SinoCoking's Second Phase of UCG Technology Upgraded for Use in Existing Coal Mines With Capital Investment Saving of 50%

PINGDINGSHAN, China, March 16, 2015 (GLOBE NEWSWIRE) -- SinoCoking Coal and Coke Chemical Industries, Inc. SCOK, a vertically integrated producer of clean energy products located in Henan Province, today announced that its Underground Coal Gasification (UCG) technology has been upgraded and will be applied to Henan Hongchang Coal mine with 50% capital saving. Compared to the first phase UCG Technology Demonstration project (announced on January 21, 2015), the second phase UCG project (approved on January 29, 2015) not only enjoys similar government benefits, but has the following four advantages: (1) The second phase will be built at the site of the company's Hongchang mine with its existing coal facilities, which results in saving of about 50 percent in capital investment. (2) The blended process will be applied to the second phase, and it will produce coal and syngas simultaneously. This is different from the first phase of UCG, which processes utilizing non-well technology to produce only syngas. (3) The blended technology is so far the most efficient technology to exploit the underground coal resources. (4) The blended technology may be applied to other mines in Henan province. The company will launch the second phase of the UCG project through its wholly-owned subsidiary, Baofeng Hongchang Coal Co., Ltd., with existing coal operations in Baofeng County.

The company said this second phase of the UCG project is scheduled to begin construction in April 2015 and will be operational within four months. At peak capacity, Baofeng Hongchang Coal is expected to achieve syngas-related coal production of 12,000 tons/month and syngas production of 120,000 cubic meters/hour.

As previously announced, the first phase of SinoCoking's UCG program, which is expected to be completed later this month, had qualified as a State Scientific Demonstration project in January 2015. Like the first phase, the second phase of UCG project in Baofeng County will be entitled to receive a series of benefits and financial support from the government, including 30% reimbursement of total capital investment, 25% refunds for taxes paid to local and state tax authorities, and access to coal for gasification purposes in Baofeng County's 37 square kilometers of coal reserves.

SinoCoking management's long-term UCG plan is to apply the blended UCG technology to SCOK'S other mines over the next 2 years. SCOK also plans to introduce its blended UCG technology to other companies' mines in Henan province in the future with total syngas production capacity of 21 million cubic meters per hour from a full industrial scale.

After visiting SCOK's operations in mid-January of this year, the Executive Vice Mayor of Pingdingshan, Zhe Li, has asked relevant government officers to "fully support SinoCoking's UCG program and help ensure that construction is completed smoothly and on a timely basis."

"Our second phase UCG project is the first project in Henan province to build a UCG facility that produces UCG syngas in an existing operational coal mine. Implementing the second phase of the UCG demonstration project in Baofeng County," said SinoCoking's CEO Mr. Jianhua Lv, "furthers our corporate mission and increases our ability to produce clean burning syngas from coal. It represents a major milestone in SCOK's transition from a traditional coal and coking business into a progressive green company that can make a significant contribution toward creating a healthier environment."

For additional information on SinoCoking, please go to http://www.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).

About SinoCoking

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.

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