Inquisitor, Thanks for the info on KSC, does that mean WEC is...

Inquisitor, Thanks for the info on KSC, does that mean WEC is covering the C&M costs in the hope that they can recoup from the legal action?

I have no doubt that the technology does allow high ash, high moisture coals to be upgraded. That's been done since WWII. At issue is the binderless coal briquetting process developed by CSIRO. It was technical issues relating to dust, noise and other problems that required the TABANG plant 'augmentation' to achieve nameplate capacity. This suggests that the technology for the entire process is far from proven as the Tabang plant has not proved itself at capacity.

Duncan stated in his evidence at ICAC (I can't recall the exact words) that you buy the coal at 8 bucks and upgrade it and sell at 110 bucks. The question that I struggle with is the economics of this. Where do you buy coal at $8, is that realistic? Flannery has stated that it is important to own the resource.

Assuming you can get the coal through ownership or JV at that price what does it cost you to upgrade and briquette it? Can we know until a plant is operating at a commercial level? I think not and being a mechanical process far more complex and technical than digging coal out of a pit there is potential for significant cost uncertainty.

We are now looking at a world where energy supply is not as constrained as it was just a few years ago. Coal is percieved as relatively less desirable than other sources, but useful because it's cheap. Most industrialised countries using coal for electricity generation ( and this is the market for WEC product ATM) are adopting other sources. The bottom line is if you can't get the resource, upgrade it, and make at least a normal profit at a price commensurate with the prevailing price of energy coal the technology doesn't work - its a dud.