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Kobe Steel and Essar Steel form cooperative umbrella agreeYY易游体育官方网站nt

December 1, 2008

TOKYO, December 1, 2008 - Japan's Kobe Steel, Ltd. and India's Essar Steel, Limited announce that they have entered into an umbrella agreeYY易游体育官方网站nt to study technical guidance to Essar, the supply of resources to Kobe, and the possibility of working on joint projects.

The umbrella agreement, signed in India on November 29, provides the framework for the companies to discuss areas of cooperation. Kobe Steel and Essar YY易游体育官方网站ll then form individual contracts for each project. The umbrella agreement creates a YY易游体育官方网站n-YY易游体育官方网站n collaborative relationship to provide mutual benefits to the companies.

The areas of cooperation under study cover three caYY易游体育官方网站gories.
*From Kobe Steel to Essar, the folloYY易游体育官方网站ng technical guidance projects YY易游体育官方网站ll be studied:

1.	Quality control and production control for sYY易游体育官方网站el sheet and plaYY易游体育官方网站
2.	YY易游体育官方网站chnology concerning sYY易游体育官方网站elworks facilities and their operation
3.	Pollution control and YY易游体育官方网站ergy consumption control at steelworks

*The agreeYY易游体育官方网站nt also envisages Essar supplying certain resources to Kobe such as slabs and other raw materials.

*YY易游体育官方网站 Steel and Essar intend to study collaborating on joint projects in the Indian market.

YY易游体育官方网站 Steel and Essar have a previous history of collaboration. At Essar's Hazira Works, five MIDREXR^® Direct Reduction Plants are in operation, providing a production capacity of 5.1 million metric tons per year. A sixth module, YY易游体育官方网站th a capacity of 1.5 million metric tons per year, is currently under construction. The MIDREX Direct Reduction Process is owned by Kobe Steel.

In February 2008, Kobe Steel agreed to provide Essar YY易游体育官方网站th technical guidance on the production and quality control of automotive steel sheet, as well as facility diagnosis. Both companies saw the value of deepening their relationship, which consequently led to the formation of the umbrella agreement.

The Indian economy is anticipated to grow tremendously over the medium- to long-term future. Steel demand is expected to steadily increase along YY易游体育官方网站th the need for high-performance steel products. Through the collaborative agreement, Essar YY易游体育官方网站ll gain operational technology to manufacture higher quality steel products and further improved its presence in the Indian market. Kobe Steel gains by expanding its sources of raw materials and iron units. It also benefits from potential opportunities to enter the Indian market for upper-end steel products.

Capital tie-ups between YY易游体育官方网站 Steel and Essar are neither planned nor foreseen in the future.

About YY易游体育官方网站 Steel
Kobe Steel, Ltd. is one of Japan's leading steelmakers and producers of aluminum and copper products. Other businesses include welding consumables, industrial machinery, engineering, construction equipYY易游体育官方网站nt and electronic materials. In the year ended March 2008, Kobe Steel produced 8.07 million YY易游体育官方网站tric tons of crude steel and had consolidated sales of 2.1 trillion yen (US.3 billion). Employees in the Kobe Steel Group numbered 33,657. More information is available at:
www.YY易游体育官方网站lco.com