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CORPORATE PRESENTATION -- 2013/04

Forward-Looking Statements 

DISCLAIMER 

This presentation contains certain forward-looking statements that involve 

various risks and uncertainties. There can be no assurances that such statements 

will prove accurate, and actual results and future events could differ materially 

from those anticipated in such statements. Such information contained herein 

represents management’s best judgment as of the date hereof based on 

information currently available. The company does not assume the obligation to 

update any forward-looking statement. 

2 

© 2005-2013 Up Energy Development Group Limited. 

All rights reserved.

• Development Status 

• Development Strategies 

• Five Advantages 

• Industry and Markets Overview 

• Increased Values in Circulation 

• Projects Introduction 

• Coal Mines Introduction 

• Quality and Quantity 

• Group Business Overview 

• Shareholding Structure 

3 



‣ A professional and international energy investment group 

based in Xinjiang, China 

‣ One of the largest integrated energy groups with circulative 

economy business model in Northwestern China 

‣ Mainly engaged in mining of coal for coking as well as 

production and sales of raw coking coal, clean coking coal, 

and coking coal products 

Coking Coal 

5 



Fukang 

Baicheng 

Kaftar Hona 

Phase 1 Mines: 

• Xiaohuangshan Mine 

• Quanshuigou Mine 

• Shizhuanggou Mine 

Proposed Acquisition: 

• Baicheng Wenzhou Mine 

• Kamarob Mine 

6 



7 



Up Energy efficiently maximizes its 

mining resources by extending the 

production chain and enhancing 

added value of coal products, thus 

actualizing the business concept of 

• Existing Coal 

Mines: 3 

• Proposed 

Acquisition: 2 

Exploration 

Mining 

• Pre-blended 

Coking Coal 

• Planned 

Production: 

6.4 Mtpa 

• Raw Coal 

Washing 

• Planned 

Production: 

4.5 Mtpa 

Washing 

Coking & 

Chemicals 

• Coking Coal, and 

by-products 

• Planned 

Production: 

1.3 Mtpa 

• Pit Water 

Recycling 

• Planned 

Processing: 

5.2m m 3 

Pit Water 

Recycling 

8 



Up Energy Group 

39.1% 

Public & Other 

Investors 

60.9% 

Including, 

among others: 

• Ospraie Special 

Opportunities, 

• Capital Sunlight, 

• Baosteel Resources, 

• Exploratory Capital, 

• Golden Energy, 

• CCB Int’l Asset 

Mgmt 

Legend: 

PRC Co. 

HK Co. 

BVI Co. 

Shareholders 

Holding Co. 

Project Co. 

Up Energy Development 

(Hong Kong) Ltd 

100% 

Up Energy 

International Ltd 


Up Energy 



Up Energy (Fukang) 

Coal Mining Ltd 

79.2% 

Xiaohuangshan Mine 

Up Energy Investment 

(China) Ltd 



Coal Washing Ltd 

70% 

Coal Washing Plant 

Up Energy (Xinjiang) 

Mining Ltd 

70% 

Quanshuigou Mine 


Coking Ltd 

70% 

Coal Coking Plant 

Up Energy Development Group 

(BVI) Company Ltd 


Shizhuanggou Mine 


Recycled Water Project Ltd 

70% 

Water Treatment Plant 

9 




53.01% 

Up Energy Capital 

3.01% 


Investors 

43.98% 

Including, 

among others: 







• CCB Int’l Asset Mgmt 

Legend: 

PRC Co. 

HK Co. 

BVI Co. 

Shareholders 

Holding Co. 

Project Co. 

