Sustainability ReportAbout This Report

This is the eighth sustainability/social responsibility report released by the Company. This report outlines the

Company's efforts in environmental protection social responsibility and corporate governance in 2025 responding to

the expectations and concerns of stakeholders.Reporting period Basis of Preparation

This report covers the period from January 1 2025 to ◎ Chinese Academy of Social Sciences "Guidelines for

December 31 2025 with certain content extending Corporate Social Responsibility Reporting in China (CASS-

beyond this period. ESG 6.0)"

◎ Guidelines No. 1 of the Shanghai Stock Exchange for Self-

Regulation of Listed Companies — Standard Operation

◎ Shanghai Stock Exchange "Self-Regulatory Guidelines

No. 4 for Listed Companies – Sustainability Report

Reporting Scope Preparation"

This report covers the Company and its subsidiaries ◎ Shanghai Stock Exchange "Self-Regulatory Guidelines No.branches and directly affiliated entities. For ease 14 for Listed Companies – Sustainability Report (Trial)"

of reference "Inner Mongolia Baotou Steel Union ◎ Global Sustainability Standards Board "GRI Sustainability

Co. Ltd." is also referred to as "Baogang Steel" "the Reporting Standards (GRI Standards)"

Company" or "we" in this report. ◎ United Nations 2030 Sustainable Development Goals

(SDGs)

◎ Guidelines for State-owned Enterprises to Better Fulfill

Social Responsibilities of SASAC of the State Council

Sources of Information

and Reliability Assurance Access to this Report

The information and data disclosed in this report The electronic version of this report is available on the

are derived from official Company documents Company's website (https://www.baoganggf.com) under

and statistical reports and have been reviewed by Investor Relations – Sustainability Reports or on the

relevant departments. The Company undertakes Shanghai Stock Exchange website (https://www.sse.com.that this report contains no false records or cn/).misleading statements and assumes responsibility

for its authenticity accuracy and completeness.Chairman's Message 04 Responsibility Topic I 12

"Rare Materials for a Rare Era Forging New-quality

About Baogang Steel 06

Productivity for Major National Equipment"

Annual ESG Performance 10

Responsibility Topic II 14

"Intelligent Manufacturing Engine Empowering a

New Steel Ecosystem with Smart Technologies"

Responsibility Topic III 16

"Resource Symbiosis Strategic Resource Security

and Green Development"

Sustainable Development Management 76

Future prospects 80

Appendix 82

CONTENTS

01 Governance Excellence 02 Green Transformation 03Innovation Engine Driving 04 Co-building and Sharing to Driving Steady Development for a Low-carbon Future Value Enhancement Reinforce the Foundations for Development

Strengthening Foundations Through 20 Climate Action and Low-carbon 34 R&D Breakthroughs and 52 Employee Development and Rights 64

Party Building and Strategic Leadership Transition "Rare" Product Innovation Protection

Enhancing Governance and 23 Resource Circularity with 39 Strengthening Quality Foundations 54 Safety First Prevention and Control 70

Standardizing Operations Efficiency at the Core and Elevating the Brand as the Priority

Strengthening Compliance and 26 Cleaner Production and Pollution 43 Supply Chain Transmission and 58 Community Co-building and Local 73

Risk Prevention Prevention and Control Responsible Procurement Commitment

Ecological Restoration and 49 Industry Synergy and Standards 74

Harmonious Coexistence LeadershipChairman's Message

Chairman's Message

2025 marks the final and pivotal year of the 14th Five-Year Plan. During the year we accelerated green transformation and achieved new breakthroughs in

In response to the call of the times and the responsibility of low-carbon development. We actively implemented the "dual carbon" strategy driven by green

development the Company has kept firmly in mind the earnest development as the foundation and digital-intelligent empowerment as twin engines. Green factory

instructions of President Xi Jinping focusing on the goal of "long- practices delivered notable results with self-generation rates reaching key milestones and energy

term stable profitability in the steel core business". We have made efficiency targets of the 14th Five-Year Plan exceeded. Hot-rolled products obtained low-carbon

every effort to "optimize structure expand markets improve steel certification and the carbon management system was steadily established. We continued to

efficiency strengthen performance reduce costs optimize consolidate ultra-low emission achievements with major pollutant emissions steadily declining

investment and ensure quality". Guided by innovation driven by demonstrating through action the green transformation of a traditional industrial enterprise.integration and oriented toward results we accelerated growth

against headwinds and strengthened core capabilities through During the year we strengthened digital-intelligent empowerment and built new advantages

transformation delivering solid results successfully completing all through digital transformation. We leveraged digital and intelligent technologies to drive industrial

targets of the 14th Five-Year Plan and laying a strong foundation transformation. Our metering data application was selected as a national outstanding case we

for a good start to the 15th Five-Year Plan. obtained the "Level 3 Intelligent Manufacturing Maturity" certification and became the first advanced

smart factory in the steel industry of the autonomous region. We advanced lean management in

During the year we deepened integrated development and parallel strengthened "quality consistency" control and steadily improved first-pass yield. Multiple

achieved a new level of operational quality and efficiency. products received the industry's "Golden Cup" awards translating technological innovation into

We firmly advanced the strategy of "high-quality specialty steel tangible development value.+ series rare earth steel" deepening the integration of business

and finance as well as R&D production and sales. Output and During the year we strengthened talent development to reinforce the Company unlocking

sales of specialty steel and rare earth steel both reached record new momentum in team vitality. We deepened state-owned enterprise reform implemented

highs. High-value products such as heavy rail wind power tailored "one enterprise one policy" assessments to unlock vitality achieved notable progress

steel and automotive steel made outstanding contributions in reforming the three core systems and significantly improved overall labor productivity. We

and "Baogang Manufacturing" has been widely applied in key implemented order-based training programs for on-site engineers continuously expanding our

national projects. We accelerated the transformation toward talent pipeline. We strengthened our compliance and risk control system ensured robust and

a "comprehensive materials solutions provider" advanced effective safety management were selected as one of the 'Top 100 ESG Pioneer State-owned Listed

EVI cooperation in automotive steel and promoted the Companies in China' and safeguarded high-quality development through standardized governance.implementation of multiple customized projects. Product

upgrading continued steadily and overseas markets The road ahead is long and only relentless effort will carry us forward. Let us stay grounded in

expanded continuously. action and driven by innovation carry forward the spirit of tackling challenges head-on cultivate the

resilience to solve any problem and maintain our pioneering drive. With the mindset that 'success

does not have to be mine' and the commitment that 'success must involve me' we will jointly shape

a more ambitious future for Baogang advance firmly toward becoming a world-class enterprise and

contribute strong momentum to writing a new chapter of Chinese modernization in Inner Mongolia.Chairman of Baogang Steel

04 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 05About Baogang Steel

About Baogang Steel Corporate Culture

Corporate Objective Corporate Spirit

Company Overview

To build a world-leading manufacturing Perseverance and

base for rare earth steel new materials and continuous self-transcendence

become an outstanding service provider of

high-quality rare earth steel new materials.The "Rare Earth Steel" brandvalue reaching

Corporate Mission Corporate Vision

RMB 27.26 billion

To deliver premium steel products and Specialty steel green homeland

create a better life together

increase of

RMB 1.101 billion

Principal Businesses

Winner of

"Inner Mongolia Steel Industry Iconic Brand" Plates Seamless Steel Pipes Heavy Rail Sections Wire Rods

"Inner Mongolia Brand Building Benchmark

Enterprise" honors

with ever-increasing brand value.The Company operates CSP The Company operates five The Company operates two The Company operates four

wide and heavy plate facilities seamless pipe production world-class large universal wire and bar production lines

and internationally advanced lines with diameters rolling lines and residual heat and is an important high-end

Founded in 1954 Baogang was one of the 156 key projects constructed during China's First Five-Year Plan. It is the only steel enterprise 2250 mm hot continuous rolling including 159 mm and quenching lines making it wire rod and bar production

whose commissioning ceremony was officiated by Premier Zhou Enlai. The well-known story of "building Baogang through united lines along with supporting cold 460 mm making it one of one of the most advanced base in northwest China.efforts" cited by President Xi Jinping originated here. Baogang's development has attracted widespread attention and had a far- rolling continuous annealing China's most comprehensive and largest high-speed rail

reaching impact. In 1999 to establish a listed steel company Baogang set up Inner Mongolia Baotou Steel Union Co. Ltd. primarily and galvanizing production seamless pipe production production bases globally.based on its rolling assets. The Company was officially listed on the Shanghai Stock Exchange on March 9 2001 with the stock code lines making it the largest plate bases in terms of product

600010. Over more than 20 years since listing the Company's total assets have increased 20-fold equity financing has reached RMB production base in central and variety and specifications.

45.935 billion and total market capitalization has grown from RMB 8 billion to a peak of over RMB 230 billion making it a key steel western China.

industry base in China.Leveraging the unique co-existing iron ore and rare earth resources of Baiyun Obo the Company has developed distinctive "rare earth Product Structure Industrial Chain

steel" products featuring excellent ductility wear resistance corrosion resistance low-temperature resistance toughness and tensile Premium High-quality Steel Cold-rolled Deep Processing

strength. These products are widely recognized by downstream customers and have been applied in major national projects such as the + +

Beijing-Shanghai High-Speed Railway Qinghai-Tibet Railway Three Gorges Project Beijing Daxing International Airport and the China- Series of Rare Earth Steel Steel Pipe Deep Processing

Russia East-Route Natural Gas Pipeline and are exported to over 60 countries and regions including Europe and the United States. After

years of development in 2025 the Company was recognized as a benchmark enterprise for brand building in Inner Mongolia for 2025 Looking ahead the Company will remain committed to its dual core businesses of "steel + resource development" align with the new

marking its eighth consecutive year on the list. The "Rare Earth Steel" brand ranked among China's Top 500 with brand value reaching stage of development uphold new development principles integrate into the new development paradigm and steadfastly pursue a

RMB 27.26 billion an increase of RMB 1.101 billion compared with 2024. Twelve products received the "Gold Cup" awards from the China high-quality development path guided by ecological priority and green development while fully advancing projects under the "carbon

Iron and Steel Association and the Company was recognized as a "China Outstanding Steel Enterprise Brand". peaking and carbon neutrality" plan. The Company focuses on advanced steel materials and rare earth steel new materials to drive

value enhancement of strategic products strengthen regional market leadership reinforce control over specialized niche markets and

At present the Company has an annual crude steel production capacity of 17.2 million tonnes producing key products including enhance its international presence. It has made new breakthroughs in transforming into an integrated solution provider established

heavy rail wind power steel plates wear-resistant steel zinc-aluminum-magnesium coated steel sheets pipeline steel home itself as an industry benchmark for low-carbon development across the entire value chain and lifecycle accelerated the development

appliance steel automotive steel and oil pipes. Its overall equipment level has reached international first-class standards forming a of full-process intelligent factories and is committed to becoming a leader in new-quality productivity for steel materials an enabler of

production structure of four premium product lines: "plates pipes rails and wire". green and low-carbon steel materials a core creator of value across the industrial chain and a first-class steel enterprise.

06 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 07About Baogang Steel

Company History The Company firmly implemented the

The Company acquired mineral processing-related The Company launched an ultra-low product structure strategy of "premium

assets from Baogang Group iron separation assets emission retrofit project for a 5 million- steel + series of rare earth steel" with

under the Baiyun Obo comprehensive utilization tonne pellet belt roasting machine. specialty steel sales increasing by 9.65%

project and tailings pond assets. year-on-year.The Company was established as Inner

Mongolia Baotou Steel Union Co. Ltd. 2025

The Company acquired rare earth and 2023

niobium separation assets from the Baiyun

Obo resource comprehensive utilization

project of Baogang Group Baoshan Mining 2024

The Company's annual steel production

Company accelerating the development

reached 10 million tonnes placing it among

and utilization of tailings resources.China's large-scale steel enterprises with

ten-million-tonne capacity.

2021

The Company completed an 800000-tonne The aluminum-magnesium coated dual-

fluorite beneficiation production line and phase steel product was successfully

fluorochemical production line achieving applied in the automotive industry for the

2016 large-scale development and deep processing first time and passed trial molding paving of fluorite resources. the way for large-scale application and

accelerating market expansion in both

2001 2012 breadth and depth through the "product + 2017 service" model.

Organizational Structure

1999 2009 2015 Strategy Risk and

Meetings of Shareholders

ESG Committee

Party

Committee Board of Directors Audit committee

Remuneration and

Management

Assessment Committee

The Company acquired 100% equity in

Barun Mining Co. Ltd. held by Baogang

Group and the mining rights of the West

Mine of the Baiyun Obo iron ore.The rare earth steel plate project was

fully completed marking a milestone

in the transformation and upgrading of

The Company was officially listed on the steel industry in the Inner Mongolia

the Shanghai Stock Exchange. Autonomous Region.

08 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 09

Steel Research Institute

Technology Center

Marketing Center

Procurement Center

Low-carbon Energy Center

Equipment Engineering

Department

Manufacturing Department

Safety Management

Department

Planning Department

Finance Department

Legal Affairs Department

Audit Department

Organization and Human

Resources Department

Discipline I

nspection Commission

Securities and

Financing Department

Communist Youth

League Committee

Labor Union

General Affairs DepartmentAnnual ESG Performance

Annual ESG Performance In September 2025

the rare earth high-strength

high-toughness casing pipe

2025 independently developed by the Company's steel pipe In February 2025 subsidiary was successfully the Company's aluminum- In August 2025 deployed for the first time in magnesium coated dual-phase In June 2025 the Company's independently an ultra-deep well at a depth In October 2025 In November 2025steel was successfully applied in the proposed list of advanced developed 400 km/h high- of 8000 meters. This enhanced the case titled "'Full-chain the Company successfully the automotive sector for the first smart factories in the Inner speed rails were successfully the core competitiveness of the metrology data + laser vision trial-produced 1000 MPa-time and passed trial molding. In March 2025 Mongolia Autonomous supplied to a domestic Company's steel pipe products + AI algorithms' collaborative grade ultra-high-strength The product has completed the Company's wind power Region was released and high-speed railway under provided valuable experience application driving intelligent weldable rare earth steel preliminary work including steel products successfully the Company was included construction. All performance for the industry's development heavy rail production and plates for hydropower laboratory and industrial coil won the bid for a major in recognition of its indicators reached leading of pipes for ultra-deep well comprehensive testing applications marking a trials and is currently undergoing domestic wind power project outstanding achievements levels in China further operations and offered efficiency improvement" major breakthrough in high-application testing with a providing critical support in digital transformation and strengthening the Company's important technical reference submitted by the Company's strength steel materials for popular vehicle model. for the national key project intelligent manufacturing. technological leadership in for developing steel pipe metrology center was hydropower."Xinjiang Power Transmission high-speed rail materials and products suitable for ultra-deep selected as one of the first

to Chongqing" and promoting providing higher-quality core wells exceeding 9000 meters. batch of typical metrology

regional energy structure material support for the rapid data application cases by

optimization and low-carbon development of China's high- the State Administration for

transition. speed railway network. Market Regulation.In March 2025 In August 2025 In October 2025 In November 2025

the first urban light rail line in the Company achieved the ESG China Innovation a key science and technology

Central Asia using rails fully bulk export of its first batch Annual Conference (2025) and project titled "Development

supplied by the Company—the In April 2025 of high-strength heat- the first ESG International and Industrialization of Rare

Kazakhstan light rail project— the Company's first batch of treated rails compliant with Expo were held in Beijing Earth Microalloyed Steel

In January 2025 officially entered the track- independently developed high- European standards marking

In August 2025 and the Company was In November 2025 Series Products" led by the

the Company achieved a new laying stage. It will become one end chromium-molybdenum a historic breakthrough during the 14th China selected for the "Top 100 ESG the Company held the Company in collaboration

breakthrough in metallurgical of the most technologically pressure vessel steel for hydrogen in high-end European- International Steel Pioneer State-owned Listed hydrogen pipeline promotion with China Iron and Steel

process innovation. The representative urban rail service was successfully rolled standard rail manufacturing. Conference the Company's Companies in China" list. and technical seminar titled Research Institute Group

industrial trial of pellet transit projects in Kazakhstan off the production line with all The successful large-scale hot-rolled coil products were "Hydrogen for the Future Steel passed final acceptance.charging for the country's and Central Asia marking performance indicators meeting supply of these high-strength awarded a low-carbon steel as the Backbone" at Baogang The project enhances the

largest 624 m2 belt roasting a substantive breakthrough required standards. This marks heat-treated rails marks a certification becoming the Hotel. At the event two new performance advantages of

machine was successfully in the Company's deep another breakthrough in high- historic breakthrough in the first steel product in the products—hot-rolled pipeline rare earth steel and injects

completed marking a participation in the joint end vessel steel technology and Company's efforts to deepen Inner Mongolia Autonomous steel strips and seamless pipes new momentum into high-

new advancement in the construction of the "Belt and injects new momentum into the its presence in the European- Region to receive this for long-distance hydrogen quality development of the

Company's pellet production Road Initiative". development of materials for standard market and certification. transmission—were released manufacturing industry.technology within the steel China's energy and chemical accelerate the development and the "Hydrogen-resistant

industry. equipment sector. of a comprehensive product Steel Joint Laboratory" was

portfolio. officially launched.

10 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 11Responsibility Topic I

"Rare Materials for a Rare Era Forging New-quality Productivity for Major National Equipment"

Responsibility Leveraging the world-class rare earth resources of Building Premium Steel Products to Support National Strategies with

the Baiyun Obo mine the Company focuses on the

strategic direction of "premium steel + series of rare Rare Earth Steel

Topic earth steel". It fully harnesses the role of rare earths— The Company continues to expand application scenarios for rare earth steel around major national projects and high-end equipment

Topic One known as "industrial vitamins"—in enhancing steel needs aligning product development with key industry demands and continuously enhancing the depth of application and market performance strengthens new-quality productivity

through technological innovation and has influence of rare earth steel in sectors such as rail transit energy development and major infrastructure.established a comprehensive rare earth steel R&D The Company has developed a full range of specialized railway steel products covering high-speed railways heavy-haul railways

system comprising five product series 67 varieties

"Rare Materials for a Rare and cold-region railways. It has continuously supported major railway projects both domestically and internationally including the and over 300 grades. In response to the needs of high- "Hungary–Serbia Railway" "China–Laos Railway" and "Baotou–Yinchuan High-speed Railway" demonstrating the strong application

Era Forging New-quality end and green development in the manufacturing sector the Company continues to transform its capabilities of rare earth steel in major engineering projects.Productivity for Major rare earth resource advantages into material and

industrial advantages steadily enhancing its capacity The Company supported the launch of track laying for the first intercity railway in Central Asia

National Equipment" to supply high-performance steel and support major

national projects. In March 2025 the first urban light rail line in Central Asia using

rails fully supplied by the Company—the Kazakhstan light

The Company continues to refine its integrated "resources–R&D–manufacturing–standards–market" advancement mechanism rail project—officially entered the track-laying stage. Upon

positioning rare earth steel as a key driver of its "premium steel + series of rare earth steel" strategy. It coordinates efforts across completion and operation the project will reduce commuting

original technology development product system optimization standards and patent layout and key application scenarios time between the two ends of the line by nearly half. It will

accelerating the transformation of resource R&D and manufacturing strengths into product and market advantages. In 2025 the become one of the most technologically representative urban

Company's R&D investment intensity remained above 5% further strengthening the foundation for rare earth steel research and rail transit projects in Kazakhstan and Central Asia marking a

innovation. Focusing on "rare earth + steel" application research the Company has developed 83 core technologies formulated and substantive breakthrough in the Company's deep participation

revised nine international and industry standards for rare earth steel obtained 1920 authorized patents and achieved first-in-industry

launches of 10 products including hydrogen embrittlement-resistant pipeline steel further reinforcing its technological accumulation in the joint construction of the "Belt and Road Initiative". High-quality Rail Products

and expanding its brand influence in the rare earth steel sector.Optimizing Production Processes to Build Quality through Innovation Dual Breakthroughs in High-end Rails at Home and Abroad Continuously Enhancing the

Company's Competitiveness in Rail Materials

The Company advances product upgrades through process innovation focusing

on the application potential of rare earth elements in wear resistance corrosion In 2025 the Company's independently developed 400 km/h high-speed rails were successfully supplied to a domestic

resistance toughness and weldability. It continuously optimizes production high-speed railway under construction with all performance indicators reaching leading levels in China. Meanwhile

processes and performance control systems driving the evolution of rare earth steel the first batch of R370CrHT high-strength heat-treated rails compliant with European standards achieved bulk export

from specialized R&D to scaled and high-end supply. marking significant progress in high-end European-standard rail manufacturing. These two breakthroughs demonstrate

the Company's continued advancement in the R&D and manufacturing of high-speed rail materials as well as its

As of the end of 2025 the Company had developed more than 60 new products comprehensive capabilities in international standard alignment complex process control and stable large-scale supply.including rare earth welding wire steel high-grade cold-rolled/galvanized ultra-deep They further enhance the high-end rail product portfolio and provide strong support for national key projects expansion

drawing steel sheets for automotive and home appliance applications hydropower into high-end overseas markets and the transition toward higher-value products.steel series high magnetic induction grain-oriented silicon steel and 400 HB-class

hypereutectoid heat-treated rails. In addition 12 products including hydrogen

transmission pipeline steel achieved first-in-industry launches filling multiple Quality inspectors are conducting thorough and

market gaps. "Baogang Rare Earth Steel" has gradually become a well-recognized detailed inspections of newly produced rare earth

brand with both strong technical capabilities and market acceptance. wear-resistant steel

The Company's self-developed rare earth oil casing successfully applied in an ultra-deep well for

the first time

In September 2025 the Company's independently developed rare earth

high-strength high-toughness oil casing was successfully deployed for the The Company's rare earth steel supports the smooth operation of the The Company's rare earth high-strength high wear-resistant heat-treated

first time in an ultra-deep well at a depth of 8000 meters. This successful Baotou–Yinchuan High-speed Railway rails are applied in the "West-to-East Coal Transportation" project

application in ultra-deep well operations not only enhanced the core Rare earth steel has become a key driver for the Company in upgrading its product structure and enhancing high-end supply capacity.competitiveness of the Company's steel pipe products but also provided The proportion of specialty steel sales continues to increase the rare earth steel product system is continuously enriched and both

valuable experience for the industry in developing pipes for ultra-deep product influence and brand recognition are further strengthened. Looking ahead the Company will continue to implement its

well operations and offered important technical reference for steel pipe

Rare Earth Oil Casing rare earth steel new materials expansion plan targeting no fewer than 10 first-in-industry product launches. It will further advance products designed for ultra-deep wells exceeding 9000 meters. the development of high-strength lightweight corrosion-resistant and customized products continuously enhancing the market

competitiveness and value creation capability of rare earth steel.

