CFoam reveals key coal-to-carbon project achievements during June quarter

The June quarter has seen inorganic carbon foam manufacturer CFoam (ASX: CFO) achieve critical milestones on a coal-to-carbon project funded by the US Department of Energy.

The project – titled “Continuous Processing of Carbon Foam Products Made from Coal at Atmospheric Pressure” – commenced in January and received $519,000 in funding during the quarter, of a total $3.25 million pool.

It aims to create a continuous manufacturing process for carbon foam which operates at atmospheric pressure and can generate well-formed panels and lightweight aggregates.

If all goes to plan, it could significantly reduce the cost of manufacturing carbon foam through reductions in capital and labour requirements; reduce the production cycle time from weeks to hours; and enable the manufacture of higher volumes of carbon foam.

All of these features would enable carbon foam to compete in much larger markets and create meaningful demand for the US coal industry.

Project milestones

Critical milestones completed during the quarter included the installation of a continuous kiln with 68-foot long belt at the project’s West Virginia production facility; the approval of an air permit; delivery and installation of a nitrogen generator absorber system; and construction of a gas fired-incinerator (thermal oxidiser) by a third-party vendor.

Utility upgrade works are ongoing with conduit for a 500 ampere service already installed and electrical panel works completed.

Connection to the electrical grid was initiated earlier this week and commissioning of the new facility has been scheduled for the December quarter.

Steady revenue

CFoam’s sales revenue for the June quarter of approximately $268,000 was steady on the March quarter’s total of $265,000 but remained significantly impacted by COVID-19 disruptions.

The company made sales to 17 organisations in the US and overseas, representing an increase of four organisations on the previous quarter and acknowledging that many orders were repeat business.

Companies continue to test and validate the product across various industries, including building materials, fire doors, autos and various aviation applications.

Sales impacted

The advent of stringent site rules meant CFoam’s sales force could maintain only limited access to customers, while the pandemic saw some customer operations curtailed and projects slowed down.

CFoam remained optimistic that sales could increase once normality is resumed, albeit with limited downstream visibility.

“[These restrictions] affected some decision timelines and slowed the pipeline of opportunities however we are optimistic that some of the opportunities will lead to recurring revenue and new applications for our products,” the company said.