AI ENERGY ENG (01751): Enters into a coal transportation framework agreement and supporting joint venture agreement, committed to applying green electricity to logistics and transportation

AI ENERGY ENG (01751) announces that its indirectly wholly-owned subsidiary Mongolia AI ENERGY ENG Co., Ltd. (Mongolia AI ENERGY ENG) has recently entered into a Goods Transportation Framework Agreement with Qianlima Coal Mine Co., Ltd. (Qianlima Coal Mine). Concurrently, Mongolia AI ENERGY ENG has entered into an Electric Heavy Truck Transportation Project Joint Venture Agreement with Hainan Yiliqi Co., Ltd. (Hainan Yiliqi) as a supporting arrangement to the transportation framework agreement. Pursuant to the transportation framework agreement, Mongolia AI ENERGY ENG will provide electric heavy truck coal transportation services to the Qianlima open-pit coal mine, and the actual transportation business is intended to be undertaken by a Mongolian joint venture company to be established under the joint venture agreement. The key arrangements are as follows: Cooperation term and transportation scope: The cooperation term is 20 years. The transportation route is from the Qianlima open-pit coal mine area to the designated cargo yard at Zamyn-Uud, with a transport distance of approximately 380 kilometers. The cargo transported is primarily washed clean coal. Capacity target: Phase I plans to establish an annual coal outbound transportation capacity of 1 million tonnes, with the target of completing construction and reaching full capacity within six months from the date of establishment of the joint venture company and the formal effectiveness of the agreement. Transportation arrangements: Provided that the joint venture company has the corresponding transportation capacity, during the cooperation period, coal outbound transportation from the mine area to Zamyn-Uud shall be preferentially entrusted to the joint venture company. Without the written consent of the carrier, the shipper may not entrust such segment of transportation to any third party. Freight rate and settlement: During the project investment payback period, the freight rate is RMB 160 per tonne, and after investment payback it will be adjusted to RMB 120 per tonne, both being tax-inclusive prices. No adjustment will be made when market freight rate fluctuations are within plus or minus 20%; if such range is exceeded or major changes occur in tax, port, and road policies, the parties may negotiate an adjustment to the freight rate. Freight charges shall be settled monthly based on actual transportation volume. Mongolia AI ENERGY ENG and Hainan Yiliqi, the holder of the mining rights of the Qianlima Coal Mine, intend to jointly establish a joint venture company and make capital contributions synchronously in proportion to their equity interests, for investment in the Phase I project including the procurement of electric heavy trucks, battery charging and swapping stations, and supporting engineering. The board of directors of the joint venture company shall have three directors, two of whom shall be appointed by the Group; the general manager shall be appointed by the Group, and the supervisor and chief financial officer shall be appointed by the mine owner. Net profit shall be distributed in proportion to paid-in capital contributions. The joint venture company intends to build battery charging and swapping facilities according to the fleet's operational needs, and to give priority to using clean energy sources such as local wind power in Mongolia and CECEP Solar Energy as its power source. The construction scale, investment amount, and construction timetable of the relevant battery charging and swapping facilities and wind-solar microgrid remain subject to further deliberation by the board of directors of the joint venture company and shall be subject to formal implementation documents. The Board believes that the above cooperation will help the Group expand mining transportation services in Mongolia, and by combining electric heavy truck operations with the construction of supporting energy facilities, newly build wind-solar-storage-charging stations, establish a green electricity microgrid, apply green electricity to logistics and transportation, and cultivate potential business growth points for the Group. In addition, based on the progress of the project, the Group plans to explore opportunities to carry out electric heavy truck transportation, battery charging and swapping, and related operational services in other mining areas in Mongolia, and to study the expansion of open-pit mine stripping and extraction, new energy power supply for mining areas, and related engineering services. The above business expansion shall be subject to the actual progress of the project and market conditions.