CENTENNIAL COAL COMPANY LIMITED 2002-05-27 ASX-SIGNAL-G --------------------------------------------------------------------- HOMEX - Sydney --------------------------------------------------------------------- +++++++++++++++++++++++++ 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. --------------------------------------------------------------------- Commenting on the MOU, Centennial Coal's Managing Director, Mr Bob Cameron, said: --------------------------------------------------------------------- "This is a ground breaking initiative providing both important economic and environmental benefits." --------------------------------------------------------------------- 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. --------------------------------------------------------------------- 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. --------------------------------------------------------------------- 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. --------------------------------------------------------------------- "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. --------------------------------------------------------------------- "This project is a win for the environment, the coal industry, our customers and shareholders, as well as the state of NSW." --------------------------------------------------------------------- "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. --------------------------------------------------------------------- Mr Cameron confirmed that the agreement with Tohoku Electric was concluded in line with current term contract prices and went on to say: --------------------------------------------------------------------- "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'. --------------------------------------------------------------------- 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. --------------------------------------------------------------------- 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. --------------------------------------------------------------------- For further information contact: Mr Bob Cameron MANAGING DIRECTOR Centennial Coal Company Limited Telephone: (02) 9299 8955 ---------------------------------------------------------------------
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