ENVIRONMENTAL Clean Technologies LTD

ABN 28 009 120 405

31 July 2007

Company Announcements Office Australian Stock Exchange Limited

By e-Lodgement

OVERVIEW OF COLDRY PROCESS

Please find attached Overview of the Company's Coldry Process, which the Company intends to distribute to potential customers and investors as part of the commercialisation phase of this unique patented cleaner coal initiative.

For further information contact Con Galtos on 0413 747 077

COLDRY® - OVERVIEW

Environmental Clean Technologies Limited Level 13, 222 Kingsway
South Melbourne Victoria 3205 Australia

$+61(0)369840800$ [email protected]

EXECUTIVE SUMMARY	3
INTRODUCTION	$\hat{A}$
THE PROCESS	5
Comparison Data Comparison: Basic Features Comparison: Electricity Generation	6 $\rm G$ 6
BUSINESS CASE ANALYSIS	ng.
Capital Expenditure	$\overline{f}$
Operating Expenditure Fuel Costs Labour Maintenance Electricity Administration Royalties/Licence Fees	$\boldsymbol{7}$ $\overline{7}$ $\begin{array}{c} 7 \ 7 \end{array}$ $\overline{7}$ $\overline{7}$ $\overline{7}$
Cost per Tonne: Raw Brown coal	$\overline{7}$
VALUE ADDED	8
Emission Savings	8
Ash	8
Water	8
Coal saved	8
EXAMPLE CALCULATIONS Brown coal Plant - 1000 MW (10% Coldry®) Brown coal Plant - 1000 MW (20% Coldry®) Black Coal Plant - 1000 MW	$\mathcal{G}$ $\mathbb{Q}$ ${\mathcal{G}}$ $\rm{G}$
CONCLUSION	10

Note: All examples, unless otherwise stated, are based on Latrobe Valley, Victoria brown coal. While these results are indicative of Coldry® performance, brown coal composition can vary widely between deposits and is subject to individual characterisation and testing.

Executive Summary

The unique, patented Coldry® process is the world's first economic method of dewatering brown coal (to an average of 12%), to create a stable, storable, transportable black coal substitute feedstock (of equal or better energy value), with:

Exponentially enhanced energy pellets (24 MJ/kg from 8.4MJ/kg Victorian brown coal)
Recovery of 95% of water expelled in the production process
- o 1000L per 2 tonnes of 60% moisture content brown coal used
- Contributing to power station water needs and 'drought-proofing' strategies $\circ$
Accumulation of up to 90% less Ash than typical black coal
o Increasing operational efficiencies and reducing removal costs
Immediate deployability in existing brown coal boilers (10% to 20% of total energy mix)

$\circ$	Decreasing coal requirement	$7\%$ to $14\%$
	Producing emission reductions	$6\%$ to 11%

$\circ$ Reducing ash accumulation $2\%$ to $4\%$
Business case drivers for introduction of modernised brown coal boilers

o Decreasing coal requirement	up to 48%
o Producing emission reductions	up to $40\%$
o Reducing ash accumulation	up to 32%

The mechanically simple Coldry® process achieves this by initiating an exothermic chemical reaction that creates a natural low heat (35°C - 40°C), low pressure method for expelling water to produce a densified, stable, transportable pellet for use in electricity generation and coal-to-oil applications, via the following production phases, for less than A\$20 per tonne;

Crushing, screening and addition of water to raw feed stock
Initiation of exothermic chemical reaction to expel water, through attritioning & extrusion of a plasticised mixture
Warm air toughening of extruded mixture on a conditioning conveyor prior to Pack Bed Dryer delivery
Formation of Coldry® pellets and removal/collection of moisture in a Pack Bed Dryer
Stockpiling of, high energy, Coldry® pellets and distilled water ready for use or transport $\bullet$

Existing brown coal power stations that consume Coldry® pellets immediately gain the benefit of, potentially tradable, emission savings (A\$20 to A\$40 per tonne), reduced ash costs (A\$50 to A\$200 per tonne) and access to increased water supply, without significant modification to existing plant infrastructure. These factors also drive the business case for evolution to super critical boiler technologies, with their ensuing efficiency and financial benefits.

New power stations can also be built with confidence that they can secure supply of a 'New Coal', based on abundant, under exploited, brown coal reserves that performs extremely well with 'next generation' gasification technologies.

The high chemical reactivity of Coldry® pellets delivers higher oil yield per tonne of coal and enables the products use as an ideal front end feedstock solution for coal-to-oil technologies, eliminating the need for costly and energy intensive oil slurry drying.

Introduction

Due to high moisture content and the spontaneously combustible nature of brown coal, the fuel in its natural form is inefficient to burn and costly to transport, and this has restricted use, almost exclusively, to mine mouth electricity generation.

