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Hazer Group to commission commercial demonstration plant early next year

Proactive Investors Tuesday, 27 November 2018
Hazer Group Ltd (ASX:HZR, FRA:2H8) has committed to its next commercialisation milestone, installing a demonstration plant in the Western Australian port city of Kwinana as the company hopes to starting testing of its Hazer Process on-site in January 2019. The Perth-based company’s new chief executive reaffirmed Hazer’s commitment to the demonstration plant in a shareholder update published yesterday. READ: Hazer Group outlines strategy to advance its patent applications Hazer’s chief executive of eight weeks Geoff Ward penned the update after the company tripled its targeted output during a pilot plant study. Ward wrote, “The pilot program has demonstrated the robustness of the underlying reaction and our ability to make viable commercial products, providing myself and the board with confidence to move into a commercial demonstration phase in 2019.” The executive is a former chemical process engineer and Woodside Energy Limited senior executive with more than 20 years experience in the oil & gas and renewable energy sectors. Ward was previously managing director and CEO of Geodynamics Limited (ASX:GDY), which now trades as Renu Energy Ltd (ASX:RNE) (FRA:GD2). Hazer is focused on producing synthetic graphite and hydrogen using the low-cost Hazer Process spun out of the University of Western Australia by the Group of Eight (Go8) university’s commercialisation arm. The CEO believes it is an opportune time to be entering the graphite and hydrogen markets. Ward said, “We are an example of ‘right technology at right time’ to take advantage of the long-term growth in this industry, driven by the value of our products, our anticipated low production cost, our low emissions profile, and capability to provide flexible, scalable hydrogen manufacturing.”   Earlier this month, Ward told the Proactive Investor Stocktube channel, “Graphite is one of the materials that I see as being used in more and more applications as it becomes more available. “Graphite can be used in a range of applications from relatively industrial applications such as manufacturing refractory, high-temperature thermal lining for reactors and blast furnaces and kilns. “It can also be used as an additive in cement to produce more green-friendly and high-specification cements.” Ward also spoke to future demand for hydrogen, saying “There is a lot of focus, emphasis and strategic drive from nations such as Japan and Korea and others to develop a hydrogen economy. “That’s the view that over 10, 20, and 30 years, we’ll transition to hydrogen being used for power generation and hydrogen being used for mobility, so as fuel for fleets of trucks, cars, and other transport.” A commercial demonstration plan in Kwinana New CEO Ward has taken stock during his first eight weeks, undertaking a review of Hazer’s strategy and short-to-medium-term plans. Ward reaffirmed the company’s commitment to a commercial-scale demonstration plant. “A commercial demonstration plant would be a continuously-operating small-scale plant producing commercial hydrogen for sale to industrial, transport or energy markets and commercial quantities of graphite. “Our current concept envisages a plant capable of producing about 300 kilograms a day of hydrogen (about 100 tonnes a year) and approximately 1,050 kilograms a day of graphite (about 375 tonnes a year). “This plant will allow us to demonstrate the safe ongoing operation of the Hazer Process, generate early revenue from hydrogen sales and allow us to grow graphite sales through having commercial quantities available to market.” READ: Hazer Group to move pilot plant to Mineral Resources site Initial engineering study costings put the Western Australian plant’s build price at $10 million. The location flagged for the plant is next to commericalisation partner Mineral Resources Ltd’s (ASX:MIN) proposed paddle tube reactor (PTR) pilot plant in the city of Kwinana. MinRes and Hazer have been formally working together since December 2017 as part of an agreement to commercialise the Hazer Process. In August 2018, acting CEO-at-the-time Mark Edwards said the co-location would produce cost savings as the partners produced graphite and hydrogen for further testing and showcased Hazer’s technology to the world. Kwinana was nicknamed 'Lithium Valley' earlier this year and is an emerging home to battery metals and energy materials companies. The Kwinana-Peel region industrial area has been a home for heavy process industries such as oil refineries for many years, with nickel companies and alumina outfits also on-site. Kwinana is in close proximity to boating and shipping industries, the heavy industrial area of Naval Base, the Royal Australian Navy’s Fleet Base West and Garden Island. The region is less than a 35-minute drive to Fremantle Port, in Perth’s southern suburbs. A positive half for Hazer Ward highlighted Hazer’s achievements in his update yesterday, writing: “The second half of 2018 has been a very positive period for the company. “We have achieved excellent test results from the fluidised bed reactor (FBR) pilot plant and continue to progress with our research & development (R&D) program including testing and analysis of our Hazer-produced graphite by independent agencies and universities. “Operationally the team have operated the FBR pilot plant exceptionally well managing the safety and environmental aspects very professionally and demonstrating improved performance in the pilot plant as we apply improvements learned from initial trials.”   As Ward highlighted to Stocktube, one of the company’s two pilot plants produced about triple its production target during a pilot plant demonstration project. The plant’s targeted production had been 100 kilograms of high-purity hydrogen a day, which translated to 500 kilograms a day of combined hydrogen and graphite nameplate capacity. Ward told Stocktube, “That pilot performed exceptionally well, and in fact, it produced approximately three times more than we anticipated. “It was above design characteristics, which is always a positive, and that’s given me the confidence coming into the role that we should be able to move very swiftly into a commercial demonstration phase.” The plant, which was located in Sydney, has been disassembled to make its way over to Perth in lots, with the company’s first consignment arriving last week. Ward wrote, “We expect to have the FBR pilot plant re-assembled at its new home in Kwinana by Christmas, with the testing program resuming in January 2019. “I firmly believe the Hazer technology has a key role to play in the emerging long-term hydrogen economy.” — with Ky Chow
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