HYDROGEN PRODUCTION DISRUPTION HAZER GROUP LTD ASX:HZR September 2018
VALUE PROPOSITION Disruptive, global and scalable low cost, low emission solution to a decarbonised hydrogen future. Technical development successfully progressed to enable transitioning into commercial phase with a strong focus on additional partnerships and offtake. Multiple potential revenue streams. hazergroup.com.au 2
WHY CURRENT HYDROGEN PRODUCTION IS RIPE FOR DISRUPTION? Production is high in emissions or expensive Significant CO 2 Fossil fuel emissions reforming 95% of total global • C n H m + [O] CO x + H 2 hydrogen production Chemically equivalent to • direct combustion, but less energy efficient Barrier to Current growth in hydrogen energy production markets Energy intensive process Electrolysis Requires renewable • energy source 2H 2 0 (+ energy) O 2 + 2H 2 Expensive (power • consumption) hazergroup.com.au 3
THE HAZER ADVANTAGE Capturing more value of feedstock gas and dual revenue streams -$ 25% Hydrogen Steam Methane Reforming $ (SMR) Hydrogen 75% Carbon gas Natural gas composition $ Graphite Hazer Process (carbon) hazergroup.com.au 4
THE HAZER PROCESS Hydrogen and graphite from natural gas Hydrogen Natural ~US$130 gas billion pa* Synthetic graphite Iron-ore ~US$14 billion pa^ CH 4 2H 2 + C * “Global Hydrogen – A US$2.5 Trillion Industry?”, Morgan Stanley Research Report July 22 2018 ^ “Global Market Study of Graphite Market”, Persistence Market Report, pg 14 hazergroup.com.au 5
THE BREAKTHROUGH Methane Decomposition - Simplified approach to old science Traditional methane decomposition research Decomposition reaction Catalyst Synthesis Catalyst recovery Natural gas Hydrogen Supported nano-catalyst Raw catalytic Catalyst Add support Catalyst Catalyst Graphite material digestion (ie. Ceramic) precipitation reduction encapsulating catalyst Hazer Group Decomposition reaction • Reaction ion creates es catalys yst from om cheap p material rial Natural gas Hydrogen • No need for catalyst synthesis • No need for catalyst recovery and reuse Catalyst creation Raw catalytic material Graphite encapsulating catalyst hazergroup.com.au 6
HAZER HYDROGEN COMPARISON Positioning as a low cost, low emission alterative Targeting low cost, low Greater CO 2 emissions (per kWhr) than direct combustion of fossil fuel^ emission hydrogen production Significant emissions reductions. Coal Gasification (18%) Emissions can be reduced further by Partial Oxidation 0 harnessing clean energy options. (30%) CO 2 Emissions Steam (per tonne Methane Reformation of H 2 ) (SMR) Lower operating cost* through graphite (30%) sales to enable access to US$100 Billion Electrolysis Industrial hydrogen market. (4%) Hazer Hydrogen Production Cost ($/tonne H 2 ) *Economic modelling as per previous ASX Announcement 28 th February 2018 ^Conceptual diagram only with numbers in brackets showing best estimates current market share hazergroup.com.au 7
OPPORTUNITIES IN THREE MAJOR GLOBAL MARKETS Industrial hydrogen Clean hydrogen and energy Synthetic graphite US$12 billion a by 2023 (FCV) US$130 billion* US$14 billion^ Low emission, low cost High quality, low cost Multiple applications alternative graphite source Growth - energy storage (batteries) Clean (low carbon) hydrogen Currently primarily addressed by has price or value premium to fossil fuel reformation processes Graphite has a wide range of standard hydrogen. (high CO 2 byproduct). desirable properties and is used in a range of industrial materials Key component of clean energy Hazer has potential to deliver applications. future (H 2 => H 2 O + energy). significant cost savings with graphite revenue offset. Current methods of graphite Fundamental cost, energy production (natural or synthetic) limitations for existing clean Industry is beginning to turn are costly and have significant hydrogen production options. toward cleaner solutions. environmental impacts. * “Global Hydrogen – A US$2.5 Trillion Industry?”, Morgan Stanley Research Report July 22 2018 a “Hydrogen Fuel Cell Vehicle Market Overview”, Allied Market Research hazergroup.com.au 8
MULTIPLE CLEAN HYDROGEN APPLICATIONS Carbon Capture Clean energy – Vehicle Clean Industrial and Utilisation (CCU) fuel and stationary power Hydrogen Market Fuel Cell Vehicle (FCV) models Traditional industrial hydrogen An alternative to CCS (Carbon being developed. users are seeking cleaner Capture and Storage), where CO 2 alternatives. emissions can be captured and Potential distribution via used as feedstock for other traditional clean energy systems, This offers opportunities to disrupt chemical products. including hydrogen injection into the large and growing industrial gas pipelines hydrogen market These include methanol and liquid fuel (diesel). Cost, energy and carbon Recent attention has been in iron emission barriers for existing production, and green ammonia. Low cost, low emission hydrogen hydrogen production methods . will be in demand as a key additional feedstock. hazergroup.com.au 9
