(EnergyAsia, December 11 2012, Tuesday) — South Korea’s K-Coal Co Ltd has signed a letter of intent (LOI) to become a 5% equity partner in a Coldry commercial demonstration plant (CDP) to be established by Australia-listed Environmental Clean Technologies (ECT) Limited.

In a letter of intent (LOI) signed by the two companies, ECT said K-Coal will act as its agent to market the plant to the Asian market.

ECT is working on a plant to demonstrate its proprietary Coldry technology to upgrade low-quality coal.

“The LOI will become binding upon the securing of a defined level of success in regard to the Australian government’s Advanced Lignite Demonstration Program (ALDP) funding for the CDP project,” said ECT.

“The LOI obliges K-Coal to contribute 5% of the equity required for the subsequent two million tonnes per annum (mtpa) commercial-scale plant on proving of the feasibility of Coldry production at commercial scale through the successful operation of the CDP.”

Describing this as a very “significant development”, ECT executive chairman Mike Davies said it augurs well for other equity participation in the CDP.

He said: “Whilst K-Coal’s equity interest is modest, we believe it will have significant influence on other Asian resources companies, including several Korean companies, whom we are in negotiations with, regarding equity participation in the CDP.

“We hope to announce the outcomes of these negotiations during the first quarter, after we re-engage with these parties once the status of ALDP shortlisting has been announced by the government in mid December.”