12 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 13Responsibility Topic II

"Intelligent Manufacturing Engine Empowering a New Steel Ecosystem with Smart Technologies"

Responsibility The Company keeps pace with the digital and intelligent

era taking "intelligent production and smart operations" Advancing ○ With the goal of building an excellence-level smart factory the Company promoted the full-

Comprehensive

Topic as its core strategic direction. It continues to advance

scale development of central control centers integrating information silos across production

Deployment of

the development of "Digital Baogang" driving deep Intelligent Central processes and enabling centralized control and information sharing at production sites. As of

Topic Two integration of digital and intelligent technologies with Control Centers the end of 2025 more than 30 central control centers had been completed.steel manufacturing. Focusing on key areas such as

production operations equipment management quality

control and supply chain coordination the Company ○ The Company promoted deep integration between business operations and information

"Intelligent Manufacturing continues to advance information system development Deepening Data systems established data connectivity across systems and implemented standardized Governance

automation upgrades and data governance in a governance and regulated use of key business data;

Engine Empowering a New and System coordinated manner promoting the evolution of Integration ○ It also streamlined the full-process cost control system for infrastructure project management

Steel Ecosystem with digitalization from isolated applications to full-process enabling end-to-end data digitalization and promoting automatic integration across

integration.Smart Technologies" business systems.In 2025 the Company obtained Level 3 certification under the national Intelligent Manufacturing Capability Maturity Model (CMMM) Strengthening ○ The Company prioritized equipment management as a key focus of digital and intelligent

and AAA certification under the "Integration of Informatization and Industrialization" management system and was recognized as the Intelligent transformation. Based on existing systems it added monitoring points for A+ category

first "Advanced Smart Factory" in the regional steel industry. The numerical control rate of key processes and the digitalization rate of Monitoring Across equipment enabling real-time monitoring of operating conditions and timely fault warnings;

the Equipment

production equipment reached 84.17% and 61.81% respectively further strengthening the Company's digital and intelligent foundation. Lifecycle ○ Centered on the "Integrated Maintenance" system the Company provides digital tools for full

Meanwhile the Company's intelligent manufacturing capability reached the "Advanced Level" under the MIIT intelligent manufacturing lifecycle equipment management with a focus on condition monitoring and end-to-end

maturity standard placing it among the leading tier in the industry. management of A+ category equipment.Optimizing ○ The Company upgraded information systems across core business processes optimizing

Information procurement workflows within the supply chain management system and reducing

Systems Across procurement costs.the Full Business

Chain ○ Within the quality management system the Company improved product traceability

efficiency reduced the rate of non-conforming products and enhanced the efficiency of

handling quality-related claims.Deploying ○ The Company developed and deployed the Baogang AI intelligent recognition and analytics

Artificial system installing multi-point cameras across selected production lines and key scenarios to

Intelligence Across enable intelligent detection and real-time alerts for events such as conveyor belt deviation

Operational and unauthorized personnel crossing thereby advancing the on-site application of artificial

Scenarios intelligence.Enhancing Digital and Intelligent Management

The Company continues to improve its digital and intelligent management system strengthening the foundation for intelligent

manufacturing through standardization and systematization. Through system certifications process optimization and rule development

the Company has further enhanced the standardization and coordination efficiency of its digital and intelligent management providing

a solid foundation for the deployment of intelligent scenarios and end-to-end integration.The Company was recognized as an "Advanced Smart Factory"

in Inner Mongolia Autonomous Region

Intelligent Central Control Center at the Rail and Beam Plant Reshaping Smart Mining Activates the Resource Engine Advancing from Isolated

Industrial Capabilities Through End-to-End Smart Manufacturing Breakthroughs to Ecosystem Synergy

Advancing Digital and Intelligent Transformation

Intelligent manufacturing has become a key enabler for the Company to enhance manufacturing efficiency product quality and

In 2025 the Company advanced digital and intelligent transformation initiatives across five key areas—hardware infrastructure data operational coordination. Looking ahead the Company will continue to advance the "AI+" initiative enabling end-to-end data

governance equipment management system optimization and technology application—driving implementation across multiple connectivity across mining ironmaking and steel rolling processes building smart production lines and customized intelligent

dimensions and translating top-level design into frontline execution. factories and driving the evolution of intelligent manufacturing from scenario deployment to business empowerment.

14 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 15Responsibility Topic III

"Resource Symbiosis Strategic Resource Security and Green Development"

Responsibility Leveraging the resource endowment of the Baiyun Advancing Green Design and Development

Obo mining area and its core steel business the

Topic Company continues to advance coordinated The Company integrates green and low-carbon principles throughout the entire R&D process focusing on rare earth new materials efforts in resource security comprehensive and advanced steel materials strengthening fundamental research standards development and downstream application

Topic Three utilization and green development striving to coordination and promoting the shift from raw material supply to high-value utilization. Leveraging the unique co-existence of

transform resource advantages into industrial and iron and rare earth resources at the Baiyun Obo Mine the Company is committed to building the world's largest base for rare

development strengths. The Company positions earth raw materials and new functional materials focusing on rare earth new materials and advanced steel materials. Focusing on

resource and comprehensive utilization industries key bottleneck technologies in rare earth steel new materials and comprehensive resource utilization the Company strengthens

"Resource Symbiosis as key growth drivers continuously enhancing fundamental research in end-use applications advances standards development and labeling applications and has achieved a series

the "resources–materials–products–recycling"

Strategic Resource Security of major technological breakthroughs. By incorporating the "RE" designation into rare earth steel grades the Company enhances value chain through resource development product recognition and brand influence strengthens its capacity to supply high-end products and core competitiveness and

and Green Development" green design and high-value utilization and continuously improves the value creation of rare earth steel.strengthening its control over strategic resources

and overall resource utilization efficiency.The Company has established a drone countermeasure and control system across three key areas—the concentrator tailings

pond Barun Mine and its tailings pond and Baoshan Mining—to safeguard information security in rare earth strategic resource

protection zones and sensitive classified areas under its jurisdiction.Securing Strategic Resource Supply

The Company regards resource control as a fundamental pillar for enhancing industrial security and stability continuously

strengthening its capabilities in mineral resource development and utilization to support core business growth and industrial

upgrading. The Baiyun Obo Mine is the world's largest deposit of co-associated iron rare earth and niobium resources and a major

repository of China's mineral wealth widely known as the "fertile sacred mountain" and the "world capital of rare earths". The Baiyun

Obo Mine is a multi-metal co-associated deposit of iron rare earth niobium and fluorite consisting of the Main Mine East Mine and

West Mine. The West Mine owned by the Company is a multi-metal co-associated deposit of iron and rare earth. It has proven iron The Company's rare earth OCTG was applied for the first time in an 8000-meter deep well

ore reserves of 750 million tonnes and an annual mining capacity of 10 million tonnes. With its unparalleled resource diversity the

Baiyun Obo Mine has provided critical support for major breakthroughs in China's research on the occurrence patterns of rare earth

elements.Baiyun Obo Mine Resource Reserves

Proven iron ore resources of The largest rare earth resource Fluorite concentrate output exceeding

reserves in the world

15.7billion tonnes tonnesNiobium resources ranking 800000

second globally after Brazil

The Company successfully trial-produced 1000 MPa-grade ultra-high-strength easy-to-weld rare earth steel plates for hydropower applications

A new rare earth mineral named "Huangheite- Two new niobium-rich minerals "Zuolinite" and

(Nd)" was discovered in the central section of the "Hongruite" were discovered in the Baiyun Obo

main ore body of the Baiyun Obo deposit and has mining area and have been officially approved by Resource and comprehensive utilization industries have become a key support for the Company's industrial synergy and value

been unanimously approved by the Commission on the Commission on New Minerals Nomenclature extension. Looking ahead the Company will further strengthen its resource control and comprehensive utilization capabilities

New Minerals Nomenclature and Classification of and Classification of the International Mineralogical accelerate the development and utilization of mineral resources at the Baiyun Obo Mine advance hydrogen-based phase

the International Mineralogical Association. Association. transformation of medium- and low-grade oxidized ores and promote the upgrading of fluorine materials and coal coking-based

materials toward new energy materials and electronic chemicals thereby extending resource development to support industrial

upgrading and new growth drivers.

16 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 17SDGs Targets

01

Governance Excellence

Driving Steady

Development

The Company upholds high-quality Party building as a driver of high-quality development deeply integrating Party

leadership into all aspects of corporate governance strengthening its political foundation and enforcing strict discipline and

work conduct. In 2025 in response to the revised Company Law of the People's Republic of China and new capital market

regulatory requirements the Company continued to optimize its governance structure strengthened compliance and risk

management and established a modern corporate governance system characterized by clearly defined and transparent

responsibilities coordinated operations and effective checks and balances providing strong political and organizational

support for steady development.

18 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 19Governance Excellence Driving Green Transformation for Innovation Engine Driving Co-building and Sharing to Reinforce

Steady Development a Low-carbon Future Value Enhancement the Foundations for Development

Strengthening Foundations Through

Party Building and Strategic Leadership

The Baogang Party Committee organized a dedicated

study session on "Deeply Studying and Implementing

Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era the Company's Party Committee fully the Spirit of the Fourth Plenary Session of the 20th

implements the key principles on Party building and self-reform thoroughly carries out the decisions and deployments of the CPC CPC Central Committee Fulfilling Entrusted Missions

Central Committee and higher-level Party organizations upholds and strengthens overall Party leadership reinforces the sense of a Advancing with Gratitude and Building a Globally

shared Chinese national community strictly implements the Eight-point Decision on improving work conduct advances discipline Leading World-class Enterprise"

enforcement and anti-corruption efforts and ensures all work is carried out effectively with high-quality Party building providing

strong guidance and assurance for high-quality development.Political Leadership Setting Strategic Direction Strengthening Discipline and Promoting Integrity

The Company places political development at the forefront translating the strengths of Party leadership into governance The Company consistently maintains strict governance integrating Party conduct improvement and integrity risk prevention into

effectiveness. By improving governance structures and strengthening political oversight it ensures alignment between corporate all aspects of operations and management. Through ongoing efforts to address the "Four Forms of Misconduct" and deepen anti-

development and national strategies. corruption initiatives it has fostered a clean and disciplined business environment.○ The Company strictly implements the "First Agenda" mechanism ensuring the timely communication and study of the

latest important speeches and instructions of President Xi Jinping. ○ The Company established a coordinated mechanism integrating political routine and special-

○ The Company takes strengthening the sense of a shared Chinese national community as a purpose oversight ensuring effective alignment across all forms of supervision.Strengthening

Strengthening guiding principle across all work integrating it deeply into Party building business operations and Political ○ It carried out targeted oversight in key areas such as the implementation of the Fourth Plenary

the Political corporate culture. Oversight Session of the 20th CPC Central Committee and personnel selection and appointment.Foundation

○ The Company carried out in-depth education on implementing the spirit of the Eight-point ○ Throughout the year the Company reviewed 418 pre-decision reports on "major decisions major

Decision advancing integrated actions of learning inspection and rectification with all 13 identified appointments major projects and large capital operations" ensuring that power is exercised in a

issues in 2025 fully rectified and closed. standardized manner under effective oversight.○ Leveraging platforms such as the Party Committee's theoretical study group learning forums and the "Three Meetings

and One Lecture" system the Company advanced tiered and targeted theoretical learning for Party members and cadres ○ The Company precisely applied the "Four Forms of Oversight and Discipline Enforcement"

enhancing political literacy. Its research achievement "Practices and Exploration of High-level Ideological and Political addressing issues at an early stage and preventing escalation strictly investigating violations of

Work Empowering High-quality Enterprise Development" was awarded by the China Metallurgical Political Research Enforcing Strict discipline and law and upholding the rigidity of discipline.Association. Discipline and

Accountability ○ The Company conducted joint supervision and inspections in key areas such as bulk procurement

○ The Company formed a communication team composed of model Party members model and tendering promoting the standardized exercise of business authority.Strengthening workers outstanding female representatives and youth exemplars conducting face-to-face

outreach at the frontline and reaching over 1000 employees. ○ The Company supported the Party Committee in advancing full and rigorous Party governance Ideological urging Party organizations at all levels to fulfill their primary responsibilities.Guidance ○ The Company launched the "Micro Party Lecture Month" initiative adopting a model of "one

theme per month with everyone as a speaker" to promote deeper understanding and internalization

of the Party's innovative theories.○ The Company continuously optimized its communication strategy producing nearly 100 themed reports on "Strengthening ○ The Company intensified efforts to address misconduct and corruption affecting employees and

the Enterprise through Branding" and publishing over 120 articles on reform and development achievements in the public organizing warning education sessions that analyzed 19 typical cases reaching over 400

authoritative media such as China Metallurgical News further enhancing brand reputation and social influence. Strengthening cadres and employees.Work Conduct ○ The Company implemented long-term mechanisms to reduce burdens at the grassroots level

optimized document circulation and reporting processes and consolidated 127 low-efficiency

WeChat groups effectively reducing repetitive work.○ The Company conducted oversight on issues such as inadequate performance of duties and poor

The Company received the 2025 "SSE Eagle · Golden Quality" Award

work conduct among cadres providing admonitions and corrective education to responsible

for Excellence in Party Building

personnel and effectively addressing formalism and bureaucracy.

20 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 21Governance Excellence Driving Green Transformation for Innovation Engine Driving Co-building and Sharing to Reinforce

Steady Development a Low-carbon Future Value Enhancement the Foundations for Development

Strengthening Organizational Foundations Enhancing Governance

The Company emphasizes the role of grassroots Party organizations as strongholds and Party members as role models. By building

distinctive Party-building brands and deepening cultural and ideological development it has fostered a strong collective drive for and Standardizing Operations

entrepreneurship and performance.The Company strictly implemented the revised Company Law of the People's Republic of China and new capital market regulatory

○ The Company advanced the Party and mass organizations' special initiative of "Focusing Efforts to requirements continuously optimizing its corporate governance structure. The Company revised and improved core governance

Promote Reform and Ensuring Implementation through Practical Actions". policies including the Articles of Association Rules of Procedure for Shareholders' Meetings and Rules of Procedure for the Board

Implementing of Directors. It formally abolished the Supervisory Board with its statutory functions assumed by the Audit Committee of the Board ○ The Company established 58 Party-building initiatives targeting bottlenecks and challenges in

Targeted further clarifying the responsibilities and authority boundaries of the Shareholders' Meeting Board of Directors management and production and operations.Initiatives specialized committees and continuously improving a governance mechanism characterized by clearly defined and transparent

○ The Company leveraged Party building to address development challenges enhancing both responsibilities coordinated operations and effective checks and balances.quality and efficiency in core operations.○ The Company established a comprehensive Party-building brand matrix guided by the principle Improving the Governance System

of "Bearing Responsibilities with Iron Shoulders and Reflecting Original Aspirations through the

Build Furnace" achieving a 100% brand development rate across all units. The Company has established a three-tier governance structure of "Shareholders' Meeting–Board of Directors–Management" and

Fortress-type ○ The Company completed the establishment of stronghold Party branches with high quality set up three specialized committees namely the Strategy Risk and ESG Committee the Audit Committee and the Nomination

Party Branches achieving a 100% completion rate across 308 Party branches. Remuneration and Appraisal Committee forming a corporate governance mechanism with clearly defined and transparent

responsibilities coordinated operations and effective checks and balances.○ A total of 98 branches were recognized as Company-level stronghold branches and 35 were

designated as model stronghold branches.Meetings of Shareholders

Strategy Risk and ESG Committee

The highest authority of the Company composed of all

○ The Company formulated the "2025 Key Points for Party Building" and the "Implementation shareholders responsible for making decisions on major Responsible for providing recommendations on medium- and long-term corporate matters. development strategies risk management major investment decisions

Plan for Special Initiatives of Party and Mass Organizations" establishing a system that deeply

Optimizing and ESG objectives governance structures policies and reporting.integrates Party building with business operations.Institutional Board of Directors

Framework ○ The Company established a mechanism that aligns Party building with production and operations Audit committee

in planning deployment evaluation and incentives incorporating Party-building outcomes into Responsible for setting strategies making decisions and

core performance indicators for grassroots units. preventing risks. For major operational and management

Assumes the functions of the former Supervisory Board. Responsible for

matters Board decisions are subject to prior review and reviewing financial information and its disclosure and overseeing and

discussion by the Party Committee. evaluating internal and external audits and internal controls.Nomination Remuneration and Assessment Committee

Management

Responsible for the selection and qualification review of directors and

Appointed by the Board of Directors responsible for senior management as well as the formulation of remuneration policies

business operations execution and management under and performance evaluation.a tenure-based and contract-based management system.Key Governance Initiatives

Enhancing the Performance Capabilities of Directors Supervisors and Senior Management

○ The Company organized directors supervisors and senior management to participate in specialized training programs such

as the "2025 Session 1 Follow-up Training for Independent Directors of Listed Companies" "Independent Director Capacity-

building Training" and "Analysis of the Regulatory Environment Public Opinion and Value Management under the New 'Nine

Guidelines'" enhancing their compliance performance and scientific decision-making capabilities.Standardizing the Operation of Shareholders' Meetings

○ The Company strictly convenes and holds shareholders' meetings in accordance with regulations adopts a combination of on-site

and online voting and implements the "one-click access" system for shareholders' meetings to increase shareholder participation.○ Meeting time and venue are arranged with full consideration of shareholder convenience with a director attendance rate of 91.23%.The Company's Party Committee organized a 2025 demonstration training program for young cadres Party

branch secretaries and Party affairs personnel ○ Each shareholders' meeting resolution discloses in detail the attendance and participation of directors supervisors and senior

management safeguarding shareholders' rights to information and participation.

22 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 23Governance Excellence Driving Green Transformation for Innovation Engine Driving Co-building and Sharing to Reinforce

Steady Development a Low-carbon Future Value Enhancement the Foundations for Development

In 2025 Communication Channels Key Measures and Outcomes

Board meetings of Board committee

the Company held: 17 meetings 3 independent directors 15 meetings

○ The Company hosted 15 on-site visits by investment managers and analysts

On-site Investor

5 shareholders' 12 Board 4 independent female from institutions such as CITIC Securities Huatai Securities and Taiping meetings members directors 2 directors Engagement Insurance presenting key highlights of its development.

