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ESI Forms Strategic Alliance With JC Steele

ENVIRONMENTAL CLEAN TECHNOLOGIES FORMS STRATEGIC 
ALLIANCEWITH JC STEELE 
 
Tuesday, 19 October 2010:
 
Environmental Clean Technologies Limited (ASX:ESI) has taken another step toward commercialising its revolutionary Coldry brown coal drying technology,forming a strategic alliance with United States based global equipment supplier JC Steele & Sons (JCS). 
 
Significant in-kind contribution from JCS 
 
Improved commercial scale production outcomes for Coldry 
 
Enhanced Coldry pellet strength and durability 
 
The Collaboration Agreement means JCS will supply a `series 25' pug mill and extruder combination, at its cost to ECT's Coldry pilot plant at Bacchus Marsh, with a replacement value in excess of $250,000, which will assist in the localisation study leading to the Victoria Coldry Project at Loy Yang Power Station and enable ECT to produce larger `test burn' quantities of Coldry for its sales prospects.
 
The deal will deliver world-class support for the ongoing refinement and optimisation of a key stage in the Coldry process.
 
Under the terms of the agreement JCS will retain ownership of the equipment, ECT will manage the installation and maintenance, with JC Steele providing O&M services and support, and being
recognised as ECT's preferred supplier as it moves toward establishing Coldry plants around the
world. ECT and JCS will engage in joint testing and development activities.
 
Activity leading to this alliance saw Victorian coal sent to JCS' head office in NC, USA and 
pelletised under laboratory conditions, delivering significantly improved pellet quality lighlighted by a stronger, more robust product compared with ECT's smaller scale pilot plant equipment.
 
"The pilot plant extruder, while effective at this size plant, is of a different configuration to what we intend to use at commercial scale. While the results have been viable from our pilot plant, the collaboration with JCS and the exponentially improved performance of their equipment means our process modelling and business case are significantly improved", said ECT's Coldry Business Manager, Ashley Moore.
 
The performance data from testing has led to revised engineering calculations that indicate that Coldry can be deployed in Victoria for less than US$100/t CapEx and $8/t OpEx (exc. cost of raw coal and debt).
 
ECT Chief Executive Mr Kos Galtos said he looked forward to collaborating with one of the worlds most experienced extruder manufacturers and maintainers.
 
He said the deal was a `win-win' scenario for both companies, with ECT able to further
inform and refine the commercial design of the Coldry technology, improving capital and operational cost estimates at commercial scale due to improved configuration and tuning of extruders in line with the characteristics of subject coals.
 
"It means that black coal equivalent pellets produced using Coldry technology will be even
better quality and more cost effective," Mr Galtos said. "In addition, we will now be able to deliver large sample production runs from our pilot plant for power stations seeking to test burn Coldry due to the increased capacity the equipment will provide."
 
Michael Haycock, Managing Director of JCS Australia commented "We keenly support the 
development of the Coldry technology and see it as an exciting opportunity to increase our
footprint in a new market vertical. We feel we have a lot of expertise to contribute and look forward to working with ECT."
 
Extruders are required for the third stage of the Coldry process, known as `Attrition and
Extrude'.
 
The attritioning, or shear-intensive mixing of the lignite, forms a paste, which initiates a
chemical reaction in lignite enabling a black coal equivalent Coldry pellet to be produced.
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