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AFC moves closer to breakthrough

COMPANY PROFILE: AFC Energy (AFC)
November 1, 2010

STRENGTHS:

■ Technology in testing with industry majors

■ Partnerships in place for commercial exploitation

■ Well funded

WEAKNESSES:

■ Beta product not yet completed

■ Risk of technology replication

69p

Fuel cell company AFC Energy is developing alkaline fuel cells that run off hydrogen. But unlike many fellow fuel cell developers who have tried to adapt fuel cell technology for consumer applications, AFC is concentrating on industrial markets. This means that instead of spending time trying to engineer a product that will look good on a kitchen wall, AFC has been able to concentrate on perfecting the fuel cell technology for industrial applications where aesthetics are less important.

The company has trial fuel cells in the field with two key customers. Chemicals giant Akzo Nobel has AFC fuel cell units creating energy using the hydrogen produced as a by-product from its chloro-alkali plant in Germany. AFC's second key commercial development contract is with underground goal gasification specialist Linc Energy of Australia. Linc has taken an AFC fuel cell to create energy from hydrogen produced at its Chinchilla underground coal gasification project in Australia. Linc recently backed a placing by AFC to the tune of £3m, cementing its relationship which includes an option for worldwide rights to use AFC's fuel cells in conjunction with underground coal gasification.

AFC is also pushing its technology for the development of clean coal in the UK. Its technology has been included in two project proposals, firstly with Powerfuel who are developing the Hatfield Colliery site in South Yorkshire into a power station running on synthetic gas created from the coal reserves. Secondly, AFC is part of a consortium, which includes Linc Energy, bidding to be the first Carbon Capture and Storage project in the UK at Rio Tinto Alcan's Lynemouth smelter in Northumberland.

TIDM:AFC
Market:Aim
Share price:69p
Market capitalisation:£119m
Exchange market size: 20,000
12 Month high/low:81.25p/9.25p
Average daily volumes traded (last 30 trading days):2,570,335
Market makers:7
Key upcoming events:Completion of beta product

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