2.  Business Nature

    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 Crown
Property Bureau, the Ministry of Finance, the Siam Commercial Bank
(PCL), and the Public. Foreign participation consists of a 30 percent
holding, Paron Resources Inc., a Canadian Public Listed Company.

On being founded in 1906 by an Australian business man, Captain Edward
t. miles, as Tongkah Harbour Tin Dredging Co. NL., offshore tin mining
began in 1907. 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 Nilubon
Company Limited, an affiliated company of Telecom Asia PCL.

2.  BUSINESS OPERATIONS OF THE COMPANY AND GROUP

2.2.1 Tungkum Limited: Gold Mining, Block 4 concession, Loei Province,
Northeast Thailand. License pending, expected sometime in year 2001.
Resources: 3.46 M tons at 4.38 g/t gold. Open pit operation with
resource base open laterally and to depth. 86.36% owned by THL and
13.64% by Cholsin Limited.

2.2.2 Igneous Rock Mining: Igneous rock mining (granodiorite) currently
in operation at Kaeng

Khoi, Saraburi province. Surveyed resources are about 12 M tons and open
to depth and laterally indicating a further 15 M tons mineable.
Operating under a 10 year mining license granted on 24 May 1999, and
with a second ten year mining application in progress. 100% owned by
THL.

2.2.3 Cholsin Limited: Crushing plant operators at the igneous rock
quarry, formerly in underground gold mining at Toh Moh, South Thailand.
THL took control in 1997 with 72.1% shareholding, remaining shares held
by the CPB Equity Co Ltd (a subsiduary of The Crown Property Bureau),
the Ministry of Finance, and others.

2.2.4 Tin Mining: Offshore tin mining in the Phuket Bay area on leases
totaling 23.64 sq km and valid through 2006 and 2008. About 19.1 sq km
are currently worked by contractors. 100% owned by THL.

2.2.5 Land Holdings: Phuket: three parcels totaling 55,753.2 sq m,
located in town, and on beach front with resort development potential.
100% owned by THL. Also, tin tailings area with potential for tin and
accessory minerals extraction. In Bangkok: a 75% holding in Sky Cliff
Limited which has a 5,448 sq m area in prime location near a subway
station development on Rachadapisek Road.

 2.2.6 Policy on Division of Business Operations of Group Companies: As the parent company, THL has major control in its subsidiary companies. However, when any significant decision have to be made, the Company’s management will table the Board of Directors of the company concerned the course of action proposed for consideration and approval. Operations are divided as follows:

1. Tin Mining: Since the offshore tin mining is operated by a
contractor, THL’s Phuket office liaises with the contractor on a daily
basis, and is advised by a consultant mining engineer who has been
involved in offshore tin mining for many years. Activities are reported
to Bangkok office on a regular basis.

2. Andesite Quarrying: The andesite mining operations are supervised by
geologists with assistance from experienced miners from the ex-Toh Moh
mine. The crushing operations are supervised by a mining engineer with
the support of technical and maintenance personnel. Records of the
production, sales, and purchased items are kept in a database,
supervised by the Company’s chief geologist and Project director. In
addition, the operations are reported to the Company’s management
committee.

3. Gold Mining Project: Once the mining license is granted, the gold ore
processing

plant will be set up under the hands-on supervision of experienced
mining engineers in plant processing operations, plus other relevant
experienced expertise, in cooperation with the Company’s and Tungkum’s
mining section. It is expected that many of the experienced miners from
Cholsin’s former Toh Moh operation will be employed.

2.2.7 Investment of More than 10% in Other Companies

  ----- ------------------ ------------------- -------------- -------------
  No.   Company            Business            Registered and % of
                                               Paid Up        Investment
                                               Capital (M Bt) 

  1     Tungkum Limited    Mineral Exploration 150            86.36

  2     Cholsin Limited    Gold Mining         150            72.1

  3     Sky Cliff Limited  Serviced Apartments 41.93          75

  4     Sea Minerals       Offshore Tin Mining 72             10
        Limited                                               

  5     Mining & General   Mining Management   1              10
        Management Co Ltd  Service                            
  ----- ------------------ ------------------- -------------- -------------

3.  Revenue Structure

  --------------- -------------- --------- -------- -------- -------- -------- ----------- -------- ------- -------- ------- --------
  Nature of       Operated by    % of                                          Revenue                                       
  Business                       Share                                         Structure                                     

                                 In the    2000              1999                                           1998             1997

                                 Company   Mil.     %        Mil.     %        Mil. Bht.   %        Mil.    %        Mil.    %
                                           Bht.              Bht.                                   Bht.             Bht.    

  1. Tin Ore      THL                      103.77   66.85    80.13    69.79    31.10       47.37    12.30   26.93    32.05   35.43
  Sales                                                                                                                      

  Andesite Sales  THL                      20.82    13.41    13.37    11.65    10.04       15.28    -       -        -       -

  2. Property                                                                                                                
  Development                                                                                                                

  - Sale of                                         -        -        -        -           -        -       -        -       -
  Commercial land                                                                                                            
  and                                                                                                                        

  office building THL                                                                                                        

  - Sale of                                         -        -        -        -           -        -       -        -       -
  equipment and                                                                                                              
  machinery                                                                                                                  

  use in the                                                                                                                 
  building                                                                                                                   
  project                                                                                                                    

  3. Developing   Sky Cliff Ltd. 75.00     -        -        -        -        -           -        -       -        -       -
  Service A                                                                                                                  

  Apartment       (Development                                                                                               
                  on Hold)                                                                                                   

  4. Gold         Tungkum Ltd.   96.19     -        -        -        -        -           -        -       -        -       -
  Exploration and                                                                                                            
  gold Mining                                                                                                                
  development                                                                                                                

                  (Became                                                                                                    
                  subsidiary                                                                                                 

                  company on                                                                                                 

                  3rd March,                                                                                                 
                  1997)                                                                                                      

  5. Crushing     Cholsin        72.10     5.34     3.44     4.77     4.15     2.10        3.20     -       -        -       -
  contractor of   Limited                                                                                                    
  the                                                                                                                        

  Company's       (Became                                                                                                    
  andesite mining subsidiary                                                                                                 

                  company on                                                                                                 

                  28th April,                                                                                                
                  1997)                                                                                                      

  6. Other income THL                      25.30    16.30    16.55    14.41    22.42       34.15    33.36   73.07    58.43   64.57

  - Service,                                                                                                                 
  Interest income                                                                                                            
  and                                                                                                                        

  other income                                                                                                               

  TOTAL REVENUE                            155.23   100.00   114.82   100.00   34.56       100.00   45.66   100.00   90.48   100.00
  --------------- -------------- --------- -------- -------- -------- -------- ----------- -------- ------- -------- ------- --------