Coal production to start in the first quarter of 2011
TAIYUAN, China, Dec. 15, 2010 /PRNewswire-Asia-FirstCall/ -- Puda Coal, Inc. (NYSE AMEX: PUDA) ("Puda Coal" or the "Company"), a supplier of high grade metallurgical coking coal used to produce coke for steel manufacturing in China and a consolidator of twelve coal mines in Shanxi Province, today announced that Shanxi Puda Coal Group Co. Ltd ("Shanxi Coal"), a 90% subsidiary of Puda Coal, has received approval from the Shanxi Yuncheng Municipal Coal Mine Industry Bureau to commence construction of the designed production expansion of Shanxi Pinglu Dajinhe Coal Industry Co., Ltd ("Dajinhe Coal"). Dajinhe Coal is the project company 100% owned by Shanxi Coal, which holds the acquired coal mining rights and assets of Pinglu County Da Wa Coal Industry Ltd.
On December 9, 2010, Shanxi Yuncheng Municipal Coal Mine Industry Bureau approved all comprehensive reports prepared on Dajinhe Coal's geology, preliminary construction design, and safety and environmental impact. Construction of the production expansion of Dajinhe Coal was also approved to begin on January 1, 2011. The mine has total recoverable reserves of 10.8 million metric tons and its annual production capacity is expected to expand from 300,000 metric tons before the construction to 600,000 metric tons after the construction and production expansion. Dajinhe Coal's existing coal mine is in good condition, which reduces the complexity of construction and production expansion. The Company estimates the expansion will be completed within a period of eight to twelve months. Since the improvements are based on the existing coal mine, which had good operating record prior to the government mandated shut down under Shanxi Province's coal mine consolidation program, coal will be produced during the construction period. The Company estimates that Dajinhe Coal will produce approximately 150,000 to 290,000 metric tons of thermal coal during the construction period.
"Receipt of construction design approval marks an important milestone for Phase I of our Pinglu Project. We plan to begin the designed production expansion in full force and commence construction-period coal mine production at Dajinhe Coal early in 2011," commented Mr. Liping Zhu, CEO of Puda Coal. "Our continued progress in executing our coal mine consolidation projects supports our plan to become an integrated coal mining company. We are working to obtain the geological technical report on the Guanyao Coal mine and are hopeful to receive approval from the Shanxi provincial government in the near future."
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 eight 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, the expected time to complete their construction and production capacity and the annual capacity of the acquired coal mines will be subject to risks and uncertainties relating to market and geological conditions as well as our management's ability to operate and manage the coal mines. 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.
CONTACT: Company Contact: Laby Wu, Chief Financial Officer, Director of Investor Relations, Puda Coal, Inc., +86-10-6439-2405, or labywu@gmail.com; Or Investor Relations Contact: Crocker Coulson, President of CCG Investor Relations, +1-646-213-1915, or crocker.coulson@ccgir.com; Or Elaine Ketchmere, Partner, +1-310-954-1345, or elaine.ketchmere@ccgir.com
