PROPERTY, PLANT AND EQUIPMENT, NET

3 Months Ended

Mar. 31, 2012

NOTE 5 – PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net consist of the following:

	March 31, 2012			December 31, 2011
At cost:
Mineral rights	$	6,325,120		$	6,318,750
Buildings		41,015,836			40,974,528
Plant and machinery		137,000,357			136,862,383
Motor vehicles		7,031			7,024
Furniture, fixtures and office equipment		4,061,446			4,057,356
Total		188,409,790			188,220,041
Less: Accumulated depreciation and amortization		(46,669,224	)		(41,019,301	)
Net book value	$	141,740,566		$	147,200,740

The Company has certain buildings and salt pans erected on parcels of land located in Shouguang, PRC, and such parcels of land are collectively owned by local townships. The Company has not been able to obtain property ownership certificates over these buildings and salt pans as the Company could not obtain land use rights certificates on the underlying parcels of land. The Company could not obtain property ownership certificates covering certain properties of aggregate carrying value of $30,827,784 and $33,108,012 as at March 31, 2012 and December 31, 2011, respectively.

During the three-month period ended March 31, 2012, depreciation and amortization expense totaled $5,596,921, of which $5,242,333 and $354,588 were recorded as cost of net revenue and administrative expenses, respectively. During the three-month period ended March 31, 2011, depreciation and amortization expense totaled $3,348,519, of which $2,974,742 and $373,777 were recorded as cost of net revenue and administrative expenses, respectively.

For the three-month periods ended March 31, 2012 and 2011, ordinary repair and maintenance expenses were $127 and $50,633, respectively.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

+ References+ Details