Our Company promotes the safety concept of “safety is of paramount importance, life is the most valuable”, adheres to the “people oriented” principle and safe development, to reinforce the fundamental safety management in a comprehensive manner, to establish the mechanism of ”highly efficient and safe mines, the system of essential safety, refined fundamental management, modernized technical equipment, and systematic personnel training”. This is also to build an enterprise that is safe by nature, to establish a long-term mechanism for safety production, and to improve on the integration of environmental protection and management system, hence promoting the harmonious development of the enterprise. In 2006, our safety in production has continued to maintain a leading position in China. The fatality rate per million tons of raw coal production was 0.076, which was much lower than the national average rate of 2.041.

We have established and improved all systems for safe production management comprising the construction of a focused and safe production responsibility system, a hierarchical safety management system, the establishment of a safety target responsibility and evaluation mechanism and the enhancement of the enterprise’s safety control capability.

The implementation of safety quality standardization has been effected. 7 out of the 10 existing mines have reached the 1st-class level of safety quality standards. Two mines have reached the 2nd grade level for safety quality standards. One mine put into production in 2005 is in the process of being appraised. The production safety of the Company is standardized and regulated.

Investment into ensuring mining safety has been increased. In 2006, an accumulative amount of RMB537 million safety fund was invested by the Company’s affiliated coal production enterprises and this was mainly used to reinforce the mining safety monitoring and control system, upgrade and renovate safety facilities, as well as water control prevention, fire extinguishing, upgrade and renovate ventilation equipments, which further solidified the safety basis and enhanced the mine’s ability to prevent and control disasters.

Safety training has been further strengthened. Two 3-level safety training centers and five 4-level safety training centers have been established by the Company. In 2006, 645 sessions of safety training courses were held, with 55,132 training attendances, which helped to increase the awareness of safety, law, and the quality of employees’ safety techniques.