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Advanced coal projects to drive new jobs

16 May 2014

Joint release with Victorian Deputy Premier the Hon. Peter Ryan MP and Victorian Minister for Energy and Resources the Hon. Russell Northe MP.

Federal Minister for Industry Ian Macfarlane, Deputy Premier Peter Ryan and Victorian Minister for Energy and Resources Russell Northe today announced $50 million for the first two advanced coal projects that will deliver new jobs and investment to the Latrobe Valley.

Mr Ryan said the projects, funded under the 50:50 State-Commonwealth Advanced Lignite Demonstration Program (ALDP), make possible the development of two demonstration plants producing high value products including oil, fertiliser and upgraded coal.

"Victoria is home to one of the world’s largest brown coal reserves and this joint investment will enable the development of new smarter, cleaner and sustainable uses for this important resource," Mr Ryan said.

"We have reached an important milestone today in announcing two successful ALDP applicants, whose proposals will provide significant opportunities for communities in the Latrobe Valley and broader Gippsland region."

Mr Northe said the Victorian and Federal Governments had committed to this project two years ago and today’s funding announcement was a significant step towards the construction and operation of demonstration plants using coal sourced from existing licence holders in the Latrobe Valley.

"Brown coal has a long history of providing benefits to all Victorians, delivering reliable and affordable power, and we believe it has a bright future helping build a better Victoria," Mr Northe said.

"The projects we are announcing today have the potential to bring significant employment and investment to the Latrobe Valley and to contribute to the economic growth of the area."

The funding agreements are based on the achievement of stringent milestones that indicate positive progress of the overall project outcomes.

Federal Minister for Industry Ian Macfarlane said Australia has a great opportunity to secure a sustainable future for Victoria’s brown coal reserves.

"This program is designed to accelerate the development of new technologies which could drive new industries and make a significant economic contribution to the Latrobe Valley and the State," Mr Macfarlane said.

"The projects being announced today are about making progress toward clean solutions for capitalising on this rich resource and seeing a bright future for the Latrobe Valley and its community."

Project 1

Coal Energy Australia has been granted $30 million for the development of a $143 million demonstration plant producing fertiliser, oil and high value coal used in steelmaking.

The project will entail:

• Building a pre-commercial lignite upgrading plant to process high value metallurgical-grade carbon and other hydrocarbon products.

• Integrating technologies for the pyrolysis of coal, based on coking, semi‐coking and advanced heating technology.

•Applying coal pyrolysis technology.

•Production of three products: low volatile solid fuel or char – a substitute for PCI coal in steel manufacture; pyrolysis oil, which can be distilled into various oils, including diesel oil for industrial heating and ammonium sulphate for use as a fertiliser or soil conditioner.

Project 2

Ignite Energy Resources has been granted $20 million for the development of an $84.3 million pre-commercial plant producing upgraded coal products for local or export markets and synthetic oil which can be refined into fuel sources such as diesel and petrol.

The project will entail:

•Building and operating a pre-commercial lignite upgrading and processing plant.

•Utilising Ignite’s unique ‘catalytic hydrothermal reactor’ technology, which rapidly converts lignite in a water slurry into an oily coal, that can be separated into high energy products.

•Production of three products: oily coal, which can be separated into high energy products: synthetic crude (Syncrude) and micronized upgraded coal; upgraded coal – for use in blast furnaces as Pulverised Coal Injection (PCI) for steel manufacturing and synthetic crude oil.

Media Contacts:

Mr Macfarlane's office 02 6277 7070

Mr Ryan's office 03 9651 1222

Mr Northe's office 03 9938 5970