Peabody Energy and trading firm Vitol have become the latest companies to buy into Arq’s patented coal-to-oil technology.

The deals, which could see both investing further over the next three years, will see Peabody identify potential mine sites where Arq can deploy its technology, while Vitol has agreed to distribute Arq Fuel™ globally.

Arq said: “For almost 100 years, the energy industry has struggled to find a cost-effective way of upgrading coal into oil. Arq Technology™ represents a major breakthrough in this field, achieved by inventing a low-cost mechanical process for treating coal as a micro-particle system.”

The Arq Technology process starts with reclaiming coal waste before moving on to sizing. This creates a micro-particle system through a series of advanced milling techniques to enable the liberation of hydrocarbons from mineral matter.

Arq’s proprietary micro-separation technique isolates the hydrocarbon from the mineral matter through advanced chemistry and flotation technology, removing more than 99% of the impurities. A mechanical de-watering and thermal drying process then creates a purified hydrocarbon product containing less than 2% moisture.

The resulting product, Arq Fuel, is a new energy source ideal for blending directly into oil products without the need for expensive liquefaction and comes with several environmental benefits, the company said.

Arq now has $50 million of equity from investors, meaning it carries a market valuation of over $500 million.

The agreement with Vitol will see the trading company blend Arq Fuel into fuel oil and crude oil, working to position the product as a low-cost blending component with specific customers, according to Arq. These are initially envisaged to include consumers of fuel oil and, subject to ongoing testing, refineries.

Arq’s first plant in Corbin, Kentucky (pictured), is nearing completion, with Arq Fuel expected to be available in early 2019.

Julian McIntyre, Founder and CEO of Arq, said: “Our goal at Arq is to produce the lowest cost hydrocarbon products on the planet. We can only do this by building a coalition of industry partners, who share our perspective that technology will be the catalyst in unlocking value in a changing energy landscape.

“These partnerships are a validation of our products and technology and a major milestone towards realising our ambition.”

Charles Meintjes, Executive Vice President – Corporate Services and Chief Commercial Officer of Peabody, said: “We believe our partnership with Arq represents a rare opportunity to add value to our product, reduce our environmental footprint and expand the market for our product at the same time.”