Exhibit
      10.1

     

     

    Asset
      Exchange Agreement

     

    


    Party
      A:
      Shanxi Puda Coal Group Co.

    Registered
      Address: No. 426, Xuefu Street, Taiyuan, Shanxi Province

    Legal
      Representative: Zhao Ming

    


    Party
      B:
      Lingshi County Jinliao Coal & Chemical Co., Ltd.

    Registered
      Address: Liangdu Industrial Park of Lingshi County

    Legal
      Representative: Zhang Laiyi

    


    


    


    WHEREAS,
      the annual production of the coal washing plant owned by Party A is 400,000
      metric tons, and the annual production of the coal washing plant owned by Party
      B is 1.2 million metric tons; and 

    


    WHEREAS,
      Party A wishes to expand its production capacity. 

    


    NOW
      THEREFOR, Party A and Party B (collectively, “Parties”) hereto agree
      upon such exchange (the “Asset Exchange”) of all assets of the coal washing
      plant owned by Party A plus additional cash for all assets of the coal washing
      plant owned by Party B.

    


    
      	
            	1.	
              The
                board of directors of Shanxi Puda Coal Group Co. has made a resolution
                approving the Asset Exchange of all assets of its 400,000-MT coal
                washing
                plant, evaluated at RMB 11.50 million, plus RMB 45.50 million in
                cash, for
                all assets of Chongjie Coal Washing Plant, owned by Lingshi Jinliao
                Coal
                & Chemical Co., Ltd., evaluated at RMB 57 million.
                

            


    

    


    
      	
            	2.	
              The
                board of directors of Lingshi Jinliao Coal & Chemical Co., Ltd. has
                made a resolution approving the Asset Exchange of all assets of Chongjie
                Coal Washing Plant, evaluated at RMB 57 million, for all assets of
                the
                coal washing plant owned by Shanxi Puda Coal Group Co. plus additional
                cash with a total value of RMB 57
                million.

            


    

    


    Through
      friendly consultation, both Parties agree to the following terms of the Asset
      Exchange (the “Agreement”):

    


    
      	 	
              I.

            	
              Description
                of the Asset Exchange

            


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    Shanxi
      Puda Coal Group Co. exchanges all assets of its coal washing plant, located
      in
      Shachuan Village, Liulin County, Shanxi Province (“Plant A”), plus additional
      cash, with a total value of RMB 57 million, for all assets of Chongjie Coal
      Washing Plant, owned by Lingshi Jinliao Coal & Chemical Co., Ltd., located
      at Yi Zhuang Villagers’ Group, Tai Village, Liang Du Township, Lingshi County
      (“Plant B”).

    


    
      	 	
              II.

            	
              Considerations
                of the Asset Exchange 

            


    

    


    
      	 	
              a.

            	
              Assets
                Exchanged from Party A to Party B:

            


    

    


    All
      assets of Plant A, which is owned by Party A, with a book value of RMB 11.5
      million (the schedule of assets is attached to this Agreement).

    


    
      	 	
              b.

            	
              Assets
                Exchanged from Party B to Party A:

            


    

    


    All
      assets of Plant B, which is owned by Party B, with a book value of RMB 57
      million (the schedule of assets is attached to this Agreement). 

    


    
      	 	
              c.

            	
              Pricing
                and Evaluation of the Asset
                Exchange

            


    

    


    Pricing
      of the exchanged assets is based on book value as prepared and maintained by
      both Parties. Assets of Plant A are evaluated at RMB 11.5 million. Assets of
      Plant B are evaluated at RMB 57 million.

    


    
      	 	
              d.

            	
              Additional
                Cash

            


    

    


    Both
      Parties agree that the price differential of RMB 45.5 million in this Asset
      Exchange will be paid in Additional Cash by Shanxi Puda Coal Group Co. to Party
      B.

    


    
      	 	
              III.

            	
              Rights
                and Obligations of Both Parties

            


    

    


    
      	 	
              a.

            	
              Rights
                and Obligations of Party A:

            


    

    


    
      	 	
              i.

            	
              Party
                A warrants that it owns Plant A, which is free from any lien, mortgage
                or
                any other encumbrance which may affect this Asset
                Exchange;

            


    

    
      	 	
              ii.

