Circular on Handling Opinions on Quality Problems in Preparation of EIA Documents of China Tianchen Engineering Co., Ltd.

Environmental Protection Departments (Bureaus) of Provinces, Autonomous Regions and Municipalities, Environmental Protection Bureau of Xinjiang Production and Construction Corps, Environmental Engineering Assessment Center of Ministry of Environmental Protection, China Tianchen Engineering Co., Ltd.:

Recently, our department accepted the "Environmental Impact Report of Qinghai Mining Group Co., Ltd. 600000 Tons/Year Olefin Project" compiled by China Tianchen Engineering Co., Ltd. After examination, the quality of the EIA document is poor, and the handling opinions of the EIA agency and relevant compilators are hereby notified as follows:

Quality problems existing in the 1. EIA document

Error in application of (I) environmental standards

The flue gas of the heating furnace in the EIA document shall be subject to the Emission Standard for Pollutants from Industrial Furnaces (GB9078-1996), it does not meet the requirements of the "Notice on Printing and Distributing the Environmental Access Conditions for Modern Coal Chemical Construction Projects (Trial)" (HB [2015] No. 111) on the flue gas of the heating furnace shall be subject to the "Petrochemical Industry Pollutant Emission Standard" (GB31571-2015).

(II) Environmental Impact Prediction and Evaluation Method Error

The EIA document did not analyze the current situation and change trend of atmospheric environmental quality in the past three years, did not propose a reduction plan for the regional atmospheric environmental quality exceeding the standard, and did not carry out corresponding impact prediction in accordance with the Technical Guidelines for Environmental Impact Assessment-Atmospheric Environment (HJ2.2-2008).

2. Handling Opinions

According to the relevant provisions of the Measures for the Administration of Environmental Impact Assessment Qualifications for Construction Projects (Decree No. 36 of the Ministry of Environmental Protection), our department has imposed rectification on China Tianchen Engineering Co., Ltd. and Yang Jianqi, the compilation host of the EIA document, and the main compilation personnel Liu Xiyuan, Wang Ling, Tao Jin, Gong Zhenqiang and Huang Donghui within 6 months. The rectification period shall be calculated from the date of issuance of this circular. During the rectification period, the competent environmental protection departments at all levels shall not accept the application for examination and approval of the environmental impact report (form) prepared by the organization and Yang Jianqi, Liu Xiyuan, Wang Ling, Tao Jin, Gong Zhenqiang and Huang Donghui as the preparation host and main preparation personnel. The examination and approval department that has accepted before the rectification may continue to complete the examination and approval. After the rectification period expires, China Tianchen Engineering Co., Ltd. shall submit a rectification report to the Ministry.

If the above-mentioned institutions and personnel have objections to the handling opinions, they may apply to our Ministry for administrative reconsideration within 60 days from the date of receiving this notification, or they may file an administrative lawsuit in accordance with the law within 3 months from the date of receiving this notification.

General Office of Ministry of Environmental Protection

May 9, 2016

Qinghai Mining Group Co., Ltd. 1.2 million Ton/Year Olefin Project is located in Golmud Industrial Park, Qinghai Province. The first phase of the construction scale is 600000 Ton/Year, with a total investment of 21143.9355 million yuan. The investment in engineering environmental protection facilities is about 1386.27 million yuan, accounting for 6.56 of the total investment in the project.

Geermu Industrial Park Kunlun Major Industrial Base Area Location Plan

Project Scale and Product Plan

Project uses coal as basic raw material to build a plant with an annual output of 1.8 million tons (100%) of MTO grade methanol and 600000 tons (ethylene + propylene) of methanol to olefin. MTO grade methanol produced by

methanol plant is used as olefin raw material for olefin plant production, and 99.9 (vol) hydrogen is recovered from methanol synthesis purge gas to be supplied to sulfur recovery unit, olefin separation unit and polypropylene unit.

The main products of this project are ethylene and polypropylene, and the main intermediate products include MTO-grade methanol and hydrogen. In addition, the by-products of the project are sulfur, MTBE, butene-1, C4/C5, fuel gas and other products.

General Process

Qinghai Mining Group Co., Ltd. is formed by Qinghai Muli Coal Development Group Co., Ltd. and Yima Coal Industry group Co., Ltd., Qinghai Qinghua Mining, Metallurgy and Coal Chemical Group Co., Ltd., China Railway Co., Ltd. and other original development enterprises of Muli Coal Mine jointly established a joint stock limited company.

Qinghai Mining Group Co., Ltd. was incorporated in January 2012 with a registered capital of 1 billion yuan. The company's main business is to use coal as raw materials to produce and sell coke and chemical products, olefins and downstream products; coking coal and coal chemical products trade, and the construction and operation of the Golmud Industrial Park Qinghai Mining 600000 tons/year olefin project.