Most research into dewatering or drving brown coal has focused on costly 'heat and squeeze' methods using temperatures over 200C and pressures of around 1.3 tonnes/cm². As much of the moisture in brown coal is locked in at a molecular level, it has proven difficult to break the bonds and release water in this way, with 'heating and squeezing' only proving able to reduce moisture content from 60% to around 30%, leaving the rest trapped in the coal.

By building on the research initially conducted by CRA and Melbourne University in the early 1980's, Coldry® delivers a patented process that changes this paradigm by 'unlocking' the natural tendency of brown coal to 'expel' moisture, providing the first scalable, immediately deployable and cost-effective, commercial brown coal dewatering solution, to produce a stable, storable, transportable, energy rich fuel pellet.

The Process

Once Brown coal has been excavated from a mine, crushed by hammer mill (<6mm), then passed through screens to achieve homogenous consistency, fines are transported to the Coldry® plant to be processed into Coldry® pellets, via the following production phases.

Step 1. Raw Feed Stock

Brown coal fines, of between 30-70% moisture content and of a soft, friable consistency, are fed into a surge bin" (storage hopper with automatic variable feed control) and screened again, to remove foreign objects, prior to the addition of a small quantity of water (up to 5% depending on inherent moisture of the coal).

Step 2. Attritioning & Extrusion

The coal and water mixture is fed into an "Attritioner" which rubs the coal faces together, which initiates an exothermic chemical reaction that triggers a natural process for expelling water from the coal. This reaction accelerates when the now plasticised mixture is extruded under low pressure onto a conditioning belt.

Exothermic Chemical Reaction

A flow of chemical reactions initiated by the attritioning-shearing step destroys the original microstructure of the coal to a significant extent, releasing finely dispersed water, which coalesces with the dispersed coal fragments to form a plastic mass.

This small particulate form of coal is now able to move freely and re-associate effectively during drying/densification. Additionally, shearing has the effect of creating newly fractured coal surfaces and exposing reactive molecules which are able to participate in new bond forming reactions, some of which form early in the shearing process.

In keeping with the chemical cross-linking above, a discemable temperature rise occurs in the coal mass during the Attritioning period. Humic acid constituents of brown coal are bound covalently into the densified products and are involved in the cross-linking associated with the densification process. The coal particle surfaces continue to bond together during the 48 hour drying - with their strength reflecting the extent of cross-linking which has occurred.

Step 3. Conditioning Conveyor

Warm air, at 35C to 40C heats the extruded mixture for an hour, at which point it is sufficiently toughened to withstand delivery via conveyor belt into the Pack Bed Dryer.

The toughness of the extruded Coldry® mixture is characterised by an increased level of firmness and a dry surface, and as it hardens, it contracts and breaks up into 'pellets'.

Pack Bed Dryer & Water Recovery Step 4.

The newly formed pellets are conveyed into the vertical Pack Bed Dryer. Warm air at 35C-40C, harnessed through heat exchange from the neighbouring power station, is circulated through, collecting and removing moisture from the pellets.

The highly saturated warm air exiting the pack bed dryer at 30C is chilled causing the water to condense and be collected (either in tanks or dam) as distilled water.

After 48 hours in the pack bed dryer (depending on the coal's starting moisture level), the pellets have been dewatered to around 12% moisture content and are discharged from the base.

Coldry® Output Step 5.

The stable, stockpiled, high energy, Coldry® pellets are now ready for use or transport, and the recovered, distilled, water may be used in neighbouring power stations to offset water use in electricity generation, or other commercial purposes.

Comparison Data

Comparison: Basic Features

Feature	Brown Coal Morwell, Vic	Black Coal Qld CSIRO Data	Black Coal NSW CSIRO Data	Coldry^® Pellets
Moisture	59.3% wb	$15.5\%$ adb	$3.3\%$ adb	$12\%$ adb
Volatile matter	$20\%$ wb	22.5% wb	$26.5\%$ wb	48.9% wb
Fixed carbon	19.86% wb	$44.1\%$ wb	46% wb	49.1% wb
Ash	$0.9\%$ wb	17.9% wb	$24.2\%$ wb	$2.4\%$ wb
Total sulphur	$0.12\%$ wb	$0.25\%$ wb	$0.58\%$ wb	$0.3\%$ wb
NWSE	8.4 MJ/kg ar	20.1 MJ/kg adb	23.79 MJ/kg adb	24.6 MJ/kg adb

Note: wb - wet basis, adb - air dry basis, db - dry basis, daf - dry ash free basis, ar - as received basis. Source: Black Coal data taken from averages on CSIRO database (http://www.det.csiro.au/cgi-bin/bfb-search/). Brown coal data taken from Perry G.J. and Allardice. D.J., 1987. New Research and Development initiatives for the use of Victorian brown coal. Coal Res. Conf. N.Z. Proc. I, Section 4, Paper R 4.1. Coldry Data taken from test commissioned by ECT Limited.

