LanzaTech lands second China deal

LanzaTech lands second China deal

By Peter Kerr

Sept. 7 (BusinessDesk) – LanzaTech, the Auckland-based company that uses bacteria to biologically ferment waste industrial gases into useful products such as ethanol, has secured a second Chinese partner in as many months.

The memorandum of understanding with China’s second-largest coal producers, will integrate its coal gasification with LanzaTech’s fermentation process for the production of fuels and chemicals.

A Bio Energy Research Centre, supported by multiple research institutes under the Chinese Academy of Sciences, will also be established in the Henan provincial capital, Zhengzhou. The centre will develop complementary process technologies like product separation, water conservation and process integration as well as other high-value added technology and products.

The announcement follows a July US$18m investment by Qiming Ventures and Softbank China Venture Capital who joined initial LanzaTech investors, U.S.A. based Khosla Ventures and N.Z.’s K1W1. The Series A funders had backed the three-year technology development and selection of the microbes, which have a World Health Organisation safety rating of the same category as baker’s yeast.

In turn, the China-backed financing followed LanzaTech’s agreement with Boasteel, China’s largest steel and iron conglomerate to commercialise its technologies for producing ethanol from steel mill off gases.

LanzaTech’s development of a second China project is both a demonstration of the nation’s determination to develop clean technologies and the fact it has a huge number of waste gas streams that could be converted to useful products rather than being pumped into the atmosphere to add to its carbon load said director of external relations, Freya Burton.

Both the Baosteel project and the HNCC project are expected to be fully-commissioned in late 2011. The use of Baosteel’s off-gases is expected to produce over 200 millions of ethanol a year.

“Our technology is unique as we can progamme the microbes to produce certain things,” Burton said. “Depending on the market and its geographics, we can make a range of products including ethanol.” The creation of a new research centre will allow a greater range of chemical products to be made by the microbes she said.

The company has worldwide patents on a number of aspects of its technology, including the microbes it uses, and will move very carefully to ensure its intellectual property is not co-opted by others she said.

“Some of the IP protection will be along the lines of Coca Cola or KFC’s secret recipe, where a microbe and media mix are supplied rather than an a list of ingredients,” Burton said. “We’re also going to have our own teams on-site.”

The company’s incredible growth rate over the past three years has also seen a “reverse brain-drain” she said.

“We have people coming down to New Zealand to work on our technology,” Burton said. “We’re definitely attracting a lot of talent into New Zealand because of the clean tech work that we’re doing.”

(BusinessDesk)

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