Projects to clean up ‘dirty’ coal

TWO ground-breaking coal projects will be announced today under a federal-state strategy to exploit Latrobe Valley reserves.

TWO ground-breaking coal projects will be announced today under a federal-state strategy to bolster the national economy by exploiting eastern Victoria’s vast Latrobe Valley reserves, ignoring green alarm over so-called “dirty’’ resources.

The Napthine government and the commonwealth will ­announce grants totalling $50 million to companies at the heart of attempts to use one of the world’s biggest brown coal reserves to aid industry and create new fuel sources for the modern economy.

The announcement will anger green groups and runs counter to the years-long push to shun brown coal in favour of cleaner alternatives.

Both governments will argue that the announcements will lead to a cleaner environmental outcome and the new technologies could be embraced by countries such as India and China.

Victorian Energy and Resources Minister Russell Northe will detail a $30m grant to Coal Energy Australia for the development of a $143m demonstration plant producing fertiliser, pyrolysis oil — which can be distilled into diesel for industrial heating — and fuel for steelmaking.

A second company, Ignite Energy Resources, will be handed a $20m grant for the development of an $84m pre-commercial plant for synthetic crude oil and more valuable coal.

The grants will be made available under the $90m Advanced Lignite Demonstration Program.

Lignite or brown coal is considered a lower grade fuel, but the Victorian government has been looking for ways to upgrade the value of the resource, of which there are hundreds of years worth of commercial deposits in the Latrobe Valley.

It is part of a broad strategy the government hopes will lead to large-scale exports and cheaper fuel sources for manufacturing amid pressure on ­existing coal-fired power.

Mr Northe said the grants were a significant step forward for the region, which has faced structural upheaval due to the fluctuating fortunes of the brown coal intensive power industry and job-shedding under privatisation. “Brown coal has a long history of providing benefits to all Victorians, delivering reliable and affordable power, and we believe it has a bright future for helping build a better Victoria,’’ he said.

Federal Industry Minister Ian Macfarlane said the Victorian brown coal reserves were of national significance.