China Energy Corp. Anticipates No Material Impact from Chinese Government's Recent Announcement on Thermal Coal Contract Price Hikes

Thursday, Jul 08, 2010

China Energy Corporation (OTC:CHGY) (BULLETIN BOARD: CHGY) , ("China Energy" or "the Company"), a leading Inner Mongolia producer and processor of raw coal for domestic heating, electrical generation, and coking purposes for steel production in the People's Republic of China, with operations in coal trading and heat and power supply, today announced that it anticipates no material impact on the Company from the Chinese Government's recent announcement on thermal coal contract prices, and confirms its recently issued net income guidance of $17 million to $18 million for 2010.

On June 25, 2010, the National Development and Reform Commission (NDRC) issued a notice on its website, asking some of China's major coal mining players to keep contract coal prices steady. "Prices for coal under annual supply contracts could not be changed, and coal miners must return any additional charges before the end of June if they have lifted contract coal prices. State-owned coal companies and industry leaders should lead the way in keeping contract coal prices steady," said the NDRC in the notice.

The purpose of this NDRC notice is to curb inflation and ensure sufficient supplies of electricity during the summer. According to the China Coal Resource website ( http://www.sxcoal.com/ ), the benchmark thermal coal price in Qinghuangdao Port for 5,000 kilocalories increased 9.1% to $96 per ton in late June 2010, compared to $88 per ton in late April 2010. In the same period the price for 5,500 kilocalories of thermal coal rose to $111 per ton, up by 7.8% from $103 per ton.

"We do not anticipate that the recent requirement by the NDRC will have a material impact on China Energy, since we sell on the spot coal market and have not entered into any annual contract with Independent Power Producers. Year to date, we have not experienced any pressure on our coal sales prices," commented Mr. WenXiang Ding, President and CEO of China Energy. "Furthermore, we have maintained a steady and multi-faceted customer base, including coal fired power plants, heating plants, steel manufacturing and metallurgy of non-ferrous metals."

About China Energy Corporation

China Energy Corporation produces and processes raw coal for domestic heating, electrical generation and coking purposes for steel production primarily in the People's Republic of China, acts as a brokerage in facilitating coal trade transactions, and provides heat and power locally. The Company produces coal through its subsidiary Inner Mongolia Tehong Coal Group Co, Ltd. ("Coal Group") and supplies heating and electricity requirements throughout the XueJiaWan district through its subsidiary Inner Mongolia Zhunger Heat Power Co., Ltd. ("Heat Power"). Through Heat Power, China Energy operates a thermoelectric plant and 32 heat transfer stations located in XueJiaWan, Ordos City in which the Company has a monopoly for heating supply granted to the Company by the local government. For additional information on China Energy Corporation see http://www.ceccec.com/ .

Source: PR Newswire