PINGDINGSHAN, China, Jan. 12, 2015 (GLOBE NEWSWIRE) -- SinoCoking Coal and Coke Chemical Industries, Inc. (Nasdaq:SCOK), a vertically integrated producer of clean energy products located in Henan Province, today announced it had entered into a three-party venture with Fangda Special Steel Technology Co. Ltd, China's largest automotive steel spring manufacturer, and with Henan Shenhuo Group, one of the six largest state-owned coal mining companies in Henan Province, whereby Fangda will provide SCOK with Letters of Guarantee on a monthly basis, issued to Henan Shenhuo, to guarantee payment for a minimum of 300,000 tons of coking coal in 2015.
Under terms of the multi-party agreement, SinoCoking will purchase clean, high-quality coking coal from Shenhuo at prices six percent below market. By providing the Letters of Guarantee, Fangda secures through SinoCoking its current supply needs for coking products, with SinoCoking expecting Fangda's supply requirements to increase up to 6 million tons over the next three years. Fangda will purchase a minimum of 240,000 of finished coke in 2015.
"We are delighted by this significant business development by which we and our primary coke supplier and major coke customer all benefit," said SinoCoking Chairman and CEO, Mr. Jianhua Lv. "These agreements will insure an uninterrupted supply of coking coal from Shenhuo Group and guaranteed sales to Fangda. At the same time it provides a mechanism that reduces SCOK's cash needs for purchasing raw materials and frees up more of our working capital and credit to invest in the build-out and expansion of our syngas production facilities."
Mr. Lv also noted that Shenhuo's production facility is located only 65 km from the company's Baofeng factory, and he expects this close proximity - relative to the locations of current suppliers - will generate additional savings due to lower transportation costs. "Combining better pricing on coal with this transportation benefit, we expect the cost of sales in our coking division to decrease by about 10 percent."
"Our three party cooperation with Shenhuo and SinoCoking," added Chen Wen, Purchasing Director of Fangda Group, "will provide us with high quality coke products on a consistent basis. It will ensure that Fangda's steel products continuously meet their production targets and quality standards, and at the same time will improve each partner's overall competitiveness."
For additional information on SinoCoking, please go to http://scokchina.com or refer to the company's periodic reports filed with the Securities and Exchange Commission (http://www.scokchina.com/sec-filings.html). Investors wishing to receive SinoCoking's corporate communications as they become available may go to the company's Investor Relations site (http://www.scokchina.com/corporate-overview.html) and register under Email Alerts.
Also, investors may submit questions directly to Mr. Lv and his staff to receive non-confidential information about the company's operations and products at the company's "Ask Management" blog (http://www.scokchina.com/ask-management.html).
SinoCoking Coal and Coke Chemical Industries, Inc. (www.scokchina.com), a Florida corporation, is an emerging producer of clean energy products located in Pingdingshan, Henan Province, China. The company has historically been a vertically-integrated coal and coke processor of 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, Henan Hongyuan Coal Seam Gas Engineering Technology Co., Ltd., Baofeng Shuangri Coal Mining Co., Ltd., and Baofeng Xingsheng Coal Mining Co., Ltd.
This press release contains forward-looking statements, particularly as related to, among other things, the business plans of the Company, statements relating to goals, plans and projections regarding the Company's financial position and business strategy. The words or phrases "plans," "would be," "will allow," "intends to," "may result," "are expected to," "will continue," "anticipates," "expects," "estimate," "project," "indicate," "could," "potentially," "should," "believe," "think," "considers" or similar expressions are intended to identify "forward-looking statements." These forward-looking statements fall within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934 and are subject to the safe harbor created by these sections. Actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties. Such forward-looking statements are based on current expectations, involve known and unknown risks, a reliance on third parties for information, transactions or orders that may be cancelled, and other factors that may cause our actual results, performance or achievements, or developments in our industry, to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from anticipated results include risks and uncertainties related to the fluctuation of local, regional, and global economic conditions, the performance of management and our employees, our ability to obtain financing, competition, general economic conditions and other factors that are detailed in our periodic reports and on documents we file from time to time with the Securities and Exchange Commission. Statements made herein are as of the date of this press release and should not be relied upon as of any subsequent date, and the Company specifically disclaims any obligation, to update any forward-looking statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such statement.
CONTACT: SinoCoking Song Lv, Chief Financial Officer + 86-375-2882-999 email@example.com http://www.scokchina.com/ Investor Relations Counsel: Jimmy Caplan, Asia IR-PR +1-512-329-9505 firstname.lastname@example.org http://asia-irpr.com/Source:SinoCoking Coal and Coke Chemical Industries. Inc.