Aluminum of China : PROPOSED ENTERING INTO OF A SUPPLEMENTAL AGREEMENT…

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.

ANNOUNCEMENT

CONTINUING CONNECTED TRANSACTIONS

PROPOSED ENTERING INTO OF A SUPPLEMENTAL

AGREEMENT TO THE GENERAL AGREEMENT ON MUTUAL PROVISION OF PRODUCTION SUPPLIES AND ANCILLARY SERVICES

References are made to the announcement of the Company dated 17 September 2018, the circular of the Company dated 26 October 2018 and the supplemental circular of the Company dated 26 November 2018, in relation to, among other things, the renewal of the daily continuing connected transactions under the General Agreement on Mutual Provision of Production Supplies and Ancillary Services between the Company and Chinalco and the annual caps for the three years ending 31 December 2021. Reference is also made to the announcement of the Company dated 28 March 2019, in relation to, among other things, the proposed entering into of the Supplemental Agreement to the General Agreement on Mutual Provision of Production Supplies and Ancillary Services between the Company and Chinalco and the revised annual caps for the expenditure and revenue transactions under the abovementioned agreement for the three years ending 31 December 2021.

On 3 June 2019, the Company and Chinalco entered into the Supplemental Agreement to the General Agreement on Mutual Provision of Production Supplies and Ancillary Services in order to revise the scope of mutual supply of products and include the pricing principles and methods of payment for the additional products subject to mutual supply.

- 1 -

As at the date of this announcement, Chinalco is the controlling Shareholder of the Company and thus is a connected person of the Company under the Hong Kong Listing Rules. As the highest applicable percentage ratio (as defined under the Hong Kong Listing Rules) in respect of the revised annual caps for the expenditure and revenue transactions under the General Agreement on Mutual Provision of Production Supplies and Ancillary Services (as revised by the Supplemental Agreement) exceeds 5%, the revised annual caps for the expenditure and revenue transactions under the General Agreement on Mutual Provision of Production Supplies and Ancillary Services (as revised by the Supplemental Agreement) for the three years ending 31 December 2021 are subject to reporting, announcement and Independent Shareholders' approval requirements under Chapter 14A of the Hong Kong Listing Rules.

VBG Capital has been appointed by the Company as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders as to, among other things, whether the expenditure and revenue transactions under the General Agreement on Mutual Provision of Production Supplies and Ancillary Services (as revised by the Supplemental Agreement) and the revised annual caps for the three years ending 31 December 2021 are fair and reasonable and are in the interests of the Company and the Shareholders as a whole, and give recommendations on voting. The Independent Board Committee of the Company has been established to advise the Independent Shareholders in respect of, among other things, the expenditure and revenue transactions under the General Agreement on Mutual Provision of Production Supplies and Ancillary Services (as revised by the Supplemental Agreement) and the revised annual caps for the three years ending 31 December 2021.

- 2 -

A circular in relation to, among other things, the resolution in relation to the proposed entering into of the Supplemental Agreement to the General Agreement on Mutual Provision of Production Supplies and Ancillary Services between the Company and Chinalco and revision of the annual caps for the transactions and containing the notice of the AGM has been despatched to the Shareholders on 10 May 2019. Given that additional time is required to prepare certain information for inclusion in the circular, a supplemental circular containing, among other things, (i) details on revision of the annual caps for the expenditure and revenue transactions under the General Agreement on Mutual Provision of Production Supplies and Ancillary Services for the three years from 2019 to 2021; (ii) details on relevant terms under the Supplemental Agreement to the General Agreement on Mutual Provision of Production Supplies and Ancillary Services; (iii) a letter of recommendation from the Independent Board Committee to the Independent Shareholders; and (iv) a letter of advice from an independent financial adviser to the Independent Board Committee and the Independent Shareholders will be despatched to the Shareholders by the Company on 10 June 2019.

1. INTRODUCTION

References are made to the announcement of the Company dated 17 September 2018, the circular of the Company dated 26 October 2018 and the supplemental circular of the Company dated 26 November 2018, in relation to, among other things, the renewal of the daily continuing connected transactions under the General Agreement on Mutual Provision of Production Supplies and Ancillary Services between the Company and Chinalco and the annual caps for the three years ending 31 December 2021. Reference is also made to the announcement of the Company dated 28 March 2019, in relation to, among other things, the proposed entering into of the Supplemental Agreement to the General Agreement on Mutual Provision of Production Supplies and Ancillary Services between the Company and Chinalco and the revised annual caps for the expenditure and revenue transactions under the abovementioned agreement for the three years ending 31 December 2021.

