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A Marlborough-based startup is rounding up $4.5 million in its first institutional funding, with plans to use coal gasification technology to make farm fertilizer from almost worthless coal while creating no pollution. The three founders of LoraxAg LLC include a couple of local experienced technology executives and the son of former New Hampshire governor and White House Chief of Staff John Sununu.
Based in Marlborough, six-month-old LoraxAg plans to build a $1.6 billion plant somewhere in the Midwest that takes existing off-the-shelf technologies and combines them in new ways to make something cleaner and more useful out of the high-sulfur coal that currently has little use, according to president Mike Farina, former COO and CFO of Atlantic Energy Ventures, and former founder of broadband company BeckCONNECT.
“Gasification uses the worst coal in the world; it is the coal no one wants to use,” he said. “We’re buying the garbage coal.”
LoraxAg has raised about $1 million so far, said Farina, who did not disclose the investors in the new round, who have put in $200,00 of the planned $4.5 million so far. He said he expects to close the first round by the end of the year and should break ground on the plant in 18 to 24 months.
“Basically five years from now the first product goes out the door,” he said. That product will be urea and ammonia from making fertilizer, which will come from the CO2 and the hydrogen in the coal gas. Another product will be sulfuric acid which will be sold to industrial users.
Joining Farina is CEO Joshua E. Davidson, who was co-founder of Accelera Wireless and telecom construction firm DWT and who served as a consultant for Gov. Sununu. Rounding out the three employees the company has so far is COO Michael Sununu of Sununu Enterpises LLC, which specializes in project planning services.
“Michael Sununu helps us not only because of his technical skills — he is an MIT grad — but because of all of his political connections,” Farina said.
LoraxAg has chosen two likely spots for its plant — one in Kentucky and one in Illinois, each of which meets the requirements of being both in the area that produces the kind of coal they want and in the farm belt that uses its intended end products. Also, the two sites are both on navigable rivers with busy ports already used to handling both coal and fertilizer.
The plant will use coal gasification technology from Siemens AG, Farina said, and Siemens Financial Services Inc., the German giant’s investment arm, has been supportive. Once the $4.5 million round is closed, the company will hire a bunch of new people and will likely have a staff of about 18 very soon, as it moves into the project engineering phase, he said. Ultimately the plant will produce much of its own power as a byproduct of the gasification process and emit nothing into the atmosphere.
“There’s an altruistic reason we are doing this as well,” Farina said. “We like this project because of what we can bring to a part of the country that can really use some economic development.”
And, yes, the name is inspired by the Dr. Suess story, Farina said.
“The Lorax is the protector of the truffula trees,” he said. “We think this is the greenest use of coal.”
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