Zangge Mining views occupational health and safety as a crucial social responsibility and a key foundation for sustainable operations. Adhering to the safety policy of "safety first, focus on prevention, and integrated control", we continuously improve our occupational health and safety management system and enhance our ability to manage and control safety risks. We are committed to providing a safe and healthy working environment for all employees, partners, neighboring communities, and any other parties affected by our production and operations.

Safety Management System

Zangge Mining is committed to continuously improving occupational safety and health by developing and enhancing the comprehensive production safety management system and standardizing the systematic production safety management In the meantime, we organize various safety culture education and promotion activities on an ongoing basis to raise employees safety awareness and safety management capacity.

Safety system development

Zangge Mining introduced and constantly improves production safety-related systems in accordance with relevant laws and regulations, such as the Production Safety Law of the People’s Republic of China and the Law of the People's Republic of China on the Prevention and Control of Occupational Diseases, and revised and implemented the production safety-related polices and documents, including the Production Safety Management Regulations and the Environmental Protection and Safety Regulations, during the reporting period to ensure sound safety management. By the end of the reporting period, Zangge Lithium has been certified against the ISO 45001 standard and passed the Annual Surveillance Audit, which demonstrated the validity of its occupational health and safety management system certification.

Management structure: To further improve the production safety management, a Three-tier Safely Management System has been established by Zangge Mining in 2023. This system consists of:

1.The Safety Production Committee (SPC), which serves as the leading organization and organizes, guides and coordinates the production safety-related matters of various departments;

2.The Safety Production Office, which has a Safety Supervisor and Safety Engineer and is responsible for planning and implementing specific safety tasks and making regular reports on safety management progress;

3.The Safety Production Steering Groups, which are in charge of the daily production safety works of various production department.

4.The Ful-time or Part-time Safety Specialists, who are tasked with assisting workshop directors to carry out production safety works at the workshop level.

Targets management:To fully implement the main responsibility for production safety of production and business entities and fundamentally prevent various safety incidents, all employees at Zangge are required to sign the Letter of Responsivity on Safety and Environmental Protection. In addition, the "Letter of Responsibility on Safety Objectives “system has been implemented and the production safety principle of the person in charge being the person responsible" reinforced to ensure well-defined production safety duties and responsibilities. 100% of Zangge Mining's employees have signed the Letter of Responsibility on Safety and Environmental Protection in 2023.

Contractor management:Contractors are subject to compliance check before entering the operation site and required to sign the Contractor Safety Agreement, which specifies the safety responsibilities of both parties and provides for the scope of and punishment for illegal operations, illegal command and violation of labor disciplines, after entering the operation site In addition. Safety training and assessment are carried out for external construction workers to ensure safe and smooth construction and operation of contractors.

Safety investment management:To establish and improve our long-term production safety investment mechanism and further enhance production safety cost management, we have formulated and implemented the Safety Investment Safeguards and Management System, and increased our investment in production safety and occupational health, covering aspects of use of personal protective equipment, maintenance of safety devices, assessment and rectification of safety hazards, development of emergency response team, provision of safety training and education and promotion and application of advanced production safety technologies, to ensure safe operation throughout the whole production process. A total of RMB 29,815,600 has been invested by Zangge Mining in production safety and occupational health during the reporting period.

Safety culture cultivation

Zangge Mining improves employees' production safety awareness through all-staff safety training programs and comprehensive safety promotion and education initiatives. The annual safety education and training plans are prepared for the Company as well as the workshops at the beginning of each year and special training activities tailored to the categories and demands of participants are organized, covering various aspects from laws and regulations, basic and professional production safety knowledge, hazard management, advanced domestic and foreign production safety management experience, typical accident and emergency case analysis to occupational disease risk and prevention.

In addition, it also actively carries out normalized safety culture publicity activities, including but not limited to Safety Production Month campaign, daily release of safety warning videos, safety knowledge competitions and safety seminars, etc., to create a good safety production atmosphere in a practical and feasible way.

Zangge Mining implements a two-tier prevention mechanism and develops and improves the work processes from the dimensions of hierarchical control of risks and inspection & rectification of hidden dangers to effectively manage and prevent potential safety risks that may arise in our operations. We also attach great importance to safety emergency response and further the development of emergency management system so as to enhance our overall ability to respond to emergencies.

