JV agreements to produce K-Fuel – coal upgrading technology

project-building-kfuel.jpgWPG Resources and Evergreen Energy have signed the agreements that set up the joint venture between them to develop and produce K-Fuel®, Evergreen’s coal upgrading technology, throughout Australia. WPG’s subsidiary, Southern Coal Holdings, will be used as the JV venture vehicle. SCH holds all of WPG’s coal assets in South Australia. Under the terms of the agreements, SCH will hold the exclusive licence for the first 15 Mt/y of K-Fuel produced anywhere in Australia, not just from SCH’s current tenement portfolio.

SCH will also have the first right of refusal to participate in production of K-Fuel in excess of 15 Mt/y, on terms to be negotiated in good faith at the time. On completion, 50% of SCH’s shares will be held by WPG, and 50% by Evergreen.

WPG has conducted due diligence on the K-Fuel process which has been developed by Evergreen over a period of many years. WPG has no doubt that the process works at both the laboratory and production plant scale, and is capable of achieving a significant increase in calorific value and reduction in greenhouse gasses when applied to sub-bituminous and lignite coals such as those at SCH’s Penrhyn and Lochiel North project areas.

The joint venture will, over time, take on its own character and be led by its own management team. WPG’s core business will remain in the iron ore space.