○ The Company's management led delegations to conduct 5 offline

Offline roadshows in Beijing and Shanghai and 13 online roadshows presenting

Roadshows operational performance and product advantages to institutional investors

such as securities firms and fund companies.Results ○ The Company held 3 earnings briefings building an efficient communication

briefings bridge with investors and conveying its long-term value

○ The Company organized 4 investor engagement events to present its key

Investor

strengths and communicate on enhancing capital market image and market

Open Day value management.○ The Company participated in 3 strategy conferences hosted by securities

Industry Conference

firms and organized dedicated investor sessions to provide in-depth insights

Engagement into its resource advantages and operational highlights.

2025 Best Practice of Board Office of Listed Companies Outstanding Practice Case of Board of Directors of Listed Companies

○ The Company responded to over 190 investor inquiries on the SSE

e-Interaction platform and handled more than 220 investor hotline calls

Online Platform effectively communicating its intrinsic value.Engagement

Investor relations management ○ The Company published highlight news on the Eastmoney information

platform to maintain its capital market image.The Company has established and improved its investor relations management system formulated the Investor Relations

Management Policy and revised the Rules of Procedure for Shareholders' Meetings clearly defining responsible parties workflows

and channels for shareholder feedback thereby providing institutional safeguards for equal treatment of all investors and the ○ The Company disclosed a total of 143 compliance information items

Compliant

protection of minority shareholders' legitimate rights and interests. The Company has also built high-frequency multi-level interaction through Shanghai Securities News Securities Times Securities Daily

Information

mechanisms through diversified channels continuously enhancing its capital market image and value recognition through efficient and the Shanghai Stock Exchange website ensuring information is true

Disclosure

information disclosure and two-way communication. accurate complete timely and fair.Deepening State-owned Enterprise Reform

The Company closely aligned with the objectives of the concluding year of the SOE reform deepening initiative fully implementing

reform measures and completing all key tasks. Through dedicated initiatives to improve operational quality and efficiency the

Company systematically implemented enhancement measures continuously improving operational efficiency.In 2025 the Company further deepened market-oriented operating mechanisms fully implemented differentiated performance

evaluations and incremental incentives under the "one enterprise one policy" approach and achieved full coverage of tenure-based

and contract-based management for the management team effectively stimulating operational vitality. The Company implemented

refined full-process management actively captured policy incentives to secure special funding support and steadily advanced capital

structure adjustments and business model innovation for its subsidiaries and investee companies further optimizing asset structure

China Association for Public Companies "Visit Listed Companies – "I Am a Shareholder" Investor Education Event: Visit to the Company enhancing market adaptability and injecting strong momentum into sustainable development.Baotou Tour" Event: Visit to the Company

24 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 25Governance Excellence Driving Green Transformation for Innovation Engine Driving Co-building and Sharing to Reinforce

Steady Development a Low-carbon Future Value Enhancement the Foundations for Development

Strengthening Compliance Impact risk and opportunity management

and Risk Prevention Deepening Compliance Management

The Company improved its integrity and compliance management system carried out anti-commercial bribery anti-corruption and The Company continued to deepen compliance management by optimizing its quarterly meeting mechanism and launching

anti-unfair competition initiatives strengthened internal audit oversight and established a major risk early warning mechanism the "Compliance Officers Speak on Compliance" initiative with frontline compliance officers serving as speakers to promote

enabling precise risk identification dynamic monitoring and effective response thereby effectively preventing various operational cross-unit learning; it organized specialized training on compliance system development and operation along with certification

and management risks and ensuring compliant and stable operations. programs to enhance employee awareness; completed compliance effectiveness evaluations for controlled subsidiaries

extending compliance management across all levels; and implemented compliance culture promotion programs including a

Compliance Awareness Week to foster a strong culture of compliance.Integrity and Compliant Operations

The Company has established a dual system for risk management and compliance management clarifying responsibilities and

processes enhancing compliance guidelines in key areas strengthening legal management and fostering a culture of compliance

embedding integrity and compliance across all aspects of operations.Governance

The Company has established a Compliance Management Committee and built a compliance framework spanning decision-

making management and execution levels integrating compliance requirements throughout decision-making management

execution and supervision processes. The Party Secretary Chairman and General Manager serve as the primary responsible

persons for advancing rule-of-law governance ensuring top-down implementation of compliance management; the Chief

Compliance Officer as the core compliance leader reports directly to the Company's principal executive and oversees the

development and operation of the compliance system; compliance officers are designated across all departments units and

wholly owned and controlled subsidiaries to manage and review compliance within their respective areas.

2025 Comprehensive Summary of Compliance Management Work and the Regular Meeting on Compliance Management for the Fourth Quarter of

Baogang Steel

Decision-making Level Outcomes

Board of Directors Board of Supervisors

and Compliance Management Committee Stronger compliance awareness

Stronger organizational Upgrading Legal Management

leadership

Management

More robust institutional

Executive Management Lead Compliance Department framework

Functional Departments and Management Units More efficient operational Contract Standardization Litigation Risk Management Legal Outreach to Frontline Units

mechanisms

Execution Level More standardized process

The Company fully implemented stand- The Company strengthened stand- In response to training needs and

management

All units branches ardized contract templates releasing ardized management of litigation daily legal inquiries from various units More effective risk prevention

and controlled subsidiaries and control a second batch of 32 templates that cases conducted targeted analysis the Company conducted one-on-one

include clauses on tax rates integrity of high-frequency and high-risk areas on-site training sessions completing

and payment protection for SMEs im- such as construction projects and programs at three frontline units in

proving contract review and execution labor disputes and proposed and im- 2025 and effectively improving legal

efficiency. plemented improvement measures. literacy and practical capabilities.Strategy

The Company has integrated integrity and compliance into its core strategy establishing a compliance approach of "full

coverage focused control and cultural leadership" and is committed to building a long-term mechanism where violations Indicators and targets

are deterred prevented and consciously avoided. In 2025 the Company issued the Compliance Management Policy and

Compliance Management System Objectives revised the Compliance Management Measures and compiled the Compliance In 2025 the Company fully achieved its integrity and compliance objectives achieved full coverage of specialized compliance

Management Handbook; it also released specialized compliance guidelines across 12 key areas including workplace safety guidelines across 12 key areas and recorded no major litigation arbitration or other risk events. In 2026 the Company

environmental protection product quality labor practices and intellectual property forming a structured compliance will continue to strengthen its compliance management system extend compliance requirements across all levels of the

framework of "general principles + detailed rules + guidelines." organization and maintain a 100% compliance review rate for major matters throughout the year.

26 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 27Governance Excellence Driving Green Transformation for Innovation Engine Driving Co-building and Sharing to Reinforce

Steady Development a Low-carbon Future Value Enhancement the Foundations for Development

Anti-bribery and anti-corruption Impact risk and opportunity management

The Company treats anti-commercial bribery and anti-corruption as core elements of corporate governance building an end-to-end Discipline Inspection and Rectification

management approach encompassing strategic leadership risk control education whistleblower protection partner collaboration

and zero tolerance to establish a long-term mechanism that deters prevents and eliminates corruption supporting high-quality The Company adheres to coordinated discipline inspection and inspection mechanisms strengthens oversight of rectification

development. actions following Party committee inspections conducts pre-review of rectification plans tracks implementation progress

and issues reminders to accountable units and individuals with inadequate corrective actions. In 2025 the Company advanced

multiple rounds of rectification for inspection findings forming a closed-loop supervision mechanism of "using inspections to

Governance drive rectification improvement and governance."

The Company's Discipline Inspection Commission serves as the dedicated body for anti-corruption efforts. In 2025 the Company's

Discipline Inspection Commission implemented supervision system reforms adding 5 discipline inspectors establishing third-level Fostering an Anti-corruption Culture

discipline inspection bodies in 15 units and assigning 3 full-time discipline inspectors across 3 units. The Company has established The Company further strengthened the integrated approach of positive integrity education and negative case-based warnings.

18 discipline inspection bodies with 60 full-time inspectors covering finance audit engineering contracts legal affairs and Party- In 2025 the Company supported the Party committee in organizing a warning education conference on implementing the spirit

building effectively strengthening frontline oversight capabilities. of the Eight-point Regulation sharing typical cases and conducting integrity talks as well as organizing visits to the integrity

The Company strictly complies The Constitution of the People's Republic of China，The Oversight Law of the People's Republic education exhibition hall and other training activities. At the same time the Company enhanced communication throughof China，The Regulations of the Communist Party of China on Disciplinary Action etc. and has advanced the implementation platforms such as Baogang Daily and the Discipline Inspection Commission's official WeChat account fostering an environmentof the Integrity Risk Prevention and Control Plan establishing an anti-corruption system covering three dimensions: integrity in where corruption is deterred prevented and consciously avoided.conduct employee behavior and corporate safeguards.Strategy

The Company uses the Integrity Risk Prevention and Control Plan of Baogang Group as a core tool dynamically updating risk

registers and control measures to achieve closed-loop risk management. In 2025 the Company supervised and guided all units

to identify 1307 integrity risks optimize 245 workflows revise and improve 292 policies and resolve 174 issues.Risk Categories Risk description

Party Committee Conference on Implementing the Spirit of the Eight- Discipline Inspection Commission Work Advancement Meeting and On-

point Regulation and Mid-year Work Conference on Party Conduct and site Exchange on Integrity Risk Prevention

○ Some personnel lack a deep understanding of Xi Jinping Thought on Socialism with Anti-corruption

Ideological and Chinese Characteristics for a New Era resulting in weak conviction; a diminished sense

Ethical Risks of purpose with manifestations of formalism and bureaucracy; insufficient awareness

of integrity and self-discipline; and gaps in family conduct and values. Whistleblower Protection Mechanism

○ In areas such as strategic management procurement and sales and engineering The Company has established a four-channel reporting system covering letters visits online platforms and telephone with

Key Area construction the complexity and specialization of operations still lead to issues such reporting mailboxes installed across facilities and public disclosure of reporting hotlines and mailing addresses. The Company

Risks as non-standard internal management insufficient identification of integrity risks and strictly implements the Measures for Handling Petitions and Reports clearly defining procedures for acceptance verification

inadequate control measures. feedback and whistleblower protection prohibiting retaliation and safeguarding stakeholders' lawful rights to supervision.○ Influenced by industry "implicit practices" and external factors Company personnel

External

face risks of misconduct and commercial bribery in business activities with ongoing

Environment Risks Integrity Governance in the Supply Chainexternal pressure on integrity compliance.The Company through the Implementation Measures for the Integrity Agreement embeds anti-bribery requirements across the

○ Certain regulations governing the exercise of authority remain incomplete with entire process of supplier onboarding contract execution and performance evaluation and requires business partners to sign

Institutional and

insufficient checks and supervision mechanisms in key processes leading to integrity agreements with clear mechanisms such as termination of cooperation and inclusion on restricted transaction lists for

Mechanism Risks institutional gaps. violations promoting joint integrity governance across the supply chain.○ Personnel in leadership and critical roles due to the nature of their positions may be

Role-related Risks susceptible to influence from related parties posing risks of non-compliance inaction

or abuse of power for personal gain. Indicators and targets

○ Certain business processes remain non-standardized with incomplete control and In 2025 the Company achieved full coverage of anti-corruption training for Party members and employees with no major

Business Process

supervision loops and gaps in process coordination creating risks of abuse of incidents of commercial bribery corruption or related violations recorded throughout the year. In 2026 the Company will

Risks authority for personal gain. achieve full coverage of anti-corruption training for Party members and employees and establish a normalized long-term

mechanism for anti-bribery and anti-corruption efforts.

28 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 29Governance Excellence Driving Green Transformation for Innovation Engine Driving Co-building and Sharing to Reinforce

Steady Development a Low-carbon Future Value Enhancement the Foundations for Development

Anti-unfair competition Comprehensive Risk Management

The Company strictly complies with the Anti-Unfair Competition Law and the Anti-Monopoly Law of the People's Republic of China The Company has established a four-tier risk management structure of "Board of Directors – Management – Functional Departments

and with the Anti-Unfair Competition Compliance Guidelines as its core framework has established a compliance review mechanism – Business Units": the Board and its committees are responsible for risk decision-making and oversight the General Manager leads

for major decisions to effectively prevent unfair competition and antitrust risks. In 2025 the Company recorded no litigation major overall risk management the Legal Affairs Department serves as the central coordinating unit and each department and business

administrative penalties or contract terminations arising from unfair competition practices. unit acts as the primary owner of risk management within its scope.Guided by the Comprehensive Risk Management Measures the Company implements full-cycle risk management covering

identification assessment response and monitoring applies tiered oversight of major and critical operational risks and has

established a reporting mechanism to ensure timely escalation and response to risk events.Management Measures

○ The Company conducted anti-unfair competition compliance reviews for major decisions Management Measures

reviewing a total of 244 proposals in 2025 covering capital increases strategic cooperation and

major project development.Compliance

Review ○ The Company carried out risk assessments for joint venture and cooperation projects ○ The Company has enhanced its compliance risk database organized departments and units

reviewed strategic and cooperation agreements and strictly prevented unfair competition Compliance to develop risk inventories for key areas and clarified compliance responsibilities and process

and monopolistic practices including false advertising defamation of business reputation Risk control lists for critical roles.concentration of undertakings and abuse of market dominance. Management ○ The Company conducted reviews of risk assessment reports for investment projects providing a

basis for risk-informed investment decision-making.○ At quarterly meetings the Company analyzed compliance cases related to bidding and market

Education and competition. ○ The Company established a major risk early warning mechanism issuing 9 risk alert reports on

Training ○ The Company organized "Chief Compliance Officer on Compliance" sessions sharing case studies Risk Early compliance risk events and notifying relevant units to drive corrective actions.of compliance failures and providing training to unit heads and compliance officers. Warning

Mechanism ○ The Company issued advisory notices on export-controlled dual-use items in subsidiaries'

international operations to mitigate foreign trade compliance risks.○ In 2025 the Company completed 122 audit projects including sub-items covering economic

Conducting performance evaluation compliance in key areas non-plan products operational management

Internal Audit

post-investment evaluation post-construction project evaluation and final account audits

Oversight

achieving full audit coverage.

30 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 31SDGs Targets

02

Green Transformation

for a Low-carbon

Future

Integrating green principles to build a low-carbon future. The Company upholds its signature model of "half industrial

half ecological" embedding ecological stewardship throughout all operations. Aligning with China's dual carbon strategy

the Company focuses on climate response energy efficiency precise emissions control and full-process environmental

protection advancing coordinated efforts in energy saving carbon reduction pollution control and ecological enhancement

driving a high-standard green and low-carbon transformation to build a modern clean and environmentally responsible steel

enterprise and contribute to a greener industrial future for a "Beautiful China."

32 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 33Governance Excellence Driving Green Transformation for Innovation Engine Driving Co-building and Sharing to Reinforce

Steady Development a Low-carbon Future Value Enhancement the Foundations for Development

Climate Action Risk Category Risk Parameters Potential Impact Response Measures

and Low-carbon Transition

○ Hold meetings on flood prevention

Increasing

To standardize carbon management enhance carbon governance and meet carbon market compliance requirements the Company and cold-weather heating work es-Physical severity and In recent years the increasing tablish working groups and distribute

strictly follows the Work Plan for Accelerating the Establishment of a Dual-Control System for Carbon Emissions the Implementation risks frequency occurrence of extreme weather emergency plans.Plan for Establishing a Carbon Footprint Management System and the Detailed Rules for Carbon Management of Baogang (Group) Acute of extreme events globally may lead to tem-

Company the "2025 Low-Carbon Energy Work Plan" and other relevant documents. This ensures that every decision and action Risks weather events porary disruptions in raw material ○ The Company strengthens extreme

taken by the company aligns with the requirements of sustainable development supports the transition to a green and low-carbon (such as heavy and water supply thereby affect-

weather monitoring early warning

rain and ing production stability. and emergency response capabilities

economy and contributes to achieving the goals of carbon peaking and carbon neutrality. snowstorms) to enhance climate resilience across

its facilities supply chain and assets.Governance With increasingly stringent ener-

gy-saving emissions reduction

The Board of Directors serves as the highest decision-making body for climate-related matters reviewing the Company's climate and environmental regulations

strategy medium- and long-term emission reduction targets and carbon neutrality roadmap and assuming primary responsibility for the implementation of the Interim

climate governance; the General Manager leads a cross-functional climate working group as the executive body implementing Board Expansion Measures for Carbon Emissions

decisions developing annual climate action plans coordinating resources resolving key implementation issues and reporting regularly; of carbon Trading has heightened compliance risks for enterprises; the expansion

the Low-carbon Energy Center is designated as the responsible department managing climate risk assessment data collection and markets and

accounting and establishing a climate data management system to ensure the accuracy completeness and reliability of emissions and rising carbon

of the national carbon market des-

pricing and ignates 2024 as the first compliance related data. costs year requiring the Company to par-ticipate in carbon trading leading

to increased compliance costs and ○ The Company has established a

exposure to carbon price volatility Low-carbon Energ y Center with

Strategy thereby raising operating costs and dedicated technical personnel to

impacting strategic development. interpret policies actively participate

The Company conducts weekly production coordination meetings energy benchmarking sessions and quarterly low-carbon energy in industry and regulatory training

meetings to review annual greenhouse gas emissions reports and sustainability reports hear climate-related research updates and stay informed on carbon market and CBAM rules and conduct internal

assess climate risks and opportunities; it also integrates climate-related emissions targets into its "14th Five-Year Plan" annual rolling policy and regulatory training pro-

strategic plans "three transformations" initiatives and annual low-carbon energy plans to proactively respond to the expansion of The European Commission has grams.the national carbon market and the implementation of the EU Carbon Border Adjustment Mechanism. introduced the world's first Carbon

Policies Border Adjustment Mechanism

○ The Company strengthens carbon

Transition

and Carbon Tariff imposing tariffs on carbon-intensive

emissions accounting to ensure data

Risks imports such as steel and cement accuracy and reliability.Category Reporting period Response Measures Regulations

which may restrict the Company's ○ The Company has de veloped a

exports increase export costs and carbon peaking and carbon neutrality

○ By developing annual low-carbon energy plans aligned with the Company's short-term impact revenue. action plan defining specific targets

strategic scope and energy cost planning; and key tasks for each phase.Short

Term 1–2 years ○ By establishing monthly low-carbon energy plans aligned with annual strategic and ○ The Company continues to enhance

energy cost plans while incorporating the impact of maintenance and overhaul its full-process carbon data MRV

schedules for key energy-consuming equipment. The transition from energy consump- (Monitoring Reporting and Verifi-

tion dual control to carbon emissions cation) system to support carbon

dual control is a key national measure market compliance and internal

to address climate change and drive management.○ By formulating a low-carbon energy development plan for the steel industry during the green economic transformation;

"15th Five-Year Plan" period analyzing current conditions and challenges assessing the Shift in "Dual under this policy framework primary

Medium

3–5 years development environment and defining strategies objectives and key initiatives; Control" Policy energy consumption will be further

Term with Stronger restricted accelerating the shift

○ By aligning with the Company's long-term strategy and energy cost planning. Carbon toward renewable and low-carbon

Constraints energy while requiring the Company

to invest in technology development

technology adoption and facility

○ By aligning with the Group's carbon peaking and carbon neutrality roadmap and upgrades resulting in increased

Long 5–10 years defining a "dual carbon" strategy focused on controlling total emissions and reducing capital and operating costs and

Term and beyond intensity. impacting revenue.

