ENVIRONMENTAL CLEAN TECHNOLOGIES LIMITED. — Capital/Financing Update 2015

Jul 7, 2015

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Shareholder)Update)–)India)Activity) Entering)Stage)1)of)the)Indian)Project)

Wednesday,)8)July)2015:) Environmental!Clean!Technologies!Limited!(ASX:!ESI)!(ECT!or! Company)!is!pleased!to!provide!the!following!update!on!its!activities!in!India.

• Tripartite!Collaboration!Agreement!progressing!through!formal!Indian!Federal!Government! clearance!processes!

• Coldry!and!Matmor!project!activities!progressing!as!Stage!1!of!the!Neyveli!Project!

Following!on!from!recent!updates,!the!Company!confirms!it!continues!to!work!toward!the!execution! of!a!tripartite!collaboration!agreement!with!two!significant!Indian!Public!Sector!Undertakings! (PSU’s),!Neyveli!Lignite!Corporation!(NLC)!and!the!National!Mineral!Development!Corporation!of! India!(NMDC),!for!the!advancement!of!its!Coldry!and!Matmor!technologies!to!demonstration!and! pilot!stage,!respectively.!

Given!that!the!nature!of!the!remaining!approvals!process!prior!to!signing!the!tripartite!agreement! are!largely!Indian!Federal!Government!clearance!formalities,!the!Company!has!undertaken!to! progress!aspects!of!both!Coldry!and!Matmor!technology!development!activity,!collectively!referred! to!as!Stage!1!of!the!project.!

In!particular,!we!are!pleased!to!inform!you!that!we!are!working!on!the!technical!and!planning! components!to!streamline!an!integrated!Coldry]Matmor!project,!including:!

• Matmor]Coldry!integration!basis!of!design!

• Coldry!plant!modifications!for!Matmor!pellet!production!

• Refinement!of!the!Coldry!detailed!specification!work!package!

• Preparation!of!Matmor!test!plant!works!

This!work!includes!finalising!engagement!terms!with!our!Coldry!EPC!and!manufacturing!partner! Thermax!and!appointing!our!new!India]based!Matmor!engineering!design!partners.!

The!Company!is!extremely!mindful!of!the!impacts!delays!can!have!on!investor!sentiment!and! believe!it!is!important!that!the!company!continue!progressing!the!preliminary!works!in!support!of! the!Indian!project.!To!this!end,!Stage!1!of!the!project!focuses!on!all!those!components!which,!while! critical!to!the!support!of!the!project,!can!be!undertaken!ahead!of!formal!execution!of!the!tripartite! agreement!by!NLC!and!NMDC,!and!also!have!universal!application!to!any!project!that!ECT!may! take!on!for!Coldry!and!Matmor.!

Background)to)the)government)approvals)for)the)tripartite)agreement)

India’s!Federal!Government!Cabinet!issued!a!Directive!earlier!this!year!that!requires!PSU’s!to!seek! its!approval!prior!to!entering!into!‘material!agreements’!with!‘foreign!agencies’.!!

This!Directive,!being!a!relatively!recent!requirement,!was!not!overtly!incorporated!into!the!normal! approvals!processes!within!the!PSU’s!and!has!added!another!layer!of!procedure!for!the!parties!to! work!through.!

The!recent!nature!of!this!Directive!also!means!that!it!has!not!previously!been!applied!in!a!real! world!situation!by!the!PSU’s,!resulting!in!the!need!to!conscientiously!navigate!its!requirements!and! applicability.!

Suite!502,!Level!P5,!9!Yarra!Street,!South!Yarra,!VIC!3141!Australia!|!Phone!+613!9939!4595!|!www.ectltd.com.au!|!ABN!28!009!120!405! Listed!on!the!Australian!Stock!Exchange!(ASX:ESI)

The!key!to!assessing!the!Directive’s!applicability!to!the!proposed!tripartite!agreement!is!the! definition!of!the!term!‘foreign!agencies’.!This!is!the!focal!point!of!clarification!being!sought!by!the! parties,!directly!with!relevant!Indian!Government!ministries,!and!with!support!from!Australia’s!High! Commission!in!India.!

At!present,!the!parties!do!not!believe!that!this!Directive!applies!to!the!tripartite!agreement!as!ECT! is!not!a!‘foreign!agency’.!It!is!believed!that!the!term!‘foreign!agency’!is!intended!to!apply!to!what!we! in!Australia!would!call!a!Government!Agency!or!Government!Enterprise,!such!as!the!various! Government!Departments!or!organisations!authorised!by!legislation!to!carry!out!government! functions!or!entities!such!as!AusTrade!or!the!CSIRO.!!

However,!given!the!material!nature!of!the!tripartite!agreement,!all!parties!agreed!to!seek!official! confirmation,!from!an!appropriate!Federal!Government!representative,!before!executing!the! agreement.!

