Yesterday I told the company’s annual shareholders meeting in Denver that we’re making good progress at achieving higher reliability and production rates at our Gillette, Wyoming plant, but I reminded everyone that the company’s credibility has been hurt by past missed deadlines--and I vowed to restore it through improved performance and execution.
Let’s not forget that Evergreen has matured in short order from a small coal technology company to a vertically integrated energy production company. Now, we’re putting this company on fast forward and know that our performance during the next few months is critical.
The K-Fuel® process works well and our customers like the product. At the plant in Gillette we are working with outside engineering sources: Lurgi and Bechtel Power--and we have strengthened our own engineering teams. We’ve made large scale improvements to the plant that have raised throughput by considerable measures.
In addition to improving the rate at which coal moves through the plant, our near term goal is to raise reliability past the 80 percent continuous operations mark. We continue to improve reliability and we are close to hitting that 80-percent threshold. It’s a matter of performing the engineering and mechanical work necessary to optimize the plant for reliability and efficiency.
On the business development front customer interest remains high, especially among industrial customers seeking to meet new emissions standards using eastern coal blended with K-Fuel® supplied by our wholly owned subsidiary Buckeye Industrial Mining in Ohio.
Our operations focus principally on the U.S., but we’ve also opened a small operation in Tokyo to license the K-Fuel® technology in several Asian nations, with particular emphasis on Indonesia. Sumitomo Corporation of Japan recognized K-Fuel’s ® potential and took an equity investment in the Asian venture. We have a good relationship with Sumitomo and have held extensive talks with them about the potential of K-Fuel® to serve the Asian market.
Last week at the invitation of the U.S. Department of Energy, a small Evergreen team traveled to Beijing for initial talks with Chinese interests about the potential for K-Fuel® technology and K-Direct to help China exploit its estimated 52 billion tons of sub-bituminous and lignite coals in cleaner, more efficient ways.
We’ve saved money by consolidating our coal laboratory operations in Rapid City South Dakota while also launching a new venture there, C-Lock Technology Inc., which offers a patented methodology for measuring, verifying and marketing carbon emissions reduction credits. With The New York Times suggesting carbon markets will grow from $37 billion this year to $1 trillion in the next decide, C-Lock has the potential to grow, and it’s a natural fit with the emissions-favorable profile of K-Fuel®.
The key issues for us today are that we are light years ahead of where we were two years ago, but we must still achieve better results and reestablish our credibility. I have a lot of reasons to be optimistic. All we can do now is stick to our game plan of improving our operations in Gillette and following through on the continued strong customer interest we see in K-Fuel®.
In our formal business at the annual meeting, shareholders reelected Mr. Stanford M. Adelstein and Dr. Robert S. Kaplan to our Board of Directors & reappointed Deloitte Touche, LLP as the company’s independent auditors.
