1934 ACT FILE NO. 001-15264

         [Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.]

         [Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.]

         [If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-              ]

          Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date  August 29, 2007       

By                 /s/    Liu Qiang                     
Name: Liu Qiang
Title: Company Secretary

Certain statements contained in this announcement may be regarded as "forward-looking statements" within the meaning of the U.S. Securities Exchange Act of 1934, as amended. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual performance, financial condition or results of operations of the Company to be materially different from any future performance, financial condition or results of operations implied by such forward-looking statements. Further information regarding these risks, uncertainties and other factors is included in the Company's filings with the U.S. Securities and Exchange Commission. The forward-looking statements included in this announcement represent the Company's views as of the date of this announcement. While the Company anticipates that subsequent events and developments may cause the Company's views to change, the Company specifically disclaims any obligation to update these forward-looking statements, unless required by applicable laws. These forward-looking statements should not be relied upon as representing the Company's views as of any date subsequent to the date of this announcement.

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Aluminum Corporation of China Limited, you should at once hand this circular to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

This circular appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for the securities.

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, 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 circular.

Aluminum Corporation of China Limited*
(a joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 2600)

A letter from the Board of Directors of Aluminum Corporation of China Limited is set out on pages 1 to 20 of this circular. A letter from the Independent Board Committee of Aluminum Corporation of China Limited is set out on pages 21 to 22 of this circular. A letter from Taifook Capital Limited containing its advice to the Independent Board Committee and the Independent Shareholders and the independent holders of H Shares of Aluminum Corporation of China Limited is set out on pages 23 to 39 of this circular.

A special general meeting of the Shareholders of Aluminum Corporation of China Limited and separate class meetings of the holders of H Shares and the holders of A Shares, respectively, of Aluminum Corporation of China Limited will be held on 12 October 2007 at 2:00 p.m. at 29th Floor, No. 62 North Xizhimen Street, Haidian District, Beijing, the People's Republic of China. A Notice of Special General Meeting and Notice of Class Meeting of the holders of H Shares dated 27 August 2007 setting out the resolutions to be approved at the special general meeting and the class meeting are set out at the end of this circular. A proxy form for use at the special general meeting and the class meeting of the holders of H Shares and the reply slips are also despatched together with this circular. If you intend to attend the special general meeting and the class meeting of the holders of H Shares, you should complete and return the reply slips in accordance with the instructions printed thereon as soon as possible.

Whether or not you are able to attend, you should complete and return the form of proxy in accordance with the instructions thereon and return it to Hong Kong Registrars Limited at 46th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong, as soon as possible and in any event by not later than 24 hours before the time appointed for holding such meeting or any adjournment thereof.

Completion and return of the form of proxy will not preclude you from attending and voting at the special general meeting and the class meeting of the holders of H Shares should you so wish.

27 August 2007

* For identification purpose only

CONTENTS

Page

DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ii

LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1

Baotou Aluminum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

Summary of the Merger Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4

Merger Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6

Effects of the Merger Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7

Financial effects of the Merger Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10

Information of the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10

Information of Baotou Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11

Information of Baotou Aluminum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11

Reasons for and benefits of the Merger Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12

Hong Kong Listing Rules and Takeovers Code implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12

The SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15

The Class Meeting of the holders of H Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16

The Class Meeting of the holders of A Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17

Procedures for demanding a poll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18

Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18

Other matters to be approved at the SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20

LETTER FROM THE INDEPENDENT BOARD COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21

LETTER FROM TAIFOOK CAPITAL LIMITED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

23

APPENDIX I

-

FINANCIAL INFORMATION OF THE GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . .

39

APPENDIX II

-

2007 INTERIM RESULTS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

143

APPENDIX III

-

FINANCIAL INFORMATION OF BAOTOU ALUMINUM . . . . . . . . . . . . . . . . . . . . .

160

APPENDIX IV

-

GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

186

NOTICE OF THE SPECIAL GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

200

NOTICE OF CLASS MEETING OF THE HOLDERS OF H SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

204

- i -

DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions have the following meanings:

"A Shares"

ordinary shares in the share capital of the Company with a nominal value of RMB1.00 each and which, are listed and traded on the Shanghai Stock Exchange

"ADSs"

American Depositary Shares, each representing ownership of 25 H Shares, which are listed on the New York Stock Exchange Inc.,

"ADRs"

American Depositary Receipts evidencing the ADSs;

"Announcement"

the announcement dated 20 July 2007 issued by the Company in relation to the Merger Proposal, the Share Exchange and the Whitewash Waiver

"Board"

the board of Directors;

"Baotou Aluminum"

Baotou Aluminum Co., Ltd (Chinese Characters), a joint stock limited company established in the PRC, the A shares (referred to as Baotou Shares in this circular) of which are listed on the Shanghai Stock Exchange;

"Baotou Group"

Baotou Aluminum (Group) Co., Ltd. (Chinese Characters), a State-owned enterprise established in the PRC and is the holder of 237,309,321 Baotou Shares, representing approximately 55.06% of the total issued share capital of Baotou Aluminum. Baotou Group is owned as to 80% by Chinalco and is a connected person of the Company;

"Baotou Shares"

the ordinary shares in the issued share capital of Baotou Aluminum;

"Baotou Shareholders"

the holders of the shares of Baotou Aluminum;

"Cash Alternative"

the cash alternative under the Merger Proposal to be provided by the Cash Alternative Provider to the Baotou Shareholders who elect not to receive in whole or in part the Chalco A Shares, subject to the Merger Proposal becoming unconditional;

- ii -

DEFINITIONS

"Cash Alternative Provider"

the person who has agreed, subject to contract, to pay RMB21.67 per Baotou Share for the holders of Baotou Shares who elect to receive cash for the Baotou Shares, and who will then exchange such Baotou Shares so acquired for the Chalco A Shares at the Exchange Ratio;

"Chalco A Share(s)"

ordinary shares new issued with a nominal value of RMB1.00 each to be issued by the Company pursuant to the Merger Proposal, which, upon completion of the Merger Proposal, will be listed on the Shanghai Stock Exchange;

"Chinalco"

(Chinese Characters) Aluminum Corporation of China, the controlling shareholder and a connected person of the Company;

"Class Meeting of holders of A Shares"

the shareholders' meeting to be convened for the holders of the Chalco A Shares to consider, and if thought fit, approve the Merger Proposal and the Merger Agreement;

"Class Meeting of holders of H Shares"

the shareholders' meeting to be convened for the holders of the H Shares to consider, and if thought fit, approve (i) the Merger Proposal and the Merger Agreement; and (ii) the Whitewash Waiver;

"Company"

(Chinese Characters) Aluminum Corporation of China Limited, a joint stock limited company incorporated in the PRC with limited liability, the A Shares, H Shares and ADRs of which are listed on the Shanghai Stock Exchange, Hong Kong Stock Exchange and the New York Stock Exchange, respectively;

"CSRC"

China Securities Regulatory Commission;

"Director(s)"

director(s) of the Company;

"Board"

the board of Directors of the Company

"Exchange Ratio"

the ratio at which 1.48 Chalco A Shares will be issued by the Company in exchange for one (1) Baotou Share under the Merger Proposal;

"Executive"

the Executive Director of the Corporate Finance Division of the SFC from time to time and any delegate of such Executive Director

- iii -

DEFINITIONS

"Group"

the Company and its subsidiaries;

"Guiyang Aluminum"

(Chinese Characters) Guiyang Aluminum and Magnesium Design and Research Institute, subsidiary of Chinalco in which Chinalco has an indirect 95% equity interest and a holder of 2,783,495 A shares in Baotou Aluminum prior to implementation of the Merger Proposal;

"H Share(s)"

the overseas listed foreign invested shares in the ordinary share capital of the Company with a nominal value of RMB 1.00 each which are subscribed for and traded in Hong Kong Dollars, and which are listed on the Main Board of the Hong Kong Stock Exchange;

"HK Dollar" or "HK$"

Hong Kong dollars, the currency of Hong Kong;

"Hong Kong Listing Rules"

the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited;

"Hong Kong Stock Exchange"

The Stock Exchange of Hong Kong Limited;

"Independent Board Committee"

the board committee of the Company established for the purpose of considering the Share Exchange with Baotou Group and Guiyang Aluminum which will constitute connected transactions under the Hong Kong Listing Rules and the Whitewash Waiver, which comprises all independent non-executive Directors, namely Mr. Poon Yiu Kin, Samuel, Mr. Kang Yi and Mr. Zhang Zhuoyuan who are independent of the transactions relating to the Merger Proposal and the Whitewash Waiver;

"Independent Financial Adviser"

Taifook Capital Limited, being the independent financial adviser to advise (1) the Independent Board Committee and the Independent Shareholders in respect of the connected transactions which will be constituted by the Share Exchange with Baotou Group and Guiyang Aluminium, non-wholly owned subsidiaries of Chinalco, upon implementation of the Merger Proposal; and (2) the Independent Board Committee and the independent holders of H Shares on the Whitewash Waiver ;

"Independent Shareholders"

the Shareholders who are independent of the transactions relating to the Merger Proposal and the Whitewash Waiver, being Shareholders other than Chinalco and its associates (for the transactions relating to the Merger Proposal) and parties acting in concert with it (for the Whitewash Waiver);

- iv -

DEFINITIONS

"Lanzhou Aluminum Factory"

(Chinese Characters), a wholly-owned subsidiary of Chinalco, holding approximately 79.5 million A Shares representing approximately 0.62% of the total issued share capital of the Company immediately prior to implementation of the Merger Proposal;

"Latest Practicable Date"

24 August 2007, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information herein

"Merger Agreement"

the agreement entered into between the Company and Baotou Aluminum on 20 July 2007 in relation to the Merger Proposal;

"Merger Proposal"

the proposed merger of Baotou Aluminum with the Company pursuant to the Merger Agreement through the proposed issue of Chalco A Shares by the Company at the Exchange Ratio to exchange for the Baotou Shares together with the Cash Alternative;

"PRC"

The People's Republic of China which, for the purpose of this circular, excludes Hong Kong Special Administrative Region of the PRC;

"RMB"

Renminbi, the lawful currency of the PRC;

"SASAC"

the PRC State-owned Assets Supervision and Administration Commission of the State Council;

"SFC"

the Securities and Futures Commission of Hong Kong

"SFO"

the Securities and Futures Ordinance, Chapter 571 of the Laws of Hong Kong

"SGM"

the special general meeting of the Company to be convened to separately consider and, if thought fit, approve, among other things, (1) the Merger Proposal and the Merger Agreement as well as the proposed issue of new Chalco A Shares under the Merger Proposal; (2) the consequential amendment to the Articles of Association of the Company upon implementation of the Merger Proposal; (3) the exemption for Chinalco and parties acting in concert with it to make a general offer pursuant to the relevant laws and regulations of the PRC and (4) the granting of the authorization to an executive committee of the Company to implement the Merger Proposal and all the matters contemplated thereunder;

- v -

DEFINITIONS

"Shandong and Lanzhou

the share reforms of Shandong Aluminum Industry Co., Ltd and

    Aluminum Share Reforms"

