china: metals & mining:...

November 12, 2012

China: Metals & Mining: Coal

Equity Research

Coal Weekly: High inventories cause slide in thermal prices

Qinhuangdao prices down; metallurgicals rebound further

Last week the Bohai Rim price index held at Rmb643, port prices fell further,

thermal prices in producing regions were stable and rebounded in some areas. Qinhuangdao 5500/5000Kcal/kg thermal fell Rmb5-10/t to Rmb635/550 per ton.

Jingtang port 5500/5000Kcal/kg thermal fell Rmb10/t to Rmb645/560/t. Thermal

was flat in producing regions, rebounded in others: Anhui Huainan gas mixed

coal rose Rmb30/t and thermal rose Rmb10-30/t in Huangling, Hancheng and

Tongchuan, Shaanxi. Metallurgicals and anthracite prices rose higher. Metallurgical coal prices rose Rmb20-50 in various Shanxi regions; rose Rmb30-

35/t in Tangshan and Kailuan, Hebei; and rose Rmb60-95/t in Huainan and

Huaibei, Anhui. Anthracite prices rose Rmb10-70/t in various parts of Guizhou. Newcastle 6,000 Kcal/ kg thermal coal gained 0.5% to US$80.30/t, Rmb53/t

less than Guangzhou CIF coal. Queensland hard coking coal edged up 0.6% to

US$155.20/t, Rmb91/t less than domestic coking coal.

Qinhuangdao inventories up; some downstream prices rose

As of Nov. 9, inventories at Qinhuangdao rose 13% wow to 6.21 mn tons. As of

Oct. 19, coal inventories at key power plants were 93.75 mn tons (31 days). Qinhuangdao to Guangzhou/Shanghai slid a further 1.7%/2.7%. Rail deliveries to

Qinhuangdao rose 4.2% wow to 4.62 mn tons. Some downstream prices rose

further. Steel inventories edged down while prices diverged (steel inventory fell

2%, rebar prices held at Rmb3,852/t). As of Nov. 9, cement prices in key Chinese

cities held steady. Urea and methanol prices fell 1% to Rmb2,011/2544 per ton.

As of Oct. 31, daily crude steel production was 1.93 mn tons, up mom from Sept.

As of Nov. 9, cokes that we follow rebounded Rmb50/t in Jiexiu; Rmb80/t in

Linfen; and Rmb100/t in Taiyuan.

Investment view: High inventories cause thermal prices to slide

Port inventories rose 10% or more & shipping rates have declined for a month.

Throughput at Qinhuangdao port declined 12.8% wow. High inventories at

power plants limit any rebound. We remain cautious on thermal prices. Coking

coal prices have made gains and the rebound in foreign prices show trough

pricing. We prefer coking coal more now that steel production rose in October.

3Q12 earnings for coal firms were below expectations. Looking forward, industry

profitability could further decline in 2013 and the industry valuation remains

unattractive. Stock recommendations: Look for firms with strong organic and

earnings growth (Lanhua Sci-Tech, Lu'an, Jizhong). Stocks with relative risk:

Datong, Pingzhuang, Yuanxing due to rising cost pressures.

12-MONTH TARGET PRICES AND RATINGS

* Indicates the stock is on our Regional Conviction List.

Current (target) prices are in local currency and as of market

close of November 9, 2012. Yitai in US $.

We use EV/GCI vs. CROCI/WACC (Director’s Cut) to derive

our 12-month target prices. Key risks: Downside risks:

further unfolding of risks from European debt concerns;

weaker coal demand as a result of slower FAI growth in

China. Upside risks: Better-than-expected stimulus policies

drive demand for coal.

Source: DataStream, Gao Hua Securities Research estimates.

LATEST REPORTS

China: Metals & Mining: Prices have bottomed but 3Q earnings

risk; Pingzhuang to Neutral, September 25, 2012

China: Metals & Mining: Prices below expectations on multiple

issues; wait for better entry points, July 6, 2012

China: Metals & Mining: Demand still weak; sector risk/reward

less attractive; Datong to Sell, May 17, 2012

China: Metals & Mining: Coal sector supports visible, but

previous valuation highs unlikely, March 14, 2012

China: Metals & Mining: 2012 Outlook: Identifying opportunities

amid macro and policy risk, December 22, 2011

China: Metals & Mining: Anthracite stands out in economic

slowdown; initiate Lanhua at Buy, December 22, 2011

Yong Han, CFA +86(21)2401-8948 [email protected] Beijing Gao Hua Securities Company Limited Goldman Sachs does and seeks to do business with

companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to www.gs.com/research/hedge.html. Analysts employed by non-US affiliates are not registered/qualified as research analysts with FINRA in the U.S.

Jefferson Zhang +86(21)2401-8945 [email protected] Beijing Gao Hua Securities Company Limited

The Goldman Sachs Group, Inc. Global Investment Research

Ticker 9-Nov % Up/downJizhong 000937.SZ Buy* 18.45 11.6 59.0%Lu'an 601699.SS Buy 24.14 17.1 41.3%SCIE 600546.SS Buy 23.29 18.0 29.2%Lanhua 600123.SS Buy 23.00 18.7 23.2%Yitai (B) 900948.SS Buy 6.59 5.5 19.9%Yitai (H) 3948.HK Buy 51.40 42.7 20.4%Pingzhuang 000780.SZ Neutral 10.88 9.7 12.4%Panjiang 600395.SS Neutral 16.84 14.7 14.7%SDIC Xinji 601918.SS Neutral 11.75 9.3 26.4%Yangquan 600348.SS Neutral 15.11 13.6 11.0%Haohua 601101.SS Neutral 13.43 12.4 8.4%Kailuan 600997.SS Neutral 9.05 9.5 -4.3%Shenhuo 000933.SZ Neutral 7.33 7.5 -1.8%Xishan 000983.SZ Neutral 13.40 12.3 8.8%Pingdingshan 601666.SS Neutral 8.37 8.1 2.9%Huolinhe 002128.SZ Neutral 12.70 12.9 -1.6%Yuanxing 000683.SZ Sell 4.15 4.9 -14.7%Datong 601001.SS Sell 7.28 9.1 -19.9%

Rating 12M TP Price

November 12, 2012 China: Metals & Mining: Coal

Goldman Sachs Global Investment Research 2

The author wishes to thank Rory Wang for her contribution to this report.

Exhibit 1: Summary of coal price performance and coal-related data

Source: SXCoal, Gao Hua Securities Research.

