Linc, Exxaro sign African underground coal gasification agreement
PERTH (miningweekly.com) - ASX-listed Linc Energy has signed a term sheet with diversified miner Exxaro Resources to jointly pursue underground coal gasification (UCG) projects in sub-Saharan Africa.
Exxaro would pay Linc a fee of A$3-million within the next 30 days, and would also pay an agreed-upon upfront licence fee as well as ongoing royalties for the synthesis gas produced from Linc’s UCG technologies used in the region.
Linc would hold a minimum of 15% equity interest in the first project to be developed and would have the option to participate up to a 49% equity position in all UCG projects which Exxaro developed.
Exxaro, in turn, would be granted a nonexclusive licence to use Linc’s UCG intellectual property in the region and would have conditional access to the UCG intellectual property to jointly develop commercial opportunities on its own coal resources outside of the sub-Saharan region.
“This is a substantial move towards UCG commercialisation in an area that has embraced and spearheaded the move towards clean energy through its historic dominance in conversion of coal and natural gas to liquid fuels and power, and more recently its renewable-energy programmes,” said Linc Energy CEO Peter Bond.
He noted that the joint business model with Exxaro was well-aligned to optimally draw on the companies' respective strengths.
The two companies were aiming to finalise the binding formal agreements for the development and implementation of commercial opportunities during the first quarter of 2013, at which point further details of the agreement would be released to the market.
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