Tangshan Rongfeng Iron & Steel Co., Ltd.

CDQ Power Generation

EMC Cooperation Agreement

Item 1 General

Party A: Tangshan Rongfeng Iron & Steel Co., Ltd.

Party B: Xi’an TCH Energy Technology Co., Ltd.,

Based on the principle of win-win cooperation, after friendly duly negotiation, both parties agree to cooperate in energy-saving through Energy Management Contract. In compliance with Contract Law of People’s Republic of China, on the basis of truly and duly consideration, both parties enter into following agreement.

Item 2 Terms and Definitions

The two parties agreed: The relevant terminology and technical terms involved in this agreement and related accessories are defined and explained as follows:

2.1 Project Description:

Party B has an annual production capacity of 1.4 million tons of coking coal. Party B will invest and build a coke dry quenching (“CDQ”) facility and a waste heat power plant based upon the coking process of Party A. The power generated is the energy saving benefit, which will be shared by both parties.

The construction schedule for the phase Ⅱ of the CDQ facility and waste heat power plant will be determined upon the specific situation.

2.2 Completion: construction and installation are completed according to Party B’s design and the system operates properly for consecutive 72 hours.

2.3 Force majeure: natural disasters and other can't be controlled events according to the law.

Item 3 Energy Services and Requirements

3.1 Party A appoints Party B for energy services as follows:

3.1.1 Objective: Based on Party A’s annual production capacity of 1.4 million tons of coke and its energy saving requirement, Party B shall build a CDQ facility and a waste heat power plant. The power generated is the energy saving benefit, which will be shared by both parties.

The design of CDQ facility, CDQ waster heat power generation system, technical performance and technical specifications shall be arranged after both parties’ agreement.

3.1.2 Content:

1. CDQ body: CDQ auxiliary, hot coke loading equipment, equipment for recovery of coke powder, cold coke discharging equipment, speed and control system for hoist, speed control system for fan, electrical control and equipment, PLC control system, and inspection instrumentation.

2. Supporting facilities: dust removal system, auxiliary machine room, main control building, belt conveyor system, and water pump house.

3. Power generation facilities: waste heat boiler, boiler auxiliary, waste gas unit, steam turbine, and power generator.

4. Nitrogen manufacturing facilities and water treatment, exclude special building foundation treatment and dismantlement or transformation of original equipment. Fresh water and waste water treatment plant will be shared by with Party A. Party A is responsible for connecting the water to the CDQ area, and waste water will be discharged into the waste water treatment facility built by Party A.

3.1.3 Method: Party B is responsible for the investment, design, construction (include civil construction) and operation. Party A is responsible for providing new water and electricity during the project construction period as well as the water for the operation. The settlement price for such utilities will be done according to the internal settlement price of Party A. The energy saving benefits will be shared as agreed by both parties.

3.2 Party B shall provide energy saving services according to the following requirements:

3.2.1 Locations: plant area of Tangshan Rong Feng.

3.2.2 Term and schedule:

(1) The agreement becomes effective on the date when the agreement is signed and sealed by the parties;

(2) Construction period: 18 months after the agreement becomes effective and construction conditions are ready. The first and second months are the preparation period to apply and receive all the permits and get the design and technical confirmation. The third to the fifth months are equipment tendering and bidding period. The sixth to the eighteenth months are the project construction period.

(3) The start date for the energy saving benefit sharing will be the date when the waste heat power station successfully passes 72 consecutive hour test run.

(4) Power generated and related revenue during commissioning belong to Party B.

(5) The energy saving sharing term is 20 years, and at the end of the term, the property will be transferred from Party B to Party A at the price of RMB 1.

Item 4 Energy Saving Sharing Method

4.1 Party B is responsible for the investment, design, equipment procurement, and construction. The investment is RMB 150 million (subject to the technical proposal).

4.2 During the benefit sharing period, as for CDQ waste heat power generation, Party A shall pay Party B the energy saving service fee as:

Energy saving service fee = quantity of power supply x settlement price

From the 1 ^st year to the 10 ^th year (including the 10 ^th year), the settlement price = RMB 0.582/kWh (including TAX)

From the 11 ^th year to the 20 ^th year (including the 20 ^th year), the settlement price = RMB 0.432/kWh (including TAX)

If the power price, where Party A is located, is adjusted, the settlement price will be adjusted same as the local power grid price.