Lanzhou Aluminum Co., Ltd and the mergers of both companies with the Company by the issue of 1.237 billion Chalco A Shares to exchange for the then issued shares of Shandong Aluminum Industry Co., Ltd and Lanzhou Aluminum Co., Ltd., which share reforms and mergers were implemented by the Company on 24 April 2007;

"Shareholder(s)"

the holders of the Shares of the Company;

"Shares"

A Shares and H Shares in the capital of the Company;

"Share Exchange"

upon implementation of the Merger Proposal, the issue of Chalco A Shares by the Company to Baotou Group and Guiyang Aluminum in exchange for the Baotou Shares held by them, which will constitute connected transaction under the Hong Kong Listing Rules;

"Takeovers Code"

the Hong Kong Code on Takeovers and Mergers;

"%"

per cent;

"Whitewash Waiver"

the waiver of the obligation of Chinalco and the parties acting in concert with it to make a mandatory general offer arising from the Merger Proposal and the Share Exchange in accordance with Note 1 on Dispensations from Rule 26 of the Takeovers Code;

- vi -

LETTER FROM THE BOARD

Aluminum Corporation of China Limited*
(a joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 2600)

Executive Directors:

Registered office:

Mr. Xiao Yaqing

No. 62 North Xizhimen Street

Mr. Luo Jianchuan

Haidian District

Mr. Chen Jihua

Beijing

Mr. Liu Xiangmin

The People's Republic of China

Postal code: 100082

Non-executive Directors:

Mr. Helmut Wieser

Principal place of business

Mr. Shi Chungui

No. 62 North Xizhiman Street

Haidan District

Independent non-executive Directors:

Beijing

Mr. Poon Yiu Kin, Samuel

The People's Republic of China

Mr. Kang Yi

Postal Code: 100082

Mr. Zhang Zhuoyuan

Principal place of business in Hong Kong:

Unit 3103, 31st Floor,

Office Tower Convention Plaza

1 Harbour Road Wanchai

Hong Kong

27 August 2007

DISCLOSEABLE AND CONNECTED TRANSACTIONS AND
APPLICATION FOR WHITEWASH WAIVER
THE PROPOSED MERGER OF BAOTOU ALUMINUM AND
SHARE EXCHANGE WITH BAOTOU GROUP AND GUIYANG ALUMINUM

Dear Sir or Madam,

Reference is made to the announcements of the Company dated 20 July 2007 and 11 August 2007, respectively, regarding the Merger Proposal. On 20 July 2007, the Board approved and the Company entered into the Merger Agreement with Baotou Aluminum in relation to the Merger Proposal. The Merger

- 1 -

LETTER FROM THE BOARD

Proposal, if fully implemented, will involve the issue of 637,880,000 Chalco A Shares by the Company to the Baotou Shareholders on a record date to be determined in exchange for all the existing issued 431,000,000 Baotou Shares. In addition, pursuant to the Merger Agreement, the holders of Baotou Shares are entitled to elect to exchange for cash under the Cash Alternative which will be provided by the Cash Alternative Provider. Upon completion of the Merger Proposal, the assets of Baotou Aluminum will be absorbed into and the liabilities of Baotou Aluminum will be assumed by the Company. Baotou Aluminum will then cease to exist.

Under the Hong Kong Listing Rules, implementation of the Merger Proposal constitutes a discloseable transaction and the Share Exchange with Baotou Group and Guiyang Aluminum, which are non-wholly-owned subsidiaries of Chinalco, a connected person, will constitute connected transactions of the Company under the Hong Kong Listing Rules. This circular is prepared to comply with the Hong Kong Listing Rules. In accordance with the Articles of Association of the Company, the Merger Proposal which involves the issue of new Chalco A Shares has to be approved by the Shareholders at the SGM and Class Meetings of the holders of H Shares and Class Meeting of the holders of A Shares, respectively. The Share Exchange with Baotou Group and Guiyang Aluminum upon the implementation of the Merger Proposal will result in an increase of the shareholding of Chinalco and parties acting in concert with it, which has implications under Takeovers Code as well under the relevant PRC laws and regulations relating to takeovers. Chinalco has applied to the SFC for a Whitewash Waiver and Chinalco has applied to the CSRC for an exemption from making a general offer pursuant to the relevant PRC laws and regulations.

The purposes of this circular are:

1.

to provide you with further information in relation to (1) the Merger Proposal and Merger Agreement as well as the proposed issue of new Chalco A Shares under the Merger Proposal; (2) the connected transactions to be constituted by the Share Exchange with Baotou Group and Guiyang Aluminium; and (3) the Whitewash Waiver;

2.

to set out the letter of advice from Taifook Capital Limited to the Independent Board Committee, the Independent Shareholders and the independent holders of H Shares, and the recommendations of the Independent Board Committee in respect of (1) the connected transactions to be constituted by the Share Exchange with Baotou Group and Guiyang Aluminum; and (2) the Whitewash Waiver. As the Share Exchange forms part of the Merger Proposal, Taifook Capital Limited, the Independent Financial Adviser, will advise on the Merger Proposal and the Independent Board Committee will provide its recommendations to the Independent Shareholders on the Merger Proposal for the purpose of advising the Independent Shareholders on the connected transactions to be constituted by the Share Exchange;

- 2 -

LETTER FROM THE BOARD

3.

to seek your approval of the resolutions proposed at the SGM in relation to, among other things, (1) the Merger Proposal and the Merger Agreement and the connected transactions to be constituted by the Share Exchange which forms part of the Merger Proposal; (2) the consequential amendment to the Articles of Association of the Company upon the implementation of the Merger Proposal; and (3) the exemption for Chinalco and the parties acting in concert with it to make a general offer for the Shares pursuant to the relevant laws and regulations of the PRC; (4) the granting of the authorization to an executive committee of the Company to implement the Merger Proposal and all the matters contemplated thereunder. Chinalco and parties acting in concert will abstain from voting at such resolutions;

4.

to seek your approval of the holders of H Shares of the resolutions proposed at the Class Meeting of the holders of H Shares in relation to (1) the Merger Proposal and the Merger Agreement as well as the proposed issue of new Chalco A Shares under the Merger Proposal; and (2) the Whitewash Waiver; and

5.

to provide you with information relating to the Class Meeting of the holders of A Shares.

Baotou Aluminum is a joint stock limited company established in the PRC, the A shares of which are listed on the Shanghai Stock Exchange. Baotou Group is the controlling shareholder of Baotou Aluminum, holding 237,309,321 Baotou Shares, representing approximately 55.06% of the total issued share capital in Baotou Aluminum. Baotou Group is in turn owned as to 80% by Chinalco and as to 20% by the Baotou City People's Government. In addition, Chinalco holds an indirect 95% interest in Guiyang Aluminum, which in turn holds an additional 2,783,495 Baotou Shares, representing approximately 0.65% equity interest in Baotou Aluminum. The remaining shareholding in Baotou Aluminum is held by the public shareholders.

Shareholding structure of Baotou Aluminum

Holders of A Shares

No. of Shares

% Shareholding

(in millions)

Baotou Group

237.31

55.06%

Guiyang Aluminum

2.78

0.65%

Public Shareholders

190.91

44.29%

431.00

100%

- 3 -

LETTER FROM THE BOARD

On 29 June 2007, the Board resolved to approve, in principle, the Merger Proposal. On 20 July 2007, the Board approved and the Company entered into the Merger Agreement with Baotou Aluminum. On 7 August 2007, SASAC issued its approval to Chinalco approving the merger of Baotou Aluminum by way of share exchange. On 8 August 2007, the Baotou Shareholders (other than Baotou Group and Guiyang Aluminum) approved the Merger Proposal at a special general meeting of Baotou Aluminum convened for such purpose. The implementation of the Merger Proposal will involve the issue of Chalco A Shares by the Company at the Exchange Ratio to the Baotou Shareholders on a record date to be determined, who elect to exchange in whole or in part their Baotou Shares for Chalco A Shares. In addition, the holders of Baotou Shares are entitled to elect to exchange for cash pursuant to the Cash Alternative which will be provided by the Cash Alternative Provider.

1.48 Chalco A Shares in exchange for one (1) Baotou Share.

The Company will exchange the 431,000,000 Baotou Shares in the issued share capital of Baotou Aluminum by an issue of 637,880,000 Chalco A Shares. The Exchange Ratio has been determined based on the following:

1.

The price per Baotou Share was determined at RMB21.67 based on the average closing price of Baotou Shares for a period of 20 days up to and including 11 June 2007, being the last trading day prior to the suspension of trading in the Baotou Shares on the Shanghai Stock Exchange;

2.

The issue price per Chalco A Share is determined at RMB20.49, which was determined based on the average closing price per Chalco A Share for a period of 20 days up to and including 11 June 2007, being the last trading day immediately before the suspension of trading of the A Shares of the Company on the Shanghai Stock Exchange; and

3.

Based on a premium of 40%, each Baotou Share would worth RMB30.34, representing an exchange ratio of 1 to 1.48 as stated above.

- 4 -

LETTER FROM THE BOARD

The Exchange Ratio was determined based on arm's length negotiations and the premium was determined based, among other things, the following principal considerations:

1

In view of the recent increase of trading volume and share prices of the Baotou Shares prior to the suspension of trading on 12 June 2007, the Directors consider that the average closing price of Baotou Shares for a period of 20 trading days prior to 12 June 2007, which is determined at RMB21.67 per Baotou Share, is representative of the investment by the average investors in the Baotou Shares;

2.

The Directors have reviewed (i) the recent mergers by absorption in the A share stock market as well as in the recent proposed offers involving the non-ferrous metal industries in the international market; and (ii) the price earning ratios of similar A share listed companies whose principal businesses are similar to Baotou Aluminum and are of the view that the above premium is fair and reasonable; and

3.

No premium is provided on the Cash Alternative (referred to below) as the Directors are of the view that the premium should be sufficiently attractive in order to encourage the Baotou Sharesholders, instead of electing to receive cash, to exchange for Chalco A Shares and to hold the Chalco A Shares on a long term investment basis.

Subject to the Merger Proposal becoming unconditional, the Baotou Shareholders who elect not to receive in whole or in part the Chalco A Shares may elect to exercise the Cash Alternative to receive in whole or in part cash at the rate of RMB21.67 per Baotou Share. The Cash Alternative will be provided by the Cash Alternative Provider who is a third party independent of the Company and is not a connected person of the Company or any of its associates. The Cash Alternative Provider will pay the cash to any Baotou Sharesholders who exercise the Cash Alternative and will then exchange the Baotou Shares so received for the Chalco A Shares at the Exchange Ratio. Under such arrangement, the number of Chalco A Shares to be issued pursuant to the Merger Proposal will be fixed. The Cash Alternative ensures that any Baotou Sharesholders will be able to immediately receive cash if they do not intend to receive Chalco A Shares under the Merger Proposal. The introduction of an independent third party as the Cash Alternative Provider will relieve the Company from the financial burden of providing cash for the Cash Alternative, allow the Company to fix the number of Chalco A Shares to be issued and avoid the dependency issues which may be associated with a non-independent cash alternative provider.

