Maanshan Iron & Steel : (1) - (3) Continuing Connected Transactions ; and (4) Notice of EGM

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Maanshan Iron & Steel Company Limited, you should at once hand this circular and the form of proxy to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular.

(A joint stock limited company incorporated in the People's Republic of China)

(Stock Code: 00323)

(1) CONTINUING CONNECTED TRANSACTIONS

REVISION OF THE ANNUAL CAPS

FOR THE EXISTING ENERGY SAVING AND ENVIRONMENTAL PROTECTION AGREEMENT AND

THE EXISTING CCT AGREEMENT;

(2) CONTINUING CONNECTED TRANSACTIONS -

IN RELATION TO

NEW SALE AND PURCHASE OF ORE AGREEMENT,

NEW ENERGY SAVING AND

ENVIRONMENTAL PROTECTION AGREEMENT,

NEW CCT AGREEMENT AND

NEW FINANCIAL SERVICES AGREEMENT;

(3) CONNECTED TRANSACTIONS - DISPOSAL AND DEEMED DISPOSAL OF

INTEREST IN SUBSIDIARIES AND CONTINUING CONNECTED TRANSACTIONS; AND

(4) NOTICE OF EGM

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

SOMERLEY CAPITAL LIMITED

A letter from the Board is set out on pages 12 to 118 of this circular. A letter from the Independent Board Committee is set out on page 119 of this circular. A letter from the Independent Financial Adviser containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 120 to 248 of this circular.

Notice for convening the 2018 second extraordinary general meeting (the "EGM") of Maanshan Iron & Steel Company Limited (the "Company") to be held at Magang Office Building, No.8 Jiu Hua Xi Road, Maanshan City, Anhui Province, the PRC, at 1:30p.m. on 21 November 2018 was issued on 28 September 2018.

Whether or not you intend to attend the said meeting in person, you are requested to complete and return the form of proxy in accordance with the instructions printed thereon and return it to the Company's registered office (in the case of proxy for, by holders of domestic shares) at No.8 Jiu Hua Xi Road, Maanshan City, Anhui Province, the PRC or at the Company's H share registrar and transfer office, Hong Kong Registrars Limited (in the case of proxy form of holders of H shares) at Rooms 1712-1716, 17/F, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong as soon as possible and in any event not later than 24 hours before the time appointed for such meeting. Completion and return of the form of proxy will not preclude you from attending and voting in person at the said meeting or any adjournment thereof, should you so wish.

23 October 2018

CONTENTS

Page

Definitions ............................................................... 1

Letter from the Board

1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

• 2. Continuing Connected Transactions - Revision of the Annual Caps for the Existing Energy Saving and Environmental Protection Agreement

  and the Existing CCT Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

• 3. Continuing Connected Transactions - in relation to

  New Sale and Purchase of Ore Agreement,

  New Energy Saving and Environmental Protection Agreement,

  New CCT Agreement and New Financial Services Agreement . . . . . . . . . . . . . 31

• 4. Connected Transactions - Disposal and Deemed Disposal

  of Interest in Subsidiaries and Continuing Connected Transactions . . . . . . . . . . 71

5. EGM and Proxy Arrangement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117

6. Procedures for Voting at the EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117

7. Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118

Letter from the Independent Board Committee ................................. 119

Letter from the Independent Financial Adviser ................................. 120

Appendix IAppendix IIAppendix IIIAppendix IV

• - Valuation report in respect of the share transfer

  of Scrap Steel Company .................................. 249

• - Valuation report in respect of the capital increase

  of K. Wah Company ..................................... 288

• - Valuation report in respect of the capital increase

  of Chemical Energy Company ............................. 333

• - General information ....................................... 377

  Appendix V

• - Notice of the 2018 Second Extraordinary General Meeting ........ 381

In this circular, unless the context otherwise requires, the following expressions have the following meanings:

"2019-2021 CCT Agreements"

meansthe New Sale and Purchase of Ore Agreement, the New Energy Saving and Environmental Protection Agreement, the New CCT Agreement and the New Financial Services Agreement

"Abstained Directors"

means

Mr. Ding Yi, Mr. Qian Haifan, and Mr. Ren Tianbao, who abstained from voting as Directors on the relevant Board resolution(s) relating to the Agreements

