July 9, 2010

Dear Mr. Douglas (Hague),

Hello. First, please accept my sincere greeting to you.

Since December 2008, your company and our joint venture company, Mongolia International Investment Company, have been working together to commence the initial phase of our project which provides for the production of 1.5 million tons of clean coal, per our contract..

We have been aggressively working on the preparatory phases for the past year, however, the reason for the extended delay are the administrative complexities associated with the Chinese joint venture structure, particularly the supporting documentation approval requirements, that have taken much longer that originally contemplated.

The final approval of the project is predicated on the individual approval of the following eight supporting documents:

• The Environmental Impact report,
• Energy( Green Energy) report,
• Safety Evaluation report,
• Water Resource report
• Geological Hazard report
• Water and Soil Conservation program report
• Land Survey report
• Zoning report.

The approval of these supporting documents are a mandatory pre-requisite, and each is required to undergo an expert assessment by which they are reviewed and approved by the relevant government department.

At this time, seven of the eight required documents have been approved for the commencement of the initial 1.5 million ton clean coal project and we are awaiting the final approval of the Environment Impact documents, which have already been pre-approved. Once we receive the final approval from the Office of Inner Mongolia Autonomous Region Environmental Protection Department, and the Office of Finance council, we estimate that we should receive the formal approval of the project by no later than the end of July.

Mr. Douglas (Hague), we fully recognize that the failure to commence your company's initial phase of our 1.5 million tons clean coal project is due to the many repeated delays outside your control, for which we sincerely apologize. However, now that we have completed the land acquisition and infrastructure development phases, the construction project will be able to commence as soon as we receive the final approval, and I will be aggressively pursuing all avenues to ensure that this takes place as soon as possible.

We look forward to welcoming you back again to Xing An, China in the near future.

Wishing you Good Health and Happiness.
步进来
Bu Jin Lai
Vice Governor
Xing'An, League of Inner Mongolia

2010, July 9