Employees

As of December 31, 2006, we employed around 463 full－time employees, of whom approximately 18％ are with Qianzhen Mining, 56％ are with Xiangzhen Mining, 8％ are with Tianzhen Mining (Nonferrous copper, zinc, lead and other metal ore mining and processing), 13％ are with Qingshan Nonferrous Metal (copper and zinc ore mining) and 5％ are with Xingzhen Mining (Holding exploration rights of copper ore and zinc ore) Approximately 18％ of our employees are management personnel, and 3％ are sales and procurement staff. In terms of education level, 8.5％ of our employees have a college degree or higher.

Under Chinese law, our employees’ have formed trade unions which protect employees rights, aim to assist in the fulfillment of our economic objectives, encourage employee participation in management decisions and assist in mediating disputes between us and union members. We believe that we maintain a satisfactory working relationship with our employees and we have not experienced any significant labor disputes or any difficulty in recruiting staff for our operations.

As required by applicable Chinese law, we have entered into employment contracts with all of our employees. We have also entered into a confidentiality agreement with all of our employees under which such employees are prohibited from disclosing confidential information of the Company or using it for other purposes than the benefit of the Company. Directors, officers, mid－level managers and some key employees in sales and R&D are required to sign a non－compete agreement which prohibits them from competing with the Company while they are employees of the Company and within two years after their employment with the Company is terminated.

Our employees in China participate in a state pension arrangement organized by Chinese municipal and provincial governments. We are required to contribute to the arrangement at the rate of 20％ of the average monthly salary. In addition, we are required by Chinese law to cover employees in China with other types of social insurance. Our total contribution may amount to 30％ of the average monthly salary. We have purchased social insurance for all of our employees.