Our operating results for the third quarter were again impacted by the government's plan to consolidate small- and mid-sized coal mines and the related temporary moratorium of mining operations. As this has been a massive undertaking and the deadline to complete the consolidation has been extended to the end of 2011, we believe that we, along with other consolidators, now have the time needed to work through governmental administrative procedures.
Just a month ago, we secured a RMB 360 million medium-term loan which has significantly improved our financial position and has provided us with the funds needed to accelerate our growth strategy including the completion of the construction of the new coke facility and the purchase of raw materials needed to start production at the new coke facility once construction is completed. The new facility, which has a projected annual production capacity of 900,000 metric tons, is expected to generate approximately $100-$150 million of revenue and contribute $20-$25 million to our net income per year. Additionally, our cost estimate for construction of the facility has been reduced from $70 million to $60 million. Through the implementation of our ambitious business plan, we are positioning the Company to be able to meet and adapt to changing demands for coke and coal products. We remain committed to profitably growing our Company and in so doing, enhancing shareholder value.
SinoCoking Coal and Coke Chemical Industries today announced that on April 2, 2011, Henan Province Pingdingshan Hongli Coal & Coke Co. (Hongli) entered into a medium-term loan agreement with Bairui Trust Co., pursuant to which Bairui has loaned Hongli the sum of RMB 360 million (approximately $54 million), of which RMB 180 million is due in two years and RMB 180 million in three years, with an APR of 6.3%. All of the Company's business operations are currently conducted by Hongli, which the Company controls through contractual arrangements.
"The new loan significantly improves our financial position and provides us with the funds needed to accelerate our growth strategy, including the completion of the construction of the new coke facility with projected annual production capacity of 900,000 metric tons, the purchase of raw materials needed to start production at the new coke facility once construction is completed and, in addition to our ongoing consolidation, the ability to take advantage of other acquisition opportunities as they present themselves."
2010 has been a very dynamic period for the Chinese coal industry as a whole and SinoCoking in particular. While we are disappointed with the results of the last few quarters, we believe we have positioned the Company well to take advantage of the tremendous growth forecasted for our industry. I am optimistic that the strategic decisions we have taken over the last several months will put SinoCoking in a leadership position in the markets we serve long into the future.