4.3 Energy saving service fee is paid in installments by Party A to Party B, the specific timing and amount of payments are as follows:

4.3.1 After the power plant is put into operation, Party A shall pay Party B once a month. The 25 ^th day of each month is the closing day for the billing circle of that month. Fees shall be paid before the 5 ^th day of next month. The energy saving service fee is calculated based on the actual quantity of generated power and the price.

4.3.2 Party A will install power generation measurement instrument independently. Party B shall report the reading of the instrument and Party A shall confirm.

4.3.3 Party A shall pay Party B the energy saving service fee according to power supply data reported by Party B. The payment shall be made as described in 4.3.4. Party B shall provide invoice for the energy saving service fee.

4.3.5 The payment shall be made by Party A in wire transfers.

Item 5 Obligations of Party A

In addition to other requirements in the agreement, Party A shall fulfill the following obligations:

5.1 Within 30 days after the agreement is signed, 1) Party A and its parent company shall provide Party B with the performance guarantee or commitment; 2) Party A shall provide approved materials to Party B as required.

5.2 Without interfering normal operation, Party A shall provide temporary offices, canteen, accommodation, and transportation for assigned employees of Party B.

5.3 Provide necessary information; and coordinate Party B to carry out energy saving measurement and verification.

5.4 Coordinate Party B with maintenance, inspection, and repair of equipment and facilities, and make sure Party B could use equipment and facilities of the project.

5.5 Party A shall complete the project establishment, environmental assessment, and approval application for construction land, national grid connection without transmitting electricity to the national grip quickly after the agreement is signed. Party B shall provide assistance. Relevant costs shall be paid in advance by Party A, and will be deducted from subsidies, rewards, or other applicable grants from the government, institutions or organizations for the project as described in 5.8. If the power plant could not be put into operation because Party A did not complete the above procedures, the lost or delayed time shall be borne by Party A.

5.6 As for waste heat provided by Party A required by boiler of the waste heat power station according to the normal CDQ process of Party B, the waste heat supply shall be no less than 8,000 hours annually, and the temperature shall be no lower than 950 Celsius. If the time and number cannot be reached, the cooperation period shall be prolonged accordingly.

5.7 Provide assistance on project execution and management.

5.8 Assist Party B in applying for subsidies, awards, or other applicable grants from the government or organizations. The grants received shall be shared between two parties as 50% for each, and relevant costs and expenses shall be borne by both parties.

5.9 Party A shall fully participate in the design, equipment tendering and procurement and give technical advices to Party B regarding the design and equipment utilization.

Item 6 Obligations of Party B

In addition to other requirements in the agreement, Party B shall fulfill the following obligations:

6.1 Party B shall mobilize construction personnel and start construction after the construction plan is approved by Party A. The construction personnel shall abide by rules and regulations of Party A. Party B is responsible for the safety. The project shall be completed on schedule unless the delay is caused by Party A or force majeure.

6.2 Assist Party A in energy saving measurement and verification on the 5 ^th day of each month.

6.3 Deliver all drawings, construction plans, training materials, equipment lists to Party A within 30 days before the commencement of construction.

6.4 Equipment installation and adjustment and test shall comply with the design and meet designed power generation and other technical indexes (mainly on handling quantity of dry coke, coke loss, steam quantity per ton of coke, power generation per ton of coke, power consumption per ton of coke). Power generated by Party B shall comply with the national standard.

6.5 Party B shall send experts on site to check the project operation regularly or from time to time based upon the project operation conditions.

Item 7 Project acceptance

7.1 The following standards and methods are agreed by the two parties to be used to inspect the functional completion of the construction:

7.1.1 Functional completion indicator for Party B:

CDQ waste heat power generation: the power station can produce electricity normally;

7.1.2 Functional completion acceptance criteria: refer to design criterion;

7.1.3 Acceptance measures for functional completion: Party B is responsible for the examination and acceptance for the constructional engineering and installation engineering involved into the project as well as assumes related expenses. Party A is responsible for the specialized and government inspection and acceptance and assumes related expenses, including environmental protection, fire fighting, industrial hygiene, records, pressure vessel (boiler detection), electrical equipment, anti-thunder and hoisting equipment.

7.1.4 Inspection and acceptance time, date and personnel: within 15 days after Party B informs Party

A that the power station is qualified for acceptance, both parties negotiate the place and personnel.

7.2 Party A cooperates with Party B to organize the construction agreementor for project inspection and acceptance. If the equipment works 72 hours continually and the project is under stable operation, the project passes acceptance inspection. The project acceptance report shall be signed by the supervisors and technicians of the both parties that participate the acceptance inspection as well as seals on the report by all entities participated in the acceptance inspection. The acceptance report should indicate the operational instrument data, operation state and instant effects.

