Lawsuit filed against Kobe Steel and a Group company

October 3, 2018

Kobe Steel, Ltd.

Kobe Steel, Ltd. announces that a lawsuit has been filed against Kobe Steel and its 100% owned subsidiary, Kobelco Power Kobe No. 2, Inc. (hereinafter, the Companies) at Kobe District Court on September 14, 2018 and that the Companies have received a service of complaint today.

The lawsuit concerns the Kobe Power Plant's No. 3 unit and No. 4 unit (hereinafter, the new power plant) currently under construction at 2, Nadahama Higashicho, Nada-ku, Kobe, Hyogo Prefecture (within Kobe Steel's Kobe Works).

1. Circumstances leading to the causes and raising of the lawsuit

The Companies undertook environmental impact assessment procedures for the plan to establish the new power plant (procedures completed on June 25, 2018 with the end of the public inspection period for the environmental impact assessment report), as well as made efforts to provide information and explanations in order to gain the understanding of the parties involved, including the residents of the immediate area. At this time unfortunately, a lawsuit demanding injunctions on the construction of the new power plant, etc. has been filed from those who claim that by living in the vicinity of the planned construction site for the new power plant, they will suffer from the operation of the new facility.

2. Overview of the people raising the lawsuit

40 people who live in the vicinity of the new power plant

3. Content of the lawsuit

The plaintiffs claim that the operation of the new power plant will cause air pollution and global warming (climate change) and consequently violates their personal rights. The plaintiffs demand injunctions on the construction of the new power plant, etc. by the Companies and one other company.

4. Future prospects

The new power plant will implement the highest levels of environmental measures and comply with the environmental preservation agreement concluded, based on the Ordinance to Protect Kobe Citizens' Environment, as well as play a role as an urban power plant in harmony with the local community. In line with Japan's policy, the new power plant will contribute to maintaining a highly efficiency source of power with low transmission loss from a power supply location close to the power demand areas of Kobe and the Hanshin area, in addition to installing ultra-supercritical pressure power generation equipment, the state-of-the-art power generation technology. The Companies consider that through the stable, economical supply of electric power, the Companies will be able to further contribute to the growth of the region. The Companies believe that the plaintiffs do not have reasons for their claims, and in the future, the Companies' policy is to respond appropriately to the lawsuit by making a claim in court.

The effect of this lawsuit on Kobe Steel Group's business performance is unclear at this time. In the case that items for disclosure should arise in the future, Kobe Steel will promptly make a disclosure.

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