Linyi Daily reported that Jiangsu Shagang and Shandong Linyi Hengchang Coal Industry Co have signed investment agreement June 23rd agreeing to jointly spend CNY 5 billion to build a 3 million tonnes per year coking project in 3 years.

According to the report, with cost of CNY 2 billion the first stage project is slated to go trial operation this month, with designed annual capacity of 100,000 tonnes of methanol, 1.3 million tonnes of coking coal, 80,000 tonnes of coal tar and 30,000 tonnes of crude benzol and annual pretax profit of CNY 500 million. The first stage project can fulfill taxation of CNY 20 million by the end of the year and to break CNY 100 million next year.

The report added that the project will boast 3 million tonnes per year of coke output, with sales revenue of CNY 10 billion and pretax profit of CNY 1.5 billion after the second-stage construction completes, and will become the largest coal chemical industry base in Lunan and Subei regions by then.

Shagang and Hengchang Coal Industry have formed a JV with shareholding ratios of 60%:40%. Under the name of Linyi Shagang Hengchang Coking Co Ltd, the JV has registered capital of CNY 400 million.