US China Mining Group, Inc. Announces Launch of Coal Sorting Business at Xing An Mine

Mar 03, 2011, 07:30 ET from U.S. China Mining Group, Inc.

CITY OF INDUSTRY, Calif., March 3, 2011 /PRNewswire-FirstCall/ -- U.S. China Mining Group, Inc. (OTC Bulletin Board: SGZH), a Chinese leader in coal production and exploration in the People's Republic of China, today announced that the Company has successfully launched a coal sorting business at its Xing An mine location.

The Xing An mine, located in the far northern region of Heilongjiang Province, near the Russian border, produces high-quality thermal coal, which is sold throughout China. The newly-announced coal sorting business consists of sourcing raw coal from producers in Inner Mongolia via railcar and then cleaning and sorting the raw coal at the Xing An facility. The coal from Inner Mongolia has a high level of impurities when compared to the coal produced at Xing An directly. Therefore it needs to be cleaned and sorted to yield prevailing market prices, which are currently $47.50 per ton for thermal coal and similar to those the Company receives for its internally produced coal. The Company expects to sort at least 500,000 metric tons in FY2011 with gross profits of approximately $15 per metric ton (gross margins > 30%) and net profits of $12 per metric ton.

Mr. Hongwen Li, President of US China Mining Group, commented, "With the successful launch of our coal sorting business, we continue to leverage US China Mining Group's expertise and relationships in the coal business. The equipment cost approximately $0.80 million and provides an annual capacity of 600,000 tons. We have sorted about 40,000 metric tons since our initial launch in November and expect to sort approximately 20,000 metric tons each month through June 2011, at which point we anticipate a significant acceleration in sorting volumes to commence. During the winter months, availability of railway cars for coal from Inner Mongolia is limited as food and timber take government priority for shipping. However, as the summer approaches we expect these transportation restrictions to be mitigated and anticipate operating at full capacity during the second half of the year. We are also evaluating the feasibility of expanding our sorting capabilities directly in Inner Mongolia."

About US China Mining Group

US China Mining Group is a company engaged in coal production and sales by exploring, assembling, assessing, permitting, developing and mining coal properties in the People's Republic of China ("PRC"). After obtaining permits from the Heilongjiang Province National Land and Resources Administration Bureau and the Heilongjiang Economic and Trade Commission, we extract coal from properties to which we have the right to mine capped amounts of coal, and then sell most of the coal on a per metric ton ("ton") basis in cash on delivery, primarily to power plants, cement factories, wholesalers and individuals for home heating. We do not own the coal mines, but have mining rights to extract a capped amount of coal from a mine as determined by government authorized mining engineers and approved by the Heilongjiang Department of Land and Resources. Our business consists of the operations of Tong Gong coal mine in northern PRC, located approximately 175 km southwest of the city of Heihe in the Heilongjiang Province and the Hong Yuan and Sheng Yu coal mines located in the city of Mohe in Heilongjiang Province

Safe Harbor Statement

This press release contains certain statements that may include "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are often identified by the use of forward-looking terminology such as "believe", "expect", "anticipate", "optimistic", "intend", "will" or similar expressions. Such forward-looking statements involve known and unknown risks and uncertainties that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of risks and factors, including those discussed in the Company's periodic reports that are filed with and available from the Securities and Exchange Commission. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these risks and other factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements


Investor Relations

US China Mining Group, Inc.

HC International

Yvonne Zhang

Ted Haberfield, Executive Vice President

(626) 570-6866

Phone: +1-760-755-2716



SOURCE U.S. China Mining Group, Inc.