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Puda Coal to Restructure Six Coal Mines, Add Coal Gangue Power Plant

02/04/2009 - Puda Coal signs letter of intent with a local county government located in Shanxi Province to consolidate the County's six coal mines and construct a coal gangue power plant.

Puda Coal, Inc. has signed a letter of intent with a local county government located in Shanxi Province to consolidate the County's six coal mines and construct a coal gangue power plant.
 
According to the letter of intent, the County will apply for project approval from the Shanxi provincial government for consolidation of the coal mines. Once it receives provincial approval, Puda Coal will work with the County to consolidate and restructure the six coal mines. After the County has obtained all supporting documents related to the gangue power plant, Puda Coal will work with the County to construct a 2x135-MW coal gangue power plant.
 
The company said that consolidation of the coal mines as well as construction of the power plant will comply with the Shanxi provincial government's mandate to accelerate the pace of consolidation and restructuring of coal mining enterprises.
 
Once the provincial government has approved the project, the company will invest the necessary funds to increase the mines’ production capacity after consolidation, and will also provide the funds necessary to construct the coal gangue power plant.
 
''We are excited about this opportunity and view this letter of intent with the County government as a step forward in our efforts to enter into the coal mining industry and extend our reach along the coal value chain,'' said Mr. Liping Zhu, CEO and President of Puda Coal. ''We look forward to the opportunity to leverage our experience in the coal industry to consolidate and fully utilize the mines and to construct a coal gangue power plant to help serve China's increasing demand for energy.''

The company noted that details related to timing and the requirements and conditions for any binding agreement for detailed coal mine consolidation are not yet available.
 
Puda Coal, through its subsidiaries, supplies premium grade metallurgical coking coal to the steelmaking industry in China for use in making coke. The company currently possesses 3.5 million tonnes of annual coking coal cleaning capacity. Shanxi Province provides 20 to 25% of China's coal output and supplies nearly 50% of China's coke.