            	
              Upon
                the completion of this Asset Exchange, Party A shall assist Party
                B in
                completing necessary transfer procedures, and shall provide documentation
                as may be required in a timely
                manner.

            


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    
      	 	
              b.

            	
              Rights
                and Obligations of Party B:

            


    

     

    
      	 	
              i.

            	
              Party
                B warrants that it owns Plant B, which is free from any lien or any
                other
                encumbrance right which may affect this Asset
                Exchange;

            


    

    
      	 	
              ii.

            	
              Upon
                the completion of this Asset Exchange, Party B shall assist Party
                A in
                completing necessary transfer procedures, and shall provide documentation
                as may be required in a timely
                manner.

            


    

    


    
      	 	
              IV.

            	
              Performance
                and Payment

            


    

    


    
      	 	
              a.

            	
              Within
                ten days after the execution of this Agreement, both Parties shall
                designate representatives to take necessary procedures to complete
                the
                asset transfers.

            


    

    
      	 	
              b.

            	
              Party
                A shall remit the Additional Cash, in the amount of RMB 45.50 million,
                to
                party B within three days of the completion of such asset transfers.
                

            


    

    


    
      	 	
              V.

            	
              Liabilities
                of Breach 

            


    

    


    In
      the
      event of delayed performance after the execution of this Agreement, the delaying
      Party shall pay to the non-delaying Party a daily damage, in the amount of
      0.5%
      of the total value unperformed.

    


    
      	 	
              VI.

            	
              Miscellaneous
                

            


    

    


    
      	 	
              a.

            	
              This
                Agreement shall be executed in six copies, three to be kept by each
                Party.
                The Agreement shall become effective when signed and sealed by both
                Parties.

            


    

    
      	 	
              b.

            	
              This
                Agreement shall be deemed executed at the location of Party A. In
                the
                event of dispute not resolved through consultation, the moving Party
                may
                submit the dispute to the People’s Court sitting at the location of
                execution of this Agreement.

            


    

    
      	 	
              c.

            	
              Upon
                the completion of this Asset Exchange, the business licenses of both
                Parties shall remain valid and in effect. Each Party shall be responsible
                for updating its business address as it may become
                necessary.

            


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    Party
      A:
      Shanxi Puda Coal Group Co. (Seal)

    


    Legal
      Representative: /s/ Zhao Ming

    


    Signed:
      June 6, 2007

    


    


    Party
      B:
      Lingshi Jinliao Coal & Chemical Co., Ltd. (Seal) 

    


    Legal
      Representative: /s/ Zhang Laiyi

    


    Signed:
      June 6, 2007

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      Asset
        list--Puda Liulin Dongqiang Coal Washing
        Plant

    

    

      
        	
                Name

              	 	
                Quantity

              	 	
                Book
                  Value('000 RMB)

              	 
	
                Office
                  Building

              	 	 	
                1

              	 	 	
                1,246

              	 
	
                Plant

              	 	 	
                1

              	 	 	
                2,287

              	 
	
                Coal
                  Washing Machine

              	 	 	
                2

              	 	 	
                2,000

              	 
	
                Pump

              	 	 	
                4

              	 	 	
                120

              	 
	
                Belt
                  Conveyor

              	 	 	
                4

              	 	 	
                220

              	 
	
                Compressor

              	 	 	
                3

              	 	 	
                630

              	 
	
                Forklift

              	 	 	
                4

              	 	 	
                1,200

              	 
	
                Bulldozer

              	 	 	
                2

              	 	 	
                218

              	 
	
                Floatation
                  Machine

              	 	 	
                1

              	 	 	
                324

              	 
	
                Testing
                  Equipment

              	 	 	
                1

              	 	 	
                92

              	 
	
                Electrical
                  Pump

              	 	 	
                2

              	 	 	
                436

              	 
	
                Car
                  and Truck

              	 	 	
                6

              	 	 	
                2,100

              	 
	
                Computer

              	 	 	
                6

              	 	 	
                64

              	 
	
                Copier

              	 	 	
                3

              	 	 	
                19

              	 
	
