JOINT VENTURE AGREEMENT
                            -----------------------

                                     between

                         Hoelter Technologies Holding AG
                         23548 Calabasas Road, Suite 203
                               Calabasas, CA 91302
                            United States of America
                            (Tel.: 001-818-224.2145)
                             (Fax: 001-818-224.2145)

                      - hereinafter referred to as "HTH" -

       represented by Prof. Dr. Dr. Heinrich Holter, Chairman of the Board
                                       and

                            Fushun Coal Mining Bureau
                    No. 25, Zhongyang Street, Xinfu District
                        113008 Fushun, Liaoning Province,
                           People's Republic of China
                            (Tel.: 0086-413-253.8888)
                            (Fax: 0086-413-253.2267)

                    - hereinafter referred to as the "FCMB" -

             represented by Mr. Wang Zhan Zhou, Director of the FCMB

     - FCMB and HTH hereinafter collectively referred to as the "Partners" -


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                                    Preamble

To improve  commercial  viability at the FCMB's  Laohutai  Colliery by producing
additional   coking  coal  from  slurry  and  to  reduce  the  impact  upon  the
environment,  the  Joint  Venture  Company  to be  established  by FCMB  and HTH
(hereinafter  referred  to as the JV) intends to erect and operate a coal slurry
preparation plant (hereinafter referred to as the CSPP).

Heinrich  Holter GmbH  (Holter)  of  Gladbeck,  Germany,  an  affiliate  of HTH,
possesses  the  know-how  and  technology  needed  to erect and  operate  such a
preparation plant.

The Partners  subscribe to the  principle of equality and mutual  benefit and by
way of amicable  negotiations  have agreed to establish a Joint Venture  Company
pursuant to the "Law of the  People's  Republic  of China on Joint  Undertakings
with  Sino-Foreign   Participation"   and  other  applicable  Chinese  laws  and
regulations.

                                Article 1 Purpose

The purpose pursued by the JV Partners conforms to their desire:

o  to promote  economic  cooperation and technology  transfer;
o  to increase the commercial strength of both Partners;
o  to promote environmental  protection;
o  to create jobs.

All activities of the JV are subject to the laws,  orders,  and other applicable
statutory provisions and regulations of the People's Republic of China.

On approval and  registration  by the competent  Chinese  authority the JV shall
enjoy the status of a juristic  person under  Chinese law and be entitled to the
protection and benefits offered by the applicable Chinese laws and regulations.

The company of the JV is a limited liability company.

This means that in settling  the debts of the JV the  creditors  of the JV shall
have recourse only to the assets of the Joint Venture Company.


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Each JV  Partner  shall be  liable to the JV only in the  amount of the  capital
subscribed.  The profits,  risks,  and losses of the JV shall be  distributed in
accordance with each Partner's contribution to the registered capital.  However,
no Partner shall in any case assume  liability for the debts or  obligations  of
the other.

With respect to the debts or  obligations of the JV the Partners shall be liable
only in the amount of their subscribed, but as yet unpaid capital contributions.

                            Article 2 Name of the JV

The JV has the Chinese name:

             "Fushun-Holter Jingmei Youxian Zeren Gongsi"

The name of the JV in German is:

    "Fushun-Holter Kohlenaufbereitungs-Gesellschaft mit beschrankter Haftung"

The official address of the JV is:

No. 19, Huwan Street, Dongzhou District
Fushun, Liaoning Province, People's Republic of China
Zip code 113003.

       Article 3 - Nominal Capital of the JV, Percentage of Participation

The nominal capital of the JV equals 50% of the total investment and amounts to:

                                 30 200 000 yuan
                (conversion into USD effected on the basis of the
              official exchange rate in China on 8 September 2000)

The nominal capital shall be paid in cash by the  shareholders  (in yuan by FCMB
and in USD by HTH) in the amount of their JV stake.

In accordance with their stakes in the JV, FCMB shall subscribe 49% and HTH 51 %
of the nominal capital.


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The nominal capital of the JV Company shall be paid by the Parties  according to
their share of the  registered  capital onto an account held by the JV within 30
days of the JV being approved by the competent Chinese local authority.

