CENTENNIAL COAL COMPANY LIMITED 2002-05-27

CENTENNIAL COAL COMPANY LIMITED 2002-05-27 ASX-SIGNAL-G
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HOMEX - Sydney
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Centennial Coal has today finalised a Memorandum of Understanding
(MOU) linking a new long-term coal sale agreement with Tohoku
Electric of Japan to the purchase of carbon credits.
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Commenting on the MOU, Centennial Coal's Managing Director, Mr Bob
Cameron, said:
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"This is a ground breaking initiative providing both important
economic and environmental benefits."
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In what is believed to be one of the first trades under Article 3.4
of the Kyoto Protocol, Centennial Coal will purchase Certified
Emission Reduction Units ("CERUs") generated from the planting of
saltbush in far western New South Wales. Centennial Coal will then
on-sell these carbon credits to Tohoku Electric, one of Japan's
largest coal consuming electricity generators, thus assisting the
power utility to meet its obligations under the requirements of the
Kyoto protocol. The implementation of the sale/purchase of the carbon
credits is subject to the commencement of an International Emissions
Trading System.
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The Saltbush Project has been facilitated by 'Australian Inland
Energy and Water', a NSW Government owned energy and water supplier
in far western NSW. The project involves planting up to 1,000
hectares of land in south western NSW with saltbush, as well as the
grazing of livestock. Saltbush is an Australian native plant which,
due to its deep root system and salt tolerance, is ideally suited to
grow in saline affected areas where it can aid in erosion control.
The plant is also considered unique because of its ability to
sequester carbon dioxide from the atmosphere and deliver it back to
the soil within two years of planting.
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This innovative project represents an opportunity to not only
contribute to an economic and sustainable land management system, but
also sequester global carbon dioxide emissions and create CERUs which
have the potential to be traded, both in Australia and overseas.
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"Centennial Coal is the first Australian coal company to formalise
the future purchase of such CERUs to on-sell to Japanese customers,"
Mr Cameron said.
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"This project is a win for the environment, the coal industry, our
customers and shareholders, as well as the state of NSW."
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"By purchasing these CERUs and selling them to our customersas
'bundled' credits or 'GreenCoal', we are making our coal more
attractive to our customers, as these credits cover their emissions
and help them meet their obligations under the Kyoto Protocol," Mr
Cameron said.
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Mr Cameron confirmed that the agreement with Tohoku Electric was
concluded in line with current term contract prices and went on to
say:
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"Our contract with Tohoku is an expansion of an existing agreement
and this development clearly strengthens the relationship between our
two companies. We are confident that today's MOU will be the first of
many and will position Centennial Coal as a recognised provider of
'GreenCoal'.
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Centennial Coal is a publicly listed Australian coal producer,
operating seven mines in NSW and Queensland which produce five
million tonnes of coal per annum.
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A large proportion of this output is thermal coal which is purchased
by power generators, located both overseas, such as Tohoku electric,
and in Australia. The Australian market continues to be the largest
consumer of Centennial's output.
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For further information contact:
Mr Bob Cameron
MANAGING DIRECTOR
Centennial Coal Company Limited
Telephone: (02) 9299 8955
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