A VALUABLE PROPOSITION

NZ Truth, Issue 1199, 22 November 1928, Page 2

A VALUABLE PROPOSITION

Jinaneial^eviews

"Land N." Coal Distillation, N.Z., Limited

PROSPECTUS UNDER REVIEW V,'.' ■ . ■ • . (By "Fiat Lux"). That the advance of the world is over paths made smooth by science is so true as to becorffe trite and commonplace, but it is always interesting 1 , mentally and financially, to follow the commercialization of scientific discoveries.

IT has been known for many yean past that m using coal straight f rorr the mine, m furnaces and household grates very valuable Constituent parts were going up the flue. In gas works m comparatively receni times even tar and coke were both looked upon as embarrassments unti: shortage of charcoal gave coke its opportunity m the smelting furnaces anc the research chemist proved the valuable contents of tar. Now comes a tremendous advance m the use of coal. Under the new process the coal is nol ■■''burned" as m a present day gas plant but it is "distilled" under very moderate temperatures. The whole of the volatiles are thus recovered, leaving' a residual solid fuel, which, it is claimed, possesses a calorific value equal to the original whilst it is actually superior to either coke or coal m many respects, When it is added that the coal requires to be broken down to slack for processing and that the recovered volatiles include pitch, Diesel oil, lubricating oil, petrol, wax, carbolic acid, cresoles, etc., etc., asid .from which are obtained dyes of the analine family, it will be dimly realized that m this instance .the commercialization of the scientific process contains more than possibilities of :' enormous profit 1 — it holds forth very definite prospects of great wealth. Having thus very briefly and sketchily outlined the idea behind the distillation of coal, let us. now digress to examine the financial prospects of "L. and N." . Coal Distillation (N.Z.) Limited. ■ ■■ This company is being formed with a nominal capital of £100,000, divided into £1 shares. Fifty thousand of thgse are to be issued as fully paid-up to the vendors of the "L. & N»" licenses patent rights, etc., and fifty thousand are T now available to the public on usual terms, i.e., 2/6 on application, 2/6 on allotment and the balance m calls of not more than 2/6 'per share at intervals of not less than two months. The company is being formed for the purpose of acquiring from Sensible Heat Distillation Limited, q£ London, an exclusive license for, New Zealand and its Dependencies to make, use, exercise«or vend the "L. & N." process and patents for the distillation of coal, to produce primary oils, gas, smokeless fuel and other by-products of coal m addition to further objects outlined m the Memorandum. Sensible Heat Distillation Ltd., is the owner of the Lairig ' & Nielson processes and patents for the distillation at low temperature of carbonaceous 1 materials, popularly known as the "L. & N." distillation processes. The company does hot itself operate plants, but has confined, its operations to the promotion of.subsidiary operating companies m various countries. It acts as permanent technical adviser to such subsidiaries m which it always retains a very substantial interest by Way of Shar.e capital. It will be appreciated; that'few coals are exactly alike and that whilst the principles to be applied to the distillation of any given coal are well-defined the details of such application must vary to get the best results m each C£LS6 ' ♦ Consequently, with Sensible Heat Distillation Limited, acting as technical advisers' to plants m Buch widely separated territories, as North inland arid' France, Bulgaria and Britain, Germany and Aus- \ trUlia, it follows that tbre most complete data can be collected, collated afrd disseminated to the utmost advantage'of all concerned. Now, although the company .under review has taken unto itself powers to operate plsihts m New Zealand: it is deemed advisable .that v it should act as a parent company and assist m the formation of working subsidiaries m which It will retain share interest. lit addition,; it will trade m "L. & N." pjants ; and market the by-products thereof. - v ■ ' ' ' Thus this- parent company's revenue will arise from : — v -. a. Profit on sale; of plants. . b. Marketing- of subsidiaries outputs c.-Soyaltieis. fi'om subsidiary c6ncerns. ■■ ■ , ■■ - \ ■ '. d. Dividends from shares held m subsidiaries. , - .' , , The cOal -mining industry throughout the world is 'undoubtedly jn' a de> pressed state due to the competition brought about "by hydro-electricity* but _m6re particularly by the developments m the internal combustion engines made possible and profitable by the productio'rt of such huge> quantities of raw petroleum oils as were undreamt of twenty years ago. ! New Zealand, has hot entirely escaped thfs retrograde movement m its coal industry. It has felt the effect of the competition presented by the Importations of fuel oils Which m twenty years have risen practically, from gero to the region of 3% million pounds p'eV ahntim. Nowi the putting into operation of a/ series of "L. & N." plants .\tfill mean, that considerable, portion of'the moiiey at present going overseas will ultimately be returned m the country. The coal industry will r.eceive a much-needed fill.up and the increased general employment" must add materially to the economic advancement of the Dominion. . ,i Yes, this all sounds very wonderful, but What .'■ has been' done to proVe (1) that the process is a commercial success, s (2) that, it can be; applied, to Ne;w Zealand coal, (3) that there is' a market for the products, particularly for the solid residual fuel? Eet us /deal with number two first In' .October. 1927,' the New Zealand Government despatched to England a representative 'range of New Zealand coals-from both^^ islands. The shipment corisisted of . twelve substantikl samples for testing by: Sensible Heat Distillation Limited by the '*L. & N." process '.:]-.['■.; : r „.■-..>;■:.■■•/:■;.• ';■; .:..:. ; ■ ."

