Recently, certain media reported that the company's supplies have been cut off by its ore supplier, Companhia Vale do Rio Doce (CVRD), and the company can only maintain its operations for 20 to 30 days. In response to the rumor, the company makes the following clarification:

1. In August 2008, CVRD required its major users in China, including the company, to pay for an increase in the prices of its supplies. In view of the unfairness of the increase to the entire iron & steel industry in China, the China Iron & Steel Association and all CVRD's Chinese clients unanimously opposed the CVRD's increased price requirements.
As the actions of CVRD effect the entire iron & steel industry in China, the company is not the only party to face a cut-off in supply.

2. The largest ore sources for the company originate in Australia, India and the Republic of Chile. Following CVRD's unreasonable price increase, the company purchased sufficient ore material from other sources, both domestic and foreign, to guarantee its normal production.
To date, the company is operating normally, and there is no significant undisclosed information.

The Shanghai Securities News, the China Securities Journal, the Securities Daily, the Securities Times and the website of the Shanghai Stock Exchange (www.sse.com.cn) are the company's designated media for information disclosure.

Board of Directors
29 Oct 2008


Source: Shanghai Stock Exchange

Date: 29 Oct 2008

CN01/RP/JL/JE/KM