Letter To Zijin Mining Group

PERU

Piura (Peru), 17 February 2007

Gentlemen:
Tongling
Xiamen C &D
Zijin Tongguan
Zijin Mining Group Co. Ltd.

With the present document, the representatives of the Farmer Communities, Farmer "Rondas", youth and environmental organizations, local authorities and the general population, address you about the violations of national and international law regulations and the damages caused to the environment by the mining company Minera Majaz S.A., a subsidiary of the British company Monterrico Metals plc.

1. Minera Majaz Company, subsidiary of British Monterrico Metals plc., is operating illegally in the country.

Minera Majaz has generated a serious social conflict with the Farmer Communities of Yanta and Segunda y Cajas of the Provinces of Ayabaca and Huancabamba in the Region of Piura, Peru, by its intention of imposing mining exploitation in the territory of the respective communities, without implementing the authorizations demanded by Law. The National Ombudsman of the Republic of Peru (Defensoría del Pueblo de la República del Perú) carried out an investigation into the mining exploration authorization granted by the Ministry of Energy and Mining to Minera Majaz S.A., and, in its report N° 001-2006/ASPMA-MA, pages 17 and 18, recommends that the Ministry of Energy and Mining, in order to authorize the execution of exploration activities, also takes into account the "social aspect". This implies, as a priority, verifying the proper obtaining of the first agreements between the company and the owner, one of which concerns authorization over the surface land use.

Regarding this, the agreement should observe minimum formalities, such as the legalized signatures of the mining company owner and the surface land owner, and a clear and legible authorization for the use of all or part of the land, according to article 11 of Law N° 26505, Peruvian Farmer Communities' Law. This obliges having the approval of two thirds of the members of the Community Assembly. None of these provisions have ever been observed by Minera Majaz.

2. Minera Majaz assaults on biodiversity and the environment.

The Rio Blanco copper project, located in forest land at an average altitude of between 2,000 and 3,000 metres above sea level, including named cloud forests, in the territory of the Farmer Communities of Yanta and Segunda y Cajas in the Provinces of Ayabaca and Huancabamba, Piura Region, Peru, is affecting the springs of the Quiroz and Chinchipe river basins.

The granting of metallic mining concessions in these delicate river basin-spring ecosystems poses a serious threat to their existence, and means the beginning of severe processes of desertification over vast agroecological areas. Various institutions, such as the Binational Catamayo-Chira Project in its Catamayo and Chira rivers' basin environmental study, have pointed these natural areas as in need of protection. Similarly, the National System of State Protected Natural Areas (Sistema Nacional de Áreas Naturales Protegidas por el estado - SINANPE) has integrated them as part of the Prioritized Areas for Conservation in the Master Plan of the National Institute for Natural Resources (Instituto Nacional de Recursos Naturales – INRENA). The protection of this basin is of strategic importance, being the only water source in Peruvian territory within the Binational Peru-Ecuador basin.

For the above-mentioned reasons we demand that your companies request additional information before proceeding to take on economic commitments. For our part we are at your disposition to facilitate all additional information you require.

Yours sincerely, etc.