Patent Process

Operations In N.Z.

The whole of these' samples were successfully treated, including brown coal from the Waikato, Otago, Southland districts, as well as bituminous and 1 sub-bituminous coal. In each case definite evidence was obtained that the "L. & N." process can^profltably treat New Zealand coals and also that the residual solid fuel obtained, ; therefrom besides being smokeless, equals the raw coal m calorific value besides 'producing large quantities of primary oils and gas. Some of the samples proved capable of much more profitable treatment than others, but even the average sample compares favorably, m resultant by-products with British coals now being profitably treated on a big commercial scale by the large "L. & N." plant operating '■ m- Leicestershire. The tests proved also that the average New Zealand coal contains a very, high oil content and this should 'ensure that the country * will soon be able to produce at least, a portion of Its own oil re- > quirements. V In June of 1928 a complete "L. & N." plant was erected at the pit head of the New Lount Colliery m Leicestershire, which is owned by the Leicestershire Colliery and Pipe Company, Ltd. ' .•:•• •• • The plant was supplied by "L. & N." Coal Distillation Limited and was guaranteed to treat 100 tons of slack per day. ' ■' In operation the plant actually treated 150 tons of slack per day and oh account of! its successful results the ' colliery 'company ~~ " has rbeen reorganized with a capital oof £860,000 to put m additional plant ■ with a capacity of . " 750 tons per day. They are a mighty hard-headed people * m ; Leicestershire and if four months working of the new process produces this amount of enthusiasm, this critic's opinion is that New Zealand ' investors need not hesitate to follow the lead. , Now, regarding question number three as to whether a. ready and .profitable market can be found locally to absorb the products arising from the new process. Let us deal firstly with the distinctive features of the solid residual fuel which is comparable m many ways to ordinary coke produced m high temperattjre retofts, but is infinitely superior to both coke and coal; It is* entirely free from dangers . of spontaneous* combustion when stored m bulk. ■■ ' ■ It ' is free from any suggestion of smoke or soot and can be stored indefinitely; it possesses heating value equal to the original coal;, it (s especially suited to domestic' purposes* and will ignite as readily as best household coal. In pulverised form it can be pumped or fed by gravity and has ail the advantage m this connection of Oil fuel. That these advantages are fully appreciated by the largest user of coal m the Dominion— the New Zealand Railway Department — ris fully . evidenced by the following extract from the Railway Statement for 1928 presented to Parliament by the Brime Minister. 1 , "Regarding the scientific treatment of coal and lignite by distillation, it has been stated that New Zealand brown coal so treated would produce a .smokeless fuel of high calorific value. The possibilities presented by the carbonization of our native brown coal, thereby producing a satisfactory fuel for use- in locomotives, have not been overlooked by, the Gdverniiiieht. "The' Railway De p ar trft 6 n t, iri conjunction with the Mines De- ~ partmSnt and .the Department of Scientific arid Industrial Research, has, after obtaining the most up-to-date lnforrriatlqh and reports from the leading authof Ities m England, fully investigated thi» matter, and the mining interests m the Waikato are fully acquainted with thß results. . I "As \an indication of the practical encouragement given by the GfoVernment to the establishment of a carbonizing plaint, we (the Government), have made aft ,offer to let a contract for the supply of all railway coal'requirements m the middle $orth Island District should the industry be established" So that's that. . . ' * \ Regarding the by-products— -a ton of siack of average oil content should produce, roughly: 4 gallons of pitch; 5 gallons of diesel oil; -2% gallons of lubricating oil; 2 gallons of petrol and 0 gallons of tar, which latter item is thfe: source of the wide range of iril^ portant dyeing substances, which, derived from analine, phenol (carbolic acid), a,nd anthracene respectively may all be clashed as tar colors. comes coal n apt ha from which is obtained benzol and tdlu'o'l, and. so' the 4 riierry round con* Unites. V ' Nothing much has been s/ild about possible profits arising from this undertaking and little can be said on the subject since m all patent 1 processes much secrecy must of necessity be observed. v . Although the English parent! company is obtaining £10,000 m cash m addition to the £ 50,000 fully paid-up shares, every penny of this is going back m subscribing 1 fiharos and it must have cost the c6mi>anv a bit of nioney to Investigate the New Zealand conditions. Then a very strdng board of coal directors has accepted office which is a further indication /of the value of this proposition, which pda ■ this : writer's unqualified support; "