Sinocoking Coal And Coke Chemical Industries ... - PrecisionIR

SinoCoking News Release Page 2May 14, 2013Upgrading technical capabilities of our existing coking facility- To reduce our dependency on high cost raw materials, such as coking coal, we upgraded our existingcoking facility, which has an annual production capacity of 250,000 metric tons. The facility can nowproduce high quality coke and coke by-products using low cost raw coal, such as long flame coal. We alsoupgraded oven capabilities to improve their energy efficiency, capture additional by-products forrefinement into high value-added chemical products, and satisfy strict environmental requirements.Resuming construction of the new coking facility- In April we resumed construction of our new facility, which we plan to complete before fiscal 2014year-end. Trial production will start immediately after construction. Additionally, we receivedapproval from local authorities to increase the facility’s designed annual production capacity from900,000 metric tons to 1.2 million metric tons. Such increase, if implemented, would enable us tofurther expand our product offering by recapturing additional coke by-products for refinement intohigh value-added chemical products. This fits well with our business plan to focus on increasing ourmarket share in China’s coal chemical industry which has been growing rapidly.Signing a leasing agreement to operate a 200,000 metric tons coking facility for a period of one year- Trial production at our recently leased coke production facility began on April 24, 2013. This facility isapproximately 3 miles from our existing coking facility and rail yard. We have started work to improveboth the efficiency of the coke ovens and the quality of the coke produced at this facility, and will graduallyincrease production to full capacity. Coke by-products such as crude benzol, sulfur, sulfur ammonia andpurified coal gas will be produced at the same time, thereby increasing our product portfolio. Throughoperating this facility, we aim to gain and hone the skills needed to operate and manage its new type ofcoke ovens, which will be a valuable experience once our state-of-the-art coking facility is completed andbecomes operational.Continuing to invest to improve safety of our coal mines- As required by the Henan government, we are upgrading the safety-related systems at our coal mines inorder to be approved to resume our mining operations. We are also in the process of merging theoperations of Hongchang mine, Shunli mine and Shuangrui mine. To date, we have invested a total ofapproximately $27.9 million as follows:a) Mine upgrades totaling approximately $35.0 million, 70% or approximately $24.5 million to be paid bySinoCoking and the remainder by Henan Coal Seam Gas, our joint-venture partner. To date, we havepaid approximately $17.0 million for these upgrades which are expected to be completed in calendaryear 2013.b) Mine consolidation totaling approximately $32.0 million. To date, we have paid approximately $10.9million toward such integration. We expect to complete such integration 4-6 months after we obtainclearance to resume our mining operations, which clearance we expect to receive in calendar year 2013”Mr. Lv. concluded, “Due to the recent steps taken to increase production of coke and coke by-products, we expectour top and bottom lines to substantially improve in the final quarter of fiscal 2013 and in fiscal 2014. Wecurrently have coke production capacity of 450,000 metric tons annually, including the 200,000 metric tons we areleasing. Once construction of our new facility is completed, our coking capacity will increase by approximately 1.2million metric tons annually.”Conference CallMr. Lv and Sam Wu, the Company’s CFO, will host a conference call on Thursday, May 16, 2013 at 10:00 am ET /10:00 pm China time to discuss fiscal 2013 third quarter financial results as well as recent corporate developments.Interested parties may participate in the call by dialing: (201) 493-6744. Please call in 10 minutes before theconference is scheduled to begin and ask for the SinoCoking call. After opening remarks, there will be a questionand answer period. Questions may be asked during the live call, or alternatively, you may e-mail questions inadvance to lcati@equityny.com.