JX Nippon Mining & Metals : Transfer of Equity in Changzhou Jinyuan Copper Co., Ltd.

JX Nippon Mining & Metals Corporation (President: Shigeru Oi; 'the Company') has reached an agreement to transfer to Baosheng Science & Technology Innovation Co., Ltd. ('Baosheng') a portion of its equity in Changzhou Jinyuan Copper Co., Ltd. ('Changzhou Copper'), a joint venture with China Minmetals Non-ferrous Metals Co., Ltd. ('Minmetals NF') and Changzhou Industrial Investment Group Co., Ltd. ('Changzhou Industrial Investment'). After completing the necessary procedures including obtaining official approvals, Baosheng is expected to acquire a majority share of Changzhou Copper from the Company and Minmetals NF in 2017.

The Company began equity participation in Changzhou Copper in 1996, while also sending human resources to Changzhou Copper and providing Changzhou Copper with a wide range of technologies and expertise, from casting technology to business administration and safety management methods. These were reflected in the management of Changzhou Copper, leading to solid performance as well as earning high acclaim on the Chinese domestic market for the quality of its copper wire rods and drawn wire products.

In response to a request from Baosheng to acquire equity in Changzhou Copper, upon careful deliberation the Company decided to accept the request. Behind the decision was the judgment that for Changzhou Copper to come under Baosheng, one of China's leading domestic cable and wire manufacturers, would enable Changzhou Copper to acquire a stable customer base, while combining with Baosheng to achieve all-process manufacturing capability. This in turn should enable more efficient and stable management and investment in growth fields, opening the way to further growth.

Another factor is that the synergies between Changzhou Copper and the JX Nippon Mining & Metals Group in the copper wire rods and drawn wire products business have faded since the initial investment, a situation that is unlikely to change significantly in the future. It is hoped that this equity transfer arrangement will be the occasion for deeper ties between our Group and the Baosheng Group, leading to expanded sales of electrolytic copper to China and collaboration with the Baosheng Group in peripheral areas, and in other ways creating synergy at a different level from that up to now.

Reference

Overview of Changzhou Jinyuan Copper Co., Ltd.

Name	Changzhou Jinyuan Copper Co., Ltd.
Location	Changzhou, Jiangsu Province, PRC
Established	March 1994
Capital	RMB 282,429,000 (as of December 2016)
Equity holders	(before the equity transfer) JX Nippon Mining & Metals 61.44%, Minmetals NF 36.29%, Changzhou Industrial Investment 2.27%
Operations	Manufacture and sale of copper wire rods and drawn wire products (intermediate materials of electrical wire)

Overview of Baosheng Science & Technology Innovation Co., Ltd.

Name	Baosheng Science & Technology Innovation Co., Ltd.
Location	Yangzhou, Jiangsu Province, PRC
Established	June 2000
Capital	RMB 905,268,531 (as of December 2016)
Listed	Shanghai Stock Exchange (A-shares)
Operations	Manufacture and sale of electric power cable and wire, etc.