Up Energy Development 



Up Energy 



Up Energy 




Coal Mining Ltd 

79.2% 

Xiaohuangshan Mine 

Up Energy Investment 

(China) Ltd 



Coal Washing Ltd 

70% 

Coal Washing Plant 


Mining Ltd 

70% 



Coking Ltd 

70% 

Coal Coking Plant 

As of 2013/03/28 

Up Energy Development Group 






70% 

Water Treatment Plant 

10 



Upon completion 


48.9% 

Proposed Acquisition 

Up Energy Capital 

2.8% 

Kaisun Energy Group 

1.6% 

Hao Tian Resources 

6.1% 


Investors 

40.6% 

Including, 

among others: 







• CCB Int’l Asset Mgmt 

Legend: 

Up Energy 

Development 



Up Energy 



Up Energy 



Up Energy 

(Fukang) 

Coking Ltd 

70% 

Coal Coking 

Plant 

Up Energy 

Investment 

(China) Ltd 



Mining Ltd 

70% 

PRC Co. HK Co. BVI Co. UK Co. TJ Co. 

Shareholders Holding Co. Project Co. 

11 

Up Energy 

Development Group 





70% 

Up Energy 

(Fukang) Coal 

Washing Ltd 

70% 

Coal Washing 

Plant 

Up Energy 

(Fukang) Coal 

Mining Ltd 

79.2% 

Quanshuigou 

Mine 

Xiaohuangshan 

Mine 

Shizhuanggou 

Mine 

Water 

Treatment 

Plant 

Ping’an Gas, a 

Huainan Group’s 

company, owns 

12% of this 

company. 

Up Energy 

Mining Ltd 


Champ 

Universe Ltd 


Venture Path 

Ltd 


West China Coal Mining 

Holdings Ltd 


Baicheng Wenzhou 

Mining Development Ltd 


Baicheng 

Wenzhou Mine 

Up Energy 

Resources Co. Ltd 


West Glory 

Development Ltd 


100% 52% 

Essential 

Win Ltd. 


Saddleback 

Mining Ltd. 


Kaisun Mining 

Corp. LLC 


Kamarob 

Mine 



Coal 

Mines 

Circulative 

Projects 

Since 2005, Up Energy started from coal resources exploration, and gradually established a 

complete set of projects with the concept of circulative economy which includes raw coal 

mining, raw coal washing, coal coking, cogenerating, coal mine gas utilizing. With Phase I is 

now close to completion, the diagram below best illustrates our development blueprint: 

Phase I Coal Mines: 

79.2% Xiaohuangshan Mine (2.40 Mtpa) 

70.0% Quanshuigou Mine (1.05 Mtpa) 

70.0% Shizhuanggou Mine (1.05 Mtpa) 

Proposed Coal Mines Acquisition: 

100% Baicheng Wenzhou Mine (0.90 Mtpa) 

52.0% Kamarob Mine (1.00 Mtpa) 

Coal Coking Project 

(1.3 Mtpa) 

Phase I 

Phase II 

Coke Oven Gas Power Plant 

(4×12.5 MW) 

Coal Washing Project 

(4.5 Mtpa) 

Pit Water Recycling Project 

(~5.2 million m 3 per year) 

Coal Mine Gas Power Plant 

(2×15 MW) 

Coal Gangue Cogeneration 

(2×135 MW) 

Standard Fly-ash Bricks Mfg. 

(250 million pcs/year) 

13 



In Fukang, Xinjiang. 

Xiaohuangshan 

Mine 

(2.40 Mtpa) 

Pit Water 

Shizhuanggou 

Mine 

(1.05 Mtpa) 

Pit Water 

Quanshuigou 

Mine 

(1.05 Mtpa) 

Coal Washing 

Project 

(4.5 Mtpa) 

Clean Coal 

1.755 Mtpa 

Gangue, 

Middling Coal 

and Coal Slurry 

Coal Coking 

Project 

(1.3 Mtpa) 

Existing 

Mines 

Phase I 

Projects 

Clean Coal 

(1.98 Mtpa) 

Metallurgical Coke 

(Grade 2) 

(1.3 Mtpa) 

Coke Oven Gas 

(317 million m 3 /year) 

Coke Tar 

(63.57 tpa) 

End 

Products 

Pit Water 

Crude Benzene 

(18.59 tpa) 

Pit Water Recycling 

Project 

(~5.2 million m 3 /year) 

Irrigation Water 

Phase I Final Products: Clean Coal, Metallurgical Coke, Water for Industrial Use, By-products 

