White Energy Company Limited White Energy Company Limited (ASX : - - PowerPoint PPT Presentation

White Energy Company Limited White Energy Company Limited

(ASX : WEC) (ASX : WEC)

Other OTC: WECFY (ADR)

Company Profile

January 2008

Except for the historical information contained herein, the matters discussed in this presentation contain forward-looking statements, including statements, containing the words “planned”, “expects”, “believes”, “strategy”, “opportunity”, “anticipates”, and similar words. Such forward-looking statements are subject to known and unknown risks, uncertainties, or other factors that may cause the company’s actual results to be materially different from historical results or any results expressed or implied by such forward-looking statements. We assume no obligation to update any forward-looking statements to reflect events or circumstances arising after the date hereof. In addition where comparisons are made between White Energy Company and other companies, we have made best efforts to properly interpret publicly made information by these companies but cannot be certain that such comparisons are completely accurate.

Forward Looking Statements

White Energy’s BCB process upgrades low value coals by reducing the moisture and compacting into dense, physically and chemically stable lumps that can be handled, transported and utilised like normal coal. White Energy’s Coal Upgrading

Company Snapshot

Listed: Australian Securities Exchange (ASX: WEC) Other OTC: ADR Program (WECFY). Business Description: Commercialization of Coal Upgrading Technology. Shares outstanding: 123,632,586 fully paid ordinary shares. – Options Outstanding 32,415,097 Recent share price 31 December 2007 – ASX: A$3.00 (US$2.64) – Other OTC: US$13.40 Equity market capitalisation*: A$486M (US$428M). Available funds: A$46.7M (US$41M) plus US$35million through a converting note facility from BHP Billiton Corporate headquarters: Sydney, Australia; offices in Indonesia and China. Full-time personnel: 30. Public since: March 2005. Insider ownership: 34% of shares outstanding.

Notes: * Total fully diluted shares on issue if all options are exercised. Assumes all notes are not converted, Exchange Rate A$1.00 =US$0.88

Financial Snapshot

119,579 119,579 5,956 125,535 76,561 48,974 31 Dec 2007* 61,415 77,469 Total Equity 61,415 77,469 Net Assets 4,411 8,423 Total Liabilities 65,826 85,892 Total Assets 59,126 67,482 Non Current Assets 6,700 18,411 Current Assets 30 June 2006 30 June 2007 (A$000’s)

Consolidated Balance Sheet

46,474 31,402 45,529 (12,150) (1,977) YTD 31 Dec 2007* 6,564 15,072 Closing Cash & Cash Equivalents 3,615 8,508 Net Increase (decrease) in cash & equivalents 5,902 22,509 Net Cash (outflows) from Financing Activities (1,518) (12,700) Net Cash (outflows) from Investing Activities (769) (1,301) Net Cash (outflows) from Operating Activities FY2006 FY2007 (A$000’s)

Consolidated Statement of Cash Flows

* Forecast

Global Market Drivers

• Rapidly growing coal demand - Global coal demand is expected to grow

significantly through 2030, particularly from the fast growing economies of China and India (IEA).

• New crude oil paradigm placing upward pressure on competitive fuels
• Rising crude oil pricing is increasing demand for cheaper, indigenous

fossil fuels.

• Deliverability of high quality coals is declining - In both North America

and Asia, production of high thermal value / low emission coal is declining.

• Increasing global emphasis on emissions reductions - Across the

globe, emissions of CO2, SOx, NOx and Hg are coming under increased

• regulation. Coal is a vital resource option for meeting the world’s

sustainable energy needs.

Issues Facing the Coal Industry

• Combustion of coal releases CO2 and inefficient use could have

global climatic impact.

• Many traditionally utilized coals are major sources of pollutants

such as SO2 and NOx.

• The world has very large reserves of coal which is low in pollutants

such as sulphur and ash but are not exploited because of their low energy, impacting CO2 emissions and transportation economics.

• In some regions such as the USA dust from coal transportation and

handling has become a major environmental, economic and logistical problem.

Coal is the lowest cost and most easily accessed energy source in the world, however there are several issues that reduces its attractiveness as an energy source into the future.

WEC - A Facilitator to Zero Emissions

Source: Adapted from World Coal Institute (2003) Coal upgraded by the White Coal technology can be used to supply each of the stages of the coal technology lifecycle offering immediate CO2 emission reductions of up to 10%. Conventional sub-critical plants can achieve thermal efficiencies of up to 40%. Improving less efficient plants will reduce CO2 emissions by up to 22%. Improved efficiency sub-critical plants operate throughout the world. Supercritical and ultra supercritical plants can achieve efficiencies of up to 45% and operate in Japan, USA, Europe, Russia, China, and Australia. Integrated gasification combined cycle and pressurized fluidized bed combustion plants operating in the USA, Japan, and Europe achieve very high efficiencies and low CO2 emissions. Integrated gasification fuel cells, under development, can achieve even higher efficiencies. Carbon capture and storage can reduce emissions of C02 to near zero. Advanced technologies gasify coal by heating it to temperatures so high that it breaks down into a variety of petroleum products. CO2 is separated out and then sequestered by directing it into underground reservoirs where it will remain buried forever. When combined with advanced technologies, carbon capture and storage will facilitate the hydrogen fuel economy.

