The licensing agreement, which will be formally acknowledged by both parties at a ceremony on Friday June 25, will be the largest trade deal between Vietnam and Victoria with exports forecast to exceed $1.5 billion a year by the early 2020s.

ECT chief executive Kos Galtos said the signing of the agreement created substantial value for the company’s shareholders and delivered a whole new industry for Victoria.

“We are heralding a new era in brown coal technology as we establish innovative export technologies that will not only capitalise on the world’s vast lignite resources, but also give impetus to our home state to expand its existing port and rail infrastructure to meet this new export demand,” he said.

“Vietnam has defied the global financial crisis, growing at impressive rates. This rate of growth is projected to continue for decades to come.

“Faced with fierce competition for black coal, Thang Luong has recognised the value of applying the Coldry technology to lignite to create a black coal equivalent feedstock to enhance its energy security while mitigating the impact of brown coal on the environment.”

The first Coldry production pellets are expected to be available for export by late 2013.

The project will begin with the funding of the special purpose vehicle Victoria Coldry Pty Ltd, which was established earlier this year and will enable the detailed, site-specific design and feasibility study to be undertaken by engineers Arup.

This is expected to result in the tendering, procurement and construction of the flagship Coldry plant at Loy Yang power station by late 2013 at an estimated cost of around $US400 million ($A462.89 million).

The 2 million tonnes per annum plant is targeted for production by early 2014, rolling out to 20Mtpa by 2020.

Environmental Clean Technologies will receive revenue of $10 million a year, increasing to $100 million a year plus a potential dividend from its 10% joint venture stake.