China Direct has agreed to acquire a 60% interest in the newly created CDI Magnesium Company, Limited and a 51% interest in Jinan Wanda New Energy Company.

Through the agreement with Jinan Wanda, CDI China will own 51% of Jinan Wanda New Energy Company. Jinan Wanda is an alternative energy company engaged in the manufacture and distribution of equipment that converts waste tires into distillate fuels such as diesel, gasoline and fuel oil. Jinan Wanda has successfully developed this patented "green energy" technology to convert waste tires into distillates and carbon black by means of catalytic reaction under normal pressure. There is no molecular structure change in the process.

Through Jinan Wanda's patented catalyst process, the rubber waste is decomposed and reversed into its original
carbon and hydrogen components. After refining and rectifying, these components are converted into end products such as diesel, gasoline, and fuel oil.

Through the first agreement, CDI China will own 60% of CDI Magnesium Company, which is engaged in manufacturing and worldwide distribution of magnesium alloy. The finished magnesium alloy is marketed to the automobile, PC, and cell phone industries as well as various other product manufacturers.

Dr. James Wang, CEO of China Direct, stated, "We are very pleased to forge ahead with these two new and exciting business opportunities. We feel confident both will have a significant impact on our overall revenues for 2007 as we continue to create value for our shareholders. As both industries are experiencing rapid growth, we look forward to exploiting each venture's technical and economic advantages in the global marketplace. We believe our partners possess leading technologies that have significant competitive advantages, making them welcome additions to our growing portfolio of companies. Currently, we have six subsidiaries operating in China in five different industries including industrial metals, chemicals, alternative energy, management services, and toy distribution."

China Direct is maintaining active, majority stakes in a diversified portfolio of Chinese companies as well as offering consulting services for both private and publicly traded Chinese entities.