As part of the agreement, BHP will act as White Energy’s exclusive global marketing agent for its upgraded export coal produced through its coal technology plants.
White Energy is the licence holder of the binderless coal briquetting process that enhances relatively poor quality coal and significantly increases its energy efficiency.
White Energy managing director John Atkinson said the process has two major benefits: it results in substantial transportation and operational cost savings and it creates significant environmental benefits.
The two companies are also considering working together to apply technology to some of BHP’s subbituminous coal deposits.
“The provision of this convertible funding facility by BHP Billiton reflects well on our patented, environmentally friendly coal upgrading technology developed by the CSIRO,” Atkinson said.
“We look forward to working with BHP Billiton from both a development perspective and also in having access to their expertise and global reach in the marketing of our upgraded coal.”
Under the terms of the facility, $US7.5 million of the facility must be converted into ordinary shares in White Energy by September 2008 at a 10% discount to the then prevailing market price subject to a floor of $2.45 per share.
BHP also has the right to convert up to $US12.5 million into ordinary shares in White Energy over the next four years.
