BEIC Leases a New Furnace to Increase Production Capacity

BEIC Leases a New Furnace to Increase Production Capacity

August 21, 2007

    TAIYUAN, China, Aug. 21
/Xinhua-PRNewswire-FirstCall/--Beicang Iron & Steel,
Inc. (OTC Bulletin Board: BEIC)("BEIC" or the
"Company") announces today that Pinglu County
Changhong Ferrochromium Co., Ltd., ("PL") one of
the subsidiaries of the Company, has leased an ore heating
furnace of 12,500 KVA  to produce high-carbon ferrochrome
alloy since June 1st, 2007, thus increasing its production
capacity to meet growing market demands.

    On June 1, 2007, PL reached a lease agreement with
Shanxi Yuncheng Yunneng Electric Power Enterprise Co.,
Ltd., ("Yunneng") to rent its ore heating furnace
of 12,500KVA for an initial term of 7 months. Upon the
maturity date of the term, the agreement may be renewed
upon mutual consent at the end of each financial year. As
one of the earliest group of companies to obtain the
admittance license from the State Permission for
Ferrochromium Production, PL has always been devoted to
producing high quality ferrochrome products to supply iron
and steel enterprises. PL had been approached by other
companies to take-over increase production capacity.
Currently, PL owns two ore heating furnaces of 6,500KVA.
After putting the third furnace of 12,500 KVA into
production, PL's monthly output increased by 1,200 tons or
a monthly sales revenue of $1.2 million. 

    PL's production increase was driven by a growing market
demand. In the first half year of 2007, the total output of
stainless steel in Taiyuan Iron & Steel Co., Ltd.
(TISCO) was 955.9 thousand tons, representing an increase
of 107.53% compared with the previous year. The substantial
growth of China's stainless steel market is directly driven
by the development of raw material market. In 2007, the
demand of ferrochromium by TISCO, one of PL's largest
clients, is estimated to be 800,000 tons. At present, the
supply of ferrochrome still falls short of the demand. 

    Mr. Hou Beicang, Chairman of the board of directors and
CEO of BEIC, stated, "BEIC has always been devoted to
supplying high quality raw materials to iron and steel
manufacturing enterprises. Although production capacity has
been increased, we cannot satisfy the raw material demand
from iron and steel enterprises since their output has also
increased. PL's ferrochrome products are mainly supplied to
TISCO and those iron and steel plants surrounding Shanxi
province. Under the premise of a quality guarantee, the
Company will continuously enlarge its production capacity
to fulfill market demand, thus increasing the profitability
and bringing higher investment returns for its
investors".

    BEIC is a Nevada corporation that is publicly listed in
the US. It is focused on providing elementary refined raw
materials to iron and steel enterprises. The main products
of the company include pelletized ore and ferrochromium
alloy products, which are essential for iron-making and
stainless steel production. The company produces pelletized
ore and ferrochromium alloy through its two subsidiaries in
Shanxi province, P.R.China, Fanshi county Xinyu Iron
Resource Co., Ltd. (FS) and Pinglu County Changhong
Ferrochromium Co., Ltd. (PL). PL is capable of an annual
production capacity of 40,000 tons of ferrochromium alloy.


    For more information, please contact:

    Investor Relations Contact:	
    Crocker Coulson
    President	
    CCG Elite	
    Tel:   [phone]	
    Email: [e-mail]	

    Company Contact:
    Beicang Hou
    CEO and CFO
    Beicang Iron and Steel, Inc.
    Tel:   [phone]
    Email: [e-mail]