Chinalco Mining International : Announcements and Notices - Joint Announcement

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.

This announcement appears for information purposes only and is not intended to and does not constitute, or form part of, any offer to purchase or subscribe for or an invitation to purchase or subscribe for any securities of the Offeror or CMC or the solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance or transfer of securities of CMC in any jurisdiction in contravention of applicable law.

Aluminum Corporation of

China Overseas Holdings Limited

Chinalco Mining

Corporation International

（ 中 鋁 海 外 控 股 有 限 公 司 ） （ 中 鋁 礦 業 國 際 ）

(Incorporated under the laws of Hong Kong with limited liability)

(Incorporated under the laws of the Cayman Islands with limited liability)

(Stock Code: 3668)

JOINT ANNOUNCEMENT

1. PROPOSED PRIVATISATION OF CMC BY THE OFFEROR BY WAY OF A SCHEME OF ARRANGEMENT

   (UNDER SECTION 86 OF THE COMPANIES LAW)

2. PROPOSED WITHDRAWAL OF LISTING OF CMC SHARES

3. SPECIAL DEAL RELATING TO SPOT SALES ARRANGEMENT AND

4. RESUMPTION OF TRADING IN CMC SHARES

Financial Adviser to the Offeror

INTRODUCTION

The respective directors of the Offeror and CMC jointly announce that on 14 September 2016, the Offeror requested the board of directors of CMC to put forward the Proposal to the Scheme Shareholders regarding the proposed privatisation of CMC by way of a scheme of arrangement under Section 86 of the Companies Law.

TERMS OF THE PROPOSAL

Under the Proposal, the Scheme Shares will be cancelled in exchange for the payment by the Offeror to each Scheme Shareholder of the Cancellation Price of HK$1.39 in cash for each Scheme Share. The Cancellation Price will not be increased, and the Offeror does not reserve the right to do so.

The Cancellation Price represents:

• a premium of approximately 32.4% over the closing price of HK$1.05 per CMC Share as quoted on the Stock Exchange on the Last Trading Day;

• a premium of approximately 33.7% over the average closing price of approximately HK$1.04 per CMC Share based on the daily closing prices as quoted on the Stock Exchange for the 5 trading days up to and including the Last Trading Day;

• a premium of approximately 33.7% over the average closing price of approximately HK$1.04 per CMC Share based on the daily closing prices as quoted on the Stock Exchange for the 30 trading days up to and including the Last Trading Day;

• a premium of approximately 61.6% over the average closing price of approximately HK$0.86 per CMC Share based on the daily closing prices as quoted on the Stock Exchange for the 180 trading days up to and including the Last Trading Day;

• a premium of approximately 65.5% over the average closing price of approximately HK$0.84 per CMC Share based on the daily closing prices as quoted on the Stock Exchange for the one year up to and including the Last Trading Day; and

• a premium of approximately 239.0% over the unaudited consolidated net asset value per CMC Share of approximately HK$0.41 as at 30 June 2016.

CONDITIONS OF THE PROPOSAL AND THE SCHEME

The Proposal and the Scheme will be conditional upon the fulfillment or waiver, as applicable, of all the Conditions on or before the Long Stop Date (or such later date as the Offeror and CMC may agree or, to the extent applicable, as the Grand Court may direct and in all cases, as permitted by the Executive), failing which the Proposal and the Scheme will not proceed or lapse, as the case may be.

REASONS FOR AND EXPECTED BENEFITS OF THE PROPOSAL

The Offeror wishes to privatise CMC in order to ensure the continued normal operation of the Toromocho Project given the significant financial pressures facing CMC as an independent listed company.

Since CMC's initial public offering in January 2013, copper prices as quoted by the LME have decreased approximately 43% from US$3.77/lb on 31 January 2013 to US$2.15/lb on the Last Trading Day. This has had a negative impact on the trading prices of CMC Shares, together with other copper producers and similar companies, and has also decreased the ability of CMC to raise equity funding for operations.

