Hazer Group Ltd (ASX:HZR) plans to relocate its fluid bed reactor (FBR) pilot plant from Sydney to Mineral Resources Ltd’s (ASX:MIN) Perth site.
Hazer and MIN executed a binding cooperation agreement in December 2017 to work together to develop Hazer’s technology known as the Hazer Process.
Hazer acting CEO Mark Edwards said: “This is an important step in the commercialisation of the Hazer Process because we see great synergies, cost savings and benefits in locating the two plants together at MIN’s site in Kwinana so they can both produce graphite and hydrogen for further testing but also showcase our technology to the world.”
READ: Hazer Group commissions studies for plants aimed at building business case for Hazer process
Hazer’s FBR plant will be next to MIN’s paddle tube reactor (PTR) pilot plant providing for synergies such as cost sharing.
Edwards added: “This pending agreement is an outstanding deal for Hazer because it allows the paddle tube technology which is ideal for graphite production to be developed using the larger capital resources of Mineral Resources while we provide the technical support and know-how of the Hazer process technology.”
Mineral Resources committed to investing in development
As per the December 2017 agreement, MRL is providing all capital required for a staged development project for graphite production in exchange for Hazer's technology.
Positively, MIN has progressed its PTR pilot plant and committed to many long lead items and started construction.
The planning and design of the co-located pilot plants has mostly been finalised at MIN’s Kwinana facilities in Western Australia in anticipation of construction of the PTR pilot plant.
Hazer and MRL are negotiating final terms for Hazer’s FBR relocation.
PTR pilot plant graphite testing in December quarter
The commissioning of MIN's PTR pilot plant aims to be in the December quarter of this year.
Importantly, MRL is to pay Hazer a revenue-based royalty that achieves an agreed share of profits after tax generated from the sale of graphite.