Clean Coal Technology Initiatives by Sherritt Technologies

1. Clean Coal Technology Initiatives by Sherritt Technologies February 26, 2008

2. 2 Sherritt International Corporation Diversified Canadian natural resource company involved in the production of thermal coal, nickel, cobalt, oil and power $3 Billion asset base 2006 revenues $1.1 billion 50 years of experience operating complex process plants Strong mineral processing technology background World class safety and labour relations record Operations in: Coal production Metals mining and refining Oil and gas exploration and exploitation Power generation

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4. 4 Carbon Development Partnership (CDP) A partnership between Sherritt and Ontario Teachers

5. 5 Major Coal DepositsA Partnership Advantage

6. 6 Typical Coal Mining Sequence

7. 7 Coal Conversion TechnologiesFlow Sheet Options

8. 8 Benefits to Alberta and Canada from Coal Conversion Technologies Gasification technology will provide a cost effective and a stable long term source of hydrogen for the Alberta Petrochemical industry – the ‘new’ Alberta Advantage. Gasification technology provides a secure, economic, reliable and ‘clean’ feed stock supply for power generation for the oil-sands industry Allows sequestration of CO2, enabling enhanced oil recovery (EOR) to be expanded and allow significant additional recovery of conventional oil resources

9. 9 Bridge Project – Phase 1Beneficiation of Western coals Objective: “ to develop cost effective cleaning technologies for low rank coals for use in pulverized fuel boilers and for gasification” In conjunction with Alberta Energy Research Institute (started in 2004)

10. 10 Bridge Project – Phase 2Gasification of Western Coals Impact of beneficiation on gasification Reduced capital costs for syn-gas cleanup Increased reliability of the gasification process Increased gasification potential for Sherritt coals Improved fuels handling Determine scale-up potential This project was also funded jointly by Sherritt and Alberta Energy Research Institute

11. 11 Bridge Project – Phase 1 Project Plan: Characterization of all Western Canadian Coals Mechanical Separation Pressure Pyrolysis Solvent Extraction Integrated Flow Sheet Development

12. 12 Air Jig Lignite evaluated at Falkirk showed potential application of Air Jig BTU increase: 1-6% Ash reduction: 5-23% SO2 reduction: 8-31% Hg reduction: 13-32% Quote requested: $310K plus installation and operating costs Searching for bench scale unit to pre-evaluate different coals, then pilot the ones with potential

13. 13 Fluid Bed Dryer Moisture reduction and ash removal Lehigh University bench experiments completed Additional piloting at Great River Energy to follow

14. 14 Wet Pyrolysis Because certain types of gasifiers are slurry-fed, their overall efficiency is dependant upon the coal/water ratio in the feed stream A reduction in equilibrium moisture content would allow us to ship drier, higher calorific value coal from the plant site to our existing customers without the worries of spontaneous combustion Reduced shipping costs (less water shipped) Higher boiler efficiency The result is a higher overall heating value fuel that can be fed into a gasifier or boiler A reduction in slag and ash forming components would reduce fouling and corrosion in the existing plants, increasing their operating efficiency and reducing their maintenance costs

15. 15 Process Flow Diagram Heat recovery via flash tanks Autoclave (we have the know-how) Heat recovery via flash tanks Autoclave (we have the know-how)

16. 16 Solvent ExtractionProcess Overview

17. 17 Integrated Flow Sheet Development

18. 18 Barriers to Gasification of low rank coals Technical Barriers Coals are higher in ash and in moisture (compared to Bituminous) Coals can not be “slurried” to the required solids content for it to be economical for either combustion or gasification High sodium content will potentially cause ‘fouling’ problems in the down stream equipment Commercial Barriers (ref: EPRI survey) High capital costs for gasification Low reliability and availability High O & M costs

19. 19 Development of “Optimal Gasification Technology” for Western Canadian Feed stocks Conduct a “proof-of concept” study at Siemens gasification facilities (formerly Future Energy) to gather data on the behaviour of slag characteristics under different oxygen/feed ratios Collect large scale data on the gasification and the water treatment areas Based on the information come with a ‘optimal strategy’ to select and operate an economically viable gasifier for Western Canadian feed stocks

20. 20 Bridge Project - # 1619Proof of Concept study for Gasification at Future Energy, Germany Approximately 40 tons of coal (8 tons of CV, 12 tons of Dodds and 20 tons of boundary dam) and 5 tons of petroleum coke were shipped to Future energy in July. All the samples were ground ( 95% - 100 micron and dried) at a pilot vertical mill operated by Klaudius-Peters and the ground samples were bagged, sealed under nitrogen and sent to Future energy Pre fluidization tests were conducted on all our samples to determine the drying level for each of the coals. Gasification tests were conducted between Nov 12 to Dec 2, 2005

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22. 22 Some Preliminary Conclusions The proof-of-concept tests proved that the entrained flow gasifier with a quench is the right technology for our coals All the coals tested gasify readily yielding high carbon conversions and cold gas efficiencies All the coals tested fluidize easily and conveyed through the high density mass flow system to the gasifier. The slagging characteristics of all the coals tested were satisfactory and did not create any flow or plugging problems The Dodds-coke mixture yielded good syngas flow and produced a slag at 1700 C The pure petroluem coke yielded much less syn gas (H2+CO) and much higher CO2 content (>15%). The slagging temperature was also high (>1900 C) and produced high viscosity slag. The relative leachability of these slags showed that pure coke gasification without adequate flux will not produce environmentally acceptable slag.

23. 23 Top of the gasifier

24. 24 View of the quench system

25. 25 The ‘Beautiful flame’ of the Syngasproduced from Dodds coal

26. 26 Path Forward Sherritt Technologies will be building a “Clean Coal Technology Center” for upgrading ‘low-rank’ coals to ‘higher rank’ coals by beneficiation Sherritt Technologies will be willing to work with any potential end user (combustion or gasification) of Sherritt’s coals The site for the center has been chosen Laboratory facilities will be completed by Q3 2008