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At current, China's government is proactively and steadily speeding up reform of its taxation system. Tax refund price for aluminum alloy bars (original tax refund price is 11%) and aluminum wire rod (original tax refund price is 11%) exported by Baotou Aluminum were adjusted to zero, which can impact Baotou Aluminum's operation revenue to some extent. Except these department corporations and subsidiaries that are entitled to tax preferential treatment, the applicable enterprise revenue tax fee of the Company will change to 25% from 33% beginning January 1, 200 On March sixteen, 2007, the National People's Congress of the People's Republic of China approved the Enterprise Income Tax Law of the People's Republic of China ("New Income Tax"). New Income Tax will come into force from January 1, 2008, with a transition period of not extra than 5 years for companies that are entitled to tax preferential policies.

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