All USD amounts  referred to in this  Agreement  shall be converted into yuan on
the basis of the yuan-USD  exchange rate published by the State Foreign Exchange
Control Authority of the People's Republic of China as of the date hereunder.

                            Article 4 Term of the JV

The term of the JV shall be 7-1/2 years, commencing on the date the plant enters
into full  production.  On  completion  of the term the JV shall be dissolved in
accordance with the terms set forth in the Bylaws.

If,  on  completion  of the  term of the  JV,  both  Partners  are  desirous  of
continuing  the JV, the Partners in the joint  undertaking  shall  without delay
make and submit to the local authority  responsible for the joint  undertaking a
written  agreement  contrary  to the  terms  of  Paragraph  1  providing  for an
extension of the term of the joint undertaking.

Upon  affixation of signatures to this  Agreement the JV shall be deemed to have
been established on the day the JV is authorized to commence trading.

                              Article 5 Fiscal Year

The fiscal year of the JV shall commence on 1 January of a calendar year and end
on 31 December of the relevant year. An abridged fiscal year shall be formed for
the year 2000.

                        Article 6 Assignment of Interests

No Partner of the JV may assign  its  subscribed  interest  in the JV to a third
party in whole or in part  without  the  consent  of the  other JV  Partner  and
agreement of the original control and approval body.

Should a JV Partner assign its interest in the JV in whole or in part, the other
Partner shall have the right of first  refusal.  "Right of first refusal" in the
aforementioned  sense means that the other  Partner can call upon the  assigning


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Partner to transfer its interest to the other Partner on the same  conditions as
would be agreed for an assignment to a third party.

                          Article 7 Business of the JV

The JV's  production  and business  scope covers the  production of two saleable
coal products from raw coal slurry at Laohutai Colliery and the sale thereof.

The following products shall be produced:

- coking coal:           K I containing 8-9% ash and 12-15% H2O,(K8 according to
                         Standard)
- industrial grade coal: K II containing 30-35% ash and 22-26% H2O.

To this end the JV shall  erect and  operate  a coal  slurry  preparation  plant
(CSPP) on the site of Laohutai  Colliery,  partly in buildings already belonging
to the existing preparation plant and partly in new buildings.

              Article 8 Technology and Performance of the Partners

Process know-how and development is by Heinrich Holter GmbH, Gladbeck,  Germany.
In addition,  Holter shall supply the core  preparation  equipment for the plant
from Germany.

The FCMB   shall  supply  the  remaining  parts of the plant and  construct  the
aforementioned buildings.

The goods and  services  supplied  by both  Partners  for the  construction  and
operation of the CSPP have been laid down  individually  in two separate  supply
contracts, the terms and conditions of which have already been negotiated by the
JV and Holter and the FCMB respectively. The supply contracts shall be concluded
immediately  in their  existing form and substance by the JV upon  affixation of
signatures to the JV Agreement.

The entire raw slurry needed to operate the plant, in the size range approx. < 2
mm, shall be supplied to the JV by the FCMB from the existing  preparation plant
at Laohutai  Colliery at a cost price of 20 yuan/t  containing 22% H20,  surface
moist.


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The coal slurry  price shall be linked to  developments  in the market price for
industrial  grade coal (KII).  Changes in the coal slurry price will be effected
in accordance with the percentage change in the price for industrial grade coal.

The agreed raw slurry quantity is 168 000 tonnes/year  (surface dry). The agreed
water  content is 22% H20,  giving a quantity  of 215 000  tonnes/year  (surface
moist).  (The individual  water content  definitions are provided at Exhibit 7.)
These quantities can fluctuate to a certain extent.

Upon  preparation  of the slurry by the JV, the FCMB shall on a long-term  basis
purchase  the  aforementioned  two saleable  products  from the JV at the market
price.  The market price is defined as being the average amount  received by the
FCMB  from  the sale of  coking  coal  (KI)  and  industrial  grade  coal  (KII)
respectively.

At the beginning of 2000 the market price for coking coal from Laohutai Colliery
was 280 yuan/tonne, in accordance with Exhibit 6 (price list).

KI:

Accordingly,  the JV shall on the basis of the 2000  price  receive a payment in
the amount of 277.5 yuan/t, moist from the FCMB for the KI product.

