PROPERTY, PLANT AND EQUIPMENT, NET

9 Months Ended

Sep. 30, 2012

PROPERTY, PLANT AND EQUIPMENT, NET [Abstract]

NOTE 5 - PROPERTY, PLANT AND EQUIPMENT, NET

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

	September 30, 2012			December 31, 2011
At cost:
Mineral rights	$	6,278,539		$	6,318,750
Buildings		46,805,669			40,974,528
Plant and machinery		156,277,753			136,862,383
Motor vehicles		6,743			7,024
Furniture, fixtures and office equipment		4,031,535			4,057,356
Total		213,400,239			188,220,041
Less: Accumulated depreciation and amortization		(55,462,905	)		(41,019,301	)
Net book value	$	157,937,334		$	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 aggregate carrying values of these buildings and salt pans are $35,988,055 and $33,108,012 as at September 30, 2012 and December 31, 2011, respectively.

During the three-month period ended September 30, 2012, depreciation and amortization expense totaled $5,619,219, of which $5,275,200 and $344,019 were recorded as cost of net revenue and administrative expenses, respectively. During the three-month period ended September 30, 2011, depreciation and amortization expense totaled $4,988,255, of which $4,657,093 and $331,162 were recorded as cost of net revenue and administrative expenses respectively. During the nine-month period ended September 30, 2012, depreciation and amortization expense totaled $16,737,318, of which $15,920,903 and $816,415 were recorded as cost of sales and administrative expenses respectively. During the nine-month period ended September 30, 2011, depreciation and amortization expense totaled $12,363,918, of which $11,462,272 and $901,646 were recorded as cost of net revenue and administrative expenses respectively.

For the three-month periods ended September 30, 2012 and 2011, repair and maintenance expenses were $21,204 and $12,985, respectively. For the nine-month periods ended September 30, 2012 and 2011, repair and maintenance expenses were $21,331 and $102,076, 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.

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