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Oil Report

INTERVIEW-Israel's EER to expand waste treatment globally

JERUSALEM, March 18 (Reuters) - Israel's Environmental Energy Resources Ltd (EER), a unit of Israeli investment company Shrem Fudim Kelner Co. Ltd. SFK.TA, is rapidly expanding its operations worldwide, EER President Moshe Stern told Reuters.

EER will invest up to $60 million in four waste treatment facilities to dispose of low-level radioactive waste at the Chernobyl nuclear power plant, to treat some 500,000 tonnes of waste on a build, operate and transfer basis for 20 to 25 years.

“We expect to make about $145 million a year from the four waste treatment plants,” Stern said, noting that each plant had about a 25-year life cycle.

The Chernobyl explosion on April 26, 1986, was the world’s worst civil nuclear accident and has been blamed for thousands of deaths due to radiation-linked illness.

EER uses molten gas at temperatures between 1,400 and 7,000 degrees celsius in a process called plasma gasification melting (PGM) to melt down municipal and household, medical, and low-level radioactive waste.

The final product is a dark, ceramic-like block with a volume of about 10 percent of the input material which, aside from the radioactive waste, can be used in construction.

He noted that at a treatment of up to 500 kilograms of radioactive waste per hour per plant, PGM technology cut average costs of $30,000 to $4000 per tonne.

EER developed the PGM technology together with Russia’s Kurchatov Institute research centre and Radon Institute.

EER also signed a working protocol with Samstar, a state-owned company in China, according to which Samstar would order planning and construction of medical waste and radioactive waste plants from EER and its Russian partners.

“Our project in China is much greater ... We intend to build around 800 small (medical waste treatment) plants at about $6 million a plant,” Stern said, noting that the local development of plant parts and units cut down on costs.

The lack of proper treatment of medical waste in hospitals in China was a key factor giving rise to the SARS epidemic.

Severe Acute Respiratory Syndrome (SARS) emerged in southern China in 2002, swept through the province of Guangdong and spread globally in 2003, infecting 8,000 people and killing 800.

OTHER MARKETS

EER has also created subsidiaries in two target markets, Japan and Korea, through which it is marketing its waste treatment technology.

“Japan, which has about 2,700 incinerators, is a prime target as landfilling is no longer allowed there,” Stern said, noting that both the Japanese and the Korean governments had multi-billion dollar budgets for radioactive waste disposal.

“Europe, where landfilling is also being banned, is a close second, with Poland a key target,” Stern said.

He said Poland has never had a proper system for waste disposal, and given EU regulations and the available budget, would have a big incentive to invest in the new technology.

Last week EER launched a demonstrational plant in Israel, which melts municipal and household waste, and which it intends to use as a marketing tool to countries worldwide.

As part of EER’s global expansion scheme, the company is investigating options for an initial public offering.

“We are currently looking to join a large partner in the industry with the aim of eventually going public,” Stern said, adding that he foresees an IPO within the next year and a half.

He noted that joining with a strategic partner would increase the company’s market value.

Investors in EER include Israeli investment company SFK and its subsidiary Shrem Fudim Kelner Technologies SFKT.TA, Urdan Industries URDN.TA, Japan's Tokyo Financial Group and South Korean investment firm EBN.

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