New market opportunity

The third recipient in the Australian Lignite Development Program may change the international and domestic briquette market, amid challenges surrounding local briquette manufacturer, HRL’s Energy Brix.

The state and federal governments today announced $25 million to Shanghai Electric Australia Power and Energy Development (SEAPED) to develop a $119 million demonstration plant at Loy Yang ‘A’ Power Station as part of the $90 million ALDP program.

The demonstration plant intends to produce briquettes for Chinese export to fuel a power station in Shanghai.

If successful, a commercial-scale plant could also potentially supply Latrobe Valley power generators.

The announcement follows a contractual dispute at the Morwell Energy Brix factory last week.

Reports suggested factory operator Mecrus planned to begin standing down workers after it was given no further production orders from owner HRL.

Energy and Resources Minister Russell Northe said HRL had previously exported to China, Japan and Germany, and plans were not an “absolutely brand new form of exporting briquettes”.

Mr Northe said the project sought to drastically reduce the moisture content of brown coal for international transportation and with current challenges at HRL and local briquette manufacturing, there was potential in the domestic market.

“The intention is not to compete with HRL in the short term,” Mr Northe said.

“In the future if there are opportunities in the domestic market, it could explore those, particularly if you’re talking about improving environmental aspects of the resource itself.”

Mr Northe said SEAPED had conducted pilot scale testing in China on Loy Yang coal, which showed a significant reduction in emissions.

He said Shanghai Electric expected more than 100 jobs could be created during construction and up to 40 jobs during the project’s operation.

The Shanghai Electric $25 million allocation follows state and federal governments announcing $30 million to Coal Energy Australia and $20 million to Ignite Energy under ALDP in May.

Mr Northe said the remaining $15 million was yet to be determined and the three projects were successful under applicant criteria to ensure the commercial viability of projects.

“We don’t anticipate any further proponents under the project, further discussion will need to be held between state and federal governments.”

The Express made attempts to receive comment from HRL before print, but was unsuccessful.