Lihua International Breaks Ground on Second Copper Recycling Facility

DANYANG, China, Nov. 8, 2010 /PRNewswire-Asia/ -- Lihua International, Inc. (Nasdaq: LIWA) ("Lihua" or the "Company"), a leading Chinese developer, designer, and manufacturer of low cost, high quality alternatives to pure copper products, including refined copper products and superfine and magnet wire, as well copper clad aluminum ("CCA") wire, today announced that it has broken ground on its second copper recycling facility. The groundbreaking follows Lihua's acquisition of Land Use Rights from the Jiangsu Provincial government.

The new recycling and smelting facility, which is expected to open during the second half of 2011, is being built on approximately 30 acres of land located adjacent to Lihua's existing copper recycling facility in Danyang, China. Based on the Company's construction plan, the facility will initially house two smelters, and will increase Lihua's annual refined copper production capacity to 100,000 tons from current annual capacity of 50,000 tons. Total costs associated with the new facility, including the acquisition of 50-year Land Use Rights, construction and equipment are expected to total $35 - $40 million. The construction and all associated costs will be fully funded from Lihua's cash on hand, which totaled $87.0 million as of June 30, 2010.

"We are pleased to secure these land use rights and to break ground on our second copper recycling facility, which will provide us with a much needed increase in refinery capacity as we work to keep up with the tremendous demand that exists for our products in the Chinese market," said Jianhua Zhu, chairman and CEO of Lihua. "We have received 2011 copper anode supply contracts and customer demand indications totaling 110,000 metric tons, which exceeds our estimated refinery capacity for the full year, reinforcing our belief in the sizeable market opportunity that exists for this product and supporting our decision to launch the anode product line during the second quarter of 2010. Demand for our other products remains strong as well, and we believe that this capacity addition will allow Lihua to capture additional share of the Chinese copper market."

Mr. Zhu added, "Similar to our current facility, this new facility is designed and constructed to meet the most stringent environmental standards, and includes a smoke collection system to filter the exhaust, as well as a water collection system which allows Lihua to recycle the water used for the cooling of molten copper, in addition to a variety of other technologies. Our recycled copper products carry numerous ecological benefits over products made from newly-mined copper."

About Lihua International, Inc.

Lihua International, through its two wholly-owned subsidiaries, Lihua Electron and Lihua Copper, is a leading value-added manufacturer of copper replacement products for China's rapidly growing copper wire and copper replacement product market. Lihua is one of the first vertically integrated companies in China to develop, design, manufacture, market and distribute lower cost, high quality alternatives to pure copper magnet wire and pure copper alternative products. Lihua's products include copper-clad aluminum wire ("CCA") and pure copper products including copper wire and copper rod, which are produced from recycled scrap copper. Lihua's products are sold in China either directly to manufacturers or through distributors in the wire and cable industries and manufacturers in the consumer electronics, white goods, automotive, utility, telecommunications and specialty cable industries. Lihua's corporate and manufacturing headquarters are located in the heart of China's copper industry in Danyang, Jiangsu Province. For more information, visit: http://www.lihuaintl.com.

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Safe Harbor Statement

This press release contains certain statements that may be deemed to be "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, that address activities, events or developments that the Company expects, projects, believes or anticipates will or may occur in the future, including, without limitation, statements about its business or growth strategy, general industry conditions including availability of copper or recycled scrap copper, future operating results of the Company, capital expenditures, expansion and growth opportunities, bank borrowings, financing activities and other such matters, are forward-looking statements. Although the Company believes that its expectations stated in this press release are based on reasonable assumptions, actual results may differ from those projected in the forward-looking statements.

Please note that information in this press release reflects management views as of the date of issuance.

SOURCE Lihua International, Inc.