Category Unit LatestPrevious

week%

Previous month

%Beginning of

the year% Coal producers

Coal Prices at domestic portsThermal Coal Prices at QHD port Datong quality mix FOB (5800Kcal/Kg) Rmb/t 685 690 -0.7% 700 -2% 855 -20% Shanxi quality mix FOB (5500Kcal/Kg) Rmb/t 635 640 -0.8% 645 -2% 800 -21% Shanxi mix FOB (4000Kcal/Kg) Rmb/t 550 560 -1.8% 560 -2% 695 -21%

Coal Prices in coal producing areasThermal Coal Thermal coal price in Datong (6000Kcal/kg) Rmb/t 590 590 0.0% 580 2% 725 -19% Datong coal Thermal coal price in Datong (5500kcal/kg) Rmb/t 485 485 0.0% 465 4% 685 -29% Datong coal Thermal coal price in Yanzhou (6000Kcal/kg) Rmb/t 860 860 0.0% 810 6% 1200 -28% Yanzhou coal Thermal coal price in Yanzhou (5000Kcal/kg) Rmb/t 615 615 0.0% 560 10% 940 -35% Yanzhou coal Thermal coal price in Yulin (6000Kcal/kg) Rmb/t 620 620 0.0% 600 3% 610 2% Thermal coal price in Yulin (5500Kcal/kg) Rmb/t 440 440 0.0% 420 5% 490 -10% Thermal coal price in Shenmu (6000Kcal/kg) Rmb/t 475 475 0.0% 465 2% 690 -31% Yangquan coal Thermal coal price in Binxian (5500Kcal/kg) Rmb/t 435 435 0.0% 425 2% 690 -37% Yangquan coalCoking Coal 8# coking coal price in Gujiao Rmb/t 1120 1120 0.0% 1120 0% 1440 -22% Xishan coal 2# coking coal price in Gujiao Rmb/t 1250 1250 0.0% 1250 0% 1600 -22% Xishan coal 4# coking coal price in Liulin Rmb/t 1200 1200 0.0% 1150 4% 1670 -28% Shougang resources 9# coking coal price in Liulin Rmb/t 1060 1060 0.0% 1050 1% 1550 -32% Shougang resources 1/3 coking coal price in Kailuan Rmb/t 1155 1125 2.7% 1105 5% 1515 -24% Kailuan energy Coking coal price in Liupanshui Rmb/t 1260 1260 0.0% 1260 0% 1720 -27% Panjiang coal 1/3 coking coal price in Xingtai Rmb/t 1070 1070 0.0% 1070 0% 1430 -25% Jizhong energyAnthracite Coal Anthracite slack coal price in Yangquan Rmb/t 700 700 0.0% 700 0% 850 -18% Yangquan coal Anthracite blocks price in Yangquan Rmb/t 1180 1180 0.0% 1180 0% 1330 -11% Yangquan coal Anthracite small blocks price in Yangquan Rmb/t 1100 1100 0.0% 1100 0% 1250 -12% Yangquan coal Anthracite slack coal price in Jincheng Rmb/t 710 710 0.0% 710 0% 880 -19% Jincheng coal Anthracite blocks price in Jincheng Rmb/t 1230 1230 0.0% 1230 0% 1430 -14% Jincheng coal Anthracite small blocks price in Jincheng Rmb/t 1150 1150 0.0% 1150 0% 1350 -15% Jincheng coal Anthracite slack coal price in Yongcheng Rmb/t 710 710 0.0% 710 0% 820 -13% Yongcheng coal Anthracite blocks price in Yongcheng Rmb/t 1295 1295 0.0% 1295 0% 1540 -16% Yongcheng coal Anthracite clean coal price in Yongcheng Rmb/t 900 900 0.0% 900 0% 1280 -30% Yongcheng coalPCI Coal PCI coal price in Yangquan Rmb/t 895 875 2% 855 5% 1170 -24% Yangquan coal PCI coal price in Changzhi Rmb/t 895 865 3.5% 835 7% 1170 -24% Lu'an energy

International coal prices Australia Newcastle FOB steam coal USD/t 80.3 79.9 0.5% 80.6 0% 115.5 -30% 2012/11/09 Queensland hard coking coal port price USD/t 155.2 154.2 0.6% 144 7% 227.0 -32% 2012/11/09

Coal Inventory Inventory at QHD port mt 6.2 5 13.0% 5 13% 6 -4% 2012/11/09 Inventory in power plants mt 94 n.a n.a 93 1% 80 17% 2012/10/19

Sea Freight of CoalChina domestic freight Qinhuangdao-Guangzhou Rmb/t 34.7 35.3 -1.7% 37 -7% 40 -12% 2012/11/09 Qinhuangdao-Shanghai Rmb/t 25.7 26.4 -2.7% 28 -8% 31 -16% 2012/11/09International freight (Newcastle-Huangpu port) Panamax 63000 dwt USD/t 15.5 15.7 -1.3% 15 3% 19 -20% 2012/11/02 Panamax 74000 dwt USD/t 13.5 13.7 -1.5% 13 4% 17 -20% 2012/11/02

Rail deliveries & Throughput at port Rail deliveries to Qinhuangdao port mt 4.6 4.4 4.2% 4 14% 4.9 -6% 2012/11/09 Throughput at Qinhuangdao port mt 4 4 -12.8% 5 -15% 5.2 -25% 2012/11/09

Summary of coal price performance and coal related data



Exhibit 2: Qinhuangdao coal prices (VAT included) fell

again last week

Exhibit 3: Thermal coal prices in Shanxi’s Datong region

were stable last week



Exhibit 4: Coking coal prices in Shanxi’s Liulin region

remained stable last week

Exhibit 5: Coking coal prices in Xingtai and Hebei held

steady last week



Exhibit 6: PCI prices in Changzhi city (Lu’an) rose last

week

Exhibit 7: Anthracite coal prices in Yangquan city were

flat last week



400

500

600

700

800

900

1000

Jul‐09 Mar‐10 Nov‐10 Jul‐11 Mar‐12 Nov‐12

Rmb/t Datong quality mix 5800kcal/kgShanxi quality mix 5500kcal/kgShanxi quality mix 5000kcal/kg

200

400

600

800

1000

Nov‐09 May‐10 Nov‐10 May‐11 Nov‐11 May‐12 Nov‐12

Rmb/tDatong thermal 6000kcal/kg

South Datong thermal 5500kcal/kg

800

1000

1200

1400

1600

1800

2000


Rmb/t Liulin 4# coking coal

Liulin 9# coking coal

800

1000

1200

1400

1600

1800


Rmb/tXingtai 1/3 coking coal Xingtai coking coal

600

800

1000

1200

1400


Rmb/t PCI coal in Lucheng, Changzhi

Changzhi PCI 6000‐6300kcal/kg

300

600

900

1200

1500

Nov‐08 Jul‐09 Mar‐10 Nov‐10 Jul‐11 Mar‐12 Nov‐12

Rmb/t Yangquan anthracite slack coal

Yangquan anthracite blocks

Yangquan anthracite small blocks



Exhibit 8: Australia Newcastle BJ thermal coal prices

rebounded slightly last week

Exhibit 9: Queensland hard coking coal spot prices edged

up last week


Source: McCloskey, Gao Hua Securities Research.

