The MoU covers the key terms of a licence for Coal Plus technology, and was signed with Chinese technology company Zhengzhou Zhongneng Metallurgy, an associate of Li Xipeng, Jatenergy’s largest shareholder.

Coal Plus uses pyrolysis technology, which has long been used in coal processing around the world, coupled with a proprietary heat exchange technology that makes the process more efficient.

The technique is currently used in three operating facilities in the Fugu County of Shaanxi Providence, China, which have a combined throughput of 2.2 million tonnes per annum.

Two more facilities using the technology are under construction in Fugu and Yulin with a combined planned throughput of 8Mtpa. The key outputs are electricity from gas production, coal tar for chemical feed-stocks and coal char potentially suitable as a semi-soft coking coal. A two million tonne per year plant is expected to have a capital cost of around US$50m.

Jatenergy said the Coal Plus license would initially cover a coal-upgrade project in Indonesia, and was expected to be formally put in place during the next eight weeks, subject to final commercial and technical due diligence.

“Coal Plus has the potential to unlock large, low grade coal assets that currently are uneconomic to mine. We can look at doing this now because of Indonesia’s new export rules governing low grade ores and local processing,” Jatenergy executive chairman Tony Crimmins said.

“It is a great opportunity to leverage Jatenergy into potentially large projects through the use of proven technology, using our proven local staff and contacts. I have visited sites in China where Coal Plus technology being utilized. This technology is the real deal, and we are at a great advantage using our operational beach-head in Indonesia, the worlds’ largest thermal coal exporter.

“This MoU is the first important step in the making of Jatenergy into a substantial company based upon our operational success to date and the potential this technology brings.”