Southern lignite has been turned into high-energy briquettes in Solid Energy's push to build an up-to $15 million briquetting plant in Southland.
Its United States-based joint venture partner, GTL Energy, has finished converting and testing the 420 tonnes of New Vale Mine lignite sent to North Dakota, in the United States, last year.
Solid Energy new energy general manager Brett Gamble said this week he was impressed by the trial results and that they boded well for the pilot plant.
On average, the briquettes had 65% less moisture than the lignite and about 50% more energy - making them very similar to Ohai coal, Mr Gamble said.
The next step was to test them in local conditions.
A spokeswoman confirmed they would be used to heat the boilers of at least two commercial customers, likely in Canterbury.
The ongoing trials are part of the state-owned miner's work to establish the feasibility of building a pilot briquetting plant in Eastern Southland.
The plant would upgrade about 100,000 tonnes of lignite - a low-ranked fuel - mined each year from the New Vale opencast mine, near Waimumu, west of Gore.
Solid Energy has been testing ground stability at the old Mataura mine in the hunt for a home for the plant.
It is also considering New Vale and the old Mataura paper mill.
The proposed plant is the first of three projects planned for lignite from the Waimumu, Croydon and Mataura areas of Southland.
Solid Energy is doing pre-feasibility work for a liquid fuel plant.
With southern fertiliser co-operative Ravensdown, it is also investigating the viability of a coal-to-fertiliser plant near Gore.
Together, they could cost $11 billion to complete.
At least another six months had been added to the fertiliser plant's timeline as Solid Energy assessed the technologies best suited to Southland conditions, the spokeswoman said.