14 



Prime Quality Coal Mines 

Coal Mines 

Area (km 2 ) Production (Mtpa) No. of Service Years In Operation 

Xiaohuangshan 2.178 2.40 13.6 Jun 2013 

Shizhuanggou 7.1572 1.05 28.1 Sep 2013 

Quanshuigou 6.6052 1.05 25.3 Sep 2013 

Baicheng Wenzhou 5.9178 0.90 46.0 2015 

Kamarob 4.2698 1.00 31.3 2016 

Rich in Coal Resources 

Coal Mines Project Resources (Mt) Project Reserves (Mt) 

Xiaohuangshan 119 26 

Shizhuanggou 142 24 

Quanshuigou 147 21 

Baicheng Wenzhou 126 81 

Kamarob 158 N/A 

Total 692 152 

Source: John T. Boyd Co.’s Technical Report, Oct 2010 

15 

Existing Mines 




Raw Coal Production Plan (Mtpa) 

Coal Mines 2013 2014 2015 2016 2017 

Xiaohuangshan 0.80 2.40 2.40 2.40 2.40 

Shizhuanggou 0.10 1.00 1.05 1.05 1.05 

Quanshuigou 0.10 1.00 1.05 1.05 1.05 

Baicheng Wenzhou 0.00 0.10 0.90 0.90 0.90 

Kamarob 0.00 0.00 0.06 1.00 1.00 

Total 1.00 4.50 5.46 6.40 6.40 

Remarks: 

Currently, Up Energy’s mining permit for each mine is limited to 0.9 Mtpa, totaled to 2.7 Mtpa. The 

production plan shown above is based on the assumption of obtaining the necessary licenses and 

permits, so that Up Energy can increase production to the planned production levels. 

16 





Production and growth 

Total Planned Raw Coal Production of the 5 Mines (upon successful acquisition) 

‘000 t 

Planned raw coal production from the 5 Mines 

reaches 6.4 Mtpa in 2016 

17 



Composition of Up Energy’s 

Coal Reserves 

5% 

23% 

34% 

Gas Coal 

1/3 Coking Coal 

Fat Coal 

‣ One-stop coking coal provider 

for all sorts of coal blends 

‣ Ready-for-coking blended coal 

combo sale ensures premium 

pricing 

10% 

28% 

Lean Coal 

Anthracite 

‣ Guaranteed supply of coal for 

producing 1.3Mtpa coking coal 

18 



The raw coal quality from the 5 coal mines in Xinjiang and Tajikistan are: 

Low-mid Ash 

High Volatiles 

Low Sulfur 

High Calorific Value 

Good Caking Index 

Coal Mines 

Ash % Volatiles % Sulfur % Calorific Value Caking Index Coal Sample 

(Ad) (daf) (d) (Kcal/kg) (Gri) Number 

Xiaohuangshan 9.7 34.2 0.33 7,490 95 142 

Shizhuanggou 10.8 34.1 0.33 7,310 81 

Quanshuigou 9.9 37.5 0.30 7,370 90 

150 

Baicheng Wenzhou 8.62 28.83 0.34 7,133 92 160 

Kamarob 7.15 N/A 0.43 8,000 N/A N/A 

19 





Coal Coking Project — 70% owned 

Location: Next to the Shizhuanggou Coal Mine 

Expected Commencement Date of Production: Q3, 2013 

Daily Processing Capacity: 4,808 tonnes 

Annual Processing Capacity: : 1.755 Mtpa 

Planned Annual Coke Production Capacity at Full Operation: 1.3 Mtpa 

Raw Coal Washing Project — 70% owned 


Expected Commencement Date of Production: Q3, 2013 

Planned Annual Coal Washing Capacity at Full Operation: 4.5 Mtpa 

Recovery Rate of Clean Coal: 83% 

Expected Annual Production of Clean Coal: 3.735 Mtpa 

Water Recycling Project — 70% owned 


Expected Date of Trial Run: Q3, 2013 

Planned Annual Processing Capacity at Full Operation: 5.2 million m 3 

Usage of Processed Pit Water: Water for industrial use for the Shizhuanggou Coal 

Mine, the QuanshuigouCoal Mine, the Raw Coal Washing Project and the Coal Coking 

Project; Irrigation water 

21 



Type of Cokery: 