34 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 35Governance Excellence Driving Green Transformation for Innovation Engine Driving Co-building and Sharing to Reinforce

Steady Development a Low-carbon Future Value Enhancement the Foundations for Development

Risk Category Risk Parameters Potential Impact Response Measures ○ Regulatory efforts to address excessive competition in the steel industry through measures such as energy

consumption and carbon emissions controls will support a more balanced supply-demand dynamic.Opportunity

○ The Company conducts research on ○ As the economy and society accelerate the transition to green and low-carbon development demand for "low-

low-carbon metallurgy and advances emission steel" and "green steel" is rapidly increasing across multiple steel-consuming sectors.To align with national "dual car- technologies such as waste heat and

bon" goals and achieve its own energy recovery replacement of high-

targets the Company will need to energy-consuming equipment process The Company is developing a systematic climate transition pathway aligning carbon peaking and carbon neutrality targets with its Low-carbon invest significant resources in the upgrades intelligent scheduling and medium- and long-term strategies while advancing energy structure optimization technological upgrades and carbon management Technology

Transition development and application of

integrated water conservation. capability building. Against the backdrop of deepening national "dual carbon" policies improving carbon market mechanisms and

low-carbon metallurgical technolo- ○ Focusing on energy efficiency improve- continuous advances in green technologies the Company is strengthening organizational support optimizing resource allocation

gies which remain at an early stage ment fuel mix optimization CCUS

and carry considerable uncertainty. and enhancing digital capabilities to drive orderly implementation of transition initiatives and achieve phased progress.and green products the Company is

developing a deep decarbonization

Technology pathway for the steel industry.and Cost

Impact risk and opportunity management

○ The Company optimizes resource allo-

During the low-carbon transition cation to reduce long-term operating Strengthening Carbon Emissions Management

increased investment in ener- costs.gy-saving environmental protec-

Transition ○ The Company actively seeks policy To enhance carbon management the Company has established a carbon data quality control system defining accounting tion and low-carbon smelting

Costs support.technologies may lead to higher boundaries at both enterprise and process levels; it conducts monthly accounting and record-keeping prepares annual

costs and potential impairment of ○ The Company promotes technological reports supports government verification and fulfills compliance obligations; in accordance with regulatory requirements of

existing fixed assets. innovation to reduce the cost of low- the Ministry of Ecology and Environment's "Notice on Carrying Out Relevant Work for the National Carbon Emission Trading

carbon technologies. Market in 2025" it has consolidated carbon emission entities into a unified key emission entity for centralized management;

and it regularly reviews carbon management system implementation and certification progress assigning corrective actions for

identified issues.Driven by the global trend toward In 2025

Transition Growing green and low-carbon develop- the Company completed its 2024 carbon quota compliance obligations on schedule

Risks Demand for ment demand for low-carbon steel ○ The Company advances research on

Green and with no cases requiring regulatory rectification or investigation.products is expected to continue low-emission steel and promotes EPD

Low-carbon rising intensifying industry com- certification.Products petition; a slower transition may

result in loss of market share.Market

○ The Company optimizes procurement

Energy and resource prices are strategies to reduce reliance on single

Rising Raw likely to increase due to climate-re- sources.Material and lated impacts driving up procure-

Fuel Costs ment costs for raw materials and ○ The Company invests in R&D and

fuels and increasing cost risks. process improvements to enhance raw

material utilization efficiency.Carbon Management System Construction and Certification Launch On-site Investigation for Carbon Management System Construction

Meeting

Investors stakeholders and the

public are placing increasing focus ○ The Company proactively addresses

Stakeholder on the Company's climate actions stakeholder concerns and enhances

Expectations transparency. Advancing Steel Product Certification

Reputation which may become a key perfor-on Climate mance indicator and pose repu-

Action ○ The Company engages in public tational risks requiring additional awareness initiatives to build broader The Company completed EPD recertification for cold-rolled steel sheets and strips produced by the rare earth steel cold rolling

investment in carbon management recognition. mill and hot-rolled reinforcing bars (ribbed and plain) from the long products mill; it also obtained CFP certification for H-beams

to meet expectations. hot-dip galvanized coils and non-oriented electrical steel. As of the end of 2025 the Company had published 7 EPD and 4 CFP

reports covering core products such as plates pipes rails and wire expanding its green product portfolio and strengthening

the foundation for increasing market share.

36 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 37Governance Excellence Driving Green Transformation for Innovation Engine Driving Co-building and Sharing to Reinforce

Steady Development a Low-carbon Future Value Enhancement the Foundations for Development

Developing Carbon Management Talent Resource Circularity

The Company delivers systematic training on carbon knowledge carbon quota management and practical implementation with Efficiency at the Core

strengthening policy communication and capability building to integrate carbon management across operations; in

collaboration with authoritative institutions such as China Classification Society it provides precise interpretation of domestic The Company is comprehensively building itself into a resource-conserving and environmentally friendly steel enterprise. Through

carbon regulations industry standards and accounting requirements enhancing employees' capabilities in carbon asset ultimate energy efficiency and intelligent upgrading it enhances energy utilization efficiency and the share of clean energy use

management emissions accounting and compliance to support high-quality low-carbon development. strengthens water recycling and reuse and remains firmly committed to a green and low-carbon development path featuring

ecological priority and conservation- and intensive-use orientation.Energy utilization

The Company strictly complies with the Energy Law of the People's Republic of China the Limits of Energy Consumption per

Unit Product for Major Processes of Crude Steel Production and other applicable legal requirements. It has formulated energy

management and assessment systems such as the Measures for Energy Management Assessment of Baogang Steel and the 2025 Low-

carbon Energy Work Plan of Baogang Steel established a full-process carbon metering and traceability system and participated in

Carbon Knowledge Training Study on Latest Carbon-Related Laws Regulations and Policies the assessment and acceptance of the Best-Practice Energy Efficiency Benchmark Demonstration Enterprise for Carbon Peaking and

Carbon Neutrality. It has achieved full compliance with regulatory requirements for the installation coverage and accuracy of Class

I Class II and Class III energy measuring instruments. As of the end of 2025 Baogang Steel and all its subsidiaries had established

an energy management system compliant with the national standard GB/T 23331 and had obtained third-party certification of the

Indicators and targets energy management system.Indicator

Governance

The Company conducts emissions accounting in strict accordance with the Guidelines for Enterprise Greenhouse Gas Emissions

Accounting and Reporting including defined accounting boundaries emission sources data acquisition principles and default In line with the principle of "clear accountability full horizontal coverage end-to-end vertical management and systematic

parameter values.The covered greenhouse gas category is carbon dioxide and the calculation scope only includes Scope 1 and control" The Company has established a five-tier vertical management structure covering teams sections workshops (operation

Scope 2 while Scope 3 is not included in the statistical accounting. In 2025 carbon dioxide emissions per ton of steel decreased divisions) plants/mines and Baogang Steel at the corporate level. Horizontally it spans eight processes: mining ore dressing

by more than 2% year-on-year. coking sintering (pelletizing) blast furnace ironmaking steelmaking rolling and utilities & auxiliary power thereby forming a

five-tier vertical and eight-process horizontal management matrix for energy management.

2025

Scope 1 Greenhouse Gas Scope 2 Greenhouse Gas Total Emissions “Five-tier Vertical and Eight-process Horizontal” Management Network

Emissions Reduction Emissions Reduction for Scope 1 + Scope 2

3347 tCO2e 129 tCO2e 3476 tCO2e

Baogang

Targets Workshop Plant/Mine Steel

Section (Operation

Team Division)

Short term Medium term Long term

(1–2 years) (3–5 years) (beyond 5

years)

Mining ? Ore Dressing ? Coking ? Sintering (Pelletizing) ? Blast Furnace ? Steelmaking ? Rolling ? Utilities & Auxiliary Power

Carbon intensity to decrease by 2–4% Carbon intensity todecline by 2%–6% Strive to achieve carbon neutrality

year on year subject to verification by subject to verification by government- before 2060. Clear accountability full horizontal coverage end-to-end vertical management and systematic control

government-designated third-party designated third-party institutions.institutions.

38 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 39Governance Excellence Driving Green Transformation for Innovation Engine Driving Co-building and Sharing to Reinforce

Steady Development a Low-carbon Future Value Enhancement the Foundations for Development

Strategy Use clean energy

The Company has actively deployed clean energy through projects such as photovoltaic power generation and solar street lighting

Risks Response Measures promoting the integration of clean energy throughout the production process. It has successfully developed product series including

steel for hydropower and steel for wind power providing solid material support for energy structure transformation and the dual-

○ Promote energy-saving technologies and equipment to reduce energy consumption; carbon goals through the superior performance of green products. It has also actively participated in the green electricity trading

Low energy utilization market continuously increasing the share of purchased electricity obtained through green power trading and effectively reducing

efficiency ○ Strengthen energy-saving awareness to reduce energy waste. total carbon emissions. As of the end of 2025 the Company had rooftop photovoltaic power generation projects with a total installed

capacity of 41.45 MW and annual power generation of 42.61 million kWh with the share of clean energy use reaching 0.51%. Its total

○ The Company optimizes resource allocation to reduce long-term operating costs; green electricity trading volume reached 558 million kWh and the proportion of green electricity trading reached 15.17%.Rising transition costs ○ Strive for policy support and secure government subsidies;

○ The Company promotes technological innovation to reduce the cost of low-carbon

technologies.Impact Risk and Opportunity Management

Closely aligned with China's dual-carbon goals and the autonomous region's requirements for green low-carbon and high-

quality development The Company has advanced energy mix adjustment and energy efficiency improvement in a coordinated

manner promoted a new green development pattern featuring more efficient resource utilization and lower-carbon energy Photovoltaic power generation project at the Rare-earth Steel Cold- The Company's steel for wind power products supporting the "Xinjiang

consumption and systematically strengthened its green competitiveness. rolled Sheet Plant Power Transmission to Chongqing" new energy strategy

Improving Utilization Efficiency Indicators and targets

Guided by ultimate energy efficiency The Company has strengthened specialized energy management and enhanced its cost

reduction capability through low-carbon energy. It has formulated the Acceptance Work Plan for Baogang Steel's Best-Practice Energy Indicators

Efficiency Benchmark Demonstration Plant for the Dual-carbon Goals to consolidate the foundation for refined energy-efficiency

2025

operations. Taking the metering system as the core lever it has established a full-process energy metering and control mechanism

and advanced the smart upgrading of energy metering equipment. It has also steadily promoted energy saving and carbon reduction Renewable energy consumption Share of renewable energy consumption

in key processes strengthened precise gas dispatching waste heat recovery management specialized electricity-use management

and specialized oxygen management restructured energy utilization processes and unlocked energy-efficiency potential through 42610kWh 0.51%

targeted retrofits. In 2025 the Company's comprehensive energy consumption per tonne of steel was 623.72 tonnes of standard coal

equivalent per tonne of crude steel down 0.86% year on year. Self-generated electricity reached 6.853 billion kWh an increase of 306

million kWh year on year correspondingly reducing purchased electricity cost by RMB 135 million.Targets

In accordance with the 15th Five-Year Plan the Company will advance energy projects and the

development of Baogang Steel's digital platform for energy and carbon management and control

The Rare-earth Steel Plate Company of striving to reduce comprehensive energy consumption per tonne of steel by 5% by the end of the 15th

Baogang Steel successfully passed the Five-Year Plan period as compared with the end of the 14th Five-Year Plan period.ultimate energy-efficiency acceptance by the

China Iron and Steel Association for its full- It will continue to carry out projects such as the high-efficiency spherical steam heat accumulator

process operations Coke Ovens No. 5-10 technology for the steel plant steam balancing and regulation technology in steelmaking and blower

and Blast Furnaces No. 4 and No. 6. The efficiency enhancement retrofit at the ironmaking plant so as to further improve energy utilization

proportions of blast furnace converter efficiency.and coke oven capacity reaching

benchmark level were 70% 32% and 100%

respectively exceeding the target of having 30%

of capacity reach advanced levels during the

14th Five-Year Plan period. Utilization of water resources

Throughout the entire process of production and operational water use The Company consistently adheres to the principles of

Diameter expansion retrofit of the blast-furnace gas interconnection conservation first and balance between water abstraction and supply. It continues to improve its water resources management

pipeline at the Utilities and Power Supply General Plant realized near- system carry out water-saving technical retrofits strengthen water-saving awareness among all employees and enhance the

zero venting of blast-furnace gas and coke-oven gas. intensive and efficient use of water resources.

40 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 41Governance Excellence Driving Green Transformation for Innovation Engine Driving Co-building and Sharing to Reinforce

Steady Development a Low-carbon Future Value Enhancement the Foundations for Development

Governance Indicators and targets

The Company has established a Water Resources Management Committee. The Secretary of the Party Committee and Chairman Indicators

serves as Director; Company executives in charge serve as Deputy Directors; and the manager of the Low-carbon Energy Center

2025

together with leaders in charge from relevant functional departments and units serve as members. The office is set up within

the Low-carbon Energy Center with a deputy manager serving as Director of the Office and a senior executive of the Low-carbon Total water consumption Recirculating water volume Water reuse rate

Energy Center serving as Deputy Director of the Office. In 2025 The Company was awarded the title of "2025 Water-saving

Enterprise of Baotou City". 2614844000 m3 2562830700 m3 98.01%

Strategy

Risks Response Measures Targets

○ instrument inspections shall be carried out for existing projects By 2029 the Company plans to save 1.5 million m3 of water raise the water reuse rate to 98.05% For entities whose water abstraction reaches

the prescribed threshold but that have not as well as new renovated and expanded projects to ensure increase the concentration ratio of circulating water to 3.0-4.0 and carry out measures including the

installed online metering facilities or whose compliance with the equipping and management requirements of repair of inefficient cooling towers water-saving and plume-abatement retrofit of 62 cooling towers

online metering facilities are unqualified or GB/T 24789-2022 General Rules for Equipping and Managing of the and remediation of direct discharge from steam traps.not operating properly Water Measuring Instrument in Water-use Organization.For water-use entities whose unit water ○ priority shall be given to the use of unconventional water and

consumption of products exceeds the cascading water use; monitoring of water quantity and water

mandatory water-use quota and that have quality at each water-use link shall be strengthened; tiered water

not implemented water-saving technical use and recirculating water use shall be enhanced; and water-

retrofits within the prescribed timeframe Cleaner Production saving retrofits of water-use facilities shall be carried out.and Pollution Prevention and Control

Impact risk and opportunity management The Company continues to consolidate the foundation of its environmental management system and improve its full-process

environmental control mechanism. It standardizes emissions management strengthens control over pollutant discharge

The Company strictly follows the Water Law of the People's Republic of China the Regulations on Groundwater Management to ensure compliance improves the system for classification recycling and harmless disposal and promotes the efficient

the Measures for the Administration of Water Abstraction Permits and other relevant regulations. It has formulated the Measures circular use of resources. Through multiple measures it reinforces the green development safeguard and supports the green

for Water Resources Management of Baogang Steel to comprehensively manage compliant water use precise metering water transformation of the industry.conservation and strict drainage. It has established a Water Resources Inspection Team to conduct special inspections on the

implementation of the 2025 Water-saving Action Plan of Baogang Steel. It has deepened whole-chain metering management

of water resources and established a metering-based settlement management mechanism. It has also carried out retrofits of

outdated water treatment processes and water-saving and plume-abatement retrofit of cooling towers; implemented water

recovery and reuse projects involving rainwater seepage water condensate office water and tailings pond return water; Strengthening Environmental Management

improved the water recycling treatment system; and developed unconventional water sources to expand water supply channels.In 2025 Baogang Steel used 52.2852 million m3 of surface water and approximately 128046 m3 of groundwater and discharged

1.681245 million m3 of wastewater during the year. Freshwater consumption per tonne of steel reached the best level in the The Company continues to improve its environmental management system precisely identify and proactively prevent

Company's history. various environmental risks comprehensively strengthen its environmental emergency preparedness capability and carry

out regular communication and implementation of environmental policies and environmental skills training thereby

safeguarding the Company's green low-carbon high-quality and sustainable development with robust environmental

governance capabilities.Governance

The Company has one Assistant General Manager in charge of environmental protection while the Manufacturing Department

coordinates specialized environmental management. Within the Manufacturing Department there is one department head one

Environmental Protection Director one head of the Environmental Management Office module and 17 professional technical

staff members responsible for atmospheric emissions wastewater general industrial solid waste and hazardous waste pollutant

discharge permits environmental emergency response plant appearance and related matters. In addition 37 environmental

Barun Mining Branch implemented high-efficiency tailings pond The Coal Coking and Chemical Branch carried out a project for

return water. advanced treatment and reuse of phenol-cyanide wastewater. management personnel are assigned across secondary units forming a professional and standardized management team.

42 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 43Governance Excellence Driving Green Transformation for Innovation Engine Driving Co-building and Sharing to Reinforce

Steady Development a Low-carbon Future Value Enhancement the Foundations for Development

○ Routine reporting: Frontline operators report daily on the operation of environmental protection Strengthening Environmental Emergency Response

facilities pollutant discharges and hidden-risk inspections. Environmental officers in workshops

report environmental ledgers on a daily basis. The Manufacturing Department regularly reports The Company's emergency response plan system for environmental emergencies is built around the core principles of "prevention Information

Reporting emissions data and compliance risks to the management team. first and rapid response". It identifies environmental impact factors such as waste gas wastewater and hazardous waste throughout

Mechanism the full process and assesses risk levels. It conducts regular inspections of key risk points including gas holders hazardous chemicals ○ Periodic reporting: The Manufacturing Department prepares the pollutant discharge permit warehouses and sewage ponds rectifies hidden hazards and ensures that facilities such as emergency ponds and containment

implementation report quarterly and annual environmental statistics reports and environmental tax

filing data submits them as required and discloses them to the public. bunds remain in good condition. For potential leakage fire or excessive discharge incidents the Company has established a graded

emergency response mechanism and implemented measures including source isolation pollution interception (such as switching

rainwater and sewage valves) and personnel evacuation. It also regularly stocks emergency supplies organizes rescue teams and

○ Internal supervision: The Manufacturing Department takes the lead in conducting routine supervision conducts drills to ensure that pollution can be effectively controlled and escalation prevented when incidents occur.special supervision and management system reviews and has established a mechanism for issue

Supervision notification and corrective action tracking.and Implementing Environmental Monitoring

Management ○ External supervision: The Company accepts supervision and inspection by ecological environment

authorities environmental inspections and online data verification and proactively accepts public The Company has established a three-tier environmental monitoring system consisting of automatic monitoring third-party

oversight and responds to complaints in a timely manner. monitoring and government supervisory monitoring. It has formulated the Measures for Quality Management of Monitoring Data of

Baogang Steel and the Annual Environmental Monitoring Plan of Baogang Steel to comprehensively ensure full coverage traceability

and standardization of environmental control data monitoring.○ Monthly assessments are implemented and the results are directly linked to employee compensation.○ For environmental violations the Company imposes penalties such as circulated criticism Automatic monitoring Third-party monitoring Government supervisory monitoring

Assessment and performance-based pay deductions and accountability measures depending on the specific

Accountability circumstances. Automatic monitoring is installed The Company engages third-party institutions The Company cooperates with ecological

Management at major emission outlets with CMA-accredited qualification to carry environment authorities in carrying out

○ Where environmental pollution incidents are caused legal liability shall be pursued in accordance with dedicated personnel and out full-factor manual monitoring of general unscheduled spot-check monitoring

with law. equipment assigned to conduct emission outlets at the required frequency. and online data verification and accepts

routine sampling analysis and Comparative monitoring of automatic supervision and guidance from competent

data reporting. monitoring equipment is conducted once every industry authorities.Strategy quarter to verify the accuracy of automatic

monitoring data.The Company identifies risks such as pollutant discharge hazardous waste disposal and noise pollution as well as opportunities

including energy saving cost reduction and technological innovation by combining internal information collection with external

information tracking. It then prioritizes such risks and opportunities based on compliance and formulates environmental risk Fostering an Environmental Protection Culture

prevention and control mechanisms and response measures accordingly.Taking World Environment Day (June 5) as an opportunity the Company

has carried out in-depth publicity and education activities on laws

and regulations concerning ecological and environmental protection

Risk Opportunity

Response Implementation environmental protection knowledge advanced environmental

management concepts and exemplary environmental cases. It actively

communicates the Company's ecological civilization story fully

○ For risks of the highest priority special rectification ○ Opportunities of the highest priority are included in demonstrates the achievements made in creating ultra-low emissions

teams are established and issues are addressed the annual investment plan for implementation. and a Class A environmental performance enterprise enhances

within a specified time limit under a "one plan for ecological civilization awareness among all employees and builds a Baiyun Ore Dressing Branch conducted a 2025 lecture on

each risk" approach. ○ For high- and medium-priority opportunities project sound ecological civilization image for the Company. environmental protection knowledge training.reserves are established and progress is dynamically

○ For high- and medium-priority risks the responsible tracked.departments take the lead and work with relevant ○ For potential opportunities the Company cooperates Indicators and targetsdepartments to advance rectification. with external institutions to carry out technical In 2025 the Company continued to improve its environmental protection management systems strengthened the management

○ General risks are incorporated into routine management research and breakthroughs.for ongoing optimization. of pollutant discharge permits and environmental emergency incidents enhanced publicity training and education on

ecological civilization and refined the management of retired environmental protection equipment and facilities. Throughout

the year all pollutants were discharged in compliance with applicable standards. No environmental incidents or environmental

administrative penalty cases occurred and the Company achieved its established targets.Impact risk and opportunity management 2025

On the basis of compliance with the Environmental Protection Law of the People's Republic of China the Company has formulated Environmental 35.5 Percentage of sites covered by RMB 100 million %13 internal procedure documents and special management measures including the Procedure for Identification Evaluation and protection investment environmental risk assessment 100

Risk Control of Environmental Aspects and Hazard Sources and successfully passed the surveillance / recertification audit of Percentage of sites certified under the ISO Training coverage rate for employees

the environmental management system thereby ensuring the scientific basis and effectiveness of its environmental compliance 14001 environmental management system 100% engaged in environmental-related work 100%

management.

