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September 08, 2008


National Coal completes acquisition of Mann Steel

National Coal Corp announced that it has completed its previously announced Stock Purchase Agreement with Mann Steel Products Inc for USD 55 million. The transaction was funded through a combination of USD 60 million in debt financing and USD 12 million of equity. The equity financing was raised through a private placement of 4 million shares of common stock at USD 3.00 per share.

Under the terms of the agreement, National Coal Corp has acquired 100% of Mann Steel and renamed the company as National Coal of Alabama Inc. As a result of this transaction, National Coal will have more than 350 employees and a total production capacity of approximately 3 million tones. Sales during 2007 for the combined company are expected to reach approximately 2.6 million tons and are anticipated to generate about USD 140 million in annualized sales.

Mr Daniel Roling president & CEO of National Coal said that "Closing this transaction represents a significant milestone in our history and an important step in building shareholder value. In a fiscally responsible manner, we have essentially doubled our sales and increased our production capabilities by about 50%. The Mann Steel acquisition will strengthen both our financial operations and physical presence in the Central and Southern Appalachian regions. Our production mix will now change with surface mining accounting for about 65%, underground 28% and 7% from high wall mining. In addition, an increase in volume should more efficiently leverage the infrastructure investments we've made in wash plants, railroad load out facilities, and our railroad. At the close of this transaction, I believe we are closer to our goal of further defining our leadership role in the production and supply of industrial and steam coal in the Southeastern US."

Mann Steel produces coal from three surface mines which have a capacity of approximately 1 million tonnes. During 2006, Mann Steel sold approximately 860,000 tonnes of coal and generated revenues of USD 55.2 million. For the first half of 2007, coal sales totaled about 502,902 tons and generated revenues of USD 33.1 million.