Wuhan Iron and Steel Company Limited (600005) announced on 13 Jun to invest RMB 1.5 bln in Pingdingshan Coal (Group) Company Ltd, following which Wuhan Iron and Steel would hold 11.55% stake in Pingdingshan Coal (Group). Meanwhile, Pingdingshan Coal Group will invest approximately RMB 1.5 bln in Wuhan Steel Coking Co Ltd, a wholly-owned subsidiary of Wuhan Iron and Steel Company, following which Pingdingshan Coal Group would hold a 50% stake in Wuhan Steel Coking. The first investment is the premise for the second investment. Wuhan Iron & Steel will arrange one payment for its investment in Pingdingshan Coal Group, following which the registered capital of Pingdingshan Coal Group will be increased from RMB 6.9 bln to RMB 7.8 bln.

Wuhan Iron and Steel Company's investment in Pingdingshan Coal Group is aimeed to tackle the coal price hike pressure. Pingdingshan Coal Group is one of the coal mining bases of the country, with the widest range of coking and thermal coals. In 2007 Pingdingshan Coal Group produced 37.43 million tons of raw coals and 7.79 million tons of coking coal.

Source: Shanghai Securities News

Date: 13 Jun 2008

CN01/MZ/AR/WH