7.3 The execution date of the acceptance report will be regarded as the date when the project is under stable operation state. Since then, the produced electricity will be considered officially supplying to Party A.

Item 8 Ownership

During the term of the agreement, Party B possesses the assets of the project (including equipment and facilities, tangible assets like proposal and drawings, and intangible assets like technology secrets and operation management, etc.). After the agreement expires, item 3.2.2 (5) will be executed.

Item 9 Liability for Breach of Agreements

9.1 Party A’s liability for breach of agreement

9.1.1 After the agreement becomes effective and before the beginning of the benefit sharing date, if Party A didn’t perform its obligation under the agreement due to its own fault, Party A shall pay Party B’s actual expenses regarding implementing the project including engineering design, equipment purchase price, installation cost, transportation, etc. and a penalty equivalent to 20% of such total expenses.

9.1.2 If Party A didn’t pay Party B the energy-saving service fee according to item 4.4.1 of the agreement, Party A shall pay penalty for overdue payment on the daily basis of each day overdue equivalent to 1‰ of total due service fee.

9.1.3 If the project stops operating due to Party A’s reason, Party A shall undertake the energy-saving service fee during the shutdown (equivalent to 12-month average power supply volume before shutdown × unit price of the electricity). If the shutdown period is more than 6 months, Party A shall take responsibility according to item 9.1.1.

9.2 Party B’s Responsibility for Breach of the Agreement

9.2.1 After the agreement becomes effective and before the beginning of the benefit sharing date, if Party B fails to perform its obligation due to its own fault or cannot fund the project construction under the agreement, Party B shall pay Party A’s actual expenses regarding implementing the project including project construction and preparation fee, etc. as well as a penalty equivalent to 20% of such total expenses.

9.2.2 Party B shall be responsible for the technical proposal and designing scheme.

9.3 If any party breaches the agreement, the other party shall take appropriate remedial measures according to the written notice from the breaching party to prevent the increase of losses. Otherwise, the enlarged loss or reasonable expense for the remedial measures cannot be reimbursed.

9.4 Remediation for the breach of the agreement

9.4.1 Remedies for Party A’s breach of the agreement: if Party A breaches the agreement, Party B has the right to terminate the agreement or seek judicial arbitration directly to recollect its due payment or losses. Party B has the right to request Party A paying its incurred expenses. In addition, Party B has the right to dismantle the equipment on Party A’s production site if Party B makes advance written notice to Party A.

9.4.2 Remedies for Party B’s breach of the agreement: if Party B breaches the agreement, Party A has the right to terminate the agreement or seek judicial arbitration directly to recollect its losses. Party A has the right to require Party B undertaking Party A’s all related expenses.

Item 10 Projects Risks and Responsibility

10.1 The improvement of the project shall comply with following condition and responsibilities:

10.1.1 The improvement of equipment. During the term of the agreement, Party B has the right to improve the equipment or modify the operational program to enhance economic returns with Party A’s written consent.

10.2 The change of the project shall comply with following conditions and responsibilities:

if any party thinks it necessary to make any change to the equipment, the party shall get the other party’s written approval before it makes changes.

10.3 The removal of the project shall comply with following conditions and responsibilities:

Without party B’s written consent, Party A cannot remove the equipment or make any substantial change to the equipment. Otherwise, Party B has the right to terminate the agreement immediately. Party A shall pay all compensation according to the item 9.1.1 and 9.1.2 of the agreement.

10.4 Large-scale reconstruction of the project should comply with following conditions and responsibilities:

10.4.1 Without Party B’s written consent, Party A cannot reconstruct the project on a large scale. During the term of the agreement, if both parties agree to reconstruct the project to improve the energy-saving efficiency, the two parties should make written agreement first and revise the related items of this agreement before reconstruct the project.

10.5 Turn off or close the project shall comply with following conditions and responsibilities:

10.5.1 Party A shall inform Party B and obtain Party B’s written consent before turn off or shut down any equipment under this agreement at least 7 days in advance. In an emergency situation, Party A shall report Party B as soon as possible.

10.6 The utilization and change of equipment and facilities owned by Party A shall comply with following conditions and responsibilities:

10.6.1 Party A should ensure its equipment related to this agreement can operate normally. If there is any malfunction of such equipments affect the normal operation of the project and results in the energy-saving amount decrease, the fee charging period will be postponed according to the item 4.3 of the agreement.

10.6.2 If Party A intends to modify its equipment or production plan which may affect the energy-saving amount of the project, Party A shall make written notice to Party B at least 7 days in advance. If the energy-saving amount declined, Party A should assume the economic loss of Party B.