                Projector

              	 	 	
                2

              	 	 	
                17

              	 
	
                Printer

              	 	 	
                2

              	 	 	
                4

              	 
	
                Central
                  Air Conditioner

              	 	 	
                1

              	 	 	
                524

              	 
	
                Total

              	 	 	 	 	 	
                11,501

              	 


      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      
        Asset
          List--Lingshi Jinliao Coal Washing
          Plant

      

    

    
      

        
          	
                  Name

                	 	
                  Quantity

                	 	
                  Book
                    Value('000 RMB)

                	 
	
                  Land
                    use right&Plant

                	 	 	 	 	 	
                  3,957

                	 
	
                  Compressor

                	 	 	
                  1

                	 	 	
                  740

                	 
	
                  Pump

                	 	 	
                  7

                	 	 	
                  635

                	 
	
                  Centrifugal
                    Dewatering Machine

                	 	 	
                  2

                	 	 	
                  1,142

                	 
	
                  Sift

                	 	 	
                  3

                	 	 	
                  5,253

                	 
	
                  Desliming
                    Screen

                	 	 	
                  1

                	 	 	
                  523

                	 
	
                  Magnet
                    Beneficating Machine

                	 	 	
                  1

                	 	 	
                  1,934

                	 
	
                  Scraper

                	 	 	
                  1

                	 	 	
                  720

                	 
	
                  Filter
                    Press

                	 	 	
                  3

                	 	 	
                  3,485

                	 
	
                  Floating
                    Beneficating Machine

                	 	 	
                  2

                	 	 	
                  5,996

                	 
	
                  Monitoring
                    Equipment

                	 	 	
                  3

                	 	 	
                  4,295

                	 
	
                  Thickening
                    Machine

                	 	 	
                  1

                	 	 	
                  3,830

                	 
	
                  Furnace
                    

                	 	 	
                  1

                	 	 	
                  157

                	 
	
                  Crusher

                	 	 	
                  3

                	 	 	
                  1,977

                	 
	
                  Belt
                    conveyor

                	 	 	
                  5

                	 	 	
                  4,275

                	 
	
                  Adaptor

                	 	 	
                  6

                	 	 	
                  1,192

                	 
	
                  Scale

                	 	 	
                  3

                	 	 	
                  858

                	 
	
                  Bulldover

                	 	 	
                  2

                	 	 	
                  760

                	 
	
                  Loader

                	 	 	
                  2

                	 	 	
                  1,216

                	 
	
                  Oil
                    Tank

                	 	 	
                  1

                	 	 	
                  69

                	 
	
                  Jigging
                    Machine

                	 	 	
                  2

                	 	 	
                  1,198

                	 
	
                  Cyclone

                	 	 	
                  2

                	 	 	
                  2,050

                	 
	
                  Fuel
                    Dispenser

                	 	 	
                  2

                	 	 	
                  27

                	 
	
                  High
                    Voltage Equipment

                	 	 	
                  2

                	 	 	
                  1,926

                	 
	
                  Power
                    Generator

                	 	 	
                  1

                	 	 	
                  2,650

                	 
	
                  Coal
                    Feeder

                	 	 	
                  2

                	 	 	
                  1,037

                	 
	
                  Processor

                	 	 	
                  1

                	 	 	
                  560

                	 
	
                  Desliming
                    Cone

                	 	 	
                  2

                	 	 	
                  1,364

                	 
	
                  Coal
                    Middlings Dewatering Machine

                	 	 	
                  1

                	 	 	
                  405

                	 
	
                  Digger

                	 	 	
                  1

                	 	 	
                  948

                	 
	
                  Filter

                	 	 	
                  1

                	 	 	
                  669

                	 
	
                  Shale
                    Tank

                	 	 	
                  3

                	 	 	
                  897

                	 
	
                  Testing
                    Equipment

                	 	 	
                  1

                	 	 	
                  161

                	 
	
                  Oil
                    Cone

                	 	 	
                  1

                	 	 	
                  47

                	 
	
                  Roots
                    Blower

                	 	 	
                  1

                	 	 	
                  57

                	 
	
                  Total

                	 	 	 	 	 	
                  57,010