Magnesita Refratarios : Material Fact - Completion of the transaction between Controlling Shareholders of Magnesita and RHI AG

MAGNESITA REFRATÁRIOS S.A.

CNPJ (Corporate Taxpayer Registry) no. 08.684.547/0001-65 NIRE (Commercial Registry Number) 31.300.026.485

MATERIAL FACT

Magnesita Refratários S.A. ("Company" or "Magnesita"), pursuant to the terms of Law no. 6,404/76 and Rule no. 358/02 of Comissão de Valores Mobiliários ("CVM"), and in furtherance to the Material Fact dated October 5, where by the Company informed the market that Alumina Holdings, LLC ("Alumina"), Rearden L. Holdings 3 S.À R.L. ("Rearden") and RHI AG ("RHI") signed an agreement (the "SPA") with the purpose of combining the operations of RHI and the Company to create a leading company in refractory solutions, named RHI Magnesita N.V. ("RHI Magnesita") ("Transaction"), hereby informs its shareholders and the market in general that:

The Company was informed by RHI Magnesita and its controlling shareholders that all the conditions precedent have been satisfied and the completion of the Transaction occurred on October 26, 2017 ("Closing Date"), and as a result Dutch Brasil Holding B.V., a subsidiary of RHI Magnesita, acquired 25,020,242 shares of the Company (representing 50% plus one share of the Company's capital stock) and Alumina became a relevant shareholder of RHI Magnesita.

The admission to listing of RHI Magnesita shares on the premium listing segment of the Official List of the UK Financial Conduct Authority occurred, and the trading on the London Stock Exchange's main market for listed securities initiated, on the date hereof.

Pursuant to articles 9, 10 and 12 of Rule no. 358/02 of CVM, the Company was also informed by RHI Magnesita of the following:

"1. Information on the Buyer: Dutch Brasil Holding B.V. ("Buyer") is a wholly-owned company incorporated under the laws of The Netherlands, indirectly owned by RHI Magnesita. RHI Magnesita is the result of the combination of RHI and Magnesita to form the global leading supplier of high-grade refractory products, systems and services which are indispensable for industrial high-temperature processes exceeding 1,200°C in a wide range of industries, including steel, cement, non- ferrous metals, and glass, among others. With a vertically integrated value chain, from raw materials to refractory products and full performance-based solutions, RHI Magnesita serves more than 10,000 customers in nearly all countries around the world. RHI Magnesita has unmatched geographic diversification with more than 14,000 employees

in 35 main production sites and more than 70 sales offices. RHI Magnesita intends to use its global leadership position in terms of revenue, greater scale, complementary product portfolio and diversified geographic presence around the world to target opportunistically those countries and regions benefitting from more dynamic economic growth prospects.

1. Information on the Sellers: Information on Rearden, Alumina and GPCP4 Fundo de Investimentos em Participações (jointly, the "Controlling Shareholders of Magnesita") can be found in the Reference Form of Magnesita.

2. Total Price, Price per Share, Form of Payment: The Controlling Shareholders of Magnesita and other shareholders of the Company that adhered to the SPA sold a total of 25,020,242 shares in the Company. The purchase price paid, on the Closing Date, in aggregate, corresponded to EUR 117,342,035.00 and 5,000,000 shares of RHI Magnesita (equivalent to EUR4.69 and 0.1998 shares of RHI Magnesita per share of Magnesita).

3. Tender Offer and Plans of Delisting: Due to the sale of control of Magnesita, and as required by Law no. 6.404/76, Rule no. 361/02, the Novo Mercado Regulation and the Company's bylaws, RHI Magnesita and/or one of its affiliates will submit to CVM and B3, within thirty days, a request for the registration of a tender offer in Brazil to acquire up to all remaining shares of Magnesita ("254-A Tender Offer"). RHI Magnesita and/or its subsidiaries will also request to CVM an authorization to combine the 254-A Tender Offer with a delisting tender offer and a voluntary offer to exit the Company from the Novo Mercado, pursuant to article 4, §4 of Law No. 6.404/76, Rule no. 361/02, the Novo Mercado Regulation and the Company's bylaws ("Integrated Tender Offer"). The price per share to be paid to the shareholders of Magnesita that adhere to the Integrated Tender Offer will be the same price applicable to the Controlling Shareholders: R$17.81 (which is equivalent to EUR4.69, at the exchange rate of R$3.7979 per Euro, as disclosed by the Brazilian Central Bank on the Closing Date) and 0.1998 shares of RHI Magnesita, per share of Magnesita, to be paid on the date of the settlement of the auction of the Integrated Tender Offer ("Equal Treatment Price"). Alternatively, the Integrated Tender Offer offerees may opt to receive R$31.09 (equivalent to EUR8.19, at the exchange rate of R$3.7979 per Euro, as disclosed by the Brazilian Central Bank on the

   Closing Date) per share in cash, to be paid in Reais on the date of the settlement of the auction of the Integrated Tender Offer ("Cash Price"). The cash portion of the Equal Treatment Price and the Cash Price will be adjusted by the SELIC rate as from the Closing Date until the date of the settlement of the auction of the Integrated Tender Offer, and further adjusted in accordance with the rules to be described in the "Edital de Oferta de Pública de Aquisição de Ações da Magnesita Refratários S.A." to be submitted to CVM. The Integrated Tender Offer will be launched after the registration is granted by CVM.

4. Valuation Report. The Board of Directors of Magnesita will approve, on the date hereof, a list of three independent appraisers to prepare the valuation report on the Economic Value of the shares of Magnesita, to be submitted to the free float shareholders on a Special Shareholders' Meeting, to be convened and held in accordance with the applicable regulation. If the valuation report issued by the independent appraiser indicates that the Economic Value of the shares of Magnesita is higher than R$31.09 adjusted by the SELIC rate as from the Closing Date until the date of the settlement of the auction of the Integrated Tender Offer , RHI and/or its affiliates may withdraw the delisting tender offer and the voluntary offer to exit the Company from the Novo Mercado.

5. Rationale of the Transaction: As stated above, the rationale of the Transaction is to form the global leading supplier of high-grade refractory products, systems and services.

6. Number of Shares and Percentage of the Capital Stock: the Buyer acquired a total of 25.020.242 shares of the Company, representing 50% plus one share of the Company's total and voting capital stock.

7. Agreements: on October 26, 2017, as a result of the Transaction, the Shareholders Agreement of the Company, entered into by the Controlling Shareholders of Magnesita on 5 November 2008, as well as the Shareholders Agreement entered into by Krosaki Harima Corporation and certain controlling shareholders of Magnesita on 17 June 2008 were automatically terminated. Currently there are no other agreements to regulate voting rights or the acquisition and sale of the securities issued by the Company.

8. Management of the Company: a meeting of the Board of Directors will occur on the date hereof to decide on the substitution of some members of

   the Board of Directors. Currently, it is envisaged that the majority of the members of the Board of Directors and all Executive Officers will remain in their respective offices.

9. Other Information and Corporate Restructurings. Currently, there are no plans to any corporate restructurings involving the Company."

The Company will keep its shareholders and the market in general informed regarding the steps following completion of the Transaction, as required by law and the rules issued by CVM and by the Brazilian Stock Exchange (B3 S.A. - Brasil, Bolsa, Balcão).

São Paulo, October 27, 2017.

Otavio Augusto Castro Lustosa Nogueira Financial and Investors' Relations Officer Magnesita Refratários S.A.