Exhibit 10: Freight rates from Newcastle to Huangpu port

diverged as of November 2, 2012

Exhibit 11: Domestic seaborne freight rates fell further

last week



Exhibit 12: Coal inventory in Qinhuangdao rose rapidly

Exhibit 13: Coal inventories at major power producers

rose sharply as of October 19, 2012



40

60

80

100

120

140

160


USD/tAustralia Newcastle thermal coal 6000kcal/kg

50

100

150

200

250

300

350

400


USD/t HCC contract price in Queensland

HCC spot price in Queensland

5

10

15

20

25

30

Oct‐11 Dec‐11 Feb‐12 Apr‐12 Jun‐12 Aug‐12 Oct‐12

USD/t Handymax 52000 dwt Panamax 63000 dwt

Panamax 74000 dwt

0

20

40

60

80

100

120


Rmb/t Qinghuangdao‐Guangzhou freight

0

2

4

6

8

10


mt Total inventoryDomestic tradeForeign trade

0

5

10

15

20

25

30

35

0

20

40

60

80

100

Oct‐08 Jun‐09 Feb‐10 Oct‐10 Jun‐11 Feb‐12 Oct‐12

daysmt Coal inventory in major power plants

Inventory days (RHS)



Exhibit 14: Daqin Railway’s daily coal throughput

improved somewhat in September yoy Exhibit 15: Price differentials between domestic and

imported coal decreased somewhat last week



Exhibit 16: China’s daily raw coal production rose

somewhat in September

Exhibit 17: China’s daily coal throughput by rail rose

mom in September



Exhibit 18: Correlation between oil, US dollar, and coal

Exhibit 19: Steel inventories in key cities declined

somewhat last week

Source: Bloomberg, globalCOAL, Gao Hua Securities Research.

Source: My Steel, Gao Hua Securities Research.

‐40%

‐20%

0%

20%

40%

60%

80%

6

7

8

9

10

11

12

Jan‐10 Sep‐10 May‐11 Jan‐12 Sep‐12

mtDaily average raw coal production

yoy

‐150

‐50

50

150

250

350

500

700

900

1100

1300

Oct‐10 Feb‐11 Jun‐11 Oct‐11 Feb‐12 Jun‐12 Oct‐12

Rmb/tRmb/t Price difference (RHS)

Domestic thermal CIF

Newcastle thermal CIF

‐40%

‐20%

0%

20%

40%

60%

80%

6

7

8

9

10

11

12


mtDaily average raw coal production

yoy

‐30%

‐20%

‐10%

0%

10%

20%

30%

40%

3.0

3.5

4.0

4.5

5.0


mtNational railway daily average coal throughput

yoy %

50

60

70

80

90

100

20

40

60

80

100

120

140

160


WTI oil price (USD/bbl)Newcastle thermal coal price (USD/t)USD index (RHS)

1

2

3

4

5

6

7

8

9


mtRebar HR coil CR sheet



Exhibit 20: Price and inventory of major coal downstream products

Source: SXCoal, My Steel, Chemsino, Digital Cement, Gao Hua Securities Research.

Exhibit 21: Crude steel production in China increased in

Oct

Exhibit 22: Steel prices diverged in key Chinese cities


Source: My Steel, Gao Hua Securities Research.

Exhibit 23: China’s daily power generation continued to

decline in September yoy

Exhibit 24: Daily coal consumption fell sharply at major

power plants in October



Category Unit LatestPrevious

week%

Previous month

%Beginning of

the year% Data as of

Prices of downstream productsCoke First-grade metallurgical coke price at Tianjin Port Rmb/t 1670 1580 5.7% 1450 15% 2100 -20% 2012/11/09 Second-grade metallurgical coke price in Tangshan Rmb/t 1460 1400 4.3% 1240 18% 1900 -23% 2012/11/09 Second-grade metallurgical coke price in Taiyuan Rmb/t 1450 1300 11.5% 1200 21% 1910 -24% 2012/11/09Steel HR coil price Rmb/t 3991 3905 2.2% 3864 3% 4354 -8% 2012/11/09 CR sheet price Rmb/t 4540 4517 0.5% 4518 0% 5147 -12% 2012/11/09 Rebar price Rmb/t 3852 3853 0.0% 3879 -1% 4322 -11% 2012/11/09Cement Cement price in North China Rmb/t 316 316 0.0% 316 0% 368 -14% 2012/11/09 Cement price in East China Rmb/t 359 363 -1.2% 325 10% 415 -14% 2012/11/09 Cement price in South China Rmb/t 362 362 0.0% 342 6% 406 -11% 2012/11/09Chemicals China domestic urea price Rmb/t 2011 2032 -1.0% 2048 -2% 2168 -7% 2012/11/09 China domestic methanol price Rmb/t 2544 2573 -1.1% 2562 -1% 2571 -1% 2012/11/09

Steel inventory CR sheet mt 2 2 -1.0% 2 -1% 1 7% 2012/11/09 Rebar mt 5 5 -0.7% 5 -8% 5 1% 2012/11/09

Prices and inventory of coal downstream products

1.0

1.2

1.4

1.6

1.8

2.0

2.2

Oct‐10 Apr‐11 Oct‐11 Apr‐12 Oct‐12

Mt China's crude steel production

2000

2500

3000

3500

4000

4500

5000

5500

6000

6500


Rmb/tRebar HR coil CR sheet

‐20%

0%

20%

40%

60%

5

6

7

8

9

10

11

12


GWHDaily average of power generation

yoy

0

1

2

3

4

5


mtCoal consumption of major power

plants



Exhibit 25: China’s daily ammonia production continued

to rise yoy in September

Exhibit 26: Urea and methanol prices slipped last week


Source: Chemsino, Gao Hua Securities Research.

