Arch Coal Inc. said Thursday it agreed to invest $25 million in DKRW Advanced Fuels LLC as part of a deal in which it acquired a 25 percent equity interest in the company.
Arch said in a release that in exchange for the equity interest, it also agreed to extend its existing option agreement with DKRW Advanced Fuels, and to work with the firm to secure coal reserves for two additional coal-to-liquids projects outside of the Carbon Basin in Wyoming.
DKRW Advanced Fuels, a subsidiary of Houston-based DKRW Energy LLC, is the principal developer of the Medicine Bow Fuel and Power coal-to-liquids project in the Carbon Basin of southern Wyoming. DKRW Advanced Fuels and its subsidiaries hold various proprietary coal conversion technology licenses, according to a release.
The Medicine Bow project is being planned as a coal-to-liquids facility that will use coal from Arch’s Carbon Basin reserves in southern Wyoming as a feedstock. As part of the equity transaction, Arch and DKRW Advanced Fuels completed an extension of the existing option agreement on about 180 million tons of Carbon Basin coal reserves relating to the Medicine Bow coal-to-liquids project. The firms also 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.
St. Louis-based Arch Coal Inc. is one of the largest coal producers in the country, providing the fuel for about 6 percent of the electricity generated in the United States.
Published August 24, 2006 by the St. Louis Business Journal bizjournals.com