The licensing agreement will be the largest trade deal between Vietnam and Victoria with exports of brown coal from that state’s La Trobe Valley forecast to exceed $1.5 billion a year by the early 2020s.
But environment groups are outraged that the signing event, attended by Julia Gillard backer and federal Trade Minister Simon Crean in Melbourne on Friday, would go ahead at a time of continuing debate on climate policy.
"This is a disastrous first action for the new Gillard government," Environment Victoria chief executive Kelly O'Shanassy said.
"We're calling on Prime Minister Gillard to take control on climate policy and withdraw the federal government's support for a brown coal export industry.
"Prime Minister Gillard has a difficult task ahead of her on climate change and it's a worrying sign if one of the Gillard government's first announcements is to support a brown coal export industry."
Gillard indicated there would be no changes on emissions trading policy because no community consensus had been reached on the need for a price on carbon.
Last April, former Prime Minister Kevin Rudd controversially announced that the government would delay emissions trading until at least 2013.
Environmental Clean Technologies (ECT) claims its dewatered brown coal pellets are more environmentally sound than using raw brown coal and can cut carbon emissions by 30%.
The patented process enables brown coal to be economically dewatered from 60% down to 12% moisture producing an exportable, black coal equivalent pellet.
TinCom’s agreement with TinCom is the first commercial deployment of its brown coal dewatering technology, known as COLDRY, proposed for development at Gippsland’s Loy Yang Power site.
Victoria has around 30Bt of economically winnable brown coal which, to date, has predominantly been used for local power generation.
Under the terms of the agreement, ECT will draw a royalty of $5 for every tonne, resulting in revenues of $10 million a year in the project’s phase one, increasing to $100 million a year after 2020.
The COLDRY plant is expected to be fully operational by late 2013 or early 2014.
ECT chief executive Kos Galtos said this license agreement was an “historic step” for the company, and concluded almost two years of intense negotiations.
TinCom chairman Thang van Luong said the technology created an environmentally friendly, sustainable energy supply, which was critical for emerging economies around the globe.
