- Environmental Clean Technologies has revoked an offer to extend a Memorandum of Understanding (MoU) for a research and development operation with Indian companies NLC and NMDC
- The MoU was for the largest-ever joint research and development operation between Australia and India and was initially signed in May 2018. The project was designed to develop ECT’s low-emission iron and steel process via a Coldry-Matmor plant to be build in India
- NMDC fell silent when it came time to renew the MoU after both ECT and NLC boards approved the signing of the extension
- ECT said it has failed to receive a direct formal response NMDC, but has gathered that the company will not be proceeding with the project
- ECT and NLC will continue to work closely together to develop energy solutions in India
Environmental Clean Technologies has revoked an offer to extend extend a deal with two Indian companies.
The deal was the largest-ever joint research and development operation between Australia and India, signed in May 2018 between EC, NLC India, and NMDC.
The project was designed to develop ECT’s low-emission iron and steel process via a Coldry-Matmor plant to be built in India.
The plant would make use of ECT’s propriety the technologies Matmor, a lower-cost alternative iron making technology, and Coldry, a zero-emission lignite upgrading technology and fuel generator.
However, NMDC fell silent when it came time to renew the MoU, even after both ECT and NLC boards approved the signing of the extension. What followed was months of ambiguity and a lack of communication from NMDC, according to ECT management, which brought the process of signing the Research Collaboration Agreement (RCA) to a standstill.
Now, ECT leadership has travelled across India over the past week to meet with NLC, NMDC and the Australian High Commission in Delhi to discuss the future of the agreements.
ECT told investors today that it still failed to receive a direct formal response NMDC, but has gathered that the company will not be proceeding with the project. Subsequently, ECT has cancelled the extension and withdrawn from the current MoU as it stands.
“NMDC’s apparent unwillingness to pursue the project is, from ECT’s perspective, new and unexpected,” the company said in an announcement to the ASX today.
The company maintains that should NMDC decide to communicate more directly with ETC in the future to suggest an alternate court of action, ECT will be happy to consider this and discuss it with other partners.
While the withdrawal from the MoU has an impact on the expectations around the timing and funding of the India Project, ECT will continue to work with the Indian Government and maintain a strong relationship with NLC for research and technological development.
ECT Chairman Glen Fozard said senior NLC representatives have agreed to continue to work closely with the company to develop energy solutions in India.
“Whilst we acknowledge the change to status and engagement with NMDC, the need for ECT to move forward is closely related to our strong relationship with NLCIL together with the desire to see alternative projects take shape as part of our company’s broader India strategy,” Glen said.
“Our work on the Matmor project has brought the two companies into a strong and positive alignment and we look forward to honouring this relationship with targeted projects as we move ahead,” he said.
ECT shares are currently in suspension while the company is engaged in due diligence for a proposed Waste-to-Energy acquisition, but last closed at 1.3 cents per share. As such, the effect of the cancellation of the MoU on ECT share prices is uncertain, but the company expects to come out of suspension on 4 July this year.