Mr. Slawek Smulewicz reports

CONSTRUCTION STARTS IN INDONESIA FOR MICROCOAL'S COMMERCIAL COAL UPGRADING FACILITY

Microcoal Technologies Inc.'s initial project payment has been made to PT Citicon Energy (CEN) for the construction of the first MTI plant in Indonesia, and site work construction commences of the first commercial Microcoal facility installation at the PT Wijaya Tri Utama power plant in Banjarmasin, the capital of South Kalimantan, Indonesia. Pursuant to the contract, CEN is responsible for all aspects of engineering, construction and project management.

The Microcoal facility has been designed and engineered to upgrade the calorific value of approximately 190,000 tonnes per year of low-rank coal (approximately 8,000 British thermal units per pound) to a higher calorific coal (approximately 9,000 British thermal units per pound) by removing only 10 per cent of the total moisture. Further, Microcoal has concluded that its technology has another significant element, it can substantially increase the calorific content of this specific low-rank Indonesian coal above 11,000 British thermal units per pound by reducing the moisture content.

Slawek Smulewicz, chief executive officer and director of the company, stated: "I am pleased that Microcoal has engaged the energy division of PT Citicon, a well-respected Indonesian construction and engineering company. Microcoal is now looking forward to working with PT Citicon to commence the first commercial installation in the world.

"In addition to this commercial project, I am very encouraged by the interest which has been generated for Microcoal from leading utilities in the U.S. and around the world to build commercial installations that will reduce costs, enhance the performance of their coal-powered facilities, and improve the quality of the environment."

We seek Safe Harbor.