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Shougang Fushan Resources Group Limited (the "Group") is one of the most sizable integrated coal corporations in central-western China. Coke is one of the major raw materials for the manufacture of steel. The Group's coking coal products are mainly used for the production of coke. According to the Technical Review Report of John T. Boyd Company based on the standard of JORC, the total in-place reserves and recoverable reserves of the three coal mines was 205.75 million tons and 142.35 million tons respectively as at the end of 2007, comprised with mainly hard and semi-hard coking coal. The Group currently owns and operates three coal mines in Liulin County, Jinjiazhuang Coal Mine and Zhaiyadi Coal Mine, namely Xingwu Coal Mine, China, Shanxi Province, with an aggregate mining area of 31.89 sq.km and an aggregate raw coal production capacity of 6.3 million tons per annum. Taking Shanxi Province as its major investment base, it is principally engaged in mining of coking coal and production and sales of raw and clean coking coal, The Group is the second largest hard coking coal producer in the PRC in terms of production capacity. The Group's principal clients are among the top iron and steel producers in the PRC.
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