Exhibit 27: China’s daily cement production continued to

rise yoy in September

Exhibit 28: Cement prices were stable in eastern and

southern China


Source: Digital Cement, Gao Hua Securities Research.

Exhibit 29: China’s daily coke production decline yoy in

September

Exhibit 30: Key metallurgical coke prices rebounded

further across the board last week

Source: SXCoal, Gao Hua Securities Research


‐20%

‐15%

‐10%

‐5%

0%

5%

10%

15%

20%

0

30

60

90

120

150

180

May‐09 Jan‐10 Sep‐10 May‐11 Jan‐12 Sep‐12

'000 tChina's daily average ammonia production

yoy

1000

1500

2000

2500

3000

3500

4000


Price

Urea price Methanol price

‐20%

0%

20%

40%

60%

0

10

20

30

40

50

60

70

80

May‐09 Jan‐10 Sep‐10 May‐11 Jan‐12 Sep‐12

'000 tChina's daily average cement production

yoy

200

300

400

500

600


Rmb/t East China Northeast region

North China South China

Southwest region

‐40%

‐20%

0%

20%

40%

60%

80%

0.5

0.7

0.9

1.1

1.3

1.5

May‐09 Mar‐10 Jan‐11 Nov‐11 Sep‐12

mt China's coke production yoy

500

1000

1500

2000

2500


Rmb/t Second‐grade metallurgical coke in Tangshan

Second‐grade metallurgical coke in Xingtai

Second‐grade metallurgical coke in Pingdingshan



Exhibit 31: Valuation and price performance of major A-/H-share-listed coal stocks

*Not covered by GS/GH - EPS estimates based on Bloomberg consensus

Source: Bloomberg, Goldman Sachs Research estimates, Gao Hua Securities Research estimates.

9-Nov-12 Mkt cap

Ticker Price Currency Mn US$ 2012E 2013E 1W 1M 3M YTDA/B Share

Shenhua (A) 601088.SS 22.67 CNY 72,203 9.9 10.2 -2.8% -0.7% 1.0% -10.3%

Yanzhou (A) 600188.SS 17.79 CNY 14,011 12.3 15.0 -4.5% -7.5% -8.4% -21.8%

China Coal (A) 601898.SS 6.97 CNY 14,798 11.4 13.2 -4.3% -3.6% -10.3% -23.0%

Lu'an Energy 601699.SS 17.09 CNY 6,297 13.3 13.5 -3.6% -6.1% -18.6% -18.8%

Jizhong Energy 000937.SZ 11.60 CNY 4,296 11.7 11.2 -5.3% -9.7% -20.9% -31.6%

Panjiang 600395.SS 14.68 CNY 3,890 16.0 14.2 -7.5% -15.9% -15.0% 7.1%

SCIE 600546.SS 18.03 CNY 2,862 14.2 10.3 -6.3% -10.1% -20.9% -26.3%

Xishan Coal 000983.SZ 12.31 CNY 6,212 16.8 17.8 -4.8% -7.6% -16.1% -15.5%

Yangquan Coal 600348.SS 13.61 CNY 5,241 15.0 16.2 -6.0% -7.4% -12.6% -10.4%

Datong Coal 601001.SS 9.08 CNY 2,433 39.1 53.5 -4.3% -5.7% -10.9% -25.6%

Kailuan Energy 600997.SS 9.45 CNY 1,868 17.2 19.9 -3.5% -8.0% -11.5% -15.0%

Pingdingshan Coal 601666.SS 8.14 CNY 3,079 15.9 17.7 -3.8% -4.6% -12.4% -22.9%

Huolinhe Coal 002128.SZ 12.90 CNY 2,740 12.1 13.0 -1.5% -0.8% -5.0% -3.0%

Pingzhuang Energy 000780.SZ 9.68 CNY 1,572 15.3 16.7 -6.1% -9.3% -4.8% -6.0%

Yuanxing Energy 000683.SZ 4.87 CNY 599 26.9 28.5 -4.9% -4.1% -14.4% -15.1%

Yitai Coal 900948.SS 5.50 USD 8,944 7.9 7.6 -0.1% 1.7% 0.1% 10.6%

Haohua Energy 601101.SS 12.39 CNY 2,381 12.5 13.6 -7.0% -7.0% -9.5% -14.6%

Lanhua Sci-Tech 600123.SS 18.67 CNY 3,415 10.9 10.3 -5.3% -5.5% -8.6% -4.2%

Shenhuo Coal 000933.SZ 7.47 CNY 2,273 3.4 10.2 -6.0% -9.7% -16.6% -19.0%

SDIC Xinji 601918.SS 9.29 CNY 2,753 12.0 10.6 -6.2% -19.0% -30.9% -17.2%

Dayou Energy* 600403.SS 17.21 CNY 3,265 10.4 9.2 -6.1% -13.0% -24.0% -30.4%

Yongtai Energy* 600157.SS 7.93 CNY 2,224 12.9 8.8 -9.2% -5.9% -14.1% 9.4%

Taiyuan Coal Gasification * 000968.SZ 12.48 CNY 1,018 24.5 17.3 -6.2% -7.6% -13.8% -12.4%

Hengyuan Coal* 600971.SS 12.90 CNY 2,047 12.8 12.1 -6.3% -5.8% -7.2% -2.5%

Average-A/B share coal companies 14.8 15.4 -5.1% -7.2% -12.7% -13.3%

Median-A/B share coal companies 12.9 13.4H Share

Shenhua (H) 1088.HK 31.80 HKD 81,597 11.0 11.3 6.7% 11.9% 17.2% -0.9%

China Coal (H) 1898.HK 7.64 HKD 13,068 9.9 11.4 2.3% 9.5% 10.6% -8.0%

Hidili 1393.HK 2.01 HKD 536 9.7 7.5 -2.1% 1.6% -9.1% -17.7%

Shougang Resources 0639.HK 2.79 HKD 1,926 8.2 9.1 6.3% 23.4% 25.2% -3.8%

Average-H share coal companies 9.0 9.4 2.8% 11.1% 10.8% -10.8%Median-H share coal companies 9.7 9.1

P/E (X) Stock price performance



Exhibit 32: Valuation summary for global coal companies under GS/GH coverage

*Indicates the stock is on our Regional Conviction List. Target prices of US coal stocks are based on a 6-month timeframe. PT Adaro EPS estimates are in USD. Coal India EPS estimates are for FY13E and FY14E (fiscal year ending March).

