PyroGenesis Canada Inc (CVE:PYR) (OTCQB:PYRNF) has completed the first phase of testing one of its plasma torches at a clients industrial iron pelletization furnace at part of a multiphase contract to ultimately replace its existing fossil fuel burners.
The first phase demonstrated that swapping in a PyroGenesis plasma torch had no detrimental effects on the production of iron ore pellets while significantly reducing both greenhouse gases and costs.
The client, which PyroGenesis didn’t name for competitive reasons, has 10 plants, each requiring 50 torches. Each torch generates as much as $3 million in revenue.
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The client’s switch to plasma would result in a CO2 reduction of more than 350,000 tons per year, the company said, the equivalent of taking 76,000 cars off the road. Going forward, the next phase of modeling is designed to further quantify the benefits of such a transition.
All phases will be completed by the end of the second quarter, the company said.
“This is a very significant development with a very significant player in the industry,” CEO Peter Pascali said in a statement. “We have effectively demonstrated that by using our proprietary plasma torch to replace the environmental damaging fossil fuel burners, not only will there be a significant reduction in greenhouse gases but there will also be significant cost savings (avoiding future carbon taxes alone is noteworthy), and all without any detrimental effect anywhere in the process. How many process changes can boast of that trifecta?”
Pelletization is the process in which iron ore is concentrated before shipment, thus significantly reducing the cost of transportation. Typically, the heat is generated by oil or natural gas burners. Plasma torches, because they can convert renewable electricity to heat, offer an environmentally attractive alternative.
Pascali attributes the current contact in part to the company’s previous deal with Swedish client Rise Energy Technology Center AB earlier this year. The company provided a 900-kilowatt plasma torch system to replace the firm’s fossil fuel burners.
“Since our success with RISE .. most major iron ore pelletization producers have reached out to us, as have several producers from the metallurgical industry,” Pascali said. “This has resulted in several modelling proposal requests. However, what I find most exciting is that in recent weeks the interest in our torch capabilities has also come to include significant steel producers, and these discussions have been moving forward at a rapid pace as well.
“All this interest is from producers that use natural gas and heavy fuel oil burners and want alternatives to help them meet greenhouse gas reduction targets/policies. We find that the proposition to reduce greenhouse gases emissions, and avoid carbon taxes, with a simple bolt-on replacement of their current environmentally damaging fossil fuel burners, is too compelling to resist.”
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