When the plant goes into  operation  this payment shall be adjusted on the basis
of the FCMB's price list for the year 2002.

The  difference in the FCMB's coal price between the years 2002 and 2000 will be
added to or subtracted from the payment made to the JV for KI.

Based upon a range of 12-15%,  the  assumed  water  content of the KI product is
approx. 13.5%. The ash content is approx. 8-9%.


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KII

On the basis of the year 2000  price the sales  price  charged  by the JV to the
FCMB for  industrial  grade coal (K II) is 55 yuan/t,  moist.  The price will be
adjusted as for KI.

Based upon a range of 22-26%,  the assumed  water  content of the KII product is
approx. 24%. The assumed ash content is approx. 30-35%.

In the  event of any  changes  in price  the FCMB  shall on 21  December  of the
relevant  calendar year inform the JV of the price levels for the following year
by submission  of the new price lists.  The price changes shall take effect on 1
January of the following calendar year.

As the FCMB will incur  additional  sales  costs in selling  the JV's  products,
these shall be refunded to the FCMB in the amount of 1.0% of the JV's turnover.

For the erection and operation of the CSPP the FCMB is to make  available to the
JV buildings and any equipment still in a utilizable  condition at a charge. The
costs hereof are included in the FCMB's supply contract with the JV.

The JV shall pay the FCMB an annual rent of 30 000 yuan for the use of the site.

The FCMB shall make  available  all the  necessary  utilities  to the JV at cost
price without any mark-up (the current price for electrical energy, for example,
is 0.59 yuan/kWh and 1.20 yuan/m3 for water).

Holter shall make available the process know-how.

Holter is  available  to monitor  the process  technology  and  machinery  in an
advisory  capacity.  To this end a Holter  specialist  will  visit the site four
times a year for two weeks at a time. The costs hereof shall be borne by the JV.

Holter  shall  provide the spare parts  service for the imported  machinery  and
plant components on behalf and for the account of the JV.

As  and  when  required  by  the JV  this  shall  include  the  inquiry,  order,
organization  of the  transport,  and  control of quality  and  delivery  dates.
Important plant  production data  shall be sent to Holter in Germany on a  daily


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basis using an SMS (short message  service)  system,  thus  permitting the early
provision of technical assistance in the event of any disruptions in the routine
operation of the plant.

                    Article 9 Investment Realization Schedule

The coming into effect of this Agreement,  its performance,  and the erection of
the CSPP shall be effected in accordance with the schedules attached at Exhibits
1 and 2.

The  collective  goal of the FCMB and  Holter is to keep the plant  construction
period as short as possible.

                             Article 10 JV Personnel

On  handover  of the CSPP by Holter  and the FCMB to the JV the  plant  shall be
operated by and at the responsibility of the Ms own specialist personnel.

The specialist  personnel  consists of the plant managers employed by the JV and
the operating personnel.

The operating  personnel  selected by the JV will be made  available by Laohutai
Colliery in return for a reimbursement of personnel costs.

For the  duration  of the  secondment  this  personnel  shall be  subject to the
disciplinary control of the JV.

The details shall be laid down in a personnel  secondment  agreement still to be
made between Laohutai Colliery and the JV.


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                      Article 11 Duties of the JV Partners

Duties of the FCMB:

The FCMB shall:

-    submit applications for the approval,
     registration,  licensing of the business, and any other matters relating to
     the formation of the JV by the competent government offices of the People's
     Republic of China;

-    if necessary, submit an application to prolong the right to use the site to
     the authority in the People's Republic of China responsible for the site;

-    obtain the  license to operate  the plant and  provide  the  infrastructure
     required to operate the plant and the premises and other  facilities of the
     JV during the term thereof;

-    pay its contribution to the nominal capital and secure the financing of the
     JV in a total amount of 49% of the funds invested;

-    procure  the goods and  services in  accordance  with the  separate  supply
     contract negotiated by and between the JV and the FCMB;

-    process the import customs  declaration  and all other such  formalities in
     conjunction   with  the  import  of  machinery   and   equipment   and  the
     transportation of the imported goods on Chinese territory;

-    assist  the  JV in  recruiting  Chinese  management  staff  and  any  other
     necessary staff on request by the JV;

-    assist  foreign  personnel  in  applying  for entry  visas,  work  and,  if
     necessary,  route  permits,  and process any travel  formalities  as may be
     required in the People's Republic of China;

-    handle any other matters entrusted to it by the JV.

