The technology will accomplish this conversion without releasing meaningful levels of carbon dioxide or other greenhouse gases above ground, said SinoCoking.

Located in Henan Province, these mines have been shut down for three years due to Chinese government-mandated mine consolidation guidelines. Now, however, these properties can be reactivated and their resources utilized in an environmentally friendly manner, said the company.

The first phase of the project, which will cost approximately $18 million and be funded primarily from SinoCoking’s cash reserves, is expected to be completed in February 2015 and yield a combined syngas output of 60,000 cubic meters per hour (m3/hr). This output will produce incremental gross profit in 2015 of from $30 to $45 million, said SinoCoking.

Subsequent phases of the project, expected to be completed by the end of 2016, will cost about $280 million and will be funded primarily from bank loans and company-issued debt. At completion, the project is expected to have an output capacity, subject to market demand, of 880,000 m3/hr of syngas.

Customers for this syngas will be comprised primarily of local power, chemical and transportation companies, as well as households requiring electricity in Henan Province, said SinoCoking.

“The production of this vast new quantity of syngas – a clean burning fuel – while preventing the escape of carbon dioxide and other greenhouse gases, is, we believe, a major technological accomplishment,” said SinoCoking Chairman and CEO Jianhua Lv. “Combined with the opening next month of our above-ground syngas facility in Pingdingshan, this new project further establishes our company as one of China’s leading producers of clean energy products.”

Lv said that SinoCoking would announce additional details on the construction and financing of the underground facility “in the near future.”