China National Electric Equipment Corporation (CNEEC) said it will build a $750m coal-fired power station in Victoria, Australia.
The Latrobe Valley power station will be fuelled by low-grade coal and employ new technologies.
CNEEC president Zhao Ruolin told China Daily that low-grade coal should ideally be used.
"China has a lot of low-grade coal, which is often left in the ground. By using the low-grade variety, we can extend the life of coal," Ruolin said.
CNEEC is expected to sign an agreement with its Australian partner HRL Corporation on 22 April 2010.