(EnergyAsia, May 8 2013, Wednesday) — SinoCoking Coal and Coke Chemical Industries Inc, a Nasdaq-listed vertically-integrated coal and coke processing firm, said it started trial production at a newly leased coking coal production plant in China’s Henan province last month.

Subsidiary Pingdingshan Hongli Coal & Coke Co Ltd, which owns and operates another plant located nearby, leased the 200,000 metric ton plant from Pingdingshan Hongfeng Coal Processing and Coking Ltd.

SinoCoking said it plans to improve the efficiency of the coke ovens and the quality of the coke output at the same time operating near capacity. The two plants will also add to its product range by producing crude benzol, sulphur, sulphur ammonia and purified coal gas.

Chairman and CEO Jianhua Lu said: “We have received approval from local authorities to increase that facility’s annual production capacity from 900,000 metric tons to 1.2 million metric tons. (The) increase would enable us to expand our product offering by recapturing additional coke by-products for refinement into high value-added chemical products. This fits well with our business plan to focus on increasing our market share in China’s coal chemical industry which has been growing rapidly.”

He said the company would benefit from Beijing’s recent decision to lift domestic coal price controls and encourage coal imports as it will give consumers more choice and bargaining power during negotiations with coal suppliers.

“The recent recovery in the steel and construction markets should positively affect coke and coke by-product prices. We also believe that strategic decisions such as leasing the Hongfeng facility will put SinoCoking in a leadership position long into the future<’ he said.

SinoCoking and Coke Chemical Industries Inc, a Florida, US-based company, 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. It also produces and supplies thermal coal to its customers in central China.