Sino Clean Energy, a China-based producer and distributor of coal-water slurry fuel (CWSF), today announced that it started the construction on an additional 750,000 metric tons (MT) of annual production capacity to its existing 300,000 MT capacity plant in Dongguan, Guangdong Province, with completion expected in August of 2011. Upon completion of the construction, the company said it plans on additional testing before ramping production in the fourth quarter of 2011.

The decision to expand its production capabilities follows recently announced mandates and subsidies from the Dongguan government that the company anticipates will increase demand.

The addition of the new 750,000 MT CWSF production line in Dongguan, brings the company’s total capacity at the facility to 1,050,000 metric tons, and a company aggregate total of 1,900,000 metric tons, which supports management expectations of a payback period of about two years from the investment. Sino Clean Energy estimates the total construction and equipment costs at approximately $13.6 million.

“We are pleased with the progress we have seen so far from our Dongguan facility,” Baowen Ren, chairman of Sino Clean Energy stated in the press release. “After the 300,000 metric tons annual capacity coal water slurry fuel production line was successfully put into operation in Dongguan, Guangdong province this January, the yield and sales volumes have continued to increase rapidly. We have added new customers and overall demand has exceeded our expectations.”

On March 2, 2011, the Dongguan municipal government made several significant commitments to promote the use of CWSF, including the mandate that all coal-fired boilers below 4 steam ton/hour and 10 steam ton/hour with using life over eight years must be renovated or eliminated by the end of Dec. 31, 2012. More than 1,000 industrial boilers in Dongguan do not comply with these standards; and by providing a subsidy of 40,000 RMB ($6,105) per steam ton, with a cap of 400,000 RMB ($61,059) per year.

Ren noted CWSF as a logical choice for clean energy and said the company is positioned to benefit from the opportunities created by the Dongguan government’s mandates.

“As the safest and the most economic clean energy source, CWSF has tremendous potential in China. In its 12th five-year plan, the PRC government will continue to support the development of clean coal technologies reduce carbon dioxide emission and increase energy yields. With the strong monetary and policy support from the Dongguan government, Sino Clean Energy will capitalize on this emerging opportunity,” Ren stated. “To date, the company has five CWSF customers in Guangdong province under CWSF supply agreements totaling approximately 275,000 metric tons. The company will continue to target large CWSF customers in Guangdong, as the province is one of the most economically developed in China. The province also holds the greatest amount of Small and Medium Enterprises (SME), and the largest consumer capacity for CWSF, in China.”

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