Amerod on course with BCBC deals

SYDNEY-based Amerod Resources yesterday extended its option by six months to purchase White Energy Technology and its patented coal technology, which processes relatively poor quality coal into higher quality, more environmentally friendly coal.

Angie Tomlinson

If the deal goes ahead in May 2006, Amerod will acquire White subsidiaries Binderless Coal Briquetting Company and Coking BCB (BCBC). White Energy previously valued BCBC at $A15.5 million.

Amerod said during the extended period option it would finalise its due diligence process and help White and BCBC to secure customers and further develop the technology. Amerod said since it first signed the option to buy in June, the level of market interest in the BCBC technology had “increased markedly, driven in part by the broader energy-supply dynamic”

BCBC coal technology results in significant cost benefits in coal transportation and processing.

In June the company executed a Heads of Agreement with one of China's largest energy companies, Datang International Power Company, to form a joint venture to use the technology in China. A technical due diligence by Datang will be completed shortly, which will allow final negotiations on the joint venture to be completed.

In Australia, a processor of Australian low-rank coal has reached agreement on preliminary commercial arrangements to initiate the design and supply of a 170,000 tonne per annum BCBC plant.

Four Indonesian companies have expressed interest in upgrading their sub-bituminous coals using the BCBC technology and have sent coal samples for testing in BCBC’s pilot plant. All four samples were deemed suitable for BCBC coal processing technology.

Following successful trials of its coal in the pilot plant, a South African company is now negotiating for a more significant trial.

Amerod was trading at A52c this morning.