Source: DataStream, Goldman Sachs Research estimates, Gao Hua Securities Research estimates.

GS/GH 9-Nov-12

Ticker Rating Price Ccy 12M TP 2012E 2013E 2012E 2013E 2012E 2013E 2012E 2013E 2012E 2013E

China-A/B share

Shenhua (A) 601088.SS Buy 22.67 CNY 26.80 2.28 2.22 9.9 10.2 1.8 1.6 6.1 5.9 19% 17%

China Coal (A) 601898.SS Neutral 6.97 CNY 6.60 0.61 0.53 11.4 13.2 1.1 1.0 7.4 8.1 10% 8%

Jizhong Energy 000937.SZ Buy* 11.60 CNY 18.45 0.99 1.03 11.7 11.2 1.7 1.5 5.7 5.2 15% 14%

SCIE 600546.SS Buy 18.03 CNY 23.29 1.27 1.75 14.2 10.3 1.7 1.5 5.5 4.8 13% 16%

Lu'an Energy 601699.SS Buy 17.09 CNY 24.14 1.28 1.26 13.3 13.5 2.4 2.1 6.1 5.6 19% 16%

Lanhua Sci-Tech 600123.SS Buy 18.67 CNY 23.00 1.71 1.81 10.9 10.3 2.2 1.9 7.3 6.0 22% 20%

Yitai Coal (B) 900948.SS Buy 5.50 USD 6.59 4.35 4.49 7.9 7.6 2.0 1.7 5.2 4.9 32% 25%

Panjiang 600395.SS Neutral 14.68 CNY 16.84 0.92 1.03 16.0 14.2 3.2 2.9 9.3 8.1 21% 21%

SDIC Xinji 601918.SS Neutral 9.29 CNY 11.75 0.77 0.88 12.0 10.6 1.9 1.7 7.7 6.7 17% 17%

Pingzhuang Energy 000780.SZ Neutral 9.68 CNY 10.88 0.63 0.58 15.3 16.7 1.9 1.8 6.8 6.6 13% 11%

Xishan Coal 000983.SZ Neutral 12.31 CNY 13.40 0.73 0.69 16.8 17.8 2.5 2.2 5.7 5.7 16% 13%

Yangquan Coal 600348.SS Neutral 13.61 CNY 15.11 0.91 0.84 15.0 16.2 2.5 2.2 5.9 5.7 18% 15%

Huolinhe Coal 002128.SZ Neutral 12.90 CNY 12.70 1.06 0.99 12.1 13.0 3.1 2.8 9.1 9.2 28% 23%

Shenhuo Coal 000933.SZ Neutral 7.47 CNY 7.33 2.17 0.73 3.4 10.2 1.2 1.1 5.9 4.8 45% 11%

Pingdingshan Coal 601666.SS Neutral 8.14 CNY 8.37 0.51 0.46 15.9 17.7 1.7 1.6 4.5 4.5 11% 9%

Haohua Energy 601101.SS Neutral 12.39 CNY 13.43 0.99 0.91 12.5 13.6 2.1 2.0 7.7 8.2 18% 15%

Kailuan Energy 600997.SS Neutral 9.45 CNY 9.05 0.55 0.48 17.2 19.9 1.7 1.6 8.2 8.5 10% 8%

Yanzhou (A) 600188.SS Sell 17.79 CNY 13.10 1.45 1.18 12.3 15.0 1.8 1.7 10.6 9.1 16% 12%

Yuanxing Energy 000683.SZ Sell 4.87 CNY 4.15 0.18 0.17 26.9 28.5 1.5 1.5 8.9 8.7 6% 5%

Datong Coal 601001.SS Sell 9.08 CNY 7.28 0.23 0.17 39.1 53.5 1.5 1.5 5.8 6.1 4% 3%

Median-A/B share coal companies 12.9 13.6 1.9 1.7 6.5 0.3 16% 14%

HK-H share

Shenhua (H) 1088.HK Buy 31.80 HKD 38.00 2.85 2.82 11.0 11.3 2.0 1.8 6.8 6.5 19% 17%

Yitai Coal (H) 3948.HK Buy 42.70 HKD 51.40 5.34 5.58 7.9 7.7 2.0 1.8 5.2 4.9 32% 25%

China Coal (H) 1898.HK Neutral 7.64 HKD 7.80 0.76 0.67 9.9 11.4 0.9 0.9 6.7 7.4 10% 8%

Shougang Resources 0639.HK Neutral 2.79 HKD 2.39 0.34 0.31 8.2 9.1 0.8 0.7 3.4 3.3 9% 8%

Yanzhou (H) 1171.HK Sell 11.68 HKD 10.30 1.87 1.50 6.2 7.8 1.0 0.9 6.6 5.9 16% 12%

Hidili 1393.HK Sell 2.01 HKD 1.20 0.21 0.27 9.7 7.5 0.4 0.4 9.5 8.4 4% 5%

Median-H share coal companies 8.9 8.4 1.0 0.9 6.7 6.2 13% 10%

US

Consol Energy CNX Buy 32.95 USD 37.00 1.11 2.24 29.7 14.7 1.9 1.8 9.2 6.7 9% 13%

Peabody Energy BTU Neutral 26.17 USD 28.00 2.11 2.15 12.4 12.2 1.2 1.1 6.7 6.0 8% 9%

Alpha Natural Resources ANR Neutral 8.00 USD 9.00 (1.29) (1.29) 0.3 0.4 5.8 4.7 -37% -6%

Arch Coal ACI Sell 7.36 USD 5.00 (0.43) (0.14) 0.5 0.5 8.3 6.1 -13% -1%

Walter Energy WLT Sell 33.10 USD 27.00 1.13 2.82 29.4 11.7 1.9 1.7 9.0 5.8 -63% 15%

Median-US coal companies 29.4 12.2 1.2 1.1 8.3 6.0 -13% 9%

IndonesiaHarum Energy HRUM.JK Buy* 5,500 IDR 7,500 0.06 0.06 9.6 8.9 4.0 3.6 3.9 3.4 43% 42%

Banpu Public Company BANP.BK Buy 384 THB 530 42.65 48.67 9.0 7.9 1.2 1.1 6.0 5.7 14% 15%

PT Adaro Energy ADRO.JK Neutral 1,410 IDR 1,250 0.01 0.01 10.7 13.5 1.7 1.6 5.2 6.0 17% 12%

Bumi Resources BUMI.JK Neutral 650 IDR 750 0.01 0.01 7.0 6.5 1.9 1.5 4.9 5.0 -12% 26%

Tambang Batubara Bukit Asam PTBA.JK Sell 16,150 IDR 12,000 1,221.45 1,105.67 13.2 14.6 3.8 3.2 8.7 9.5 31% 24%

AustraliaRio Tinto plc RIO.L Neutral 3,099 GBP 3,400 4.68 5.39 10.5 9.1 1.6 1.4 6.7 5.9 17% 17%

IndiaCoal India Ltd. COAL.BO Neutral 346 INR 375 25.82 29.10 13.4 11.9 5.4 4.5 8.6 6.5 40% 37%

EV/EBITDA (X) ROEEPS P/E (X) P/B (X)



Exhibit 33: GS estimates on US and China macro indicators and global commodity prices

Source: National Bureau of Statistics of China, ABARE, GS Global ECS Research estimates.

