Laws of the People's Republic of China

Announcement on the First Public Bidding for Export Quotas of Carborundum of 2007

The first public bidding for export quotas of carborundum of 2007 will start on December 15, 2006. In accordance with the relevant provisions of Measures for the Invitation of Bid for Export Commodity Quotas and Circular on Printing and Issuance of Detailed Rules on the Implementation of the Invitation of Bid for Export Quota of Industrial Products (Wai Jing Mao Mao Fa [2001] No.626), the relevant matters are promulgated as follows:

I.

Name and Scope of the Commodities under the Invitation for Bid

Carborundum

Custom Coding of the Commodities:

28492000 Carborundum

38249090.10 Raw Carborundum

II.

Amount of Biding:

Amount of this public bidding of carborundum: 109,000 tons

III.

Time for Bid

Time for Biding: From December 15, 2006 to December 18, 2006

Time for Ending the Invitation for Bidding: 16¡Ã00, December 18, 2006

Time for Opening Bid: 10¡Ã00, December 19, 2006

IV.

Means of Bid

Bids will be conducted via www.ec.com.cn. An enterprise may send only one electronic bid document before the time point for ending the invitation for bidding. When an enterprise successfully sent more than two (including two) electronic bid documents, the bid documents shall be regarded as invalid.

China International Electronic Commerce Center (EDI) shall be responsible for the technical guarantee work for the electronic bids. Problems on specific operation shall be interpreted by EDI.

Tel.: 010-67870108 (Call-Center)

010-67800472, 67800334, 67800365, 67800045

Fax: 010-67800343

V.

Amount of Bid

1.

The minimum amount of bid is 100 tons. The maximum amount of bid shall be classified according to the average annual amount of export goods supply from 2003 to 2005 of the enterprise. The concrete scheme for the classification is as follows:

Average Annual Amount of Export Goods Supply¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡Maximum Amount of Bid

¡¡¡¡¡¡equal or greater than 500 tons¡¡¡¡¡¡¡¡¡¡¡¡average annual amount of export goods supply ¡Á 48%

¡¡¡¡¡¡¡¡¡¡¡¡less than 500 tons¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡¡150 tons

2.

Average Annual Amount of Export Goods Supply=Actual Average Annual Amount of Export¡Á0.95 + Actual Average Annual Sum of Export + National Average Unit Price of Export¡Á0.05+ Average Annual Amount of Goods Supply¡Á0.05

Given that the actual average annual amount of export of an enterprise is greater than its average annual amount of goods supply,

Average Annual Amount of Export Goods Supply=Actual Average Annual Amount of Export¡Á0.95 + Actual Average Annual Sum of Export/ National Average Unit Price of Export¡Á0.05

3.

Any bid document with an amount of bid above its maximum or below its minimum amount of bid shall be treated as an invalid bid.

VI.

Base Price for Bid

A base price of bid is set up for this invitation for bid. A bidding enterprise may directly incept the base price for bid as determined by the Committee for Invitation for Bid in its own electronic bid document.

Any bid documents with a price level lower than the level of the base price for bid as provided by the Committee for Invitation shall be treated as an invalid bid.

VII.

Price of Winning Bid and Amount of Winning Bid

The bid prices of all the bidding enterprises shall be sorted in descending order. The amounts of bid of the enterprises shall be accumulated according to their order. When the accumulative amount of bid equals the total amount of invitation for bid, the enterprises which are reckoned in the accumulative total amount of bid (i.e. the total amount of invitation for bid) shall be the bid winners.

The amount of winning bid of a bid winner is its amount of bid. If the total amount of bid of the enterprises at the base price level exceeds the rest amount of quotas, the rest quotas shall be distributed among the enterprises at this price level. Any enterprise whose amount of winning bid is less than the minimum amount of bid shall be taken as failing to win the bid.

The price of winning bid of an enterprise shall be its price of bid.

VIII.

Inquiry of the Result of Winning Bid

This invitation for bid shall be opened at 10¡Ã00, December 15, 2006, and the preliminary result of winning bid will be promulgated on www.ec.com.cn on the morrow. In case an enterprise has any question, it may submit to the Public Bidding Administration before 15£º00, December 22. Any bidding enterprise may inquire about its status of winning bid via www.ec.com.cn after December 25. The Public Bidding Administration will not issue a written Notice for Winning Bid to each enterprise.

IX.

Deposit for Winning Bid

The deposit for winning bid for this invitation for bid is 10% of the award amount for the bid winner. Any enterprise, after it wins the bid, shall remit the deposit for winning bid (price of winning bid ¡Áamount of winning bid¡Á10%) into an appointed bank account before February 28, 2007.

Name of the Entity: China Chamber of Commerce of Metals Minerals & Chemicals Importers & Exporters

Bank for Opening the Account; Beijing Wanda Square Branch of China CITIC Bank

Account Number: 7112410182600001325

As for any enterprise which fails to pay the deposit for winning bid, the Bidding Office shall execute in accordance with the relevant provisions of Measures for Invitation of Bid and the Detailed Rules on the Implementation thereof.

X.

The Address of the Bidding Office of Export Quotas of Carborundum

: 17/F, Prime Tower, No. 22 Chaowai Street, Chaoyang District, Beijing

Postal Code: 100020

Tel.: 010-65882501-1721, 1730, 1732

Fax: 010-65882509

Committee for the Invitation for Bid for Export Commodity Quotas

December 11, 2006