44 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 45Governance Excellence Driving Green Transformation for Innovation Engine Driving Co-building and Sharing to Reinforce

Steady Development a Low-carbon Future Value Enhancement the Foundations for Development

Emissions Management Waste disposal

The Company strictly complies with the Law of the People's Republic of China on the Prevention and Control of Atmospheric The Company continues to strengthen full-process management of waste classification collection storage and recycling. It

Pollution the Law of the People's Republic of China on the Prevention and Control of Water Pollution the Law of the People's vigorously promotes the harmless and resource-based treatment of waste effectively reduces resource waste and minimizes the

Republic of China on the Prevention and Control of Noise Pollution and other applicable laws and regulations. In accordance with adverse environmental impacts of waste generated during production and operations thereby achieving low-carbon and sustainable

policy requirements such as the Emission Standards of Air Pollutants for the Steel Industry (Steelmaking) and the Emission Standards development.of Air Pollutants for the Steel Industry (Rolling) the Company has steadily advanced ecological and environmental risk prevention and

control consolidated the achievements of ultra-low emissions transformation and Class A environmental performance enterprise

designation and implemented ten environmental governance projects including the treatment of fugitive dust emission sources Governance

in the pellet production line of Guyang mine. It has strengthened the supervision of pollution control facilities with both the data The Manufacturing Department is responsible for the unified management allocation and recycling of the "three wastes"

transmission rate and disclosure rate of the automatic pollution-source monitoring system reaching 100%. In 2025 emissions (wastewater waste gas and solid waste) generated by departments and their subordinate production lines. This includes the

per tonne of steel of sulfur dioxide nitrogen oxides and particulate matter decreased by 3.7% 9.52% and 11.11% year on year management of general industrial solid waste hazardous waste and the resource utilization of wastewater and waste gas. At

respectively. The number of days with good air quality in the region increased by 5.5% compared with the previous year and air the same time the Company is subject to unified management and assessment by the Group.quality in surrounding communities continued to improve.Strategy

○ Core processes such as sintering machines blast furnaces and converters are equipped with high-

Air Pollution efficiency bag filters and desulfurization and denitrification facilities. Waste gas is treated and then

The Company has established an Environmental Protection Committee to oversee waste-related management activities. Each unit's

Control discharged in compliance through exhaust stacks. Environmental Protection Committee conducts identification and evaluation of risks and opportunities within the organization

every six months. The Company-level environmental risk and opportunity identification and evaluation team analyzes reviews and

○ Raw material stockyards and transportation roads adopt enclosed management plus spray dust determines the Company's risk and opportunity control list. For risks included in the list response measures are formulated based

suppression to strictly control fugitive emissions. on actual conditions.Risk Categories Detailed Description

○ All production wastewater is collected into the Company's central discharge system. After purification

Wastewater through a "conventional treatment system plus advanced treatment system" most of the treated water is If waste treatment practices fail to comply with the Law of the People's Republic of China on the

Treatment recycled while a small amount of compliant treated effluent is discharged to the terminal receiving water Compliance Prevention and Control of Environmental Pollution by Solid Waste the National Catalogue of Hazardous

project. Risks Wastes and other relevant laws and regulations the Company may face administrative penalties

production suspension for rectification or even criminal liability.Environmental Waste leakage or improper disposal may cause soil water and atmospheric pollution leading to

Noise Control ○ High-noise sources are equipped with sound barriers and silencers to reduce external noise impacts. Risks ecological damage and harming the health of surrounding residents.The cost of compliant disposal (such as hazardous waste transportation and professional incineration/

Financial landfill) may increase; compensation and remediation costs arising from pollution incidents may impose

Risks additional financial burdens on the Company.Air Emissions Management Targets and Plans Reputational Exposure of waste pollution incidents may trigger a public trust crisis damage brand image and lead to

Risks customer loss and reduced cooperation opportunities.In 2025 the Company ensured that total pollutant In 2026 the Company aims to reduce pollutant emissions

emissions did not exceed the permitted discharge limits. such that particulate matter emissions are less than 0.38 Supply Penalties imposed on upstream suppliers or downstream customers due to their own waste management

No incidents of resident health damage caused by the kg per tonne of steel sulfur dioxide emissions are less than Chain Risks issues may affect the Company's raw material supply or product sales.Company's emissions occurred and no related group 0.30 kg per tonne of steel and nitrogen oxides emissions

complaints were reported. are less than 0.60 kg per tonne of steel.Types of Opportunities Detailed Description

Policy Participation in government green procurement enjoyment of environmental tax incentives (such as tax

Opportunities rebates for comprehensive resource utilization) and access to subsidies for ecological restoration projects.Market Development of "zero-waste" production processes and launch of low-carbon and environmentally

Opportunities friendly products to attract ESG-focused investors and enhance market competitiveness.Development of waste resource utilization technologies (such as producing building materials from

Technological industrial solid waste and generating biogas from kitchen waste) creating new business growth points

Opportunities and even providing external technical services.Brand Obtaining ISO 14001 environmental management system certification and issuing sustainability reports to

Opportunities build a "responsible enterprise" image and enhance investor and consumer trust.Supply Chain Synergy Promoting the co-construction of a green supply chain among upstream and downstream enterprises.Opportunities

Coking coal pulverizer Baghouse dust collector

46 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 47Governance Excellence Driving Green Transformation for Innovation Engine Driving Co-building and Sharing to Reinforce

Steady Development a Low-carbon Future Value Enhancement the Foundations for Development

Impact risk and opportunity management Ecological Restoration

The Company strictly implements standardized management of solid waste and compliant disposal of hazardous waste in

accordance with the Law of the People's Republic of China on the Prevention and Control of Environmental Pollution by and Harmonious Coexistence

Solid Waste the Solid Waste Pollution Prevention and Control Management Measures of Baogang (Group) Company and the

Solid Waste Pollution Prevention and Control Management Measures of Inner Mongolia Baotou Steel Union Co. Ltd. thereby The Company attaches great importance to ecological and environmental protection. It deeply integrates the concept of green

promoting the achievement of the goals of reduction resource recovery and harmless treatment of waste. development into daily office operations plant environment improvement and green mine construction systematically

enhancing the diversity stability and sustainability of ecosystems and achieving harmonious coexistence between corporate

development and the ecological environment.Hazardous

Solid Waste

Waste

Management

Management Promoting Green Office Practices

○ Optimize processing and treatment methods for solid ○ Formulate hazardous waste management systems and In its daily office operations The Company actively advocates a green and environmentally friendly culture by reasonably controlling

waste and adjust product structures. establish comprehensive hazardous waste management air-conditioning temperatures using energy-saving lighting and high-efficiency office equipment promoting electronic documents

electronic signatures online approval systems and video conferencing and encouraging employees to use public transportation for

○ Expand external sales channels for solid waste ledgers. green commuting. These efforts help foster a sustainable culture with full employee participation.products and establish a direct sales system for slag ○ Entrust qualified third-party institutions sign formal

with surrounding cement plants. disposal agreements and strictly implement the

○ Explore new pathways for solid waste utilization hazardous waste transfer manifest system during

including deep utilization projects for desulfurization transportation. Hazardous waste is transported using

Building Green Factories

gypsum. dedicated enclosed vehicles to ensure full-process The Company actively leverages the foundational and guiding role traceability from generation to disposal. of green factories in the green and low-carbon transformation of the

manufacturing industry. It has formulated the 2025 Plant Environment

Improvement Project Task List of Baogang Steel and carried out plant

environment improvement initiatives including greening and hardening

open material yards roads and surrounding areas as well as repairing

and illuminating plant fa?ades and other structures thereby cultivating

a green natural landscape within the plant area. In 2025 the green

coverage rate of the Company's plant area reached 50.1%. Greening around newly built material yards at the Ironmaking Plant

Developing Green Mines

In accordance with the requirements of the Announcement on Adjusting the Capacity Replacement Plan for the Upgrade and Retrofit

Project of Certain Converter Equipment of Baotou Iron and Steel (Group) Co. Ltd. The Company has strictly carried out shutdown

and withdrawal within ecological conservation red lines. It has actively rectified environmental risks and hidden hazards identified

in tailings pond inspections and conducted thorough investigations of such risks. During production and project construction the

For dust-collection ash without direct utilization value fully enclosed Through systematic processes desulfurization waste liquid is converted Company places strong emphasis on biodiversity conservation minimizes the impact of resource development on vegetation and

collection and transportation is carried out using suction and discharge into ammonium thiocyanate products achieving resource utilization of

tank trucks. waste. animal habitats and carries out ecological restoration and land reclamation and revegetation in mining areas thereby improving

the rate of mine rehabilitation and restoration.Indicators and targets Ecological Restoration of the Waste Dump at the West Mine of Baiyun Obo Iron Mine

In 2025 100% compliant disposal was achieved across all stages of solid waste generation transportation storage treatment In 2025 the West Mine of Baiyun Obo Iron Mine adopted a site-specific

and utilization. The comprehensive utilization rate of bulk solid waste reached 97.5% (excluding tailings) achieving the technical approach of "engineering measures as support and biological

established targets. In 2026 the Company will continue to achieve 100% compliant disposal across all stages and the measures as the main approach". Engineering measures were used to

comprehensive utilization rate of bulk solid waste will be maintained at 97.5% (excluding tailings). stabilize the structure while biological measures addressed the root

causes. Restoration measures included slope topsoiling and reshaping soil

2025 improvement vegetation restoration and spray irrigation. Shrubs such as

Caragana and Amorpha fruticosa as well as grasses such as ryegrass and

Total waste generated Recycled amount of general waste Recycled amount of hazardous waste

crested wheatgrass were planted to prevent soil erosion and restore the

14.4213 1135.20 116500 original ecological functions to the greatest extent possible. Approximately million tonnes million tonnes tonnes 160000 m2 of vegetation restoration were completed at the waste dump. Slope spray irrigation system at the waste dump

48 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 49SDGs Targets

03

Innovation Engine

Driving Value

Enhancement

Empowered by intelligent innovation embarking on a new journey; driven by quality and efficiency composing a new

chapter. The Company actively practices the concept of high-quality development focusing on the goal of industrial

modernization. It has established a sci-tech innovation and digital-intelligence management system covering the entire value

chain promoting quality and efficiency improvements across R&D production and supply chain processes. It is committed

to building a modern enterprise characterized by innovation leadership intelligent efficiency outstanding quality and

strong responsibility thereby injecting strong momentum into high-quality industrial development and fostering a mutually

beneficial and trustworthy industrial ecosystem.Governance Excellence Driving Green Transformation for Innovation Engine Driving Co-building and Sharing to Reinforce

Steady Development a Low-carbon Future Value Enhancement the Foundations for Development

R&D Breakthroughs Strengthening the Foundation for Innovation

and "Rare" Product Innovation The Company continues to strengthen the construction of scientific research platforms

and improve its research system. Leveraging

The Company actively responds to the national and Inner Mongolia Autonomous Region strategies of "innovation-driven academicians' workstations it carries out

development". Guided by technological innovation and advancement it vigorously promotes innovation in organizational core technology research and establishes a

mechanisms continuously stimulates the vitality of research entities and accelerates the development of an innovation-driven metallurgical performance research system

Baogang making technological innovation the core driving force of corporate development. tailored to the smelting characteristics of

the Baiyun Obo Mine. In 2025 the Company

owned or co-established two national-level

research platforms one provincial-level

Governance platform and two academician workstations.It was also recognized as a high-tech enterprise The Company's achievements in "Key Technologies and Applications for Digital

The Company has established a Science and Technology Management Committee led by Company management as the decision- in the fifth batch of 2025 in Inner Mongolia Intelligent Control Throughout the Seamless Steel Pipe Manufacturing Process" and

making body for science and technology management. The Committee is responsible for defining innovation strategies approving "R&D and Industrial Application of Rare-earth High-strength Steel Plates for Special Autonomous Region further consolidating Vehicles" won the Second Prize of the Science and Technology Progress Award of

plans and projects coordinating resource allocation overseeing the full R&D process reviewing funding and talent outcomes and platform support and qualification assurance Inner Mongolia Autonomous Region.recognizing outstanding innovation achievements thereby ensuring compliant and efficient advancement of innovation activities. for innovation and R&D.At the same time the Company has issued management notices revised and compiled the Implementation Rules for Technical Research

Procurement Management of Baogang Steel and issued the Notice on Further Adjusting and Optimizing Management Authority of

Research Institutes. It has delegated authority in personnel procurement and funding implemented diversified incentive mechanisms

optimized talent evaluation systems established an industry-university-research collaborative R&D model and built a rigid growth Tackling Core Technologies

mechanism for R&D investment thereby stimulating innovation vitality and driving high-quality development through innovation.Focusing on the two core processes of ironmaking and steelmaking The Company has optimized process parameters and

achieved breakthroughs in key technologies with the objectives of cost reduction quality improvement and low-carbon

Strategy development thereby realizing process upgrades and efficiency gains.Ironmaking

Risks Risk description Response Measures

○ Actively advanced the implementation of academician workstation projects and proposed targeted measures to reduce the

○ Strengthen feasibility studies and assessments prior to reduction swelling index of Baiyun Obo iron ore pellets reducing the index of belt-roasted pellets from 18% to below 17%.○ New technology development may en- R&D to comprehensively analyze technical challenges ○ Established a method for testing metallurgical properties of integrated blast-furnace burden adapted to the alkali metal

counter technical challenges that can- and potential risks.Technical and fluorine circulation conditions of Baogang blast furnaces determining optimal process parameters and effectively

not be overcome or may fail to achieve ○ Establish backup technical solutions to enable timely

Risks reducing the blast furnace fuel rate.expected results due to technological switching or adjustment when issues arise.immaturity. ○ Completed a pilot production line for coal-based colloidal binder preparation and conducted industrial trials partially ○ Continuously track technological development trends replacing bentonite achieving the substitution of 1.0% bentonite with 0.1% coal-based binder while maintaining stable

and introduce external technological resources. pellet quality.○ Continued experimental research on cost-effective iron ore promoting the application of new ore types such as Indian

○ Inaccurate forecasting of market demand ○ Strengthen market research to improve forecasting ore fines reducing blending costs by over RMB 50 million in 2025.for new technologies and products may accuracy. ○ Completed industrial trials of direct reduction of Baiyun Obo ore using a pure hydrogen shaft furnace verifying the

hinder the conversion of innovation ○ Formulate diversified market strategies to reduce feasibility of producing direct reduced iron with a metallization rate above 94% from pellets with TFe content of 62%–

achievement into actual value. dependence on a single market. 63% laying a foundation for hydrogen metallurgy projects.Market

Risks ○ Competitors may launch similar or more ○ Adjust innovation direction and product functions in a

advanced technologies and products timely manner based on market changes to enhance Steelmaking

more quickly capturing market share. market adaptability.○ Developed a mold wire-feeding process to enable production of steel with high rare-earth content.○ Innovated the rare-earth ferrosilicon deoxidation process to promote balanced utilization of rare-earth resources; through

Impact risk and opportunity management process optimization measures such as eliminating calcium treatment achieved cost savings of nearly RMB 10 million.○ Introduced a smart converter steelmaking system with AI-based modeling data collection accounting for over 50% of

Relying on the resource advantages of the Baiyun Obo Mine The Company focuses on the core field of rare-earth steel. It total production data initially establishing an AI-enabled smart steelmaking platform.systematically advances scientific research application and commercialization innovation cooperation and intellectual property ○ Developed and applied a steelmaking process with a high scrap ratio in long processes formulated four production

protection. During the year it achieved breakthroughs in multiple core technologies developed a number of high-end new control standards for low-carbon-emission steel and obtained Kingfisher Certification for green steel products with 20%

products strengthened industry-university-research collaboration and realized dual improvements in technological innovation and 50% high scrap ratios as well as certification for low-carbon-emission hot-rolled coil significantly enhancing the

and production efficiency. market competitiveness of green steel products.

52 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 53Governance Excellence Driving Green Transformation for Innovation Engine Driving Co-building and Sharing to Reinforce

Steady Development a Low-carbon Future Value Enhancement the Foundations for Development

Protecting Intellectual Property Strategy

In accordance with the Patent Law of the People's Republic of China the Implementing Regulations of the Patent Law of the In line with industry trends and the Company’s development needs Baogang Steel has identified opportunities and potential

People's Republic of China and the Patent Management Measures of Baogang (Group) Company Baogang Steel has revised risks related to product quality and formulated targeted response strategies to promote the deep integration of quality and stra-

and issued the Patent Management Measures of Baogang Steel. It has improved its intellectual property management system tegic development including:

specifying management structures and responsibilities the application and use of patent systems and patent application

procedures. The Technology Center has been designated as the centralized management department for intellectual property Opportunity Response Measures

and patent matters responsible for system development planning strategic implementation and overall coordination across

units. The Company has also clarified ownership of intellectual property in research collaborations established accountability ○ Focus on energy infrastructure new energy and large-scale equipment manufacturing projects

mechanisms standardized patent protection management and conducted internal patent training optimized review processes in the autonomous region strengthen industrial chain collaboration and strive to achieve

Seizing the "Two New"

and improved patent application efficiency and authorization rates. As of the end of 2025 the Company held 2721 valid patents annual sales of 9 million tonnes of specialty steel.and

and obtained 98 newly granted invention patents. "Two Major" ○ Upgrade channel structure and step up efforts to expand direct-supply customers and leading

policy opportunities enterprises.Indicators and targets ○ Optimize the handling model for off-plan products and explore diversified trading approaches.In 2025 The Company's total R&D investment amounted to RMB 3.367 billion (full-caliber) with operating revenue of RMB 66.358 ○ Accelerate the transformation from manufacturer to service provider and advance the integration

billion. R&D intensity reached 5.07% significantly exceeding the target of 4.5%. of R&D production and sales as well as IPD-integrated product development management.Meeting downstream ○ Expand into upstream and downstream industrial chains including cutting and distribution as

According to the Company's 15th Five-Year Plan for scientific and technological innovation The Company will continue to increase demand for high-end well as deep processing.efforts in technological innovation and R&D investment in 2026 striving to achieve an annual R&D intensity of 5%. steel products ○ Deepen the EVI (Early Vendor Involvement) collaboration model and provide customized

material solutions.Strengthening Quality Foundations Risks Response Measures

and Elevating the Brand Difficulty in accurately ○ Advance the development of EVI technology R&D and service teams proactively engage from the

matching application new product development stage and provide support in material selection process design and

scenarios other areas.The Company consistently adheres to its quality policy of "guided by Baogang's high-quality development strategy driven by

customer needs strengthening risk awareness stabilizing production processes enhancing quality management implementing

Insufficient product ○ Build a three-in-one closed-loop management system integrating standardized process quality

brand building and continuously improving customer satisfaction and loyalty". Centered on this policy the Company has established quality stability operations refined control and routine monitoring and strengthen control over process parameters.a full-process quality control system continuously optimized its customer service system effectively ensured product quality and

enhanced customer satisfaction.Insufficient technical ○ Establish a professional technical service team composed of multiple departments to provide

service capability value-added services including guidance on material selection and on-site process optimization.Product Quality Assurance Impact risk and opportunity management

Under the quality management policy of being guided by "Baogang's high-quality development strategy driven by customer needs In 2025 the Company focused on implementing management requirements in two areas—quality management upgrading and

strengthening risk awareness stabilizing production processes enhancing quality management implementing brand building and quality culture development—and achieved remarkable results.continuously improving customer satisfaction and loyalty" The Company ensures that its product quality meets and exceeds industry

standards while addressing diverse customer requirements. Quality Management

Quality Management Measures

Governance ○ Organized the revision of 56 enterprise standards and interim technical specifications including hot-

Strengthening rolled steel plates and strips for railway vehicles with atmospheric corrosion resistance and silicon-

