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March 30, 2009

Mozambique biofuel project cautiously makes progress

BioEnergy Africa Ltd said it is making progress on its Massingir fuel ethanol project in Mozambique but that it is cutting two director posts to conserve cash, as the economic climate has led to reduced interest in non-carbon related fuel products.

The group, formed to develop the production of ethanol from sugar cane projects in southern Africa, said site clearing at the project remains a priority. By February, more than 800 hectares had been cleared of trees and shrubs, and some 170 hectares had been windrowed prior to planting.

In accordance with the company's community responsibilities under the terms of the initial investment agreement with the government of Mozambique, approximately 125 family drip systems have been implemented, with excellent results on the first vegetable harvests.

Some 20 hectares of maize have been planted on irrigated land for the local community. A further 40 hectares is being planted in the coming weeks in addition to the company providing further irrigated land for local villages.

The global economic climate and resultant reduced interest in non-carbon related fuel products has prompted a strategy review with cash preservation as primary focus. In line with this, the employment of Nick Brooks and Jorge Neves has been terminated and they have ceased to be directors of BioEnergy Africa.

Development director Izak Cornelis Holtzhausen is re-assuming control of the Massingir project.

The company is working towards first production by the end of 2011.

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