Macquarie Harbour Mining to commence processing of salt slag, revenues to follow

Macquarie Harbour Mining Limited (ASX: MHM) has moved closer to generating first revenues with the settlement of the Aluminium Salt Slag Facility with a subsidiary of Sims Metal Management Limited (ASX:SGM).
Aluminium Salt Slag is a waste stream that results from the recycling of aluminium, a by-product from recyclers that has traditionally been placed in landfill.
MHM, through its wholly-owned operating subsidiary Alreco Pty, will take possession of the Facility on Monday 18 January 2010.
The company will begin processing of salt slag upon taking possession, resulting in immediate income generation for MHM.
Alreco will operate under Sims existing EPA licenses whilst the transfer of licenses is being affected.
The upgrade of the existing Sims facility will commence on Monday 18 January 2010 and will take 26 weeks. It has been planned so that there will be no interruption to ongoing production.
During the plant upgrade period, the business is expected to earn pre-tax profits (EBITDA) of $230,000 per month for Alreco and MHM.  With significant revenue upside once the upgrade is completed.
During the upgrade phase, the Aluminium Salt Slag landfill will not be processed. Although the plant will be running at 40% capacity, MHM will continue to book profits from both the Alcoa and Sims processing contracts during this period.
Background
Due to regulatory changes by the EPA, Aluminium Salt Slag can no longer be disposed in landfill and this has presented a major problem for the industry. Without a viable solution the secondary aluminium industry cannot continue to operate using the existing highly-efficient yet waste-generating processes.
Alreco has a license to a proprietary technology developed by two MHM directors that was licensed to a Third Party entity, in which the two directors have an interest, that provides a “closed-loop” solution to the Salt Slag waste issue.
The technology removes the need for any of the waste to be consigned to landfill. The waste is processed and converted into its primary components being aluminium metal, salt and non-metallic product (aluminium oxide), which is a by-product that can be sold into a variety of other uses.
Alreco has executed a processing and sales agency agreement under which, in return for a fee, Alreco will process the Aluminium Salt Slag recovered from the Alcoa landfill and sell the resulting products as agent for the Third Party.
Alreco will also perform the Third Party's obligations under a tolling contract with Alcoa, as a sub-contractor. Alreco will receive 60% of the EBIT profits for performing these services for the Third Party, and has the first right of refusal to acquire 100% of the rights of the Third Party, subject to independent valuation and shareholder approval.
The Third Party has access to a landfill owned by Alcoa containing 160,000 tonnes of aluminium waste, from which at least 16,000 tonnes of aluminium is expected to be recoverable. The Third Party has acquired from Alcoa the rights to 100% of the proceeds of materials recoverable from the landfill. In addition, the Third Party has executed a three-year tolling contract with Alcoa for the processing of Aluminium Salt Slag.
Alreco has now acquired exclusive global rights to this technology from the Technology Providers. http://www.proactiveinvestors.com.au/companies/news/4286/macquarie-harbour-mining-to-commence-processing-of-salt-slag-revenues-to-follow-4286.html