Risk of increasing fuel price andor raw materials andor

increase in fuel price. The increase in fuel price will indirectly trigger the increase in coal sales price, which in turn will also impact the volume of demand for coal supply. The increase in fuel prices in the future can cause an adverse impact on the financial condition, operations results and business prospects of the Company, when it leads to a decline volume of coal demand. 3. Risk of adjustment to the estimation of proven and probable coal reserves and limited coal reserves Estimation of proved and probable reserves of coal set forth in this Prospectus is the statement of assessment based on knowledge, experience and common industry practice. Although the estimations are considered reasonable at the time they were made, but they may change significantly when new information is available, where there is a risk that the coal has quality, volume or stripping ratio different from or not as good as what has been estimated previously and the cost of production is higher than that of the estimation. Adjustment of proven and probable coal reserves can influence the development and mining operations plan of the Company and its subsidiaries, and may cause negative impacts on the financial condition, results of operations and prospects of the Companys business. The amount of coal reserves in the territory of PKP2B and IUP of subsidiaries will decrease in line with the Companys mining activities. The Companys growth and success in the future depend on the success of the Company and subsidiaries to acquire additional coal reserves within the current territory of PKP2B and IUP and will depend on the ability of the Company and its subsidiaries in converting the existing coal resources into coal reserves which can be mined economically before the validity of concerned PKP2B and IUP is expired.

4. Risk

of subsidiaries’ dependence on mining and shipping contractors Currently, most of the mining activities in the area of PKP2B and IUP of the subsidiaries performed by the mining contractors based on medium-term to long-term contract agreements. Based on those contract agreements, each contractor is responsible to provide all equipments, facilities, services, materials, supplies, manpower, and management required for the operation activities and maintenance of each area of work. Damage, failure or operational difficulties of equipments or machineries operated by the contractors can be a negative impact on the financial condition, results and prospects of the Companys business, as well as on delay or disturbance on the disposal of overburden and coal production logistics. Performance of the contractors or subcontractors may be disrupted also by manpower problems or lack of processing capacity, equipments, facilities, services, materials or supplies needed in their operations. Failure by the contractors or subcontractors to comply their obligations in accordance with the existing labor contract, or cancellation or breach against working contract may cause a negative impact on the financial condition, results of operations and the Company’s business prospects. 5. Risk of subsidiaries’ dependence on major installations, equipments, production facilities and other supporting