DISCLOSEABLE TRANSACTION PROPOSED INVESTMENT ON ESTABLISHMENT OF MCC CCB JINXIU INVESTMENT MANAGEMENT PARTNERSHIP (LIMITED PARTNERSHIP)

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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. DISCLOSEABLE TRANSACTION PROPOSED INVESTMENT ON ESTABLISHMENT OF MCC CCB JINXIU INVESTMENT MANAGEMENT PARTNERSHIP (LIMITED PARTNERSHIP) The Board announces that MCC Real Estate and MCC International Investment, being wholly-owned subsidiaries of the Company, will enter into the Partnership Agreement with CCB Trust to establish the Partnership. According to the Partnership Agreement, MCC Real Estate and CCB Trust will be limited partners, while MCC International Investment will be the general partner. The total subscribed contribution to the Partnership will be RMB10 billion, comprising RMB5.099 billion to be subscribed by MCC Real Estate, RMB4.9 billion to be subscribed by CCB Trust, and RMB1 million to be subscribed by MCC International Investment. The Company will make further announcement on the signing date of the Partnership Agreement. As the highest applicable ratio (as required under the Listing Rules) of the Transaction exceeds 5% but falls below 25%, the Transaction will constitute a discloseable transaction of the Company under Chapter 14 of the Listing Rules, which shall be subject to the reporting and announcement requirements under the Listing Rules. BACKGROUND INFORMATION The Board announces that MCC Real Estate and MCC International Investment, being wholly-owned subsidiaries of the Company, will enter into the Partnership Agreement with CCB Trust to establish the Partnership. According to the Partnership Agreement, MCC Real Estate and CCB Trust will be limited partners, while MCC International Investment will be the general partner. The total subscribed contribution to the Partnership will be RMB10 billion, comprising RMB5.099 billion to be subscribed by MCC Real Estate, RMB4.9 billion to be subscribed by CCB Trust, and RMB1 million to be subscribed by MCC International Investment. The Company will make further announcement on the signing date of the Partnership Agreement. 1

2 DETAILS OF THE TRANSACTION Details of the Transaction are set out as follows: (I) Parties (a) Limited partners: MCC Real Estate and CCB Trust (b) General partner and executive partner: MCC International Investment (II) Information on the Partnership (a) Name: MCC CCB Jinxiu Investment Management Partnership (Limited Partnership)* (subject to the final approval of the registration authority). (b) Purposes: to fully leverage the advantages of the partnership structure in accordance with the national conditions and the current capital market development in the PRC and in compliance with laws, and to make full use of the general partner s advantages in various aspects such as resources, information, talents and systems to carry out professional management and application of assets of the Partnership through investment in selected projects, so as to realize capital preservation and appreciation and create better returns for the partners. (c) Term: 10 years from the date when the Partnership obtains the business license. Any change to the term of the Partnership shall be approved at the partners meeting before the procedure for the change of registration is made with the industrial and commercial department according to law. (III) Investment projects The funds of the Partnership will be used in Cuiyuan Project and Santang Project developed by MCC Real Estate. Both Cuiyuan Project and Santang Project are the real estate development projects located in Hangzhou, the PRC. Any idle funds of the Partnership may be managed through investment in bank deposits, purchase of national debts and other fixed income products or in any other safe manner as agreed by the Investment Decision-making Committee so as to increase the income from such idle funds. The income generated from the idle funds of the Partnership shall be audited separately. 2

3 (IV) Subscribed contributions According to the capital requirement of the projects to be invested by the Partnership, the total subscribed contribution to the Partnership shall be RMB10 billion, which shall be paid in full in monetary (Renminbi) form. Details are set out as follows: Partner Subscribed contribution As a percentage of the total subscribed contribution Payment schedule MCC Real Estate RMB5.099 billion 50.99% Subject to the Payment Notice issued by the manager CCB Trust RMB4.9 billion 49% Subject to the Payment Notice issued by the manager MCC International Investment RMB1 million 0.01% Subject to the Payment Notice issued by the manager MCC Real Estate and MCC International Investment will satisfy the requirement of capital contribution with their own funds. (V) Investment Decision-making Committee The Partnership will establish the Investment Decision-making Committee, which will mainly be responsible for reviewing and making decisions on matters such as investment decision-making, management and withdrawal of investment projects. The Investment Decision-making Committee shall comprise five members, of which two members shall be appointed by MCC International Investment, one member shall be appointed by MCC Real Estate and two members shall be appointed by CCB Trust. The member appointed by MCC International Investment shall serve as the chairperson of the committee. Any resolution of the Investment Decision-making Committee shall be passed by an affirmative vote of three-fifths or above of the committee members. (VI) Partners meeting The partners meeting, which shall comprise all partners, is the highest authority of the Partnership. The partners meeting will be responsible for approving matters in relation to the operation and existence of the Partnership as stipulated in the Partnership Agreement, including the change of basic information of the Partnership, change of partners, change of subscribed contribution of each partner, confirmation and change of profit distribution plan of the Partnership, appointment of consulting agencies, selection of the manager, early dissolution of the Partnership and amendments to the Partnership Agreement. 3