Tamping 

Annual Processing Capacity: 

1.755 Mtpa 

Quenching Technique 

Wet quenching: Utilizes biochemical sewage 

treatment solution that allows for water recycling 

and minimizes external discharge of wastewater 

Production 

(T-000/A) 

Price 

(RMB/T) 

Value 

(Million RMB/Year) 

Coke 

By-Products 

Crude 

Coal Tar 

Benzene 

1,300 64 19 

1,400 2,200 4,100 

1,820 140.8 77.9 

Cokery: 

Two cokeries with 5.5m high 

coking chambers 

22 



Washing Process – 

Jigging Separation (2 production lines) 

Washing Process Flow: 

Recovery Rate of Clean Coal (%): 

83% 

Raw Coal 

Prep 

System 

Jigging 

Separation 

System 

Coarse Slime 

Separation 

System 

Floatation 

System 

Slurry 

Water 

Processor 

Product 

Transportation 

System 

Coal Washing 

Washing Capacity 

4.5 Mtpa 

Recovery Rate of Clean Coal (%) 83% 

Production (Clean Coal) 

3.735 Mtpa 

23 



Annual Treatment Capability: 

5,200,000 m 3 /year 

Fully utilizes coal associated resources 

and develops circulative business to 

achieve increased value in circulation. 


PIT WATER 

Industrial 

Water 

Coal Washing 

Coal Coking 

Industrial 

Water 

Plant 

Irrigation 

PIT WATER 


Pit Water Recycling 

Annual Treatment Capability 

5,200,000 m 3 /year 

About 16 km long main water supply pipe 

Price per M 3 RMB 2.4 

24 

Value 

RMB 12.48m/year 



Up Energy enjoys 5 distinctive advantages, 

namely: 

• Regional Advantage 

• Resources Advantage 

• Cost Advantage 

• Circulative Advantage 

• Management Advantage 

Regional 

It is expected Xinjiang’s 

economy will grow and the 

demand for steel, coking coal 

and coke will increase 

significantly, which would create 

favorable conditions for Up 

Energy’s coal business. 

Management 

Resources 

Circulative 

Cost 

26 



Favourable Government Policies for Economic 

Development of Xinjiang 

 

The PRC Government continues to implement 

policies to develop the western China, of which 

supporting the growth of Xinjiang is a part of the 

key policy. 

 

In the 12 th Five-Year Plan (2011 to 2015), the PRC 

Government: 

plans to invest RMB3.9 trillion in fixed assets 

in Xinjiang, and 

will invest more than RMB310 billion in the 

next decade to expand Xinjiang’s railway 

network 

Xinjiang Satellite Image 

 

To cope with the 12 th Five-Year Plan, the steel 

manufacturing industry in Xinjiang plans to 

produce 32 million tons of steel, at an average 

annual growth of 26%. 

 

As a result, the utilization of mineral resources 

becomes a strategic importance of the econopolitical 

direction. 

27 



Widening Demand-Supply Gap of Xinjiang Coking Coal to 

Push Up Clean Coking Coal Price 

2015 Regional Coke 

Consumption Ratio in Xinjiang 

 

 

According to Fenwei, Xinjiang is a net importer of coking 

coal, the supply-demand gap of clean coking coal in 

Xinjiang will increase to 10.9 Mt by 2015. The local 

demand for clean coking coal in Xinjiang far exceeds 

supply. 

Steel and industrial coke enterprises in Xinjiang are mainly 

located at Wuchang district, where coke consumption 

represents a significant proportion of the total 

consumption in Xinjiang. 

3% 

10% 

53% 34% 

 

Up Energy’s coal mines are located at Wuchang region, 

where Fukang has the richest coking coal geological 

reserves, representing 60% of the total coking coal 

reserves of Xinjiang. 

