Active Energy Group PLC (AIM:AEG, OTCQB:ATGVF) said it is talking to lawyers and alternative production partners after the contractor building its first CoalSwitch 'black pellet' biomass plant refused to commit to future production.
After contractor Player Design Inc (PDI) pushed back the date of the commissioning of the Ashland plant, which is situated in the US state of Maine, several times last year, Active Energy said it had been in talks to try and resolve the construction issues.
PDI has now said it is "no longer willing or able to commit to either: i) a future production date for CoalSwitch fuel; or ii) future production volumes of CoalSwitch fuel", the AIM-listed company said in a statement.
Active Energy said it has several potential customers lined up to receive CoalSwitch fuel at the earliest opportunity.
Chief executive Michael Rowan said: "The actions of PDI are as surprising as they are disappointing after a long journey toward the production of CoalSwitch fuel, especially given the fact that [PDI boss] Tyler Player is a shareholder of Active Energy.
"The board is taking swift and decisive action in the interests of our shareholders to minimize the impact, and to actively investigate and pursue all available claims arising from Active Energy's dealings with PDI over the last three years."
Active has engaged lawyers in the US to investigate the company's rights, with the company owning an estimated US$1.5 million of the production equipment and components at Ashland, and having paid US$1.1 million cash towards the development of the facility, with PDI pre-paid a further US$300,000 for future services.
"Shareholders should rest assured that we are taking all the necessary steps to protect Active Energy's current and prospective interests," said Rowan.
He said the result of marketing efforts by the company has been to convince the board about the significant future commercial opportunities for CoalSwitch fuel, with discussions and evaluations currently being undertaken by "several alternate commercial production partners".