The Hazer Group Ltd (ASX: HZR) share price is plummeting on news the company's planned hydrogen and graphite production will likely be delayed.
A part needed to progress work at the company's Hazer Commercial Demonstration Project has critically failed during fabrication. The plant is expected to be the first fully integrated demonstration of the HAZER Process, developed by the company to convert natural gas into hydrogen and graphite using iron ore as a catalyst.
The failure is expected to delay the company's targeted production from the end of this year to sometime in 2023.
At the time of writing, the Hazer share price is 70 cents, 16.67% lower than its previous close.
Let's take a closer look at the news weighing on the technology developer's stock today.
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Hazer share price plunges amid likely production delay
The Hazer share price is tumbling today on news its next step towards production has hit a major roadblock.
A part that was to be installed at the company's Western Australia-based demonstration plant suffered a critical failure during fabrication.
The part – a high-temperature heat-exchanger – is needed to kick-start the second phase of the plant's testing program: Hot operating mode.
Hazer CEO Geoff Ward acknowledged the news is "very disappointing" and vowed to investigate the matter thoroughly.
Hazer is looking for potential remedies hidden among its contract terms and insurances.
In the meantime, it will continue working on the plant's first phase – cold operations. That will progress over the next three to six months.
There is slither of good news in today's release from Hazer, however. A hot-wall reactor vessel – also needed to move the plant into hot operations – is nearly completed. The part is expected to arrive in Australia this quarter.
Today's news sees the Hazer share price handing back some of the gains won on the completion of commissioning at the demonstration plant last month.
The stock has fallen 38% since the start of 2022.
