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 SUPPLY CHAIN POLICY

In the process of sourcing raw materials, the company recognizes that mining, trading, processing, and export of minerals in conflict-affected and high-risk areas may have major negative impacts, and recognizes that we have the obligation to respect human rights and not contribute to conflict. We promise to adopt and widely promote the following responsible mineral procurement policies for conflict-affected and high-risk areas, and incorporate them into contracts and/or agreements signed with transaction parties (suppliers). This policy provides a basic reference for the whole process of the mineral resources supply chain, conflict-sensitive procurement activities, and the risk awareness of transaction parties (suppliers). We are committed to abide by the relevant UN sanctions and resolutions, abide by the domestic laws that apply and implement such resolutions, and promise not to participate in any behavior that will help or facilitate conflicts.

To this end, we are committed to identifying and avoiding the following risks in our business activities:

A、Serious violations of human rights, we neither tolerate nor in any way benefit, facilitate, assist or facilitate the implementation of any party:

1. Any form of torture, cruel, inhuman and degrading treatment;

2. Any form of forced or compulsory labor. Forced or compulsory labor refers to any labor or service that is squeezed out of any individual under the threat of punishment and is not provided voluntarily by that person;

3. The worst forms of child labor;

4. Other serious violations and violations of human rights, such as widespread sexual violence;

5. War crimes or other serious violations of international humanitarian law, crimes against humanity or genocide.

Risk management: If we have reasonable grounds to believe that the upstream transaction party (supplier) has purchased or is associated with any of the above-mentioned serious human rights violations, we will immediately suspend or interrupt the cooperation with the transaction party (supplier).

B、It is forbidden to provide direct or indirect support to armed groups.

Providing "direct or indirect support" to non-state organized armed groups through the mining, transportation, trading, processing or export of mineral resources includes, but is not limited to, the purchase and payment of minerals from non-state organized armed groups or their affiliates , Or provide logistics support or equipment in other ways. These armed groups or related parties:

1. Controlling mine sites, or otherwise controlling transportation routes, mineral resource trading points, and upstream actors in the supply chain;

2. Illegal taxation or extortion of money or mineral resources at the entrance of the mine site, along the transportation route or at the mineral resource transaction point;

3. Illegal taxation or extortion of middlemen, export companies, or international traders.

Risk management: If we have reason to believe that the upstream transaction party (transaction party (supplier)) purchases from or has a relationship with any party that provides direct or indirect support to non-state armed groups as defined in the third paragraph, we will Immediately suspend or interrupt the cooperation with the transaction party (transaction party (supplier)).

C、 Regarding public or private security forces:

We will stop illegally controlling mine sites, transportation routes, and upstream participants in the supply chain, illegally levying taxes or asking for money or mineral resources at the entrance to the mine site, along the transportation route, or at the mineral resource transaction point, or from middlemen, export companies or international Public or private security forces that illegally levy taxes or extortion by traders provide direct or indirect support.

 We recognize that the role of public or private security forces along the mine site and/or its surrounding areas and/or transportation roads is only to maintain the rule of law, including protecting human rights, protecting the safety of miners, equipment and facilities, and protecting mine sites or transportation routes to ensure Legal mining and trade are not affected and disturbed.

When we or any company in our supply chain has signed a contract with public or private security forces, we promise or will stipulate that in the process of cooperating with these security forces, the voluntary principles of safety and human rights will be accepted. In particular, we will support or take measures to apply screening policies to ensure that individuals or security armed units who are known to have committed serious human rights violations are not hired.

We will support or take measures to cooperate with local governments, international organizations and civil society organizations. The mineral resources in the supply chain are mined through small workshops or small-scale mining methods to avoid or minimize the presence of public or private security forces. The negative impact of mining sites on disadvantaged groups, especially the negative impact on small workshop miners.

Risk Management: 

If we find that such risks exist to a certain extent, we will immediately formulate, adopt and implement risk management plans for upstream counterparties (transaction parties (suppliers)) and other stakeholders based on the company’s specific position in the supply chain. As a result, the risk of providing direct or indirect support to public or private security forces is contained or reduced. If the risk management plan does not work for six months, we will temporarily suspend or discontinue cooperation with upstream counterparties (transaction parties (suppliers)). We find that there may be behaviors that violate the above content to a certain extent, and we will take the same countermeasures.

