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PyroGenesis Canada in final contract negotiations with major iron ore pelletization client

The client is a multi-billion-dollar international owner of 10 plants requiring 50 plasma torches to replace existing fossil fuel burners

plasma
Plasma torches can convert renewable electricity to heat without greenhouse gases emissions

PyroGenesis Canada Inc (CVE:PYR) (OTCQB:PYRNF) announced Tuesday it has entered into the final stages of negotiations over an equipment-supply contract with a major iron ore pelletization client. 

The company said the client is a multi-billion-dollar international producer of the pellets and one of the largest in the industry whose name remains confidential for competitive reasons. 

The client has over 10 plants each requiring about 50 plasma torches to replace existing fossil fuel burners.

READ: PyroGenesis Canada wraps up first phase of plasma torch tests for iron ore client

“This is indeed a very significant development as the client has accepted the successful completion of the first phase in the modeling contract as a basis to move forward for equipment supply,” said PyroGenesis CEO Peter Pascali in a statement. 

Pascali said that was not entirely unexpected as the balance of the modeling contract was geared to further quantify the benefits of transitioning to plasma, and the initial stage of negotiations had already begun prior to the first phase getting underway, confirming expectations.

“In management’s opinion, this is moving quickly, particularly in light of the client’s size, the current pandemic, and how busy they are. This is just one of many discussions taking place with other producers in this, and other industries,” he added.

PyroGenesis said the purpose of the multi-phase modeling contract was to evaluate the performance of its proprietary torches in an existing iron ore industrial furnace with the goal of replacing all existing fossil fuel burners with the plasma torches. 

As the all-important first phase has been successfully completed, the company said all modeling phases remain to be completed by the end of the second quarter of 2020.

“There is no guarantee of successful conclusion, nor of the timeframe in which this might occur,” noted Pascali. “However, things seem to be moving in the right direction, and at a very rapid pace. Since our success with RISE, we have seen a significant increase in interest in using our proprietary torches to reduce greenhouse gases.”

He added: “We continue to find that the proposition to reduce greenhouse gases emissions, and avoid carbon taxes, with a simple bolt-on replacement of current environmentally damaging fossil fuel burners, is too compelling to resist. That, combined with the environmental pressure these industries are currently under (only recently a new trend has emerged where financial institutions are tying credit facilities and debt issuances to carbon reduction targets for multi-national industrial and mining conglomerates), has contributed significantly to this wave of interest and proposals.”

Pelletization is the process in which iron ore is concentrated before shipment, thus significantly reducing the cost of transportation. Typically, the heat is generated by oil or natural gas burners. Plasma torches, because they can convert renewable electricity to heat, offer an environmentally attractive alternative.

Contact the author: [email protected]

Follow him on Twitter @PatrickMGraham 

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TSX-V:PYR
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