Coal Age

JAN 2014

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news continued Coalview Finances Fine Coal Recovery Plant for TransAlta Coalview Ltd. LLC, a company that finances, designs and builds fine coal recovery plants to provide environmental solutions for mining property owners while recovering coal, has completed $42 million of project financing for its subsidiary, Coalview Centralia LLC, to construct a waste processing and fine coal recovery plant in Centralia, Wash. The $42 million project was financed by lead investor, David A. Schwedel, a Miami, Fla.-based energy technology investor, and Coalview Investment Partners I LLC; $26.5 million of Environmental Facilities Revenue Bonds issued by the Washington Economic Development Finance Authority, which creates no public debt and use no tax funds for repayment; and more than $10 million of capital equipment contributions. Project implementation of the 200-tonper-hour (tph) fine coal recovery plant began during December, and is scheduled to complete construction within the next 12 months. "Our Coalview team has worked diligently to bring this project through to fruition," said David A. Schwedel, director of Coalview. "We are grateful to the state of Washington for their cooperation, and for the assistance of our entire working group." Coalview Centralia expects to have more than 25 full-time personnel operating the plant. "Centralia has a highly qualified mining, administrative and finance talent pool, and we are looking forward to working with local constituents to move this process forward," said David Henry, president, Coalview Recovery Group, the management company responsible for the project. The plant is located at the Centralia mine, a former open-pit mine owned by TransAlta Corp. The mine was a captive coal operation supplying the nearby Centralia power plant. TransAlta purchased the mine and power plant from Pacificorp in 2000. In 2006, mining operations ceased and the power plant now burns coal from the Powder River Basin. At the height of its production, the Centralia mine produced more than 4 million tpy and it's believed the have more than 92 million tons of remaining reserves. Coalview specializes in the removal and processing of impounded tailing from the coal preparation process, and is the only company with a sample extraction technique, an in-house laboratory, design and operating techniques to handle the entire project from start to finish. Funding Environmental Solutions In April 2011, Coalview acquired Beard Technologies, which was a contractor that built fine coal recovery plants for coal mine property owners. "Their business model revolved around supplying those fine coal recovery services," Schwedel said. "The sole purpose of the These before and after photos demonstrate what Coalview hopes to achieve. January 2014 Beard Technologies acquisition was to enable us to build, own and operate those types of plants." All of the projects listed in Table 1 prior to Centralia, are projects that were developed by Beard Technologies. Prior to launching Coalview, Schwedel was a venture capitalist with a focus on the resource sector. His resource-related investment portfolio consisted of 85% mining and 15% oil and gas. In 2005, he was the lead investor for Synthesis Energy Systems. "We raised a lot of money for that group and subsequently brought in JPMorgan and Deutsche Bank for a large capital offering, and today Synthesis Energy Systems is a successful, publicly traded coal gasification company," Schwedel said. What piqued his interest about the Beard Technologies opportunity was being able to work with Dave Henry on these projects, as he is an expert in this area. "Dave Henry is well-known, highly respected, and well-regarded on a national level, and they were the national leaders in building fine coal recovery plants," Schwedel said. Henry specializes in the recovery and reclamation of coal slurry impoundments, testing and analysis of coal slurry reserves, slurry impoundment reclamation design and coal preparation. He has participated in thousands of tests to evaluate size distribution, deposition patterns, washability studies, facility circuit design and anticipated product quality. During his time with Beard Technologies, he focused on developing coal recovery operations through the use of advanced coal processing technologies and the production of high-grade fine coal products. The motivating factor for pursing this segment is two-fold, Schwedel explained. "A lot of coal property owners are finding themselves in very similar situations today," Schwedel said. "They have a reclamation obligation that's important to them. Oftentimes there is a parallel need with refuse impoundments reaching their useful lives and the mines are still operating full steam. By building a fine coal recovery plant, you can return the use of the impoundment back to the property owner while recovering the coal fines." What Schwedel brings to the table is the ability to finance these projects. "We have the ability to provide project financing around that. So these plants come at no cost to the property owner," Schwedel said. "We provide all of the cost of project financing. We put up all of the money. We provide all of the equity. We work with debt providers, such as banks or other institutions, that issue debt for these types of opportunities, so that they property owners or operators do not have to come up with the money." Coalview provides the plant and they own the plant. "We process the slurry, recover the coal and sell it to the property owner through an offtake agreement to the property owner for the life of the project," Schwedel said. "That's the only thing we ask them for. It's a unique way of approaching a problem that solves everyone's issue." Schwedel successfully applied a similar formula for financing coal gasification projects. This is the first time he has applied the principles to fine coal recovery. "At the end of the day, it's really a partnership," Schwedel said. "When the coal markets retracted and we came through the backside of the recession, money was hard to come by and still is." Coalview has the ability to build these projects and gain the project financing for them. www.coalage.com 9

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