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Gov't gives nod to Hebei steel venture
By Xiao Wan (China Daily)
Updated: 2007-03-10 08:04

Gov't gives nod to Hebei steel venture China has approved the construction of the 67.7-billion-yuan Jingtang Iron and Steel Project in North China's Hebei Province, according to the National Development and Reform Commission (NDRC).

The joint-venture project between Shougang Corp and Tangshan Iron and Steel Group has been given the go-ahead, the NDRC, the nation's top economic planning body, said on its website on Friday.

The new project, located at Caofeidian deep-water harbour, is projected to produce 8.98 million tons of iron and 9.7 million tons of steel a year. It will also make 9.13 million tons of steel products, the NDRC said.

Hebei Province will reduce its current steel capacity by 7.3 million tons to offset the new capacity, it said.

Beijing-based steel giant Shougang is relocating to neighboring Hebei Province, where it will launch the project with Tangshan Iron and Steel Group. Shougang will own 51 percent of the new facility, while Tangshan Iron and Steel will own the rest.

Shougang now has a combined production capacity of 13 million tons a year. It produced 12.48 million tons of steel in 2006, earning 87.47 billion yuan in revenue.

The company plans to halt all steel production in Beijing, host city of the 2008 Olympics, by 2010 to alleviate pollution in line with central government orders.

Shougang's 2008 steel production could fall by 4 million tons, or almost half, because of the move to Hebei, Shougang's chairman Zhu Jimin said at a news conference in Beijing on Friday.

The company is unlikely to take part in the mergers and acquisitions among China's steel producers this year, because it will concentrate on shifting production to Hebei Province, Zhu said.

China, which makes one-third of the world's steel, plans to merge its 260 steelmakers into bigger companies to improve efficiency and cut pollution.

Baosteel Group Corp, the nation's top steel maker, agreed in January to buy Xinjiang Ba Yi Iron & Steel Group its first acquisition in nine years.

(China Daily 03/10/2007 page10)

 

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