D、Regarding bribery and fraudulent misrepresentation, corruption, money laundering and payment to the government in the origin of minerals

We do not provide, promise, give or solicit any bribes, and resist the temptation of corruption. We will not falsely report the taxes paid to the government for mining, trading, processing, transportation, export and other activities of mineral resources in order to cover up or falsify the origin of mineral resources Bribes for fees and concession fees. We prohibit bribery in all business activities and transactions, including bribery by agents and other third parties, and establish standards and approval procedures for gifts and receiving gifts. If we have reason to believe that there are mineral resources obtained by mining, trading, processing, transporting or exporting at the entrance of the mine site, along the transportation route, or at the place where the upstream transaction party (supplier) conducts illegal taxation or blackmail. We will support or take measures to contribute to the effective elimination of money laundering behaviors caused by or related to money laundering risks. We are committed to taking effective measures to prevent involvement in money laundering or terrorist financing.

We will ensure that all legal taxes, fees and royalties related to the mining, trading, and export of mineral resources in conflict-affected and high-risk areas are paid to the government, and we are committed to disclose such payments based on the company's position in the supply chain. Risk reduction: According to the company’s specific position in the supply chain, we promise to cooperate with transaction parties (suppliers), central or local governments, international organizations, civil society, and affected third parties as appropriate. The purpose of taking measurable measures within a time span to prevent or reduce the risk of adverse effects, to improve or track performance. If the risk reduction measures do not work, we will temporarily suspend or suspend cooperation with upstream transaction parties (suppliers).

E、Land rights, emissions and small workshops

We do not participate in, do not tolerate, and do not benefit from the exploitation of resources on land without the consent of the locals and indigenous people, including those who hold legal ownership, lease rights, concessions or licenses. We also do not participate in, do not tolerate, or benefit from the unrespected and protected cultural and heritage of locals and indigenous peoples, or the exploitation of local traditional culture. We do not participate in, do not tolerate, and do not benefit from the exploitation of resources on land that has illegally obtained legal ownership, lease rights, concessions or permits, or violates domestic laws. We ensure that we avoid causing significant damage to the surrounding soil, air and water conditions. Pollution, a serious violation of relevant local laws and regulations, including the manufacture, trading, and use of chemicals and hazardous substances that are subject to international bans due to high toxicity to organisms, environmental persistence, or potential irreversible ecological effects.

We agree to ensure compliance with applicable laws and regulations regarding the management of chemicals and toxic substances. Avoid manufacturing, trading, and using chemicals and hazardous substances that are subject to international bans due to high toxicity to organisms, environmental persistence, or potential irreversible ecological effects. We will pay close attention to the possible risks of small workshops and small-scale miners, including the existence of forced labor, the use of child labor, unsafe working conditions, the use of uncontrolled chemicals and other major environmental risks. Risk reduction: If we have reasonable grounds to believe that such risks exist, we will immediately formulate, adopt and implement risk management plans with counterparties (suppliers) and other stakeholders based on the company’s position in the supply chain. In order to prevent or reduce such as infringement of land rights, causing major adverse environmental impacts, or other risks associated with small workshops and small-scale miners.

F、Transportation We will strictly abide by the international transportation standards for 7 types of substances, and we will ensure that the handling, storage and transportation of hazardous materials comply with the requirements of relevant laws and regulations. We guarantee that there will be no leakage during transportation and production, thereby preventing adverse effects on the environment and humans. Risk reduction: Strictly distinguish 7 types of goods and non-7 types of goods in accordance with international standards. If it is 7 types of goods, we will package, transport, and declare according to such substances to ensure that there is no leakage and no harm to humans and the environment.

G、Contact information of responsible minerals supply chain representation: the relevant parties received in the work regarding the responsible minerals supply chain

Information on concerns related to mining, trade, processing and export situations.

Contact: Huang Yan Complaint Telephone: 0795-3259660 

Email: jxthxc@sina.com

Huang Yan reports to the general manager as soon as she receives the complaint. After the report is completed, she investigates and feedbacks the complaint, and continues to track the investigation results and follow-up whether they happen again.