Puda Coal Announces Additional Coal Mine Consolidation Project
(NYSE Amex: PUDA), a supplier of high grade metallurgical coking coal used to
produce coke for steel manufacturing in
mines in Pinglu County,
and consolidate four additional coal mines located in Huozhou County, central
In order to improve production efficiency and workplace safety and to
reduce coal mine accidents, in early 2009, the
issued a policy which requires mergers and consolidations of coal mining
companies in
production enterprises are given the opportunity to acquire, consolidate and
restructure smaller coal mines through mergers, acquisitions and asset or
share transfers. As previously announced by the Company on
Shanxi Puda Coal Group, Co., Ltd (“Shanxi Coal”), a 90% subsidiary of the
Company, was appointed by the
of eight thermal coal mines located Pinglu County in southern
(the “Pinglu Project”). Shanxi Coal recently received a new approval by the
into one coal mine. 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
approval.
Among the four target coal mines, Shangxi Huozhou Leijian Coal Co., Ltd
(“Leijian”) and Shanxi Huozhou Fengshen Coal Co., Ltd (“Fengshen”) are the
smaller ones, and Shanxi Huozhou Jianzhuang Co., Ltd (“Jianzhuang”) and Shanxi
Jianhe Coal Industry Limited (“Jianhe Coal”) are the larger ones; Jianhe Coal
is the largest one of the four.
In
at a purchase price of
corporate shareholder of Jianhe Coal (the 82% equity owner is an individual
shareholder) and a consolidator in the Pinglu Project, the Company applied and
received approval to be the consolidator in the Jianhe Project.
Pursuant to the plans for the Jianhe Project, the four existing coal mines
will be consolidated into one mine. The assets of the four coal mines will be
transferred to Shanxi Lituo Coal Industry Co., Ltd, (“Shanxi Lituo”), a newly
registered company that will be wholly owned by Shanxi Coal. The Company has
received approval from the
of Shanxi Lituo. It is anticipated that upon the completion of the
consolidation, the current 82% equity owner of Jianhe Coal will become a
minority shareholder of the Company. The Company has commenced the coal
reserve technical geological prospecting for the Jianhe Project.
Below is a summary of the Jianhe Project, according to the
provincial government approvals:
Jianhe Project
4 Coal Mines- 1 Coal Mine- Added Capacity
Pre-Consolidation Post-Consolidation
Total area of
Coal mines 4.8959 km2 6.5471 km2 1.6512 km2
Coal reserves 19.28 million 23.72 million 4.44 million
metric tons metric tons metric tons
Annual coal mine
production 720,000 900,000 180,000
capacity metric tons metric tons* metric tons
* Servicing term after consolidation is 21 years
Source: The above data is based on the approval document sent to Puda Coal
by the Shanxi provincial government.
The target coal mines are approximately 200 kilometers south of Puda
Coal’s headquarters and 50 kilometers from the Company’s Lingshi coal washing
plant. The coal in that area is fat coal and coking coal. The fat coal can be
used as raw coal for making cleaned coal or as high quality thermal coal for
power plants. Coking coal is used to make coke.
The Company is currently negotiating with the owners of the target coal
mines on definitive coal mine asset purchase agreements.
“As an appointed coal mine consolidator of two coal reserve areas, located
in southern and central
our position as a major coal mining player in
coal mine asset purchase agreements with all parties involved and completing a
comprehensive coal mine construction plan. As a result, we are confident that
our strategic transformation upstream into the coal mining and coal washing
business should help increase our shareholder value.”
About Puda Coal Inc.
Puda Coal, through its subsidiaries, supplies premium high grade
metallurgical coking coal used to produce coke for steel manufacturing in
coking coal capacity.
and supplies nearly 50% of
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 the four mines in the Jianhe Project 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:
Company Contact:
Laby Wu, Chief Financial Officer, Director of Investor Relations
Puda Coal, Inc.
Phone: +86-10-6439-2405
Email: labywu@gmail.com
Web: http://www.pudacoalinc.com
Investor Relations Contact:
Crocker Coulson, President
CCG Investor Relations
Phone: +1-646-213-1915
Email: crocker.coulson@ccgir.com
Elaine Ketchmere, VP of Financial Writing
Phone: +1-310-954-1345
Email: elaine.ketchmere@ccgir.com
Web: http://www.ccgirasia.com
SOURCE Puda Coal, Inc.