The Sydney-based group announced in December that it had signed a 90-day option agreement with an unnamed US coal company to acquire an existing open cut mining operation in the region.

In March, White Energy reached an agreement with the seller to extend the option period until April 10 in order to allow the completion of its due diligence investigations.

Announcing that it has decided not to proceed the company says it will continue to search for suitable projects in the US and other markets.

White Energy holds exclusive licensing for a compaction and hydration coal upgrade process known as binderless coal briquetting, which it had expected to apply to the acquisition.

The company said it had already tested coal fines sourced from a mine at the Appalachian location in its BCB demonstration plant in Australia.

If the deal had proceeded, White would have paid $US21.5 million inclusive of all mine infrastructure, plant and equipment, permits and $200,000 option fee.

The company would also have had to replace security bonds of $7.5 million on settlement of the transaction.