Coalscan Sales, Inc.

In the early 1980s Jim Howarth of Mineral Consultants Incorporated (MCI) of Adelaide, Australia attended an International Coal Testing Conference in Lexington, Kentucky. At that conference he gave a paper on his company’s new products including instrumentation for the on-line analysis of coal. The paper described a new technology using gamma rays to predict ash contents of coals moving on a belt in real time.

Howarth’s presentation focused on the work with CSIRO which produced the “4500” analyzer. This used “new” technology to infer ash content by irradiating coal and looking at the radiation spectrum emitted . The analytical technique was named Pair Production and was ultimately replaced by the GammaMetrics and MDH Motherwell technology of Prompt Gamma Neutron Activation Analysis (PGNAA). The 4500 was deployed in conjunction with a mechanical sampler.

Later the “3500” analyzer was introduced which MCI developed with less of CSIRO’s help. It used low energy Dual Gamma Ray Transmission (DET or simply LET) as an analytical technique. LET and low energy backscatter had been deployed by Berthold, SAIC and others. The 3500 was the instrument of choice in the U.S. even though it was very much less precise than the 4500. It’s design was thru-belt and had an off-belt standardization feature that proved unnecessarily expensive as the understanding of the detected spectra became more sophisticated. This led to development of the 2500 but Coalscan Sales was unable to place many of these units.

In 1985 Std Labs became the North America sales representative for Mineral Processing Systems, Inc. (MPSI) of York, Pennsylvania, which was under manufacturing license from MCI of Australia. Coalscan, Inc. was administered by Dr. Del Devins of Indiana University, a professor in pair production nuclear physics who became a known on-line coal technical expert in the United States. Mick Samples served as the Std Labs manager of sales in supporting the introduction of on-line analysis in the U.S. This company offered two on-line sampling and analysis systems.

The Model 4500 provided analysis of ash content, moisture content and bulk density. The Model 3500 was an over the belt system which measures ash content alone. Those products provided the most sophisticated and most precise on-line ash measuring systems ever offered to the mining industry. Later, an elemental system measuring a variety of minerals and calculating heating values was developed by MCI andalso marketed by Coalscan Sales, Inc. (The entire PGNAA industry was supported by the perceived need for sulfur analysis.)

Dr Geoff Gault of MCI was loaned to Std Labs for a one year term to manage the establishment of the company and provide liaison with the Australia manufacturing and engineering operations. Dr Gault worked closely with Dr Devins during this assignment and

after one year Gault returned to Australia. Mick Samples became the salesman for Coalscan Sales supported technically by Dr. Devins. The first sold instrument, Model 4500, may have been to Hobet Mining and placed near Madison, West Virginia in late 1985. During the next several years sales of on-line monitors grew slowly but steadily. In 1986, Mick Samples was named President of Scan Technologies, Inc. of West Virginia (replacing Coalscan Sales, Inc.) and revenues grew to seven million in four years. At some point MPSI formed Coalscan, Inc. and changed the name to Scan Technologies during this same time frame.

At the beginning of 1992 Kirby B. Martin, Jr. was named President of Scan Technologies, Inc. of West Virginia. Mick Samples, the previous President had started a new management and technical consulting company within Std Labs called Seer Services. (See the Diversifications appendix.) Mick also continued in his role as Technical Director (also actively supporting Technical Services with field work) and as Division Manager for the Ashland Division and the Evansville Environmental Division. SEER Services began marketing itself in 1996.

Martin was well experienced in the coal business as Vice President of Sales at Carbon Fuels Sales Company. His background included engineering at B. F. Goodrich and he had also been a private business owner at one time. He was well known in the industry as he had been President of Peters Creek coal Association, the Southern Coal Conference and the Appalachian Coal, Inc. Association.

Under Martin’s leadership the company grew to nearly two million in sales revenues with many instruments placed all across the country. However, the company began experiencing severe difficulties in receiving competent and timely technical support from MCI. This produced some customer dissatisfaction which was of considerable concern to Std Labs management and in 1994 the company was dissolved.

Kirby Martin moved on to become Sales Manager of a coal brokering company and MCI begin to search for other sales representatives in the United States.

See Appendix V for Scan Technologies marketing literature.