Ann: Update Progress at Bloodwood Creek & Inner Mongolia, page-15

Hi guys. I think the problem stems from the parent company (Zhengzhou Coal Industry Group) which appears to be undergoing internal restructuring and debt consolidation. As you may be aware the Chairman Mr Meng Zhongze was arrested on 21 Dec, 2013 and resigned. You can google it, but here's a couple

http://in.mobile.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idINL3N0K21GB20131223
http://www.dgxljt.com/en/news_view.asp?id=369

According to reports their profit dropped 90% for 2013 and did no pay a DIV. They have been refinancing etc
http://in.reuters.com/finance/stocks/600121.SS/key-developments/article/2958763

If they wanted to renege or retrench the project I think it may have been done by now. I think we are just one of the projects on the expenditure go slow lane for the present.

Even though I have often been pissed at the Qld Gov. for their performances regarding UCG, in the long run I think they may have done UCG in general a favour. With the final processes completed, the A-Z of UCG has been basically and independently scrutinized, picked apart, put back together and able to be presented by Carbon Energy to any prospective client. More importantly to any Government Environmental Department. The final green light by Qld should be more than enough to address environmental concerns for UCG projects that pick suitable sites.

China Gov. has been interested in UCG for many years and as we know many companies from the UK, Australia and Canada have been vying for a start there. IMO what is encouraging for us is that CNX was the one to actually get the start through the largely State owned Zhengzhou Coal Group. Should we get the chance to continue to succeed then the end result of course should be an absolute game changer. Coal prices may be depressed, but Gas is not, Syngas certainly has bright possibilities in Coal rich China.

Unfortunately there are a lot of things we don't know and are not privy to regarding Zhengzhou CIG, so the reality is we will just have to wait until the JV PCM is employed and signs off on the payments to further advance. The fault is not on CNX end which is important as regards the Company and it's future projects.

On a side note for Shanzii Province, more and more officials continue to bite the dust.
http://www.scmp.com/news/china/article/1501228/more-shanxi-officials-investigated-corruption
http://www.bloomberg.com/news/2014-...de-to-ex-president-hu-jintao-probed-scmp.html

The Communist Party’s Central Commission for Discipline Inspection must be one of the busiest departments in China.