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Jatenergy Tests Convert Mongolian Brown Coal To Semi-Coking Coal

Jatenergy (ASX: JAT) is on track to pursue its Mongolian coal upgrading plans after testing proved that coals from the country were highly suitable for conversion using Coal Plus technology.

This sets the stage for the immediate start of its investment strategy with Monrospromugoli LCC, which could result in a US$2 million upfront technology payment and ongoing annual royalties of US$1.76 million.

The test results had demonstrated that the high moisture, high volatile, low calorific Mongolian brown coal can be easily converted into semi coking coal using Coal Plus.

"This report independently verifies that Coal Plus has potential in Mongolia," executive chairman Tony Crimmins said.

"Most important is that we have a scalable and inexpensive test to determine the outputs from sampled coal provided to us.

"It allows us to determine for the client if the deposit site is suitable for Coal Plus and what the general returns, all in a matter of weeks.

"As the technology is already commercialised and in use in five locations in China for over 4 years, we see high probability of financing this project in Mongolia".

Monrospromugoli Business Manager Otto Khurts said the company was pleased with the outcome and looked forward to working with Jatenergy to improve the ongoing pollution problem surrounding Inner Mongolia.

Test Results

According to the initial test results, the main features of the Mongolian coal are:

- Higher moisture content: Mt=38.6%;
- Higher volatility: Vdaf=49.03%;
- Lower calorific value: Qnet,ar=13.549MJ/kg (3238kcal/kg); and
- Lower combustion efficiency and poorer thermal stability.

After using the Coal Plus conversion technology, the results were as follows:

- After processing, the main products from Coal Plus conversion of brown coal are Low Volile Solid Fuel (LVSF), pyrolysis oil, crude benzene and gas. Conversion of brown coal to LVSF is 2.6 tonnes of input brown coal to 1 tonne of LVSF. The as-received basis productivity of pyrolysis coal is 36.6% and pyrolysis oil 2.14%;
- The calorific value of the upgraded coal is increased apparently, to 6,666kcal/kg from 3,238kcal/kg, while the total moisture is decreased to 0.8% from 38.6% to 0.8%. Volatile matter has also dropped to 5.7% from 49.03%;
- The produced LVSF is hard weathered and not hypergolic, making it suitable for long-term storage and long-distance transportation. It can be used as clean solid fuel while its higher combustion efficiency increases its commodity value significantly;
- The upgraded coal can be used widely as granules with ash content less than 13-15%. This can be used as carbon reductant for submerged arc furnace of calcium carbide, ferrosilicon and industrial silicon. It also has application as a PCI (pulverized coal) for blast furnace injection or simply used as a high quality steam coal; and
- The calorific value of the resulting gas is 16.424MJ/Nm3(3922kcal/Nm3). It can be used as high calorific value clean gas fuel, or the raw gas for further synthesizing NH3, methanol or artificial natural gas.

"The results from the test and potential returns have been correctly identified in this report. Coal Plus is suitable for this site and has strong profitable return for the customer," Jatenergy senior process technologist Tam Tran said.


Under the binding agreement reached with Monrospromugoli on 24 September, a testing and feasibility study would be carried out to confirm the results of the simulated commercial Coal
Plus process analysis conducted by Jatenergy.

Success would allow the Mongolian private sector and government make better use of the abundant low-rank, high-volatile bituminous coal, which is currently being ineffectively burnt by coal-fired heating companies.

A Coal Plus conversion plant capable of processing 600,000 tonne of lignite per year would generate revenue of about US$41.36 million.

Under a typical Jatenergy royalty agreement, the Company would receive a US$2,000,000 upfront technology payment with US$7.50 per tonne royalty on revenue generated from of LVSF coal and $5.00 per tonne royalty on the pyrolysis oil produced, or about US$1.76 million per annum.

Coal Plus

Coal Plus is a proprietary coal upgrading technology which coverts low value brown coal into high value energy products.

Significantly, it is a proven technology with five commercial plants operating in Asia.

A sixth plant that is currently being built in Mongolia is the most ambitious, being designed to handle 10 million tonnes of input coal for conversion to LVSF coal.

Jatenergy currently has the license for the technology in Asia with the option to expand this license.


The confirmation that Mongolian brown coal is suited for conversion using Coal Plus into higher value products paves the way for Jatenergy's agreement with Monrospromugoli to go ahead.

That this could result in a 600,000 tonne conversion plant that will generate annual royalties of US$1.76 million per annum in addition to the upfront US$2 million technology payment is value accretive for Jatenergy.

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