Industrial Gasification Implementation for Biomass Presentation to Mosaic Company 22 May 2006

Presentation Objectives Industrial Gasification – Wellman Galusha (commercial industrial gasifier reference ) HMI Background –MIFGA Project Capital Steam Plant Study (USDOE) HMI/ARI Collaboration –MIFGA Project HMI/ARI Heads of Agreement, 1998 Coal gasification to MN Peat & Faggio wood gasification Vision 21 Proposal Recap –HMI/ARI/CPM/Coen/EPRI

Desired Outcome Mosaic commit to Industrial Biomass Gasification for drying processes (displacing high cost natural gas) Define Objectives and begin Site specific Feasibility Study – June 2006 Develop Hot-Raw Wood Gasification plant to be on-line in early 2007 fueling Mosaic’s dryers

Industrial Gasification Wellman Galusha gasifier reference HMI personnel have 50+ years of industrial operational experience with W-G gasifier W-G gasifier operated worldwide commercially from 1930’s to 1960’s (principally gasifying coals) MIFGA project ( ) quantified gasifier performance, efficiency & gas cleaning

Justification for Small Industrial Gasifiers Cost and availability of waste wood in Florida Cost of HMI wood Gasification system applied to industrial dryers & other thermal processes Clean utilization of industrial waste (will further enhance the economics)

MIFGA Project Scope Driven by the energy economics and gas curtailments in the mid 70’s and early 80’s, industry and the US DOE needed to demonstrate the gasification performance of US coals in a proven industrial gasifier (single-stage fixed bed gasifier)

MIFGA Project Process Flow Schematic

MIFGA Project Coals Gasified

MIFGA Project Operations Continuous 10-day runs (minimum) for each fuel gasified Continuous process monitoring and raw fuel gas sampling Process operations limits quantified throughout each test 203 days of continuous gasifier operation on 15 different coals/fuels

MIFGA Project Continuous Gas Sampling

MIFGA Project Tar Droplet Size Distribution

MIFGA Project Tar/Oil Yield Correlation

MIFGA Project Tar/Oil Quality (HHV)

MIFGA Project Barrel Quantities of Tar Enlarged tar removal and collection system was designed and operated to recover gallon-quantities of tar and oil Tar/oil collection efficiency greater than 99.99% Established foundation for complete gas cleanup system with 99.99% removal efficiency

MIFGA Project Single Stage Gasifier Schematic

MIFGA Project Impact on Capital Steam Plant Study KY coal gasification performance quantified Product gas quality known Coal liquids quantified System performance & economics quantified Environmental impact known O&M known

Capital Steam Plant HMI Gasification Economics Gasifier Island $18.8 million Net Power 40.3 MWe Gasifier Island $466/KW

MIFGA Project ARI selected HMI Gasifier Gasifier design and performance demonstrated (fuel flexible) High gasification conversion efficiency (80- 85%, gas+liquids) Simple and reliable gasifier operation Flexible fuel experience and knowledge HMI O&M capabilities desired by ARI HMI gas cleaning technology & experience

Ansaldo Ricerche Contracts/Collaboration Early 1998 ARI began evaluating mild gasification technologies worldwide Late 1998 ARI selected HMI, Inc. as technical partner December 1998 Signed HEADS of the AGREEMENT

Ansaldo Ricerche Contracts/Collaboration Q HMI, Inc. Biomass Gasifier design completed Q HMI/ARI gasifier fabrication and installation completed July/August 2001 HMI commissioned 1.3m HMI/ARI gasifier –Started on coke –Initial biomass faggio (beech wood) chips –Commissioning complete success

HMI/ARI Gasifier Performance: 1.3 Meter Diameter Coal throughput: T/hr Clean gas: MM/BTU/hr Electrical output: MWe

HMI/ARI Gasifier R&D Activities: Flexible fuel pellet development Automatic bed level and fuel feed Automate grate drive and ash management Process control via continuous gas analysis Gas cleaning for both fuel cell & gas engine implementation

HMI/ARI Gasifier Faggio Woodchip Feed

MN Peat pellets (MIFGA) Excellent gasification performance Hot-raw gas yields 92% conversion efficiency ( 60 MMBtu/hr/10-ft dia unit) Mosaic/HMI will establish integration and utilization of Hot-raw gases in dryers Degree of gasifier automation will be jointly defined by HMI & Mosaic

MN Peat Pellets Proximate & Ultimate Analyses Proximate Analysis (%)Ultimate Analysis (%) Volatile Matter42.20Carbon34.30 Fixed Carbon16.10Hydrogen 3.50 Ash 7.30Nitrogen 1.60 Moisture34.40Sulfur 0.20 Sulfur 0.20Oxygen Ash 7.30 Moisture34.40

MN Peat Pellets Proximate & Ultimate Analyses Heating Value: 6,092 BTU/lb Ash Fusion Temperatures (Deg F) Oxidizing Reducing Initial deformation Softening Hemispherical Fluid Free Swelling Index (FSI):0

MIFGA Project MN Peat pellets Product Gas Dry Gas Composition (Mol %) Hydrogen17.20 Carbon Monoxide Methane 1.46 Ethane 0.10 Ethylene Propane Propylene 0.04 Carbon Dioxide 7.97 Nitrogen & Argon 44.3 Dry Gas HHV 168 Dry Gas LHV 158

MIFGA Project MN Peat pellets Design Performance MN Peat gasification throughput (120 lb/hr/sq-ft grate) Air/Peat1.29 lb/lb Steam/Peat0.19 lb/lb Saturation Temperature139 ºF Gas Offtake Temp251 ºF Gas Dewpoint153 ºF Tar Yield7.9 lb/100 lb-peat Tar HHV (dry)15,552 Btu/lb Tar Pour point110 ºF Tar Specific gravity (60/60 ºF)1.0491

Vision 21 Overall US DOE Goal: Effectively eliminate, at competitive costs, environmental concerns associated with the use of fossil fuels.

Vision 21 Goals Efficiency – Electrical generation 60% for coal- based systems Environmental – <0.01 lb/MMBtu sulfur & NOx <0.005 lb/MMBtu particulate <50% emission rates organic compounds <1 lb/trillion Btu, Hg 50% reduction in CO 2 via efficiency gains Costs – Must be cost competitive Timing – Major improvements by 2007

Vision 21 Proposal Objectives Demonstrate fuel flexibility (coal & biomass) Demonstrate nominal $0.00 cost for industrial fuel pellets Utilize air blown fixed-bed industrial gasifier Clean gas for fuel cell or gas engine operation Gas used for various power generation systems (0.5 – 10MWe) Demonstrate 50+% efficiency using fuel cells for power generation

Vision 21 Proposal Industrial Gasification Economic Objectives Coal/Biomass pellets cost < $0.00 Industrial gasifier island installed for < $500/KW Operational costs at industrial site < $50/Kwyr Clean fuel gas cost < $3.00/MMBTU

Vision 21 Proposal Three Phase Project Phase I Coal/Biomass pellet development Phase II Demonstrate gasification performance of best commercial pellets Phase III Demonstrate gas cleaning & fuel cell performance/efficiency

Vision 21 Proposal HMI/CPM Pellet Development Car fluff and coal pellet development

Action Plan (HMI & Mosaic) Scope & Begin Feasibility Study for waste wood by 12 June 2006 and complete by mid August 2006 (8 weeks) Begin Permitting Process by First of September 2006 Deliver Hot-raw Gas to Mosaic’s dryer by end of August 2007