ANNOUNCEMENT RENEWAL OF CONTINUING CONNECTED TRANSACTION RENEWAL OF THE FIXED ASSETS LEASE FRAMEWORK AGREEMENT WITH CHINALCO

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1 Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. ANNOUNCEMENT RENEWAL OF CONTINUING CONNECTED TRANSACTION RENEWAL OF THE FIXED ASSETS LEASE FRAMEWORK AGREEMENT WITH CHINALCO Reference is made to the announcement of the Company dated 28 April 2015, in relation to, among other matters, the entering into of the Existing Fixed Assets Lease Framework Agreement between the Company and Chinalco. As the Existing Fixed Assets Lease Framework Agreement will expire on 31 December 2018, the Company renewed the Fixed Assets Lease Framework Agreement with Chinalco on 19 November 2018 as considered and approved at the thirty-first meeting of the sixth session of the Board held on 17 September As at the date of this announcement, Chinalco is the controlling Shareholder of the Company, and thus is a connected person of the Company under the Hong Kong Listing Rules. The transaction constitutes a continuing connected transaction of the Company under Chapter 14A of the Hong Kong Listing Rules. As the highest applicable percentage ratio (as defined under the Hong Kong Listing Rules) in respect of the expenditure and revenue transactions under the Fixed Assets Lease Framework Agreement exceeds 0.1% but is less than 5%, the transactions contemplated thereunder are subject to the reporting and announcement requirements and are exempt from the independent shareholders approval requirements under the Hong Kong Listing Rules. 1

2 1. BACKGROUND Reference is made to the announcement of the Company dated 28 April 2015, in relation to, among other matters, the entering into of the Existing Fixed Assets Lease Framework Agreement between the Company and Chinalco. As the Existing Fixed Assets Lease Framework Agreement will expire on 31 December 2018, the Company renewed the Fixed Assets Lease Framework Agreement with Chinalco on 19 November 2018 as considered and approved at the thirty-first meeting of the sixth session of the Board held on 17 September THE FIXED ASSETS LEASE FRAMEWORK AGREEMENT 2.1. Date of the agreement 19 November Parties (1) Chinalco as both lessor and lessee (for itself and on behalf of its subsidiaries); and (2) the Company as both lessor and lessee (for itself and on behalf of its subsidiaries) 2.3. Term Three years from 1 January 2019 to 31 December

3 2.4. Fixed assets Buildings, constructions, machinery, apparatus, transportation as well as equipment, appliance or tools and other fixed assets owned by either party in relation to the production and operation Price determination The rent shall be adjusted every two years and shall not be higher than prevailing market rent as confirmed by an independent valuer. When determining the rent, the parties will also make reference to the prices charged or quoted by at least two independent third parties providing services of similar size and nature under normal trading conditions in the market around that time Payment term Monthly payment. 3. HISTORICAL AMOUNTS UNDER THE EXISTING FIXED ASSETS LEASE FRAMEWORK AGREEMENT Set out below are the actual amounts and annual caps of the continuing connected transactions under the Existing Fixed Assets Lease Framework Agreement for the two years ended 31 December 2017 and the six months ended 30 June 2018: Transaction Actual For the year ended 31 December 2016 For the year ended 31 December 2017 amounts for the six months ended 30 June Annual caps for the year ending 31 December Actual amounts Annual caps Actual amounts Annual caps (RMB million) (RMB million) (RMB million) (RMB million) (RMB million) (RMB million) (i) Expenditure transactions under the Existing Fixed Assets Lease Framework Agreement (ii) Revenue transactions under the Existing Fixed Assets Lease Framework Agreement

