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Active Energy inks partnership for logging operation at Lumberton

Chief executive Michael Rowan described the new venture as “another important milestone” and highlighted that it gives the company a complementary revenue stream.

Lumber / logs in a stack
More blue sky for the Lumberton project

Active Energy Group PLC (LON:AEG) has inked a joint venture agreement with Renewable Logistics Systems LLC which sees the AIM-quoted firm enter the  saw logging export market.

Renewable Logistics Systems is a supplier of saw-logs, pulpwood and wood chips and together the companies will form a new vehicle, called Renewable Energy Systems (RES), which will manage logistics and saw-logging exports from the Lumberton property.

READ: Active Energy starts installation of reactors at Lumberton

Active Energy will initially own a 30% stake in RES with a right to increase its stake to 49%, after it has established a 50 tonne per hour CoalSwitch plant (expected before the end of next year).

RES will manage the material handling within Lumberton for AEG along with transportation services, such as the delivery of product to customers.

It is estimated that the RES operation will process some 200-500 containers of saw-logs for the export market per month, which would equate to 5,000-15,000 square metres of product per month.

The company noted that forestry waste products from the Lumberton operation will provide feed for pelletised fuels, including CoalSwitch.

Active Energy chief executive Michael Rowan described the new venture as “another important milestone” and highlighted that it give the company a complementary revenue stream.

“It establishes an additional source of feedstock supply for the production of pelletised fuels, and importantly accommodates all the near-term logistics requirements for Lumberton for the supply of existing and new pelletised renewable fuels to customers,” Rowan added.

"Revenue from the JV will be utilised for the future development of Lumberton and further demonstrates the value of our new operational centre, as it provides valuable commercial opportunities for the company through being an industrial hub located strategically in the heart of America's forestry industry."

Quick facts: Active Energy Group PLC

Price: 0.45 GBX

LSE:AEG
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Market Cap: £5.41 m
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