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Clean Invest Africa Plc - Commencement of Commercial Production


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Clean Invest Africa Plc · CIA

04/07/2022 07:00

Clean Invest Africa Plc - Commencement of Commercial Production PR Newswire

4 July 2022

CLEAN INVEST AFRICA PLC

("Clean Invest Africa", the “Group” or the "Company")

CoalTech Announces Commencement of Commercial Production

CoalTech to commence commercial coal production, initially 3,500 tonnes per month and rising to 7,000/7,500 tonnes per month in 2023.

Clean Invest Africa Plc is pleased to announce the commencement of commercial production by its clean coal subsidiary, CoalTech. The commencement of this commercial production strategy involves the full operationalisation and commercialisation of its existing pelletising plant at its South African Bulpan site. Previously the plant was, as announced, used extensively as a test facility for potential large-scale clients. CoalTech believes it has successfully completed sufficient client testing with an almost 100% client satisfaction outcome and that the time is now right to commence in-house commercial production.

CoalTech is planning to use its plant at its Bulpan site in South Africa to produce commercial quantities of coal with a target of producing 7,000-7,500 tonnes per month in 2023, generating revenue of approximately USD450,000 - USD500,000 monthly and with an annual estimated net profit in the region of USD1.2m.

CoalTech anticipates the first production and sales of coal pellets to occur in September 2022. Contracts associated with suppliers, operational readiness and commencement of production activities of the Bulpan Plant are currently being discussed with potential partners, which will be responsible for the supply of coal fines and for the sale of pellets and these arrangements should be finalised shortly. Further announcements will be made in due course.

Initial production volumes, based on a single shift only, are expected to ramp up over 8-12 weeks to a regular output volume of 3,500 tonnes per month. Once these targets are achieved, and with approximately USD250,000 in capital expenditure, and improvements to local infrastructure, this will lead to a double shift operation aiming for  7,000-7,500 tonnes per month of regular output.

This commercial production strategy is in addition to CoalTech’s current strategy of running testing for potential large-scale customers. Significant large scale client testing has taken place over the prior years and a final large-scale test is currently being completed. These tests have been overwhelmingly successful. As a result of the successful testing, discussions continue with a number of potential customers. These discussions have been seen to involve very long lead times. For example, the recent successful test and subsequent discussions in Columbia were expected to be concluded in June 2022. These are progressing, albeit slowly, and CoalTech is optimistic that these will lead to a commercial agreement. Any one of these potential arrangements under discussion would be on a large scale (for example 2 x 28,000 tonnes per month are under discussion with one potential client). In addition, such contracts would be long term with likely output over 10-20 years and hence game changing in scale and scope for CoalTech if commercial terms are reached.  CoalTech will continue to advance these commercial discussions in parallel with its commercial production strategy.

The opportunity for CoalTech to produce and sell output is currently too attractive to ignore. There is a global spike in demand for coal, and substantially increased selling prices of coal have improved the business case to self-produce at Bulpan. Should a testing customer nevertheless wish to conduct further testing, commercial terms can always be agreed based on a number of options. CoalTech has developed and plans, subject to cash flow generation, to commission a mobile testing plant with a capacity of approximately 500 tonnes per month. CoalTech currently has a testing device for much smaller volumes which it already uses for clients as required.

Shaikh Mohamed Abdulla Khalifa AlKhalifa, Chairman of Clean Invest Africa remarked that “this commercial production strategy is a very significant development for CoalTech with potential for cash flow and profitability in the near term, whilst in parallel enabling CoalTech to advance its negotiations for much larger scale commercial agreements, which upon agreement will be game changing.”

Filippo Fantechi Founder and CEO added that “the Company plans to marshall all available resources with commercial rigour to ensure production and sales targets are met at what is a most exciting time for CoalTech.”

The Directors of the Company accept responsibility for the contents of this announcement.

ENQUIRIES :

Clean Invest Africa plc

Filippo Fantechi (Executive Director) +973 3969 6273

Shaikh Mohamed Abdulla Khalifa AlKhalifa (Non-Executive Chairman) +973 3969 2299

Peterhouse Capital Limited

Corporate Adviser +44 20 7469 0930 Guy Miller/Mark Anwyl

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