4 4. PROPOSED ANNUAL CAPS FOR THE CONTINUING CONNECTED TRANSACTIONS UNDER THE FIXED ASSETS LEASE FRAMEWORK AGREEMENT AND THE BASIS FOR DETERMINATION OF THE PROPOSED ANNUAL CAPS Set out below are the proposed annual caps of the continuing connected transactions under the Fixed Assets Lease Framework Agreement for the three years ending 31 December 2021: Transactions Proposed annual caps for the year ending 31 December (RMB million) (RMB million) (RMB million) (i) Expenditure transactions under the Fixed Assets Lease Framework Agreement (ii) Revenue transactions under the Fixed Assets Lease Framework Agreement The proposed annual caps have been determined by reference to: Each of the proposed annual caps for the expenditure transactions under the Fixed Assets Lease Framework Agreement for the three years from 2019 to 2021 is RMB200 million, representing an increase of approximately 82% from those of the preceding three years. Such increase is mainly due to the growing demand for the leasing business from the Group s newly consolidated entities. Each of the proposed annual caps for the revenue transactions under the Fixed Assets Lease Framework Agreement for the three years from 2019 to 2021 is RMB100 million, basically at par with the annual caps of the preceding three years, which is mainly based on Chinalco s estimation of generally stable demand for leasing services to be provided by the Company under the Fixed Assets Lease Framework Agreement in the following three years. In conclusion, the Board is of the view that the proposed annual caps for the transactions contemplated under the Fixed Assets Lease Framework Agreement are fair and reasonable, and in the interests of the Company and its Shareholders as a whole. 4

5 The Company has adopted a set of effective internal control measures to supervise the continuing connected transactions of the Company. Prior to entering into operative agreements, the authorized departments of the Group will review and assess the specific terms and conditions of the transactions to ensure their consistency with the Fixed Assets Lease Framework Agreement and determine the rent with reference to the current market conditions and the prices charged or quoted by at least two independent third parties for providing services of similar size and nature under normal trading conditions in the market around that time. The financial department of the Company traces, monitors and checks the progress of the continuing connected transactions of the Company on a monthly basis. Meanwhile, the Audit Committee of the Board will strictly review the continuing connected transactions on a continuing basis to ensure the integrity and effectiveness of the internal control measures regarding continuing connected transactions. 5. REASONS FOR AND BENEFITS OF ENTERING INTO THE FIXED ASSETS LEASE FRAMEWORK AGREEMENT Given the long-term relationship between the Group and Chinalco, the Company considers that the Fixed Assets Lease Framework Agreement and the continuing connected transactions thereunder are in the Company s interests for the following reasons: (1) the Company can acquire prompt and stable supply of services from Chinalco, thus lowering the operating risks and costs and facilitating the Company s routine management on production; (2) the Company can provide part of products and services to Chinalco, which will boost the operating revenue of the Group. The Directors (including independent non-executive Directors) are of the view that the Fixed Assets Lease Framework Agreement is entered into in the ordinary course of business of the Group on normal commercial terms or better, and relevant terms and proposed annual caps are fair and reasonable and in the interests of the Company and the Shareholders as a whole. 5

6 6. IMPLICATIONS UNDER HONG KONG LISTING RULES As at the date of this announcement, Chinalco is the controlling Shareholder of the Company, and thus is a connected person of the Company under the Hong Kong Listing Rules. The transaction constitutes a continuing connected transaction of the Company under Chapter 14A of the Hong Kong Listing Rules. As the highest applicable percentage ratio (as defined under the Hong Kong Listing Rules) in respect of the expenditure and revenue transactions under the Fixed Assets Lease Framework Agreement exceeds 0.1% but is less than 5%, the transactions contemplated thereunder are subject to the reporting and announcement requirements and are exempt from the independent shareholders approval requirements under the Hong Kong Listing Rules. As Mr. Yu Dehui and Mr. Ao Hong, the Directors of the Company, concurrently hold positions in Chinalco, they have abstained from voting on the Board resolution with respect to the renewal of the continuing connected transactions between the Company and Chinalco and the proposed annual caps thereunder (including the transactions contemplated under the Fixed Assets Lease Framework Agreement and the proposed annual caps thereunder). Saved as disclosed above, none of the Directors has any material interest in the transactions and therefore none of the Directors has abstained from voting on such Board resolution. 7. INFORMATION OF THE PARTIES Information on the Company The Company is a joint stock limited company incorporated in the PRC, the H Shares, A Shares and ADS(s) of which are listed on the Hong Kong Stock Exchange, Shanghai Stock Exchange and the New York Stock Exchange, respectively. The Group principally engages in the mining of bauxite, coal and other resources; production, sales and technology research and development of alumina, primary aluminium and aluminium alloy products; international trade; logistics business; thermal and new energy power generation, etc. Information on Chinalco Chinalco, as the controlling shareholder of the Company, directly and indirectly, holds approximately 36.36% of the shares of the Company as at the date of this announcement. Chinalco is a wholly state-owned enterprise incorporated in the PRC, whose entities and business were contributed to the Company upon the Company s establishment. The principal activities of Chinalco include the production and sales of aluminum, copper, rare earth and related non-ferrous metals mineral products, smelted products, fabrication products and carbon products. 6

