Mr.
Moore
informed
delegates
that
our
Coldry
coal
upgrading
technology,
which
creates
black
coal
equivalent pellets
from
low-‐-‐-‐rank
brown
coal,
could
provide
this
much
sought
after
cost
effective
energy
solution, particularly
in
the
Asian
region.
Coal
use
is
forecast
to
increase
by
1
billion
tonnes
a
year
by
2035.
There
is
a
recognised
global
need
for innovations,
which
help
to
mitigate
the
inevitable
emissions
increases
due
to
increased
energy
production.
While
renewables
are
forecast
to
increase
their
market
share
from
~3%
to
~15%
by
2035,
there
exists
a tremendous
opportunity
to
target
and
mitigate
the
inevitable
CO2
increase
from
the
forecast
growth
in
coal
use by
electric
utilities,
especially
in
the
Asia
region
where
the
majority
of
the
coal
demand
growth
is
focused.
Mr.
Moore
told
delegates
that
with
the
forecast
increase
in
coal
demand,
low
rank
coal
is
becoming
increasingly more
attractive
in
terms
of
price
and
availability,
despite
its
somewhat
higher
CO2
intensity.
ECT
presented
at
the
forum
as
part
of
a
delegation
of
five
companies
led
by
consulting
firm
Deloitte.
Power Stations Conference, New Delhi India
Ashley
Moore
also
presented
at
the
Indian
Power
Stations
Conference
in
New
Delhi
on
Tuesday
14
February 2012.
The
topic
of
the
presentation; ‘Enhancing Energy Security through Lignite Beneficiation’ was
timely
and topical
given
the
very
real
coal
shortages
currently
experienced
in
India.
Key
points
noted:
- According
to
India’s
Central
Electricity
Authority,
as
at
11
Jan
2012
60%
of
India’s
generation
capacity
had
7
critical
supply
shortages
with
less
than
7
days
supply.
-
Approximately
28%
of
India’s
generation
capacity had
less
than
4
days
of
supply
on
hand. -
Some
recently
commissioned
power
stations
such as
DVC’s
Koderma
are
sitting
idle
due
to
lack
of
coal supply.
India
has
the
opportunity
to
apply
the
leading-‐edge Coldry
technology
to
its
brown
coal
reserves, transforming
them
into
black
coal
equivalent
pellets suitable
for
use
in
power
generation
and
that
are
able to
be
transported
with
lower
spontaneous
combustion risk.
Coldry
also
offers
the
ability
to
acquire
and
upgrade brown
coal
resources
in
places
like
Indonesia, further
enhancing
supply
options
for
Indian power
stations.
ECT
presented
both
its
Coldry
and Matmor
technologies,
in collaboration
with Neyveli
Lignite
Corporation (NLC),
to
a
broad
audience in
this
significant
market.
Low Rank Coal Symposium, Melbourne
The
2nd
Annual
Low
Rank
Coal Symposium
was
held
in
Melbourne
during
16-‐19 April
and
was
attended
by
over
200
delegates
from
23 countries.
The common thread throughout the event was that despite the carbon dioxide tax here in Australia and elsewhere around the world, coal demand is likely to rise by several billion tonnes a year by 2035 under current policies.
This
message
highlighted
the
very
clear
and
urgent
task ahead
–
how
best
to
mitigate
CO2
emissions
from
the inevitable
increase
in
low-‐-‐-‐rank
coal
use
driven
by emerging
nations.
CCS
programs
(Carbon
Capture
and
Storage)
were discussed
at
length.
These
initiatives
have
the
ability
to significantly
mitigate
CO2
emissions,
but
costs
are significant.
It’s
worth
noting
that
the
conference
generally acknowledged
there
is
no
silver
bullet
or
single
solution to
mitigating
CO2
from
brown
coal
use.
We
need
a multi-‐pronged
approach
to
deliver
CO2
abatement
at
least
cost.
The
conference
organisers,
Victoria’s
Department
of Primary
Industries,
agreed
to
include
an
optional
tour of
ECT’s
Bacchus
Marsh
facilities
as
part
of
the conference
program.
This
tour
occurred
on
20
April and
attracted
a
broad
group
of
30
attendees
including engineers,
technology
developers,
multinational companies,
academics
and
investors
from
around
the world.
Our
guests
were
given
a
tour
of
the
Coldry
pilot plant
in
operation,
and
an
overview
of
our
Matmor test
plant,
followed
by
an
overview
of
our
planned commercial
scale
Coldry
project
here
in
Victoria’s Latrobe
Valley.
World Coal Magazine
The
April
2012
edition
of
World
Coal
Magazine
is
out and
features
an
article
on
Coldry
titled ‘Drying
Out’.
April’s
issue
focuses
on
coal preparation
with
an
article
by
the IEA’s
Nigel
S.
Dong
on
low-‐rank
coal upgrading.
It
follows
on
from
his December
issue
article
titled
‘Soaking
it Up’
which
explained
trial
and
commercial technologies
for
drying
low
rank
coal
(Coldry included).
