In an operational update, GEM BioFuels (AIM: GBF) said it will release its first shipments of Crude Jatropha Oil (CJO) by mid-January. The first 40 tonne shipment will leave Madagascar for Australia on two 20 foot shipping containers. A second shipment of 20 tonnes will depart for Germany a week later.
Jatropha is a small tree which grows to about 5 metres; the plant's high oil yielding seeds are mildly toxic and are well suited for use in the production of biodiesel. The resultant biodiesel refined from Jatropha oil complies with international standards, including EN14214 in Europe, the major market for biodiesel.
GEM BioFuels, the emerging Jatropha feedstock supplier, was founded in 2004 to capitalise on the opportunity presented by the local agricultural and socio-economic conditions in Madagascar. The company began commercial production of CJO in November 2009. The commercial production is being carried out under contract using a third party oil extraction facility; the maximum anticipated rate of production for 2010 under this arrangement would be 5,000 tonnes per annum.
In the South of Madagascar, the BioFuel producer’s current planted area covers 55,700 hectares. The company has a prudent approach towards asset management and it is not currently carrying out a significant planting programme for the 2009-2010 planting season. GEM is consolidating existing plantation areas with a view to maximising their future viability.
GEM has a 50 year agreement providing exclusive rights over 452,500 hectares to establish plantations in Southern Madagascar, ranging in size from 2,500 - 50,000 hectares.