CDII Trading, Inc. (CDII) in Contract to Supply Manganese Ore

DEERFIELD BEACH, FL — (Marketwire) — 05/13/10 — China Direct Industries, Inc. (“China Direct Industries”) (NASDAQ: CDII), a U.S. owned holding company operating in China in two core business segments, pure magnesium production and distribution of basic materials, announced today that its wholly owned subsidiary, CDII Trading, Inc. (“CDII Trading”), has entered into a contract to supply manganese ore over the next 12 months to a privately held China-based trading and refining company.

CDII Trading expects to supply manganese ore to its China-based buyer to be obtained under a signed purchase agreement with a Chilean mining company over a twelve-month period. CDII Trading is in the process of finalizing financing for its supplier to produce the required quantity of ore to fulfill this contract and expects to begin the first shipment in July 2010. Upon successful completion of this shipment, CDII Trading expects to supply additional shipments to its China-based buyer on a monthly basis over a twelve-month period. CDII Trading estimates that the sales contract has the potential to generate up to $18 million in revenue over the course of the twelve-month period.

Commenting on these contracts, Mr. Ross A. Friedman, Vice President of Commercial Trading at CDII Trading, stated, “This agreement to secure the quantity of manganese ore from our Chilean miner is pivotal to our future success. Upon completion of the first shipment and the buyer’s approval for future shipments in China, we believe this contract represents a potential long term continuous revenue stream for us. We anticipate it will also set the stage for other similar arrangements for other miners that we are in various stages of negotiations with for numerous ores such as Iron, Chromium and Copper, to name a few. We believe that tapping into the vast mineral reserves in Chile in this fashion will truly be a springboard to a rapid acceleration of growth in our trading operations.”

About China Direct Industries, Inc.

China Direct Industries, Inc. (NASDAQ: CDII), is a U.S. owned holding company operating in China in two core business segments, pure magnesium production and distribution and distribution of basic materials in China. China Direct Industries also provides advisory services to China-based companies in competing in the global economy. Headquartered in Deerfield Beach, Florida, China Direct Industries operates 8 subsidiaries throughout China. This infrastructure creates a platform to expand business opportunities globally while effectively and efficiently accessing the U.S. capital markets. For more information about China Direct Industries, please visit http://www.cdii.net.

About CDII Trading, Inc.

CDII Trading, Inc. was created to facilitate industrial international commodity trading between China and various countries throughout the world. As a subsidiary of a U.S.-based public company, CDII Trading is in a unique position to ensure reliability, continuity, and transparency for effective international trade. For more information about CDII Trading, visit http://www.cdiitrading.com.

DISCLOSURE NOTICE:

In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, China Direct Industries, Inc., is hereby providing cautionary statements identifying important factors that could cause our actual results to differ materially from those projected in forward-looking statements (as defined in such act). Any statements that are not historical facts and that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, indicated through the use of words or phrases such as “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimated,” “intends,” “plans,” “believes” and “projects”) may be forward-looking and may involve estimates and uncertainties which could cause actual results to differ materially from those expressed in the forward-looking statements. These statements include, but are not limited to, our expectations regarding our ability to secure long term sources of manganese ore, completion of the required financing for production and its shipment, approval by the buyer for future shipments, possible future arrangements with other miners and our prospects for future growth.

We caution that the factors described herein could cause actual results to differ materially from those expressed in any forward-looking statements we make and that investors should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors emerge from time to time, and it is not possible for us to predict all of such factors. Further, we cannot assess the impact of each such factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. This press release is qualified in its entirety by the cautionary statements and risk factor disclosure contained in our Securities and Exchange Commission filings, including our Transition Report on Form 10-K for the nine month period ended September 30, 2010 and our reports on Form 10-Q.