OREANDA-NEWS. May 19, 2011. The Board of Chongqing Iron & Steel Company Limited (the “Company”) voted and passed the written resolution in respect of “Plan for Environmental Relocation of Chongqing Iron & Steel Company Limited”, reported the press-centre of Chongqing Iron & Steel Company.

The contents of the resolution are set out as follows:

I.
The Company is located in Dadukou District of Chongqing city, the People’s Republic of China, (the “Old Zone”) only 17 km away from the centre of the city, making it one of the major sources that negatively impact the environmental quality of the main urban areas. In order to apply the scientific outlook on development, change the pattern of economic growth, improve environmental quality of the main urban areas, optimize the urban function, promote energy saving and emission reduction throughout the city, eliminate outdated production capacities, increase the efficiency of comprehensive unitization of resources and achieve sustainable development, it is necessary for the Company to implement the relocation plan.

The Company’s new premise lies at Jiangnan Town, Changshou District, 65 km away from the main urban areas of Chongqing. The Company will strive for significant pollution reduction and up-to-standard emission by enhancing process technology and employing advanced equipment in a bid to fundamentally improve the environmental quality and benefit the local people. Meanwhile, the Company also takes advantage of this opportunity to comprehensively upgrade its technology by exploiting new techniques, new process and new equipment to reduce cost of production and adjust product mix with the aim of growing more sophisticated and stronger and enhancing its capabilities to meet challenges and opportunities emerging in the market.

II. Basic Principle s of Environmental Relocation

1. Principle of “Overall Consideration and Concurrent Action”
As a listed company and the largest municipal industrial enterprise, the Company’s production, operation, reform, development and stability are major issues of overall significance for Chongqing city. In respect of the Company’s relocation and its production and operation, overall plans shall be made to take all factors into consideration to ensure both aspects of the work going on at the same time.

2. Principle of “Unified Planning and Step-by-Step Implementation”

With the orderly shutdown of production lines in the Old Zone, a large amount of assets there will be relocated and reutilized, or sold, transferred or scrapped according to the overall plan and implemented step by step.

The first step is to build new 4100mm wide-thick plates and 1780mm hot rolling production lines, relocate and upgrade the 2700mm medium-size plates production line at the industry advanced level in the Old Zone in Dadukou District, creating a base for choice products of plates and strips.

The second step is to reduce the production scale of the Old Zone gradually to ultimately shut it down altogether. The rod and wire production line, largescale production line and some smelting equipment in the Old Zone in Dadukou District are technologically advanced and in line with national industrial policies, and thus shall be upgraded and put into use to create a base for choice products of long products and a base for pig iron, satisfying the demand for long products stemming from the urban and rural construction of Chongqing.

III. Arrangement for Environmental Relocation
1. The 4100mm wide-thick plates production line was completed and put into operation in 2009.

2. The 1780mm hot rolling production line was completed and put into operation in 2010.

3. The relocation and upgrade of the 2700mm medium-size plates production line will be completed in June 2011. The Old Zone in Dadukou District will be totally shut down in September 2011.

4. The relocation and upgrade of the long products production line and the production line of pig iron for steel manufacture will be completed in the first half of 2012.

IV. Scale and Layout of Environmental Relocation
After scraping some outdated equipment such as one 45-hole coke oven, three 42-hole coke ovens, two 102m2 sintering machines, two 8m2 pellet shaft furnaces, one 1200m3 blast furnace, one 80t converter and one set of 650 medium section mill with the environmental relocation, the Company will form an appropriate scale with its production capacity at 6.50 million tons/year.