CHAR Technologies Ltd. (“CHAR” or the “Company”) (TSXV:YES) is pleased to announce the April 27th, 2023, signing of a memorandum of understanding (“MOU”) with the First Nations co-operative Lake Nipigon Forest Management Inc. (“LNFMI”) to collaboratively develop, build, own and operate a wood waste and residues to renewable natural gas (RNG) and biocarbon facility in the Lake Nipigon Region of Northern Ontario.
The MOU is a productive step forward for the ongoing project negotiations and development work, and sets out the intended partnership structure to develop, build, own and operate the facility.
LNFMI is a forest management co-operative comprised of four local First Nation Communities who hold the Sustainable Forest License (SFL) on the Lake Nipigon Forest:
- Animbiigoo Zaagi igan Anishinaabek
- Bingwi Neyaashi Anishinaabek
- Biinjitiwaabik Zaaging Anishinaabek
- Red Rock Indian Band
LNFMI oversees an annual harvest operation from the Lake Nipigon Forest, which supplies wood fiber across Northern Ontario. A relationship between CHAR and LNFMI will provide long-term wood waste feedstock security to support not only the initial RNG and biocarbon facility operations, but future opportunities to scale up and increase production capacity.
“LNFMI is thrilled to have signed our MOU with CHAR for the development of a new RNG and Biocarbon Facility on the Lake Nipigon Forest,” says LNFMI President Theresa Nelson. “This opportunity will provide employment for the memberships of the four First Nation partners, as well as a steady, yearly revenue stream for the continual development of our communities. It will also find a home for wood waste and residues from the Lake Nipigon Forest, ensuring an environmentally sustainable solution for the Region as a whole.”
The proposed Lake Nipigon facility would annually produce 500,000 gigajoules of RNG and 10,000 tonnes of biocarbon through the conversion of 75,000 tonnes of wood wastes and residuals, using two of CHAR’s commercial-scale high temperature pyrolysis kiln systems. The facility is projected to reach initial operations in 2025. The same two-kiln structure is currently in advanced construction stages in Thorold, Ontario.
“With Budget 2023 calling for increased production of Canadian biofuels, this project couldn’t come at a better time,” says CHAR CEO, Andrew White. “We’re proud to be working with our friends at LNFMI to develop this project to replicate our existing Thorold, Ontario, facility. With LNFMI managing our wood residuals and wastes supply chain, we can focus on delivering what we do best, supporting Canada’s green energy transition.”
The RNG produced by the facility will be marketed to natural gas utilities in the Region while the biocarbon is targeted for consumption as a metallurgical coal replacement for Canadian steel manufacturers.
Successful implementation of the facility would generate countless social, economic, and environmental benefits for both the region and Province of Ontario. These benefits would be realized through local, full-time employment opportunities, reducing the dependency on petroleum-based fuels, and increasing the utilization of wood fiber that is conventionally undesirable, unmarketable or a waste product of traditional harvest systems.
Under the terms of the MOU, voting rights in respect of the project entity would be split between LNFMI and CHAR on a 51%:49% basis, with each party being entitled to appoint two directors. CHAR and LNFMI would develop and operate the project collaboratively. Once operational, LNFMI would be responsible for sourcing and managing delivery of the feedstock, and CHAR responsible for sales and marketing of the renewable natural gas and biocarbon that is produced, with each party being paid customary fees for the services they provide to the project during development and operation.