It is reported that a US company seeking to fuel Western Australia booming mining sector with biodiesel from algae is poised to raise an additional USD 100 million from private investors mid-year ahead of a probable share market listing.
Aurora Algae would use funds to build a facility producing commercial quantities of biodiesel for use in mining trucks and other by-products from algae in Karratha a fast-growing mining town in Australia’s Pilbara region, which accounts for a quarter of the world’s trade in iron ore by sea.
Construction of the commercial facility is due to begin later this year for completion early in 2013, supplanting an existing demonstration plant in Karratha.
Mr Matthew Caspari MD of Aurora Algae Australian operations said that the California-based company aims to begin the process for a US public listing by the end of the year, but wouldn’t speculate on its potential value.
He said Aurora can make cost-competitive fuels by also extracting Omega-3 oils from its algae and selling it to the dietary and pharmaceutical industries. The company is able to develop other types of product because it has researched the oil production qualities of different types of algae and developed its own refining technologies.
He added that “Profit, especially in the shorter term, is heavily weighted towards the Omega-3 product. And by having that higher margin product we’re able to sell fuel at parity with diesel.”
The company has forged a supply agreement with a major carbon dioxide producer in Karratha that Mr Caspari declined to identify. It received about USD 2 million funding from the Western Australia government for its 2.6ha demonstration facility and hopes the government will contribute more to the 100ha first-phase commercial plant.
Biofuels made from algae can be developed in arid areas, preventing the need to use agricultural land, and Western Australia vast, dry landscape provides an ideal place for harvest. The algae feeds on carbon dioxide, an environmental benefit sought after by large gas-export terminals in Karratha wanting to cap their carbon emissions.
Mr Caspari said Aurora has already raised over USD 40m from US venture capital firms Oak Investment Partners, Gabriel Venture Partners and Noventi Ventures. They are likely to contribute to the USD 100 million raising along with an unnamed strategic investor that the company recently signed up.
Drawn by algae’s potential as a substitute for gasoline and diesel, ExxonMobil in 2009 invested $US600m in a partnership with Synthetic Genomics of California to develop commercially viable biofuels.
(Sourced from www.theaustralian.com.au)