- 5 -

LETTER FROM THE BOARD

Pursuant to the agreement to be entered into between the Company and the Cash Alternative Provider, the Cash Alternative Provider will commit a maximum total amount of approximately RMB9.34 billion cash, being the aggregate total of the maximum Baotou Cash Alternative Amount, if all Baotou Shareholders elect to accept the Baotou Cash Alternative. On the assumption that all Baotou Shareholders elect to receive cash under the Cash Alternative, the Cash Alternative Provider will hold all the Chalco A Shares to be issued under the Merger Proposal, representing approximately 4.72% of the total issued share capital of the Company as enlarged by the Merger Proposal.

A summary of the major terms and conditions of the Merger Agreement is as follows:

Date

:

20 July 2007

Parties

:

The Company and Baotou Aluminum

Consideration

:

1.48 Chalco A Share will be issued by the Company in exchange for one (1) Baotou Share.

Baotou Shareholders who elect not to receive in whole or in part the Chalco A Shares may elect to receive in whole or in part cash under the Cash Alternative at the rate of RMB21.67 per Baotou Share.

Conditions Precedent

:

The Merger Proposal is conditional upon, among other things, the following conditions:

a.

Approvals by special resolution of the Merger Proposal and the Merger Agreement and the issue of 637,880,000 new Chalco A Shares as consideration for the exchange of Baotou Shares under the Merger Proposal by (i) the Shareholders at the SGM; and (ii) the separate Class Meeting of the holders of the A Shares and the Class Meeting of the holders of H Shares, respectively, at which Chinalco and its associates will abstain from voting;

b.

Approval of the Merger Proposal and the Merger Agreement by the Baotou Shareholders at a special general meeting of Baotou Aluminum to be held for such purpose;

c.

Approval of the Whitewash Waiver by the independent holders of H Shares of the Company, at which Chinalco and the parties acting in concert with it will abstain from voting;

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LETTER FROM THE BOARD

d.

Approval of the Merger Proposal to approve the connected transactions which will be constituted by the Share Exchange with Baotou Group and Guiyang Aluminum, at which Chinalco and its associates will abstain from voting;

e.

The requisite consents and approvals having been obtained from the relevant governmental and regulatory authorities in the PRC (including, without limitation, CSRC and SASAC); and

f.

CSRC granting waivers to Chinalco and parties acting in concert with it from making a general offer in the PRC and the SFC granting the Whitewash Waiver to Chinalco and parties acting in concert with it.

The condition regarding the obtaining of the Whitewash Waiver will not be waived under the Merger Agreement. As stated above, SASAC approved the merger of Baotou Aluminum and issued its approval document to Chinalco on 7 August 2007. Condition (b) above has been fulfilled upon the approval by the Baotou Shareholders of the Merger Proposal at a special general meeting of Baotou Aluminum held on 8 August 2007.

Termination

:

The Merger Agreement shall be terminated upon occurrence of any of the following circumstances:

1.

The Company and Baotou Aluminum agreeing in writing to terminate the Merger Agreement prior to the completion of the Merger Proposal;

2.

Any material breach of the responsibilities, undertakings or representations in the Merger Agreement by a party to the Merger Agreement and such breach makes the performance or fulfilment of the Merger Agreement impossible; and

3.

Failure to fulfill the conditions precedent to the Merger Agreement as stated above.

The Merger Proposal, if fully implemented, will involve the issue of the new Chalco A Shares at the Exchange Ratio by the Company to the Baotou Shareholders in exchange for the Baotou Shares held by them. Upon completion of the Merger Proposal, the assets of Baotou Aluminum will be absorbed into and the liabilities of Baotou Aluminum will be assumed by the Company. Baotou Aluminum will then cease to exist. Subject to the approval of the CSRC and the Shanghai Stock Exchange, the new Chalco A Shares to be issued for the purpose of the Merger Proposal will be listed on the Shanghai Stock Exchange. The H Shares will continue to be listed on the Hong Kong Stock Exchange.

- 7 -

LETTER FROM THE BOARD

In the event that the Merger Proposal is implemented, a total of 637,880,000 new Chalco A Shares will be issued under the Merger Proposal to exchange for all Baotou Shares in issue and no proceeds will be raised by such issue.

Upon completion of the Merger Proposal, the total issued share capital of the Company will be 13,524,487,892 Shares, comprising 3,943,985,968 H Shares and 9,580,521,924 A Shares, representing approximately 29.16% and 70.84%, respectively, of the total issued share capital of the Company as enlarged by the issue of new Chalco A Shares pursuant to the Merger Proposal. The Chalco A Shares issued pursuant to the Merger Proposal will represent approximately 4.95% of the existing issued share capital of the Company before implementation of the Merger Proposal or 4.72% of the total issued share capital of the Company as enlarged by the Merger Proposal. The Chalco A Shares to be issued to the Baotou Shareholders (other than those issued to Baotou Group and Guiyang Aluminum) pursuant to the Merger Proposal will be freely tradable and not subject to any lock-ups. Upon implementation of the Merger Proposal, a total of approximately 5,649,217,014 A Shares (inclusive of the A Shares indirectly held by Chinalco through Lanzhou Aluminum Factory, Baotou Group and Guiyang Aluminum in the Company) will be held directly and indirectly by Chinalco, representing approximately 41.77% of the total issued share capital of the Company. Lanzhou Aluminum Factory is wholly-owned by Chinalco. Chinalco also holds an indirect 95% interest in Guiyang Aluminum. Baotou Group is owned as to 80% by Chinalco and the remaining 20% by Baotou City People's Government.

Before implementation of the Merger Proposal

Percentage

to issued

Holders of A Shares and H Shares

No. of Shares

share capital

(in millions)

Holders of Chalco A Shares

    Chinalco

5,214.4

40.46%

    Lanzhou Aluminum Factory

79.5

0.62%

    Other holders of A Shares

        (including A Shares public shareholders)

3,648.8

28.31%

Holders of H Shares

3,944.0

30.61%

Total

12,886.7

100%

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LETTER FROM THE BOARD

After implementation of the Merger Proposal (assuming that the Whitewash Waiver is granted and no further Shares are issued between the Latest Practicable Date and implementation of the Merger Proposal):

Percentage

to issued

Holders of Chalco A Shares or H Shares

No. of Shares

share capital

(in millions)

Holders of Chalco A Shares

    Chinalco

5,214.4

38.56%

    Lanzhou Aluminum Factory

79.5

0.59%

    Baotou Group

351.2

2.60%

    Guiyang Aluminum

4.1

0.03%

    Other holders of Chalco A Shares

        (including A Shares public shareholders)

3,931.3

29.07%

Holders of H Shares

3,944.0

29.16%

Total

13,524.5

100%

The Merger Proposal may or may not be proceeded with or become unconditional or effective. There is no assurance that all the conditions precedent contained in the Merger Agreement can be satisfied. Investors and potential investors in the Shares of the Company should exercise care, and they should only rely on information published by the Company, when they deal, or contemplate dealing, in the H Shares or other securities of the Company.

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LETTER FROM THE BOARD

FINANCIAL EFFECTS OF THE MERGER PROPOSAL

(i)

Earnings

According to the 2006 annual report of the Company, the audited consolidated profit attributable to the Shareholders for the year ended 31 December 2006 prepared under the HKFRS was approximately RMB11,744.7 million. According to the 2006 annual report of Baotou Aluminum prepared under the PRC GAAP, the audited consolidated profit attributable to equity holders of the Baotou Aluminum for the year ended 31 December 2006 was approximately RMB403.1 million. In addition, given that both of the Group and Baotou Aluminum are under the common control of Chinalco before and after the implementation of the Merger Proposal, merger accounting will be adopted for the Merger Proposal under the HKFRS, pursuant to which (i) the assets and liabilities of the Group and Baotou Aluminum will be combined using their carrying values and the results of Group and Baotou Aluminum will be combined as if the combination of the Group and the Baotou Aluminum had occurred from the date when they first came under the control of Chinalco; (ii) no goodwill will be recognised for the Merger Proposal; (iii) any difference between the aggregate par value of the Chalco A Shares issued for the Merger Proposal and the net assets value of Baotou Aluminum will be recorded in a reserve account of the Group; and (iv) all expenditure incurred for the Merger Proposal will be recognised as expense. Save as aforesaid, there will not be any immediate material effects on earnings of the Group as a result of the completion of the Merger Proposal.

(ii)

Net assets value

According to the 2006 annual report of the Company, the audited consolidated net assets value of the Group as at 31 December 2006 prepared under the HKFRS was approximately RMB44,224.7 million. According to the 2006 annual report of Baotou Aluminum prepared under the PRC GAAP, the audited consolidated net assets value of Baotou Aluminum as at 31 December 2006 was approximately RMB1,687.4 million. Upon completion of the acquisition of Baotou Aluminum by the Company, the assets and liabilities of the Baotou Aluminum will be combined into the consolidated accounts of the Group using merger accounting as mentioned above. As a result, the net assets value of the Group is expected to be increased.

(iii)

Working capital

Given that the Cash Alternative will be made available by an independent third party and the consideration for the Baotou Shares acquired by the Company will be satisfied by the issue of new Chalco A Shares, there will be no cash outflow from the Group to satisfy the consideration for the Baotou Shares.

The Group is engaged principally in alumina refining and primary aluminum smelting operations. It organises and manages its operations according to the alumina segment, primary aluminum segment and corporate and other services segment. The scope of business of the Group includes bauxite mining, alumina refining and primary aluminum smelting. The principal products include alumina and primary aluminum.

- 10 -

LETTER FROM THE BOARD

Baotou Group is a state-owned enterprise established in the PRC, with a registered capital of RMB 416.7 million, and is the controlling shareholder of Baotou Aluminum. As at the Latest Practicable Date, Baotou Group held 237,309,321 Baotou Shares, representing approximately 55.06% of the total issued share capital of Baotou Aluminum. Baotou Group is owned as to 80% by Chinalco and 20% by Baotou City People's Government. Based on the audited financial information of Baotou Group prepared in accordance with PRC GAAP, the total asset value and the net profit (before and after tax) of the Baotou Group for the two financial years ended 31 December 2006 are as follows:

As at

As at

31 December 2006

31 December 2005

(RMB in millions)

(RMB in millions)

Total net asset value

1,183.19

1,022.22

Net profit before tax

374.84

40.06

Net profit after tax

146.65

-14.97

Baotou Aluminum is a joint stock limited company established in the PRC and the Baotou Shares are listed on the Shanghai Stock Exchange. Baotou Aluminum is engaged principally in the production of aluminum and aluminum alloys and the production and sales of carbon. Based on the audited financial information of Baotou Group prepared in accordance with PRC GAAP, the total asset value and the net profit (before and after tax) of Baotou Aluminum for the two financial years ended 31 December 2006 are as follows:

As at

As at

31 December 2006

31 December 2005

(RMB in millions)

(RMB in millions)

Total net asset value

1,687.36

1,343.05

Net profit before tax

454.46

150.72

Net profit after tax

403.07

132.14

- 11 -

LETTER FROM THE BOARD

The reasons for and benefits of the Merger Proposal are:

1.