"Agreements"

means

the Supplementary Energy Saving and Environmental Protection Agreement, the Supplementary CCT Agreement, the New Sale and Purchase of Ore Agreement, the New Energy Saving and Environmental Protection Agreement, the New CCT Agreement, the New Financial Services Agreement, the Scrap Steel Company Share Transfer Agreement, the K. Wah Company Capital Increase Agreement, the Chemical Energy Company Capital Increase Agreement, the Scrap Steel Company Continuing Connected Transaction Agreement, the K. Wah Company Continuing Connected Transaction Agreement and the Chemical Energy Company Continuing Connected Transaction Agreement

"Anhui Xinchuang"

means

Anhui Xinchuang Energy Saving and Environmental Protection Science & Technology Co., Ltd., a joint stock limited company incorporated in the PRC

"Associate" or "Associates"

means

has the meaning as ascribed thereto in the Listing Rules

"Board"

means

the board of the Directors of the Company

"CBRC"

means

China Banking Regulatory Commission

"Chemical Energy Company"

"Chemical Energy Company

Capital Increase Agreement"

meansAnhui Ma Steel Chemical Energy Technology Co.,

Ltd. €τᏏ৵፻ʷʈঐ๕߅ҦϞࠢʮ̡ , a limited company incorporated in the PRC

meansThe capital increase agreement dated 15 August 2018 executed by the Company, the Parent Company and Chemical Energy Company, according to which the parties agreed that the Parent Company shall subscribe for the capital of Chemical Energy Company

"Chemical Energy Company

Continuing Connected Transaction Agreement"

means

The Continuing Connected Transaction Agreement dated 15 August 2018 executed by the Company and Chemical Energy Company, according to which the parties agree that from 2019 to 2021, the Group will sell or provide products to Chemical Energy Company, and Chemical Energy Company will sell or provide products to the Group

"Company"

means

Maanshan Iron & Steel Company Limited, a joint stock limited company incorporated in the PRC, the shares of which are listed on the Stock Exchange

"CCT Agreements for Scrap

Steel Company, K. Wah Company and Chemical Energy Company"

means

The Scrap Steel Company Continuing Connected Transaction Agreement, the K. Wah Company Continuing Connected Transaction Agreement and the Chemical Energy Company Continuing Connected Transaction Agreement

"Directors"

means

the directors of the Company

"Disposal"

means

The disposal of 55% shareholding of Scrap Steel Company by the Company to the Parent Company according to the Scrap Steel Company Share Transfer

Agreement

"Deemed Disposal"

meansAccording to the K. Wah Company Capital Increase Agreement and the Chemical Energy Company Capital Increase Agreement, the share capital of K. Wah Company and Chemical Energy Company shall be increased, and the shareholding held by the Company will be diluted accordingly. According to Rule 14.29 of the Listing Rules, the relevant dilution is considered to be deemed disposal of the Company's interest in a subsidiary

"Disposal and Deemed

Disposal Agreements"

meansthe Scrap Steel Company Share Transfer Agreement, the K. Wah Company Capital Increase Agreement and the Chemical Energy Company Capital Increase Agreement

"EGM" or "2018 Second

Extraordinary General Meeting"

means

the extraordinary general meeting of the Company to be held on 21 November 2018 to approve, among other things, the Revision of Annual Cap Agreements, the 2019-2021 CCT Agreements, the Disposal and Deemed Disposal Agreements as well as the CCT Agreements for Scrap Steel Company, K. Wah Company and Chemical Energy Company and the transactions contemplated thereunder, and the respective Proposed Annual Caps

"Energy Saving and

Environmental Protection Construction and Services"

means

the environmental protection construction, maintenance services, the procurement of spare parts and dust removal bags & dust removal bag cages, contract energy services, operation and management of environmental protection facilities, sintering waste heat power generation services and operation and management of water quality, etc. that will be provided by Anhui Xinchuang to the Group according to the Existing Energy Saving and Environmental Protection Agreement, the Supplementary Energy Saving and Environmental Protection Agreement and the New

Energy Saving and Environmental Protection Agreement