Shares in Blackham Resources surged as much as 83 per cent today after it signed an agreement with Synfuels China Co for the joint development of a coal-to-liquid facility near Esperance.
Shares in Blackham Resources surged as much as 83 per cent today after it signed an agreement with Synfuels China Co for the joint development of a coal-to-liquid facility near Esperance.
Both parties have signed a memorandum of understanding whereby Synfuels will carry out evaluation activities, with a view to signing a formal agreement regarding the application of its coal-to-liquids technology to the Scaddan project.
The formal agreement, subject to positive evaluation studies, is expected to be executed by the second quarter of 2010.
News of the MoU sent Blackham shares' up 20 cents, or 83 per cent, to a high of 44c before settling at 34c at 15:37 AEDT.
Following the formal agreement, Synfuels China would have the priority opportunity to negotiate to undertake the whole project design in Blackham's Coal-to-Liquids (CTL) Fischer-Tropsch Diesel Facility.
After the Esperance Facility is successfully started-up, Blackham and Synfuels China will establish a feasible commercial co-operation model to promote the prompt industrialisation of Synfuels China technology in Australia.
Blackham's Chairman, Mr Brett Smith stated "Coal to liquids in China is advancing at a rapid rate, faster than any other country in the world. Blackham is excited about its relationship with Synfuels China and looks forward to working closely with one of the world's premier CTL engineering and technology firms in the development of the Esperance Regional Facility."
"Blackham intends to dry the lignite to an acceptable level for the gasifier prior to gasification. The innovative drying technology developed by Synfuels China is of significant interest to Blackham," Mr Smith said.
Synfuels China is recognised as a world-leader in the development of CTL projects, having carried out long term research and development in the coal-to-liquids field and is accumulating production experience following the commissioning of the Inner Mongolia Yitai Group Co. Ltd's, Ordos plant and the Luan Group's Shanxi demonstration plants.
These plants are both currently operating at 4,000 barrels per day. Synfuels China's technology is also to be used in Shenhua Group Co. Ltd's 4,000 barrel per day FT CTL plant in Ordos, Inner Mongolia. All three of these demonstration plants are planned to be expanded to over 120,000 barrels per day within 12 months.
Prior to entering the MOU, Synfuels China reviewed the lignite analysis for the Scaddan and Zanthus Energy Projects. Blackham will now provide lignite samples to Synfuels China for testing and evaluation by Synfuels China.
Blackham is evaluating the development of the Scaddan and Zanthus Energy Projects into Australian's premier CTL FT Diesel Facility. Blackham currently controls a combined lignite resource in excess of 1.11 billion tonnes estimated in accordance with the JORC Code.