Climate Change Data

Environmental Metrics

ESG Focus Areas

• Emission
• Health and Safety
• Supply Chain Management

Environmental Achievements

• Reduced carbon emissions intensity by approximately 2.1% compared to the previous year.
• Removed coal combustion boilers and replaced them with clean energy boilers in Kaiyuan Mine.
• Built a new wastewater treatment plant in Kaiyuan Mine.

Social Achievements

• Implemented the “Internal Control and Management System for Mining Site Safety and Production” to protect employee health and safety.
• Provided annual health checks for high-risk employee groups.
• Organized 66 hours of safety certificate annual training and 60 hours of training for employees obtaining their safety certificate for the first time.

Governance Achievements

• Formulated and implemented the “Employee Organization Management System” to prohibit corruption.
• Implemented the “Employee Complaints and Whistleblowing Management System”.

Climate Goals & Targets

Environmental Challenges

• Government-mandated production suspension at Kaiyuan Mine due to non-compliance with environmental remediation requirements.
• Government order to demolish an illegal gas station at Kaiyuan Mine.

Mitigation Strategies

• Kaiyuan Mine conducted remedial works in four aspects: mining system, storage and crushing-screening system, road in the mining area, and sewage water in the mine.
• Kaiyuan Mine demolished the original coal combustion boilers and replaced them with clean energy boilers.
• A new wastewater treatment plant and a 1,000 cubic meter reservoir were built.
• Road-hardening was carried out to prevent dust dissemination.
• A new screening system was under construction.
• Kaiyuan Company amended the gas station design and received approval from relevant government departments.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Procurement Management System

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Stringent policies against the coal mining industry in China

Opportunities

• Opportunities in developing renewable energy

Reporting Standards

Frameworks Used: SEHK ESG Reporting Guide

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Low-ash raw coal with medium-sulfur, low-to-medium phosphorus contents and medium-to-high calorific value

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Emissions
• Health and Safety
• Supply Chain Management

Environmental Achievements

• Reduced total carbon emissions by 33.9% compared to the previous reporting period due to phased production suspension.

Social Achievements

• Implemented a Training System of Safety Education to provide targeted safety training for employees in different roles.
• No cases of non-compliance with laws and regulations in relation to health and safety, employment, or child labor.

Governance Achievements

• Established a whistleblowing procedure to encourage employees to make reports on internal misconduct.
• No cases of non-compliance with laws and regulations in relation to corruption.

Climate Goals & Targets

Environmental Challenges

• Policy changes in relation to sustainability introduce various risks to the Group’s operation.
• The operation of coal mine leads to unavoidable environmental impact.
• The coal industry is faced with numerous challenges including the risks and opportunities brought by issues related to sustainability.

Mitigation Strategies

• Management maintains close connection with the local governments and makes timely adjustments to the operational strategy and the production plan in response to government policies.
• Ensuring legal and regulatory compliance through environmental management measures and increasing investment in upgrading eco-friendly equipment.
• Maintaining close contact with business partners to jointly promote sustainability.
• Strive to enhance its management, complement national policies and grasp new opportunities to continue creating values for stakeholders.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Procurement Management System, Guidelines on Environmental and Social Risks of Suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of renewable energy business

Reporting Standards

Frameworks Used: ESG Reporting Guide in Appendix 27 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Environmental Protection
• Employment and Labour Practices
• Operation Practices
• Community
• Climate Change
• Anti-corruption
• Community Investment

Environmental Achievements

• Implemented measures to reduce energy consumption (1,703.6 MWh total energy consumption in 2020/21, down from 1,702.4 MWh in 2019/20)
• Reduced water consumption through water-saving measures (110,795 cubic meters in 2020/21, significantly higher than previous years due to dust reduction measures)
• Reduced air pollutant emissions due to decreased vehicle use during the pandemic
• Implemented shrub plantation policy to improve water storage capacity and prevent soil erosion

Social Achievements

• Provided 95.1 average training hours to 22 employees (26.5% of total employees)
• Maintained a safe working environment with zero work-related injuries or fatalities
• Implemented a well-established employment system compliant with relevant laws and regulations
• Donated 1,020 tonnes of coal to various communities

