Natural Resource Stocks Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Natural Resource Stocks

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

From: Michael Collings	5/19/2005 9:33:38 PM
	Read Replies (2) of 108720

I don't know if any of you are looking into the coal industry but there is a stock that may move significantly in the fairly near future. I am sure many of you have heard Bush running around giving his clean coal speech as an answer to many of our energy needs. The coal industry is going through it's own revolution right now as new technologies for clean coal are developed. A little background into coal may help here. First, there are a number of different types of coal. Coal in the east, bituminous coal, is high in heat value or btu (british thermal units) in fact eastern coal has a btu per lb. of around 12000. Eastern coal is being depleted as evidenced by the inability to increase production even with a more than doubling of price in the past few years. When they say we are the "Saudi Arabia" of the coal industry, they are largely talking about western coal or sub-bituminous coal. Western coal has a btu per lb of around 8000. Utilities would prefer to use the higher btu coal because it is more efficient in generating electricity. However eastern coal has more emissions issues, i.e., sulfur, NOX and Mercury. Western coal sells for around $6 and eastern coal over $60 per ton. Recently the EPA initiated a new ruling that utilities must now reduce mercury emissions by 30% by 2010 and 70% by 2020. A number of companies including GE are working on various carbon like compounds that can be used in the flue gas to reduce mercury now. But there is a company out in Wyoming that is building a plant now to remove those emmissions from the coal itself and raise the btu of western coal to 11000 to 11500 btu per lb. The process removes up to 30% of the moisture from western coal and with the removal of water, it also removes 70% of already low mercury coal. The plant is expected to be completed in the next few months and be in full production by 4th quarter this year. This is basically a pilot plant to show this technology works and to give the company visibility. The company name is KFX and the symbol (amex) KFX. Arch Coal has invested $2 million in this company. James Schlesinger is on the board of directors. The stock is currently trading at $12.20. Once the plant is open they will immediately expand. Taiwan has signed a licensing agreement to build a plant up in Alaska for $35 million and royalties. Arch Coal and Peabody are in negotiations to license plants at their mine sites. (Arch Coal CEO Leer was on cnbc discussing it a couple of days ago) There is also international interest in this process as other countries also have subbituminous coal Obviously they have little revenues at this point but that should change very soon. And change significantly. Visit their web site at www.kfx.com and do your own due diligence if you have any interest. I'm also a big gold investor but I thought this company was so intriguing that I thought I'd share it first.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next