The Merger Proposal enables the Company to restructure Baotou Aluminum and through the Merger Proposal, the Company will achieve a more balanced chain of production and will enable the Company to integrate Baotou Aluminum into the management and operations of the Company.

2.

The Merger Proposal implements the undertaking to inject quality aluminum assets into the Company, which undertaking was given by Chinalco at the Shandong and Lanzhou Aluminum Share Reforms in December 2006.

3.

The acquisition of Baotou Aluminum by the Company through the Merger Proposal will eliminate the competition posed by Baotou Aluminum to the Company.

The Board believes that the terms of the Merger Proposal are fair and reasonable and are in the interests of the Shareholders as a whole.

The percentage ratios applicable to the transaction under the Merger Proposal are more than 5% but less than 25%. As a result, the Merger Proposal will constitute a discloseable transaction of the Company under Rule 14.06(2) of the Hong Kong Listing Rules. As at the Latest Practicable Date, Baotou Group was held as to 80% by Chinalco. Under the Hong Kong Listing Rules, Baotou Group is an associate of Chinalco and a connected person of the Company. Chinalco has an indirect 95% interest in Guiyang Aluminum, which is also a connected person of the Company. The Share Exchange relating to the issue of new Chalco A Shares to Baotou Group and Guiyang Aluminum to exchange for the Baotou Shares held by them upon implementation of the Merger Proposal will constitute non-exempt connected transactions which are required to be approved by the Independent Shareholders.

As the Merger Proposal involves the issue of 637,880,000 new Chalco A Shares, and in accordance with Rule 19A.38 of the Hong Kong Listing Rules and the articles of association of the Company, the resolution relating to the Merger Proposal has to be approved by a special resolution of the Shareholders in a special general meeting and the approvals by special resolutions of the holders of H Shares and holders of A Shares at separate class meetings.

- 12 -

LETTER FROM THE BOARD

As the Share Exchange with Baotou Group and Guiyang Aluminum forms part of the Merger Proposal, the Independent Shareholders will be asked to consider and approve the resolution relating to the Merger Proposal to approve the connected transactions to be constituted by the Share Exchange. Chinalco and its associates will abstain from voting on such resolution. In accordance with the requirements of the Hong Kong Listing Rules, an independent board committee has been formed to consider and an independent financial adviser, has to be appointed to advise the independent board committee and the independent shareholders on the fairness and reasonableness of the connected transactions. As the Share Exchange forms part of the Merger Proposal, the independent financial adviser will advise on the Merger Proposal and the Independent Board Committee will provide its recommendations to the Independent Shareholders on the Merger Proposal for the purpose of advising the Independent Shareholders on the connected transactions to be constituted by the Share Exchange;

The Company will convene the SGM to consider the Merger Proposal and the Merger Agreement as well as the proposed issue of new Chalco A Shares under the Merger Proposal and the connected transactions to be constituted by the Share Exchange. As the Share Exchange forms part of the Merger Proposal, the Independent Shareholders will be asked to consider and approve, if thought fit, the Share Exchange by approving the resolution relating to Merger Proposal.

The implementation of the Merger Proposal will result in the change in the percentage shareholding of Chinalco and the parties acting in concert with it in the Company. Assuming that the Merger Proposal is implemented and completed before the end of December 2007, the lowest percentage shareholding of Chinalco and parties acting in concert with it in the Company was 39.59%, which was the percentage shareholding of Chinalco immediately prior to the implementation of the Shandong and Lanzhou Aluminum Share Reforms on 24 April 2007. Upon implementation of the Merger Proposal and the Share Exchange with Baotou Group and Guiyang Aluminum (assuming the Whitewash Waiver is obtained and no further Shares are issued between the Latest Practicable Date and completion of the Share Exchange), the percentage shareholding of Chinalco and parties acting in concert with it in the Company will increase from 39.59% to approximately 41.77%. Accordingly, Chinalco will be obliged to make a mandatory general offer for all the issued Shares not already owned or agreed to be acquired by Chinalco and parties acting in concert with it under Rule 26.1 of the Takeovers Code, unless the Whitewash Waiver is obtained from the SFC.

- 13 -

LETTER FROM THE BOARD

Chinalco has made an application to the Executive for the Whitewash Waiver. The Executive has indicated that the Whitewash Waiver will be granted subject to, among other things, the approval of the independent holders of H Shares of the Company by way of poll. Chinalco and parties acting in concert with it are required to abstain from voting at the relevant resolution relating to the Whitewash Waiver. Completion of the Merger Proposal is subject to the satisfaction of a number of conditions precedent (including the obtaining of the Whitewash Waiver from the Executive) as detailed above. The condition regarding the obtaining of the Whitewash Waiver will not be waived under the Merger Agreement. The Whitewash Waiver may or may not be granted by the Executive. If the Whitewash Waiver is not granted, the Merger Agreement shall lapse.

As at the Latest Practicable Date, Chinalco together with Lanzhou Aluminum Factory are holding an aggregate of approximately 41.08% of the issued share capital of the Company. Other than the 41.08% interest in the Company, Chinalco and parties acting in concert with it do not hold any other shares, convertible securities, warrants or options of the Company or any outstanding derivative in respective of securities in the Company.

There were the following dealings in the Shares by Chinalco for the 6 months prior to the date of the Merger Agreement and the date of the announcement of the Company on 20 July 2007 relating to the Merger Proposal:

1.

the acquisition of 602,246,135 Shares by Chinalco from China Orient Asset Management Corporation on 24 April 2007, which took place simultaneously with the issue of 1.237 billion Chalco A Shares pursuant to the Shandong and Lanzhou Aluminum Share Reforms; and

2.

the acquisition of 79,472,482 Chalco A Shares by Lanzhou Aluminum Factory, a wholly-owned subsidiary of Chinalco, upon completion of the Shandong and Lanzhou Aluminum Share Reforms on 24 April 2007.

The negotiations for the Merger Proposal and the proposed issue of new Chalco A Shares only started on or about 11 June 2007, which resulted in suspension of trading of both the A Shares and H Shares on 12 June 2007. As the negotiations for the proposed issue of new Chalco A Shares under the Merger Proposal were first made on or about 11 June 2007 which were subsequent to the dealings in the Shares by Chinalco on 24 April 2007, the above transactions are not disqualifying transactions for the purpose of Note 1 of the Notes on Dispensations from Rule 26 and the Whitewash Guidance Note contain in Schedule VI of the Takeovers Code. The SFC has confirmed that such dealings are not disqualifying transactions for the purpose of the Takeovers Code.

Save for the transactions set out above and the proposed Share Exchange, there have been no dealings in the securities of the Company by Chinalco and parties acting in concert with it in the 6 months prior to the date of announcement of the Merger Proposal but subsequent to the commencement negotiations on 11 June 2007 for the proposed issue of Chalco A Shares for the purpose of the Merger Proposal.

- 14 -

LETTER FROM THE BOARD

Pursuant to the relevant PRC regulations relating to takeovers, Chinalco and parties acting in concert with it will incur an obligation to make a general offer for the Shares by reason of the change in shareholding of Chinalco and parties acting in concert with it as a result of the implementation of the Merger Proposal. Chinalco has applied to the relevant PRC authorities for an exemption of Chinalco from making a general offer in accordance with the relevant PRC regulations relating to takeovers. The exemption will be granted by the relevant PRC authorities subject to approval by the independent Shareholders at the SGM and the undertaking by Chinalco and parties acting in concert with it not to dispose of any of their shareholdings in the Company within 36 months from date of the implementation of the Merger Proposal.

The Company will convene the SGM for the independent Shareholders to consider and, if thought fit, approve, among other things, by way of special resolutions:

(1)

The Merger Proposal and the Merger Agreement as well as the proposed issue of new Chalco A Shares under the Merger Proposal and the connected transaction to be constituted by the Share Exchange, which forms part of the Merger Proposal;

(2)

The consequential amendment to the Articles of Association of the Company upon the implementation of the Merger Proposal;

by way of ordinary resolutions:

(3)

The exemption for Chinalco and the parties acting in concert with it to make a general offer for the Shares pursuant to the relevant laws and regulations of the PRC; and

(4)

The granting of an authorization to an executive committee of the Company to implement the Merger Proposal and the matters contemplated thereunder.

Chinalco and its associates will abstain from voting at such resolutions. In relation to resolution (2) above, the Independent Shareholders will be asked to consider and, if thought fit, approve the proposed amendment to the Articles of Association of the Company to reflect the changes in the total number of issued Shares and the Share capital structure of the Company after the Company's issue of new Chalco A Shares to implement the Merger Proposal.

According to the Articles of Association of the Company, the Merger Proposal, which involves the issue of new Chalco A Shares, has to be approved by separate Class Meeting of the holders of H Shares and Class Meeting of the holders of A Shares. The Classing Meeting of holders of H Shares will also be convened in order to seek approvals from the holders of H Shares in relation to the Merger Proposal and the Merger Agreement. As the Whitewash Waiver is required to be approved by the independent holders of H Shares, the Class Meeting of the holders of H Shares will also consider and approve, if thought fit, the Whitewash Waiver. The Class Meeting of the holders of A Shares will be convened in order to seek their approval of the Merger Proposal and the Merger Agreement.

- 15 -

LETTER FROM THE BOARD

In accordance with the requirements of the Hong Kong Listing Rules relating to shareholders' approval of connected transaction and the requirements of the Takeovers Code, the Independent Board Committee has been formed to consider the connected transaction which will be constituted by the Share Exchange with Baotou Group and Guiyang Aluminum and the Whitewash Waiver. The Independent Board Committee will comprise the three independent non-executive Directors. Taifook Capital Limited is appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders on the Merger Proposal for the purpose of advising the Independent Shareholders on the connected transactions to be constituted by the Share Exchange with Baotou Group and Guiyang Aluminum and to advise on the Whitewash Waiver. As the connected transactions which will be constituted by the Share Exchange with Baotou Group and Guiyang Aluminum form part of the Merger Proposal, the Independent Shareholders will be asked to consider and to approve the Share Exchange by approving the resolution relating to the Merger Proposal.

Holders of H Shares whose names appear on the register of members of the Company at the close of business on Tuesday, 11 September 2007 will be entitled to attend the SGM upon completion of the necessary registration procedures. The H Share register of members of the Company will be closed from Wednesday, 12 September 2007 to Thursday, 11 October 2007, both days inclusive, during which period no transfer of the Company's H Shares will be effected. Where applicable, any person who purchased any H Shares and intends to attend the SGM therefore has to lodge the instrument of transfer and the relevant share certificate to the Company's H Share registrar, Hong Kong Registrars Limited at 46th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong, by no later than 4.00 p.m. on Tuesday, 11 September 2007.

