On November 18th, the official ground breaking of Phase II Honghe Iron Making Project of Kunming I/S Group Contracted by SINOSTEEL MECC, to be of 1 million ton iron output, was realized.

This project is one of the key EPC contracts attained recently in China by SINOSTEEL MECC. The total contract value is 394 million RMB. The Phase I project (including raw material charging system, 90m2 sintering system, 450m2 Blast Furnace and related utilities) was already put into operation on February of 2005 after MECC engineers and technicians’ 11 months hard work. In the second phase project, one set of 90m2 sintering system and one set of 450m3Blast Furnace will be constructed. The Phase II Project is planned to put into production on the September of 2006, which is one month earlier than the duration of the Phase I Project, so we are still faced with great challenge concerning the time schedule and heavy workload.

At present time, MECC is actively organizing backbone staff to prepare for the project implementation, requiring all staff to carefully organize and strengthen the cooperation with various partners from project owner, design institute, equipment manufacturers, to supervision, erection, and construction companies, to guarantee the successful and smooth operation of the project. It will promote our company image and show our technical strength.