In November of last year, Hebei Iron & Steel, an indirect controlling shareholder, made a public commitment to transfer its iron ore business assets to the listed company through legal procedures at fair and reasonable market prices. At the time, the company stated that it would actively facilitate the asset injection process following the public offering and acquisition of Sinbo Steel Co., Ltd., aiming to complete the first batch of asset transfers before December 31, 2012. The initial assets to be injected included major iron mines such as Sijiaying, Heishan, and Shirengou, with estimated reserves of no less than 1 billion tons and annual production capacity of iron concentrate exceeding 7 million tons. The remaining assets were expected to be gradually transferred as conditions allowed, until all of the group’s iron ore assets were integrated into Hebei Iron & Steel.

However, this promise was not fulfilled within the stipulated timeframe. In a recent announcement, Hebei Iron & Steel provided three main reasons for the delay. First, the capital market remained weak throughout the year, with the company’s stock price consistently below its net asset value per share. According to the third-quarter report, the company’s net asset value per share stood at 4.03 yuan, but its stock price had been hovering around 2.74 yuan by the end of December. As a state-owned enterprise, Hebei Iron & Steel emphasized the need to avoid any loss of state assets, which meant that any equity issuance could not be priced below the net asset value.

Second, iron ore prices have been declining since the start of the year, reducing the profitability of mining assets. The company argued that injecting these assets now would negatively impact the earnings of the listed company. This decline in iron ore prices was partly due to weak demand from the steel industry, especially in the second half of the year when prices hit historic lows.

Third, the scale and complexity of the iron ore assets involved are significant. They include extensive development history, expanded mining rights, reserve verification, and improvements in asset ownership—each requiring substantial groundwork and regulatory approvals.

Despite these challenges, Hebei Iron & Steel has not ruled out future asset injections. In its statement, the company reaffirmed that the major shareholder, Hebei Iron & Steel Group, remains committed to gradually transferring mature iron ore assets to the listed company. This effort aligns with the long-term goal of supporting Hebei Steel’s sustainable growth and maintaining accountability to small and medium-sized investors. The company reiterated its original commitment to eventually bring all iron ore business assets into the listed entity.