Carbon Energy Ltd (ASX:CNX, OTCQX:CNXAY) has played a key role in the formation of the underground coal gasification (UCG) research centre in China.
The centre was formed in conjunction with one of the world's largest mining universities, the China University of Mining and Technology (CUMT).
Carbon Energy has two representatives on the governing body of the CUMT International Research Centre for Underground Coal Gasification.
The centre was officially opened on 24 April 2016 in Xuzhou, Jiangsu Province.
Funding will be provided by Chinese private industry participants and the CUMT, with future government funding anticipated.
This is a step forward in the advancement of Carbon Energy's expansion plans in China, where the company has a joint venture with Beijing JinHong Investment Co. Ltd.
Morné Engelbrecht, CEO and managing director of Carbon Energy, commented: "This is an important development in a market that is highly receptive to UCG technology.
"The establishment of the centre funded by the university indicated the country's willingness to establish a world leading UCG industry based on science."
JinHong joint venture
Carbon Energy has used its UCG technology to recently enter a joint venture that aims to develop a vertically integrated gas company in China.
JinHong is required to contribute US$30 million over three years and is entitled to 70% of dividends.
Next steps in 2016:
- Secure coal leases located near existing gas users
- Conduct site suitability assessment
- Appoint EPCM Company
- Appoint Drilling Company
- Obtain project PRC/local Government approvals
- Formally sign Licensing and service agreements (already agreed)
Carbon Energy recently received a Speculative Buy recommendation and a A$0.09 target price from APP Securities.
The report recommended that despite recent events the company's valuation still significantly exceeds the current share price of circa $0.012.
Recently, Carbon Energy raised $3.48 million from a rights issue.
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