White Energy Company Limited (WEC) today announced that its wholly owned subsidiary, White Energy China Limited, has entered into a non-binding Heads of Agreement with Guodian Inner Mongolian Energy Sources Co Limited, regarding the development of a coal upgrading facility in China. Negotiation of the detailed project documents remains subject to both parties completing a technical and financial feasibility study, and a subsequent decision to proceed being made by both White Energy and Guodian.
The Heads of Agreement contemplates White Energy and Guodian forming a joint venture company to build and operate a coal upgrading facility with an initial capacity of 1 million tonnes per annum. Following the successful commissioning of the first 1 million tonne per annum plant, the parties propose to increase the capacity of the project to 5 million tonnes per annum.
The Heads of Agreement anticipates that White Energy China will hold a minority stake (35%) in the joint venture company having contributed the relevant intellectual property and technical ‘know-how’ for each coal upgrading plant built by the joint venture company up to the 5 million tonnes contemplated.
Guodian will be the majority shareholder in the venture (65%) and they will be responsible for funding all of the capital costs associated with each coal upgrading plant built by the joint venture. The operating costs and profits derived from the joint venture will shared by the parties pro- rata to their relevant equity holdings in the joint venture company. The proposed transaction with Guodian represents another step for White Energy in establishing a solid platform for the global roll out of its proprietary binderless coal briquetting technology through joint ventures with world leading energy companies. Given the growth profile of China’s overall energy demands and its vast high moisture coal resources China was always a key potential market for White Energy.
