Biofuel supplier Mission NewEnergy (ASX: MBT) has delivered on a contract secured in August 2011, shipping its first run of biodiesel to a major world oil company in January.
The six month contract, expected to generate US$40 million to Mission, was structured on a feedstock cost plus basis.
The company has also secured a US$10 million trade loan facility to fund the ongoing production of biodiesel under the contract.
Under the terms of the trade loan, Mission has placed the ownership of its 100,000 tonne per annum refinery as collateral.
Late last year, Mission announced it planned to construct a major waste material processing facility in Sandakan, Sabah Malaysia, to recover palm oil from waste material, known as Spent Bleached Earth (SBE).
The 66,000 ton per annum SBE Solvent Extraction Facility will be the first facility of its kind in the region.
The project gives Mission access to a lower cost feedstock for producing biofuel, which increases the company’s profit margin.
A further benefit of using waste material is the reduction in greenhouse gas emissions, making the product more environmentally friendly and more desirable in an eco-conscious society.