Up until 1921, a subsidiary of the Great Northern Railway mined more than 1.3 million tons of coal from the Lehigh mine located at the heart of the Pace coal project.

At that time, the mined coal was transported by railway to other parts of America.

"The Pace coal project already has substantial infrastructure in place, including a federal highway, electrical transmission lines, and the BNSF railway running through our property,” chief executive of American Power Al Valencia said.

“Having access to an established railway transport solution like this is vital to economic coal production and delivery, and we intend to take all steps necessary to develop the Pace coal project as needed on our end so we can commence operations as soon as practicable.”

In November 2009, Warren Buffett's Berkshire Hathaway made a $US34 billion investment in acquiring the Burlington Northern Santa Fe Railway (BNSF).

Valencia said many analysts have commented that this acquisition is a huge bet on the future of coal in America.

Coal hauled by the BNSF powers one in 10 homes in the US.

According to BNSF figures, more than 90% of that coal is from the Powder River Basin in Wyoming and Montana.