US China Mining Group, Inc. Provides Update on Xing An Coal Mine Upgrade

Mine Expected to Resume Full Production In May with New Long Wall Equipment

Mar 09, 2011, 07:30 ET from U.S. China Mining Group, Inc.

CITY OF INDUSTRY, Calif., March 9, 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, announced today that the Company's retrofit project is on schedule and expects full coal production at its Xing An mine to commence by May 2011. The Xing An mine was closed for maintenance and retrofit projects that began at the end of fiscal 2009 and resumed partial production in November 2010.

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. In December of 2009, the Company began a program to upgrade the Xing An mine.  These improvements were intended to increase efficiency, safety and boost production at the site.  Operations at the Xing An mine will be transitioning from room-and-pillar mining to long wall mining process, which will enable year round coal production.

Mr. Hongwen Li, President of US China Mining Group, commented, "We are pleased with the progress of our equipment retrofit at our Xing An mines. Once testing is complete and we receive regulatory approval, we expect to reach full production capacity by the end of May. This, along with contribution from our coal sorting business, will help accelerate our revenues and profitability in the second half of this year."

“Additionally, we expect our permitted production will increase from 600,000 metric tons per year to 900,000 beginning in the second half of 2012, pending government approval,” Mr. Li continued.  “With 11.79 million tons of minable reserves* at our Xing An mine, the projected increase in permitted production will help meet strong demand in Heilongjiang Province, while driving incremental revenue growth for our Company.”

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.

*per Industry Guide 7


Yvonne Zhang

US China Mining Group, Inc.

(626) 570-6866

Investor Relations

HC International

Ted Haberfield, Executive Vice President

Phone: +1-760-755-2716



SOURCE U.S. China Mining Group, Inc.