VIASPACE Inc. (VSPC.OB) Announces Agreement with Provident Agro to Plant Giant King Grass in Indonesia
Before the opening bell today, VIASPACE Inc. and its renewable energy subsidiary VIASPACE Green Energy Inc. (OTCBB: VGREF) announced that they have signed a Memorandum of Understanding with PT Provident Agro of Jakarta Indonesia with the objective of using Giant King™ Grass as feedstock for a large scale pellet mill to manufacture a minimum of 300,000 metric tonnes per year of pellets for the export market, primarily in Europe.
Owning extensive oil palm plantations and land in Sumatra, Kalimantan and Sulawesi, Indonesia with a total land bank of 150,000 hectares (370,000 acres), Provident Agro produces more than 23,500 tons of crude palm oil each year. Provident Agro is owned 50% by the Saratoga Group and 50% by Provident Capital Indonesia. The Saratoga group, headed by Edwin Soeryadjaya, Ernst & Young’s Indonesian Entrepreneur of the Year in 2010, has extensive holdings in energy and natural resources including coal and palm plantations.
As terms of the Memorandum of Understanding, Provident Agro will initially plant a 25 acre test plot in Indonesia using Giant King Grass seedlings provided by VIASPACE. The press release did not offer further details of the business relationship. Provident Agro has signed a Nondisclosure and Non-Circumvention Agreement with VIASPACE, and has visited the Giant King Grass plantation in China as part of its due diligence.
Giant King Grass is an exceptionally high-yield, nonfood, low carbon energy crop that can be burned in electric power plants to replace coal. With only minor modifications, many existing power plants can burn as much as 25% Giant King Grass pellets instead of coal, reducing carbon emissions substantially and meeting their emissions targets for the next 10 to 20 years while preserving their large capital investment. New power plants are capable of burning up to 100% Giant King Grass.
Bloomberg recently reported, “The highest-priced coal in two years is making wood pellets a viable fuel alternative for U.K. power producers, heralding a doubling of electricity generation from biomass in the next three years…Benchmark coal for delivery next month in Northwest Europe has climbed 40 percent this year to close at $116.25 a metric ton yesterday, the highest since Oct. 24, 2008, according to data compiled by Bloomberg from broker prices. Pellets have fallen 0.7 percent this year to 126.30 euros ($167) a ton, according to APX-Endex, an Amsterdam-based exchange that plans to begin trading of wood contracts on its system by mid-2011…Power companies are turning to biomass as the profit from coal-based electricity generation slides.”
Giant King Grass is a dedicated and sustainable energy crop that provides an attractive alternative to wood pellets which are being criticized for diverting wood waste from current applications in the pulp & paper, plywood, veneer and engineered wood products industries.
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