In June 2006 construction started on a $6.3 million coal drying...

In June 2006 construction started on a $6.3 million coal drying demonstration plant at Loy Yang. The plant will use a process called Mechanical Thermal Expression (MTE) to reduce the moisture content of brown coal. The Australian and Victorian Governments have each provided $2.2 million for the project with the remaining $1.9 million being provided by the power suppliers in the region. Commissioning is expected in January 2007 and the overall project will conclude in mid-2007. The MTE plant is expected to be able to process up to 15 tonnes per hour and if successful stakeholders hope to retrofit existing power plants. The use of dried brown coal would reduce CO2 emissions by about 5% in existing plants and by about 30% in new plants. If the demonstration plant is successful a commercial scale pilot plant could be in place by 2008.
http://www.australianminesatlas.gov.au/info/aimr/coal.jsp

Seems like they are on track.