10.7 If Party B has any losses caused by Party A’s production safety accidents, Party A would take full responsibility; If Party A has any losses caused by Party B’s production safety accidents, Party B would take full responsibilities.

10.8 Other risks and responsibilities of the project are as follows:

Neither party would take any responsibility for the risks caused by unforeseen objective reason. The two parties shall negotiate and agree the responsibilities of the wrongdoers accordingly first, then such party shall assume the liabilities.

10.9 Special arrangements for the risk control are as follows:

In order to prevent investment risk and ensure Party B’s expected earnings, the risk control arrangements are as follows:

10.9.1 If Party A breaches the agreement and cannot provide Party B with related enterprise information and normal production data or necessary basis material such as feasibility research report, environmental appraisal report, safety appraisal report of the waste heat power generation project, or cannot deliver site to Party B before scheduled date, Party B can postpone its performance term accordingly.

10.9.2 Party A shall guarantee its production operates normally. Total heat supply time in the first ten years is no less than 80,000 hours. Otherwise, the second phrase will be postponed until the heat supply time reaches 80,000 hours. If Party A makes large-scale reconstruction to its equipment which affects Party B’s due benefits under the agreement, Party A need to inform Party B to negotiate to handle the related issue.

Item 11 Modification, cancellation and termination of the agreement

11.1 If any party wants to amend, supplement this agreement, it shall be discussed and agreed by both parties and sign a supplement agreement. The supplement agreement shall have the same legal affect to this agreement.

11.2 During performance of the agreement, if Party A intends to terminate the agreement early, it shall send written notice 60 days in advance to the Party B. The termination fees and compensation shall be paid to Party B in the following manner:

11.2.1 If it is less than 5 years (including 5 years) into the term when Party A requests to terminate the agreement;

Termination fees and compensation= total amount of investment by Party B + average annual investment return * (5- number of years has been in operation)

11.2.2 If it is more than 5 years (excluding 5 years) into the operation when Party A requests to terminate the agreement;

Termination fees and compensation= total amount of investment by Party B – total amount of amortization (the amortization period is 10 year).

11.3 It anything happens to Party A or Party B that could affect its ability to continue its business operation, including but not limited to bankruptcy, closure, merger, transfer, separation, each party shall inform the each other within 5 working days and provide relevant certified document. If the agreement cannot be performed due to such situation, Party A or B has right to ask other party for compensation for losses.

11.4 Under conditions of mutual agreement, both parties can terminate or cancel the agreement. The parties agree that after written notice of termination reaches to the other party, the validity period for such party to confirm the termination of the agreement is 30 days.

11.5 During the term of the agreement, if Party A is closed, discontinued or ceased to survive, conversion or merger or division with other entities, this agreement is still valid to Party A or its successor. Party A shall inform relevant party under such circumstance and include such condition into the new entity. If relevant party do not accept the condition, Party A shall purchase this project according to item 11.2 before the event. If the agreement is terminated due to bankruptcy of Party A, Party B shall have the first priority to be compensated during the bankruptcy procedure.

11.6 During the performance of the agreement, Party B has right to delegate its subsidiaries or affiliates to undertake the investment, design, construction and operation of the agreement. The agreement can be also directly transferred to Party B’s subsidiary or affiliate as the main entity for the performance of this agreement.

Item 12 Transfer of Rights and Obligations

Item 13 Tort and indemnification

Item 14 Confidentiality

Both parties agree to fulfill the following obligations of confidentiality.

Item 15 Force Majeure

Item 16 Settlement of Disputes

Item 17 Insurance

Item 18 Intellectual Property Rights

18.1 With respect to patent use rights and technical secret license, both parties agreed: parties shall conduct patent license procedures according to law; For technical secrets obtained by Party B during performance of this agreement, they belong to Party B; for technical secrets obtained by Party A during construction and operation processes, they belongs to Party A.

Item 19 Appendixes

19.1.1 Project description, item description: see appendixes;

19.1.2 List of equipment and materials: provided by Party B;

19.1.3 Technical solutions and technology agreements of this project.

19.2.1 Separate electricity meter for the project shall be set up and the energy saving service fee shall be calculated according to the meter.

Item 20 Effectiveness of Agreement and Miscellaneous

Party A: Tangshan Rongfeng Iron & Steel Co., Ltd. (Seal)

Representative Signature:

Party B: Xi’an TCH Energy Technology Co., Ltd.(Seal)

Representative Signature:

Date: