China Direct Industries (CDII) Provides Update for Its Magnesium Segment Sales

DEERFIELD BEACH, FL–(Marketwire – 01/12/11) – China Direct Industries, Inc. (“China Direct Industries”) (NASDAQ:CDII – News), 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 magnesium segment operations received new purchase contracts valued at approximately $31 million in its first quarter of fiscal 2011, ended December 31, 2010. Deliveries of these new orders began in the first quarter of fiscal 2011 and are expected to be completed by the third quarter of fiscal 2011.

The $31 million in new contracts consisted of direct purchases from new and existing customers including three major Fortune 500 companies. Additionally, the efforts of our direct marketing company International Magnesium Group or “IMG” and its branding efforts made a significant contribution to these contracts. Management sees these new contract wins as continuing evidence of an improving overall demand for its magnesium products and recognition of its branding initiative.

Commenting on the contracts, Dr. James Wang, Chairman and CEO of China Direct Industries, Inc., stated, “We are excited to see a continued improvement in our magnesium sales as evidenced by these new contracts. We are particularly pleased to have signed supply contracts with Fortune 500 customers directly through our IMG marketing efforts as we continue to build our IMG brand as the source for reliable supplies of magnesium. We are confident that the magnesium industry will continue to recover and we intend to build on this momentum throughout fiscal 2011.”

About China Direct Industries, Inc.

China Direct Industries, Inc. (NASDAQ:CDII – News) 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 9 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.

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 concerning demand for our magnesium products, the recognition of our IMG branding initiative, the expected delivery dates for the magnesium and the recovery of the magnesium industry.

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 Report on Form 10-K for the fiscal year ended September 30, 2010.

Contact Information:
China Direct Industries, Inc.
Richard Galterio or Lillian Wong
Investor Relations
Phone: 1-877-China-57
Email: richard.galterio@cdii.net
lillian.wong@cdii.net