White’s Upgraded Coal + Efficiency Improvements Existing Power Plants + + Advanced Technologies New Power Plants Zero Emissions

Research and Technology Enhancements

Act as an enabling technology partner today:

• Coal upgraded by White Coal Technology can be used to supply each of the stages of

the coal technology lifecycle offering significant environmental benefits.

• WEC will continue to improve our existing process and invest in developing our

technology with a particular emphasis on applications to coking coal

Invest in coal technologies for the future:

• As the global market for coal and related end products grows, White Energy will

continue to develop and acquire synergistic technologies in both coal upgrading technology and emissions reductions.

• Developing a unique suite of coal upgrading and emissions reductions technologies will

enable White Energy to partner with a growing number of players in the coal value chain and enable it to be a key player in a zero emissions world.

White Energy’s strategy is to:

Transportation of coal presents significant logistical, environmental and financial challenges for all stakeholders in the coal value chain. Coal transported by rail from the Powder River Basin (PRB) to power utilities results in dust accumulating on the track along the joint line. Problems associated with increasing levels of dust include:

– Coal accumulation results in track surface and maintenance issues. – Reduction in train velocity on the high density PRB route. – Coal dust releases foul track ballast and requires higher ballast maintenance. – Takes capacity away from loadings.

Coal Dust – A Major Problem in the USA

Coal Dust – A Major Problem in the USA

PRB Lost Loading Opportunities (YTD 4 Sept 2007)

With the rapidly increasing number of shipments, accumulation rates have visibly accelerated over the past few years. While no other product is allowed to spill or leach from railcars, coal has historically been

• verlooked.

However, due to increasing economic and environmental pressures, a much greater focus is being directed to solving this problem. White Energy’s briquetting process substantially reduces the levels of dust. This is considered a significant competitive advantage

• ver

competing technologies because it increases railway efficiency by reducing maintenance costs and increasing loading opportunities.

970 275 90

100 200 300 400 500 600 700 800 900 1000 1100

Mine Railroad Utility

Increasing Coal Shipments: Rail Co Ave. PRB Coal Trains Per Day

Jan-03 Mar-03 May-03 Jul-03 Sep-03 Nov-03 Jan-04 Mar-04 May-04 Jul-04 Sep-04 Nov-04 Jan-05 Mar-05 May-05 Jul-05 Sep-05 Nov-05 Jan-06 Mar-06 May-06 Jul-06 Sep-06 Nov-06 Jan-07 Mar-07 May-07 Jul-07

Higher energy content: WEC increases heat the useable energy content by between 30% and 200%, creating valuable power generation efficiencies. High volume production capacity Low upgrading costs: Favorable conversion economics allow the product to compete with bituminous coals. Lower spontaneous combustion risk: Upgraded coal is physically and chemically stable, and can be handled, stored and transported as normal coal. Lower transportation costs: Process reduces moisture, resulting in up to 30% decrease in load volumes and concomitant transportation costs. Reduced greenhouse gas and pollutant emissions: More efficient burning results in lower CO2, SO2, NOx and Hg emissions. Reduced levels of dust: Significantly reduces the quantity of dust when compared with unprocessed sub-bituminous coal.

The White Energy Technology Benefits

The White Coal Technology was

• riginally

developed by a consortia led by the CSIRO, the pre-eminent Australian government sponsored research organisation. Low value coal is crushed and rapidly dried to remove water content and reduce dust levels. Compaction generates close bonding between the dried coal particles without the need for expensive binding agents. As a result, high density, higher energy content briquettes are formed. The process works on both fine and lump coal. Coal samples from China, the US, Australia, Indonesia and South Africa have all been successfully processed with significant calorific value increases and effective stabilisation of the product for handling, storage and transportation purposes.

The White Energy Value Added Process

White Energy Impact on Coal Chemistry

9561 6251 BTU/lb 22.18 14.50 MJ / kg Gross Calorific Value 1.93 1.93 Sulfur (%) 0.85 0.87 Nitrogen (%) 4.17 4.08 Hydrogen (%) 61.3 61.3 Carbon (%) ULTIMATE ANALYSIS (dried basis) 40.8 23.4 Fixed Carbon (%) 37.0 28.1 Volatile Matter (%) 13.6 8.5 Ash (%) 8.6 40 Total Moisture arb (%) PROXIMATE ANALYSIS

WEC Upgraded Coal FEED Coal

Sample – North Dakota

Strong Power Plant Performance

Sub-bituminous coal upgraded by White Energy compares very favorably with higher priced bituminous coal

57.6 17.3 21.3 Ash Generation (Kg/MWh) 1404 169 223 SOx (mg/Nm3) 454 280 284 NOx (mg/Nm3) 36.1 36.3 34.1 Overall Efficiency (%) 5.9 5.7 6.4 Parasitic Load (%) 89.5 89.4 85.3 Boiler Efficiency (%) Australian Bituminous Coal 14% ash White Energy Upgraded Coal Sub-bituminous Coal Parameter

Source: BHP Billiton 2007

Compare

Asian Coal Outlook

• Global thermal coal import demand (seaborne plus

land-borne) is forecast to grow by 116Mt by 2015.

