Strategy & Competitive Advantages

We have developed a comprehensive strategy to grow in a profitable and intelligent manner.  In response to strong demand for high grade metallurgic cleaned coal driven by large infrastructure projects, a prosperous national real estate market as well as China's ongoing western development plan we have increased our capacity from 500,000 metric tons per year in October 2005 to 3.5 million metric tons per year in June 2007. With the new capacity available, we intend to ramp up our sales to meet the demand for cleaned coal.

Due to our unique processing know-how, modern processing facilities, operating efficiencies, and ideal location in Shanxi Liulin County, we enjoy strong competitive advantages as one of Shanxi's leading cleaned coal processors. Liulin County, where our core processing facilities are located, is widely known as the"King of Coal" in China due to the rich coal reserves around the area. In addition, given our high grade cleaned coal and the ability to transport it outside the local region, we are in the early stages of geographic expansion.

We have built long-term business relationships with established customers, mostly coking companies and steel manufactures with their own coking facilities, such as Baotou Steel and Iron Group Co., Ltd., the largest steel maker in Northwest China. We will continue to explore more business relationships with other large scale steel and chemical makers and expand our geographic coverage in the future.

Another key element of our business strategy is our desire to become an integrated coal production and coal washing company. We intend to accomplish by acquiring coal mines in the Liulin region. This will improve our position in the value chain, allow us to implement advanced coal mine technologies and management systems and achieve higher profit margins.