Yalian Steel Corporation wishes to clarify the interest rate on the new CNY 25 million line of credit from China Merchants Bank.

Further to the news release on June 28, 2011, the Company clarifies that the interest rate will be fixed at 120% of the prevailing benchmark rate at the time of draw downs.

Based on 6.31%, the last reported benchmark interest rate in China this means that the interest rate on a current drawdown would be 7.57%.