Domestic coal prices forecast (Rmb/ t) 2007 2008 2009 2010 2011 2012E 2013E 2014EShanxi Quality Coal (5500lcal/kg) 466 725 600 745 819 710 689 689Coking coal prices of Xishan 1182 947 1166 1252 1189 1189 1225Commodities price forecast ($/ Mt) 2011 3Q12E 4Q12E 1Q13E 2Q13E 2012E 2013E 2014EHard coking coal (FOB QLD) 289 190 185 185 190 203 193 210Low-Vol PCI (FOB QLD) 223 143 145 145 150 147 153 155Semi-soft coking coal (FOB NSW) 214 107 110 115 120 121 123 130Thermal coal (FOB NSW) 121 86 95 100 105 97 105 105Oil prices forecast ($/ bbl) 2Q11 3Q11 4Q11 1Q12 2Q12 3m 6m 12mWTI Crude Oil 102.34 89.54 94.06 103.03 93.35 110 106 99.5Brent Crude Oil 116.99 112.09 109.02 118.45 108.76 115 110 105Economic forecast 2010 2011 1Q12 2Q12 3Q12 4Q12E 2012E 2013EReal GDP US 2.4 1.8 2.4 2.1 2.3 1.7 2.2 1.9Unemployment Rate 9.6 9.0 8.3 8.2 8.1 7.9 8.1 7.8Real GDP China 10.4 9.3 8.1 7.6 7.4 7.5 7.6 8.0CPI China 3.3 5.4 3.8 2.9 1.9 2.4 2.8 3.0



Disclosure Appendix

Reg AC

We, Yong Han, CFA and Jefferson Zhang, hereby certify that all of the views expressed in this report accurately reflect our personal views about the

subject company or companies and its or their securities. We also certify that no part of our compensation was, is or will be, directly or indirectly,

related to the specific recommendations or views expressed in this report.

Investment Profile

The Goldman Sachs Investment Profile provides investment context for a security by comparing key attributes of that security to its peer group and

market. The four key attributes depicted are: growth, returns, multiple and volatility. Growth, returns and multiple are indexed based on composites

of several methodologies to determine the stocks percentile ranking within the region's coverage universe.

The precise calculation of each metric may vary depending on the fiscal year, industry and region but the standard approach is as follows:

Growth is a composite of next year's estimate over current year's estimate, e.g. EPS, EBITDA, Revenue. Return is a year one prospective aggregate

of various return on capital measures, e.g. CROCI, ROACE, and ROE. Multiple is a composite of one-year forward valuation ratios, e.g. P/E, dividend

yield, EV/FCF, EV/EBITDA, EV/DACF, Price/Book. Volatility is measured as trailing twelve-month volatility adjusted for dividends.

Quantum

Quantum is Goldman Sachs' proprietary database providing access to detailed financial statement histories, forecasts and ratios. It can be used for

in-depth analysis of a single company, or to make comparisons between companies in different sectors and markets.

GS SUSTAIN

GS SUSTAIN is a global investment strategy aimed at long-term, long-only performance with a low turnover of ideas. The GS SUSTAIN focus list

includes leaders our analysis shows to be well positioned to deliver long term outperformance through sustained competitive advantage and

superior returns on capital relative to their global industry peers. Leaders are identified based on quantifiable analysis of three aspects of corporate

performance: cash return on cash invested, industry positioning and management quality (the effectiveness of companies' management of the

environmental, social and governance issues facing their industry).

Disclosures

Coverage group(s) of stocks by primary analyst(s)

Yong Han, CFA: Asia Commodities Companies, Asia Energy. Jefferson Zhang: Asia Commodities Companies, Asia Energy.

Asia Commodities Companies: Aluminum Corporation of China (A), Aluminum Corporation of China (H), Angang Steel (A), Angang Steel (H), Anhui

Conch Cement (A), Anhui Conch Cement (H), Asia Cement, Asia Cement China Holdings, BBMG Corporation (A), BBMG Corporation (H), Banpu

Public Company, Baoshan Iron & Steel, Borneo Lumbung Energi and Metal Tbk PT, Bumi Resources, China Coal Energy (A), China Coal Energy (H),

China Molybdenum Co., China National Building Material, China Resources Cement Holdings, China Shanshui Cement Group, China Shenhua

Energy (A), China Shenhua Energy (H), China Steel (GDR), China Steel Corporation, Coal India Ltd., Harum Energy Tbk PT, Hidili Industry International

Development, Jiangxi Copper (A), Jiangxi Copper (H), Korea Zinc, Maanshan Iron & Steel (A), Maanshan Iron & Steel (H), Mongolian Mining Corp.,

PT Adaro Energy Tbk, PT Indo Tambangraya Megah, PT Tambang Batubara Bukit Asam, Sakari Resources, Shandong Gold Mining Co, Shougang

Fushan Resources Group, TCC International Holdings, Taiwan Cement, Tangshan Jidong Cement Co, West China Cement, Wuhan Iron and Steel,

Yanzhou Coal Mining (A), Yanzhou Coal Mining (H), Zhaojin Mining Industry, Zhongjin Gold, Zijin Mining (A), Zijin Mining (H).

Asia Energy: Beijing Haohua Energy Resource, Datong Coal Industry, Guizhou Panjiang Refined Coal, Henan Shen Huo Coal Industry & Electricity

Power Co., Huolinhe Opencut Coal, Inner Mongolia Yitai Coal Co Ltd, Jizhong Energy Resources, Kailuan Energy Chemical, Pingdingshan Tianan Coal

Mining, Pingzhuang Energy Resources, SDIC Xinji Energy Co., Shanxi Coal International Energy Group Co., Shanxi Lanhua Sci-Tech Venture, Shanxi

Lu'an Environmental Energy Development, Shanxi Xishan Coal and Electricity Power, Yangquan Coal Industry Group, Yitai Coal, Yuanxing Energy.