Duties of HTH:

HTH shall:

-    procure  the goods and  services in  accordance  with the  separate  supply
     contract negotiated by and between the JV and Heinrich Holter GmbH;

-    pay its contribution to the nominal capital and secure the financing of the
     JV in a total amount of 51 % of the funds invested;

-    supply the know-how and modern and reliable equipment and CSPP technology;


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-    guarantee the following technical product standards:

     -   KI: ash content  8-9%,  moisture  12-15%,  45%  (plus/minus  2%) of the
         saleable product, ash content of the raw slurry 20.15%;

     -   KII: ash content  30-35%,  moisture  22-26%, 55% (plus/minus 2%) of the
         saleable  product,   ash  content  of  the  raw  slurry  20.15%;  -

-    if  applicable,  handle any matters  entrusted  to it by the JV such as the
     selection and purchase of additional  machinery and equipment outside China
     etc.

                           Article 12 Bodies of the JV

                              A) The Managing Board

-    The  supreme  authority  of the JV is the  Managing  Board.  It shall  have
     decision-making powers for all major issues.

-    The following items must be agreed by unanimous vote:

     -   general  company policy and development  plans,  short- and medium-term
         objectives,    in   particular    business-related   plans,   including
         investments, financial planning and loans;

     -   annual plans including financing;

     -   applicable finance and budgeting principles;

     -   selection,  acquisition,  use, and closure of branch  offices and other
         facilities;

     -   percentage  relationship,  amount,  and  utilization  of allocations to
         reserves and/or provisions and the expansion, bonus and welfare funds;

     -   allocation  of  net  profits  and  losses  plus  special   measures  in
         unforeseen circumstances;

     -   staffing  guidelines   including   recruitment   conditions  and  labor
         protection as well as disciplinary guidelines;

     -   organization   and   modification   of  the  JV  structure;   areas  of
         responsibility of the management and their appointment,  dismissal, and
         recruitment   conditions,   and  the  salary   paid  to  the   managers
         [Geschaftsfuhrer];

     -   major changes in the business scope of the JV;

     -   mergers  with,  investment  in, or  withdrawal  from  other  commercial
         undertaking and company formation;


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     -   all items  requiring a resolution  by the Managing  Board at its annual
         meeting such as annual reports and profit-and-loss statements;

     -   appointment and dismissal of one or more than one external auditor;

     -   increases in the registered capital;

     -   amendments of this JV Agreement and/or the company Bylaws;

     -   use of  registered  capital and  allocation  in whole or in part of the
         registered capital or the capital contributions made by the Partners;

     -   expansion, termination, dissolution, and liquidation of the JV;

     -   any other items as considered appropriate by the Managing Board.

The  Managing  Board  shall be  appointed  by the  Partners  without  delay upon
conclusion of the JV Agreement.

The Managing Board shall consist of four members, two of whom shall be appointed
by the FCMB and two by HTH.

Initially,  the chairman of the Managing Board shall be appointed by HTH and the
deputy  chairman  by the FCMB.  On expiry of the first  term of office  the FCMB
shall nominate the board chairman. Thereafter, chairmanship of the Managing Bard
shall alternate per period of office between the Partners.

The term of office of the board  chairman and his deputy is three years.  It may
be extended by the relevant party if the appointment is to be continued.

The term of office of the ordinary board members is also three years.  It may be
extended by the relevant party if the appointment is to be continued.

FCMB hereby nominates:

Mr. Wang Zhanzhou (Deputy Managing Board Chairman)

Mr. Chen Naikang (ordinary board member)

HTH hereby nominates:

Prof. Dr. Dr. Heinrich Holter (Chairman of the Managing Board)


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Dr. Li Xixian (ordinary board member).

The Chairman of the Managing Board is the legal representative of the JV.

If, for whatever  reason,  the chairman is unable to carry out his duties,  said
duties shall be carried out by the deputy chairman.

