The coal and iron oxide are heated to high temperatures, where the materials react with each other. Carbon from the coal binds with the oxygen from the iron oxide and creates carbon dioxide, which rises into a chamber where it is captured. Hot iron and coal ash are left behind. Because the iron beads are so much bigger than the coal ash, they are easily separated out of the ash, and delivered to a chamber where the heat energy would normally be harnessed for electricity. The coal ash is removed from the system.
The carbon dioxide is separated and can be recycled or sequestered for storage. The iron beads are exposed to air inside the reactor, so that they become re-oxidized be used again. The beads can be re-used almost indefinitely, or recycled.
The US Department of Energy is helping to fund this research and is building a pilot scale reactor set to go online later this year. While there are still environmental concerns with coal mining this technology could possibly remove the air quality issues involved with using coal for energy.