Distribution of ratings/investment banking relationships

Goldman Sachs Investment Research global coverage universe



Rating Distribution Investment Banking Relationships

Buy Hold Sell Buy Hold Sell

Global 31% 55% 14% 49% 42% 35%

As of October 1, 2012, Goldman Sachs Global Investment Research had investment ratings on 3,442 equity securities. Goldman Sachs assigns stocks

as Buys and Sells on various regional Investment Lists; stocks not so assigned are deemed Neutral. Such assignments equate to Buy, Hold and Sell

for the purposes of the above disclosure required by NASD/NYSE rules. See 'Ratings, Coverage groups and views and related definitions' below.

Regulatory disclosures

Disclosures required by United States laws and regulations

See company-specific regulatory disclosures above for any of the following disclosures required as to companies referred to in this report: manager

or co-manager in a pending transaction; 1% or other ownership; compensation for certain services; types of client relationships; managed/co-

managed public offerings in prior periods; directorships; for equity securities, market making and/or specialist role. Goldman Sachs usually makes a

market in fixed income securities of issuers discussed in this report and usually deals as a principal in these securities.

The following are additional required disclosures: Ownership and material conflicts of interest: Goldman Sachs policy prohibits its analysts,

professionals reporting to analysts and members of their households from owning securities of any company in the analyst's area of

coverage. Analyst compensation: Analysts are paid in part based on the profitability of Goldman Sachs, which includes investment banking

revenues. Analyst as officer or director: Goldman Sachs policy prohibits its analysts, persons reporting to analysts or members of their

households from serving as an officer, director, advisory board member or employee of any company in the analyst's area of coverage. Non-U.S. Analysts: Non-U.S. analysts may not be associated persons of Goldman, Sachs & Co. and therefore may not be subject to NASD Rule 2711/NYSE

Rules 472 restrictions on communications with subject company, public appearances and trading securities held by the analysts.

Distribution of ratings: See the distribution of ratings disclosure above. Price chart: See the price chart, with changes of ratings and price targets in

prior periods, above, or, if electronic format or if with respect to multiple companies which are the subject of this report, on the Goldman Sachs

website at http://www.gs.com/research/hedge.html.

Additional disclosures required under the laws and regulations of jurisdictions other than the United States

The following disclosures are those required by the jurisdiction indicated, except to the extent already made above pursuant to United States laws

and regulations. Australia: Goldman Sachs Australia Pty Ltd and its affiliates are not authorised deposit-taking institutions (as that term is defined in

the Banking Act 1959 (Cth)) in Australia and do not provide banking services, nor carry on a banking business, in Australia. This research, and any

access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act, unless otherwise agreed by Goldman

Sachs. Brazil: Disclosure information in relation to CVM Instruction 483 is available at http://www.gs.com/worldwide/brazil/area/gir/index.html.

Where applicable, the Brazil-registered analyst primarily responsible for the content of this research report, as defined in Article 16 of CVM Instruction

483, is the first author named at the beginning of this report, unless indicated otherwise at the end of the text. Canada: Goldman, Sachs & Co. has

approved of, and agreed to take responsibility for, this research in Canada if and to the extent it relates to equity securities of Canadian issuers.

Analysts may conduct site visits but are prohibited from accepting payment or reimbursement by the company of travel expenses for such

visits. Hong Kong: Further information on the securities of covered companies referred to in this research may be obtained on request from

Goldman Sachs (Asia) L.L.C. India: Further information on the subject company or companies referred to in this research may be obtained from

Goldman Sachs (India) Securities Private Limited; Japan: See below. Korea: Further information on the subject company or companies referred to

in this research may be obtained from Goldman Sachs (Asia) L.L.C., Seoul Branch. New Zealand: Goldman Sachs New Zealand Limited and its

affiliates are neither "registered banks" nor "deposit takers" (as defined in the Reserve Bank of New Zealand Act 1989) in New Zealand. This research,

and any access to it, is intended for "wholesale clients" (as defined in the Financial Advisers Act 2008) unless otherwise agreed by Goldman

Sachs. Russia: Research reports distributed in the Russian Federation are not advertising as defined in the Russian legislation, but are information

and analysis not having product promotion as their main purpose and do not provide appraisal within the meaning of the Russian legislation on

appraisal activity. Singapore: Further information on the covered companies referred to in this research may be obtained from Goldman Sachs

(Singapore) Pte. (Company Number: 198602165W). Taiwan: This material is for reference only and must not be reprinted without permission.

Investors should carefully consider their own investment risk. Investment results are the responsibility of the individual investor. United Kingdom: Persons who would be categorized as retail clients in the United Kingdom, as such term is defined in the rules of the Financial Services

Authority, should read this research in conjunction with prior Goldman Sachs research on the covered companies referred to herein and should refer

to the risk warnings that have been sent to them by Goldman Sachs International. A copy of these risks warnings, and a glossary of certain financial

terms used in this report, are available from Goldman Sachs International on request.

European Union: Disclosure information in relation to Article 4 (1) (d) and Article 6 (2) of the European Commission Directive 2003/126/EC is available

at http://www.gs.com/disclosures/europeanpolicy.html which states the European Policy for Managing Conflicts of Interest in Connection with

Investment Research.

Japan: Goldman Sachs Japan Co., Ltd. is a Financial Instrument Dealer under the Financial Instrument and Exchange Law, registered with the Kanto

Financial Bureau (Registration No. 69), and is a member of Japan Securities Dealers Association (JSDA) and Financial Futures Association of Japan

(FFAJ). Sales and purchase of equities are subject to commission pre-determined with clients plus consumption tax. See company-specific

disclosures as to any applicable disclosures required by Japanese stock exchanges, the Japanese Securities Dealers Association or the Japanese

Securities Finance Company.

Ratings, coverage groups and views and related definitions

Buy (B), Neutral (N), Sell (S) -Analysts recommend stocks as Buys or Sells for inclusion on various regional Investment Lists. Being assigned a Buy

or Sell on an Investment List is determined by a stock's return potential relative to its coverage group as described below. Any stock not assigned as

a Buy or a Sell on an Investment List is deemed Neutral. Each regional Investment Review Committee manages various regional Investment Lists to a

global guideline of 25%-35% of stocks as Buy and 10%-15% of stocks as Sell; however, the distribution of Buys and Sells in any particular coverage

group may vary as determined by the regional Investment Review Committee. Regional Conviction Buy and Sell lists represent investment

recommendations focused on either the size of the potential return or the likelihood of the realization of the return.