The  Managing  Board shall  convene at least one meeting per year.  The meetings
shall  normally  be held at the head  office of the JV; one  meeting may also be
held at another venue by mutual agreement of the Partners.

All outlays  incurred by the members of the Managing  Board in  connection  with
board meetings  (flight and local travel costs plus hotel and subsistence  costs
etc.) shall be borne by the JV in the amount of the actual  costs  incurred  and
backed by documentary evidence.

The board chairman  shall convene and preside over the meetings.  Minutes of the
meetings shall be taken and kept on file.

                                B) The Management

Upon being appointed the Managing Board shall immediately  select the management
team, which shall consist of a director and a deputy-director.

The management  shall be responsible  for conducting the day-to-day  business of
the JV under the stewardship of the Managing  Board.  The  management's  term of
office shall be three (3) years; the management may be re-appointed.

Initially,  the director shall be appointed by the FCMB and the  deputy-director
by HTH.  On expiry of the  period of office  HTH shall  nominate  the  director.
Thereafter,  the  position  of  director  shall  alternate  per period of office
between the Partners.

The management is obliged to effect the resolutions of the Managing Board and to
organize and conduct the day-to-day business of the JV.


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The  Partners  shall not refuse to appoint the manager  proposed by the relevant
Partner without good cause.

In  the  absence  of  the  director  his  duties  shall  be  transferred  to the
deputy-director  or an employee of the JV empowered to stand in for the director
in his absence. This shall also apply in the absence of the deputy-director.

The Managing  Board is  empowered  to dismiss a manager at any time  following a
breach of faith or major breach of duty.

The managers shall represent the JV collectively.

Details shall be laid down in management agreements yet to be concluded.

                               Article 13 Staffing

All  contracts  of  employment  concerned  with  the  recruitment,  appointment,
dismissal,  or  withdrawal  of  employees  or  with  wages,  salaries,  employee
insurance,  unemployment insurance,  rewards,  penalties, and any other measures
affecting the employees of the JV, insofar as these employees have been seconded
from the  colliery,  are to be made by and between the JV and Laohutai  Colliery
pursuant  to  the   "Regulations   of  the   People's   Republic  of  China  for
Employee-Employer    Relations   at   Joint    Undertakings   with   SinoForeign
Participation" and their implementing provisions plus any other relevant Chinese
laws.

The  signed  contracts  of  employment  shall be filed at the local  office  for
employee-employer relations.

The  Managing  Board shall  appoint  the senior  administrative  staff,  who are
recommended  by both  Partners,  and fix the level of the  salaries,  social and
unemployment insurance payments, and travel expenses etc..

                      Article 14 Taxes, Finances and Audits

The JV shall pay taxes in  accordance  with the  provisions of the laws of China
and other relevant regulations.


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The employees of the JV shall pay income tax in accordance  with the "Income Tax
Act of the People's Republic of China".

Allocations to the reserves/provisions, the JV expansion funds, and the employee
welfare and bonus funds shall be made in accordance  with the  provisions of the
"Law of the People's  Republic of China on Joint  Undertakings with Sino-Foreign
Participation".

The  Managing  Board shall fix the annual  percentage  of these  allocations  in
accordance with the JV's current business situation.

All vouchers, receipts, statistics, balance sheets, reports, and books of the JV
shall be prepared in Chinese.  The JV shall make German  translations on request
by HTH.

The audits of the JV shall be conducted by an  internationally  approved firm of
auditors  operating  in China whose  reports are to be presented to the Managing
Board and the management in Chinese and German.

In the first three months of each fiscal year the  management  shall prepare the
previous  year's  balance  sheet and  profit-and-loss  statement.  It shall also
present  proposals  in Chinese and German for the use of profits and submit them
to the Managing  Board for approval  once they have been  reviewed and signed by
the reviewing party.

             Article 15 Disposal of Assets on Termination of the JV

On termination  of the JV the company shall be dissolved in accordance  with the
"Law of the People's  Republic of China on Joint  Undertakings with Sino-Foreign
Participation"  and  other  relevant  regulations  as  well as the  Articles  of
Incorporation of the JV.

The liquidated  assets shall be  distributed to the Partners in accordance  with
their interests in the JV.