Ex-warehouse Price Reference from Tianjin Port (incl. tax) 

Nanjiang District 

Yili District 

Wuchang District 

Other District 

Products 

Grade I (RMB/T) 

Grade II (RMB/T) 

30-90 10-30 30-90 10-30 

Coke Powder 

(RMB/T) 

2013/04/01 1700-1770 1400-1400 1610-1700 1300-1400 1100 

2013/04/03 1700-1770 1400-1400 1610-1700 1300-1400 1100 

28 



Up Energy Possesses Quality Coal Resources 

Up Energy has the Largest Planned Capacity 

 

 

Up Energy currently owns high quality coal 

resources of 407 Mt. 

The proposed acquisition of the Baicheng 

Wenzhou and Kamarob coal mines would 

add another 284 Mt of high quality coal 

resources to Up Energy’s portfolio. 

 

 

By 2016, Up Energy’s planned production 

capacity of coking coal will reach 6.4Mtpa – 

being the top of the list. 

Upon the commencement of operation of 

phase 1 and 2 of the project, Up Energy will be 

the largest coking coal and electricity 

circulative economic energy group in Xinjiang 

area. 

29 



Low Mining Cost for Up Energy’s Coal Resources 

Thick Coal Seams = High Prod. Efficiency 

 

The coal seams of Up Energy’s mines are 

relatively thick, which is easier for mining and 

the coal production system is relatively simple 

and concentrated. 

This increases the efficiency of mining 

operations and the productivity of its mining 

equipment, resulting in a higher recovery rates. 

 

The thick coal seams allow two face layouts set 

in two sides of the same tunnel, which means 

lower capital expenditures due to less channel 

construction. This significantly reduces the 

capital expenditures on a raw coal tonne basis. 

Adv. Mining Equipment = Lower Op. Cost 

 

Up Energy uses highly mechanized mining 

methods and advanced mining equipment that 

results in higher productivity, lower staffing 

requirements and less maintenance 

requirements, thus significantly driving the 

labour and maintenance costs down. 

30 

Up Energy Cost and Profit Advantage 

Coke Supply to Local Customers 

 

To ensure constant product demand, Up 

Energy has entered into 5-year strategic 

cooperation agreements for coking coal 

and coke supply with 2 major local steel 

producers and 3 major local coking plants. 

Efficient Transportation Network 

 

Our coal mines are close to Tu-Wu-Da 

Expressway and Wuzhun Railway. Relatively 

low transportation cost and convenient 

transportation network effectively enhance 

the competitiveness of our products. 

Quality Products = Better Sales Price 

 

 

Our coal resource is low in ash, high in 

volatile, low in sulfur content, with high 

calorific value and good caking index. 

Compared to the weighted average price of 

individual coal type found in coking coal 

blends, the price of a blended coal can be 

sold at a premium of 10% or higher. 



Increased Value in Circulation 

 

Up Energy adheres to the principle of “increased value in 

circulation” by extending its production chain and enhancing 

added value of coal products through effective utilization of 

coal resources. 

Raw Coal 

Exploration 

Raw Coal 

Mining 

Raw Coal 

Washing 

Coal 

Coking 

Water 

Recycling 

Gas 

Power 

Generation 

Cokeoven 

Gas 

Electricity 

Coal- 

Gangue 

Cogenera 

-tion 

Fly-ash 

Based 

Building 

Materials 

31 



Management Received Strong Support from 

Relevant Institutions 

Cooperation with Renowned National Institution 

Specialized in Design and Safety of Coal Mines 

and Gas Operations 

 

Up Energy considers safety a crucial issue to mine 

operation. Ping’an Coal Mine and Gas (Methane) 

Engineering Research Ltd., led by Mr. Yuan Liang (a 

prestigious expert and professor in the industry), will 

provide consultation services to Up Energy that 

includes the design and planning, environmental 

protection and safety, exploration and exploitation of 

mines, etc. 

