China BlueChem Expands Business to Phosphate Fertilizer     

On December 12th, 2008 China BlueChemical Ltd. (China BlueChem, HK code: 3983), a leading nitrogenous fertilizer producer in China, announced it plans to acquire a 83.17% interest in Hubei Dayukou Chemical Co., Ltd. (DYK Chemical) and a 100% interest in ZHJ Mining Co., Ltd. (ZHJ Mining) from China National Offshore Oil Corporation (CNOOC), its parent company. The deals are valued at RMB1.26 billion, financed by its internal budget.
   Upon completion of the acquisitions, China BlueChem will expand its businesses from nitrogenous fertilizer to a wide field of phosphate fertilizer production.
    DYK Chemical focuses on phosphate mining and processing, and sale and production of mono-ammonium phosphate (MAP) and di-ammonium phosphate (DAP) fertilizers. The situ quantity resources of Hubei Province Dayukou Phosphate Mine (Dayukou Mine) which is owned by DYK Chemical have been estimated as 124 016 thousand tons at an average grade of 19.6% P2O5. The mining production of Dayukou Mine in 2007 was 882 thousand tons. The total designed production capacity of MAP and DAP in DYK Chemical is 500 thousand t/a, and the actual total production reached the designed production capacity in 2007.
   ZHJ Mining's main business is phosphate mining and sale. It possesses Hubei Province Wangji Phosphate Mine (Wangji Mine) of which the situ quantity resources have been estimated as 35 697 thousand tons at an average grade of 21.57% P2O5. The mining volume of ZHJ Mining in 2007 was 570.4 thousand tons.
   According to Mr. Yang Yexin, CEO and President of China BlueChem, this acquisition will mark an important milestone in the company's execution of its strategic development objectives. The fertilizer business will be extended to phosphate fertilizer field from the production and sale of nitrogenous fertilizer and this will be conducive to enhancing the company's position in the fertilizer industry in China. More importantly, through this acquisition the company will further enlarge its phosphate resources and acquire the know-how and expertise in the mining and exploiting of low-medium phosphate resources, which will help to lay a solid foundation for the company to develop its phosphate fertilizer and phosphoric chemical business.
   The acquisition is subject to approval of the State-owned Assets Supervision and Administration Commission of the State Council and relating regulators.