Carbonxt Group, a leading emissions solutions provider for the US coal-fired power station sector, made a steady ASX debut today after completing a $10 million Initial Public Offering.

Carbonxt (ASX:CG1) sold 14.3 million shares at 70c in an offer led by Shaw & Partners.

The shares closed Tuesday at 67c.

The company’s core business is the production and sale of proprietary, powdered Activated Carbon (AC) produced for the removal of pollutants and toxins such as mercury from industrial flue gas and waste water emissions.

Carbonxt’s main focus is the sale of Activated Carbon to remove mercury from US coal-fired power stations, which is a legal requirement under US law.

Carbonxt already supplies multiple power stations — particularly in the US Midwest — and is in commercial trials with another five potential customers.

Its Activated Carbon product is superior to competitors because it doesn’t contain bromine.

Bromine acts in a similar way to chlorine, which may cause serious and costly corrosion issues inside power stations, according to Carbonxt.

Demand growing at 9 per cent

With more than 400 coal-fired US power stations and government-mandated mercury emission reduction regulations — demand in the US is growing at about 9 per cent per year. It’s expected to pass 500,000 tonnes per year by 2020.

Carbonxt plans to carve out a bigger share of a market which is approaching $1 billion a year.

Its strategy includes on-boarding more utility clients and expanding into other US emission control markets  which are not governed by Mercury and Air Toxic Standards.

Carbonxt’s solution is proven in the market place with FY18 Revenue from US power station customers forecast at A$8.9m, 134% growth over FY17.

The company will use the capital IPO funds to move much of its Activated Carbon production requirements in-house, using inexpensive feedstock — giving the company a very significant cost advantage.

The Minamata United Nations convention, which came into force in August, is expected to increase demand for Carbonxt’s mercury-stripping technology as more stringent anti-pollution measures are adopted by countries worldwide, including Australia.

That means Carbonxt should find demand in any country with coal-fired power stations.

Carbonxt is also developing additional pollution reduction solutions, including a process to manufacture activated carbon from a biomass waste product.

 

This special report is brought to you by Carbonxt.

This advice has been prepared without taking into account your objectives, financial situation or needs. You should, therefore, consider the appropriateness of the advice, in light of your own objectives, financial situation or needs, before acting on the advice.

If this advice relates to the acquisition, or possible acquisition, of a particular financial product, the recipient should obtain a Product Disclosure Statement (PDS) relating to the product and consider the PDS before making any decision about whether to acquire the product.

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