The facility’s initial phase of development will produce up to 90,000 tonnes a year of low-moisture and higher-energy briquettes from about 150,000 tonnes of lignite mined from the company’s New Vale Opencast mine.

SENZ also plans to expand the scale of the Mataura briquetting plant once the initial phase of the facility has successfully met its objectives of producing low-moisture, higher-energy briquettes.

GTL Energy (GTLE) said it has moved a step closer to commercial demonstration of its unique coal upgrading technology with the commencement of this construction work at the facility, which is expected to begin production by mid-2012.

GTLE and SENZ worked closely for several years to determine the best means of upgrading this lignite resource.

GTLE CEO Fred Schulte said this is a major step forward in realising the commercial value of GTLE’s unique technology for conversion of low-grade coal to higher rank fuel and for New Zealand in unlocking the value potential in deposits of lignite coal in Southland.