LittleJim ... carbon sinks are not on my list of preferred...

LittleJim ... carbon sinks are not on my list of preferred investment themes.

The move on OMC is of little interest in the overall equation. The Oil Mallee Company has struggled away for years pursueing eucalyptus oil production dreams which have made no economic sense when China does it for 1/4 of the cost. The OMC has failed to see the potential of the cellulosic ethanol prospects for biomass and hence has made no headways there. Judging by the reaction in the share price the market is also unimpressed with the acquisition.

You also have to remember that in electricity generation and ethanol manufacture from biomass the mallees will be competing with waste streams such as cereal stubble out of the agricultural sector. Millions of tonnes of potential feedstock there to compete with which end users would likely preferred over wood chips because of more reliable supply. For ethanol production, the surface areas of straw is much much higher and contains far less lignin than wood chips say from mallees meaning straw is also preferred. Lignin is more expensive to 'digest'.

COZ will need to raise money if they are to go down any of these energy pathways as all are infrastructure intensive projects. But they are getting away from their core sell aren't they? Are they acknowledging the carbon sink game is likely to be a tougher gig than first thought?