Technology developed by New Zealand's LanzaTech will lie at the heart of a joint venture being established by two Taiwanese corporations that aims to produce commercial quantities of fuel ethanol and other valuable chemicals from steel mill waste gases.
The biotech company, which has its scientific base in Parnell, has licensed its technology to a partnership between China Steel, one of Taiwan's biggest steel manufacturers, and Taipei-based chemical firm LCY.
More than $6 million will be invested into the partnership that will establish a plant at one of the companies' factories in Taiwan that will convert industrial waste gases into valuable products using LanzaTech's gas fermentation technology.
LanzaTech's Chicago-based chief executive, Jennifer Holmgren, said the establishment of the Taiwanese joint venture was gratifying.
"The only reason [China Steel and LCY] agreed to work together is because they feel they are going to be able to better exploit our technology," Holmgren said. She said that the Taiwanese plant would be a demonstration facility at first, but within 18 to 24 months it would be ramped up to commercial scale and licensing would then begin generating US$10 million ($12.3 million) a year for LanzaTech.
LanzaTech was expected to become profitable in 2015, Holmgren added.
Over the past couple of years LanzaTech has entered partnerships with a host of industrial companies across the globe including Chinese steel maker Baosteel, IndianOil, China's Henan Coal, Chemical Industrial Corporation and Mitsui & Co, part of Japan's Mitsui conglomerate.
Holmgren said a demonstration plant at a Baosteel factory in China was exceeding yield expectations and should go commercial by the start of 2014.
The company - which had previously indicated it may list on the NZX and another overseas exchange at some point - still had plans to go public, she said.
But it first needed to build up a unit that could validate Lanzatech's technology and economics.
"I don't think we'll be listing until 2014," she said. "We're still investing in growing the company and the partnerships."
According to documents lodged with the Companies Office, LanzaTech earned revenue and grant income of $2.7 million in the nine months to December 31, 2011.
But with operating expenses of $16.1 million - including $5.1 million for research and development and $4.7 million in employee costs - the company reported a loss of $15.3 million over the same period.
LanzaTech has raised more than US$100 million from private investors since its 2005 founding.By Christopher Adams Email Christopher