White and Black River, which is a subsidiary of Cargill, will originate, develop, construct and operate coal upgrading plants in Africa either alone or in conjunction with other companies.

As well as upgrading lower rank coal reserves, White said there was opportunity in Africa to treat and process discard coal fines.

Both companies said they had already commenced discussions with “a number of key players” interested in the technology in Africa.

Under the deal, White will hold 51% of the new company and Black River will take 49%, equity contribution will be funded 66% by Black River and 34% by White, and White will receive a large upfront payment from the company when it is established.

Black River paid $US70 million for its 49% stake in the company, while White has contributed $31 million.

Besides profit generated from White’s share in the new company, White will also receive royalties.

The two companies are also considering listing the new entity in the medium term.