Fremantle-based Oil Mallee Company Ltd hopes to capitalise on current market sentiment by working towards bioenergy production with an initial $300,000 capital raising and possibly listing on the Australian Securities Exchange.
Fremantle-based Oil Mallee Company Ltd hopes to capitalise on current market sentiment by working towards bioenergy production with an initial $300,000 capital raising and possibly listing on the Australian Securities Exchange.
The Oil Mallee Company may also join on the ASX its joint venture partner, CO2 Group Ltd, which is the dominant player in the nation’s carbon offset sector.
Formed in 1997 as the commercial arm of the Oil Mallee Association, the Oil Mallee Company has played a major role in the development of the state’s oil mallee industry, with mallee eucalyptus plantings across Western Australia’s Wheatbelt currently at 13,000 hectares.
The company has pursued economic returns through its carbon sequestration program for carbon emissions offsets by industry, engaging in tree-planting projects for organisations such as Japanese utility Kansai, HISmelt, Western Power and Woodside.
Following the success of these projects, the company entered into an exclusive joint venture with the CO2 Group in 2004, allowing the group exclusive rights to the company’s knowledge and intellectual property associated with its offsets program.
Following this agreement, the CO2 Group became the largest individual shareholder of OMC, and has since undertaken the majority of carbon sequestration projects via the joint venture.
OMC managing director Simon Dawkins said the company was now looking to capitalise on current concerns surrounding climate change and pursue further investment opportunities.
“We have acquired significant knowledge and relationships, and we believe those relationships will develop even more significant income for the company going forward,” he said.
“We need to ensure we’re in a strong position to take advantage of market sentiment and policy changes as they come about.”
Mr Dawkins believes the uptake of emissions offsets programs by industry will be further accelerated if regulatory changes, such as an emissions trading scheme or mandatory reporting, are introduced.
“People will be concerned about what’s going public – and they will work to reduce their emissions. [Trees] will be a significant part of programs to reduce emissions, and in many cases will be lower cost than investing in new capital,” Mr Dawkins told WA Business News.
While the company will retain its involvement in carbon sequestration through the JV and existing projects, the additional capital, along with income from these activities, will be targeted towards the development of opportunities in bioenergy generation.
In June 2006, the company wound up a Western Power-commissioned wood biomass energy plant trial in Narrogin, with Innovation Minister Fran Logan applauding the trial as a success.
The company is now awaiting an information memorandum from the minister to encourage investor interest in commercialising the technology at that, or an alternative, location.
With OMC owning the patent to the distilling system trialled at the plant, Mr Dawkins believes the company stands to benefit significantly from the development of a commercial bioenergy industry, predominantly through supply arrangements.
It is estimated that 20 million trees would be required to sustain a 5MW biomass energy plant.
“Were confident of the fact that mallees could be grown for this purpose – you can harvest these countless times, they are not destroyed when harvested,” Mr Dawkins said.
The company is also looking to develop mallee products for sale in both domestic and international markets.
It aims to establish an agreement with eucalyptus oil manufacturer, Kalannie Distillers, to develop and market eucalyptus oil. The oil has a variety of industrial uses, including as an environmentally friendly solvent, cleaning agent and, in its purest form, as a fuel additive.
Mallee wood pellets, which according to Mr Dawkins already are in strong demand from parts of Europe, can be used for heating and co-firing coal, reducing its carbon signature.
The company is also researching potential markets for charcoal, undertaking trials for a number of industrial applications of the substance including for soil enhancement and as a reductant in the metals industry.