• Demand for thermal coal in Asia will grow by 77Mt

accounting for 66% of total growth.

• 41Mt or 55% of thermal coal demand growth in Asia is

in India and China.

• China predicts energy sector growth of 15% p.a. with

majority being coal based.

Strategy for the Year Ahead - Asia

Initial Targets = Indonesia & China

Operations (build earnings and cash flow): – Bayan Resources (Indonesia): commission the 1MTPA plant at the Tabang coal mine in Indonesia. – Adaro Group / Itochu Corporation (Indonesia): complete all pre production work and commence construction of the 1MTPA plant at one of Adaro’s mines in East Kalimantan. – Datang International Power (China): conclude financial feasibility, agree holding structure issues and conclude JV to build ten 1MTPA White Coal technology plants at Datang’s sub-bituminous coal mine in Inner Mongolia, China.

North American Coal Outlook

• Use of sub-bituminous coal has grown rapidly as US power

utilities switch from local bituminous coals in part to avoid the need for costly flue gas desulphurization plants.

• Powder River Basin region is the largest sub-bituminous

coal producing region in the world, with an annual output > 350M tonnes

• The low sulphur Powder River Basin coals have very high

inherent moisture (20-25%) = substantially lower power generation and high transportation costs.

• WEC has tested coal from four mines located in the Powder

River Basin with excellent results

Strategy for the Year Ahead - USA

Initial US Targets: Powder River Basin & Texas

Execute on US market entry strategy: – WEC is in the process of establishing

• perations in the US with a view to having a

presence there early next year. – WEC is assessing potential US partnering

• pportunities with both coal and power
• utilities. WEC expects to make progress on

these initiatives in early 2008. – WEC will also explore the utilisation of its technology to assist in the process of generating synthetic natural gas. – The relatively dust free nature of White Energy’s product significantly adds to WEC’s

• pportunity in the US. This particular

characteristic appeals to US coal industry stakeholders including the railways, utilities and coal producers.

FY 2007 Highlights

BHP Billiton appointed as global marketing agent in exchange for US$35M funding

• package. All relevant documentation in relation to this transaction has now been
• executed. WEC is yet to drawdown any funds.

Joint venture with Bayan Resources finalised and construction of first Indonesian plant commenced. Second Indonesian joint venture announced with Adaro Group and Itochu Corporation. Final stage of China feasibility with Datang International Power Company Ltd. During FY07 and post balance date the Company has raised a significant amount of capital (approximately A$100M) to fund its development program. American Depository Receipt program initiated. Australian Government grant secured (A$4.35M).

Bayan Resources Joint Venture Progress

The Bayan Project is a JV owned 51% by WEC and 49% by Bayan. The JV is building its first 1MTPA plant with production capacity growing to 5MTPA. Bayan has agreed to acquire up to 1.5 MTPA of upgraded coal from the JV over the first five years of the plant’s operation representing over US$200M in guaranteed revenue for the JV. The JV continues to make steady progress on all major activities relating to the construction: – Site work activities completed include the site camp facilities, earthworks, haul roads, lay down areas and drainage works. – Entered into an alliance with Thiess Indonesia to build, operate and maintain the plant. – Detailed engineering and design of the production plant has been completed. – All long lead items (including briquetters) have been ordered. – Process control software design is being undertaken with testing of by EOY. – The power station (10MW) is being delivered under a turnkey contract.

Tabang Site Kalimantan (October 2007)

Tabang 1 Million MTPA Module

Management Team

• John Atkinson, Managing Director, formerly managed Baker & McKenzie in Hong

Kong, where he specialized in M&A. He is the former Chair of Baker & McKenzie’s global Major Projects Group. Long term investor in coal technologies and coal mines.

• Travers Duncan, Executive Chairman of White Energy Technology Limited, is a civil

engineer with more than 30 years’ experience managing large coal mining and infrastructure development projects in Australia, Indonesia, Papua New Guinea and

• India. Chairman and major shareholder of Felix Resources Limited (ASX: FLX).
• John McGuigan, Non Executive Chairman, is a former global executive chairman of

Baker & McKenzie Worldwide. He is a long-term investor in White Mining related coal

• ventures. Long term investor in coal technologies and coal mines.
• John Langley, Director of Business Development, has more than 30 years’

experience in mining related technology companies.

• Keith Clark, Director of Technology, has more than 35 years’ experience in research

and development in coal and mineral processing. He led the R&D program at CSIRO that developed the White Coal Technology process.

Why Invest in White Energy?

• White Energy has a technology that

represents a first step in building a cleaner coal solution.

• White Energy’s unique coal upgrading

technology is commercially viable.

• White Energy has demonstrated the

ability to monetize significant value-add.

• White Energy has capable, incentivized

management.

• High-growth investment opportunity with

near term revenue generation.