Risk Management DISTRIBUTION OF PROSPECTUS AND SHARE SUBSCRIPTION ORDER

VI. BUSINESS RISKS Before investing in the Company’s shares, prospective investors should consider that the Companys business activities will depend on many external factors that are beyond the control of the Company. In addition, prospective investors should also carefully consider various business risks described in this Prospectus. All risks, both those that are known and unknown, can have an adverse impact on the business performance, financial performance andor value of the Company’s shares. Should any of these risks occur, the Companys share price might decrease so that the investors may face a potential loss on their investments. The Company only discloses the risks associated with business activities and the Company’s industrial sector. Business risks faced by the Company in conducting business activities include: A RISKS ASSOCIATED WITH THE COMPANY’S PRODUCTION:

1. Risk of significant coal price fluctuation

Like most companies engaged in the mining industry, the revenues of the Company and its subsidiaries are greatly rely on coal sales which determined by price of the coal. The prices of coal sold by the subsidiaries are determined by numerous factors beyond the control of the Company such as world’s coal price, which can fluctuate significantly following the production capacity and coal consumption patterns of industries that use coal as the main fuel, weather conditions, distribution problems, availability of coal supply from other coal producers, availability of fuels and alternative fuels, the development of technology and employment factors. Based on data from Bloomberg, in general the price of Free-On-Board FOB coal in international trade has increased quite significantly by 354 within 10 years or in an average of more than 35 per year, from US 27.80 per ton in December 2000 to US 126.10 per ton in December 2010. Declining coal prices or world’s coal prices below the overall production costs for a long period of time could negatively impact business operations, financial condition, and the Companys business prospects.

2. Risk of increasing fuel price andor raw materials andor

supporting mining materials Fuel is a significant part of the Companys operating costs and fluctuation in fuel prices may affect the profitability of the Company. Based on the requirements in most contracts between subsidiaries and their respective contractors, the increase in most of the raw materials’ price will be the responsibility of concerned company including the