Tax Breaks, Subsidies Set For SinoCoking Coal and Coke Chem

SinoCoking Coal and Coke Chemical Industries Inc. SCOK opened sharply higher Wednesday after the company said its underground coal gasification project is newly eligible for tax breaks and subsidies in China.

SinoCoking changed hands recently at $3.02, up 18 percent.

Construction on the $18 million syngas project launched late last year and SinoCoking confirmed recently that production is expected to commence in March.

The company said Wednesday that the project now is eligible for a 30 percent reimbursement of total capital investment; 25 percent refunds for taxes, and access to coal in Shilong District's 10.4 square miles of coal reserves.

Eligibility comes with winning approval as a Technology Demonstration Project from the Henan Pingdingshan Shilong District Science and Technology Bureau.

When completed in March, the SinoCoking facility is expected to produce 60,000 cubic meters of syngas per hour, and up to 21 million cubic meters per hour when the fully complete.

SinoCoking said in an update on the project earlier this month that it expects production costs will total $0.02 per cubic meter of gas, and the current sales price is $0.10 per cubic meter.