A Missouri coal company wants to fan new life into its dwindling industry.
St. Louis-based Peabody Energy announced Wednesday that it’s teaming up with Vitol, the world’s largest independent oil trader, and London-based startup Arq in a new business endeavor to convert coal into oil products that the companies say will be more environmentally friendly than traditional coal burning.
The companies say the endeavor has a chance to revive an industry that has struggled as more people are opting for cleaner natural gas and renewables. Peabody and Vitol said they will each invest $10 million into the new partnership, with the potential for more investment over the next three years.
The process is possible because of new technology developed by Arq that pulverizes coal, removes impurities and pollutants, and then blends it with crude oil or fuels for use by refineries and other customers.
The partnership gives Peabody a chance to add value to its coal, reduce its environmental footprint and expand the market for its products, said Charles Meintjes, executive vice president and chief commercial officer for Peabody.
The new Arq refinery, which will be built in Kentucky, is planned for completion by early 2019. It’s expected to produce the equivalent of about 2,000 barrels a day once it’s running at full capacity. The company then plans to build larger plants near coal mines and targets 100,000 barrels a day within two years.