Lu'an is a chemical and energy enterprise specialized in coal, and multi-industries, such as coal-power-chemical, coal-coke-chemical and coal-oil-chemical. The company is one of the largest coal enterprises in the country, and is one of China’s top 500 enterprises. Lu’an Group was awarded one of “The Top 10 Most Influential Enterprises” by China Enterprise Association and China Enterprisers Association in 2004. Lu’an Group is located in Shangdang Basin of Changzhi City, Shanxi, a main base of coal production in China. The coal reserves are of high quality, fit for coking, with low sulfur, low phosphor, low ash and a high calorific value, with over 9.82 billion metric tons in reserves. It should be noted that this number is only for Lu'An's coal property in Shanxi Province. In addition, they obtained three big coal properties (including 10 billion metric tons of coal reserve from the acquisition of the Xinjiang's largest coal company - Hami Mining Group) Xinjiang Autonumous Region lately, which have a total geological reserve of 23 billion metric tons and one large coal property in Inner Mongolia with a total geological reserve of 7 billion metric tons. Therefore, Lu'An Group's total coal reserve is about 39.82 billion metric tons.

Its major business includes coal, power generation, coking facilities, and chemical production. The company owns geological reserves totaling 39.82 billion metric tons of coal and Lu'An Group's coal production for last year (2007) was 37.18 million metric tons. Currently, it produces 17 high quality products used by more than 500 customers in China and exported to Japan, Korea and Hong Kong etc.

Shanxi Province is the largest coal producing region in both China and the world, producing 540,000,000 metric tons of coal annually accounting for 25% of China's coal production in 2005.


New Energy and Coal Chemical Strategic Cooperation Agreement
West Hawk and Lu'An to develop three New Energy and Clean Coal Chemical Bases in China and in North America.

1. Shanxi Lu'an New Energy and Clean Coal Chemical Base,
2. Xinjiang New Energy and Coal Chemical Base, and
3. a third North America site yet to be determined, Clean Coal Chemical New Energy Base

The CTL plant is projected to be more efficient and cleaner than traditional technology and the modules are less capital intensive. This technology will apply clean technology for control of NOx, SOx, Particulates, Mercury, and it is projected that CO2 will be used in the system with carbon and oxygen separation. The CTL unit will also supply cost effective co-products with materials that would otherwise be waste.

This first West Hawk Coal to Liquids unit will be a 50/50 joint development between West Hawk Development and the Luan Mining Industries Group.

This first project will consist of a CTL plant that will produce between 25 and 35 million gallons of liquids per year with diesel fuel being the primary product. A feasibility study is underway between West Hawk China Operations and Luan Industries. Until the feasibility study is completed, the economic viability will be uncertain. The projected cost of the first unit is approximately US$200 million. The Strategic Cooperation Agreement contemplates building six units.

The first China CTL plant will be designed to be a 500 ton per day plant. The output is projected to be approximately 25 to 35 million gallons per year of clean products. Subsequently, more units can be added in parallel to increase production. West Hawk Development and Luan will raise the financing to support this project.


Lu'An is an equity partner on the Figure Four Drilling and Development Project
Lu'An becomes an equity partner by purchasing a 25% interest of West Hawk Energy (USA) LLC for US $7.5 million, and on May 6, 2008, made an additional investment of US $5 million for the 2008 drilling program in the Piceance Basin.


Agreement to jointly develop coal gasification facilities with the aim of using coal as the primary feedstock to produce clean liquids and power
Chairman Ren, of Lu'An Coal Mining, and Dr. Wm. Mark Hart, President and CEO of West Hawk have agreed to work together to jointly develop an underground coal gasification system for the purpose of producing liquids (CTL-Coal to Liquids) and power (IGCC-Integrated Coal Gasification Combined Cycle). Lu'An will dedicate 500 million tons of coal property toward this development and both companies are working diligently on a program to advance this technology.


Memorandum of Understanding with Lu'An Mining
The intent of the MOU is to form a working relationship between the two companies focusing on the joint development of a coal gasification project in the Shanxi Province of the People's Republic of China. The companies will review certain coal resources owned by the Shanxi Lu'An Mining Group to determine the best resources available for a conventional Integrated Gasification Combined Cycle (IGCC) electrical power plant and a Coal-To-Liquids (CTL) plant (diesel & naphtha).

The companies will also explore the possibility of Underground Coal Gasification (UCG), an underground gasification process, aided by the inherent high pressures of depth enabling the liberation of energy contained within the 95% of the worlds coal resources inaccessible by present day mining technology. Operating commercially in the former Soviet Union at a number of sites for more than 40 years, UCG has also recently been successfully demonstrated in Queensland, Australia.


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