Denver-based Evergreen Energy said Wednesday it has struck a deal to bring its technology for improving coal to the land Down Under.
WPG Resources, an Australian mining firm, has signed a memorandum of understanding to jointly develop and commercialize Evergreen’s K-Fuel technology.
WPG has also invested $2 million in a $16 million private placement by Evergreen.
“Our joint venture is to build a plant to sell K-Fuel in Australia primarily for the export market,” said executive chairman Ilyas Khan, Evergreen’s executive chairman.
K-Fuel uses heat and compression to remove moisture from coal and improve its value.
In Wyoming’s Powder River Basin, high-moisture coal may, if there is a buyer, go for $12 a ton at the most, Khan said.
But after it is upgraded, the same coal can sell for $50 a ton or more.
Australia has plentiful coal reserves, about 8 percent of the world’s total, and the country exports about 75 percent of its production, according to a report from the Gladstone Centre for Clean Coal.
Thermal coal from Australia sells for $80 to $90 a metric ton to China, Khan said.
Even though China ranks as the world’s largest coal producer, with about 40 percent of global production, it needs exports to fuel its growing industrial base.
Khan said Evergreen’s technology has been used primarily in North America.
“Our new venture establishes a focused presence on the Asian markets where we believe the conditions for adopting the K-Fuel technology are most attractive,” he said.
Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com