Comparison: Flectricity Generation

Per MWh	Black coal Qld CSIRO Data	Black Coal NSW CSIRO Data	Coldry^® Pellets
Feedstock required	0.451	0.38t	0.365t
Carbon	0.232t	0.224t	0.215t
CO2 emissions	0.86t	0.829t	0.795t
Ash	0.08t	0.092t	0.008t

Note: Figures based on as mined coal used in a black coal power station with 40% efficiency

Business Case Analysis

Capital Expenditure

To facilitate indicative calculation of scaling up costs, plant sizing is based upon aggregation of Coldry® Production Modules, with an average production capacity of 150,000T p.a.

In actuality, output capacity of each Coldry® Production Module is dependant upon the starting moisture content of the specific brown coal being used, as more moisture increases drying time and vice versa, resulting in greater return on assets in applications where coal is less moist.

Accordingly, when Latrobe Valley Brown coal with a starting moisture content of 62% is processed, Coldry® pellets with moisture content of 12% are delivered, with the following key numbers;

Module Output: 150,000 tonnes per annum
Module Cost: A\$18M first 4 Modules, and A\$12.6M thereafter $\overline{a}$
24 hrs / 350 days p.a. $\bullet$ Operating:
25 Years, Straight line $\bullet$ Amortisation:

Note: Current capital estimates are based on a scalability report by GRD Minoroc using off the shelf equipment currently available, such as extruders designed for brick works. Significant opportunity exists for the achievement of cost savings in custom designed equipment tailored to the low heat, low pressure nature of the Coldry® process.

Operating Expenditure

Fuel Costs

Due to the spontaneously combustible nature of Brown coal, making it uneconomical to export, pricing is based upon cost of extraction.

A\$ 3.50 to A\$5.00 per tonne Av. Cost

Labour

The labour involved in the manufacturing process is calculated as follows:

1 Labour Unit per module per hour
Cost per hour A\$39.00

Maintenance

Maintenance rate of 2% p.a. of total CapEx is reflective of the low heat, low pressure environment and similarities with standard materials handling plant and equipment.

Electricity

Minimal electricity is required in the production process due to the co-location of Coldry® plants with power stations and access to efficient heat transfer and inexpensive electricity at point of generation.

• Electricity cost estimate - A\$0.50 per tonne of Coldry® produced

Administration

A nominal figure has been allocated for plant Administration Support

Administration cost estimate - A\$0.50 per tonne of Coldry® produced

Royalties/Licence Fees

Royalties and Licence fees are based on maximum production capability and include participation in the scaling up process and ongoing support, and are as follows;

A\$2 per tonne $\alpha$ Onsite consumption
+30% of gross margin • For export

Cost per Tonne: Raw Brown coal

The raw brown coal required to produce one tonne of Coldry® pellets will vary depending on starting moisture content. As an indication, two tonnes of 62% moisture brown coal produces 1 tonne of 12% moisture Coldry pellets. Therefore, brown coal extracted at a cost of A\$5 per tonne, results in A\$10 worth of raw wet brown coal being required to produce 1 tonne of Coldry® pellets.

www.coldry.com

Value Added

Emission Savinas

Internal modelling demonstrates that Coldry® delivers immediate, potentially tradable (circa A\$20 per tonne), emissions savings, as follows:

Brown Coal (Old power stations)
10% Coldrv® mix 6.0% $\circ$
20% Coldry® mix $\sim$ $10.5%$ $\circ$
Brown Coal (New power stations)
o 100% Coldry® up to 40.0%
Black Coal
o 100% Coldry® $\sim$ up to 2.4%

Ash

The rate at which ash accumulates in a power station boiler determines the outage frequency, with lower accumulation requiring less frequent maintenance shut downs, there by increasing return on assets.

Coldry® with its enhanced energy yield and low ash content (<2.4%), delivers immediate benefits to all users through reduced ash accumulation.

Brown Coal (old power station)

	o 10% Coldry® mix		2.2%
	o 20% Coldry® mix	$\sim$	3.8%
	Brown Coal (new power station)
	o 100% Coldry®	Service	8.9%
Black Coal
	$\circ$ 100% Coldry®		up to 90.0%

Water

The Coldry® process recovers up to 95% of the moisture expelled from the brown coal input, delivering distilled water that can be used to considerable benefit by contributing to the power stations water needs and helping 'drought-proof' operations.

Alternatively, captured water can be used for other industrial or environmental purposes.