The Company strictly complies with the Product Quality Law of the People's Republic of China and other applicable laws and standard system aluminum-calcium products.regulations. Its quality management system is composed of management functional departments such as manufacturing development

and quality product production units and support departments including marketing and R&D with clearly defined roles and ○ Participated in the formulation of four national standards and one industry standard led the

responsibilities. A comprehensive quality documentation control system has been established and multiple management development of one industry standard and four group standards.systems such as the Measures for Quality Management of Raw Materials Fuels and Auxiliary Materials of Baogang Steel and

the Measures for Process Quality Management of Baogang Steel have been formulated. Focusing on full-process quality

Building a

control of steel products the Company implements targeted measures across five dimensions—product and process design ○ With the "six-oriented" approach as the foundation established 84 physical evaluation indicators

"zero-defect"

process management raw material input control of key products and final release inspection—thereby building a closed-loop and 177 process quality assurance evaluation indicators implemented quality prevention and quality prevention

management system and achieving precise quality control across the entire value chain. continuous improvement and sorted out 173 preventive standards for quality control points. mechanism

54 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 55Governance Excellence Driving Green Transformation for Innovation Engine Driving Co-building and Sharing to Reinforce

Steady Development a Low-carbon Future Value Enhancement the Foundations for Development

Indicators and targets

Conducting ○ Advanced the development of single-side trimming for cold series products expanding applicable

quality steel grades from 5 to 19. In 2025 the single-side trimming ratio increased from 55% to 62.88%. In 2025 the pass rate of key products reached 99.13% an increase of 0.07% year on year successfully achieving the annual

technology ○ The average monthly loss caused by 18 types of typical quality defects across production lines target. The reduction in 18 types of typical quality defects exceeded 46% with improvements in both product stability and

breakthroughs decreased by 45.85% year on year and the capability for inclusion control improved significantly. dimensional accuracy.In 2026 the Company aims to achieve a pass rate of key products of over 99.15%. To ensure the achievement of this target the

Company will continue to deepen precise full-process control optimize internal control standards and strengthen process

monitoring and quality traceability mechanisms to steadily improve product quality.○ Maintained ISO 9001 and IATF 16949 quality management system certifications obtained

Expanding

renewal certificates for classification societies of marine steel plates in multiple countries and

quality

certification special equipment manufacturing licenses for pressure pipeline components as well as multiple

qualifications certifications including the first certification by KRRI of the Korean Ministry of Land Infrastructure

Optimizing Customer Service

and Transport and CRCC certification expansion and trial certificates for rails.Adhering to the service philosophy of "meeting customer needs serving the market and achieving win-win outcomes" the Company

takes customer needs as the core and based on upgraded quality control and enhanced technical service capabilities continuously

optimizes the integrated service model covering production sales R&D and application. It improves its service system provides

value-added services and builds a deeply integrated development community with customers.Enhancing

○ Conducted 49 evaluations of steel product quality and dimensional stability with overall product

physical product

quality stability quality scores improving year on year. Actively Responding to Complaints

The Company strictly implements the Measures for Handling Product Claims and Customer Quality Complaints of Baogang

Steel improves quality credit standards and establishes rapid response plans for quality issues. For customer feedback

it initiates a closed-loop management process of "inspection determination handling and feedback" promptly isolates

abnormal products conducts re-inspection and traceability and quickly formulates corrective action plans. At the same time

Quality Culture it continuously optimizes customer feedback channels eliminates root causes through systematic rectification effectively

With the establishment of a "zero-defect" quality prevention system as the core the Company integrates quality requirements reduces losses arising from quality claims and enhances customer satisfaction. In 2025 The Company received 58 cases of

into standardized operations across all processes. Through continuous improvement based on process evaluation and physical product quality claims all of which were satisfactorily resolved with customer satisfaction reaching 97.84%.testing it promotes employees to firmly uphold the principle of "quality first and prevention first". At the same time driven by

quality improvement initiatives and benchmarking all units are encouraged to actively participate forming a comprehensive

quality culture involving all employees all processes and all aspects. The sales company

(marketing depart- Quality claim Handling result

ment) accepts handling (closed)

customer claims

The customer On-site investigation Handle in

submits a request for and analysis to accordance with the

handling a product determine the prescribed proce-

quality claim handling plan dures and the user

confirms the

handling result

Protecting Customer Privacy

The Company attaches great importance to customer information security management and strictly complies with the Data

Security Law of the People's Republic of China and the Personal Information Protection Law of the People's Republic of China.It has established a comprehensive customer information and privacy protection management system standardized the

management of customer transaction and demand information strengthened internal information control processes and

On August 29 2025 The Company held the September production planning meeting and the launch ceremony of "Quality Month" strictly prevented the risk of customer information leakage. In 2025 no incidents of customer information leakage occurred.

56 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 57Governance Excellence Driving Green Transformation for Innovation Engine Driving Co-building and Sharing to Reinforce

Steady Development a Low-carbon Future Value Enhancement the Foundations for Development

Supply Chain Transmission Impact risk and opportunity management

and Responsible Procurement

Strengthening Supplier Management

The Company has improved its supplier management systems and optimized procurement channels. Adhering to the principles In accordance with internal systems such as the Supplier Management Measures for Material Procurement of Baogang Steel

of fairness impartiality integrity and quality and benchmarking against leading steel enterprises it has established a the Company systematically implements full-process management of supplier onboarding review evaluation and exit. It is

transparent efficient compliant and sustainably competitive procurement system continuously enhancing the sustainable committed to building a responsible green and resilient supply chain while preventing supplier-related risks and identifying

development capabilities of its suppliers. opportunities for cost reduction.Governance ○ Supplier admission methods include admission through open tender admission by recommendation self-

Supplier nominated admission and temporary admission. Suppliers of different categories are required to submit

The Company strictly complies with laws and regulations related to safety and quality. It has established a Procurement Leading Admission corresponding qualification documents related to safety and environmental protection and are admitted

Group with the General Manager serving as Group Leader executives in charge as Deputy Leaders and heads of relevant functional only after rigorous evaluation procedures ensuring compliance from the source.departments as members providing support for major procurement decision-making. An office under the Procurement Leading

Group is set up within the Procurement Center responsible for overall coordination. In addition seven specialized procurement ○ The Company has established a special governance leading group to address "leakage and irregularities"

teams have been established to carry out procurement management across various fields according to professional division of issues in procurement placing strong emphasis on supplier integrity and compliance and promoting the

labor ensuring standardized and orderly procurement. The Company has also formulated a number of specific systems including healthy and orderly development of the supply chain.the Procurement Management Measures of Baogang Steel and the Supplier Management Measures for Material Procurement of

Baogang Steel. All departmental procurement activities are subject to prior review under the "major decision-making important

personnel appointments major project arrangements and large-sum fund use" mechanism thereby standardizing the entire

procurement process.○ Suppliers are subject to dynamic management and review mechanisms. Based on annual evaluation

Supplier results operating conditions and major changes suppliers are categorized and managed accordingly.Strategy Review

○ For suppliers receiving advance payments key dynamic monitoring is implemented to promptly track

As a steel enterprise The Company faces major supply chain risks across various links including market risk logistics risk financial major changes effectively reduce financial risks and ensure supply chain stability.risk and supplier risk. These risks may have short-term impacts on supply chain security.Risk Categories Risk Level Specific Risk Profile

Including fluctuations in market demand and prices and intensified market ○ Suppliers are comprehensively evaluated based on indicators such as supply quality price level contract

competition. It is necessary to closely monitor macroeconomic conditions Supplier performance capability and fulfillment of social responsibility. Evaluation results serve as the core basis

Market Risks Short-term risks

and policy changes dynamically adjust production plans product structures Evaluation for supplier classification continuation exit and deepening of cooperation.and marketing strategies and enhance product competitiveness. ○ Based on evaluation outcomes the Company optimizes supplier structure increases the proportion of

direct procurement reduces channel costs at the source and further enhances supply chain resilience.Covering the transportation of raw materials such as iron ore coal and coke

Logistics Risks Short-term risks as well as steel products. The effectiveness of logistics management directly

affects supply chain efficiency.The industry is capital-intensive with core risks including excessive capital

occupation and insufficient cost control. It is necessary to optimize capital ○ Based on annual evaluation results and dynamic review outcomes strict exit mechanisms are Financial Risks Medium-term risks

utilization and cost management. Supplier Exit implemented for E-grade (non-qualified) suppliers and those with major compliance risks insufficient

performance capability or integrity violations.Suppliers include mines coal enterprises and steel producers. Insufficient ○ The Company accelerates market-oriented procurement reform formulates targeted sourcing plans

Medium-term risks competition or sudden supply disruptions may lead to production intensifies market exploration efforts actively expands and introduces high-quality supplier resources and Supplier Risks

interruptions product quality issues and economic losses. achieves a virtuous cycle of supplier development.

58 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 59Governance Excellence Driving Green Transformation for Innovation Engine Driving Co-building and Sharing to Reinforce

Steady Development a Low-carbon Future Value Enhancement the Foundations for Development

Supplier Communication and Training Indicators and targets

Indicator

Supplier Supplier

Communication Training Baogang Steel has formally become a co-initiator of the China Supplier ESG Rating Platform (CS-ESG) and a drafting entity for

the group standards Guidelines for Supplier ESG Evaluation and ESG Management Requirements for Corporate Supply Chains

actively contributing to the development of the ESG ecosystem.○ A normalized communication mechanism has been ○ Focusing on environmental protection energy

established. Through source tracing return visits and conservation and safety the Company provides 2025

interviews procurement standards and compliance policy interpretation and technical exchanges from

requirements are aligned. the supplier onboarding stage to enhance suppliers' Number of suppliers Localization ratio of suppliers Localization ratio of procurement

ESG awareness and practical capabilities.○ ESG performance clauses are clearly stipulated in bidding 1679 44 % 44 %

and contractual processes requiring suppliers to sign ○ One-on-one training is provided to newly awarded

documents such as the Letter of Commitment for Contract suppliers to clarify requirements related to contract

Performance and the Integrity and Honesty Agreement performance environmental protection and

thereby strengthening transparent procurement. assessment.Targets

The Company has established a standardized management system featuring "one standard reasonable authorization and separation

of three roles". It strictly controls the procurement supply chain prohibits the use of conflict minerals and raw materials involving

conflict minerals and implements supply chain due diligence requirements to mitigate related risks.Stabilizing the Supply Chain In 2026 the Company will continue to deepen the application of its electronic procurement smart platform achieving unified

aggregation of procurement data and full-process online management thereby ensuring compliance and efficiency in procurement

operations. At the same time it will further improve green procurement standards strengthen supplier empowerment and promote

Inventory Management the development of a more sustainable supply chain.The Company implements the overall deployment of "ultimate cost reduction" and "inventory reduction". Centered on

cost efficiency and low-inventory operations it has established inventory early warning and coordinated transportation

mechanisms thereby optimizing capital utilization efficiency. It promotes strict inventory control and joint reserve and shared

stocking reducing inventories of spare parts and raw materials and lowering capital occupation. By coordinating environmental

operations and implementing precise measures the Company continues to reduce hidden costs in warehousing. As of the end

of 2025 inventories of purchased fuels decreased by approximately 21% compared with 2022 and inventories of purchased raw

materials decreased by approximately 23%.Procurement Management

Focusing on supply assurance and cost reduction and efficiency enhancement the Company has established specialized task

forces for regional ores Mongolian ores scrap steel and alloys. It strengthens procurement initiative continuously expands

sourcing channels increases the proportion of manufacturers optimizes procurement strategies and contract performance

management ensures cost alignment with market conditions and effectively enhances supply assurance capability and risk

resistance.

60 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 61SDGs Targets

04

Co-building and Sharing to

Reinforce the Foundations

for Development

The Company has deeply embedded the concept of "coexistence and win-win outcomes" integrating employee development

safety and health social well-being and industry advancement into a unified framework thereby building a sustainable

development ecosystem characterized by internal and external coordination and multi-stakeholder value creation. Adhering to

a people-oriented philosophy the Company fully safeguards employee rights and interests provides platforms for employee

development and fosters a supportive and caring workplace environment. It has established and improved an occupational

safety and health management system to build a strong defense line for the safety and well-being of all employees. The

Company actively fulfills its social responsibilities by supporting rural revitalization initiatives and participating in public

welfare activities while strengthening community co-building and sharing. Leveraging its technological advantages it also

leads or participates in the formulation of industry standards deepens collaboration with universities associations and

enterprises and promotes coordinated high-quality development across the industry.

62 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 63Governance Excellence Driving Green Transformation for Innovation Engine Driving Co-building and Sharing to Reinforce

Steady Development a Low-carbon Future Value Enhancement the Foundations for Development

Employee Development Opportunity

and Rights Protection Opportunity Reporting Opportunity description Response Measures Categories period

The Company adheres to a people-oriented approach fully safeguards employees' fundamental rights and interests

continuously improves talent cultivation and promotion systems pays close attention to employees' physical and mental well- The national government is continuously improving laws By leveraging policy guidance the

and regulations related to labor employment and social Company can advance compli-

being and emphasizes work-life balance thereby supporting employees' growth and development. Opportunities security benefits providing clear policy guidance for ance management upgrades im-

for upgrading

upgrading compliance management. The proliferation of Medium Term plement a phased digital control

compliance digital and intelligent technologies allows optimization of system achieve precise prevention

management employee management processes reduces human error and control of compliance risks

and enhances compliance management efficiency. and enhance overall compliance

management capabilities.Governance

Opportunities National policies support the development of skilled Utilize national policy support and The Company's overall employee management strategy is determined by the Board of Directors and implemented by the manufacturing talent and high-end technical personnel. align with transformation needs

management team. A Nomination Remuneration and Assessment Committee has been established. Functional departments such for talent As the Company accelerates transformation and to strengthen talent development

as the General Affairs Department Organization and Human Resources Department and Planning Department are responsible for development upgrading demand for digital and intelligent talent Long Term optimize talent structure and sup-

managing remuneration and benefits labor rights employee training and promotion with coverage extending to all employees. and team increases creating policy support and development port the effective implementation

building opportunities. of its corporate strategy.In response to national policies the

The government promotes harmonious labor relations Company continuously improves

Strategy Opportunities and supports enterprises in improving communication

employee communication mech-

mechanisms and strengthening humanistic care. The anisms reinforces human-centric

for harmonious Long TermCompany enhances employee care communication and care and mental health initiatives

labor relations mental health support to strengthen connections with fosters a community of shared

employees. interests between employees and Risks the Company and enhances team

cohesion.Reporting

Risk Category Risk description Response Measures

period

Impact risk and opportunity management

Management personnel may have insufficient under- Continuously track policy chang- The Company attaches great importance to protecting employees' legitimate rights and interests. It upholds equal employment

Compliance standing of labor laws and company policies leading to Mid- to es promptly identify and correct

deviations in employee recruitment and social insurance implementation deviations and improves compensation and benefits systems promotes democratic management enhances employee experience and well-being

Management long-term contributions; delays in updating company systems fol- response update company systems in a and builds harmonious and standardized labor relations. It provides broad development platforms and emphasizes work-life balance

Risks lowing changes in local policies may create compliance timely manner to prevent compli- creating a positive workplace environment.gaps. ance risks.Upholding Equal Employment

Amid transformation and upgrading there is a shortage of Long-term response：Advance The Company fully complies with the Labor Law of the People's Republic of China the Labor Contract Law of the People's Republic

high-end technical talent core management personnel recruitment training and talent

pipeline development; focus on of China and the Provisions on the Prohibition of Using Child Labor. It has established management measures for employees under Talent Supply and skilled workers with intense competition for talent Long Term

in the industry. Some positions face workforce aging and attracting high-end technical and labor contracts to regulate employment practices and effectively safeguard employees' legitimate rights and interests. The Company Risks

a lack of young talent resulting in a mismatch between digital talent; and optimize the adheres to equal employment and equal pay for equal work strictly prohibits child labor and forced labor and fosters a diverse and

talent supply and transformation needs. talent structure. inclusive workplace. It provides equal opportunities for all employees and follows the principles of fairness impartiality openness

and transparency. It prohibits all forms of employment discrimination and respects and treats employees fairly regardless of gender

age education ethnicity religious belief or cultural background. During the reporting period the Company recorded no incidents of

Disputes may arise with employees over salary payments Implement targeted short-term child labor forced labor human trafficking discrimination or harassment.job adjustments labor contract management or work Short- to measures to handle employee

Labor Relations injury compensation. Failure to resolve such issues mid-term concerns promptly and appropri-

Risks through consultation may lead to arbitration or litigation response ately resolve differences through Compensation and Benefits System

while delayed or improper handling of employee appeals internal consultation and prevent

may escalate conflicts. escalation. Baogang Steel continuously improves its compensation and benefits system pays the five social insurances and one housing

provident fund and enterprise annuity in full and on time in accordance with the law and provides competitive working

conditions and remuneration packages. In accordance with group requirements it also implements supplementary medical

insurance and supplementary pension insurance systems to provide comprehensive protection for employees.

64 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 65Governance Excellence Driving Green Transformation for Innovation Engine Driving Co-building and Sharing to Reinforce

Steady Development a Low-carbon Future Value Enhancement the Foundations for Development

Compensation allocation mechanism Facilitating Career Development

○ Prioritize key positions high-level technical and skilled personnel and frontline operational roles; The Company regards employee career development as a key component of corporate strategy and is committed to building a

○ Optimize salary structure and determine differentiated fixed-to-variable pay ratios based on job characteristics; systematic talent development framework. Through the establishment of a tiered talent growth mechanism and diversified career

pathways the Company provides clear and smooth support for employee capability enhancement and career advancement fully

○ Establish a distribution orientation where leading cadres have 'low security high incentives and income that can increase unleashing talent potential.or decrease'; grassroots frontline workers have 'basic security incentives and relatively stable income'; and high-level

talents and researchers have 'high security strong incentives and competitive income'.Talent Introduction Promotion Pathways Employee Training

In 2025 the Company implemented national The Company provides well- The Company places strong emphasis on

policies to stabilize employment and introduced structured career development talent development. It adopts a training

Compensation and benefits assurance system

906 talents through diversified channels. A pathways including a multi-level operation model led by professional

total of 334 employees were recruited through management sequence an eight- departments implemented through

○ Employee wages are centrally distributed monthly through the ERP human resources system generally completed before campus and social recruitment including 76 level technical and professional hierarchical management and actively

the 20th of each month. Employees can access their salary details via the ERP system or collaborative management with master's degrees or above; 36 retired sequence and a dual eight-level involving employees. Training resources

platform. military personnel were specially recruited. skills and operations sequence. This are integrated and training programs

○ Social insurance benefits are implemented in accordance with national and regional regulations. Through the "3+0.5+0.5" order-based training system supports employee career are systematically organized. In 2025 the

model 515 on-site engineers were introduced. planning ensures integration across Company invested RMB 9.56 million in

○ The Company pays pension medical work injury and unemployment insurance contributions in full and on time and Four high-end talents in the special steel three talent tracks and establishes vocational education completed 1261

implements supplementary insurance schemes as required. field were recruited to support business both vertical promotion ladders and training programs and achieved 154000

development and 53 additional hires were horizontal mobility channels. participant attendances with a training

made through other channels. coverage rate of 100%.Working hours and leave management system

○ Focused on strategy implementation and management effectiveness enhancing political awareness

Training for and performance capabilities.management

personnel ○ Training included learning on the Central Committee's eight-point decision and key policy directives

thematic programs and online training as well as specialized training for functional departments.The Company strictly complies with Employees under the standard working Paid annual leave is arranged in

national laws and regulations on working hour system work no more than 8 hours accordance with the law. If such leave ○ Aimed at improving job competency innovation capabilities and commercialization of results.hours establishes a monitoring system per day and 40 hours per week. cannot be arranged due to work

for employee rest and leave and provides requirements compensation at 300% of Training for ○ Specialized training was conducted through functional departments and the Technology Center with

timely reminders to ensure employees the employee’s daily wage is provided technical and expert-led sessions covering multiple disciplines.take their entitled leave. with written consent. professional

personnel ○ Baogang Steel's "Ecological Operation Project for Empowerment Quality Improvement and Capacity

Enhancement through the Employee Training Cloud Platform" won the Outstanding Award for Smart