A
PDF
version
of
our
article
can
be
downloaded here:
Drying
Out
–
World
Coal
Magazine
–
April 2012
(http://www.ectltd.com.au/wp-‐ content/uploads/ECT.pdf)
Coldry and Matmor Workshop, Jakarta
ECT,
in
collaboration
with
K-‐Coal
and
BPPT
presented
a Coldry
&
Matmor
workshop
for
delegates
in
Jakarta, Indonesia
on
31
May.
The
workshop
highlighted
the market
drivers
behind
the
Coldry
and
Matmor opportunities
and
showcased
the
unique
features
and benefits
of
both
technologies.
Of
great
interest
were the
economics,
with
Coldry
providing
a
low
cost
drying solution
and
Matmor
providing
the
opportunity
to decouple
iron
making
from
the
price
of
coking
coal.
==> picture [253 x 131] intentionally omitted <==
8
10. Market Perspectives
Since
the
last
shareholder
update,
external
trends
have
continued
to
influence
the
regional
markets
in
which
we operate.
Australia,
as
the
world’s
largest
coal
exporter,
and
Indonesia,
as
the
world’s
largest
thermal
coal exporter,
are
sensitive
to
the
trends
of
the
major
growth
economies,
as
well
as
those
affecting
more
established nations.
Chief
amongst
them
are:
-
China
–
the
largest
coal
consuming
country
in
the
world,
and
the
major
economic
growth
engine
in
Asia -
India
–
the
second
most
populous
nation,
with
rapidly
accelerating
needs
for
primary
energy
sources -
Japan
–
a
very
important
trading
partner,
key
coal
customer,
and
still
recovering
from
disasters
suffered during
and
following
the
2011
tsunami
Factors
affecting
these
nations
and
several
others
have
led
to
some
changes
in
the
global
marketplace
over recent
months.
Specific
changes
to
draw
your
attention
to
are:
-
Significant
increases
in
China’s
domestic
coal
supply
capability,
meaning
the
need
to
purchase
growing quantities
from
foreign
sources
has
been
significantly
mitigated.
This
has
provided
Chinese
coal
traders more
opportunity
to
‘cherry
pick’
coal
purchases. -
A
tightening
of
China’s
monetary
policy,
driving
coal
traders
to
reduce
working
capital
and
de-‐stock, which
means
their
purchase
frequency
has
decreased
–
not
to
be
confused
with
a
decrease
in
demand. This
has
largely
now
been
played
out,
with
coal
stocks
now
at
the
low
end. -
Japan,
a
nation
with
significant
immediate
needs
for
coal
and
natural
gas,
recently
announced
it
has completed
the
closure
programs
for
ALL
its
nuclear
generation
facilities.
Higher
consumption
at
gas
plants –
previously
used
only
in
the
role
of
peaking
supply
–
means
there
is
a
growing
and
significant
disparity
in natural
gas
pricing
globally.
This
has
some
far-‐reaching
implications,
including
the
option
for
Japan
to import
electricity
via
sub-‐sea
cable
from
expanded
coal-‐fired
generation
in
Korea. -
India’s
ambitions
for
generation
capacity
growth
to
support
its
overall
GDP
plans
have
(finally)
recognised the
gap
in
its
ability
to
supply
via
domestic
coal
reserves.
All
new
thermal
power
stations
are
mandated by
government
to
purchase
at
least
30%
of
coal
requirements
from
imported
sources.
This
has
driven
a higher
number
of
Indian
companies
to
seek
coal
resources
outside
India. -
US
growth
in
non-‐conventional
gas
supplies
has
driven
down
US
domestic
pricing.
This
has
led
to
a
short-‐ -‐-‐
term
trend
of
increasing
export
of
US
coal
from
the
Powder
River
Basin.
It
is
also
expected
to
lead
to investment
in
LNG
facilities
to
enable
export
of
the
large
&
low
cost
supplies
of
gas,
leading
to
an equalisation
in
the
global
gas
prices
(eg.
US
pricing
of
$2-‐3/GJ
vs.
Japan
pricing
at
~$15/GJ).
ECT
has
ongoing
business
development
activity
in
India,
China,
Japan
and
South
Korea.
Overall,
the
short
term
pricing
for
benchmark
coals
has
declined,
driven
by
several
of
the
reasons
above.
While this
is
not
welcome,
underlying
growth
trends
in
Indian
demand,
pressures
on
US
gas
pricing
(upwards,
drawing coal
away
from
the
export
market),
and
an
expected
easing
of
Chinese
monetary
policy
(allowing
coal
traders access
to
increase
their
O/S
purchases),
are
likely
to
see
the
prices
remain
on
trend.
We’re
Moving!
On
Monday
2[nd] July
we
will
move
one
floor
down
to
new
offices.
The
new
address
and
phone
contact details
will
be
as
follows:
Environmental
Clean
Technologies
Limited Suite
712,
530
Little
Collins
Street,
Melbourne,
VIC,
3000,
Australia Tel:
+613
9909
7684
Email:
[email protected]
9