7 8. DEFINITIONS In this announcement, the following expressions have the following meanings unless the context requires otherwise: A Share(s) the domestic share(s) issued by the Company and subscribed for in RMB, which are listed on the Shanghai Stock Exchange; ADS(s) Board Chinalco Company connected person(s) Director(s) Existing Fixed Assets Lease Framework Agreement the American Depository Share(s) issued by the Bank of New York Mellon as the depository bank and listed on the New York Stock Exchange, with each ADS representing 25 H Shares; the board of Directors of the Company; Aluminum Corporation of China* ( ), a wholly state-owned enterprise established in the PRC and the controlling shareholder of the Company holding directly and indirectly approximately 36.36% of the total issued share capital of the Company as at the date of this announcement; Aluminum Corporation of China Limited* ( ), a joint stock limited company incorporated in the PRC, the A Shares, H Shares and ADS(s) of which are listed on the Shanghai Stock Exchange, the Hong Kong Stock Exchange and the New York Stock Exchange, respectively; has the same meaning ascribed thereto under the Hong Kong Listing Rules; the director(s) of the Company; the agreement entered into between the Company and Chinalco on 28 April 2015, pursuant to which, the Company and Chinalco agreed to provide fixed assets lease services to each other, and the term of the Existing Fixed Assets Lease Framework Agreement will expire on 31 December 2018; 7

8 Fixed Assets Lease Framework Agreement Group the agreement entered into between the Company and Chinalco on 19 November 2018, pursuant to which, the Company and Chinalco agreed to provide fixed assets lease services to each other, for a term commencing from 1 January 2019 to 31 December 2021; the Company and its subsidiaries; H Share(s) the overseas-listed foreign invested share(s) in the Company s share capital, with a nominal value of RMB1.00 each, which are listed on the Hong Kong Stock Exchange and subscribed for in Hong Kong dollars; Hong Kong Hong Kong Listing Rules Hong Kong Stock Exchange PRC RMB Share(s) Shareholder(s) the Hong Kong Special Administrative Region of the PRC; the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited; The Stock Exchange of Hong Kong Limited; the People s Republic of China which, for the purposes of this announcement, excludes Hong Kong, the Macau Special Administrative Region and Taiwan; Renminbi, the lawful currency of the PRC; A Shares and H Shares; holders of A Shares and holders of H Shares; 8

9 subsidiary(ies) has the same meaning ascribed thereto under the Hong Kong Listing Rules; % per cent. By order of the Board Aluminum Corporation of China Limited* Zhang Zhankui Company Secretary Beijing, the PRC 19 November 2018 As at the date of the publication of this announcement, the members of the board of directors comprise Mr. Yu Dehui, Mr. Lu Dongliang and Mr. Jiang Yinggang (Executive Directors); Mr. Ao Hong and Mr. Wang Jun (Non-executive Directors); Ms. Chen Lijie, Mr. Hu Shihai and Mr. Lie-A-Cheong Tai Chong, David (Independent Non-executive Directors). * For identification purpose only 9