Environmental Protection

The Company has paid special attention to the social responsibility of environmental protection and has aimed at building an environmental friendly enterprise. It has also actively undertaken the initiative of environmental protection and to promote the coordinated development of the enterprise, the local society and the environment.

Ecological environment construction at the Mining Area received much attention from the Company. In 2006, our Company invested RMB360 million in ecological environment construction, of which RMB230 million was allocated in the Pingshuo Mining Area, located in Shanxi Province, where the ecological environment was fairly vulnerable. By the end of 2006, a total of nearly 30,000 mu in mining area was reclaimed, with 6 million plants grown and 1000 hectres of herbal plants; the reclaimation rate was 41.6%, through which the ecological environment of the mining area was substantially improved. The ecologic reclaimation greenery project of Pingshuo Mining Area was listed as exemplanary model of the Chinese coal industry.

An economy where resources are recycled has been vigorously developed. Production and household waste water from the Company’s affiliated mining areas which is undergone treatment have been completely re-used in production, plants watering, road cleaning, even in households. Zero discharge of waste water from the mining areas were achieved. As at 2006, three coal gangue-fired power plants were built, with an annual consumption of 5.44 million tons of coal gangue. In addition, one gas-fired power plant was built, with an annual gas consumption of 35 million cubic metres. The affiliated Shanghai Datun Energy Resources Co., Ltd. was appraised by the Ministry of Land and Resources as the “National Advanced Mine Enterprise for Rational Exploitation and Utilization of mineral resources” in 2006, and at the same time, it was listed as the provincial level demonstration model for an economy where resources are recycled.

Resource recovery and utilization have been enhanced. Closed circuit circulation has been achieved for all the water used by coal washing plants and all the recycled cooling water used by all the power plants. In 2006, the recovery rate for mining areas of underground mines exceeded the average figure of 81% and the recovery rate for our open-pit mines exceeded the average figure of 96%, which put us in a leading position in China. Our two open pit mines were both awarded as super-safe and high-efficiency mines by the China National Coal Association.

National standards have been reached with respect to the discharge of industrial wastes, including solid, liquid and gaseous waste from coal exploration and processing.

The Company has strictly adhered to the principle of “simultaneous design, construction, and input into production and the use of main-body projects and establishments together with environmental protection facilities”. All the newly constructed, renovated, and expanded projects were approved and certified by the environmental protection departments of the government within the year.