Whether or not you are able to attend the SGM, you are requested to complete the enclosed form of proxy for use at the SGM in accordance with the instructions printed on it and deposit it at the office of the Company's branch registrar in Hong Kong, Hong Kong Registrars Limited at 46th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong as soon as possible and in any event so as to arrive not less than 24 hours before the time for holding the SGM or any adjourned meeting. Completion and return of the form of proxy for use at the SGM will not preclude you from attending and voting in person at the SGM, if you are so desire.

As stated above, the issue of new Chalco A Shares under the Merger Proposal has to be approved by the separate Class Meeting of the holders of H Shares and the Class Meeting of the holders of A Shares. The Company will convene the Class Meeting of the holders of H Shares to consider and, if thought fit, approve the Merger Proposal and the Merger Agreement as well as the proposed issue of new Chalco A Shares under the Merger Proposal. As the Whitewash Waiver is required to be approved by the independent holders of H Shares, the Class Meeting of the holders of H Shares will also consider and approve, if thought fit, the Whitewash Waiver. Chinalco and its associates will abstain from voting on such resolutions.

- 16 -

LETTER FROM THE BOARD

Holders of H Shares whose names appear on the register of members of the Company at the close of business on Tuesday, 11 September 2007 will be entitled to attend the Class Meeting of holders of H Shares upon completion of the necessary registration procedures. The H Share register of members of the Company will be closed from Wednesday, 12 September 2007 to Thursday, 11 October 2007, both days inclusive, during which period no transfer of the Company's H Shares will be effected. Where applicable, purchasers of H Shares intending to attend the Class Meeting of holders of H Shares are therefore required to lodge their respective instrument(s) of transfer and the relevant share certificate(s) to the Company's H Share registrar, Hong Kong Registrars Limited at 46th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong, by no later than 4.00 p.m. on Tuesday, 11 September 2007.

Whether or not you are able to attend the Class Meeting of holders of H Shares, you are requested to complete the enclosed form of proxy for use in the Class Meeting of holders of H Shares in accordance with the instructions printed on it and deposit it at the office of the Company's branch registrar in Hong Kong, Hong Kong Registrars Limited at 46th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong as soon as possible and in any event so as to arrive not less than 24 hours before the time for holding the Class Meeting of holders of H Shares or any adjourned meeting. Completion and return of the form of proxy will not preclude you from attending and voting in person at the Class Meeting of holders of H Shares, if you are so desire.

As the Merger Proposal involves the issue of new Chalco A Shares, and in accordance with the requirements of the Hong Kong Listing Rules and articles of association of the Company, the Merger Proposal also has to be approved by the holders of A Shares at a separate class meeting.

The Class Meeting of holders of A Shares will therefore be convened by the Company to seek approval from the holder of A Shares in relation to the Merger Proposal and the Merger Agreement.

- 17 -

LETTER FROM THE BOARD

According to Article 81 of the Articles of Association of the Company, a resolution put to the vote at a general meeting or a class meeting shall be decided on a show of hands unless voting by way of a poll is required by the Hong Kong Listing Rules or a poll is (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) demanded by:

(i)

the chairman of such meeting; or

(ii)

at least two shareholders (in the case of a general meeting) or at least two holders of H Shares (in the case of a class meeting) present in person or by proxy entitled to vote at such meeting; and

(iii)

any shareholders (in the case of a general meeting) or holders of H Shares (in the case of a class meeting) present in person or by proxy and representing not less than one-tenth of the total voting rights of all Shareholders or the holders of H Shares (as the case may be) having the right to vote at such meeting before or after a vote is carried out by a show of hands.

Unless required by the Hong Kong Listing Rules or a poll is demanded, a declaration by the chairman that a resolution has been passed on a show of hands and the record of such in the minutes of the meeting shall be conclusive evidence of the fact that such resolution has been passed. There is no need to provide evidence on the number of proportion of votes in favour of or against such resolution.

The Board believes that the terms and conditions of the Merger Proposal are fair and reasonable and in the interests of the Company and the Shareholders as a whole. Accordingly, the Board recommends the Shareholders to vote in favour of, among other resolutions, the following resolutions proposed at the SGM: (1) the Merger Proposal and the Merger Agreement as well as the proposed issue of new Chalco A Shares under the Merger Proposal and the connected transactions to be constituted by the Share Exchange, which forms part of the Merger Proposal; (2) the consequential amendment to the Articles of Association of the Company upon the implementation of the Merger Proposal; (3) the exemption for Chinalco and parties acting in concert with it to make a general offer for the Shares pursuant to the relevant PRC laws and regulations relating to takeovers; and (4) the granting of an authorization to an executive committee of the Company to implement the Merger Proposal and the transactions contemplated thereunder.

As the issue of new Chalco A Shares is required to be approved by the holders of H Shares at the Class Meeting of the holders of H Shares, the Board also recommends the holders of H Shares to vote in favour of the resolution relating to the Merger Proposal at the Class Meeting of the holders of H Shares.

The Board also recommends the holders of A Shares to vote in favour of the resolution relating to the Merger Proposal at the Class Meeting of the holders of A Shares.

- 18 -

LETTER FROM THE BOARD

In respect of the connected transactions which will be constituted by the Share Exchange with Baotou Group and Guiyang Aluminum, as the terms of the Share Exchange are the same as the exchange of Baotou Shares with other Baotou Shareholders, the Board considers that the terms and conditions of the connected transactions which will be constituted by the Share Exchange with Baotou Group and Guiyang Aluminum as fair and reason and in the interests of the Company and the Shareholders as a whole.

On the basis that the grant of the Whitewash Waiver is a condition of the Merger Proposal, the Board also considers that the grant of the Whitewash Waiver is fair and reasonable and in the interests of the Company and the Shareholders as a whole. The Board therefore also recommends the independent holders of H Shares to vote in favour of the resolution relating to the Whitewash Waiver at the Class Meeting of the holders of H Shares.

Your attention is drawn to the letter from the Independent Board Committee to the independent Shareholders, which is set out on pages 21 to 23 of this circular. The Company has appointed Taifook Capital Limited as the Independent Financial Adviser to advise (1) the Independent Board Committee and the Independent Shareholders in respect of the connected transactions which will be constituted by the Share Exchange; and (2) the Independent Board Committee and the independent holders of H Shares in respect of the Whitewash Waiver. As the Share Exchange forms part of the Merger Proposal, Taifook Capital Limited will advise on the Merger Proposal and the Independent Board Committee will provide its recommendations to the Independent Shareholders on the Merger Proposal for the purpose of advising the Independent Shareholders on the connected transactions to be constituted by the Share Exchange. The letter of advice of Taifook Capital Limited to (1) the Independent Board Committee and the Independent Shareholders on the fairness and reasonableness of the connected transactions which will be constituted by the Share Exchange; and (2) the Independent Board Committee and the independent holders of H Shares in respect of the Whitewash Waiver is set out on pages 23 and 38 of this circular. The Independent Board Committee, having taken into account the advice of Taifook Capital Limited, considers that the terms of the connected transactions which will be constituted by the Share Exchange are fair and reasonable in so far as the Independent Shareholders are concerned. Accordingly, it recommends that the Independent Shareholders vote in favour of the resolution relating to the Merger Proposal to approve the connected transactions which will be constituted by the Share Exchange. In addition, the Independent Board Committee, having taken into account the advice of Taifook Capital Limited, considers that the grant of Whitewash Waiver is fair and reasonable in so far as the interests of the independent holders of H Shares are concerned. The Independent Board Committee therefore recommends the independent holders of H Shares to vote in favour of the resolution to approve the Whitewash Waiver at the Class Meeting of the holders of H Shares.

Your attention is drawn to the further information set out in the appendices to this circular. Your attention is also drawn to "General Information - 11. Right of Shareholders who dissent the Merger Proposal" in Appendix II to this circular.

- 19 -

LETTER FROM THE BOARD

At the SGM, the Shareholders will be asked to consider and if thought fit to approve, in addition to the above resolutions relating to the Merger Proposal and other matters incidental to the implementation of the Merger Proposal, resolutions relating to the revision of the annual limits of the transactions under the Mutual Supply Agreement (as referred to in the separate circular to Shareholders), declaration of interim dividend of the Company for the financial year ending 31 December 2007, declaration of a special dividend and the proposed amendment to article 99 of the Articles of Association of the Company. Information relating to the above is contained a separate circular to be despatched to the Shareholders.

By order of the Board of Directors of
Aluminum Corporation of China Limited
Xiao Yaqing
Chairman

- 20 -

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Aluminum Corporation of China Limited*
(a joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 2600)

27 August 2007

Dear Sir or Madam,

DISCLOSEABLE AND CONNECTED TRANSACTIONS AND
APPLICATION FOR WHITEWASH WAIVER
THE PROPOSED MERGER OF BAOTOU ALUMINUM AND
SHARE EXCHANGE WITH BAOTOU GROUP AND GUIYANG ALUMINUM

We refer to the circular of the Company dated 27 August 2007 to the Shareholders (the "Circular"), of which this letter forms part. Terms defined in the Circular shall have the same meanings when used in this letter, unless the context requires otherwise.

We have been appointed by the Board as the Independent Board Committee to advise you as to the fairness and reasonableness of the terms of (1) the connected transactions which will be constituted by the Share Exchange with Baotou Group and Guiyang Aluminum, non-wholly owned subsidiaries of Chinalco, upon implementation of the Merger Proposal; and (2) the Whitewash Waiver, details of which are set out in the "Letter from the Board" in the Circular.

We wish to draw your attention to the "Letter from Taifook Capital Limited" containing its advice to us in respect of the connected transactions to be constituted by the Share Exchange and the Whitewash Waiver as set out on pages 23 to 38 of the Circular. As the Share Exchange forms part of the Merger Proposal, Taifook Capital Limited has provided its advice on the Merger Proposal for the purpose of advising the Independent Shareholders and us on the connected transactions to be constituted by the Share Exchange. Having considered the advice given by Taifook Capital Limited and the principal factors and reasons taken into consideration by them in arriving at their advice, we are of the opinion that the terms of the connected transactions which will be constituted by the Share Exchange are fair and reasonable so far as the Independent Shareholders are concerned and are in the interests of the Company and its Independent Shareholders as a whole. As the connected transactions to be constituted by the Share Exchange form part of the Merger Proposal and as the terms of the Share Exchange are the same as the terms of the Merger Proposal, we therefore recommend the Independent Shareholders to vote in favour of the resolution relating to the Merger Proposal to approve the Share Exchange.

- 21 -

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

In addition, we wish to draw your attention to the advice to us contained in the "Letter from Taifook Capital Limited" regarding the Whitewash Waiver. Having considered the advice given by Taifook Capital Limited and the reasons taken into consideration by them in arriving at their advice, we are of the opinion that the grant of the Whitewash Waiver is fair and reasonable so far as the independent holders of H Shares are concerned and are in the interests of the Company and its independent holders of H Shares. We therefore recommend the independent holders of H Shares to vote in favour of the ordinary resolution to approve the Whitewash Waiver at the Class Meeting of the holders of H Shares contained in the Notice of Class Meeting of the holders of H Shares to be despatched to the holders of H Shares.

