SinoCoking Coal and Coke Chemical Industries, Inc. announces Hongchang and Xingsheng coal mines cleared for resumption of operations
SinoCoking Coal and Coke Chemical Industries, Inc. (Nasdaq: SCOK) (the “Company” or “SinoCoking”), a vertically-integrated coal and coke processor, today announced that Hongchang and Xingsheng coal mines have been cleared to resume operations at full capacity. The Hongchang mine has been operated by Baofeng Hongchang Coal Co., Ltd., a subsidiary of Henan Pingdingshan Hongli Coal & Coke Co., Ltd. (“Hongli”), which the Company controls through contractual arrangements. Baofeng Xingsheng Coal Mining Co., Ltd. (“Xingsheng”), of which 60% equity interest is now registered to Hongli, has been operating the Xingsheng mine.
Of note, the Hongchang and Xingsheng mines are two of only eight mines in the Pingdingshan area that have received clearance to resume coal production.
There will be a grand re-opening ceremony on Wednesday, August 10, 2011, in the presence of SinoCoking’s executives, business partners and local government officials. Pictures from the ceremony will be available at www.sinocokingchina.com.
The Hongchang mine has been operating at 50% capacity since late June 2010 as a result of a mandatory moratorium related to safety inspection issues prompted by an industry-wide consolidation initiative. On August 1, 2011, the mine received clearance from mining engineers and safety experts of the state-owned conglomerate Henan Province Coal Seam Gas Development and Utilization Co., Ltd. (“Henan Coal Seam Gas”), with which the Company has set up a joint-venture, Henan Hongyuan Coal Seam Gas Engineering Technology Co., Ltd. (“Hongyuan CSG”).
In August 2010, Hongli entered into an agreement to acquire 60% of Xingsheng. On May 20, 2011, the registration for the transfer of such equity interests to Hongli with the local State Administration of Industry and Commerce (“SAIC”) was completed, and the local SAIC issued a new business license to Xingsheng accordingly. In May 2011 Henan Coal Seam Gas deployed its mining engineers, safety experts and other professionals to the Xingsheng mine, and cleared the mine for resumption of operations on August 1, 2011. The coal extracted from the Xingsheng mine is bituminous coal which is suitable for coke production.
Both mines are currently undergoing operational and safety upgrades, and the Company will make an announcement when full operations resume. As previously announced, the Company intends to eventually manage these mines through Hongyuan CSG. Until such time, Hongchang and Xingsheng will continue to manage these mines, with mining safety, operations and technology being handled by Henan Coal Seam Gas.
As also previously announced, coal extracted from both mines will largely be used to produce coke and other coke by-products at SinoCoking’s new coking facility once its construction is complete. Construction is currently expected to be completed later on this year and production to start immediately after.
SinoCoking’s Chairman and CEO, Mr. Jianhua LV and CFO, Mr. Sam Wu, will host a conference call on Monday, August 15, 2011 at 11:00 am ET to discuss these corporate developments. After opening remarks, there will be a question and answer period.
Interested parties may participate in the call by dialing: (201) 493-6748. Please call in 10 minutes before the conference is scheduled to begin and ask for the SinoCoking call. After opening remarks, there will be a question and answer period. Questions may be asked during the live call, or alternatively, you may e-mail questions in advance to [email protected].
The conference call will also be broadcast live over the Internet. To listen to the webcast, please go towww.sinocokingchina.com (Presentations/Events section) at least 15 minutes early to register, and download and install any necessary audio software. If you are unable to listen live, the conference call will be archived and can be accessed for approximately 90 days. We suggest listeners use Microsoft Internet Explorer as their web browser.
SinoCoking and Coke Chemical Industries, Inc., a Florida corporation, is a vertically-integrated coal and coke processor that uses coal from both its own mines and that of third-party mines to produce basic and value-added coal products for steel manufacturers, power generators, and various industrial users. SinoCoking has been producing metallurgical coke since 2002, and acts as a key supplier to regional steel producers in central China. SinoCoking also produces and supplies thermal coal to its customers in central China. SinoCoking currently owns its assets and conducts its operations through its subsidiaries, Top Favour Limited and Pingdingshan Hongyuan Energy Science and Technology Development Co., Ltd., and its affiliated companies, Henan Province Pingdingshan Hongli Coal & Coke Co., Ltd., Baofeng Coking Factory, Baofeng Hongchang Coal Co., Ltd., Baofeng Hongguang Environment Protection Electricity Generating Co., Ltd., Zhonghong Energy Investment Company and Henan Hongyuan Coal Seam Gas Engineering Technology Co., Ltd, and Baofeng Xingsheng Coal., Ltd.
For further information about SinoCoking, please refer to our periodic reports filed with the Securities and Exchange Commission.