CONNECTED TRANSACTION COAL SALE AND PURCHASE AGREEMENT

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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. (Stock Code: 0347) CONNECTED TRANSACTION COAL SALE AND PURCHASE AGREEMENT The Board hereby announces that on 23 November 2017, the Company entered into the Coal Sale and Purchase Agreement with Angang Holding, its controlling shareholder. Pursuant to the Coal Sale and Purchase Agreement, the Company agreed to sell Coal to Angang Holding at a consideration of RMB86,465,000 (equivalent to approximately HK$101,879,000). As at the date of this announcement, Angang Holding directly holds an approximate 67.29% equity interest in the Company and is therefore the controlling shareholder of the Company and a connected person of the Company. As such, the transaction contemplated under the Coal Sale and Purchase Agreement constitutes a connected transaction of the Company. As one or more of the applicable percentage ratios (as defined in Rule of the Listing Rules) in respect of the transaction amount under the Coal Sale and Purchase Agreement exceed 0.1% but are less than 5%, the transaction contemplated under the Coal Sale and Purchase Agreement is subject to the reporting and announcement requirements but exempt from the independent Shareholders approval requirement under Chapter 14A of the Listing Rules. 1

2 I. INTRODUCTION The Board hereby announces that on 23 November 2017, the Company entered into the Coal Sale and Purchase Agreement with Angang Holding, its controlling shareholder. Pursuant to the Coal Sale and Purchase Agreement, the Company agreed to sell Coal to Angang Holding at a consideration of RMB86,465,000 (equivalent to approximately HK$101,879,000). Coal Sale And Purchase Agreement The principal terms of the Coal Sale and Purchase Agreement are summarized below: Date: 23 November 2017 Parties: (i) The Company (as vendor); and (ii) Angang Holding (as purchaser) Subject matter: Consideration: Payment: The Company agreed to sell, and Angang Holding agreed to purchase, the Coal. The consideration to the Coal Sale and Purchase Agreement is RMB86,465,000 (the Consideration ). The Consideration has been agreed through commercial negotiation between the Company and Angang Holding on an arm s length basis based on the cost of the Coal plus service charge (RMB5/per ton). The Consideration shall be payable by Angang Holding to the Company in cash within the month of the settlement. 2

3 II. REASONS FOR AND BENEFITS OF ENTERING INTO THE COAL SALE AND PURCHASE AGREEMENT The Coal was purchased by the Company as raw material for production purpose. During the course of its operations, the Company found the Coal was incompatible with its machineries, which emitted pollutants beyond the PRC government standard (the Standard ). The Coal was being tested and found suitable to use in the Power Plant No. 2 of Angang Holding and the emission was within the Standard. After discussion between the Company and Angang Holding, the Company decided to sell the Coal to Angang Holding. The Directors (including the independent non-executive Directors) are of the view that the Coal Sale and Purchase Agreement has been entered into on normal commercial terms or better and in the ordinary and usual course of business of the Group, and the terms of the Coal Sale and Purchase Agreement are fair and reasonable and in the interests of the Company and the Shareholders as a whole. III. LISTING RULES IMPLICATIONS As at the date of this announcement, Angang Holding directly holds an approximate 67.29% equity interest in the Company and is therefore the controlling shareholder of the Company and a connected person of the Company. As such, the transaction contemplated under the Coal Sale and Purchase Agreement constitutes a connected transaction of the Company. As one or more of the applicable percentage ratios (as defined in Rule of the Listing Rules) in respect of the transaction amount under the Coal Sale and Purchase Agreement exceed 0.1% but are less than 5%, the transaction contemplated under the Coal Sale and Purchase Agreement is subject to the reporting and announcement requirements but exempt from the independent Shareholders approval requirement under Chapter 14A of the Listing Rules. Mr. Yao Lin, the general manager of Angang Group Company and the then Chairman of the Board whose resignation was effective after voting on the resolution in relation to the Coal Sale and Purchase Agreement ( Mr. Yao ) and Mr. Wang Yidong ( Mr. Wang ), the chairman of Angang Holding and a Director of the Company, are considered to have a material interest in the transaction under the Coal Sale and Purchase Agreement due to their respective senior management positions in Angang Group Company and Angang Holding. Each of Mr. Yao and Mr. Wang has abstained from voting on the resolution in relation to the Coal Sale and Purchase Agreement proposed to the Board. Save as disclosed above, none of the Directors who attended the Board meeting for approving the Coal Sale and Purchase Agreement has a material interest in the aforementioned agreement. 3

4 IV. GENERAL INFORMATION ABOUT THE PARTIES Angang Holding is a major enterprise in the iron and steel industry in the PRC and engaged in a wide range of iron and steel-related business activities including steel products, metal wares (exclusive of franchised products), cast iron pipes, metal structure materials, iron wire ropes and relevant products, coking and coking products, cement, electricity generation, metallurgical appliance and equipment and related spare parts and components, electrical machinery, equipment, instruments and apparatus for power transmission, distribution and control, mining and beneficiation of iron ore and manganese ore as well as quarrying of refractory pebble, etc. As at the date of this announcement, it directly holds an approximate 67.29% equity interest in the Company. The Company is a major steel manufacturing enterprise in the PRC. It is principally engaged in the production and sale of hot-rolled sheets, cold-rolled sheets, galvanized steel sheets, colour coating plates, silicon steel, medium and thick plates, wire rods, large steel products and seamless steel pipes. V. DEFINITIONS In this announcement, unless the context otherwise requires, the following terms shall have the following meanings: Angang Group Company Angang Holding Board Coal Coal Sale and Purchase Agreement Company Angang Group Company* ( ), which directly holds 100% equity interest in Angang Holding. Anshan Iron & Steel Co. Ltd* ( ), the immediate holding company of the Company, which currently holds approximately 67.29% equity interest in the Company and a major enterprise in the iron and steel industry in the PRC the board of Directors of the Company 139,536 tons of coal the coal sale and purchase agreement dated 23 November 2017 entered into between the Company and Angang Holding in relation to the sale of Coal Angang Steel Company Limited* ( ), a joint stock limited company incorporated in Anshan, Liaoning Province, the PRC, the H shares of which are listed on the Hong Kong Stock Exchange and the A shares of which are listed on the Shenzhen Stock Exchange 4

5 connected person(s) controlling shareholder Director(s) Group Hong Kong Stock Exchange Listing Rules normal commercial terms or better PRC RMB Shareholder(s) has the meaning ascribed thereto under the Listing Rules has the meaning ascribed thereto under the Listing Rules the director(s) of the Company the Company and its subsidiaries from time to time The Stock Exchange of Hong Kong Limited the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited has the meaning ascribed thereto under the Listing Rules the People s Republic of China (for the purpose of this announcement, excluding Hong Kong, Macau Special Administrative Region and Taiwan) Renminbi, the lawful currency of the PRC the shareholder(s) of the Company % per cent. In this announcement, for the purpose of illustration only, amounts quoted in RMB have been converted into HK$ at the rate of HK$1.00 to RMB Such exchange rate has been used, where applicable, for the purpose of illustration only and does not constitute a representation that any amounts were or may have been exchanged at this or any other rates or at all. Anshan City, Liaoning Province, the PRC 23 November 2017 By Order of the Board ANGANG STEEL COMPANY LIMITED* Wang Yidong Executive Director and Chairman of the Board 5

6 As at the date of this announcement, the Board comprises the following Directors: Executive Directors: Wang Yidong Li Zhongwu Zhang Jingfan Independent Non-executive Directors: Wu Dajun Ma Weiguo Luo Yucheng * For identification purposes only 6