Yours faithfully,
For and on behalf of
Aluminum Corporation of China Limited
The Independent Board Committee
Mr. Poon Yiu Kin, Samuel, Mr. Kang Yi and Mr. Zhang Zhuoyuan
Independent non-executive Directors

- 22 -

LETTER FROM TAIFOOK CAPITAL LIMITED

The following is the text of the letter of advice to the Independent Board Committee, the Independent Shareholders and the independent holders of H Shares from Taifook Capital Limited for the purpose of incorporation in this circular.

25th Floor

New World Tower

16-18 Queen's Road Central

Hong Kong

27 August 2007

Dear Sirs,

CONNECTED TRANSACTIONS AND
APPLICATION FOR THE WHITEWASH WAIVER

We refer to our appointment as the independent financial adviser to the Independent Board Committee, the Independent Shareholders and the independent holders of H Shares in relation to the terms of the exchange of the Baotou Shares held by Baotou Group and Guiyang Aluminum for Chalco A Shares under the Merger Proposal (the "Transaction") and the Whitewash Waiver, details of which are set out in the "Letter from the Board" ("Letter from the Board") of the circular of the Company dated 27 August 2007 (the "Circular"), of which this letter forms part. Terms used in this letter shall have the same meanings as defined in the Circular unless the context requires otherwise.

As referred to in the Letter from the Board, Baotou Group and Guiyang Aluminum, being non-wholly owned subsidiaries of Chinalco, were interested in approximately 55.06% and 0.65% equity interests in Baotou Aluminum respectively as at the Latest Practicable Date. As Chinalco is the controlling shareholder of the Company, each of Baotou Group and Guiyang Aluminum is a connected person of the Company under the Hong Kong Listing Rules. Accordingly, the Transaction will constitute non-exempt connected transactions for the Company under the Hong Kong Listing Rules. The Merger Proposal, of which the Transaction forms part, is therefore subject to the approval by the Independent Shareholders by poll and Chinalco and its associates will abstain from voting at the relevant resolution.

- 23 -

LETTER FROM TAIFOOK CAPITAL LIMITED

In the event that the Baotou Group and Guiyang Aluminum elect to exchange in whole the Baotou Shares held by them for the Chalco A Shares, the aggregate voting rights of Chinalco and parties acting in concert with it in the Company will increase to approximately 41.77% after implementation of the Merger Proposal. As the lowest aggregate percentage holding of the voting rights of Chinalco and parties acting in concert with it in the Company in the past 12 months was approximately 39.59%, the increase of the aggregate voting rights of Chinalco and parties acting in concert with it in the Company to approximately 41.77% after implementation of the Merger Proposal may trigger a mandatory general offer obligation under Rule 26 of the Takeovers Code for all the securities of the Company not already owned or agreed to be purchased by Chinalco and parties acting in concert with it.

A formal application has been made by Chinalco to the Executive for the Whitewash Waiver pursuant to Note 1 of the Notes on dispensations from Rule 26 of the Takeovers Code. The Whitewash Waiver, if granted by the Executive, would be subject to, among other things, the approval of the independent holders of H Shares at the Class Meeting of holders of H Shares by way of poll. The Executive has indicated that the Whitewash Waiver will be granted, subject to, among other things, the approval of the independent holders of H Shares by poll at the Class Meeting of holders of H Shares pursuant to the requirements of the Takeovers Code.

It is a condition precedent to the Merger Proposal that the Whitewash Waiver is granted by the Executive. If the Whitewash Waiver is not approved by the independent holders of H Shares, the Merger Proposal will not proceed to completion. In any event, Chinalco will not make a mandatory general offer under Rule 26 of the Takeovers Code as a result of the Merger Proposal.

The Independent Board Committee, comprising three independent non-executive Directors, namely Mr. Poon Yiu Kin, Samuel, Mr. Kang Yi and Mr. Zhang Zhuoyuan, has been established to advise the Independent Shareholders and the independent holders of H Shares on the terms of the Transaction and the Whitewash Waiver. In our capacity as the independent financial adviser to the Independent Board Committee, the Independent Shareholders and the independent holders of H Shares, our role is to provide you with an independent opinion and recommendation as to whether the terms of the Transaction are fair and reasonable so far as the interests of the Company and the Independent Shareholders are concerned, and whether the terms of the Whitewash Waiver are fair and reasonable so far as the interests of the Company and the independent holders of H Shares are concerned.

In formulating our recommendation, we have relied on the financial and other information and facts supplied to us and representations expressed by the Directors and/or management of the Group and have assumed that all such financial and other information and facts provided and any representations made to us or contained in the Circular were true, accurate and complete at the time they were made and continue to be so at the date of despatch of the Circular and during the period up to the date of the SGM and the Class Meeting of holders of H Shares, and have been properly extracted from the relevant underlying accounting records (in the case of financial information) and made after due and careful enquiry by the Directors and the management of the Group. We have been advised by the Directors and/or the management of the Group that all relevant information has been supplied to us and that no material facts have been omitted from the information supplied and representations expressed to us and we are not aware of any facts or circumstances which would render such information provided and representations made to us untrue, inaccurate or misleading.

- 24 -

LETTER FROM TAIFOOK CAPITAL LIMITED

Our review and analyses were based upon, among others, the information provided by the Company as set out below:

(i)

the Merger Agreement;

(ii)

the annual report of the Company for the year ended 31 December 2006 and the announcement of the Company dated 20 August 2007 in relation to the interim results of the Group for the six months ended 30 June 2007;

(iii)

the annual report of Baotou Aluminum for the year ended 31 December 2006 ("Annual Report") and the quarterly report of Baotou Aluminum for the three months ended 31 March 2007 ("Quarterly Report"); and

(iv)

the Circular.

We have discussed with the Directors and/or the management of the Group with respect to the terms of and reasons for the Merger Proposal, of which the Transaction forms part, and the Whitewash Waiver, and consider that we have reviewed sufficient information to reach an informed view and have no reason to doubt the completeness, truth or accuracy of the information and facts provided and representations made to us. We have not, however, conducted an independent verification of the information nor have we conducted any form of investigation into the businesses, affairs, financial positions or prospects of the Group or Baotou Aluminum and its subsidiaries ("Baotou Aluminum Group").

In arriving at our opinion in respect of the terms of the Transaction and the Whitewash Waiver, we have considered the following principal factors:

A.

THE MERGER PROPOSAL

I.

Background and reasons for the Merger Proposal

(i)

The Merger Proposal

On 20 July 2007, the Company entered into the Merger Agreement with Baotou Aluminum in relation to the Merger Proposal, of which the Transaction forms part. Pursuant to the Merger Proposal, the Company will issue 637,880,000 Chalco A Shares to the Baotou Shareholders in exchange for all the existing issued 431,000,000 Baotou Shares. The Chalco A Shares issued pursuant to the Merger Proposal will represent approximately 4.95% of the existing issued share capital of the Company before implementation of the Merger Proposal or approximately 4.72% of the total issued share capital of the Company as enlarged by the Merger Proposal. In addition, pursuant to the Merger Agreement, the holders of Baotou Shares are entitled to exercise the Cash Alternative to elect to receive in whole or in part cash for their Baotou Shares. Upon completion of the Merger Proposal, the assets of Baotou Aluminum will be absorbed into and the liabilities of Baotou Aluminum will be assumed by the Company. Baotou Aluminum will then cease to exist.

- 25 -

LETTER FROM TAIFOOK CAPITAL LIMITED

In other words, the Company will acquire the entire businesses, assets and liabilities of Baotou Aluminum by way of issue of 637,880,000 Chalco A Shares to the existing shareholders of Baotou Aluminum through the Merger Proposal.

As at the Latest Practicable Date, Baotou Group and Guiyang Aluminum held approximately 237.3 million and 2.8 million Baotou Shares respectively, representing approximately 55.06% and 0.65% of the issued share capital of Baotou Aluminum respectively. Under the Merger Proposal, Baotou Group and Guiyang Aluminum are entitled to exchange the Baotou Shares held by them for approximately 351.2 million and 4.1 million new Chalco A Shares respectively.

(ii)

The Group's principal business activities

The Group is principally engaged in alumina refining and primary aluminum smelting operations and its principal products include alumina and primary aluminum. Based on the audited consolidated financial statements of the Group for the year ended 31 December 2006 prepared in accordance with Hong Kong Financial Reporting Standards ("HKFRS"), (i) the audited consolidated turnover of the Group was approximately RMB61,896.3 million, of which approximately 43.6% and 53.7% were attributable to the alumina and primary aluminum segments respectively; and (ii) the audited consolidated profit attributable to the Shareholders was approximately RMB11,744.7 million. Based on the unaudited condensed interim consolidated financial statements of the Group for the six months ended 30 June 2007 prepared in accordance with HKFRS, the unaudited consolidated turnover of the Group was approximately RMB36,527.9 million and the unaudited consolidated profit attributable to the Shareholders was approximately RMB6,396.6 million.

(iii)

Information on the Baotou Aluminum Group

Baotou Aluminum is a joint stock limited company established in the PRC, the issued shares of which are listed on the Shanghai Stock Exchange. As advised by the Directors, the Baotou Aluminum Group is principally engaged in the production and sale of primary aluminum, aluminum alloys and carbon products.

- 26 -

LETTER FROM TAIFOOK CAPITAL LIMITED

The following sets out a summary of the consolidated turnover and consolidated profit attributable to equity holders of Baotou Aluminum for the year ended 31 December 2005 and 2006, and the three months ended 31 March 2006 and 2007 based on the Annual Report and the Quarterly Report prepared in accordance with the generally accepted accounting principles in the PRC ("PRC GAAP"):

Three months ended

Year ended 31 December

31 March

2005

2006

2006

2007

(Audited)

(Audited)

(Unaudited)

(Unaudited)

RMB'million

RMB'million

RMB'million

RMB'million

Turnover

3,696.6

4,821.8

1,068.4

1,420.9

Profit attributable to equity holders

132.1

403.1

88.4

134.9

Based on the Quarterly Report prepared in accordance with PRC GAAP, the unaudited consolidated net assets value of the Baotou Aluminum Group as at 31 March 2007 was approximately RMB1,833.7 million and the corresponding unaudited consolidated net assets value per Baotou Share was approximately RMB4.3.

The audited consolidated turnover of the Baotou Aluminum Group for the year ended 31 December 2006 was approximately RMB4,821.8 million, representing an increase of approximately 30.4% as compared with that in the previous year.

The audited consolidated profit attributable to equity holders of Baotou Aluminum for the year ended 31 December 2006 was approximately RMB403.1 million, representing an increase of approximately 205.0% as compared with that in the previous year. As advised by the Directors, the substantial increase in profit was mainly attributable to increase in turnover due to higher demand for aluminum products, rise of the price of aluminum products and increase in the proportion of high value-added products. As mentioned in the Annual Report, the Baotou Aluminum Group has achieved growth in its output, with the production volume of aluminum products for the year ended 31 December 2006 reaching approximately 262,800 tonnes, representing an increase of approximately 8.5% over the previous year.

