TORONTO (miningweekly.com) – Peabody Energy, the biggest coal-miner in the US, will work with Sydney-based White Energy Company to build a coal-upgrading plant at a Peabody operation in the Powder River Basin, the firms announced on Wednesday.

The companies have signed an agreement that also gives Peabody the right to buy nearly 15% of White Energy, as well as the first right of refusal to participate in new coal-upgrading development projects that White Energy undertakes in North America and China.

White Energy's patented coal briquetting technology, which upgrades higher-moisture coals, increasing the coal's overall energy content by approximately 35%, will be used in the Wyoming plant, the firms said.

The technology produces higher-quality, more efficient and cleaner coal, with lower carbon and other emissions.

“We view this technology as a way to unlock further value in our reserves in the Powder River Basin and at other locations to create new marketing opportunities for US or export customers," said Peabody president Richard Navarre.

The two companies will begin work on the engineering design and permitting activities for the first plant, which is expected to take up to 24 months.

The plant will be built in phases, with the first phase expected to produce more than one-million tons of upgraded coal a year.

Subsequent phases could increase plant capacity ultimately to more than 20-million tons a year.

To subscribe to Mining Weekly's print magazine email subscriptions@creamermedia.co.za or buy now.