Harp Syngas, a subsidiary of Syngas Power, will provide the technical know-how to the Chongqing Energy Investment Group, one of the largest enterprises in China.

CEO of Harp Syngas, Aldous Hicks, said that Australia was at the forefront of in-situ gasification - the technology used to extract energy from deep coal - but until now no-one actually delivered it in commercial quantities.

"Syngas is the best solution at the moment to reducing the "nasties" produced by burning pulverised coal in boilers. There is a very strong anti-coal movement in Australia and rightly so. Coal is a great energy source and brought great wealth to Australia and the world, but it is now time to produce energy in a much cleaner way," he said.

Syngas production happens hundreds of metres below mined-out open-cut or underground coal mines. The process involves drilling into the coal seam, injecting air or oxygen and sometimes water to gasify the coal to produce syngas.

Syngas Power said that no fracking is involved and the process has the lowest surface foot print of any energy source.

Mr Hicks said the process had substantial potential in China because no new coal mine licences were being issued.

"We want to go over mined-out mines, so there is no need for new land area to be set aside for the process.

While we would like to use this technology in Australia, I think we are too risk averse. However, it is certainly time to look at other sources of energy apart from coal mining.

President of Chongqing Energy Investment Group, Mr Feng Yue, said they chose to work with Syngas due to their reputation and technical expertise.

"This is the first time we have used this technology. I believe this type of clean energy will eventually change the way we mine," he said.

Syngas Power was established in 2011 and is involved in projects in the U.K. and Japan as well as in Western Australia and the Hunter Valley.