Strategically Allied with Market Leader Baosteel 

Resources 

 

Baosteel Resources, a wholly-owned subsidiary of the 

Baosteel Group, will work with Up Energy to assess 

and explore upstream and downstream acquisition 

opportunities of local and foreign resources. Both 

parties will also work hand-in-hand on production 

technology, logistics, supply chain, and sales and 

marketing of coal products. This strategic cooperative 

enhances our competitiveness amongst all rivals. 

32 

Management Successfully Introduced 

Large Funds as Shareholders 

Pingán 

Gas 

Merrill 

Lynch 

Ospraie 

Deutsche 

Bank 

(as of 2012/10/31) 

ICBC 

Baosteel 

Resources 

Credit 

Suisse 

CCB 



Production will commence in Q3 2013 

Up Energy’s coal mines, plants and auxiliary facilities are located in Fukang city, a key industrial city 

in Wuchang district of northern Xinjiang, adjacent to the target customers, railway and highway 

networks. Production will commence in Q3 2013 after all construction work has been completed. 

34 



Up Energy’s Fund Utilization Plan 2013-14 

Upon completion of rights issue,RMB 340 million will be raised for 

the production and operation of the 3 existing coal mines in Fukang, 

as well as for other coal resources acquisition projects in the future. 

In the fiscal year of 2013-14, Up Energy will generate sales 

revenue of RMB 2 billion. 

From 2013 to 2016, the existing 3 mines will use RMB 370 million 

operating cost. The anticipated operating cost of the proposed 

acquisition will be RMB 800 million. 

35 



1. Prospect of Coking Coal Industry 2. Production Safety 

 

 

Fixed asset investment in Xinjiang during the 

period of “12th Five-Year Plan” would double 

that of the “11th Five-Year Plan”. 

As coking coal is the basic material for steel 

manufacturing, its growing demand and its 

scarcity nature in Xinjiang means continuous 

limited supply. The situation of over-demand 

would be further worsened and the price of 

coking coal is expected to surge in the future. 

 

 

To ensure smooth production, Up Energy 

has co-operated with a number of renowned 

third-parties and issued various guidelines 

for safety and operation. 

Cooperating parties include: 

– Professor Yuan Liang from the Chinese Academy 

of Engineering, 

– The China University of Mining and Technology, 

– The Pingan Coal Mine and Gas (Methane) 

Engineering Research, and other prof. bodies. 

36 



3. Local and Foreign Acquisitions 

 

Merger and acquisition is crucial for the long 

term development of a company. Up Energy 

will adhere to the principle of low-cost 

expansion and prudently identify merger and 

acquisition opportunities in Xinjiang which 

coincide with its development strategy and 

philosophy. 

 

Through gradual expansion of coal reserves 

and scale of mining activities, Up Energy will be 

able to secure its leading position in the coking 

coal industry in northwestern China. 

 

In respect of merger and acquisition in 

overseas countries, management of Up Energy 

regularly arranges overseas site visits and 

actively identifies investment opportunities in 

resource consolidation, merger and acquisition 

of coking coal and energy industries in foreign 

countries. 

37 



4. Long Term Plan 

 

To be the leading coal coking manufacturer in Xinjiang, Up Energy has always adhered to the lowcost 

expansion principle to gradually increase coal reserves and scale-up the mining activities. 

 

Up Energy plans to produce over 10 Mtpa coking coal in the next 5 years, a compound growth rate 

of 40%. This would substantially increase our profitability and further integrates our resource 

through our circulative business model. 

38 



Up Energy Hong Kong Office 

Address: Room 2704, 27/F, Tower 1, Admiralty Centre, 

18 Harcourt Road, Admiralty, Hong Kong 

Tel: (852) 2972-9900 

Fax: (852) 2527-8522 

Email: info@upenergy.com 

Website: www.upenergy.com 

Up Energy Xinjiang Office 

Address: 

Block A, Commercial Street, Minzu Lane, 

Fukang City, Xinjiang 

Tel: (86) 994 322-7116 

Fax: (86) 994 322-7236

40 



41 



42 



43 



4.5 Mtpa 

44 



1.3 Mtpa 

45 



1.755 Mtpa 

46 



47 



48

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