10:42     MAANSHAN IRON<00323> - Announcement (1)                             

    The Stock Exchange of Hong Kong Limited takes no responsibility           
    for the contents of this announcement, makes no representation            
    as to its accuracy or completeness and expressly disclaims any            
    liability whatsoever for any loss howsoever arising from or in            
    reliance upon the whole or any part of the contents of this               
    announcement.                                                             
                                                                              
    Maanshan Iron & Steel Company Limited                                     
    (a Sino-foreign joint stock limited company incorporated in the           
    People's Republic of China with limited liability)                        
    (Stock Code: 323)                                                         
                                                                              
    Announcement on Connected Transaction                                     
                                                                              
    Maanshan Iron & Steel Company Limited (the "Company") and its             
    board of directors (the "Board of Directors") confirm the                 
    authenticity, accuracy and completeness of the announcement,              
    and jointly accept the responsibility for any false content,              
    misleading statements or material omissions.                              
                                                                              
    Highlights:                                                               
                                                                              
    *       Transaction content: The Company entered into an                  
    "Acquisition Agreement" with Construction Co. Ltd. of Magang              
    (Group) Holding Co. Ltd. to acquire its steel structure                   
    manufacturing and installation business and the electrical and            
    mechanical equipment installation business.                               
                                                                              
    *       Construction Co. Ltd. of Magang (Group) Holding Co. Ltd. is       
    a wholly-owned subsidiary of the Company's controlling                    
    shareholder, Magang (Group) Holding Company Limited. The                  
    acquisition is a connected transaction and connected directors            
    shall abstain from voting on the resolution thereof according             
    to the regulations.                                                       
                                                                              
    *       Subject to reporting requirement, the agreement does not          
    require approval by the general meeting. Nor does it has any              
    adverse effect on the current and future financial positions              
    of the Company.                                                           
                                                                              
    The twenty-third meeting of the fourth session of the Board of            
    Directors (the "Board Meeting") of Maanshan Iron & Steel Company          
    Limited was convened on 28 April 2005 at Magang Guest House.              
    There were 11 eligible directors and 9 of them attended the Board         
    Meeting. Directors Mr. Shi Jianjun and Mr. Chan Yuk Sing                  
    appointed another director, Madam Cheng Shaoxiu to attend the             
    Board Meeting and exercise the voting right on their behalf.              
    The Board Meeting was chaired by Mr. Gu Jianguo, Chairman of              
    the Company. The resolution in respect of the acquisition in              
    cash of the steel structure manufacturing and installation                
    business and the electrical and mechanical equipment                      
    installation business of Construction Co. Ltd. of Magang (Group)          
    Holding Co. Ltd. (the "Construction Company") was reviewed and            
    approved at the Board Meeting. The acquisition referred to the            
    resolution constitutes a connected transaction and the connected          
    directors abstained from voting in respect of the related                 
    resolution.                                                               
                                                                              
    A.      SUMMARY OF THE CONNECTED TRANSACTION                              
                                                                              
    On 28 April 2005, the Company and the Construction Company                
    entered into the Acquisition Agreement in respect of the                  
    acquisition in cash by internal resources of the steel structure          
    manufacturing and installation business and the electrical and            
    mechanical equipment installation business of the Construction            
    Company. The total consideration for the acquisition amounted             
    to RMB149,773,600 (approximately HK$141.2958 million) based on            
    the net asset value relating to the steel