Linc, Exxaro to Develop UCG Projects in Sub-Saharan Africa

Australia based Linc Energy and South Africa’s Exxaro have entered into formal agreements to jointly pursue Underground Coal Gasification (UCG) as a commercial business to develop energy solutions in Sub-Saharan Africa.

As per the agreements Exxaro is to pay an upfront Licence Fee of AU$20 million for the Intellectual Property Licence Agreement. A further fee of AU$7 million is payable on the initial Exxaro UCG project passing agreed performance tests, which is expected to occur in 2017.

Linc Energy to be entitled to ongoing royalties for the synthesis gas produced and sold in return for access to Linc Energy’s UCG technologies in the Region. The agreement also says that Exxaro will be granted a non-exclusive license to use Linc Energy’s UCG intellectual property in the region and an exclusive licence for certain areas within the region.

The Australian firm will hold a minimum of 15% equity in the initial UCG project and have the option to participate up to a 49% equity position in all UCG projects which Exxaro develops.