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Date: 23 November 2004

Purchase of 160 pieces of manganese steel buckets band for Bemban Dredge entered into between PT Koba Tin (Koba Tin) and MMC Metal Industries Sdn Bhd (MMCMI).


Type Announcement
Subject Purchase of 160 pieces of manganese steel buckets band for Bemban Dredge entered into between PT Koba Tin (Koba Tin) and MMC Metal Industries Sdn Bhd (MMCMI).

Contents :

Pursuant to paragraph 10.08 of the Bursa Malaysia Listing Requirements, Malaysia Smelting Corporation Berhad ("MSC") wishes to announce that its 75% subsidiary, Koba Tin will enter into an agreement to purchase 160 pieces of manganese steel buckets band costing approximately USD1.3 million for its Bemban Dredge from MMCMI.

The above-mentioned order is referred to as the “Related Party Transaction”.

Class of Related Party Transaction

Koba Tin

Koba Tin is a 75% subsidiary of MSC and is principally involved in tin mining and tin smelting in Indonesia.

MMCMI

MMCMI is a wholly-owned subsidiary of MMC Corporation Berhad (MMC) and a supplier of bucket bands and have vast experience in manufacturing buckets of up to 30 cubic feet and above for clients in Malaysia, Indonesia and other parts of the world.

MMC is a major shareholder of MSC.

Rationale of the Related Party Transaction

The Related Party Transaction is of a revenue or trading nature, which is necessary for the day-to-day operations of Koba Tin. Such Related Party Transaction is carried out on an arm's length basis and on commercial terms which are not more favorable to the related party than those generally available to the public and which will not be detrimental to the minority shareholders of MSC.

Financial Effects of the Related Party Transaction

Share Capital

The Related Party Transaction will not have any effect on the issued and paid up share capital of MSC.

Shareholding Structure

The Related Party Transaction will not have any effect on the shareholding structure of MSC.

Earnings

The Related Party Transaction is not expected to have any material impact on the earnings of MSC Group for the financial year ending 31 December 2004.

Net Tangible Assets ("NTA")

The Related Party Transaction is not expected to have any material effect on the NTA of the MSC Group for the financial year ending 31 December 2004.

Directors' and Substantial Shareholders' Interest

MMC is a major shareholder of MSC and parent company of MMCMI. Koba Tin is a subsidiary of MSC.

Dato' Wira Syed Abdul Jabbar bin Syed Hassan and Dato' Ismail Shahudin are Directors of both MMC and MSC. Dato' Wira Syed Abdul Jabbar Syed Hassan is also the Chairman of the Board of Commissioners of Koba Tin.

As such, the Directors mentioned above are deemed interested in the Related Party Transaction.

Approval Required

The Related Party Transaction does not require the approval of shareholders.

Board of Directors' Statement

The Board of Directors of MSC, with the exception of the interested Directors, having taken into consideration all aspects of the Related Party Transaction, is of the opinion that the transaction is fair and reasonable and in the long term and best interests of MSC and its shareholders.

This announcement is dated 23rd November 2004.

By Order of the Board

ABDUL RAHIM HUSSAIN

Secretary




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