Governance Achievements

• Established an Environmental, Social and Governance Working Group
• Implemented a risk management system to identify, evaluate, and manage ESG-related risks
• Implemented internal monitoring systems for compliance with laws and regulations

Climate Goals & Targets

Environmental Challenges

• Physical risks from extreme weather events (rainstorms, droughts)
• Transition risks from changing national policies on carbon emissions and energy, increased environmental requirements in the coal industry, and competition from innovative technologies
• Market risks from decreasing coal demand, increasing pressure on investment, and increased societal supervision

Mitigation Strategies

• Established measures and systems to respond to and mitigate climate change-related risks
• Conducted in-depth quantitative assessment of climate change-related risks and opportunities
• Developed suitable response plans based on risk materiality
• Provided training to improve internal awareness and ability

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Procurement Management System with Standards regarding Suppliers’ Environmental and Social Policies

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather (rainstorms, droughts)

Transition Risks

• Changes in national policies on carbon emissions and energy
• Increased environmental requirements in the coal industry
• Competition from innovative technologies

Reporting Standards

Frameworks Used: SEHK ESG Reporting Guide

Third-party Assurance: Not disclosed

Environmental Metrics

ESG Focus Areas

• Employment and Labour Practices
• Environmental Protection
• Water
• Energy
• Product Responsibility
• Climate Change

Environmental Achievements

• Implemented water-saving measures at operating sites (e.g., water-saving taps, notices)
• Regular repair and maintenance of equipment to ensure effective energy consumption; replacement of equipment with substandard energy efficiency.
• Implemented measures to reduce air pollutants and greenhouse gas emissions (e.g., low-carbon equipment, encouraging public transport, video conferencing)

Social Achievements

• No violations of labor laws or regulations reported during the reporting period.
• Provided training activities to 47 employees, with an average of 122.8 training hours.
• No work-related injuries or fatalities reported during the past three years.

Governance Achievements

• Established an Environmental, Social and Governance Working Group to assist in policy implementation and reporting to the Board.
• Implemented an anti-corruption training program for employees and the Board (1 hour each).

Climate Goals & Targets

Environmental Challenges

• Frequent extreme weather events (rainstorms, droughts) posing risks to mining sites and employees.
• Changes in national policies regarding emission reduction targets and energy transformation impacting coal demand.
• Increasing industry environmental requirements raising compliance costs.
• Decreasing demand for coal due to global focus on renewable energy.
• Increasing investment pressure due to international and national focus on responsible investment and environmental protection.
• Competition from innovative technologies in the green energy sector.

Mitigation Strategies

• Conducting in-depth quantitative assessment of climate change related risks and opportunities with scenario analysis.
• Formulating response plans based on the severity and importance of the risks.
• Providing relevant trainings to employees to enhance their awareness and ability.
• Formulating and disclosing key indicators on assessing and managing risks and opportunities.
• Improving data collection system for trend analysis and comparison in the future.
• Establishing targets and corresponding action plans.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Environmental and social risk management requirements for suppliers.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (rainstorms, droughts)
• Changes in rainfall patterns affecting water supply

Transition Risks

• Changes in national policies regarding emission reduction targets and energy transformation
• Increasing industry environmental requirements
• Decreasing demand for coal

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: SEHK Main Board Listing Rules

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Environmental Protection
• Employment and Labour Practices
• Operating Practices
• Community

Environmental Achievements

• Greenhouse gas emissions decreased by approximately 42.6%
• Energy consumption decreased by 32.6%
• Total water consumption decreased by 31.3%
• Dust reduction and environmental protection projects implemented in mining areas (water mist dust suppression, water curtain doors, sprinklers)
• Planted 100 trees in the mining area

Social Achievements

• Established a comprehensive employment system
• Provided annual body checks for employees working in mining areas
• Formulated emergency rescue guidelines for critical incidents
• Provided training activities to 56 employees with an average of 63.5 hours
• Donated RMB 50,000 to the Red Cross Society of Qitai County