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                             Article 16 JV Insurance

The value and term of the insurance contracts to be concluded by the JV to cover
various  kinds of risk are to be agreed with the People's  Insurance  Company of
China in accordance with the provisions of this insurance company.

The Managing Board is entitled to instruct the management to take out additional
coverage against risks with an international insurance company.

       Article 17 Amendment and Performance of the Joint Venture Agreement

Amendments of this Joint Venture Agreement or its Exhibits shall take not effect
until the written amendment has been signed by both Partners and approved by the
original control and approval body.

Should the  performance of this Joint Venture  Agreement or the  continuation of
business be impossible as a result of heavy losses in successive  years,  the JV
shall be dissolved by unanimous  decision of the Managing  Board and on approval
by the original control and approval body.

Should the JV be unable to continue in  business  or achieve  the  purposes  set
forth in this Joint Venture Agreement due to a failure of one of the Partners to
perform the duties  prescribed  in the Joint  Venture  Agreement  or Bylaws or a
serious breach of the terms of the Joint Venture Agreement or Bylaws, this shall
be  deemed  to  constitute  a  unilateral  breach  of  contract  by the  Partner
concerned.

The other Partner shall be entitled to terminate the Joint Venture  Agreement in
accordance  with the terms set forth herein on approval by the original  control
and approval body and to demand compensation.

If the FCMB and HTH agree to a continuation of business and the business purpose
despite the occurrence of the aforementioned  situation,  the Partner that fails
to perform its duties shall be liable for the economic losses incurred by the JV
as a result.


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          Article 18 Liability on Breach of the Joint Venture Agreement

Should a Partner fail to pay in its capital  contribution in accordance with the
terms of this Joint  Venture  Agreement  on time,  then the Partner in breach of
contract shall pay the JV interest on the unpaid  contribution  in the amount of
8% per annum with effect from the due date.

In the case of a default  lasting  more than three months the Partner who is not
in breach shall have the right to terminate  this Joint  Venture  Agreement  and
demand the  reimbursement of its direct costs arising out of this Agreement from
the Partner in breach.

The Partners  shall have no further  claims on each other,  in  particular  with
respect to the reimbursement of indirect and/or consequential damages.

                            Article 19 Force Majeure

Force majeure refers to events such as earthquake,  typhoon,  flood,  fire, war,
and  other  unforeseen  circumstances  whose  occurrence  and  consequences  are
unpreventable  and  inescapable  and  mutually  recognized  by both  Partners as
constituting acts of force majeure. Should one of the Partners be prevented from
performing this Joint Venture Agreement by force majeure,  the Partner concerned
shall immediately give the other Partner a detailed account of what has happened
via fax.

Within 15 days of the  occurrence of any force majeure,  a notarially  certified
document,   issued  by  a  relevant  notary  public's  office,   evidencing  the
aforementioned events shall be produced stating the reasons for the inability of
the Partner  concerned to perform this Joint  Venture  Agreement or for the late
performance in whole or in part of the Joint Venture Agreement.

In such cases both Partners shall confer and decide:

     -   whether this Joint Venture Agreement is to be terminated or

     -   whether that duty which is affected by force  majeure shall be exempted
         from the performance of this Joint Venture Agreement or

     -   whether  the  performance  of this  Joint  Venture  Agreement  is to be
         postponed due to the effects  these events may have on the  performance
         of the Joint Venture Agreement.


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                        Article 20 Resolution of Disputes

All disputes arising out of or relating to the Joint Venture  Agreement shall be
resolved by the Partners by means of good faith negotiations.

If the dispute cannot be resolved by mutual agreement,  the Partners shall avail
themselves of the arbitration  services of a non-involved  country in accordance
with the "Regulations for Implementing the Law of the People's Republic of China
on Joint  Undertakings  with  Sino-Foreign  Participation  ", i.e.  those of the
International Chamber of Commerce in Zurich, Switzerland, under its rules and on
the basis of international commercial law.

The arbitrator's award shall be final and binding upon both Partners.  The costs
of  arbitration  and any other  associated  costs shall be borne by the defeated
Party or, in the event of both  Partners  being  partially  victorious,  by both
Partners on a pro-rata basis.

The arbitration proceedings shall be conducted in English.