Risk Management and Control System

Zangge Mining has developed and implemented a series of internal management documents, including the Hazard Identification and Risk Evaluation Management System and the Hidden Danger Inspection and Rectification Management System, established a two-tier risk prevention mechanism and carried out hierarchical control of risks and inspection& rectification of hidden dangers on an ongoing basis.

Zangge Mining has developed and implemented a series of internal management documents, including the Hazard Identification and Risk Evaluation Management System and the Hidden Danger Inspection and Rectification Management System, established ā two-tier risk prevention mechanism and carried out hierarchical control of risks and inspection& rectification of hidden dangers on an ongoing basis.

The Company also organizes major hazard inspections on a regular basis, and notifies relevant parties the problems discovered during the inspection through the Safety Inspection Notification with a request for rectification within a prescribed time limit. Additionally, we invite qualified third-party institutions to carry conduct major hazard assessment at a frequency no less than once every two years and demand our branches, subsidiaries and production workshops to prepare and maintain a major hazard record and further promote inspection of rectification of hidden dangers so as to safeguard employees' safety and health.

Safety emergency management

To further improve our emergency management. Zangge Mining has made sustained efforts to promote the standardization of emergency management with a focus on the development and enhancement of emergency response capacity by building up and improving the emergency management framework, advancing the development of emergency management system and adopting a variety of emergency management practices.

Management structure:To effectively prevent production safety accidents and implement accident management responsibilities, Zangge Mining has set an emergency organization system at the levels of the Company and workshop and developed and enhanced its emergency command structure, which is responsible for preparing emergency response plan, organizing emergency dills, conducing emergency team mobilization and resource allocation and facilitating coordination at the accident scene, to secure efficient emergency response.

System Development:The Company complies with various relevant laws, regulations and normative documents, such as the Emergency Response Law of the People's Republic of China and the Regulation on Emergency Responses to Work Safety Accidents, and has revised and implemented the Production Safety Emergency Response Plan, which species the emergency response procedure, in accordance with the Guidelines for Enterprises to Develop Emergency Response Plan for Work Place Accidents (GB/T 29639-2020).

The Company has set up a dedicated team to develop emergency response plan This team will carry out information collection, risk assessment and emergency response resources survey on an annual basis and improve the emergency response plan through desktop maneuvers and expert reviews to further standardize the systematic emergency preparation of the Company.

We have also worked out and implemented overall emergency response plan, special emergency response plan and on-site response plan, which cover the responses to various production safety accidents, including fire, mechanical injury, electric shock, falling accidents, crane injury, drowning. poisoning, collapse, fresh water contamination, etc. A railway siding for product transportation has been constructed for Zangge Potash Fertilizer. Taking this into consideration, we have developed the Special Emergency Response Plan for Railway Accidents based on actual conditions to enable effective emergency management and rescue in case of accidents along the railway siding.

Emergency Response Practices:We conduct regular emergency dills and emergency capacity assessments In addition, we prepare emergency dill plan and carry out a variety of comprehensive and special emergency dills, including but not limited to safety emergency drills. fire drills and railway accident drills, on an annual basis, to improve our overall emergency response capacity Moreover, the Company makes an inventory of and supplements emergency supplies regularly and conducts effectiveness checks on on-site response plan once every two years to protect employees’ safety and security.

Zangge Mining abides by relevant laws, administrative regulations and national standards on the management of hazardous chemicals, including the Regulation on the Safety Management of Hazardous Chemicals, and has formulated and implemented a series of internal documents, such as the System of Safety Management of Hazardous Chemicals and the Precursor Chemicals Management System, to specify the provisions on procurement, storage, loading and unloading, use, transportation and scrapping of hazardous chemicals, including:

1.The qualification certificates of hazardous chemicals suppliers should be submitted for strict review and the safety label and safety data sheet of the supplied products should be provided by the suppliers;

2.Qualified entitles should be engaged to transport hazardous chemicals and necessary fireproof, blast-proof and poison-proof measures should be adopted by taking into account of the nature of such chemicals;

3.Designated warehouses should be set up for storage of hazardous chemicals, and the hazardous chemicals should be under the charge of well-training warehouse keepers with necessary license and classified and separately stored in accordance with relevant provisions;

4.The safety data sheet of hazardous materials should be prepared, and the operators should be properly trained and wear special protective equipment before work;

5.Comprehensive safety measures for scrapping of hazardous chemicals should be introduced and the hazardous chemicals should be scrapped and disposed upon the approval of relevant departments, such as the Technology Department Safety Department and Production Department (the precursor chemicals should be destroyed upon approval of public security organs and work safety authorities).

