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Sam Yu at Yongye mentioned in the recent 2012 Q1 conference call that they had no intention to mine and that they would contract with a mining company. If memory serves, these comments were in response to one caller's question about whether they would be investing in mining equipment.

Regarding lignite coal, I think back to a frequent refrain of a former materials science professor. Though he always wanted the best raw materials where the raw material had a geography-dependent composition, he'd say if he had to work with crap, then he could do so--just don't ever give him different crap (as he would then have to re-engineer all his processes to accommodate a different composition). It seems plausible that Yongye's processes are designed for this variety of lignite coal; so it may be painful/risky to switch. That perspective may be in tension with the quote you found, though it still seems reasonable to me.
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