4 Each partner shall have one vote at the partners meeting, and resolutions of the partners meeting shall be passed by two-thirds or above of the partners. However, any matter required to be approved unanimously by all partners under the Partnership Agreement shall be approved by all partners. Matters required to be approved unanimously by all partners include the selection of the manager, early dissolution of the Partnership, and change of partners or executive partner. (VII) Executive partner and manager MCC International Investment will serve as the executive partner of the Partnership. Except for the matters required to be decided at the partners meeting as expressly stated in the Partnership Agreement, the executive partner shall have the sole discretion to decide on the matters of the Partnership, including the execution of the investments made by the Partnership, signing, delivery and execution of agreements or documents on behalf of the Partnership, and execution of the resolutions passed by the Investment Decision-making Committee. Upon establishment of the Partnership, the manager of the Partnership shall be appointed by the executive partner subject to the consent of all partners. The manager will enter into an entrusted management agreement with the executive partner, setting out the detailed scope of authority and management fees of the manager. (VIII) Profit distribution The investment income after deduction of the tax and partnership fees required to be undertaken by the Partnership as agreed in the Partnership Agreement shall be the distributable income of the Partnership. The distributable income shall in principle not be used for investment unless with the approval of the partners meeting, and shall be distributed in accordance with the principles set out in the Partnership Agreement. The funds for the profit distribution of the Partnership are sourced from the investment operating income of the Partnership, idle funds in the account of the Partnership and legitimate income and funds as stipulated in the Partnership Agreement. The Partnership shall convene a partners meeting and pass a resolution on profit distribution before each distribution. The Partnership shall make the profit distribution in accordance with the resolution passed at the partners meeting. Unless otherwise resolved at the partners meeting, the profit distribution shall be made in the order as follows: (a) payment of service fees of the executive partner and management fees of the manager according to the Partnership Agreement; (b) payment of other partnership fees; 4

5 (c) return of paid-in contributions and profits to the limited partners from the remaining amount until all of their paid-in contributions have been returned, and their profits have reached the amount calculated at an annualized rate of return of 8.5% as of the audit date; (d) return of paid-in contribution to the general partner from the remaining amount; (e) upon completion of the above distribution, the remaining amount (if any) shall be distributed to the limited partners as excessive profits and to the general partner as variable service fees and variable management fees based on a ratio of 5:95. REASONS FOR AND BENEFITS OF THE TRANSACTION The establishment of the Partnership enables the Group to achieve capital preservation and appreciation by making full use of the general partner s advantages in various aspects such as resources, information, talents and systems. Through establishment of the Partnership, the Group may introduce partners to jointly invest in Cuiyuan Project and Santang Project developed by MCC Real Estate. Cuiyuan Project, located in Xihu District, Hangzhou, occupies a site area of 19,914 square meters and is expected to be developed as a sales complex consisting of high-end residences, apartments and commercial properties, and a proprietary complex consisting of apartments and commercial properties. Santang Project, located in Xiacheng District, Hangzhou, occupies a site area of 38,392 square meters and is expected to be developed as a sales complex consisting of high-end residences, apartments and commercial properties, and a proprietary complex consisting of high-end residences, apartments and commercial properties. Cuiyuan Project and Santang Project are of strategic significance in enhancing the market share and brand influence of MCC Real Estate in the Yangtze River Delta region, and may have a far-reaching impact on the future development of MCC Real Estate in Hangzhou and the Yangtze River Delta region. The Partnership can provide financial support for the development of Cuiyuan Project and Santang Project to ensure the successful development of the projects and to satisfy their capital requirement. In light of the above reasons, the Directors, including the independent non-executive Directors, are of the view that the Transaction is entered into in the ordinary and usual course of business of the Group, on normal commercial terms, is fair and reasonable, and in the interest of the Company and its shareholders as a whole. LISTING RULES IMPLICATIONS As the highest applicable ratio (as required under the Listing Rules) of the Transaction exceeds 5% but falls below 25%, the Transaction will constitute a discloseable transaction of the Company under Chapter 14 of the Listing Rules, which shall be subject to the reporting and announcement requirements under the Listing Rules. 5