Learning Project Operations at the 17th Boao Awards.Promoting Democratic Management Training ○ Focused on enhancing theoretical knowledge and practical skills promoting learning through

for skilled competitions building a strong brand for skilled talent strengthening key position empowerment

operational

The Company strictly implements employees' democratic management and optimizing the skill level structure.personnel

rights and continuously deepens democratic corporate governance. On

one hand the Company has established leadership and supervision

groups standardized approval processes and disclosure directories and

promoted effective democratic supervision through special inspections.On the other hand it strictly implements the employee representative

congress system standardizes procedures enriches content and fully

leverages grassroots congresses in safeguarding employee rights

optimizing management and supporting scientific decision-making. At

the same time the Company actively tracks employee sentiments and

needs and discloses major matters related to employees and corporate

development through official websites and social media platforms

ensuring employees' rights to be informed to participate to express The Third Session of the Second Employee and Member The Company's joint program with universities for the cultivation of on- Launch Meeting for the 2025 Corporate Professional Skills Competition

opinions and to exercise oversight. Representative Congress of Baogang Steel site engineers and campus recruitment internships

66 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 67Governance Excellence Driving Green Transformation for Innovation Engine Driving Co-building and Sharing to Reinforce

Steady Development a Low-carbon Future Value Enhancement the Foundations for Development

Prioritizing employee well-being Assistance and Care Activities

The Company adheres to a people-oriented approach and has built an employee care system by improving the working environment The Company cares for and supports its employees. It has established a warm and responsive support mechanism carry out

providing regular psychological support delivering targeted assistance and care visits and fostering a harmonious workplace employee care and outreach activities on a regular basis and provide timely assistance to employees in need so as to effectively

atmosphere thereby continuously enhancing employees' sense of fulfillment happiness and belonging and strengthening the convey the Company's care and create a warm and inclusive workplace. The Company continued to advance its year-round "Four

internal driving force for the Company's development. Seasons" employee care initiative. Trade unions at two levels invested a cumulative total of more than RMB 7.5 million in care and

outreach activities for frontline employees provided assistance to 228 employees with serious illnesses and extended care visits to

791 retired employees. As a result its employee care services—covering hardship assistance warm outreach and daily-life support

Working Environment and Conditions Protection with clear levels distinct priorities and effective coordination—became more thoughtful and responsive.The Company has consistently adhered to the people-centered development philosophy and integrated the principle of "doing

practical things for the people" into its sustainable development practices. Focusing on employees' most pressing concerns

and urgent needs the Company has leveraged "small initiatives" to address "major livelihood issues." It invested RMB 4.086 Baogang Steel leaders visited frontline employees to extend care and support

million in targeted projects such as restroom renovations and the optimization of canteens and bath facilities. Effectively resolve

employees' day-to-day pain points and practical concerns. By providing living facilities such as microwave ovens and electric During the 2025 Spring Festival in order to put its people-

kettles building new smart parking sheds and optimizing commuting services the Company has comprehensively safeguarded centered care and sustainable development philosophy into

employees' health and daily convenience effectively enhanced their sense of gain happiness and belonging and strengthened practice Baogang Steel's management visited production

the foundation for democratic corporate management and harmonious labor relations. frontlines and employees' families extended holiday greetings

and practical care to on-duty cadres and employees model

workers and employees facing difficulties and placed particular

emphasis on work safety while boosting team morale for the

new year. This initiative effectively enhanced employees' sense

of belonging happiness and team cohesion and successfully

transformed organizational care into an internal driving force

that inspires employees to stay dedicated to their posts and

supports the Company's steady development.Achievements of the renovation of the "three rooms and one hall" at Newly built smart parking sheds for motorcycles and electric bicycles

Barun Mining Branch Work-Life Balance

Psychological Health Assistance The Company advocates healthy work and enjoyable living for its employees. The Company organizes a wide variety of cultural

and sports activities to enrich employees' lives outside work effectively enhance their sense of belonging happiness and

The Company attaches great importance to employees' mental health. It has organized a wide range of mental health lectures cohesion and foster a warm and caring corporate family.and activities and provided professional counseling services to help employees relieve work pressure ease emotional distress

and improve psychological resilience and work efficiency.The Fifth Baogang Steel Employees' Gas Volleyball Tournament Baogang Steel's 2025 "With Affection for the Mines Because of YOU and

Me" networking and friendship event and care activity for single young

employees working away from home

Mental health lectures Mental health lecture on "Relieve Stress Build Strength

and Move Forward" Indicators and targets

2025

Total number of Turnover rate of Labor contract Social insurance

employees employees signing rate coverage rate

252840.28%100%100%

Investment in employee training Average training hours per employee Employee training coverage rate

9.56million yuan 152hours 99%

Mental health activities Lecture on knowledge for caring for employees' mental health

68 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 69Governance Excellence Driving Green Transformation for Innovation Engine Driving Co-building and Sharing to Reinforce

Steady Development a Low-carbon Future Value Enhancement the Foundations for Development

Safety First Industry Risk Point Existing Risk Control MeasuresCategory

Prevention and Control as the Priority ○ Inspect tools and implements before operations to

Struck-by injuries ensure they are intact and undamaged;

Roll removal

The Company consistently places work safety and employees' occupational health in the foremost position. The Company has Dangerous mechanical injuries and installation ○ Strictly follow safe operating procedures during roll

continued to improve its work safety management system actively implemented the three-year action plan to address the root Chemicals operations lifting injuries and removal and installation operations.causes of work safety risks upgraded its digital and intelligent safety systems promoted the application of key SRE project Production other injuries ○ Provide labor protection articles and emergency supplies

outcomes and systematically carried out dedicated training on safety and occupational health building a solid line of defense that comply with national and industry standards.for the safety and health of all employees across all dimensions and throughout the entire chain of operations.Construction Struck-by injuries ○ Strictly follow safe operating procedures;

Industrial maintenance mechanical injuries ○ Special operators with corresponding certificates;

and trade and overhaul lifting injuries and

operations ○ Ensure that equipment interlocking devices protective Governance operations other injuries devices and related safeguards remain intact and effective.The Company has established a Safety Production Committee and an Occupational Disease Prevention and Control Committee and

has set up a dedicated Safety Management Department as its specialized safety management body. The Company has also built a

dedicated safety management team and formed a safety management system with clearly defined responsibilities and authorities. It Impact risk and opportunity management

formulated and implemented the Full Staff Workplace Safety Responsibility System and the List of Workplace Safety Responsibilities

for All Employees of the Company carried out annual evaluations of the full staff work safety responsibility system and regularly The Company has established a standardized process for safety risk identification and assessment under which safety risks are

convened Safety Production Committee meetings and special safety work meetings to accurately study plan and deploy key work classified into four levels—major relatively major general and low— enabling precise tiered and categorized risk management.safety tasks effectively reinforcing the Company's work safety defense line. Baogang Steel has also established a support mechanism pairing "pilot units" with "designated support units" and has promoted

From 2022 to 2025 in accordance with the Measures for the Extraction and Use Management of Work Safety Expenses of Enterprises the outcomes of the SRE project across three stages and eight major modules: laws regulations and standards; implementation

and the Measures for the Extraction and Use Management of Work Safety Expenses of Baogang Steel Baogang Steel made full of the full staff work safety responsibility system; capability enhancement for personnel in key positions; advancement of the

monthly provisions for work safety expenses and strictly used and wrote them off within the prescribed scope of expenditure. Major dual prevention mechanism; SJP standards for maintenance and repair operations; improvement of the hazard inspection and

areas of investment included personal protective equipment; emergency rescue equipment supplies and drills; assessment rectification system; special management of high-risk operations; and contractor management.monitoring rectification and control of major hazard sources and accident hazards; work safety inspections assessments consulting

and standardization development; safety training education and communication; maintenance and retrofit of safety protection

facilities and equipment; promotion and application of new technologies new standards new processes and new equipment; as Safety Standardization Development

well as inspection and testing of safety facilities and special equipment.In 2025 20 assessment units of Baogang Steel obtained Level 2 Work Safety Standardization certification and four assessment units

Strategy obtained Level 3 certification. To advance the implementation of the Requirements for the Management System of Work Safety Standardization in Large and Medium-sized Enterprises Baogang Steel aligned itself with the new requirements by incorporating core

elements such as leadership role and work report by the principal person in charge into its management system. The Company also

The Company's principal safety risks are concentrated in key areas such as non-coal mining metal smelting hazardous chemicals

invited industry experts to provide dedicated interpretation sessions and comprehensively completed system operation reviews as

production and construction maintenance and overhaul. In response to the most critical and prominent risks the Company has

well as rectification supervision ensuring the efficient implementation of the new requirements.formulated dedicated control measures to achieve precise risk prevention and control in key areas and crucial links. The key risks and

corresponding control measures are as follows:

Industry Risk Point Existing Risk Control Measures

Category Special Risk Control

○ Adopt presplit controlled blasting technology for operations The Company has carried out routine risk screening rectification and control. The Company revised and filed the

adjacent to the slope face; Comprehensive Emergency Response Plan for Production Safety Accidents of Baogang Steel and further reinforced the three

lines of defense namely tiered control of safety risks closed-loop management of hazard identification and rectification and

○ Conduct all-weather slope radar monitoring and carry out no

coordinated emergency response and rescue. By establishing risk registers specifying deadlines for rectification and assigning

Non-coal fewer than 3 targeted manual inspections per week and perform Slopes Collapse slope cutting and load reduction where necessary; control responsibilities the Company has continuously promoted a shift in work safety management toward ex ante prevention mining

○ Drain and dewater seepage-prone slopes through drainage holes; and prevented workplace accidents at the source.○ Conduct acceptance inspections in accordance with the ○ Baogang Steel has promoted the application of advanced technologies and equipment such as

acceptance standards for presplit slope-face blasting. intelligent monitoring and early warning systems and automated control systems. The Company

has integrated early warning for major hazard sources into its safety informatization system

Mechanical injuries ○ Keep areas involving molten metal smelting and transfer

Development

effectively prevented and mitigated safety risks and realized a fundamental transformation in work

Converter poisoning and (including lifting and transport) dry;

of the Safety

safety from manual prevention to technology-enabled prevention and intelligent prevention.smelting Informatization Metal suffocation accidents ○ Ensure the proper functioning of safety monitoring surveillance

System Platform ○ Using digitalization and informatization as key enablers Baogang Steel has comprehensively

smelting Gas being struck by interlocking and firefighting equipment and facilities; deepened the development of the dual prevention mechanism featuring tiered control of safety risks

holders objects scalds fires ○ Provide labor protection articles and emergency supplies that and hazard identification and rectification and has established an online supervision and inspection

other explosions comply with national and industry standards. platform to enable dynamic risk identification precise classification and effective control.

70 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 71Governance Excellence Driving Green Transformation for Innovation Engine Driving Co-building and Sharing to Reinforce

Steady Development a Low-carbon Future Value Enhancement the Foundations for Development

○ Baogang Steel uses containers with refractory linings and water-cooled structures and regularly

inspects them for erosion cracks and other conditions. Indicators and targets

Molten Metal ○ The Company equips operating areas with protective facilities such as slag-retaining plates and splash 2025

Discharge and guards. Before operations begin it ensures that containers and surrounding areas are dry clean and Number of work- Occupational injury Number of working days lost Injury rate per million

Storage free of combustible materials and that personnel have been evacuated from the warning zone.related deaths rate due to work-related injuries working hours

○ Emergency receiving pits (or tanks) are installed on site and dedicated emergency drills for

scenarios such as splashing and overturning are organized on a regular basis. 1 0.14 201 0 cases per million % working hours

Safety ○ Baogang Steel completed full coverage of pre-safety assessments facility design reviews and

Assessment acceptance evaluations for 36 newly built projects. The Company conducted comprehensive

for Newly Built assessments of project layout equipment and processes systematically identified risks such as fire

Projects explosion poisoning and mechanical injury and formulated targeted control measures accordingly. Community Co-building

and Local Commitment

Safety Training and Drills

The Company consistently upholds the principle of giving equal importance to social responsibility and corporate development.In light of actual production conditions The Company regularly carries out safety training safety-themed activities and emergency The Company actively implements the rural revitalization strategy engages in public welfare and charitable initiatives shares

drills. In 2025 the Company invested RMB 17.4985 million to build a 1779-square-meter Safety Experience Center covering ten the benefits of development with society and contributes to the building of a better and happier community.major practical training zones and VR virtual experience modules. The Center provides employees with immersive safety training

and effectively enhances the risk awareness and emergency response capabilities of frontline personnel. In addition the Company

organized dedicated emergency drills around key areas strengthened employees' risk prevention awareness as well as self-rescue

and mutual rescue capabilities and built a stronger safety safeguard for production and operations.Promoting rural revitalization

The Company has actively implemented the arrangements and plans of the autonomous

region and Baotou municipality. Closely centering on the main task of fostering a strong sense

of community for the Chinese nation the Company has actively supported rural revitalization

through such initiatives as consumption-based assistance. In 2025 through the Baogang

Wankai and Tiehua platforms The Company purchased RMB 7.6596 million of products

under its consumption-based assistance program. This not only helped meet employees’ Baogang Steel was recognized as an

Baogang Co. Ltd. Safety Management Information System Baogang Co. Ltd. Safety Experience Center - Blind Plate Plug Extraction needs but also generated tangible income gains for farmers. Outstanding Practice Case of Rural

Operation Safety Training System Revitalization by a Listed Company

Practising social welfare

The Company has actively practiced the volunteer spirit of dedication friendship mutual assistance and progress. The Company

encourages Youth League members and young employees to participate actively in public welfare activities proactively works

with the Baogang Working Committee on Caring for the Next Generation nursing homes and special education schools and takes

concrete action in public-interest initiatives such as assisting people in poverty and hardship supporting the elderly and helping

persons with disabilities. In 2025 Youth League organizations at all levels carried out a total of 562 volunteer service activities with

Baogang Steel hidden hazard identification and rectification competition Baogang Steel comprehensive emergency drill for gas leakage 4666 participant-times and 10545.43 service hours in total. In addition 44 employees took part in public welfare organizations

delivering warmth through concrete actions and demonstrating the Company's sense of responsibility.Occupational Health Protection

In 2025 The Company continued to advance the development of its ISO 45001

occupational health and safety management system and successfully passed

the annual surveillance audit for its ISO 45001 occupational health and safety

management system certification. In strict compliance with the relevant

requirements of the Law of the People’s Republic of China on the Prevention

and Control of Occupational Diseases the Company accurately implemented

its occupational health examination plan and fully completed occupational

health examinations for newly recruited employees employees working in

positions exposed to occupational disease hazards and employees leaving Baogang Steel carried out a co-building activity at the Baotou Social Volunteer activity themed "Carrying Forward the Spirit of Lei Feng

such positions. The Company also continued to improve its occupational health Offline special lecture conducted by the Coking Welfare Institute and Inspiring Shared Commitment" organized by the Youth League

management records providing strong protection for employees’ health. Chemical Branch Committee of the Rare-earth Steel Plate Plant of Baogang Steel

72 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 73Governance Excellence Driving Green Transformation for Innovation Engine Driving Co-building and Sharing to Reinforce

Steady Development a Low-carbon Future Value Enhancement the Foundations for Development

Deepening Cooperation and Exchange

The Company remains committed to openness collaboration mutual benefit and win-win outcomes. The Company continues

to deepen exchanges and cooperation with universities research institutes and partners across the industrial chain. Focusing on

key areas such as joint technology research commercialization of achievements product promotion and talent development the

Company has built multi-level cooperation platforms and promoted high-quality development.Volunteer Service Month activities themed on learning from Lei Feng Care and outreach activities in support of military personnel and their

families

Industry Synergy

and Standards Leadership

The Company adheres to the philosophy of openness inclusiveness and win-win cooperation. The Company actively works

Seminar on technological exchange and innovation-driven development themed "Joint Technology Research and Commercialization of Achievements"

with partners to expand mutually beneficial pathways achieve complementary advantages through resource integration jointly

advance collaborative innovation and technological development in the steel industry build comprehensive multi-field and in-

depth strategic partnerships foster a stronger industrial ecosystem and promote the high-quality development of the industry.Formulation of Industry Standards

The Company attaches great importance to the development of the industry standardization system. Relying on its core technologies

and industrial advantages in rare-earth steel the Company has repeatedly participated in the formulation and revision of national

standards industry standards and association standards. Through standardization development it has empowered technological

upgrading and product quality improvement across the industry and contributed to elevating the overall development of the steel

industry to a new level. Deepened university-enterprise cooperation with Inner Mongolia Jointly cultivated on-site engineers with Inner Mongolia University

University of Technology and opened a new chapter in the joint of Science & Technology to deepen the integration of industry and

cultivation of on-site engineers education

Official release of the first association standard for Rare-Earth Structural Steel Plates for

Bridges drafted under the leadership of Baogang Steel

In November 2025 The Company led the drafting of the standard Rare-Earth Structural Steel Plates for Bridges. Released

by the China Iron and Steel Association the standard was authoritatively recognized by an expert panel as having reached

an internationally advanced overall technical level. As the first association standard in the industry specifically for rare-

earth structural steel plates for bridges it filled a gap in China's high-end bridge steel sector. The release of this standard

not only provides unified guidance for the R&D manufacture and engineering application of rare-earth steel for bridges

but also further enhances the Company's technological influence and industry standing in the field of rare-earth steel

providing strong support for expanding the application of related products in key engineering projects and strengthening

their market competitiveness.Promotion conference and technical seminar on hydrogen transmission pipelines

74 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 75Sustainable Development Management

Sustainable Development Management Stakeholder communication

The Company has integrated the ESG concept throughout the entire process of business operations. The Company continues to

improve its governance structure strengthen its ESG management system and continuously optimize its ESG management and ESG The Company attaches great importance to stakeholder management. The Company has established regular communication

indicator system providing solid support for the steady enhancement of its sustainable development performance. channels with all stakeholders so as to promptly understand the expectations and demands of government and regulatory

authorities shareholders employees customers suppliers the public and the media. Through various measures the Company

actively responds to these expectations and concerns and incorporates them into its operations and strategic decision-making

ESG Governance Structure processes safeguarding stakeholders' rights to be informed to participate to express opinions and to exercise oversight.The Company has studied and developed an ESG governance structure comprising three levels: the Board of Directors the Board's

Strategy and ESG Committee and the ESG Working Group. The Board of Directors is the highest responsible body for the Company's

Stakeholder Expectations and Demands Communication and Response

ESG management operations and public information disclosure. Board's Strategy and ESG Committee is responsible for formulating

ESG goals and related systems while the ESG Working Group serves as the principal coordinating and execution body coordinating

and advancing the implementation of ESG-related matters. ○ Improve corporate governance

○ Compliance in operations ○ Strengthen compliance management

○ Tax payment in accordance with the law ○ Consciously accept supervision

Responsibilities of the Responsibilities of the ESG Government and

Board's Strategy and ESG Committee ○ Anti-corruption and integrity promotion ○ Actively fulfill tax obligations

Board of Directors Working Group Regulatory Authorities ○ Pollution prevention and control ○ Strengthen integrity development

○ Work safety ○ Comply with laws and regulations

○ Review and approve the ○ Study and make recommendations on the ○ Formulate ESG-related policies ○ Promote green production and

Company's ESG goals and Company's ESG goals and plans ESG governance and action plans in line with the

strategic plans; structure and related systems ESG-related Company's strategy and ESG goals;

○ Related-party transactions ○ Establish a pricing adjustment mechanism for related-party

○ Deliberate and approve the policies ESG reports and other relevant matters; ○ Manage ESG-related risks and ○ Transparency of information disclosure transactions

Shareholders and ○ Corporate governance ○ Disclose information in accordance with the lawCompany's ESG architecture ○ Identify and monitor ESG-related risks and matters arising in the Company's investors ○ Investor relations management ○ Convene shareholders' meetings and key policies; opportunities with significant impact on the day-to-day operations;

○ Investment returns ○ Establish multi-channel communication platforms

○ Deliberate and approve the Company's business and guide management to ○ Be responsible for communication ○ Participate in investor communication activities

Company's ESG report; take appropriate measures to address ESG risks with relevant departments and

○ Review and approve the public and opportunities; subsidiaries of the Company

○ Improve protection mechanisms

○ Protection of employee rights and interests ○ Standardize workplace safety management

disclosure of the Company's ○ Organize and coordinate the supervision and and coordinate and advance the ○ Occupational health and safety ○ Carry out regular employee training

performance on ESG-related inspection of the Company's ESG-related implementation of ESG-related Employee ○ Vocational training and development ○ Conduct employee satisfaction surveys

matters; policies management performance and matters; ○ Compensation and benefits protection' ○ Provide assistance to employees in difficulty

target progress and make corresponding ○ Collect compile and prepare ○ Employee care ○ Convene employee representative congresses○ Review ESG-related risks with

recommendations; ○ Organize a variety of cultural and sports activitiessignificant impact and response public disclosures relating to the

plans for major negative ESG ○ Deliberate and submit the Company's ESG- Company's performance on ESG-

events. related reports to the Board of Directors. related matters. ○ Conduct product innovation and R&D

○ Product quality ○ Apply intelligent technologies

○ Review other matters related to the Company's ○ Other ESG-related matters. Customer ○ Customer privacy protection ○ Strengthen the product quality management system

ESG work. ○ Customer service ○ Standardize information security management

○ Conduct customer satisfaction surveys

ESG Practices

The Company has progressively advanced sustainable development by publishing social responsibility/sustainability reports ○ Fair competition

participating in the formulation of association standards such as the General Rules for Environmental Social and Governance (ESG) ○ Eliminate commercial bribery ○ Improve the supplier onboarding mechanism

Information Disclosure of Mining Enterprises the Guidelines for Environmental Social and Governance (ESG) Evaluation of Iron and Suppliers and partners ○ Responsible procurement ○ Strengthen the routine management of suppliers

○ Supplier management ○ Participate in industry exchanges

Steel Enterprises and the Guidelines for Environmental Social and Governance (ESG) Special Reports of Iron and Steel Enterprises ○ Win-win cooperation

and conducting social responsibility/ESG training programs.Case: Preparation of Baogang Steel's 2025 Sustainability Report

On January 15 2026 The Company held a special training ○ Public welfare and charity ○ Organize and participate in public welfare activities The public ○ Pollution prevention and control ○ Promote green production and operations

session on environmental social and governance (ESG)

matters and a kick-off meeting for the preparation of its

2025 Sustainability Report. The meeting provided in-depth

explanations from six aspects including the core principles

for sustainability report preparation the methodology

○ Compliance in operations ○ Strengthen communication and exchanges with the media

for double materiality assessment and the "four-pillar" Baogang Steel held a special ESG training session and a kick-off Media ○ Consciously accept media supervision

meeting for the preparation of its 2025 Sustainability Report ○ Information transparency

disclosure framework providing ideas and guidance for ○ Improve the timeliness and quality of information

improving the Company's ESG management.

