TAIYUAN, China, March 14, 2011 /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 consolidator of nine coal mines in Pinglu County Yuncheng City ("Pinglu Project") and four coking coal mines in Huozhou County Linfen City ("Jianhe Project") in Shanxi Province, today announced that on March 10, 2011 Shanxi Puda Coal Group Co. Ltd ("Shanxi Coal"), a 90% subsidiary of Puda Coal, was granted a transitional business license for the operation of Shanxi Pinglu Dajinhe Coal Industry Ltd ("Dajinhe Coal") by the Shanxi provincial government.
Dajinhe Coal is a project company 100% owned by Shanxi Coal that holds the acquired coal mining rights and assets of Pinglu County Da Wa Coal Industry Co., Ltd. In January 2011, Shanxi Coal received approval to begin construction of the designed production expansion of Dajinhe Coal. Shanxi Coal has made significant construction progress and is currently connecting the new constructed main mining shaft for coal production with the existing mining shaft for workers and equipment, which are now less than 40 meters apart. Since the improvements are based on an existing coal mine with a good operating record prior to government mandated shut down and consolidation of the existing mine, certain amount of coal is being produced during the ongoing construction period and management anticipates that approximately 150,000 to 290,000 MT of thermal coal will be produced during the construction period, which is eight to twelve months. With the transitional business license, which is valid until November 17, 2011, Shanxi Coal will be able to sell thermal coal produced during the construction and expansion period to its customers at prevailing market prices. Following construction and expansion, Dajinhe Coal's annual production capacity is expected to expand to 600,000 metric tons from 300,000 MT before the construction.
"We are encouraged by the recent progress of our Pinglu Project, which involves acquisition and consolidation of nine coal mines. Since the beginning of this year, we have produced a small amount of thermal coal during the construction and expansion of Dajinhe Coal. Now that we have received a transitional business license for Dajinhe Coal, we will begin selling thermal coal to our nearby customers," said Mr. Liping Zhu, CEO of Puda Coal, Inc. "We expect to receive construction approval for Dajinhe Wujin by the end of March 2011. We believe our experience in executing acquisition of coal mines under the Pinglu Project will be very helpful in managing the Jinahe Project. More importantly, our proven execution capability has won government recognition, which is valuable to us if we take on additional coal mine consolidation projects 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 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.
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 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.
Laby Wu, Chief Financial Officer, Director of Investor Relations
Puda Coal, Inc.
Investor Relations Contact:
Crocker Coulson, President
CCG Investor Relations
Elaine Ketchmere, Partner
SOURCE Puda Coal, Inc.