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Our operations in the PRC are required to comply with PRC environmental laws and regulations administered by central and local government environmental protection bureaus. We are also subject to environmental rule. The Ministry of Environmental Protection sets national environmental protection standards, but local environmental protection bureaus may set stricter local standards.

Environment Impact Assessment

We are required to obtain an approval for our environmental impact assessment as a supporting document for the approval of the overall development plan. In order to obtain this approval, our environmental impact assessment must demonstrate to the relevant environmental protection government agencies that the project complies with all applicable environmental standards. We obtained the environmental impact assessment approval for Panzhuang in 2009 and have begun preparing the environmental impact assessment report for Mabi in 2012.