Run by the former Felix Resources team of Brian Flannery (White’s managing director) and Travers Duncan (White’s chairman), a move by White into the coal mining game was long expected.

It eventually emerged through White’s $US20 million acquisition of Kentucky producer Mountainside Coal Company last year, with White recouping much of this cost by selling 50% of MCC to its African investment partner Black River Asset Management for $17.8 million in January.

Duncan summarised the MCC investment as both an opportunity to generate “significant revenue in the short term” but also to showcase White’s binderless coal briquetting [BCB] technology to the US market.

“MCC is in the final stages of completing the construction of a new coal wash plant which will allow the company to produce low-ash sized coal product from the high quality Blue Gem seam,” Duncan said at the company’s annual general meeting this week.

“Low-ash sized coal prices continue to trade at a significant premium in the silica and ferrosilica markets. The construction of the new coal wash plant, which was funded by White Energy and Black River’s existing cash reserves, is the first phase of a proposed two-phase approach to the operation of MCC.

“The second phase, which is still under evaluation by MCC, relates to the installation of a BCB plant as part of MCC’s overall operations. A decision on whether MCC will proceed with the construction of a BCB plant will be made in early in 2015.”

While MCC has made various cost cutting measures this calendar year, including the close of its Flag Ridge mine, Flannery expected the company to start a path towards “sustainable profitability from early 2015” through opening the Blue Gem coal-targeting Flat Creek operation and completing the new wash plant.

There is also a plan to showcase White’s coal upgrading technology at MCC to target the major Powder River Basin in the US.

“White Energy remains committed to utilising the BCB technology to upgrade the high moisture Powder River Basin coals,” Flannery said.

“The upgrading of PRB coals remains a medium-term strategy for the company, with the focus on the export market opportunity. In this regard, a number of US coal producers in the PRB are currently seeking approvals to build coal export terminals at various locations of the west coast of the US, for export of coal into the Asian markets.

“So far no approvals have been forthcoming. It may therefore take a number of years before the company’s proposed PRB projects become operational.”