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Wildhorse Energy (WHE), an AIM and ASX listed company focussed on developing underground coal gasification (‘UCG’) and uranium projects in Central and Eastern Europe, has said that the Hungarian Parliament has approved the modification of the Mining Law which now includes UCG specific regulations setting out a legal framework for the development of UCG projects. These regulations have since been put into legal force as of 1 January 2014.
WHE Managing Director Matt Swinney said, “We welcome this news, representing the first legislation of its kind in Central Europe, and are confident that this regulation marks a new chapter of UCG application in Hungary and in the region as we continue to consider various development paths for our projects. This is an important component for a company looking to establish a European UCG operation, capitalising on the highly attractive energy market dynamics inherent in the region. We are a firm proponent of the considerable economic and environmental potential UCG offers, and we are delighted that Hungary, which plays host to significant stranded coal reserves, has taken this progressive stance towards the adoption of this potentially revolutionary technology in Europe.”
As previously announced, the company is currently engaged in on-going, non-binding discussions with a third party, which is consistent with its previously announced partner selection process. In line with this, the Company’s ability to advance its UCG projects in Hungary is dependent on it securing a strategic partner.
Further Information:
The WHE team is excited to see the adoption of the Modification of the Hungarian Mining Law includes UCG regulation, where the Company’s most advanced UCG asset, the Mecsek Hills UCG Project, is located. In January 2013, a study was undertaken regarding the “Guidelines for Implementing Underground Coal Gasification in Hungary”. This study was completed in cooperation between the Hungarian Geological and Geophysical Institute, the University of Miskolc, Golder Associates and WHE.
With the key aspects of the study comprising analysis of UCG technology, in addition to evaluations on the UCG potential in Hungary, environmental considerations, geological aspects of site selection, risk assessment and legislative aspects of UCG and its application in Hungary and the rest of the world, the study provided a thorough assessment of the commercial and environmental desirability of UCG application. The study concluded that UCG, as a clean coal technology, can provide Hungary with an opportunity to develop its extensive stranded coal reserves.
In summary, the Mining Law modification includes:
· UCG has been included within the existing Hungarian Mining Law as a mining method, thus the existing Mining Law would serve as the basis for the regulation of UCG.
· A Mining Plot, which gives exclusive long term rights to mine the targeted coal through the use of UCG, can be obtained directly after the conclusion of the exploration period following the approval of the exploration final report. It is left up to the individual Company to determine what scale is commercial.
· The royalty for UCG will be 2% on the value of the quantity of the utilised mineral resource.
· An UCG demonstration license (maximum six months in duration) can be obtained following the conclusion of the exploration period but prior to the final application of a Mining Plot (operational license). The licensing of the demonstration UCG facility may take place if a Company believes the existence of the technical and geological conditions of applying UCG on the targeted resource needs to be proven by a demonstration facility before applying for the final licenses.
