Lanxuan Sci-Tech Venture (600123.SH) announced on October 10th that its wholly-owned subsidiary Shanxi Lanhua Sci-Tech Venture Coal Washing Co., Ltd. operates four washing subsidiaries, namely Bofang, Tang'an, Dayang, and Wangyun. Among them, Bofang Coal Mine has a current coal production capacity of 2.1 million tons/year. The coal washeries were commissioned in 1998, with a froth coal washing capacity of 0.6 million tons/year and a lump coal washing capacity of 0.6 million tons/year. Tang'an Coal Mine has a current coal production capacity of 1.8 million tons/year. After a technical upgrade in 2008, its lump coal washing capacity increased from 0.3 million tons/year to 0.6 million tons/year. Froth coal washing, with a capacity of 0.3 million tons/year, is outsourced to Jincheng Anda Science and Trade Co., Ltd. (a wholly-owned subsidiary of Shanxi Lanhua New Type Wall Co., Ltd., which is a wholly-owned subsidiary of the holding shareholder Lanhua Group). Dayang Coal Mine has a current coal production capacity of 1.8 million tons/year. In 2015, the existing jigging process was upgraded to a heavy medium process, but only lump coal washing can be carried out, with a capacity of 0.9 million tons/year. The washing capacities of these three coal washeries are significantly insufficient compared to the raw coal production scale of each mine. Due to the early establishment, outdated technology, and serious equipment aging, operating costs and energy consumption are both high. With the continuous improvement of requirements from the national, provincial, and municipal governments for the coal washing industry in terms of scale, technological equipment, safety regulations, environmental standards, raw coal washing rate, and standardized construction, the existing coal washeries are unable to meet the standardization, informatization, and intelligence rating of industry regulators. At the same time, with the later stages of some mines like Tang'an and Dayang entering the next group coal mining phase, the existing systems will not be able to meet the demand for washing and distribution of the next group coal.

Considering the above situation, in accordance with the spirit of the Shanxi Provincial Government Office's documents, such as the 'Opinions on Promoting the Standardized Development of the Coal Washing Industry in the Province' ([Jinzbafu] No. 58 of 2019) and the 'Notice on Issuing the Interim Measures for the Management of Construction Projects in the Coal Washing Industry in Shanxi Province' ([Jinzbafu] No. 33 of 2023), to further enhance the company's coal washing capabilities, improve the quality of coal products, optimize product structure, promote the transformation and upgrading of the company's coal washing business, achieve large-scale, standardized, and standardized development. At the third meeting of the eighth Board of Directors held on October 10, 2024, it was resolved to approve the investment by the company's wholly-owned subsidiary Shanxi Lanhua Sci-Tech Venture Coal Washing Co., Ltd. (referred to as 'Lanhua Sci-Tech Coal Washing Company') as the investment entity. Its affiliated Bofang, Tang'an, and Dayang coal washing subsidiaries will be the project implementation entities for the construction and expansion of coal washeries. The total estimated investment for the three projects is 697.1314 million yuan. Specifically, the estimated investment for the Bofang Coal Mine expansion project is 208.5074 million yuan, with a construction scale of a 1.8 million tons/year froth coal washing system; the estimated investment for the Tang'an Coal Mine new construction project is 207.8618 million yuan, with a construction scale of a 1.2 million tons/year froth coal washing system; and the estimated investment for the Dayang Coal Mine expansion project is 280.7622 million yuan, with a construction scale of a 1.2 million tons/year froth coal washing system.