Mitsubishi, Dynamotive in biofuels agreement

Vancouver biofuels company Dynamotive Energy Systems (OTC BB: DYMTF.OB) said today it signed a letter of agreement with Japan's Mitsubishi to work together on project development, finance, technology development, product research and application, and fuel supply and trading.

Dyamotive previously signed a memorandum of understanding with Mitsubishi Canada in December 2005.

Under the new agreement, the two companies plan to initiate preliminary discussions for the refinancing of Dynamotive’s current plant and equity participation in West Lorne, Ontario.

Dynamotive said the plant has an asset value of approximately $18 million, with the full output of contractually committed.

Since 2005, the companies have already identified project opportunities for development in Argentina, as well as other projects in Latin America, projects in China, and in the U.S. where Dynamotive has an operating subsidiary.

Mitsubishi has also identified new projects in Japan and South East Asia.

Dynamotive said it may supply its BioOil from a Guelph, Ontario, plant to Mitsubishi for testing and market development under the agreement (see Cellulosic wood-to-oil plant commissioned in Canada).

The company uses fast pyrolysis technology to turn dry, waste cellulosic biomass into what it calls BioOil for power and heat generation.

The Guelph plant's production is rated at 50,000 tonnes annually, according to Dynamotive.

Mitsubishi also wants to license Dynamotive's technology for small plant capacity, 20 tonnes and under, for fabrication and marketing in Japan.

Dynamotive said it has a 15 tonne per day plant that could be refurbished for Mitsubishi.

Mitsubishi, Japan's largest general trading and investment company, operates a New Energy Business Unit to work on the development of new energy to supplement and replace fossil fuels.

Vancouver's Dynamotive, incorporated in 1991, has offices in the U.S., the U.K. and Argentina.

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