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2017/11/01 COAL MINING BUSINESS UPDATE
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Overview

The Group is one of the most sizable integrated coal corporations in north-eastern China, principally engaged in the production and sale of coal, as well as the provision of technology-based low-rank coal upgrading.

Due to the massive urbanization and economic development in China as well as the Central Government’s determination to rectify the country’s sever environment pollution problems by tightening restrictions on carbon dioxide emission, the demand for thermal coal, in particular high efficiency environmental-friendly coal, as the major fossil fuel for power and heat generation will remain strong in the foreseeable future.

Our coal mine based in Houlinguole City, Inner Mongolia, has been operated at optimum efficiency with an output exceeding its designed capacity of 1.2 million tonnes per annum. Our management’s emphasis on efficiency enhancement and stringent cost control was the key factor allowing the Group to achieve satisfactory performance. The Group expects the performance of the coal production and sale business to be promising in the foreseeable future.

Our coal upgrading technologies (X-B™) has been proven to be highly effective in increasing calorific value and improving product specification. We foresee a huge potential market for the low-rank coal upgrading by the Group as their consumption could effectively help to reduce pollutant emission and lower energy costs.

The low-rank coal upgrading plant (“Xilinhaote Plant”) is located in Inner Mongolia, a strategic location which possesses one of the richest low-rank coal reserves in China. Adjacency to such abundant supply of low-rank coal will enable the Xilinhaote Plant to contain purchase cost and the ancillary logistic costs allowing the Group to possess a competitive cost structure and strategic advantage to compete at the world market. The plant is designed to accommodate production facilities for a maximum capacity of 2 million tonnes per annum of upgrading coal output.
  • Phase 1: 500,000 tonnes per annum
  • Phase 2: 500,000 tonnes per annum
  • Phase 3: 1,000,000 tonnes per annum

Step by step the Group has been realizing its vision to crave a vertically integrated portfolio of resources and technologies-based and operations comprising mining, technologies development, production and processing. The Group will continue to explore and evaluate different opportunities and anticipating to develop a coal trading platform into the vertical pipeline for the Group to sustain its business expansion in the natural resource sector.
 
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