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(a joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 01088) ESTABLISHMENT OF A JOINT VENTURE FOR THE CONSTRUCTION OF A RAILWAY PROJECT AT SINO-MONGOLIAN BORDER CROSSING

On 7 April 2014, LODESTAR INVESTMENT PTE LTD. (the "Shenhua Mongolian Company" or "Shenhua Party"), in which China Shenhua Overseas Development and Investment Co., Ltd., a wholly owned subsidiary of China Shenhua Energy Company Limited (the "Company"), holds
100% of its equity interest, entered into a Shareholders Agreement and the Articles of Association of Gashuunsukhait Railway LLC(the "Gashuunsukhait Railway Company") with ERDENES TAVAN TOLGOI JSC, ENERGY RESOURCES LLC and TAVAN TOLGOI JSC (the three companies collectively, the "Mongolian Party").
Gashuunsukhait Railway Company will invest in the construction of a railway project at Sino- Mongolian border crossing (the "Sino-Mongolian Border Crossing Railway"), which will be a standard gauge (1,435 mm) cross-boundary cargo transportation railway with about 20 km in length connecting the Gashuunsukhait boundary control point in Mongolia and the Ganqimaodu boundary control point in China. The construction of the Sino-Mongolian Border Crossing Railway will help reducing transportation costs and promoting Sino-Mongolian coal trading.
The Gashuunsukhait Railway Company has an initial authorized capital of USD0.5 million, the shareholding of which is as follows: 49% of the equity interest held by Shenhua Party, and a total of 51% of the equity interest held by the Mongolian Party with each of three Mongolian companies holding 17% respectively. The funds of the Sino-Mongolian Border Crossing Railway will be financed 70% with loans and 30% with equity capital. Shenhua Party will be responsible for obtaining the loans. Shenhua Baoshen Railway Co., Ltd., a subsidiary of the Company, will be responsible for the operation, transportation and maintenance of the Sino-Mongolian border crossing Railway in accordance with the operation and maintenance contract.

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As approved by the shareholders, Gashuunsukhait Railway Company will enter into an agreement with Mongolian Railway State Owned Shareholding Enterprise (the "MTZ"). After MTZ has completed the whole Ukhaa Khudag Mines-Gashuunsukhait boundary control point railway and connected it with the Sino-Mongolian Border Crossing Railway, MTZ will acquire the ownership of the Sino-Mongolian Border Crossing Railway at a fair price arrived at by both parties. Payment can be made in cash or in the form of shares of a company established specially by MTZ for the construction of the Ukhaa Khudag Mines-Gashuunsukhait boundary control point railway.
As the aforementioned project is still at a preliminary stage, there may be uncertainties and investors are advised to pay attention to investment risks.
By order of the Board

China Shenhua Energy Company Limited Huang Qing

Secretary to the Board of Directors

Beijing, 9 April, 2014

As at the date of this announcement, the Board comprises the following: Dr. Zhang Yuzhuo, Dr. Ling Wen and Mr. Han Jianguo as executive directors, Mr. Kong Dong and Mr. Chen Hongsheng as non-executive directors, and Ms. Fan Hsu Lai Tai, Mr. Gong Huazhang and Mr. Guo Peizhang as independent non-executive directors.

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