Coal saved

Coldry® is a high energy feedstock that cost effectively increases mega joules per tonne, requiring the overall burning of less brown coal to achieve the same energy output.

$\ddot{\bullet}$ Brown Coal (old power station)

	o 10% Coldry® mix		$>7.0\%$
$\circ$	20% Coldry® mix		$>13.0\%$
	Brown Coal (new power station)
	$o$ 100% Coldry®		$>31.0\%$
Black Coal
	$\circ$ 100% Coldry®	$\sim$	N/A

Example Calculations

Brown coal Plant - 1000 MW (10% Coldry®)

Electricity Production Capacity 8.400.000 MWh $\bullet$ .
Plant Efficiency $\bullet$
Energy Yield Required $\bullet$
30.24 M GJ

$30%$

Carbon Tax/Credit $\bullet$
A\$20 per tonne $CO²$

	Coldry® Mix	Brown Coal Only	Difference
Raw Coal Required	11.1 M tonnes	12 M tonnes	7.8%
Feedstock Required	10.06 M tonnes	12 M tonnes	16.2%
CO2 Emissions/MWh	1.33 tonnes	1.42 tonnes	6.33%
GJ per tonne	10.02	84	19.3%
Cost per GJ	A\$0.36	A\$0.42	14.3%
Cost per MWh	A\$6.65	A\$7.14	6.8%

Brown coal Plant - 1000 MW (20% Coldry®)

Electricity Production Capacity 8,400,000 MWh Plant Efficiency $30%$ $\bullet$
Energy Yield Required $\bullet$ .
Carbon Tax/Credit $\bullet$
A\$20 per tonne CO²

	Coldry^® Mix	Brown coal Only	Difference
Raw Coal Required	10.39 M tonnes	12 M tonnes	13.4%
Feedstock Required	8.66 M tonnes	12 M tonnes	27.8%
CO2 Emissions/MWh	1.27 tonnes	1.42 tonnes	10.56%
GJ per tonne	11.64	84	38.57%
Cost per GJ	A\$0.31	A\$0.42	26.2%
Cost per MWh	A\$5.24	A\$7.14	26.6%

30.24 M GJ

Black Coal Plant - 1000 MW

Electricity Production Capacity
$\bullet$ Plant Efficiency

8,400,000 MWh

\$20 per tonne $CO²$

Energy Yield Required $\bullet$
30.24 M GJ

40%

Carbon Tax/Credit $\bullet$

	Coldry®	Black Coal	Difference
Feedstock Required	3.07 M tonnes	3.18 M tonnes	3.5%
CO2 Emissions/MWh	0.8 tonnes	0.82 tonnes	2.5%
GJ per tonne	24.6	23.79	3.4%
Cost per GJ	A\$1.42	A\$2.31	38.5%
Cost per MWh	A\$12.80	A\$20.81	38%

Conclusion

Coldry® delivers a commercially viable, low cost per tonne, brown coal dewatering solution that is immediately deployable, which enables brown coal to be upgraded to compete directly with good black coal. with the added benefit of lower ash resulting in greater thermal efficiency and less plant downtime due to accumulation.

Existing brown coal power stations gain immediate CO₂ reductions (around 6% to 14%) from Coldry® without significant modification to existing plant infrastructure, and the new feedstock supports the business case for evolution to super critical boiler technologies and the efficiency/financial benefits they deliver.

As Coldry® has relatively high chemical reactivity compared to black coal, plus ash and emissions benefits, new power stations can be built with confidence that they can secure supply of a 'New Coal' that performs extremely well in 'next generation' gasification technologies.

The high chemical reactivity of Coldry® pellets results in higher oil yield per tonne of coal and enables its use as an ideal front end feedstock solution for coal-to-oil technologies, eliminating the need for costly and energy intensive oil slurry drying.

Example Calculation Additional Assumptions from page 10 Brown Coal

Raw brown coal cost $\ddot{\phantom{a}}$
$\bullet$ Ash removal cost
ECT Royalty $\bullet$
$\bullet$ Capital cost

Black Coat

Black Coal cost
Raw brown coal cost
$\hat{\mathbf{o}}$ Ash removal cost
ECT Royalty $\bullet$
Capital cost i.
Transport not included $\mathbf{z}$

A\$5 per tonne A\$50 per tonne A\$2 per tonne

A\$ amortised over 25 years

A\$55 per tonne A\$5 per tonne A\$50 per tonne AS2 per tonne A\$ amortised over 25 years

AI assistant

ENVIRONMENTAL CLEAN TECHNOLOGIES LIMITED. Investor Presentation 2007

64819_rns_2007-07-30_62b424da-c154-498b-9f56-d2dc50f3861e.pdf

OVERVIEW OF COLDRY PROCESS

COLDRY® - OVERVIEW