In addition, we conduct hazard impact assessment of chemicals and carry out dangerous and hazardous substance analysis on chemicals involved in production. The Identification and Analysis of Dangerous and Hazardous Factors has been developed, covering the physical and chemical properties of hazardous chemicals, flammability, health hazards, first aid measures, emergency response, protective measures and precautions for storage and transportation, and training on relevant hazardous chemicals have been organized for warehouse keepers and field operators of such chemicals to create a standardized and safe production environment.

The hazardous chemicals used by the Company can be classified into two categories, namely the hydrochloric acid and the sodium hydroxide. For corrosive hydrochloric acid, we have obtained the purchase record certificate for Precursor Chemicals in Category II and CategoryⅢ and taken a variety of measures in daily management, such as adoption of corrosion-resistant hydrochloric acid FRP tank, installation of ant-leakage equipment, 24-hour monitoring of hydrochloric acid storage and utilization and provision of eyewash equipment, to strengthen hazardous chemicals management and prevent hazardous chemicals accidents. Moreover, Zangge Potash Fertilizer has commenced the phaseout of hazardous chemicals and applied three-in-one flotation reagents in an extensive manner This simplifies the administration of reagents while facilitating the phaseout of hydrochloric acid. By the end of the reporting period, only small amount of hydrochloric acid has been purchased by Zangge Potash Fertilizer for emergency use only.

Zangge Mining recognizes that good employee health and safe working environment promote employee welfare and operation efficiency. At Zangge, we take employee health and safety seriously and provide employees with comprehensive health protection through sustained development of occupational health management system and pro-active adoption of various health protection measures.

Occupational Health Management

Zangge Mining has formulated relevant policies, inducing the Occupational Health Management Rules and the Occupational Hazard Monitoring System, to specify occupational health management objectives, standard procedures, education and training programs and protective equipment management and conducted regular occupational hazard monitoring and evaluation with a view to enhance prevention and control of occupational diseases and create a safe and healthy working environment. During the reporting period, an Occupational Health Steering Group in charge of supervision and administration of occupational health has been established by the Company to strengthen the prevention, control and elimination of occupational hazards. On top of the Steering Group, occupational health management specialists have been assigned to assist occupational health examination, hazard factor monitoring. production site inspection, health education and training and facilitate occupational health protection.

Health Protection Measures

Aiming at creating a comfortable and healthy working environment, we continue to implement various health protection measures, including but not limited to identification of hazard factors. reinforcement of labor protection, implementation of health examination, etc., to safeguard the occupational health of our employees and other stakeholders.

Hazard factor identification:Qualified third-party institutions have been engaged by the Company to detect the occupational hazard factors existing in production and operation sites on an annual basis to improve our identification of workplace hazard factors and effectively control the concentration and intensity of occupational hazard factors. Moreover, the company-wide status quo assessment of occupational hazards has been conducted once every three years.In 2023, the branches and subsidiaries of Zangge Mining engaged third-party institutions to perform occupational hazard factor monitoring. covering dust, chemical poisons, noise, high temperature, and other chemical and physical factors, and notified and announced the results as well as the protection requirements to all employees in a timely manner. Meanwhile, Zangge Mining organized routine status quo inspections of equipment and facilities to ensure effective control of occupational health and safety risks.

Labor protection enhancement:In addition to regular occupational hazard factor assessment, the Company has provided employees with effective personal protective equipment that complies with national standards for free, including safety helmet, safety belt, insulating protective equipment, gas mask, dust mask (respirator), goggles, labor protection shoes, electric welding gloves, ear protection device, etc. Labor protection cards, which detail the labor protection equipment required for each type of work, have been distributed all production employees.Moreover, we have conducted regular special equipment inspection to detect and resolve hidden dangers in time With regard to the noise, a common occupational hazard factor, silencers and enclosed apparatus have been installed to control the noise at the source and during propagation.

Health examination:Qualified medical facilities capable of making diagnosis of occupational disease have been engaged by the Company to provide employees with occupational health examination and regular health examination on an annual basis, covering a variety of occupational hazard factors such as electrical operation, noise. other dust carbon monoxide, etc. The occupational health surveillance archives have been prepared for employees to ensure that they are aware of their own state of health In addition, we have arranged employees' working hours based on their health condition and carried out position swap at a regular basis to prevent employees from repetitive strain injury.