2.2 Business Nature

2.2.1 Background and Major Changes and Developments of Business
Operations

The Company was founded in 1906 and has been listed on the Stock
Exchange of Thailand (SET) since June 1994. Activities include offshore
tin mining, gold exploration and mining, igneous rock quarrying, and
property development and management. Shareholders include the Ministry
of Finance, and the Public. Foreign participation consists of a 27.08
percent.

Offshore tin mining began in 1907 by the Tongkah Harbour Tin Dredging
Co., NL., which was founded in 1906 by Australian, Captain Edward Miles.
The venture was the world’s first commercial offshore tin mining
operation by bucket dredging. Mining continued profitably on offshore
concessions for many decades until the tin market collapse in the
1980’s. However, in 1976, the Company registered with the Ministry of
Commerce, and in 1980 received offshore mining leases totaling 17,600
rai (28.2 sq kl) and good for 25 years. The leases are in Phuket Bay,
Bangtao Bay, and Ao-Chalong Bay. The Company’s dredge sank in 1991 in a
violent storm and since then, mining operations have been conducted
through contractors.

Due to the bleak future forecast for the tin market in general, the
Company decided to diversify its operational base in miming and,
accordingly, became involved in gold exploration in northeast Thailand
in 1989 which led to its current holdings in Tungkum Limited. In
addition, to raise earnings and investment capital, property development
was undertaken in 1990 with the construction of the 36 story Tongkah
Tower office building. On completion, the Tower was sold to the Nilubon
Company Limited, an affiliated company of Telecom Asia PCL.

2.  Business Operations of the Company and Group

  Summary of business operations as at 31 December 2003

  Business Type :Mining Operation

  Tin Mining : Six offshore tin mining lease 100% owned by THL located
  at Phuket Bay, Bangtao Bay and Pang-Nga areas. One lease expires in
  2006, three in 2008, and two in 2009. Resources: 15,702.52 rai (25.13
  sq km) of mining lease area. About 19.10 sq km are currently worked by
  contractors.

  Igneous Rock Mining : Igneous rock mining (granodiorite) currently in
  operation at Kaeng Khoi, Saraburi Province, Thailand. Surveyed
  resources are about 12 M tons and open to depth and laterally
  indicating a further 15 M tons. Operating under a 10 year mining
  license granted on May 1999, and a second ten year mining application
  granted in 2003. 100% owned by THL.

  Land Holding : Phuket : two parcels totaling 33 Rai 1 Ngan 47.4 sq.
  wah (53,389 sq m.) located in town, and on sea front with develop
  potential. 100% owned by THL.

  Business Type : Rock Crushing

  72.10% Crushing Plant operator at the igneous rock quarry. 72.10%
  owned by THL with remaining shares held by CPB Equity Co.,Ltd. (a
  subsidiary of the Crown Property Bureau), the Ministry of Finance, and
  others.

  Business Type : Gold Exploration and Mining

  94.10% Gold Mining, Block 4 concession, Loei Province, Thailand. Six
  applications of the first batch were approved in March 2003. The
  mining licenses are valid for a 25-year term. Resources: 3.46 M tons
  at 4.38 g/t gold. Open pit operation with resource base. Open
  laterally and to depth.

  Business Type : Property Development (Le Metro)

  75.00% In Bangkok : a 75% holding in Sky Cliff Limited, which owns a 3
  rai 1 ngan 61.9 sq wah (5,447.60 sq m) of land on Rachadapisek Road.
  Sky Cliff revived its plans to develop a 29-storey condominium and
  began development in 2003. The site is near a future subway station
  entrance, expressway and motorway entrances leading to the new airport
  development.

  Business Type : Offshore Tin Mining

10.00% (see Tongkah Harbour PCL. above)

  Business Type : Mining Management Service

  64.93%

3.  Revenue Structure

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  The Company's revenue was generated from its core businesses, which are
  tin mining and andesite aggregate production and the interest income
  from banks and financial institutions.

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