Sihe, in China’s Shanxi Province, is owned by the Jincheng Anthracite Mining Group. Last year the Asian Development Bank approved a $US117 million loan to develop the plant.
The project also has the backing of Methane to Markets Partnership, a US-led initiative that now includes 17 partner countries, including China.
Believed to be the world's largest power plant fuelled by coal mine methane, the Sihe plant will produce 120 megawatts of electricity from coalbed and coal mine methane produced by the mine.
Exhaust gas heat will be recovered to produce usable hot water and steam for the mining operations.
“Pollution knows no political boundaries, and in the US, we recognise that our environmental responsibility does not stop at our borders," said William L Wehrum, Environmental Protection Agency acting assistant administrator for Air and Radiation.