Solid Energy has signed an agreement with Australia-based Ignite Energy Resources (IER) securing the exclusive New Zealand rights to a technology, which converts low energy feedstocks, such as lignite and biomass, to high-grade coal and synthetic crude oils.

The binding heads of agreement will lead to a license agreement, worth up to AUD15m, plus royalties. Solid Energy and IER will work together to further develop and commercialize the technology, and will construct and commission a pilot plant able to process lignite and biomass in New Zealand. The commercial pilot plant will be capable of expansion to a one million tonnes per annum facility.

IER is currently converting lignite to synthetic crude oil and high-grade coal at a pilot plant in Somersby, New South Wales, Australia.

Solid Energy is currently investigating several technologies for converting its substantial lignite resources in Southland to energy forms and products. This includes developing a lignite-briquetting plant near Mataura with GTL Energy and assessing the viability of a lignite-to-urea plant in Southland with Ravensdown.

IER’s proprietary technology converts low-value feedstocks into oil and coal products using both ancient biomass (lignite) and modern biomass (for example, plant waste).