During the arbitration  proceedings  both Partners shall continue to perform the
Joint Venture Agreement with the exception of the items under dispute.

                      Article 21 Language of the Agreement

This Joint Venture Agreement shall be made in German and Chinese.

Both versions shall have equal legal force.

In the  event  of  discrepancies  in the  language  of the  texts  the  court of
arbitration referred to in Article 20 shall reach a decision.

               Article 22 Exhibits, Taking Effect of the Agreement

The time schedules  (Exhibits 1 and 2), the organization  chart (Exhibit 3), the
Investment Volume Agreement (Exhibit 4), the Company Cash Flow Plan (Exhibit 5),
the current 2000 price list (Exhibit 6) and the agreed method of  calculation of
the raw slurry quantity


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(Exhibit 7) have been  prepared in accordance  with the  principles of the Joint
Venture Agreement and constitute major parts thereof.

This Joint Venture Agreement and its Exhibits shall come into effect on the date
of approval by the competent local authority control and approval body.

                            Article 23 Correspondence

If a Partner sends out information  with respect to the rights and duties of the
other  Partner by telegram or fax etc.,  the other  Partner must be sent written
confirmation of the corresponding information.

The legally  effective  addresses of the Partners set forth in the Joint Venture
Agreement shall serve as the postal addresses for the purposes hereof.

Each  Partner is entitled  to specify a different  address by service of written
notice.  Correspondence  shall be sent to the new  address  with effect from the
notice date.

                            Article 24 Miscellaneous

This Joint  Venture  Agreement has been made in two copies in German and Chinese
respectively,  of which each shall be deemed an original,  and was signed by the
authorized representatives of both Partners on 8 September 2000 in Fushun.

Each Partner to this Joint Venture  Agreement shall receive one original of both
language versions.



/s/                                               /s/
-------------------------                         ------------------------------
Fushun Coal Mining Bureau                         Holter Technologies Holding AG


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<PAGE>


                    EXHIBIT 1 of the Joint Venture Agreement
                    ----------------------------------------

                                  Time schedule

8 September 2000
Signing of the Joint Venture Agreement,  the Bylaws and the Framework  Agreement
by the FCMB and HTH.

Immediately  upon  signing of the Joint  Venture  Agreement,  the Bylaws and the
Framework Agreement
Submission  of  application  for  approval of the Joint  Venture  Company to the
competent local authority control and approval bodies.

The  Managing  Board shall be appointed  by the  shareholders  as soon as the JV
Agreement and the Bylaws of the JV have been signed.

The Managing Board shall then appoint the two managers of the JV without delay.

On being appointed the management shall immediately place supply orders with the
FCMB and Heinrich Holter GmbH in accordance with the contracts negotiated.

The nominal capital of the JV shall be paid in by both Partners no later than 30
days after the Joint Venture Company is approved.

No later than 15 October 2000
Completion of all preparatory work required to commence the business activity of
the Joint Venture Company,  such as obtaining the necessary permits,  processing
the requisite registrations etc.

Beginning of November  2000
Start of coal slurry preparation plant project in accordance with Exhibit 2.

Both Partners  shall ensure that the funds required by the JV to erect the plant
will be made available  punctually in accordance  with the cash flow plan in the
amount of their participation.


                                       19
<PAGE>


Fushun, 8 September 2000






/s/                                              /s/
-------------------------                        -------------------------------
Fushun Coal Mining Bureau                        Hoelter Technologies Holding AG


                                       20
<PAGE>


Exhibit 4 of the JV Agreement


                        Total Investment by the Partners

The total investment by the Partners in the JV is:

                                            60 400 000 yuan
(sixty million four-hundred thousand yuan),

corresponding to:

                                             7 411 043 USD
(seven million four-hundred and eleven thousand forty-three USD),

(converted  into USD on the basis of the  official  exchange  rate in China on 8
September 2000),

corresponding to DM 15 100 000, at an exchange rate of 4.0 yuan = DM 1.00.

of which FCMB's supply share                        = DM 5 850 000

of which Heinrich Holter GmbH's supply share        = DM 9 250 000



Fushun, 8 September 2000





/s/                                              /s/
-------------------------                        -------------------------------
Fushun Coal Mining Bureau                        Hoelter Technologies Holding AG


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