China Nanotech Opens New Factory in Shaanxi Province

Phase I Expected to Add 60,000 Tons of NPCC Capacity Using Proprietary

Manufacturing Process

Aug 14, 2006, 01:00 ET from China Nanotech, Inc.

    TAIAN CITY, Shandong, China, Aug. 14 /Xinhua-PRNewswire/ -- China
 Nanotech, Inc., formerly Zeolite Exploration Company (OTC Bulletin Board:  
 ZXPL), a leading nano precipitated calcium carbonate (NPCC) and coal-based
 chemical products manufacturer in the People's Republic of China ("PRC"),
 today announced the opening of its new advanced NPCC factory in Xianyang
 City, Shaanxi province. The new factory will employ China Nanotech's
 proprietary technology, co-developed with China's Tsinghua University,
 which significantly reduces the cost of producing NPCC, while enhancing the
 product quality and range of applications for which this versatile
 nano-scale material can be used.
     China Nanotech is a leading manufacturer of NPCC and specialty
 chemicals in the People's Republic of China, who is the only company listed
 on foreign stock market in the nano material production industry in China,
 as well as the only company in China currently supplying NPCC to the
 domestic Chinese tire market.
     The new facilities at the Shengda Industrial Park in Xianyang City are
 planned in three phases. The industrial park occupies 500 Chinese acres
 (333,000 sqm), and the first phase of expansion is expected to cost
 approximately RMB200 million, while increasing the Company's annual
 capacity for NPCC by 60,000 tons once operations are fully scaled up. If
 completed, the third phase of construction at Shengda Industrial Park is
 expected to take production capacity to 1 million tons of NPCC per year.
     The new factory will employ China Nanotech's proprietary breakthrough
 Membrane Diffusion technology developed in collaboration with Tsinghua
 University in China. The Membrane Diffusion process offers significant
 advantages over both the traditional manufacturing method for NPCC and the
 more advanced "Ultra-Gravity" technology. Like the "Ultra-Gravity" process,
 the Membrane Diffusion process significantly increases production
 efficiency and stabilizes the grain size of NPCC, so as to enhance product
 quality. However, the Membrane Diffusion technology significantly reduces
 production costs as compared to the high-cost Ultra-Gravity process, while
 also improving quality control and consistency.
     "China Nanotech's new Shaanxi factory is the first industrial
 application of the breakthrough Membrane Diffusion method for NPCC
 production in the world," said Mr. Xiangzhi Chen, President, CEO and
 Director of China Nanotech. "By adopting this technology, we expect to
 realize a significant competitive advantage in the burgeoning global market
 for NPCC. We have already successfully tested the product in applications
 including tires, rubber, plastic and coating, and believe this will give us
 a platform to develop exciting new applications for this versatile
 nano-scale material."
     The Membrane Diffusion process results in a desirable narrow grain
 structure of within 30-60 nanometers with stable product quality, while
 also enhancing the usage of carbon dioxide. As compared to other
 approaches, the production process has the characteristics of a compact
 structure, primarily using non-moving parts, stable operations, strong
 elasticity, low energy consumption, and low production costs.
     About China Nanotech Inc.
     China Nanotech, Inc. is engaged in the business of manufacturing,
 marketing and selling a variety of nano precipitated calcium carbonate
 ("NPCC") products and coal-based chemicals for use in various applications.
 China Nanotech converts limestone into NPCC using its proprietary
 technology. The unique chemical and physical attributes make NPCC a
 valuable ingredient in tires, polyvinyl chloride ("PVC") building
 materials, paints and other products. It enhances the durability of many
 products by increased strength, heat resistance, and dimension
 stabilization. China Nanotech is also engaged in the manufacture and sale
 of coal based chemical products namely ammonium bicarbonate, liquid
 ammonia, melamine and methanol. China Nanotech markets and sells its
 coal-based products mainly for chemical fertilizers and raw materials in
 the production of organic and inorganic chemical products, including
 formaldehyde and pesticides.
     Safe Harbor Statement Under the Private Securities Litigation Reform
 Act of 1995: Any statements set forth above that are not historical facts
 are forward-looking statements that involve risks and uncertainties that
 could cause actual results to differ materially from those in the
 forward-looking statements, which may include, but are not limited to, such
 factors as unanticipated changes in product demand especially in the tire
 industry, changes in composition of tires, pricing and demand trends for
 the Company's chemical products, changes to government regulations, risk
 associated with operation of the Company's new manufacturing facility, risk
 associated with large scale implementation of the New NPCC manufacturing
 process, the ability to attract new customers, ability to increase its
 product's applications, ability of its customers to sell products, cost of
 raw material, downturns in the Chinese economy, and other information
 detailed from time to time in the Company's filings and future filings with
 the United States Securities and Exchange Commission.
     For more information, please contact:
      Crocker Coulson
      President of CCG Elite
      Tel:   +1-310-231-8600 x103
      Rick Dean
      U.S. Representative
      China Nanotech, Inc.
      Tel:   +1-716-626-3535

SOURCE China Nanotech, Inc.