Under the agreement, Linc said it will receive $19 million in licensing fees, royalties indexed to Australian CPI from Q4 2012, indexes for synthesis gas, $6.7 million pending UCG’s initial regulatory approval in 2017 and engineering partnership fees. Linc Energy officials have also agreed on a minimum 15% equity in the initial project, with an option to buy 49% equity in all operational parts developed by Exxaro which, in turn, will enjoy a non-exclusive license to Linc Energy’s UCG, officials said.

Linc Energy CEO Peter Bond said the deal is a historic event for the business. “We have developed a world-class technology that will contribute to global energy demands,” Bond said. “This demonstrates real, tangible value of our technology as we expand our position in UCG around the world.”

There is an increasing global awareness of UCG and its application range—from liquid fuels, to gas and power generation, he added. “The UCG process is a clean, indirect mining option and provides an affordable and safe method of creating an alternative energy source for a growing world market,” said Bond.