6 GENERAL INFORMATION The Group The Group has strong capabilities in metallurgical engineering. It is a large conglomerate operating in various specialized fields, across different industries and in many countries, with engineering contracting, property development, equipment manufacturing and resources development as its principal businesses. MCC Real Estate, established in Beijing, the PRC, is a wholly-owned subsidiary of the Company. The operating scope of the company is real estate development, sales of commercial housing, real estate information consultancy (excluding intermediary service), engagement in property management under entrustment and project investment. As of the end of 2017, the major financial indicators of MCC Real Estate are as follows: total assets amounted to RMB billion, total liabilities amounted to RMB billion, total shareholders equity amounted to RMB billion, total revenue amounted to RMB billion, and total profit amounted to RMB3.004 billion. MCC International Investment, established in Zhuhai, the PRC, is a wholly-owned subsidiary of the Company, which is held as to 60% and 40% of shares by the Company and MCC Real Estate, respectively. The operating scope of the company is supply chain management and consultancy business, real estate investment and development, general construction contracting, new materials relating to engineering and construction, technical development of new workmanship and new products, construction investment and management, technical services, technical exchange and technical transfer, consultancy service of construction techniques, construction equipment leasing, undertaking of overseas exploration, design and equipment supply of various industries, civil construction, municipality, roads and bridge engineering, sales of equipment for metallurgical industry, mechanic products, building materials, apparatus and instrument, hardware and electric materials, chemical products (excluding hazardous chemicals and category 1 precursor chemicals), import and export of goods and technology, agency of import and export and external labor service. As of the end of 2017, the major financial indicators of MCC International Investment are as follows: total assets amounted to RMB3.155 billion, total liabilities amounted to RMB2.505 billion, total shareholders equity amounted to RMB0.65 billion, total revenue amounted to RMB0 billion, and total profit amounted to RMB0 billion. CCB Trust CCB Trust, established in Hefei, the PRC, is a subsidiary of China Construction Bank Corporation. The operating scope of the company includes RMB and foreign currency business, such as trust of funds, trust of movable properties, trust of immovable properties, trust of marketable securities, trust of other properties or property rights, conducting investment fund businesses as a promoter of investment funds or fund management companies, reorganization, merger and acquisition of corporate assets, and project financing, corporate wealth management and financial advisory businesses, 6

7 trustee for underwriting business of securities approved by the relevant authority under the State Council, engaging in intermediary, consulting and credit investigation businesses, custodian and safe deposit box businesses, utilization of inherent properties by way of deposits in financial institutions, lending to financial institutions, loans, leasing and investments, providing guarantees with inherent properties; engaging in interbank lending, and other businesses in compliance with the requirements of the laws and regulations or approved by the China Banking Regulatory Commission. As of the end of 2016, the major financial indicators of CCB Trust are as follows: total assets amounted to RMB billion, total liabilities amounted to RMB1.109 billion, total shareholders equity amounted to RMB9.753 billion, total revenue amounted to RMB2.203 billion, and total profit amounted to RMB1.771 billion. DEFINITIONS In this announcement, unless the context requires otherwise, the following expressions have the following meanings: Board CCB Trust Company Cuiyuan Project Director(s) Group Listing Rules MCC International Investment MCC Real Estate the board of directors of the Company CCB Trust Co., Ltd.* ( ), a third party independent of the Company and its connected persons Metallurgical Corporation of China Ltd.* ( ) the real estate development project located at the west of Jiaogong Road and the north of Baoting Road, Xihu District, Hangzhou the director(s) of the Company the Company and its subsidiaries the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited MCC International Investment Development Co., Ltd.* ( ), a wholly-owned subsidiary of the Company, which is held as to 60% and 40% by the Company and MCC Real Estate, respectively MCC Real Estate Group Co. Ltd.* ( ), a wholly-owned subsidiary of the Company 7

8 Partnership Partnership Agreement PRC Santang Project Transaction MCC CCB Jinxiu Investment Management Partnership (Limited Partnership) (subject to the final approval of the registration authority) to be established under the Partnership Agreement, and a subsidiary of the Company upon its establishment the Partnership Agreement of MCC CCB Jinxiu Investment Management Partnership (Limited Partnership) to be entered into by and among MCC Real Estate, MCC International Investment and CCB Trust the People s Republic of China, and for the purpose of this announcement only, excluding Hong Kong, Macau Special Administrative Region and Taiwan the real estate development project located in Santang Unit, Xiacheng District, Hangzhou, with its east to Dongxin Road, its south to Donggang River, its west to Shangtang River and its north to Shixiang Road the transaction regarding the establishment of the Partnership by MCC Real Estate, MCC International Investment and CCB Trust By order of the board of directors Metallurgical Corporation of China Ltd.* Li Yuzhuo Joint Company Secretary Beijing, the PRC 29 March 2018 As at the date of the announcement, the Board of the Company comprises two executive directors: Mr. Guo Wenqing and Mr. Zhang Zhaoxiang; two non-executive directors: Mr. Jing Tianliang and Mr. Lin Jinzhen; and three independent non-executive directors: Mr. Yu Hailong, Mr. Ren Xudong and Mr. Chan Ka Keung Peter. * For identification purposes only 8