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(Alliance News) - Active Energy Group PLC said Wednesday it has started commercial lumber production at its forest-to-energy plant in Lumberton, North Carolina, US.
Active is also hoping to being commercial production of its CoalSwitch at the site in the near future.
The company said it has begun manufacturing rail ties, the creation of wood chip and the manufacture of board through its joint venture agreement with Renewable Logistics Systems LLC - agreed back in July.
"We are delighted that lumber related activities including the sawmill and wood processing operations have commenced; these are already generating revenues for AEG," said Chief Executive Michael Rowan.
"These activities complement the business activities relating to our CoalSwitch and biomass operations, including accessing feedstock for CoalSwitch from wood residues and waste materials and accessing future customers of CoalSwitch and black pellet fuels for AEG," he continued.
One sawmill is currently operational, which Active said is generating revenue for the firm from one one shift per day.
Rowan added: "We expect these lumber operations to scale up during the first half of 2020, bringing online more operational capability, including operating a double shift each day; I look forward to providing further updates regarding the expected economic benefits to AEG in due course."
Active said it is currently negotiating orders with international customers.
To complement its potential CoalSwitch operation, the site has started to stockpile sawdust and waste wood.
Active also noted rental payments from RLS is contributing to the financial performance of the site. The company said Lumberton's current performance is "increasing its confidence with regards to the site's future profitability."
Also on Wednesday, the company separately said the North Carolina Department of Environment & Natural Resources is continuing to review its application to begin commercial production of coalswitch at Lumberton.
Active has filed the relevant air and environmental permits to the state regulator, which has confirmed to the company it is continuing to review the application.
"Once the permits have been awarded, the company will commence construction of the reference plant to produce up to 5 tonnes per hour CoalSwitch," Active said.
While the company awaits approval, Active said it is continuing to work on plans to construct and produce facilities for larger production at the Lumberton plant following its licence agreement with Canadian forestry firm RMD Environmentals Inc.
Under the deal, agreed in late November, RMD will "develop and manage" projects using its wood fibre fuel product CoalSwitch in the Canadian states of British Columbia and Alberta. It is expected the first plant will be commissioned by RMB within the next 18 months.
Rowan commented: "Having submitted all the relevant documentation, we are positioned to commence construction of the initial 5 tonnes per hour CoalSwitch reference plant at Lumberton once we receive the final permits. In the meantime, we're making good progress across the business, looking to utilise the Lumberton site for complementary lumber activities and planning for the scale up to the 50 tonnes per hour CoalSwitch facility."
Shares in Active Energy were up 8.8% in London on Wednesday at 0.48 pence each.
By Paul McGowan; paulmcgowan@alliancenews.com
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