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Dear our Valuable Shareholders,

In 2017, China continued to maintain its steady growth in economic development with majorbreakthroughs in comprehensively deepening reform. Benefiting from the resurgence in themanganese market as supported by favourable opportunities brought by the national supply-sidereform, “the Belt and Road” Initiative and ongoing recovery in steel industry, the Groupsuccessfully recorded a turnaround with significant improvement in operating results as comparedwith previous years. Nevertheless, both the instability in the global political situation and theuncertainty over the global economic prospects have created new challenges for the Group.

Amidst such macro market conditions, the Group, by adhering to the strategies of “DeepeningReform; Innovation and Development; Cost Reduction and Efficiency Enhancement; StableDevelopment”, took a proactive approach to respond to the ever-changing market conditionsand adjusted its development strategy, endeavouring to further strengthen risk control, seizeopportunities and overcome the obstacles and difficulties. Furthermore, it insisted on innovationand technology development and increased its investment in scientific research, productionefficiency improvement, cost and energy consumption reduction so as to achieve businessoptimization and upgrading as well as sustainable development, with a view of creating newvalues for shareholders.


During the year, by adopting the management philosophy of “Expanding Income Sources andReducing Expenditures”, the management of the Group has further strengthened its overallinternal control by improving budget management system, the informationization of the financialsystem and implementation of strict cost control measures, resulting in more rational costcontrol and enhanced operational efficiency of the Group. Meanwhile, the Group also increasedits investment in scientific research to improve production technologies, enhance productivityand promote energy conservation and emission reduction so as to proactively perform its socialresponsibility, maintain its competitiveness in the industry and ensure our growth in a sustainable,steady and healthy way.


The management of the Group, keeping the development trend of the market in mind, hasprudently structured and adjusted its future development strategy through rationally allocatingcapital and resources with market orientation strategy and flexibly adjusting its investmentpolicies in accordance with market demands. During the year, the Gabon project of the Groupresumed production, achieving manganese ore sales of 840,000 tonnes (including the sales undersubcontracting arrangements). The subcontracting and profit sharing income from the Gabonproject under the subcontracting arrangement contributed an important portion of income to theGroup during the year. In terms of production adjustment, the Group, by adjusting its existingmanganese product mix in a flexible manner in line with the market demands, increased theproportion of its products with higher margin so as to enhance its profitability. At the same time,the Group also reviewed and adjusted its investment strategies in a timely manner in response tothe market condition, in order to adopt the appropriate measures in a changing market, proactivelyseize development opportunities and create reasonable returns for shareholders.


During the year, with a view to achieving a prosperous development of the Group, we activelyexplored diversified business areas, continued to assess potential investment opportunitiesand explored quality investment projects, so as to further expand our business scale and assetsportfolio and continue the development and optimization of our existing business. During theyear, the Group proactively commenced international manganese ores trading. Benefiting fromthe solid platform for financing trading in Hong Kong, the Group has built and consolidatedclose and prosperous strategic partnerships with cautiously selected major customers andthe industry-leading partners based in Shenzhen and Hong Kong and proactively conductedinternational manganese ores trading business which has achieved satisfactory development andprovided considerable revenue to the Group. In addition, the Group also expanded its business to polymetallic segment. As China Polymetallic Mining Limited, an associate of the Group, activelydeveloped the market in Myanmar, its polymetallic reserve has increased accordingly.

Looking forward, the Group will continue to response to the “the Belt and Road” initiative,improve operational efficiency, control its costs properly and maintain its competitive edges on anon-going basis in order to capture future opportunities and strive to explore new profit point in thechallenging manganese products market, achieving long-term profitability and asset growth.


I would like take this opportunity to express my gratefulness to the Directors,management teamand all staff for their hard work and contribution. I, on behalf of the Board, also hereby delivermy greatest sincere appreciation for the long-term understanding and support of our shareholders,clients, suppliers, banks and business partners. We treasure and look forward to your continuousreliance and support in a bid to compose a promising new chapter together.


Yin Bo    


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