Return potential represents the price differential between the current share price and the price target expected during the time horizon associated

with the price target. Price targets are required for all covered stocks. The return potential, price target and associated time horizon are stated in each

report adding or reiterating an Investment List membership.



Coverage groups and views: A list of all stocks in each coverage group is available by primary analyst, stock and coverage group at

http://www.gs.com/research/hedge.html. The analyst assigns one of the following coverage views which represents the analyst's investment outlook

on the coverage group relative to the group's historical fundamentals and/or valuation. Attractive (A). The investment outlook over the following 12

months is favorable relative to the coverage group's historical fundamentals and/or valuation. Neutral (N). The investment outlook over the

following 12 months is neutral relative to the coverage group's historical fundamentals and/or valuation. Cautious (C). The investment outlook over

the following 12 months is unfavorable relative to the coverage group's historical fundamentals and/or valuation.

Not Rated (NR). The investment rating and target price have been removed pursuant to Goldman Sachs policy when Goldman Sachs is acting in an

advisory capacity in a merger or strategic transaction involving this company and in certain other circumstances. Rating Suspended (RS). Goldman

Sachs Research has suspended the investment rating and price target for this stock, because there is not a sufficient fundamental basis for

determining, or there are legal, regulatory or policy constraints around publishing, an investment rating or target. The previous investment rating and

price target, if any, are no longer in effect for this stock and should not be relied upon. Coverage Suspended (CS). Goldman Sachs has suspended

coverage of this company. Not Covered (NC). Goldman Sachs does not cover this company. Not Available or Not Applicable (NA). The

information is not available for display or is not applicable. Not Meaningful (NM). The information is not meaningful and is therefore excluded.

Global product; distributing entities

The Global Investment Research Division of Goldman Sachs produces and distributes research products for clients of Goldman Sachs on a global

basis. Analysts based in Goldman Sachs offices around the world produce equity research on industries and companies, and research on

macroeconomics, currencies, commodities and portfolio strategy. This research is disseminated in Australia by Goldman Sachs Australia Pty Ltd

(ABN 21 006 797 897); in Brazil by Goldman Sachs do Brasil Corretora de Títulos e Valores Mobiliários S.A.; in Canada by Goldman, Sachs & Co.

regarding Canadian equities and by Goldman, Sachs & Co. (all other research); in Hong Kong by Goldman Sachs (Asia) L.L.C.; in India by Goldman

Sachs (India) Securities Private Ltd.; in Japan by Goldman Sachs Japan Co., Ltd.; in the Republic of Korea by Goldman Sachs (Asia) L.L.C., Seoul

Branch; in New Zealand by Goldman Sachs New Zealand Limited; in Russia by OOO Goldman Sachs; in Singapore by Goldman Sachs (Singapore)

Pte. (Company Number: 198602165W); and in the United States of America by Goldman, Sachs & Co. Goldman Sachs International has approved this

research in connection with its distribution in the United Kingdom and European Union.

European Union: Goldman Sachs International, authorized and regulated by the Financial Services Authority, has approved this research in

connection with its distribution in the European Union and United Kingdom; Goldman Sachs AG, regulated by the Bundesanstalt für

Finanzdienstleistungsaufsicht, may also distribute research in Germany.

General disclosures

This research is for our clients only. Other than disclosures relating to Goldman Sachs, this research is based on current public information that we

consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. We seek to update our research as

appropriate, but various regulations may prevent us from doing so. Other than certain industry reports published on a periodic basis, the large

majority of reports are published at irregular intervals as appropriate in the analyst's judgment.

Goldman Sachs conducts a global full-service, integrated investment banking, investment management, and brokerage business. We have

investment banking and other business relationships with a substantial percentage of the companies covered by our Global Investment Research

Division. Goldman, Sachs & Co., the United States broker dealer, is a member of SIPC (http://www.sipc.org).

Our salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies to our clients and our

proprietary trading desks that reflect opinions that are contrary to the opinions expressed in this research. Our asset management area, our

proprietary trading desks and investing businesses may make investment decisions that are inconsistent with the recommendations or views

expressed in this research.

The analysts named in this report may have from time to time discussed with our clients, including Goldman Sachs salespersons and traders, or may

discuss in this report, trading strategies that reference catalysts or events that may have a near-term impact on the market price of the equity

securities discussed in this report, which impact may be directionally counter to the analysts' published price target expectations for such stocks. Any

such trading strategies are distinct from and do not affect the analysts' fundamental equity rating for such stocks, which rating reflects a stock's

return potential relative to its coverage group as described herein.

We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in,

act as principal in, and buy or sell, the securities or derivatives, if any, referred to in this research.

This research is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be

illegal. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of

individual clients. Clients should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, if

appropriate, seek professional advice, including tax advice. The price and value of investments referred to in this research and the income from them

may fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur.

Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments.

Certain transactions, including those involving futures, options, and other derivatives, give rise to substantial risk and are not suitable for all investors.

Investors should review current options disclosure documents which are available from Goldman Sachs sales representatives or at

http://www.theocc.com/about/publications/character-risks.jsp. Transaction costs may be significant in option strategies calling for multiple purchase

and sales of options such as spreads. Supporting documentation will be supplied upon request.

In producing research reports, members of the Global Investment Research Division of Goldman Sachs Australia may attend site visits and other

meetings hosted by the issuers the subject of its research reports. In some instances the costs of such site visits or meetings may be met in part or in

whole by the issuers concerned if Goldman Sachs Australia considers it is appropriate and reasonable in the specific circumstances relating to the

site visit or meeting.

All research reports are disseminated and available to all clients simultaneously through electronic publication to our internal client websites. Not all

research content is redistributed to our clients or available to third-party aggregators, nor is Goldman Sachs responsible for the redistribution of our

research by third party aggregators. For all research available on a particular stock, please contact your sales representative or go to

http://360.gs.com.

Disclosure information is also available at http://www.gs.com/research/hedge.html or from Research Compliance, 200 West Street, New York, NY

10282.

© 2012 Goldman Sachs.



No part of this material may be (i) copied, photocopied or duplicated in any form by any means or (ii) redistributed without the prior written consent of The Goldman Sachs Group, Inc.

china: metals & mining:...

Documents