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To: Charles Broderick who wrote (995)1/11/2000 10:15:00 AM
From: Ron Luhmann  Read Replies (1) | Respond to of 1051
 
SGII NEWS RELEASE !!

SGII to Purchase Up to 650,000 Tons Coal for ENCOAL Plant
PR Newswire - January 11, 2000 06:15

LA JOLLA, Calif., Jan. 11 /PRNewswire/ -- SGI International (OTC Bulletin: SGII) announced that it has executed an agreement with Illinova Power Marketing Inc. to supply the ENCOAL plant with up to 650,000 tons per year of coal from the Buckskin Mine in the Powder River Basin. The coal will provide feedstock for SGII's ENCOAL plant for the production of enhanced coal, fuel and chemical products using its Liquids From Coal (LFC) Technology. Under a previously announced agreement, the upgraded, finished coal product will be sold to Illinova and shipped to their Wood River and Havana Stations.

John W. Hart, Vice President, Marketing of SGII, stated: "This agreement, combined with recent accomplishments by SGII, completes the elements necessary to procure feedstock, produce enhanced coal and deliver upgraded coal product to our customer."

In December 1999, SGII announced an agreement with AEI Resources to transfer the ENCOAL plant and all related assets of the LFC Technology to SGII. In an earlier announcement, an agreement was signed with American Electric Power (NYSE: AEP) that will assure SGII of competitive transportation rates for delivery of its enhanced coal to Illinova and other electric utilities located in the midwest through 2004.

Michael L. Rose, President and CEO of SGII, stated: "This accomplishment represents one more step the Company had to complete in order to continue to move toward its goal of commercialization of the LFC Technology. Several more agreements for the sale of coal liquid products are being worked on by the Company. I have every confidence in stating that these agreements will be accomplished and announced in the near future."

SGII's business is developing proprietary technology to upgrade low-value carbon feedstocks (primarily low-rank coals, heavy crude oil and petroleum refinery resid) into valuable carbon fuels and products and into valuable specialty chemicals. Its corporate headquarters is in La Jolla, California.

(This news release contains forward-looking statements. Actual results could vary from those expected due to a variety of risk factors, including, but not limited to, the uncertainty of successful completion of contemplated or proposed business transactions.)

SOURCE SGI International

/CONTACT: Nancy C. Propp of SGI International, 858-551-1090/