Sumitomo Corporation (head office: Chuo-ku, Tokyo, president and CEO: Motoyuki Oka, hereinafter "Sumitomo") has formed a strategic partnership with Evergreen Energy Inc. (headquarters: Denver, U.S.A., president and CEO: Kevin R. Collins, hereinafter "Evergreen"), which possesses a proprietary coal refining technology, and Evergreen Energy Asia Pacific Corporation (headquarters: Denver, U.S.A., president and CEO: Hideharu Enomoto, hereinafter "Evergreen Asia"), a subsidiary of Evergreen and that will operates coal refining projects outside the U.S.A. Together with these two companies, Sumitomo is set to pursue coal refining projects including coal mining operations, in Indonesia, the U.S.A. and other countries,.

Sumitomo is to take a 4% equity stake in Evergreen Asia.

[Details and Background]
Since supplies of the high-quality bituminous coals1 principally used for electric power generation are limited, the growing demand for electric power is leading gradually to a decline in bituminous coal supplies. On the other hand, although there are rich deposits of high-water-content and low-heat-content sub-bituminous coals2 and lignite (brown) coals, these have not been fully developed to now due to limitations with available technology. Due to the limited deposits of high-grade, low-cost coal throughout the world the effective utilization of low-grade coal is becoming a major issue. To address this problem, Evergreen has developed a proprietary coal refining process, K-Fuel®, that increases the heating value of sub-bituminous and lignite coals to the level of bituminous coals. In Wyoming, U.S.A., Evergreen operates the world's only large-scale commercial coal refining plant, with a capacity of 750,000 tons per year. Through this strategic partnership with these two companies, Sumitomo will utilize the K-Fuel® process to start developing the sub-bituminous and lignite coal resources, beginning with the Asia-Pacific.

The K-Fuel® process is a technique that reduces the water content and increases the heat content of sub-bituminous and lignite coals, thereby elevating these from low-grade fuels to high-grade fuels of similar quality to bituminous coals. The process is also recognized for its effectiveness in reducing emissions of substances such as sulfur, nitrogen, mercury, and carbon dioxide, thereby converting sub-bituminous and lignite into clean fuels, and helping to reduce the burden on the environment.

Sumitomo, Evergreen, and Evergreen Asia plan to develop coal refining projects including coal mine development in Indonesia and other parts of the Asia-Pacific region, and also to develop refining projects at the power plant site. Furthermore, Sumitomo will discuss joining coal refining projects that Evergreen will develop in the U.S.A. and cooperate in areas such as coal feeding for coal refining and sales of refined coal fuel. Through the use of K-Fuel® to improve the efficiency and reduce the environmental burden of electric power generation, the company will develop unexploited coal energy resources.

1. Bituminous coal :  Coal having a low water content and high carbon content. Widely used for electric power generation and steel making. 2. Sub-bituminous coal :  Has properties similar to those of bituminous coal, but has limited application due to its high water content (15 to 45%), making it difficult to handle. There are extensive deposits of this kind of coal so considerable research on how to utilize it effectively is now being done. [Corporate outline of Evergreen and Joint Venture Company] Name : Evergreen Energy Inc. Head office : 55 Madison St., #500, Denver, CO 80206 Stockholder's Equity : US$225 million CEO : Kevin R. Collins Major activities : Coal refining and related activities Joint venture company with Sumitomo : Evergreen Energy Asia Pacific Corporation [Outline of Strategic Partnership] Identification by Sumitomo of potential partners possessing coal mining rights for coal refining projects Identification by Sumitomo of new business opportunities and customers for K-FuelR technology Joining Sumitomo in K-FuelR project (at or near coal mine / at the power plant site) promoted by Evergreen/Evergreen Asia within and outside the U.S.A. (including sourcing of raw coal and marketing refined coal) Actively and preferentially support and cooperation by Evergreen/Evergreen Asia with Sumitomo to realize projects which SC plans and promotes Consider Sumitomo as a supplier of engineering, procurement and construction services [Outline of the K-FuelR Process] Evergreen's K-FuelR process reduce the water contained in sub-bituminous and lignite coals to convert these low-grade coals to clean, economically efficient fuels, enabling electric power generation that is more efficient and environmentally friendly. In addition to coal refining projects located at or near coal mine, K-FuelR at the power plant site are also under consideration. <Example projects>   Effectiveness Heat content Approx. +30% Water content Approx. -70% Mercury Approx. -70% SOx/NOx CO2 Combustion emissions can be reduced <Evergreen's plant with annual production of 750,000 tons>