Brief Introduction of Lu’an Group

         Lu’an Group, which is transformed from Lu’an Mining Administration in August, 2000, lies in the southeast of Shanxi province. It is a chemical and energy enterprise specialized in coal, and multi-industries, such as coal-power-chemical, coal-coke-chemical and coal-oil-chemical with total assets of RMB17.3 billion and over 45000 staff. It is one of the 5 greatest coal enterprises and the 12 authorized units with state-owned assets in Shanxi. It has 3 sole corporations, 22 holding subsidiaries and 17 joint stock companies. It is one of the top 500 enterprises ranking 155 in China. Lu'an Group was awarded one of “ The Top 10 Most Influential Enterprises” by China Enterprise Association and China Enterprisers Association in 2004 and is the eighteenth great enterprise in national coal industry and the twelfth in Shanxi.
         Lu’an Group is located in Shangdang Basin, Changzhi, Shanxi, and is a main base of coal production in China. The qualified coal has rich reserves in mining zone. Nowadays, the main products are lean coal and meager lean coal, which are in high quality and fit for coking (Qnet, ar>26.5 MJ/kg, Ad<16%, St, d<0.5%) with the features of low sulfur, low phosphor, low ash and high calorific quality. They are mainly used in industries of coking, power generation, dynamic force, metallurgy and chemical.
         The mining zone has ascendant geographical position and convenient communication. Taijiao Railway, Hanchang Railway, Changhan, Changjin and Changtai highways, 208 and 309 national highways joins the whole mining zone. It is only 35 km from Changzhi Airport to the headquarter of Lu’an Group and the flight is directly to Beijing, Shanghai, Taiyuan, Xi’an, Guangzhou, etc.
        Historical span has been realized in key projects and main economic indexes such as coal production, total sales income, the total profit payments and tax turnover, the profits and average annual income of the staff during the period of 2001 to 2005. In a word, it is a glorious period, during which the Group developed rapidly, furthest reform was carried out, most profits were accomplished and the staff gained maximum benefits.
        Lu’an Group has been awarded lots of honors in the last years. It is the first Modernization Mining Area of China Coal Industry, two times awarded National May 1st Worker Certificate of Merit and State Grade Enterprise for technique progress, three times awarded for Enterprise Management-Gold Horse, seven times winning the Excellent Enterprise in the National An Kang Cup Competition, nine times among the Top 10 Enterprises for Technique Progress in coal industry. At the beginning of 2005, Lu’an Group was awarded one of The Top 10 Most Influential Enterprises in China by China Enterprise Association and China Enterprisers Association.
        The strategic development goal of Lu’an Group in the Eleven-Five-Year Plan can be summed up as “7-6-5-4-3-2-1”. “7”means the coal output will reach around 70 million tons; “6” means the staff number is below 60 thousand while annual average income of each member will reach over RMB 60 thousand; “5” means the annual sales income of the Group will reach RMB 50 billion; “4” means giving priority to the development of circular economy, and constructing four large ecological industrial parks of Tunliu Coal-To-Liquids Eco-Industrial Park, Gaohe Coal-Power Eco-Industrial Park, Lucheng Coke-Chemical Eco-Industrial Park and Donggu Power-Chemical Eco-Industrial Park; “3” means elongating the three main industrial chains of coal-power-chemical, coal-coke-chemical, and coal-oil-chemical; “2” means constructing two state-level bases (the first state-level Coal-To-Liquids base and Chinese injection coal production base); “1” means constructing “China Lu’an” energy and chemical group and setting a banner of new-style coal circular economy in China coal industry.
        The staff of Lu'an Group is making their efforts to play the soaring movement with dulcet note.

Brief Introduction of Shanxi Lu’an Environmental
Protection and Energy Development Co., Ltd

        As the main initiator, Lu’an Group, together with Zhengzhou Railway Bureau, Rizhao Port Bureau, Baoshan Steel Group International Economic Trade Co., Ltd, Tianji Coal Chemical Group Co., Ltd and Lu’an Construction Co., Ltd founed Shanxi Lu’an Environmental Protection and Energy Development Co., Ltd on July 19, 2001. The address is in No.2, Chengbei Street, high-tech Industry Development Region, Changzhi, Shanxi Province and the registered assets is RMB 459.19 million. Mr. Ren Runhou is the legal agent of the corporation.
        The corporation is located in Shangdang Basin in southeast of Shanxi Province. The coalfield of the corporation is in the mid part of Qinshui coalfield, of which the area is about 1334 square kilometers, the geological gross reserves is 9.815 billion tons and the workable reserves 5.665 billion tons. The mining zone has ascendant geographical position and convenient communication.
        The main business of the corporation include the exploitation of unsorted coal, the coal preparation by washing, the smelting of coal and coke, the development and utilization of clean coal technique, the development of coal-seam gas, the integrated utilization of coal and so on. It has four mines of Wuyang Coal Mine, Zhangcun Coal Mine, Wangzhuang Coal Mine and Changcun Coal Mine, five preparation plants and two holding subsidiary companies. The total assets is RMB 5.1 billion.
         All the coal mines are sector grade high-production and high-efficiency ones, in which the integrated mechanization has reached 100% and the output capacity of unsorted coal is 18.6 million tons. The main products consist of four categories of mixed coal, washed coal, injection coal, mixed lump coal and coke, which are high quality coal for coking with the features of low sulfur, low phosphor, low ash and high calorific value. They are mainly used in industries of power generation, dynamic force, coking and steel. 1n 2005, the corporation sold coal products 18.49 million tons, unsorted coal 0.77 million tons. The sales income of main business is RMB 5.7 billion and the total amount of profits RMB 930 million.
        The corporation strategy is to develop circular and green economy, and to elongate the two industry chains of coal-power-chemical and coal-coke-chemical.
        It was first granted to issue stocks by China Securities Regulatory Commission on June 26,2004, and will be listed soon.