Transforming low grade lignite coal into a high energy, low emission product is what Australian company GTL Energy have realised.
Teaming up with New Zealand Government-owned Solid Energy, South Australian-based GTL Energy has developed the technology set to upgrade NZ’s coal energy sector.
The development involves the conversion of low-grade coal into a higher-rank fuel by removing moisture from the coal and transforming it into briquettes which have an increased energy content, reduced emissions, improved handling and transportation characteristics and increased market value.
Already implemented in New Zealand’s first commercial coal upgrading plant, the companies today announced they have achieved sustained production runs.
Further project development, plant operation and global technology deployment will be done under the newly formed joint venture company GTLE Development Ltd of which Solid Energy have a 20 per cent stake.
Discussing the joint venture, Solid Energy’s group manager coal developments, Brett Gamble said Solid Energy and GTL have worked closely over a number of years to develop the technology and they are positive about the future prospects.
“The opportunity to combine our collective expertise and assets to accelerate commercialisation and deployment of the technology makes a lot of sense for both of us,” Gamble said.
“We are excited about the future of this proposed venture and believe the transformation of low rank high moisture coal into higher energy briquettes has potential to create significant value.”
GTL Energy’s chief executive Fred Schulte, said this joint venture will not only allow the technology to be deployed globally but will also provide proof of technology.
“This deal will create a company with the ability to accelerate technology deployment,” he said.
“The achievement of continuous, safe and reliable production at the New Zealand plant will provide the demonstration that is expected to support more widespread adoption.”
Schulte is confident that challenging coal and capital markets will not hamper the project and technology’s success.
“Despite challenging coal and capital markets, we have exciting projects which make sense regardless of market timing, and we look forward to bringing these into fruition through 2013,” he said.
Solid Energy is commissioning its Mataura briquette plant in NZ’s Southland, which will produce lignite briquettes for the country’s South Island energy market using GTL’s technology.
Once fully up and running the Mataura plant will produce about 90,000 tonnes a year of low-moisture and high-energy briquettes from about 150,000 tonnes of lignite per year.
The briquette product will eventually be trialled in thermal export coal markets, but will first be rolled out to South Island customers.
Inputs for the plant will come from Solid Energy’s nearby New Vale Mine.
The progression of the briquette project has not been without controversy; the now annual protest festival ‘Keep Coal in the Hole’ was established in the Southland township of Gore as environmentalists and locals united to oppose Solid Energy’s plans to mine lignite coal in the area.
Solid Energy says there are 3 billion tonnes of lignite available in the NZ coalfields of Waimumu, Croydon and Mataura.
Lignite is the lowest quality coal, halfway between peat and coal and is usually converted into briquettes, fertilizer, syngas and diesel.
Southland is home to prime agricultural land, Queensland farmer come activist Rob McCreath at this year’s festival said that it was "hard to imagine a more productive farming area".
"It's disgraceful that you have a government-owned company and they're allowing it to dig up this beautiful farmland. That's 100 per cent stupidity," McCreath said.
In an act of symbolic protest earlier this year, festival organisers dropped off a basket of locally-grown vegetables and mothballs to the lignite briquetting pilot plant near Mataura.
"We've spent $29 million of taxpayers' money on this lignite project already – and any more money spent would be a waste," festival spokeswoman Rosemary Penwarden said.
Solid Energy spokesman Bryn Somerville said the perspectives of the Coal Action Network were in opposition to the coalminer’s. The miner believes lignite could be used to lower New Zealand's dependence on imported diesel and fertilizer, and provide an affordable and reliable energy source.
The company’s chief executive Don Elder has also previously stated that lignite conversion could reduce the $5 billion NZ spends each year on buying diesel and fertilizer from overseas.