INDUSTRIAL HYDROGEN MARKETS TRANSITIONING TO LOW CARBON HYDROGEN Conceptual Hazer plant integration into steel production with CCU Carbon Capture and Utilization (CCU) Waste to energy Steel CO 2 Emissions Plant Iron Ore Hydrogen CCU/ (Reductant) Methanol Hydrogen (CCU Usage) plant Graphite (Coke Replacement and electrodes) Hazer Natural Gas Plant Graphite Steel Methanol 3 Products = 3 Revenue Streams hazergroup.com.au 10
HAZER GRAPHITE Versatile properties – many opportunities • Current t graph phite ite market t valu lue in excess of US$ 14 Billion llion per annum^ m^ • Hazer graphite structure and properties can be altered to potentially suit different market by changing the process conditions • Graphite purity ex reactor can range between 80-95%wt, and can be purified to 99.9%> with standard purification techniques • Promising preliminary results in using Hazer Graphite in Li-ion batteries ^ “Global Market Study of Graphite Market”, Persistence Market Report, pg 14 hazergroup.com.au 11
HYDROGEN & GRAPHITE SYNERGY Potential to be a major part of the revolution in future mobility Electric Vehicle Fuel Cell Vehicle Graphite in Power Unit Graphite in Lithium-Ion Batteries Graphite in Lithium- Graphite in Fuel Ion Batteries Graphite in Cell Stack Power Low carbon Hydrogen Unit in Storage T ank hazergroup.com.au 12
STRONG COMMERCIAL PROGRESS SINCE IPO Milestones Non-binding MoU with Primetals Design options begin T echnologies GmbH for small hydrogen HZR listed on ASX in Dec 2015 (Siemens and Mitsubishi Heavy Industry) demonstration plant to investigate integration of Hazer Process with potential offtake Hazer Group Pty Ltd formed 2010 in steel production 2017 2016 2007 2010 2017 2018 2015 Non-binding MoU with Pan American Hydrogen to investigate integration of Hazer Process Research begins Binding Co-Operation Agreement with in hydrogen production $4bn Mineral Resources Ltd (ASX:MIN) for development of a commercial scale synthetic graphite plant hazergroup.com.au 13
COLLABORATION WITH ASX:MIN Investment and Commercial Partner March 2017 MIN made a A$5M strategic placement and significantly increased their stake in Hazer to 14%. December 2017 binding agreement for the potential development of a commercial scale synthetic graphite facility; • MIN to fund the commercial development. • Hazer to obtain royalties from graphite sales. • Stage 1 pilot plant first graphite expected Q4 2018. • Stage 3 target production of 10,000tpa. hazergroup.com.au 14
MULTIPLE REACTOR OPTIONS Using Hazer Process Hazer Reactor External Reactor MRL/HZR Reactor Fluidised Bed Reactor Rotary Tube Reactor Paddle Tube Reactor FBR RTR PTR Reactor flexibility allowing Alternative off the shelf Reactor tailored towards for a range of graphite reactor design identified for production of high purity purity options and high a range of graphite purity graphite for battery hydrogen production options, medium hydrogen applications with good with best productivity production but lower hydrogen potential. for reactor size. productivity for reactor size. hazergroup.com.au 15
PROPOSED PATHWAY & POTENTIAL MARKETS Hydr drog ogen en focus us with graph aphite ite by-pr product uct FBR/RTR TR PTR Graphite phite focus us with h hydrog ogen en by-pr prod oduct uct hazergroup.com.au 16
PATH TO COMMERCIAL DEVELOPMENT hazergroup.com.au 17
MULTIPLE COMMERCIAL OPTIONS Using Hazer Process License Partnership Build, Own & Operate License IP to 3rd parties and Share capital & operating Hazer can construct own and generate high margin royalty costs with hydrogen or operate plants and sell products graphite partners Currently investigating multiple options across different business models hazergroup.com.au 18
NEWSFLOW Aspirational Milestones* Commercial FBR Pilot Plant Business Case Scale Graphite Optimisation Financial Purification Results Modelling Graphite Lubrication T esting Results Aug Results 2018 Feb 2019 External Feasibility PTR Plant Independent Hazer FBR Plant Study on Commissioning FBR T esting Relocation to Perth Demonstration and Commences PTR Pilot Plant Results Commercial Plant Completion and T esting Commenced * Indicative timetable only August 2018 to February 2019 hazergroup.com.au 19
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