Plantation Energy Australia's biomass fuel pellet plant in Albany, Western Australia, to shut down until economic conditions improve; executive cites insufficient blue gum residue, strong Australian dollar

LOS ANGELES , February 3, 2012 () –

Plantation Energy Australia Pty. Ltd. has decided to mothball its biomass fuel pellet plant in Albany, Western Australia, because the operation is losing money, said the company’s chief, reported the Australian Broadcasting Corp. (ABC) on Feb. 3.

The original intent was to make the pellets using blue gum residues from the W.A. Blue Gum Ltd. plantation, said acting CEO Kevin Heydt. However, shortages of the residues developed and caused the plant to use “full-blown trees,” forcing it to compete “with the woodchip guys for the same sort of diminishing stock of material,” he said, ABC reported.

The other problem for the plant has been the strength of the Australian currency, which has moved significantly since the pellet operation was first proposed in 2008, said Heydt.

The plant was scheduled to export its last shipment of pellets from the south coast port of Albany this week. The pellets have been sold to northern hemisphere power stations, and a U.S. energy company reportedly invested about AU$50 million (US$53.9 million) in the operation, reported the ABC.

The shutdown will result in the loss of about 20 jobs.

The primary source of this article is the Australian Broadcasting Corp., Sydney, Australia, on Feb. 3, 2012.

 

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