|Covanta to acquire 40% interest in Chongqing Iron
Covanta Holding Corporation announced it has signed an agreement to purchase a 40 percent stake in Chongqing Sanfeng Environmental Industry Co., Ltd. (Sanfeng), a subsidiary of Chongqing Iron & Steel (Group) Limited.
Sanfeng designed, built, operates and has minority interests in two modern 1,200 ton per day (tpd) energy-from-waste facilities. The facilities are located in Chongqing Municipality and Fuzhou Municipality, Fujian Province. In addition Sanfeng is pursuing several energy from Waste development opportunities in China.
China generates an estimated 280 million tons of municipal solid waste annually, most of which is currently being disposed of in landfills. The Chinese Ministry of Construction has outlined a National Waste Disposal Plan to increase energy-from-waste from 2005 levels of less than 2 percent of waste disposal to 30 percent of total municipal waste disposal by 2030.
Covanta's purchase of its 40% stake in Sanfeng is subject to Chinese regulatory approvals and other conditions precedent, and is expected to close during the second quarter of 2007.
Upon closing, Sanfeng will be converted into a Sino-foreign joint venture with its name changed to Chongqing Sanfeng Covanta Environmental Industry Co., Ltd. While financial terms of the transaction were not disclosed, it is not expected to have a material impact on Covanta's financial results in the near term.