Altona Resources has commissioned Jacobs Consultancy, one of the world's largest and most diverse providers of professional technical services, to carry out a feasibility study on the four leading gasification technologies suitability to Arckaringa Coal (South Australia) for the production of environmentally-friendly, ultra-clean (0% sulphur) diesel fuel, aviation fuel and other applications. Phase One of the Jacobs coal-to-oil study, which will be conducted in conjunction with the Company's planned drilling programme at Arckaringa announced in November 2005, is expected to be concluded by no later than early in the second quarter of 2006. It is intended to identify a preferred gasification technology for the coal feedstock available from Arckaringa.
Coal based Fischer-Tropsch Synthesis (FT) technology can be used to produce a wide range of products including diesel fuel, aviation fuel, fuel cell fuel, chemicals, waxes and steam for electricity production. Following preparation (by drying or adding water), the coal feedstock is fed to a gasifier together with oxygen to produce raw synthetic gas (syngas). The raw syngas is then conditioned by cooling to generating steam and carbon monoxide shifting (both subject to gasification technology adopted) and acid gas removal to produce clean syngas with 0% sulphur content and low levels of carbon dioxide. The clean syngas is then routed to a FT synthesis plant for processing into liquid hydrocarbons. The offgas from the FT synthesis plant is then fed to a gas turbine to generate electricity. Additional steam, generated from the exhaust gas leaving the gas turbine is combined with the earlier steam to generate more electricity in a steam turbine.
Coal based FT technology can have the added benefit of substantial power generation capability which can contribute to positive economics and base load supply for the state of South Australia.
Christopher Lambert, Chairman of Altona, commented: "The appointment of Jacobs represents a significant step on the road to bringing the Arckaringa resource to being a substantial project. Arckaringa represents a potentially strategic coal resource, given its size and long term supply potential, that could be further enhanced by successful application of coal-to-oil technology.
Altona has also appointed Bill McIntosh and Chris Schrape as consultants to the Arckaringa Project. Chris Schrape, has more than 25 years' experience in the resource and mining industries. He was most recently CEO of Griffin Coal, a Perth based company for whom he worked from 1997- 2004. Before that he spent some 20 years with Rio Tinto in a variety of senior coal marketing and management roles. Bill McIntosh is a widely respected mining engineer with over 33 years' international experience who has played a key role in mining projects in Australia and globally. The majority of his career has been involved with open cut coal mining developments.
The Arckaringa Coal Project comprises the 100% interest in three exploration licences in South Australia, which have previously been calculated as a JORC compliant resource of over 7,000 Mt of sub bituminous Permian coal, amenable to open pit mining, and suitable as fuel for power generation and potential application of coal-to-oil technology. The three exploration licences cover a combined area of approximately 2,500 km2 in the northern portion of the Permian Arckaringa Basin. The Licences include three coal deposits, Westfield, Wintinna and Murloocoppie, located close to the Adelaide to Darwin railroad, facilitating improved economic potential for despatch of coal to coastal based industries and export ports. The railroad will also facilitate mine development and operations.
