Hong Kong  : DeTeam Company Limited (“DeTeam” or “the Company”, SEHK:0065) announced its subsidiaries, Beijing Guochuan and Xilinhaote Guochuan, entered into the Project Management Contract for the construction of the Production Facilities in Xilinhaote City, the PRC with Dalian Shipbuilding. The Project Management Contract is the continuity of the previous two announcements disclosed in 2012, in relation to the Investment Agreement between Beijing Guochuan and People’s Government of Xilinhaote Municipality. According to the agreement, both parties agreed to cooperate in the construction and operation of production facilities for the upgrading of low-rank coal. On 20 December 2012, Beijing Guochuan appointed Dalian Shipbuilding to manage the construction of the Production Facilities. The implementation of the Project Management Contract can speed up the development of the coal upgrading business, and optimize the business structure of the company.

Overview of Contract

The company appointed Dalian Shipbuilding to manage the construction of the Production Facilities located at Xilinhaote City in Inner Mongolia, the PRC, including tendering, procurement and supervision services in relation to the construction of the Production Facilities with a tentative total project cost of RMB 458.85 million (equivalent to approximately HK$587.33 million). The Production Facilities under the Contract shall be capable of processing 3 million tons of low-rank coal and producing 2 million tons of clean coal annually. The construction of the production facilities is project to be completed before 25 October 2014.

Cleaner Coal plays a vital role in market growth

China is the largest coal producer and consumer in the world, and the demand for coal in China is expected to see mild growth in the following years. According to industrial estimates, coal will still account for more than 50% of primary energy consumption by the end of 2050. Meanwhile, the pollution issues are the nightmares of coal miners. Under these circumstances, Clean Coal Technology (CCT) is a practical way to curb pollution issues in China and coal upgrading technology is one of the key aspects in CCT. The company entered its coal upgrading business in the middle of 2012 via its subsidiary, Beijing Guochuan. The coal upgrading technology used by Beijing Guochuan has obtained 5 domestic patents and is undergoing the application for 2 additional domestic patents and 1 additional international patent. Considering the stability and efficiency of the technology, The Ministry of Science and Technology of the PRC selected the low-rank coal upgrading project undertaken by Changchun Guochuan Energy, a subsidiary of Beijing Guochuan, as one of the environmental projects of 2012’s State High-Tech Development Plan (“863 Program”) on 31 December 2011.

Since Eastern Inner Mongolia is one of the most low-rank coal rich regions in the PRC, the Board believes this pioneer project a strategic move for the development of coal upgrading business. Other than boosting the economic value of low-rank coal, the coal upgrading business is able to curb pollution issues. In view of the above, the Board considers that the cooperation with Dalian Shipbuilding is able to speed up the development of the coal upgrading business and optimize the business structure of the company.

Source : ACN Newswire