RMDE acquires AEG CoalSwitch license, plans to build CoalSwitch plants
November 28, 2019
Following the announcement today to the London Stock Exchange by Active Energy Group confirming the acquisition of a 20-year licence to promote, sell and construct processing plants, utilizing its unique CoalSwitch technology and IP, to RMD Environmentals Inc., we are happy to confirm that RMDE has concluded the transaction to utilize this ground-breaking technology and intends to implement a number of projects in in two provinces in the coming period.
CoalSwitch provides RMDE, its partners and customers with the ability to revolutionize forestry operations, timber asset valuations and significantly enhance the profitability of a variety of harvesting and downstream timber processing companies’ operations in British Columbia and Alberta.
As ever more sawmills face curtailments and closure, the effect on other areas of the forestry and timber processing industries increases; fibre and feedstock costs become higher for all stakeholders, including traditional white pellet producers as lower cost by-products become scarce, disease and beetle/insect kill makes timber less accessible and forest fires make for less predictable forest harvesting planning. All the while, the trend in traditional markets for sawn lumber, newsprint and other products are forcing margins ever lower.
CoalSwitch is able to reverse the declining margin trend in traditional businesses and is complimentary to sawmill, board mill and pulp and paper operations, forestry waste utilization, post-fire remediation, “Salty Hog” and other legacy waste cleanups and other environmentally beneficial opportunities that, until now, have had no real economically viable solution. In short, any and all no/low value, ‘non-merchantable’ and damaged fibre, can now be considered as a revenue line item rather than a cost of ‘other’ goods sold.
RMDE is able to demonstrate to industry heavyweights that through integration of the CoalSwitch technology in their existing operations, IRRs and revenues can both be substantially enhanced, without increasing the cutting volumes of their businesses and solving the environmental issues that are faced from forest to factory in their respective supply chains.
CoalSwitch is uniquely able, in volume, to enhance the way responsible ministries and their industry partners are able to deal with residuals from harvesting operations, to utilize the whole tree, where large volumes of ‘non-merchantable’ biomass is currently ignored, discarded or burned as well as creating value from disease, pest, fire-damaged and legacy waste challenges, creating new employment, improving the environment and protecting at risk jobs and sunk capital, by averting mill curtailments and closures.
As a leading B.C.-based environmental engineering and consultancy group, and following the purchase of the CoalSwitch licenses for B.C. and Alberta, RMDE is now uniquely positioned to develop and implement investment projects involving the use of AEG’s proprietary CoalSwitch technology in the crown provinces of Alberta and British Columbia and is now set to progress a number of projects in both provinces.
RMDE chairman Grand Chief Ronald Derrickson said:
“RMDE is pleased, after over a year of due diligence and negotiation, to be in the position of becoming the first exclusive licensee partner for AEG’s CoalSwitch technology.
AEG has demonstrated to RMDE that it can provide the technical and IP support required to give us, our partners and investors the confidence to construct, commission and operate reliable, warrantied plants, with high-quality equipment manufactured and delivered by AEG, in partnership with recognized global leaders in the manufacturing space.
This gave us the confidence to invest in the license for these two key Canadian territories involved in the forestry and wood processing industry in Canada and to be able to negotiate with a major international off taker for up to 1 million tonnes of CoalSwitch per annum from our initial plant installations, with further demand still to come.
Over the last six months, RMDE has been working with its team of expert consultants to assess the CoalSwitch technology against other available options, taking into account the local forestry and timber processing markets and feedstock availability, logistics and potential relationships for each of the territories. In parallel, RMDE has worked closely with the AEG team at the Lumberton facility to develop a qualified plan and risk management protocol to give RMDE, our investors and partners comfort.
We have developed a number of significant opportunities that we anticipate will bring mutual financial benefit for both RMDE and AEG under these license arrangements, by benefitting the local economy and industry participants, for the long-term.
As a wholly Indigenous-owned company, RMDE is acutely aware of the environmental and sustainability considerations that must be taken into account before becoming involved in any opportunity involving local indigenous partners. We are delighted to be able to endorse the CoalSwitch technology process on this basis and very excited at the commercial opportunities before us.
CoalSwitch is an environmentally friendly, sustainable process and product, able to utilize all manner of fibrous materials including waste material with no other economic use and which currently represent a waste problem or fire hazard, to our indigenous partners and other communities close to forestry and other operations.
RMDE intends to build and operate both stand-alone and joint venture-based CoalSwitch plants involving various partners, with the support and involvement of provincial governments, Canadian forestry managers/owners, and many local Indigenous groups, timberlands operators and downstream production companies. RMDE is also working closely with service providers of note on the logistics to deliver product to our off-take clients for the production volumes of these new facilities with both Canadian and international partners.
One of our main goals is to find ways to bridge the often wide gap between ‘big industry’ in Canada and the Indigenous peoples of our country. We are delighted to confirm that the first project for RMDE is planned to begin shortly in Alberta and will involve and benefit one or more Indigenous groups in the province. I will say more on this shortly in a separate release.
In summary, we at RMDE are very excited at the opportunities that CoalSwitch presents for us and the wider industry and environment here, and we are keen, now that we have invested in the technology, IP and the relationship with AEG, to move forward to revenue as quickly as is responsibly possible and to bringing benefits to our partners and all stakeholders.”
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