76 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 77Sustainable Development Management

Substantive issue identification ESG materiality issue matrix

In 2025 in accordance with the latest international disclosure standards such as the European Sustainability Reporting Standards

(ESRS) and IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and in strict compliance with High

the requirements of the Guidelines No. 14 of Shanghai Stock Exchange for Self-Regulation of Listed Companies—Sustainability Report 2 5

(Trial) Baogang Steel carried out a double materiality assessment. On the basis of its previous impact materiality assessment the 7 3 8

Company incorporated a financial perspective fully included the views of multiple departments and stakeholders comprehensively 4 1

analyzed the impacts of ESG topics on the Company's finances and on the economy environment and society and provided focused 18 23 15 13 10

responses in this report to 12 topics deemed financially material. 16 22 17

2614912

62411

Dual materiality assessment process 21

1925

20

Step 1: Context analysis and issue identification

28

27

Identify 28 potential material issues based on six factors forming an issue pool.Low

Low Financial importance HighStep 2: 2-1 Impact materiality assessment

2-2 Financial materiality assessment

Impact materiality assessment: Impact level: stakeholder questionnaire survey; possibility: internal and external ESG expert assessment;

Financial materiality assessment: Internal financial department experts assess the financial materiality of each issue from two dimensions

with multiple departments reviewing and confirming.ESG Honors

Step 3: Dual materiality assessment analysis

Based on the assessment data from Step 2 form the 2025 materiality issue matrix to determine this year's

materiality issues and their priorities.In 2025 Baogang Steel received a Wind ESG "A" rating for the second consecutive year.Step 4: Analysis results guide ESG disclosure and practice

Baogang Steel was recognized by the China Association for Public Companies with the honors of "Excellent

The Strategy and ESG Management Committee reviews and confirms the analysis results. The Company uses the Practice Case for Boards of Directors of Listed Companies" "Best Practice of Board Office of Listed

analysis results as a guide to carry out targeted disclosure and practice improvements. Companies 2025" and "Excellent Practice Case for Sustainable Development of Listed Companies."

Baogang Steel was included in the "Top 100 State-owned ESG Pioneer Listed Companies in China

(2025)" list.

Material issue database

1.Environmental compliance 8. Energy utilization 15. Digital transformation 22. ESG Management of the

management 9. Work safety 16. Support industry Supply Chain

2. Waste disposal 10. Innovation driving 17. Rural revitalization 23. Stakeholder communication

3. Pollutant emission 11. Employee 18.Social contribution 24. Anti-bribery and anti-

4. Utilization of water corruption12. Product and service 19. Equal treatment for small

resources safety and quality and medium enterprises 25. Anti-unfair competition

5. Combat with climate 13. Supply chain security 20. Data security and 26.Leadership of Party building

change

14. Provide high-end customer privacy protection 27. Due diligence

6. Circular economy products 21. Compliance management 28.Technology Ethicsand risk

Baogang Steel's ESG rating was upgraded to "A."

7. Ecosystem and Biodiversity and risk prevention prevention

Protection

78 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 79

Impact ImportanceFuture prospects

Future prospects

Carry forward past achievements and embark on a new journey. 2026

marks the opening year of the 15th Five-Year Plan period. It is also a pivotal

year for Baogang Steel to consolidate its foundations build development

momentum and pursue breakthroughs on the path of high-quality

development. We will unswervingly advance the strategy of "premium

steel products + a series of rare-earth steel products." With firm confidence

broader vision united strength and pragmatic action we will harness

innovation to build growth momentum and deepen reform to improve

operational quality and efficiency. Amid the tide of our times to build a world-

class enterprise we will forge ahead with determination strive to create

a new development landscape for Baogang Steel that is of higher quality

greater efficiency and stronger sustainability and write a magnificent new

chapter of leapfrog development in the new era.

80 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 81Appendix

Appendix

Key performance

Key Indicators Unit 2023 2024 2025 Key Indicators Unit 2023 2024 2025

Economic performance Self-generated electricity 100 million kWh 52.44 65.46 68.53

Operating revenue RMB 10000 7056538.86 6808944.06 6635752.40 Installed self-owned clean energy generation

capacity (photovoltaic power generation) MW 41.45 41.45 41.45

Operating costs RMB 10000 6370751.60 6272606.36 5994677.60 Annual self-owned clean energy generation

(photovoltaic power generation) 10000 kWh 2646.00 2943.95 4261.34

Operating Operating profit RMB 10000 50870.36 9857.08 59457.97

performance Total water consumption 10000 m3 295961.88 285034.53 261484.40

Total profits RMB 10000 42026.04 8583.63 49043.59

Freshwater consumption 10000 m3 6535.00 5801.73 5201.33

Net profit RMB 10000 2960.42 2074.89 38569.82

Utilization of Fresh water consumption per ton of steel 10000 m3 4.3 3.87 3.33

water resources

R&D investment RMB 10000 376551.82 371955.43 336726.04

Recirculating water volume 10000 tonnes 289426.88 279232.80 256283.07

Proportion of RD investment in business

revenue % 5.34 5.46 5.07

Water reuse rate % 97.79 97.96 98.01

Number of R&D employees Person 2032 1997 3182

Nitrogen oxides (NOX) emissions Ton 12018.92 9518.76 8926.64

Proportion of R&D employees % 7.51 7.91 12.59

Innovation

driving Sulfur dioxide (SO2) emissions Ton 5944.69 4003.80 4004.00

Total number of valid patents Item 2015 2316 2721

Sulphur dioxide emission per ton of steel kg/t of crude steel 0.39 0.27 0.26

Number of patent applications Item 774 892 1002

Number of newly granted patents during Item 440 324 348 Particulate matter emissions Ton 7250.31 5390.29 5111.17the year

Number of newly granted invention Pollutant Item 70 117 98 Chemical oxygen demand (COD) emissions Ton 130.72 44.27 31.45patents during the year emission

Environmental performance Ammonia nitrogen (NH3-N) emissions Ton 4.09 3.04 1.99

Environmental protection investment RMB 100 million 56.60 37.71 35.50 Chemical oxygen demand (COD) emission

intensity kg/tonne of steel 0.0085 0.003 0.002

Number of environmental pollution Item 0 0 0 Dust and particulate emissions per ton of incidents steel kg/t of crude steel 0.48 0.36 0.32

Environmental Percentage of sites covered by

compliance Ammonia nitrogen (NH3-N) emission environmental risk assessment % 100 100 100 intensity kg/tonne of steel 0.0003 0.0002 0.0001management

Percentage of sites certified to ISO 14001

environmental management system % 100 100 100 Total waste generated 10000 tonnes 1063.80 1323.69 1442.13

Training coverage rate for employees

engaged in environmental-related work % 100 100 100 General waste generated 10000 tonnes 1051.80 1300.90 1429.95

Total energy consumption tonnes of standard coal equivalent 9846615.58 9431287.00 9811905.23

Total non-hazardous waste generated per

RMB million of revenue Ton 149.05 191.06 215.49

Comprehensive energy consumption per

tonne of steel tce/t of crude steel 677.95 629.11 623.72 Waste disposal Recycled amount of general waste 10000 tonnes 714.88 959.13 1135.20

Total fuel oil consumption Ton 37669.76 38225.08 35923.02 Hazardous waste generated 10000 tonnes 12.00 22.79 12.18

Diesel consumption Ton 37602.94 38156.71 35873.72 Total hazardous waste generated per RMB

million of revenue Ton 1.70 3.35 1.84

Energy Gasoline consumption Ton 66.82 68.37 49.30 Recycled amount of hazardous waste 10000 tonnes 9.14 13.11 11.65

consumption

Coal consumption Ton 9912620.49 9782357.68 10037774.87 Comprehensive utilization rate of steel slag % 100 100 100

Natural gas consumption cubic metres 83860824.00 98269505.00 70059360.00 Cleaner Recovery and utilization rate of dust and

production sludge % 100 100 100

Total electricity consumption 100 million kWh 100.26 86.53 83.31 Green coverage rate of plant areas % 50.1 50.1 50.1

Waste heat energy consumption tonnes of standard coal equivalent 767121.24 867641.35 812587.89

82 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 83Appendix

Key Indicators Unit 2023年 2024年 2025年 Key Indicators Unit 2023年 2024年 2025年Social performance Number of suppliers Units 1462 1632 1679

Labor contract signing rate % 100 100 100 Number of suppliers in Mainland China Units 1459 1632 1679

Proportion of employees covered by

collective agreements % 100 100 100

Number of suppliers subject to ESG-

Supply chain

Social insurance coverage rate % 100 100 100 related audits or assessments including

security corporate social responsibility and Units 1462 1632 1679

environmental reviews during the year

Total number of employees Person 27274 25432 25284

Number of part-time employees Person 0 0 0 Proportion of procurement orders placed

through the tendering and procurement % 100 100 100

Number of ethnic minority employees Person 2228 2139 2198 platform

Protection Total volunteer service hours Hours 900 11730 10545

of rights and Turnover rate of employees % 0.37 0.35 0.28 Social

interests of contribution Average volunteer service hours per

employees Number of employees in difficulty employee Hours 4.5 2.5 2.26

receiving assistance Person 756 339 12

Governance Performance

Average days of paid leave per employee Day 12 12 12

Proportion of independent directors % 45.45 36.36 33.33

Number of recruited demobilized veterans Person 0 45 36

Proportion of employees with disabilities % - 1.83 1.62 Proportion of female directors % 9.09 18.18 16.67

Number of discrimination- and

harassment-related incidents Cases 0 0 0

Number of board of directors meetings

held Times 14 14 17

Proportion of employees receiving training

on anti-discrimination and anti-human % 25 25 25 Board attendance rate % 100 100 100

rights violations

Employee training coverage rate % 100 100 99 Number of directors attending fewer than

75% of meetings Person 0 0 0

Career Total employee training hours Hours 6035979 5732354 4500000 Number of Audit Committee meetings Times 7 10 9

development

and training Average training hours per employee Hours 226 225 152 Number of meetings of the Nomination

Proportion of employees receiving Remuneration and Assessment Times 4 1 3

occupational and skills training % 100 100 100 Committee

Coverage rate of occupational health Proportion of women among senior % 100 100 100 executives % 20.00 16.67 20.00examinations

Incidence rate of occupational diseases1 % 0.013 0.000 0.007 Corporate Proportion of operating sites assessed for

governance corruption risks

%100100100

Work-related injury insurance investment RMB 10000 2122 2274 3161 Total number of directors receiving anti-

bribery and anti-corruption training Person 12 12 12

Coverage rate of work-related injury

insurance % 100 100 100 Percentage of directors receiving anti- % 100 100 100

Rate of special operators with bribery and anti-corruption training

Occupational corresponding certificates % 100 100 100

health and Total number of management personnel

work safety Investment in production safety RMB 10000 16100 20300 25178 receiving anti-bribery and anti-corruption Person / / 768

training

Participant-times in work safety training Person-time 176720 186060 173063 Percentage of management personnel

receiving anti-bribery and anti-corruption % 100 100 100

training

Hours of work safety training Hours 1967555 2083872 1959287

Total number of employees receiving anti- Person 27274 25432 25284

Average work safety training hours per bribery and anti-corruption training

employee Hours 71.6 78.3 78.4

Coverage rate of safety risk protection Percentage of employees receiving anti- % 100 100 100

training % 100 100 100 bribery and anti-corruption training

Number or percentage of products Shareholding ratio of senior executives % 0 0 0

Product and withdrawn or recalled for health and % 0 0 0

service safety safety reasons

and quality

Customer satisfaction % 96.87 97.17 97.84 Share pledge ratio % 18.02 13.91 15.81

1 Due to the optimization of the statistical methodology the incidence rate data for occupational diseases for the relevant years have been updated

and the 2023 data have been adjusted in accordance with the latest methodology.

84 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 85Appendix

Index of indicators Shanghai Stock Exchange "Self-Regulatory Guidelines No. 14

for Listed Companies – Sustainability Report (Trial)"

CASS-ESG 6.0 Guidelines for Corporate Social

Contents GRI Standards Topic Corresponding provisions Relevant sections of this report

Responsibility Reporting in China

About This Report GRI2 P1.1-1.2 Combat with climate change Articles 21 to 28 Green Transformation for a Low-carbon Future—Climate Action and Low-carbon Transition

Chairman's Message GRI2 P2.1

Pollutant emission Article 30 Green Transformation for a Low-carbon Future—Cleaner Production and

About Baogang Steel GRI2 P3.1-3.4 Pollution Prevention and Control

Annual ESG Performance - - Waste disposal Article 31 Green Transformation for a Low-carbon Future—Cleaner Production and Pollution Prevention and Control

Topic I: "Rare Materials for a Rare Era Forging New-quality

Productivity for Major National Equipment" GRI203 - Ecosystem and Biodiversity Protection Article 32 Green Transformation for a Low-carbon Future—Ecological Restoration and

Topic II: "Intelligent Manufacturing Engine Empowering a New Harmonious Coexistence

Steel Ecosystem with Smart Technologies" GRI203 S2.1.14

Topic III: "Resource Symbiosis Strategic Resource Security and GRI304 E3.3.1-3.3.2E3.3.4-3.3.5 Environmental compliance management Article 33

Green Transformation for a Low-carbon Future—Cleaner Production and

Green Development" Pollution Prevention and Control

Strengthening Foundations Through - - Energy utilization Article 35 Green Transformation for a Low-carbon Future—Resource Circularity with Party Building and Strategic Leadership Efficiency at the Core

Governance

Excellence Driving Enhancing Governance and

Steady Development Standardizing Operations

GRI2 G1.1.1-1.1.2

Utilization of water resources Article 36 Green Transformation for a Low-carbon Future—Resource Circularity with Efficiency at the Core

Strengthening Internal Control and

Preventing Risks GRI2GRI205GRI206 G2.1.1-2.1.4G2.2.1-2.2.3

Circular economy Article 37 Responsibility Topic III: "Resource Symbiosis Strategic Resource Security and

Climate Action and Low-carbon E1.1.1-1.1.8E1.1.14-1.1.16 Green Development"

Transition GRI305 E1.1.19-1.1.20

Rural revitalization Article 39 Co-building and Sharing to Reinforce the Foundations for Development—Resource Circularity with Efficiency at GRI302GRI303 E3.1.1-E3.1.2E3.1.4-3.1.5 Community Co-building and Local Commitment

Green Transformation the Core E3.2.1E3.2.3-3.2.5

for a Low-carbon

Cleaner Production and Pollution E2.1.1E2.1.3-2.1.8E2.1.13Future Social contribution Article 40

Co-building and Sharing to Reinforce the Foundations for Development—

Prevention and Control GRI305GRI306 E2.2.1E2.2.3E2.2.5-2.2.7

Community Co-building and Local Commitment

E2.4.1-2.4.4

Ecological Restoration and Harmonious Innovation driving Article 42 Innovation Engine Driving Value Enhancement—R&D Breakthroughs and

Coexistence GRI304 E2.3.1-2.3.6 Innovation in Rare-Earth Products

R&D Breakthroughs and Innovation in During the reporting period the Company's information and digital technology

Rare-Earth Products GRI203 S2.1.1-2.1.3S2.1.12-2.1.13 applications were mainly focused on such areas as optimization of steel

Technology Ethics Article 43 production processes and intelligent equipment monitoring. The Company Innovation Engine did not engage in scientific research or technology development activities in

Driving Value Strengthening Quality Foundations and Elevating the Brand GRI417GRI418 S3.3.1-3.3.3S3.4.1-3.4.4 technology ethics-sensitive fields such as life sciences or underlying artificial Enhancement intelligence algorithms.Supply Chain Transmission and

Responsible Procurement GRI308GRI414 S3.1.2 Supply chain security Article 45 Innovation Engine Driving Value Enhancement—Supply Chain Transmission and Responsible Procurement

Employee Development and Rights GRI401GRI402GRI404 S4.1.1S4.1.4-4.1.6S4.1.8-4.1.9S4.1.11-

Protection GRI405GRI406GRI408GRI409 4.1.12S4.3.1-4.3.6 Equal treatment for small and medium During the reporting period the Company did not have a balance of accounts

enterprises Article 46 payable (including notes payable) exceeding RMB 30 billion nor did such

Co-building and Safety First Prevention and Control as GRI403 S4.2.1-4.2.4S4.2.6-4.2.9 balance account for more than 50% of total assets.Sharing to Reinforce the Priority

the Foundations for Product and service safety and quality Article 47 Innovation Engine Driving Value Enhancement—Strengthening Quality Community Co-building and Local

Development GRI413

S1.1.2-1.1.3S1.1.5S1.2.1 Foundations and Elevating the Brand

Commitment S1.2.3-1.2.4S1.2.6

Industry Synergy and Standards Data security and customer privacy Article 48 Innovation Engine Driving Value Enhancement—Strengthening Quality

Leadership - G1.1.13 protection Foundations and Elevating the Brand

Sustainable Development Management GRI2GRI3 G1.1.1-1.1.7G1.1.9G1.3.1-1.3.2 Employee Article 50 Co-building and Sharing to Reinforce the Foundations for Development—Employee Development and Rights Protection

Future prospects - A1

Due diligence Article 52 Sound Governance for Steady Development—Strengthening Compliance and Guarding Against Risks

Key performance - A2

Stakeholder communication Article 53 SUSTAINABLE DEVELOPMENT MANAGEMENT

Appendix Index of indicators - A3

Anti-bribery and anti-corruption Article 55 Sound Governance for Steady Development—Strengthening Compliance and

Feedback - A6 Guarding Against Risks

Anti-unfair competition Article 56 Sound Governance for Steady Development—Strengthening Compliance and Guarding Against Risks

86 Inner Mongolia Baotou Steel Union Co. Ltd. 2025 Sustainability Report 87Feedback

Dear Readers

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communication and exchanges with stakeholders and further improve the Company's ability and performance in fulfilling its social

responsibilities we sincerely invite you to complete this feedback form share your valuable opinions and suggestions with us and

return your feedback to us through any of the following channels.Securities and Financing Department Inner Mongolia Baotou Steel Union Co. Ltd.Correspondence Address: Room 816 Baogang Steel Office Building Hexi Industrial Zone

Kundulun District Baotou Inner Mongolia

Tel: 0472-2669527 Email: glgfzqb@126.com

Postal Code: 014010 Fax: 0472-2669528

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88 Inner Mongolia Baotou Steel Union Co. Ltd.Inner Mongolia BaotouSteel Union Co. Ltd.

Fax: +86-472-2669000 This report is printedon

environmentally friendlypaper.Address: Hexi Industrial Zone Baotou

Inner Mongolia Autonomous Region.Postal Code: 014010