Hazer Group (ASX:HZR) - hydrogen & graphite from hydrocarbons


by Anna Napoli

Hazer Group Limited (ASX:HZR) Managing Director & CEO Geoff Ward discusses the company's hydrogen and graphite production technology, progress towards first commercial scale plant and the market opportunity.

Katrina Bullock: Hello, I'm Katrina Bullock for the Finance News Network and joining me today at FNNs investor event is Geoff Ward, the managing director of Hazer Group (ASX:HZR). Jeff, welcome to the network.

Geoff Ward: Thank you very much, Katrina.

Katrina Bullock: Now Geoff, could we start with a bit of an introduction to the company?

Geoff Ward: Well, Hazer (ASX:HZR) is a low cost, low emission hydrogen and graphite production technology company. The production technology takes methane from natural gas or biogas and creates hydrogen and graphite, so two valuable products and no emissions. It uses iron ore as a low cost process catalyst and was originally developed by the University of Western Australia.

Katrina Bullock: There's been a lot of talk about hydrogen, particularly as we move to a low emission, low carbon economy. Can you tell us a little bit about that?

Geoff Ward: Well, hydrogen can be used in many ways. It can be used as a transport fuel through the use of hydrogen fuel cell vehicles, and they're becoming readily available in trucks, in ferries, in trains and production cars. It can also be used to provide low emission heat and power for building heating, commercial heating or industrial use. It can also be used for transporting or storing renewable energy. And hydrogen is widely used as a feedstock in the chemical industry, in the manufacture of fertilisers, explosives, petrochemicals, and so the use of a low emission source of hydrogen such as the Hazer Process can help reduce the carbon impact of all those industries also.

Katrina Bullock: Thanks Geoff. So I understand that you're on a journey towards commercialisation. Could you tell us a little bit more about that? Starting with the Hazer Process?

Geoff Ward: The Hazer Process is a low cost, low emission way of making hydrogen and graphite from methane feedstock through the use of iron ore as a catalyst. We produce two products in the process. That's one of its key advantages and is also how we drive our low emissions, since we capture the carbon associated with the methane feedstock as a graphite product rather than as a carbon dioxide waste.

Katrina Bullock: And how are you a pilot plant operations progressing?

Geoff Ward: The Hazer technology spent many years in the laboratory in both the University of Western Australia and Sydney. And over the last two years we've had a really successful program of pilot operations. We have two pilot plants now in operation, one owned by the Hazer Group and one owned by our graphite partner, Mineral Resources (ASX:MIN). And those pilot projects have given us sufficient data to be confident to design a full scale commercial plant. And that's our focus now as we head through 2019.

Katrina Bullock: And where are you up to in the development pathway?

Geoff Ward: So we've just recently completed a feed study, a front end engineering design study for a commercial demonstration plant and that will be our 100 tonne per annum hydrogen production facility. And we just last week we announced a memorandum of understanding with Water Corporation in Perth to explore with them co-locating the plant on their Woodman Point Wastewater Treatment Plant. So we're looking to bring that commercial development plant into construction this year with a view to having it operational at the end of next year.

Katrina Bullock: Now turning to your financials, can you give us a bit of commentary on your funding situation, and your share price over the past 12 months?

Geoff Ward: So Hazer (ASX:HZR) is a publicly listed company, as you would obviously know. We have a reasonably strong balance sheet. We had around $7 million of cash at the end of January and we have a relatively low cost burn rate and a small concise team. So we are well funded for the next one to two years of development, market development, commercial development. We will be seeking external funding to build the commercial development plant. We've announced a $15 million capital estimate for that plant, and we're going to seek to fund that through both grant funding, market funding, and possibly some debt funding.

Katrina Bullock: Now before I let you go, Geoff, one last question. Why should investors consider adding Hazer Group to their portfolio?

Geoff Ward: Well, Hazer is one of the only ways you can gain exposure to the growing hydrogen sector. Hydrogen has been identified as a key component for the next wave of investment as we decarbonise, and we're seeing increased investment in hydrogen infrastructure, in hydrogen products, in hydrogen production. We think the Hazer Process offers a compelling opportunity to use locally produced biogas resources to produce low cost, low emission hydrogen close to future customers.

Katrina Bullock: Geoff Ward, thanks for the update.

Geoff Ward: Thank you very much Katrina.