Coal Storage Services: Providing coal storage and loading related value-added services to the Group’s customers

During 2023 to 2024, the Group completed the acquisitions of Shanxi Margaux Supply Chain Management Company Limited (“Margaux Shanxi”), Changzhishi Desheng Coal Storage and Distribution Company Limited (“Changzhi Desheng”), Shanxi Luyuan Xinneng Technology Company Limited (“Luyuan Xinneng”). The above three acquisitions added approximately 1.4 million tonnes of coal storage capacity to the Group, enabling the Group to share business knowledge regarding the storage, loading and coal mixing service line, to the Group’s existing operational team which will in turn deliver better services to the Group’s customers with additional value-added services on top of processing and trading services. This strengthen the Group's strategic control of the coal supply chain and create long-term and strategic growth opportunities for the Group.

In September 2023, the Group completed the acquisition of Margaux Shanxi. The core assets of Margaux Shanxi are the coal shed and the ancillary machinery of the coal shed. The coal shed that is owned by Margaux Shanxi has the storage capacity of 250,000 tons of coal with a construction area of approximately 16,746 square meters, and is equipped with 14 dedicated bulldozers and loaders. The coal sheds and the specialized equipment allow the Company to fulfill the storage, loading and coal mixing demands of its customers in Shanxi province, the PRC and the Margaux Shanxi Acquisition will allow the Group to vertically integrate and enhance the value chain of the coal service supply chain management business through providing additional storage and coal mixing services to the Group’s customers, and in turn strengthen the competitiveness of the Group. The coal shed of Margaux Shanxi located approximately 7.0 kilometers from the Group’s washery plant and approximately 2.5 km to 3.0 km from the key highways in Shanxi province, the PRC, which the Company considers is a prime location from an operational perspective, which would provide a stable source of demand and may potentially provide an additional source of supply to the Group’s trading businesses.

Margaux Shanxi

The storage capacity is 250,000 tonnes, with a construction area of approximately 16,746 square metre, equipped with 14 dedicated bulldozers and loaders. It is 3 km east from Chang Jin Expressway, 2.5 km west from Tailuo Highway and Taijiao Railway Line, and has a convenient railway transportation. The coal sheds and the specialised equipment allow the Group to fulfill the storage, loading and coal mixing demands of its customers in Shanxi province, the PRC and the Margaux Shanxi Acquisition will allow the Group to enhance the value chain of the coal supply chain management business through providing additional storage and coal mixing services to the Group’s customers, and in turn to enhance the vertical integration capabilities of the Group. The coal shed of Margaux Shanxi is located approximately 7.0 km from the Group’s washery plant and approximately 2.5 km to 3.0 km from the key highways in Shanxi province, the PRC. The Group considers the coal shed is a prime location from an operational perspective and would provide a stable source of demand and may potentially provide an additional source of supply to the Group’s trading businesses.

Changzhi Desheng

The core resources are two coal sheds. Each coal storage yard is 250m long, 100m wide and 46.5m high, with a storage capacity of 500,000 tonnes. The expected total storage capacity of the two coal sheds is 1 million tonnes of coal. The project is located in a logistics park in Shanxi province, the PRC, which has supporting facilities such as cylindrical silos, train dumpers, and coal storage yards. It is located approximately 1.5 km from a railway station and has a superior geographical location. The logistics park is connected to Zhangzi South Station of the Central-South Railway, and is also adjunct to the National Highway 228, Erguang Expressway, county and township roads, which it is a prime location from an operational perspective and would provide a stable source of demand for the business of Changzhi Desheng and may potentially provide an additional source of supply to the Group’s trading businesses. The coal sheds and the specialised equipment allow the Group to fulfill the storage, loading and coal mixing demands of its customers in Shanxi province, the PRC.

Luyuan Xinneng

In July, 2024, the Group has completed the acquisition of the Luyuan Xinneng project. The core assets of the project are two coal sheds and the associated machineries of such coal sheds. The expected total storage capacity of the two coal sheds is 120,000 tonnes of coal. The project is located in Setou town, Zhangzi county, Shanxi province. It mainly includes two coal sheds: the Fanpo coal shed is 150m long, 120m wide, and approximately 15m high, with 90,000 tonnes of storage capacity. It is 2.5 km from Tailuo Highway, 2.5 km from Taijiao Railway Line and Dongtianliang Coal Transportation Station, and has very convenient road and rail transportation. The Heyu coal yard shed is about 3 km away from the Fanpo coal shed, with convenient transportation. The coal shed is 105m long, 60m wide, and approximately 17m high, with 30,000 tonnes of storage capacity. The two coal sheds would provide an additional source of supply to the Group’s trading businesses. The coal sheds and the specialised equipment allow the Group to fulfill the storage, loading and coal mixing demands of its customers in Shanxi province, the PRC.