- 27 -

LETTER FROM TAIFOOK CAPITAL LIMITED

The Baotou Aluminum Group's business continued to maintain growth for the three months ended 31 March 2007 which, as advised by the Directors, was also mainly due to the reasons as mentioned above. The unaudited consolidated turnover and profit attributable to equity holders of Baotou Aluminum for the three months ended 31 March 2007 were approximately RMB1,420.9 million and RMB134.9 million respectively, representing increases of approximately 33.0% and 52.7% over the corresponding period in 2006 respectively.

(iv)

Reasons for and benefits of the Merger Proposal

As stated in the Letter from the Board, the reasons for and benefits of the Merger Proposal, of which the Transaction forms part, are:

1.

the Merger Proposal enables the Company to restructure Baotou Aluminum and through the Merger Proposal, the Group will achieve a more balanced chain of production, and the Merger Proposal will enable the Group to integrate the Baotou Aluminum Group into the management and operations of the Group;

2.

the Merger Proposal implements the undertaking given by Chinalco on 18 December 2006 to inject quality aluminum assets into the Company as disclosed in the A Share prospectus of the Company dated 19 April 2007; and

3.

the acquisition of Baotou Aluminum by the Company through the Merger Proposal will eliminate the competition posed by the Baotou Aluminum Group to the Group as disclosed in the A Share prospectus of the Company dated 19 April 2007.

The Directors consider that the Merger Proposal will enable the Group to integrate the aluminum business of the Baotou Aluminum Group into the Group, thereby reducing competition and enhancing the production capacity and market share of aluminum of the Group, which in turn is beneficial to the Group's development in the long run.

Based on the above, in particular, the historical financial performance of the Baotou Aluminum Group and the benefits of the Merger Proposal on the Group's business development as mentioned above, we concur with the view of the Directors that the Merger Proposal is in the interests of the Company and the Independent Shareholders as a whole.

- 28 -

LETTER FROM TAIFOOK CAPITAL LIMITED

II.

Major terms and conditions of the Merger Proposal

As stated in the Letter from the Board, the Merger Proposal will involve the issue of Chalco A Shares by the Company at the Exchange Ratio to the Baotou Shareholders. In addition, the Baotou Shareholders are entitled to elect to exchange their Baotou Shares for cash pursuant to the Cash Alternative which will be provided by the Cash Alternative Provider.

(i)

The Exchange Ratio

The Exchange Ratio is the ratio at which 1.48 Chalco A Shares will be issued in exchange for one (1) Baotou Share, which was determined based on the following:

1.

the price per Baotou Share was determined at RMB21.67 based on the average closing price of Baotou Shares for a period of 20 trading days up to and including 11 June 2007, being the last trading day immediately prior to the suspension of trading in the Baotou Shares on the Shanghai Stock Exchange pending the release of the announcement of Baotou Aluminum dated 2 July 2007 in relation to the board meeting of Baotou Aluminum held on 29 June 2007 for the approval of the Merger Proposal;

2.

the issue price per Chalco A Share is determined at RMB20.49, which was determined based on the average closing price of A Shares for a period of 20 trading days up to and including 11 June 2007 (the "Last Trading Date"), being the last trading day immediately prior to the suspension of trading in the A Shares on the Shanghai Stock Exchange pending the release of the announcement of the Company dated 2 July 2007 in relation to the board meeting of the Company held on 29 June 2007 for the approval of the Merger Proposal; and

3.

based on a premium of 40%, each Baotou Share would be worth RMB30.34, representing an exchange ratio of 1 to 1.48 as stated above.

As stated in the Letter from the Board, the Exchange Ratio was determined based on arm's length negotiations and the premium was determined based on the considerations that the Exchange Ratio shall be sufficiently attractive to the holders of Baotou Shares, after taking into account, among others, the increase in the share price of the Baotou Shares since the suspension of trading in the Baotou Shares on 12 June 2007 and the price earning ratios of similar A share listed companies whose principal businesses are similar to Baotou Aluminum.

- 29 -

LETTER FROM TAIFOOK CAPITAL LIMITED

(ii)

The Cash Alternative

Subject to the Merger Proposal becoming unconditional, if the Baotou Shareholders elect not to receive in whole or in part the Chalco A Shares, they may elect to exercise the Cash Alternative to receive in whole or in part cash at the rate of RMB21.67 per Baotou Share. The Cash Alternative will be provided by the Cash Alternative Provider who is a third party independent of the Company and is not a connected person of the Company or any of its associates. The Cash Alternative Provider will pay the cash to the Baotou Shareholders if they exercise the Cash Alternative and will then exchange the Baotou Shares so received for the Chalco A Shares at the Exchange Ratio. Under such arrangement, the number of Chalco A Shares to be issued by the Company pursuant to the Merger Proposal will be the same regardless whether the Cash Alternative is exercised or not by the Baotou Shareholders and no cash has to be paid by the Company to satisfy the consideration for the Baotou Shares.

Further details of the terms of the Merger Proposal, including the conditions precedent and termination of the Merger Agreement, are set out in the Letter from the Board.

III.

Analysis of the terms of the Merger Proposal

(i)

The issue price of Chalco A Shares for the purpose of determining the Exchange Ratio

As mentioned above, the issue price of Chalco A Shares at RMB20.49 per share was determined based on the average closing price of A Shares as quoted on the Shanghai Stock Exchange for the 20 trading days up to and including the Last Trading Date, which is the last trading day before the publishing date of the board meeting announcement of the Company in relation to the approval of the Merger Proposal.

Based on the information available on the website of the Shanghai Stock Exchange, we have identified a total of six issues of new shares as considerations for acquisitions by listed companies, which were completed during the period from 1 January 2007 to 29 June 2007, being the date of the board meeting of the Company held for the approval of the Merger Proposal (the "New Issues"). Based on the announcements of the New Issues, we noted that the proposals for the issues were first approved by the respective boards of the listed companies before obtaining approvals of shareholders and CSRC. Owing to the time required to obtain approvals from shareholders and CSRC, the issue prices of the new issues were also approved by the respective boards of the listed companies in advance. We also noted that all of the issue prices of the new issues approved at the board meetings were set at a price either (i) equal to the average trading price (the "Average Trading Price") of the related shares for the 20 trading days immediately before the respective publishing dates (the "Base Date") of the board meetings announcements in relation to the new issues; or (ii) not less than the Average Trading Price, save for one share issue in which the issue price as approved at the board meeting was set at a premium of 10% over the Average Trading Price. Based on the above, we are of the view that the basis of setting the issue price of the Chalco A Shares using the Average Trading Price is in line with the bases adopted by the New Issues.

- 30 -

LETTER FROM TAIFOOK CAPITAL LIMITED

To further assess whether the issue price of the Chalco A Shares is fair and reasonable, we set out below the details of the New Issues:

Percentages

of the final

Issue price

Date of

Final

issue price to

approved

issue of

issue price

the Average

Company

Stock code

by the board

new shares

per share

Closing Price

(Note 1)

Zhuzhou Smelter

600961

Not less than the Average

2 April 2007

RMB8.1

Approximately

    Group Co., Ltd.

    Closing Price, which

101.9%

    was RMB7.95

Shandong Nanshan

600219

Not less than the Average

30 April 2007

RMB5.16

100%

    Aluminium Co., Ltd.

    Closing Price, which

    was RMB5.16

Citychamp Dartong

600067

Equal to the Average

22 May 2007

RMB5.71

100%

    Co., Ltd. ("Citychamp")

    Closing Price,

(Note 2)

    which was RMB5.71

Qingdao Haier Co. Ltd.

600690

A premium of 10% over

22 May 2007

RMB4.97

110%

    the Average Closing Price

    of RMB4.52, that was,

    RMB4.97

Anhui Conch Cement

600585

Equal to the Average

25 May 2007

RMB13.3

100%

     Company Limited

    Closing Price, which

    was RMB13.3

Shandong Huatai

600308

Not less than the Average

29 June 2007

RMB9.15

100%

    Paper Co. Ltd

    Closing Price, which

    was RMB9.15

The Company

601600

Equal to the Average

N/A

RMB20.49

100%

(A Shares)

    Closing Price, which

    was RMB20.49

Source: Website of the Shanghai Stock Exchange

- 31 -

LETTER FROM TAIFOOK CAPITAL LIMITED

Notes:

1.

The Average Closing Prices shown above are based on the Average Closing Prices as disclosed in the board meetings announcements in relation to the relevant new issues.

2.

Subsequent to the board meeting announcement of Citychamp in relation to the new issue of shares, Citychamp made a bonus issue and paid cash dividend to its shareholders. The issue of new shares was completed after the aforesaid bonus issue and payment of cash dividend and the final issue price was determined at RMB4.95 per share, being the Average Closing Price after adjusting for the bonus issue and cash dividend. The final issue price shown above is the issue price without taking into account the bonus issue and cash dividend.

As shown above, among the six New Issues, the final issue prices of four New Issues were equal to their respective Average Closing Prices, whereas the final issue prices of two New Issues represented approximately 101.9% and 110% of their respective Average Closing Prices. Based on the aforesaid result, we noted that the setting of the issue price of the Chalco A Shares to be equal to their Average Closing Price was generally in line with the majority of the New Issues. For the two New Issues which set their respective issue prices at premium to their respective Average Closing Prices, we noted that their share prices had increased by approximately 96.8% and 206.8% respectively from their respective Base Dates to their respective issue dates of their new shares. As such, we consider it is reasonable for these two New Issues to set their respective final issue prices at premium over their respective Average Closing Prices. In addition, we shall further explain in the section headed "(ii) Exchange price of the Baotou Shares" below that even if the issue price of Chalco A Shares was set at a premium of 10% over the Average Closing Price, the results of our analysis in that section would not be affected, notwithstanding that the value of the entire issued share capital of Baotou Aluminum as implied by the consideration payable by the Company under the Merger Proposal would be higher.

Based on the audited consolidated net assets value per Share as at 31 December 2006 under the HKFRS of approximately RMB3.8, the issue price per Chalco A Share of RMB20.49 represents a substantial premium of approximately 439.2%. Based on the unaudited consolidated net assets value per Share as at 30 June 2007 under the HKFRS of approximately RMB4.3, the issue price per Chalco A Share of RMB20.49 represents a substantial premium of approximately 376.5%.

Having considered that (i) the basis of setting the issue price of the Chalco A Shares is in line with the bases adopted by the New Issues; (ii) the issue price of the Chalco A Shares being set equal to their Average Closing Price was in line with the majority of the New Issues; and (iii) the issue price per Chalco A Share has a substantial premium over the consolidated net assets value per Share as at 31 December 2006 and 30 June 2007, we concur with the view of the Directors that the issue price of the Chalco A Shares for the purpose of determining the Exchange Ratio is fair and reasonable.

