Puda Coal Completes Acquisition of Remaining Coal Mines Under Pinglu Project

As previously announced by the Company, pursuant to the acquisition agreements, the purchase price is RMB 250,000,000 (approximately $37.43 million) for Anrui Coal, RMB 61,200,000 (approximately $9.16 million) for Xiapingcun Coal, and RMB 140,000,000 (approximately $20.96 million) for Chuntouao Coal. Shanxi Coal paid 50% of the purchase price within three days of execution of each agreement and paid 40% of the purchase price on February 17, 18 and 22, 2011, respectively, after mining rights of those coal mines were transferred to the Company. The remaining 10% of the purchase price under each agreement, as a deposit, will be paid six months after the mining permits and property deeds are transferred.

Shanxi Coal placed all the purchased assets of Anrui Coal, Chuntouao Coal and Xiapingcun Coal into Shanxi Pinglu Dajinhe Anrui Coal Industry Co., Ltd.("Dajinhe Anrui"), a newly established project company. Provincial government has approved the PRC-standard geological technical report of coal reserves of Dajinhe Anrui.

"We have now successfully acquired all coal mines to be consolidated under our Pinglu Project. We are currently in the process of consolidating and restructuring these coal mines. We estimate that we will complete consolidation, capacity and technology improvement of the five new coal mines under Pinglu Project within next 12 months, of which Dajinhe has begun construction coal producing in this February," commented Mr. Liping Zhu, CEO of Puda Coal.

Mr. Zhu added, "We believe our experience in timely executing acquisition of coal mines under Pinglu Project will be an important asset in managing coal mine acquisition under Jianhe Project. In addition, we estimate that in fiscal year 2011 raw coal produced during the construction period of the Pinglu Project will be about 849,000 metric tons. We are encouraged by our progress thus far and are confident that as the coal mine consolidation program gains momentum, it will enable us to pursue additional coal mine consolidation projects and achieve new milestones in the near future."

Phase II of the Pinglu Project is co-developed by Shanxi Coal, Mr. Ming Zhao, Chairman and a principal stockholder of Puda Coal, and Mr. Jianping Gao under a previously announced Investment Cooperation Agreement dated August 1, 2010.  Under the Investment Cooperation Agreement, Shanxi Coal, Mr. Zhao and Mr. Gao will each contribute 40%, 30% and 30%, respectively, of the total investment needed for the consolidation and construction of the coal mines under Pinglu Project Phase II. The parties will share the profits based upon the above investment contribution percentages and bear the risks and losses in connection with the project which will be limited by the amount of investment contributed by each party.

About Puda Coal, Inc.

Puda Coal, through its subsidiaries, supplies premium high grade metallurgical coking coal used to produce coke for steel manufacturing in China. The Company currently possesses 3.5 million metric tons of annual coking coal capacity. The Company is in the process of adding coal mining operations to its business, as an acquirer and consolidator and acquirer of coal mines in Shanxi Province. On September 30, 2009, Shanxi Coal, a 90% indirect subsidiary of the Company, was appointed by the Shanxi provincial government as an acquirer and consolidator of eight thermal coal mines located Pinglu County in southern Shanxi Province. Shanxi Coal plans to consolidate the nine coal mines into five, increasing their total annual capacity from approximately 1.1 million to 3.6 million metric tons. Shanxi Coal received another approval by the Shanxi provincial government to consolidate four additional coking coal mines into one coal mine in Huozhou County. After the completion of the consolidation, the Jianhe project is expected to increase the total annual capacity from 720,000 metric tons to 900,000 metric tons, according to the Shanxi provincial government's approval. For more information, please visit http://www.pudacoalinc.com.

FORWARD-LOOKING STATEMENTS

The information contained herein includes forward-looking statements. These statements relate to future events or to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. For example, our plan to complete different phases of coal mine consolidation within certain time frame, and the estimates with respect to the reserve and the production capacity are subject to, among other things, the risks and uncertainties relating to the market, geological and construction conditions, which are beyond our control, as well as our management's ability and capacity to manage the coal mine operations, which are new to our business. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.