Arch Coal Liquids Pact

It takes a stake in a Houston developer.
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Arch Coal (ACI) - Get Report took a 25% equity interest in DKRW Advanced Fuels of Houston, the primary developer of the Medicine Bow Fuel and Power coal-to-liquids project in the Carbon Basin of southern Wyoming.

St. Louis-based Arch agreed to extend its existing option agreement to secure coal reserves for two additional coal-to-liquids projects outside of the Carbon Basin, and to invest $25 million in the company.

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

"We believe that our strategic partnership with DKRW Advanced Fuels positions Arch to play a significant role in the emerging coal-to-liquids industry," said CEO Steven F. Leer. "DKRW Advanced Fuels is widely recognized as a leader in the coal conversion field, and it has made excellent progress in assembling the core components of a successful facility in southern Wyoming. We look forward to working with DKRW to move this project forward in the months ahead."

As part of the transaction, Arch and DKRW Advanced Fuels completed an extension of the existing option agreement on approximately 180 million tons of Carbon Basin coal reserves relating to the Medicine Bow coal-to-liquids 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.