If!the!Directive!does!apply,!then!the!parties!will!have!a!defined!pathway!to!obtain!Federal!Cabinet! approval!prior!to!signing!and!will!pursue!a!contingent!activity!set!on!the!way!through,!so!as!to! minimise!delays!to!the!project.!

If!the!Directive!does!not!apply,!then!the!parties!intend!to!proceed!to!execute!the!tripartite! agreement!at!the!earliest!mutual!availability.!

We!expect!to!receive!confirmation!on!the!above!in!due!course!and!will!provide!an!update!following! confirmation.!

Next)steps)and)current)projectJrelated)activities)

With!this!in!mind,!the!Company!is!continuing!to!advance!those!aspects!of!the!preparatory!work!for! both!Coldry!and!Matmor!that!aren’t!reliant!on!the!formal!execution!of!the!tripartite!agreement.!

Coldry!Next!Steps

The!Company!is!currently!working!with!Thermax!on!detailed!project!planning!and!pre]construction! activities.!This!will!involve!additional!detailed!engineering!to!customise!designs!to!suit!available! Indian!sub]components,!vendor!development!works!and!preparation!of!various!plant!work! packages.!

Matmor!Next!Steps

With!regard!to!Matmor!Pilot!development,!the!Company!has!been!in!discussions!with!a!leading! Indian!furnace!engineering!firm,!with!the!view!to!appointing!them!as!our!engineering!design! partner.!

Work! on! the! previously! disclosed! Phase! 2:! Defined! Testing! activity! in! our! Matmor! development! pathway!is!largely!concluded,!bar!some!minor!test!results!on!peripheral!aspects.!!

The!diagram!below!outlines!the!estimated!timing!for!each!stage!of!Matmor!development,!with!refined! timeframes,!to!be!provided!and!updated!as!we!progress.!

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----- Start of picture text ----- Preparation now under wayPhase 1: Phase 3: Phase 5:Indicative Test Plant Pilot Plant Phase 7:Benchmarking Studies Project Commercial(Complete) +6-9 mo +24-36 mo PlantPhase 2: Phase 4: Phase 6:Defined Pilot Plant DemonstrationTesting Feasibility Plant(Complete) Study +36 mo+3-6 mo + 3-6 mo----- End of picture text -----

In! relation! to! Phase! 2! outcomes,! the! Company! is! extremely! pleased! to! report! outstanding! optimisation!results!across!all!Indian!iron!ore!samples!tested.!

During!Phase!1!Indicative!Benchmarking,!testing!provided!a!relative!performance!metric!in!the!form! of!percentage!iron!yield!with!respect!to!total!potential!yield.!The!average!yield!achieved!was!~60%,! with!opportunities!identified!for!significant!enhancement.!!

Phase!2!involved!iterative!formulation!changes,!achieving!an!average!of!~90%!yield!with!a!range!of! ~85%!to!~99%,!narrowing!down!the!ore!selection!and!providing!the!green!light!to!progress!to!Phase! 3,!which!will!focus!on!the!following!activities:!!

• 1)! Recommissioning!of!the!existing!Matmor!Test!Plant!

• 2)! Installation!of!additional!sensors!to!maximise!data!gathering!capability!

• 3)! Automation!of!manually!intensive!process!steps!

• 4)! Conducting!a!series!of!continuous!runs!using!NLC!lignite!and!NMDC!ore!to!refine!the!process! and!gather!the!necessary!data!to!inform!Pilot!Plant!design!

Further!updates!on!Matmor!development!will!be!made!in!due!course.!

The!Board!acknowledges!the!patience!of!the!Company’s!shareholders!as!it!pursues!these!key! objectives!and!will!continue!to!provide!updates!in!line!with!continuous!disclosure!obligations.!

For)further)information,)contact:

Glenn%Fozard%–%Chairman info@ectltd.com.au%%

About)ECT)

ECT!is!in!the!business!of!commercialising!leading]edge!coal!and!iron!making!technologies,!which!are!capable!of! delivering!financial!and!environmental!benefits.!

We!are!focused!on!advancing!a!portfolio!of!technologies,!which!have!significant!market!potential!globally.!!

ECT’s!business!plan!is!to!pragmatically!commercialise!these!technologies!and!secure!sustainable,!profitable!income! streams!through!licencing!and!other!commercial!mechanisms.!

About)Coldry)

When!applied!to!lignite!and!some!sub]bituminous!coals,!the!relatively!simple!Coldry!beneficiation!process!produces!a! black!coal!equivalent!(BCE)!in!the!form!of!pellets.!Coldry!pellets!have!equal!or!superior!energy!value!to!many!black!coals! and!produce!lower!CO2!emissions!than!raw!lignite.!

About)MATMOR

The!MATMOR!process!has!the!potential!to!revolutionise!primary!iron!making.!

MATMOR!is!a!simple,!low!cost,!low!emission,!production!technology,!utilising!the!patented!MATMOR!retort,!which! enables!the!use!of!cheaper!feedstocks!to!produce!primary!iron.!