Governance Achievements

• Established a clear governance structure for monitoring sustainable development and climate change
• Established an Environmental, Social and Governance Working Group
• Established a whistleblowing management system
• Provided anti-corruption training for employees and the Board

Climate Goals & Targets

Environmental Challenges

• Sudden and destructive risks (e.g., COVID-19) affecting employee health and operational efficiency
• Transition to a low-carbon economy requiring timely responses to policy changes
• Occupational safety risks in mining operations
• Shortage of skilled manpower
• Risks related to community relations and meeting policy standards
• Tightening environmental policies increasing compliance costs
• Risks of corruption and financial fraud
• Impacts of climate change (extreme weather, policy adjustments, decreasing coal demand, competition from innovative technologies)

Mitigation Strategies

• Established emergency rescue guidelines
• Strengthened cleaning and disinfection of operating sites
• Developed renewable energy and information technology businesses
• Formulated policies and measures regarding emissions and resource use
• Established a safety management system and conducted regular safety training and inspections
• Formulated training plans for employees
• Strengthened information disclosure and communication with stakeholders
• Paid close attention to policy changes and implemented energy-saving and emissions reduction actions
• Established a clear whistleblowing procedure and provided anti-corruption training
• Launched renewable energy and information technology businesses

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Standards regarding Suppliers’ Environmental and Social Policies

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather (heavy rains, droughts)
• Floods, landslides, debris flow

Transition Risks

• Changes in national policies on carbon emissions and energy
• Enhanced industrial environmental requirements
• Increasing investment pressure
• Decreasing demand for coal
• Competition from innovative technology

Opportunities

• Development of renewable energy and information technology businesses

Reporting Standards

Frameworks Used: SEHK ESG Reporting Guide

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Environmental Protection
• Employment and Labour Practices
• Operating Practices
• Community

Environmental Achievements

• Reduced greenhouse gas emissions by approximately 39.0% due to a significant reduction in the use of generators.

Social Achievements

• Established a comprehensive employment system to protect employee rights and benefits.
• Conducted training activities for 53 employees, with an average training time of 46.44 hours per person.
• No work-related fatalities in the past three years.

Governance Achievements

• Established a clear whistleblowing procedure to reduce violations of laws and regulations.
• Provides anti-corruption training for employees and the Board.

Climate Goals & Targets

Environmental Challenges

• Sudden and destructive risks (e.g., COVID-19) affecting employee health and operational efficiency.
• Transition to a low-carbon economy requiring timely responses to policy changes.
• Occupational safety risks in coal mining.
• Shortage of skilled manpower.
• Reputation damage risks due to non-compliance with policies.
• Tightening environmental policies increasing compliance costs.
• Corruption risks damaging company interests and reputation.

Mitigation Strategies

• Established emergency rescue guidelines for special emergencies.
• Strengthened cleaning and disinfection of operating sites.
• Developed renewable energy and information technology service businesses.
• Formulated policies and measures regarding emissions and resource use.
• Formulated emergency rescue guidelines and established a management system to reduce the impacts of production accidents.
• Organised regular occupational safety courses.
• Formulated training plans according to employees’ needs.
• Strengthened information disclosure and enhanced communication with stakeholders.
• Pays close attention to changes in policies and regulations to meet compliance requirements.
• Actively carried out energy-saving and emissions reduction actions.
• Established a clear whistleblowing procedure.
• Provides anti-corruption training for employees and the Board.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Procurement Management System including guidelines for environmental and social risks.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (heavy rains, droughts)
• Flooding
• Landslides
• Debris flow
• Soil moisture loss

Transition Risks

• Changes in national policies on carbon emissions and energy.
• Enhanced industrial environmental requirements.
• Increasing investment pressure.
• Decreasing demand for coal.
• Competition of innovative technology.

Reporting Standards

Frameworks Used: Appendix C2 Environmental, Social, and Governance Reporting Code of the Main Board of the Rules Governing the Listing of Securities on the SEHK

Third-party Assurance: Not disclosed

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Climate Goals & Targets

Supply Chain Management

Climate-Related Risks & Opportunities