On 3 June 2019, the Company and Chinalco entered into the Supplemental Agreement to the General Agreement on Mutual Provision of Production Supplies and Ancillary Services in order to revise the scope of mutual supply of products and include the pricing principles and methods of payment for the additional products subject to mutual supply.

- 3 -

2. PRINCIPAL TERMS OF THE SUPPLEMENTAL AGREEMENT

1. Scope of Mutual Provision of Production Supplies and Ancillary Services
2. 1. Copper and zinc ingot are added to the supplies provided by Chinalco to the Company. Therefore, the adjusted supplies provided by Chinalco to the Company include carbon products, cement, coal, oxygen, bottled water, steam, fire brick, aluminum fluoride, cryolite, lubricant, resin, clinker, aluminum profiles, copper, zinc ingot and other relevant or similar supplies. The scope of storage and transportation services and ancillary production supplies and services provided by Chinalco to the Company will remain unchanged.
   2. Zinc ingot is added to the products provided by the Company to Chinalco. Therefore, the adjusted products provided by the Company to Chinalco include aluminum products (aluminum ingots) and alumina products, zinc ingot, slag, coal, petroleum coke and other relevant or similar supplies. The scope of supporting services and ancillary production services provided by the Company to Chinalco will remain unchanged.
3. Pricing Principles for the Additional Products Subject to Mutual Supply
   The price for the additional products subject to mutual supply is determined with reference to the comparable local market prices, which refer to prices arrived at with reference to those charged or quoted by at least two independent third parties providing products or services with comparable scale in areas where such products or services were provided under normal trading conditions around the time.
4. Methods of Payment for the Additional Products Subject to Mutual Supply
   The methods of payment for the additional products subject to mutual supply shall be consistent with those for other products or services under the General Agreement on Mutual Provision of Production Supplies and Ancillary Services, i.e. payment on delivery (payment shall generally be made (a) within a period of time after the delivery of the relevant products at the place designated by the purchasing party or the provision of the relevant services, and the completion of necessary inspections and internal approval procedures; or (b) after setting-off the amounts due between the parties where there is mutual provision of products and services. The relevant payment term shall be no less favourable than those under comparable transactions between the Company and independent third parties.)

- 4 -

The Supplemental Agreement is conditional upon the approval by Independent Shareholders at the AGM. The Supplemental Agreement is retrospectively effective for a term of three years from 1 January 2019 to 31 December 2021. Save for the abovementioned revisions under the Supplemental Agreement, all the material terms and conditions under the General Agreement on Mutual Provision of Production Supplies and Ancillary Services shall remain unchanged and continue in full force and effect and shall not be affected in any respect.

3. REVISED ANNUAL CAPS FOR THE EXPENDITURE AND REVENUE TRANSACTIONS UNDER THE GENERAL AGREEMENT ON MUTUAL PROVISION OF PRODUCTION SUPPLIES AND ANCILLARY SERVICES (AS REVISED BY THE SUPPLEMENTAL AGREEMENT) FOR THE THREE YEARS ENDING 31 DECEMBER 2021

The actual amounts and annual caps for the expenditure and revenue transactions under the General Agreement on Mutual Provision of Production Supplies and Ancillary Services for the three years ended 31 December 2018 are set out as follows:

	For the year ended	For the year ended	For the year ended
	31 December 2016	31 December 2017	31 December 2018
Transaction	Actual amount	Annual cap	Actual amount	Annual cap	Actual amount	Annual cap
	(RMB million)	(RMB million)	(RMB million)	(RMB million)	(RMB million)	(RMB million)
Expenditure transaction	2,223	5,900	5,198	6,420	4,495	6,950
Revenue transaction	10,938	14,100	11,194	15,300	11,867	16,400

The existing annual caps of the Company for the expenditure and revenue transactions under the General Agreement on Mutual Provision of Production Supplies and Ancillary Services and the revised annual caps of the Company for the expenditure and revenue transactions under the General Agreement on Mutual Provision of Production Supplies and Ancillary Services (as revised by the Supplemental Agreement) for the three years ending 31 December 2021 are set out as follows:

	For the year ending	For the year ending	For the year ending
	31 December 2019	31 December 2020	31 December 2021
	Existing	Revised	Existing	Revised	Existing	Revised
Transaction	annual cap	annual cap	annual cap	annual cap	annual cap	annual cap
	(RMB million)	(RMB million)	(RMB million)	(RMB million)	(RMB million)	(RMB million)
Expenditure transaction	8,600	14,100	9,300	15,300	10,000	17,500
Revenue transaction	17,700	28,400	19,100	30,800	20,700	33,500

- 5 -