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LETTER FROM TAIFOOK CAPITAL LIMITED

(ii)

Exchange price of the Baotou Shares

The following table sets out the implied price to earnings multiple ("PE") and price to book ratio ("PB") of the Merger Proposal:

Issue price per Chalco A Share

(A)

RMB20.49

Number of Chalco A Shares

(B)

637.88 million

    to be issued by the Company

    under the Merger Proposal

Value of the entire issued share capital

(A) x (B)

Approximately RMB13,070.2 million

    of Baotou Aluminum as implied

    by the consideration payable

    by the Company under the

    Merger Proposal

Unaudited consolidated net assets value

Approximately RMB1,833.7 million

    of the Baotou Aluminum Group

    as at 31 March 2007

Audited consolidated profit attributable

Approximately RMB403.1 million

    to equity holders of Baotou Aluminum

    for the year ended 31 December 2006

Implied PE of the Merger Proposal

Approximately 32.4 times

Implied PB of the Merger Proposal

Approximately 7.1 times

In the event that the Baotou Shareholders elect to exercise the Cash Alternative in whole or in part, they will receive cash for their Baotou Shares in whole or in part at the rate of RMB21.67 per Baotou Share. However, since the Cash Alternative Provider will then exchange the Baotou Shares so received for the Chalco A Shares at the Exchange Ratio, the implied PE and the implied PB of the Merger Proposal to the Company in the event that the Baotou Shareholders exercise the Cash Alternative in whole or in part will remain the same as those in the event that the Baotou Shareholders elect to exchange all their Baotou Shares for Chalco A Shares.

- 33 -

LETTER FROM TAIFOOK CAPITAL LIMITED

We have reviewed the PE and the PB of A-share listed companies whose principal businesses are similar to that of the Baotou Aluminum Group ("Comparable Companies") and compared them with the implied PE and the implied PB of the Merger Proposal, details of which are set out below:

PE (Note 1)

PB (Note 2)

Place of

(approximate

(approximate

Company

Stock code

listing

Principal business

times)

times)

Henan Zhongfu

600595

Shanghai

Manufacture and sale of aluminum

92.8

11.8

    Industry Co. Ltd.

    products including

    electrolytic aluminum

Xinjiang Joinworld Co., Ltd.

600888

Shanghai

Manufacture and sale of aluminum

78.4

14.7

    products including aluminum ingots,

    electronic aluminum foils and

    other aluminum products

JiaoZuo WanFang Aluminum

000612

Shenzhen

Manufacture and sale of aluminum

80.0

16.6

    Manufacturing Co., Ltd

    products including aluminum ingots

Yunnan Aluminum Co., Ltd.

000807

Shenzhen

Manufacture and sale of aluminum

65.5

10.6

    products including aluminum ingots,

    aluminum rolls and aluminum alloys

Shanxi Guanlu Co., Ltd.

000831

Shenzhen

Manufacture and sale of aluminum

175.2

6.9

    products including aluminum ingots and

    aluminum fabrication materials

Average

98.4

12.1

The Merger Proposal

32.4

7.1

Source:

Websites of the Shanghai Stock Exchange and Shenzhen Stock Exchange, Bloomberg, annual reports and quarterly or interim reports of the respective companies.

- 34 -

LETTER FROM TAIFOOK CAPITAL LIMITED

Notes:

1.

The PE is calculated based on the closing price per share as quoted on the relevant stock exchange on the Latest Practicable Date and the basic earnings per share calculated by dividing consolidated profit attributable to equity holders by weighted average number of shares in issue during the financial year as disclosed in the latest published annual report of the relevant company after adjusted for the bonus issue subsequent to the financial year end date (if any).

2.

The PB is calculated based on the closing price per share as quoted on the relevant stock exchange on the Latest Practicable Date and the net assets value per share calculated by dividing consolidated net assets value as disclosed in the latest published quarterly or interim report of the relevant company by the number of shares in issue as at the Latest Practicable Date.

As shown above, the PEs of the Comparable Companies range from approximately 65.5 times to approximately 175.2 times, with an average of approximately 98.4 times, and the PBs of the Comparable Companies range from approximately 6.9 times to approximately 16.6 times, with an average of approximately 12.1 times. The implied PE of the Merger Proposal based on the Exchange Ratio is lower than the PEs of all the Comparable Companies. The implied PB of the Merger Proposal is within the range of the PBs of the Comparable Companies and lower than the average PB of the Comparable Companies.

Should the issue price of Chalco A Shares be set at a premium of 10% over the Average Closing Price, assuming the same Exchange Ratio at 1.48 and based on the same calculation method for the implied PE and implied PB as shown above, the implied PE and PB of the Merger Proposal would be increased to approximately 35.7 times and 7.8 times respectively. Such implied PE is still lower than the PEs of all the Comparable Companies and such implied PB is still within the range of the PBs of the Comparable Companies and lower than the average PB of the Comparable Companies.

Based on the above, we consider that the exchange price of the Baotou Shares and the Exchange Ratio are fair and reasonable.

- 35 -

LETTER FROM TAIFOOK CAPITAL LIMITED

IV.

Dilution effects of the Merger Proposal

As advised by the Directors, the shareholding structures of the Company (i) as at the Latest Practicable Date; and (ii) upon completion of the Merger Proposal (assuming that there is no change in the issued share capital and shareholding structure of the Company from the Latest Practicable Date to immediately before completion of the Merger Proposal and all existing holders of Baotou Shares elect to exchange in whole their Baotou Shares for Chalco A Shares) are as follows:

As at the Latest

Upon completion

Practicable Date

of the Merger Proposal

Approximate

Approximate

Approximate

percentage of

percentage of

percentage of

Number

total issued

Number

total issued

of Shares

share capital

of Shares

share capital

(in millions)

%

(in millions)

%

Holders of A Shares or Chalco A Shares

    Chinalco

5,214.41

40.46

5,214.41

38.55

    Lanzhou Aluminum Factory

79.47

0.62

79.47

0.59

    Baotou Group

-

-

351.22

2.60

    Guiyang Aluminum

-

-

4.12

0.03

    Chinalco and parties acting in concert with it

5,293.88

41.08

5,649.22

41.77

    Other existing holders of A Shares

3,648.76

28.31

3,648.76

26.98

    Other existing holders of Baotou Shares

-

-

282.54

2.09

Holders of H Shares

3,943.97

30.61

3,943.97

29.16

Total

12,886.61

100.00

13,524.49

100.00

As shown in the above table, the aggregate shareholding of the existing holders of A Shares other than Chinalco and parties acting in concert with it will be diluted from approximately 28.31% of the existing issued share capital of the Company as at the Latest Practicable Date to approximately 26.98% of the enlarged issued share capital of the Company upon completion of the Merger Proposal. The aggregate shareholding of the existing holders of H Shares will be diluted from approximately 30.61% of the existing issued share capital of the Company as at the Latest Practicable Date to approximately 29.16% of the enlarged issued share capital of the Company upon completion of the Merger Proposal. Accordingly, the aggregate shareholding interests of the existing Shareholders other than Chinalco and parties acting in concert with it will be diluted from approximately 58.92% of the existing issued share capital of the Company as at the Latest Practicable Date to approximately 56.14% of the enlarged issued share capital of the Company upon completion of the Merger Proposal.

- 36 -

LETTER FROM TAIFOOK CAPITAL LIMITED

Although there is dilution effect to the shareholding interests of the Shareholders other than Chinalco and parties acting in concert with it after the implementation of the Merger Proposal, having taken into account (i) the reasons for and benefits of the Merger Proposal; and (ii) the overall terms of the Merger Proposal, in particular the issue price of the Chalco A Shares and the exchange price of Baotou Shares, we consider that such dilution effect is acceptable.

B.

THE WHITEWASH WAIVER

As stated in the Letter from the Board, in the event that Baotou Group and Guiyang Aluminum elect to exchange in whole the Baotou Shares held by them for the Chalco A Shares, the aggregate voting rights of Chinalco and parties acting in concert with it in the Company will increase to approximately 41.77% after implementation of the Merger Proposal. As the lowest aggregate percentage holding of the voting rights of Chinalco and parties acting in concert with it in the Company in the past 12 months was approximately 39.59%, the increase of the aggregate voting rights of Chinalco and parties acting in concert with it in the Company to approximately 41.77% after implementation of the Merger Proposal may trigger a mandatory general offer obligation under Rule 26 of the Takeovers Code for all the securities of the Company not already owned or agreed to be purchased by Chinalco and parties acting in concert with it.

Chinalco has applied to the Executive for the Whitewash Waiver, and the Executive has indicated that the Whitewash Waiver will be granted subject to, among other things, the approval of the independent holders of H Shares by way of poll at the Class Meeting of holders of H Shares.

The independent holders of H Shares should note that the Merger Proposal is conditional upon, among other things, (i) the Executive granting the Whitewash Waiver to Chinalco; and (ii) the passing of the proposed resolution by the independent holders of H Shares by way of poll at the Class Meeting of holders of H Shares approving the Whitewash Waiver. The approval of the Whitewash Waiver by the independent holders of H Shares, therefore, will be necessary for the Merger Proposal to implement and for the Shareholders to enjoy the benefits of the Merger Proposal.

- 37 -

LETTER FROM TAIFOOK CAPITAL LIMITED

Having considered the above principal factors and reasons, in particular:

-

the satisfactory historical financial performance of the Baotou Aluminum Group for the two years ended 31 December 2006 and the three months ended 31 March 2007;

-

the Merger Proposal will enable the Group to integrate the aluminum business of the Baotou Aluminum Group into the Group, thereby reducing competition and enhancing the production capacity and market share of aluminum of the Group;

-

the issue price of the Chalco A Shares is comparable to the majority of the New Issues and represents a premium to the consolidated net assets value per share of the Company as at 31 December 2006 and 30 June 2007;

-

the implied PE of the Merger Proposal based on the Exchange Ratio is lower than the PEs of all the Comparable Companies while the implied PB of the Merger Proposal is within the range of the PBs of the Comparable Companies and lower than the average PB of the Comparable Companies,

we are of the opinion that (i) the entering into of the Transaction, which forms part of the Merger Proposal, is in the interests of the Company and the Independent Shareholders as a whole and the terms thereof are fair and reasonable so far as the Company and the Independent Shareholders are concerned; and (ii) the granting of the Whitewash Waiver is in the interests of the Company and the independent holders of H Shares as a whole and the terms thereof are fair and reasonable so far as the Company and the independent holders of H Shares are concerned. Accordingly, we advise the Independent Board Committee to recommend the Independent Shareholders to vote in favour of the resolution to be proposed at the SGM to approve the Merger Proposal, of which the Transaction forms part, and the independent holders of H Shares to vote in favour of the resolution to be proposed at the Class Meeting of holders of H Shares to approve the Whitewash Waiver.

Yours faithfully,
For and on behalf of
Taifook Capital Limited
Derek C. O. Chan
Managing Director

- 38 -

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

1.

THREE YEAR SUMMARY

The following table summaries the audited consolidated results of the Group for the last three financial years ended 31 December 2006, as extracted from the audited consolidated financial statements of the Group. There was no modification or qualification in the auditor's report of the Group for each of the three years ended 31 December 2006. There were no extraordinary items or exceptional items for these three years.