By Peter Roberts
Australian decarbonisation technology company Calix has begun to reap the rewards of its efforts to move the critical industries of cement and lime production towards a zero emissions future.
The company has accepted an investment of $24.5 million from investment business Carbon Direct to take a seven per cent stake in Calix subsidiary the LEILAC Group.
As part of the transaction, Calix has entered into a licence agreement with the LEILAC Group under which it will retain 30 per cent of royalties earned by LEILAC Group from deployment of its technology, regardless of Calix’s equity stake.
Calix is already profitable from its water treatment and other businesses, but so far it has financed its most exciting development of cement and lime decarbonisation from its own resources and through grants, including from the European Union.
The EU and a consortium of the world’s largest cement companies have already built and operated LEILAC-1 (pictured), Calix’s Low Emissions Intensity Lime And Cement technology pilot plant located at HeidelbergCement’s plant in Lixhe, Belgium.
Such was its success a full demonstration plant LEILAC-2 is now being built in Germany involving construction of a 100kTpa CO2 capture plant at a HeidelbergCement plant in Hannover, Germany.
This is the equivalent 100 per cent of the CO2 emissions from a large lime kiln.
Calix’s technology involves heating the kiln from the outside, rather than combustion taking place inside the cement kiln, including with renewable electricity from wind and solar which the cheapest form of new power generation.
The beauty of the process is that inside the kiln carbon dioxide bubbles out of the rock and is used in carbon reduction or captured ready for conversion into other materials or to be piped away for storage.
Now Calix has shown how valuable its technology really is, with Carbon Direct paying a premium for a small slice of its potential, along with the right to advise Calix on areas such as capital markets, regulations and commercial and technical development.
The deal opens the way for further investments from outsiders in the core process, and in buying licences to operate the LEILAC technology in the hundreds if not thousands of cement and lime plants globally.
At the same time Calix has cemented – pardon the pun – its royalty rate, no matter how low its shareholding in the LEILAC Group goes, at a very healthy 30 per cent.
Calix CEO Phil Hodgson said the deal represented a critical milestone in Calix’s stated strategy of seeking equity ‘farm-ins’, after initial development undertaken by Calix, to accelerate and deploy its underlying platform technology into each line of business, with Calix remaining head licensor.
Hodgson said: “As each of these businesses become independent commercial entities, they will remain joined at the hip” technically with Calix, which will continue to support development of the core intellectual property.
“Over time, growing royalty income from these companies will also support the development of new applications of the IP and associated technologies,”
LEILAC is a great development for the future of the cement and lime sectors, and as this deal shows…..for Calix Limited itself.
Picture: Calix/Leilac facility
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