News & Media

Arch Coal Licenses ADA-ES Coal Enhancement Technology

June 29, 2010 at 9:01 AM EDT

Agreement Provides Upfront Payment of $2 Million and Structure for Potential Future Royalties

Littleton, Colo. – June 29, 2010 - Arch Coal, Inc. (NYSE: ACI) (“Arch”) and ADA-ES, Inc. (NASDAQ: ADES) (“ADA” or the “Company”) today announced that the two companies have finalized the previously announced exclusive development and licensing agreement for a promising ADA-ES technology aimed at reducing combustion-related emissions of mercury and other metals from PRB coal.  In consideration for certain ADA development work and the exclusive license to Arch, ADA-ES will receive an upfront payment of $2 million and royalty payments that could amount to as much as $1 per ton of coal sold by Arch, depending upon the successful implementation of the technology and Arch’s future sales of the resulting enhanced coal product. 

Arch has been a significant shareholder of ADA since 2003 when the Company spun-out as a separate public entity.  Arch currently produces more than 100 million tons of PRB coal per year.

Arch President and Chief Operating Officer John Eaves, who has served on the ADA Board of Directors since 2004, commented, “As part of our commitment to clean energy, we are pleased to provide this additional investment in ADA, a leader in developing clean coal technology.  We believe helping finance advanced technologies developed by ADA will enhance the environmental performance of our coals.”

ADA has been successful at developing technologies that improve the performance of PRB coals, including flue gas conditioning (FGC) chemicals used to aid in the collection of ash from PRB coals.  The Company also developed a cost-effective brominated activated carbon technology that provides a means of achieving 90% removal of mercury emissions from PRB coals, as well as CyClean technology, a proprietary coal additive that improves combustion of PRB coals in cyclone boilers resulting in enhanced efficiency and reduced emissions of mercury and nitrogen oxides.  Since 2004, ADA has been working with Arch to explore certain unique characteristics of some types of coals produced by Arch that allow them to be burned with lower emissions.  A recent technical breakthrough provides a potential means to obtain similar performance improvements from all of Arch’s PRB coals.

Mike Durham, ADA President and CEO, stated, “This new technology will be complementary to our other innovative technologies such as CyClean, FGC, and different activated carbons that provide us with the tools to help our power generating customers to meet the challenges of existing and pending emissions control regulations.” 

About ADA-ES
ADA-ES is a leader in clean coal technology and the associated specialty chemicals.  We develop and implement proprietary environmental technology and specialty chemicals that enable coal-fueled power plants to enhance existing air pollution control equipment, maximize capacity and improve operating efficiencies.  We supply activated carbon injection systems, mercury measurement instrumentation, and related services.  Through our consolidated subsidiary, Clean Coal Solutions (“Clean Coal”), we produce refined coal that we expect will qualify for IRS Section 45 tax credits.  To meet the needs of the power industry for mercury control, we are a participant in a joint venture, ADA Carbon Solutions (“ADA-CS”), which is developing state-of-the-art facilities to produce activated carbon (“AC”) with the first plant projected to come on-line in 2010.  Additionally, we are developing technologies for power plants to address issues related to emissions of carbon dioxide.

About Arch Coal
St. Louis-based Arch Coal is the second largest U.S. coal producer, with revenues of $2.6 billion in 2009.  Through its national network of mines, Arch supplies cleaner-burning, low-sulfur coal to U.S. power producers to fuel roughly 8 percent of the nation's electricity.  The company also ships coal to domestic and international steel manufacturers as well as international power producers.

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, which provides a "safe harbor" for such statements in certain circumstances.  The forward-looking statements included in this release include statements regarding the impact of ADA’s technologies on the performance of Arch’s coal and Arch’s ability to sell the enhanced coal to its customers, and timing of commencement of operations at ADA-CS’s first AC plant.  These statements are based on current expectations, estimates, projections, beliefs and assumptions of our management.  Such statements involve significant risks and uncertainties.  Actual events or results could differ materially from those discussed in the forward-looking statements as a result of various factors, including but not limited to changes in laws and regulations, prices, economic conditions and market demand; technical and operational difficulties; impact of competition and litigation; availability of skilled personnel; and risks related to ADA-CS such as changes in the costs and timing of construction of the AC plant, failure to raise additional financing or satisfy conditions in existing agreements and actions of our joint venture partner.  You are cautioned not to place undue reliance on our forward-looking statements.  Our forward-looking statements are presented as of the date made, and we disclaim any duty to update such statements unless required by law to do so. 

ADA-ES, Inc.
Michael D. Durham, Ph.D., CEO & President
Mark H. McKinnies, Senior VP & CFO
Investor Relations Counsel
The Equity Group Inc.
Melissa Dixon, 212-836 9613
Linda Latman, 212-836-9609