Petratherm said the funding would help it further assess China's engineered geothermal potential.

The company is aiming to develop China's potentially large geothermal resource to provide emissions-free sources of heat and electricity to the world's largest growing energy maker.

According to Petratherm, the joint study with four Chinese Government institutions is well advanced and researchers have already begun holding mid-term project meetings in Beijing.

Once the study is finished, Petratherm expects to be granted several geothermal exploration licences.

The Petratherm-China agreement was facilitated under the Australian Government's Asia Pacific Partnership (APP) inter-governmental program that involves the United States, China, India, South Korea, Japan and Australia.