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Author/Source: China Securities Journal Date: 2009-4-1 -------------------------------------------------------------------------------- Yuanxing Energy (000683) announced that its holding subsidiary, Inner Mongolia Boyuan Coal Chemical Co., Ltd., has recently received approval from the National Development and Reform Commission to proceed with the construction of the Wantuogou coal mine and coal processing plant project. The project is located in Yijinhuoluo Banner, Ordos City, Inner Mongolia Autonomous Region. The mining capacity is 3 million tons per year, with a coal processing plant of the same capacity being built as well ； Coal products are consumed locally, mainly used as raw materials for chemical industries such as methanol production and as fuel ； The total investment for the project is 1.08 billion yuan. The project’s capital contribution amounts to 390 million yuan, accounting for 36% of the total project investment, and this amount is covered by Inner Mongolia Boyuan Coal Chemical Co., Ltd. using its own funds ； An additional 690 million yuan, other than the capital funds, will be used to apply for bank loans. The approval document also states that within 3 years after the coal mine project begins operations, no applications for renovation or expansion may be submitted, nor may the scale of production be increased through capacity assessments. The validity period of this approval document is 2 years, starting from the date of issuance. The company stated that Boyuan Coal Chemical will actively proceed with the construction of a mine plant with an annual capacity of 3 million tons, building on the work already done in accordance with the aforementioned documents. The construction period for this project is estimated to be 1.5 years, with a risk of delays. The approval of this project is of great significance to the company, as it marks substantial progress in its efforts to expand its business scope. Taking this as an opportunity, the company will leverage the abundant coal resources in the Ordos region to accelerate its entry into the energy industry. According to the available information, Yuanxing Energy currently holds 34.9% of the company’s shares, while Inner Mongolia Boyuan Holding Group Co., Ltd. holds 17.5%.