Puda Coal Provides Update on Shanxi Province Coal Mine Consolidation
November 12 2009 - 9:00AM
PR Newswire (US)
TAIYUAN, China, Nov. 12 /PRNewswire-Asia-FirstCall/ -- Puda Coal,
Inc. (NYSE Amex: PUDA), a supplier of high grade metallurgical
coking coal used to produce coke for steel manufacturing in China,
today provided an update on its plans to consolidate eight coal
mines. On September 28, 2009, the Shanxi provincial government
appointed a subsidiary of Puda Coal, Shanxi Puda Coal Group Co.,
Ltd. ("Shanxi Coal") as a consolidator of eight coal mines in
Yucheng City, Pinglu County. Shanxi Coal has the government's
permission to consolidate eight coal mines into five. The Company
has commenced the technical geological prospecting process for the
targeted coal reserves. The Company will also perform a
comprehensive financial analysis of the project and then determine
the most efficient plan to develop and construct the targeted
consolidated coal mines. So far, Shanxi Coal has not entered into
any definitive agreements for the acquisition of the eight coal
mines. Below is a summary of the consolidation plan according to
the government approval: Consolidation Plan 8 Coal Mines- 5 Coal
Mines- Added Pre- Consolidation Post- Consolidation Capacity Total
area of Coal mines 18.3 km squared 35.6 km squared 17.3 km squared
Coal reserves 49.24 million 163.87 million 114.63 million metric
tons metric tons metric tons Annual coal mine production 1.65
million 3.60 million 1.95 million capacity metric tons metric tons
metric tons Remark: the numbers listed in the sheet are excerpted
from the approval document of government Pursuant to the government
approval, Shanxi Coal will consolidate eight coal mines into five,
which is expected to increase the total area of the coal mines by
94.5% to 35.6 square kilometers, expand the estimated coal reserves
by 232.8% to 163.9 million metric tons, and grow the coal mine
production capacity by 118.2% to 3.6 million metric tons per year.
The coal reserves of the target coal mines are mostly low-grey,
high- sulphur, high-heat lean coal and middle-grey, low-sulphur,
high-heat and strong adhesion coking coal. Lean coal is mainly used
for power generation and can also be used as a secondary raw coal
for coke production. Coking coal is the primary raw coal for coke
production. The first phase of the consolidation will be the
expansion of two coal mines from current annual capacities of
300,000 metric tons and 150,000 metric tons to 600,000 metric tons
and 300,000 metric tons, respectively. Since the overall
construction conditions of the two target coal mines are good, we
expect that the coal mines' production capacities can be expanded
without disrupting the mines' current mining operations. At present
the Company is negotiating with the owners of the eight coal mines
on the acquisition or merger. "We are committed to restructuring
and consolidating these eight coal mines in Pinglu County and plan
to complete all these activities within three years," commented Mr.
Zhu Liping, Chairman and CEO of Puda Coal. "We are finalizing our
strategic plans, balancing our efforts to maximize our return on
investment and to ensure the safety of the consolidation projects."
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
has recently moved upstream into coal mining. In May 2009, the
Company entered into an equity transfer agreement to acquire 18% of
Jianhe Coal. In September 2009, the Shanxi government approved the
Company's plan to consolidate eight coal mines in Pinglu County,
Shanxi Province. Shanxi Province provides 20 - 25% of China's coal
output and supplies nearly 50% of China's coke. For more
information, please visit http://www.pudacoalinc.com/ .
FORWARD-LOOKING STATEMENTS 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 acquire and consolidate coal mines and to
complete the three phases of coal mine consolidation in three
years, and the estimates with respect to the size of the mining
areas, the reserve and the production capacity are subject to,
among other things, the risks and uncertainties relating to the
market and geological condition, due diligence, negotiation for
definitive agreements, etc. which are beyond our control, as well
as our management's ability and capacity to execute our coal mine
acquisition strategy and manage the coal mine operations. 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. For more information, please contact: Investor
Relations Contact: Crocker Coulson, President CCG Investor
Relations Tel: +1-646-213-1915 Email: Elaine Ketchmere, VP of
Financial Writing Tel: +1-310-954-1345 Email: Web:
http://www.ccgirasia.com/ Company Contact: Laby Wu, Chief Financial
Officer, Director of Investor Relations Puda Coal, Inc. Tel:
+86-10-6439-2405 Email: Web: http://www.pudacoalinc.com/
DATASOURCE: Puda Coal, Inc. CONTACT: Investor Relations Contact:
Crocker Coulson, President, CCG Investor Relations,
+1-646-213-1915, , or Elaine Ketchmere, VP of Financial Writing,
+1-310-954-1345, ; Company Contact: Laby Wu, Chief Financial
Officer, Director of Investor Relations, Puda Coal, Inc.,
+86-10-6439-2405, Web site: http://www.pudacoalinc.com/
http://www.ccgirasia.com/
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