During the same period, CMC has and continues to experience several operational challenges resulting in (i) inefficiencies in both the mining and processing operations with lower recovery rates for copper and the production of copper concentrates, (ii) the production of copper concentrates with more than 0.5% arsenic content and other penalty elements (which make the sale of such products being subject to higher than industry standard penalties and renders such products unfit for sale to certain buyers) and (iii) a high rate of oxidation of ores mined (which affects ore recovery rates).

In June 2013, the board of directors of CMC approved the Project Expansion with an anticipated capital expenditure of US$1.32 billion. The completion of the Project Expansion will enhance the operation efficiency of the Toromocho Project significantly. However, as at the Announcement Date, a substantial part of such future capital expenditure remains unfunded.

Meanwhile, CMC has financed its continued operations and expansion using loans (including shareholder loans) and borrowings which total US$4.30 billion as at 30 June 2016. As at 30 June 2016, CMC's unaudited current liabilities exceeded its current assets by over US$1.0 billion. The CMC Group continued to adopt the going concern basis in preparing its financial statements after taking into consideration the debt funding secured by CMC and the fact that the Offeror has agreed not to demand the repayment of the shareholder loans due from the CMC Group until the CMC Group is financially capable to do so. The Offeror believes that it may be challenging for CMC to fund its expansion given the financial pressure CMC is under and the difficulty it faces in raising further equity funding in the current environment.

The Offeror believes that it is unsustainable in the long-term for the Offeror to maintain continuing financial support to CMC by way of shareholder loans and there are significant challenges in securing additional debt financing required for the Project Expansion under the current capital structure. By privatising CMC, the Offeror will be able to exercise greater flexibility in reorganising the capital structure of CMC and in increasing funding to CMC. The Proposal would also provide current shareholders with a reasonable exit of their investment in CMC that is attractive in light of current market conditions.

IRREVOCABLE UNDERTAKINGS

On 21 September and 22 September 2016, the Offeror received the Irrevocable Undertakings from the Committed Shareholders, pursuant to which each of the Committed Shareholders has undertaken to, amongst other things, exercise (or procure the exercise) of all voting rights attached to the CMC Shares held or owned by it at the Court Meeting and the extraordinary general meeting to be convened by CMC in connection with the Proposal in favour of all the resolutions to approve the Proposal and any matters in connection with the Proposal. The total number of CMC Shares held by the Committed Shareholders which are the subject of the Irrevocable Undertakings are 745,382,000, representing approximately 44.27% of the CMC Shares held by the Independent CMC Shareholders and approximately 6.31% of the total issued share capital of CMC as at the Announcement Date.

The Irrevocable Undertakings will be terminated and the obligations of each of the Committed Shareholders under their respective Irrevocable Undertakings shall lapse and terminate if the Scheme does not become effective, lapses or is withdrawn in accordance with its terms and no new, revised or replacement Scheme is announced by the Offeror and/or CMC at the same time.

Tongling Nonferrous Metals Group Holdings Co., Ltd. (though not being a party to the Irrevocable Undertakings) has confirmed its intention to exercise all voting rights attached to the 221,516,000 CMC Shares (representing approximately 1.87% of the total issued share capital of CMC as at the Announcement Date) held or owned by it at the Court Meeting and the extraordinary general meeting to be convened by CMC in connection with the Proposal in favour of all the resolutions to approve the Proposal and any matters in connection with the Proposal.

Taking into account the Irrevocable Undertakings and the confirmation of intention received by the Offeror, five Independent CMC Shareholders holding an aggregate of 966,898,000 CMC Shares, representing approximately 57.43% of the CMC Shares held by all the Independent CMC Shareholders and approximately 8.18% of the issued share capital of CMC, have undertaken or indicated their intention to vote in favour of the Proposal. However, given the Committed Shareholders and Tongling Nonferrous Metals Group Holdings Co., Ltd. are also the Offtake Shareholders, they will be required to abstain from voting on the proposal for the Spot Sales Mechanism at the extraordinary general meeting of CMC.

SHAREHOLDING STRUCTURE OF CMC AND SCHEME SHARES

As at the Announcement Date, the authorised share capital of CMC was US$1,000,000,000 divided into 25,000,000,000 CMC Shares of US$0.04 each, and the issued share capital of CMC was US$472,711,297.12 divided into 11,817,782,428 CMC Shares of US$0.04 each.