After acquiring a 25% equity interest in DKRW, Arch agreed to invest $25 million in the company, which is the principal developer of the Medicine Bow Fuel and Power coal-to-liquids project in the Carbon Basin of southern Wyoming.

 

The Medicine Bow project is being planned as a mine-mouth CTL facility that will use coal from Arch's Carbon Basin reserves in southern Wyoming as a feedstock.

 

The project already has licenses in place from technology providers, as well as a site with nearby access to a liquids pipeline network that supplies a large and under-served refined products market.

 

“We believe that our strategic partnership with DKRW Advanced Fuels positions Arch to play a significant role in the emerging coal-to-liquids industry,” Arch Coal chairman and CEO Steven Leer said.

 

As part of the transaction, Arch and DKRW Advanced Fuels completed an extension of the existing option agreement on around 180 million tons of Carbon Basin coal reserves relating to the Medicine Bow CTL project, and entered into a new agreement whereby Arch and DKRW Advanced Fuels will explore potential reserves and project opportunities of similar size to Medicine Bow in two other coal basins.

 

“We believe coal conversion technologies hold tremendous potential for serving America's future energy needs,” Leer said.

 

“By converting its vast and highly economic domestic coal reserves into transportation fuels and synthetic natural gas, the United States can reduce its reliance on foreign sources of energy.”