SOURCE: Puda Coal, Inc.

June 21, 2006 09:53 ET

Puda Coal, Inc. Announces Contract With Member of 2nd Largest Raw Steel Producing Group in China

New Customer Xuanhua Steel Group Part of Industry Giant Tangshan Steel Group

TAIYUAN CITY, CHINA -- (MARKET WIRE) -- June 21, 2006 -- Puda Coal, Inc. ("Puda" or the "Company") (OTCBB: PUDC), a leading supplier of China's highest grade metallurgical coking coal -- which is used to make coke for the purposes of steel manufacturing -- announced today that it has begun to execute on a 9-month supply contract signed on April 21st with new customer Xuanhua Steel Group ("Xuanhua"), a member of one of China's largest steel groups. Puda is providing Xuanhua with 30,000 metric tons (MT) per month, or 270,000 MT for the contract term. This contract addresses the following goals central to Puda's continued growth:

1) Form Strategic Relationships with Major Steel Groups -- Xuanhua recently merged with Tangshan Steel Group, the 2nd largest raw steel producer in China. Xuanhua, significant in and of itself, represents a potential inroad into a much larger organization.

2) Overcome Geographic Barriers to Market to a Broader, Larger Customer Base -- In order to extend its geographic reach, Puda has assumed responsibility for transporting the cleaned coal to Xuanhua; this is the first time such a provision has been included in a Puda client contract. However, Puda is able to pass along 100% of the additional cost incurred in the form of an increased sales price. This new contract feature allows Puda to attract larger, more geographically distant clients with no adverse impact on net income.

"We continue to execute on our business plan in a way consistent with the 2006 revenue guidance previously provided. We reaffirm our revenue guidance of $120 million -- $135 million," said Puda Chairman and Chief Executive Officer Zhao Ming. "This contract is both an important source of revenue and a symbol of our ongoing development as a national industry leader."

About Puda Coal, Inc.

Puda Coal, through its affiliates and controlled entities, supplies premium grade coking coal to the steel making industry for use in making coke. The Company currently possesses 2.7 million metric tons of annual coking coal cleaning capacity, and management believes it is one of the largest coke coal cleaning companies in terms of capacity in Shanxi Province, China. Shanxi Province provides 20-25% of China's coal output and supplies nearly 50% of China's coke.

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. 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. The safe harbor for forward-looking statements contained in the Securities Litigation Reform Act of 1995 protects companies from liability for their forward-looking statements if they comply with the requirements of the Act.

Contact Information

  • CONTACTS:
    Justin K. Davis
    Keating After Market Support, LLC
    Toll Free: +1 (888) 850-PUDC
    jd@keatingams.com