Mixed Greens: Biochar group rejigs plans to list on ASX

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Biochar groups dusts off plans to list on ASX; funds begin move on climate; Galaxy may tap into growing EV battery demand.

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Waste to energy company Pacific Pyrolysis has announced details of its ASX listing, revealing plans to raise $4 million and become the first listing of a biochar developer on the Australian Securities Exchange. It will effectively use the corporate shell of WAG Ltd for a backdoor listing and focus on its plans to develop Australian technology that efficiently converts organic waste into electricity and biochar.

The company said late last year that it would seek up to $5 million by issuing 25 million new shares at 50c each. However, the issue has been repriced and the company will now offer up to 20 million shares of 20c each, with a minimum subscription amounting to $2.2 million.

The company late last year formally opened a demonstration plant at Somersby north of Sydney, and its other major project is the Carbon Negative Electricity Project in Melbourne that will create a pilot plant that will process organic waste at the rate of 2 tonnes an hour to generate 1MW of electricity and up to 5,000 tonnes of high grade biochar a year, along with renewable energy certificates and potentially carbon credits. The project is supported by a $4.5 million grant from the Victorian Government under the Sustainable Energy Pilot Demonstration Program.

Pacific Pyrolysis says it is targeting a niche position in the $10.2 billion per annum waste industry. “PacPyro’s technology has tangible benefits in waste management, energy security, food security and will qualify for carbon credits as it reduces greenhouse gas emissions,” CEO John Glen said. “The proven waste management technology can divert large volumes of waste materials from landfill, will value add to the treatment of organic waste and low grade biomass and create valuable energy and biochar.”

PacPyro acquired 100% ownership and global rights to develop and commercialise its slow-pyrolysis technology in mid 2011. Global ownership of the technology will facilitate the company’s future intended expansion into the major Asian markets of China and India and ultimately America, Europe and Africa.

 Funds begin move on climate

Actuarial firm Mercer says funds managers are starting to either adopt climate change considerations in the way they allocate investments – or at least looking at how this can be done. Mercer issued a surprising assessment last year when it recommended that funds should invest 40 per cent of their portfolio into “climate sensitive assets.” It warned that climate could account for up to 10 per cent of portfolio risk.

A year later, it has surveyed12 investors representing almost $2 trillion in assets under management, and found that more than half of them had decided to include climate change considerations in future risk management and/or strategic asset allocation processes, half had undertaken or plan to make changes to their actual asset allocations, and 80% of partners have or will increase their engagement on climate change with companies and policy makers.

It also found that one third had begun to or plan to allocate more to “climate sensitive assets” – which the report identified as real estate, infrastructure, private equity, sustainable equities, efficiency/renewables and commodities (including agricultural land and timberland) – and more than half have or plan to review, climate risks within climate-sensitive asset classes.

Helga Birgden, the head of Responsible Investing for Asia Pacific at Mercer, said there is still a long road ahead both globally and locally, and the Durban climate negotiations suggested the world was a long way from seeing strong, internationally coordinated action on climate policy. “This creates a significant investment risk for the foreseeable future,” she said. “However, Australia’s decision to adopt a carbon tax now means that investors in our region are required to recognise capital market signals associated with climate change entailing costs and prudent risk management.”

Galaxy considers expansion

Lithium producer Galaxy Resources is looking at expanding lithium hydroxide production at its Jiangsu Lithium Carbonate Project to respond to the growing demand for battery-grade lithium. The company says it may expand the 17,000 tonne a year facility by an extra 5,000 tonnes. Managing director Iggy Tan said the review was prompted by strong demand for battery grade lithium hydroxide and the limited production capacity around the world.

“Like lithium carbonate, lithium hydroxide is also used in cathode and electrolyte production. While there is ample technicalgrade hydroxide available, higher purity battery-grade hydroxide is in limited supply, which also means it commands a price premium to lithium carbonate,” he said. The expansion could be made at relatively small cost and allow the company to expand its growth.



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