Baosteel gets Zhanjiang plant nod
By Richard Fu |
May 26, 2012, Saturday
|
Print Edition
Print Edition
BAOSTEEL Group Corp has won final approval to build a US$11 billion steel plant in south China's port city of Zhanjiang, years after the project was first proposed.
The National Development and Reform Commission, which is responsible for approving major projects in China, yesterday said it has granted the go-ahead for the project, which will require a total investment of 69.68 billion yuan (US$11 billion) and have an annual capacity of 10 million tons.
The commission delayed approving such major projects at a time China's steel industry is struggling with overcapacity. But the recent slowdown in the economy has prompted the government to focus more on stimulating growth.
The central government said on Wednesday that it would speed up investment on a number of major infrastructure projects this year as part of efforts to facilitate growth.
The NDRC has also approved a plan by Wuhan Iron and Steel Group to build a steel mill in Fangchenggang, south China's Guangxi Zhuang Autonomous Region, which will have an annual capacity of 9.2 million tons and require 64 billion yuan in investment, according to a separate statement.
The two new modern steel projects have come to fruition only after local governments agreed to ditch some old capacity. The Guangdong government will close 16.14 million tons of obsolete crude steel annual capacity elsewhere in the province as part of its deal with Baosteel for the Zhanjiang project.
Baosteel is China's third-largest steel firm, producing 43.3 million tons of crude steel last year, after the Hebei Iron and Steel Group and the Anshan Iron and Steel Group. Baosteel Chairman Xu Lejiang said earlier this month that the company plans to reduce capacity on its home turf of Shanghai by 3 million tons within the decade.
In a separate development, three Chinese companies - Baosteel, Hunan Valin and Minmetals - have subscribed to become founder shareholders of globalORE, a Singapore-based electronic platform for physical iron ore trade. The platform is considered by some as a rival to a similar one just launched by the China Beijing International Mining Exchange.
A Baosteel representative said the two platforms could complement each other. It also backs the Beijing platform.
The National Development and Reform Commission, which is responsible for approving major projects in China, yesterday said it has granted the go-ahead for the project, which will require a total investment of 69.68 billion yuan (US$11 billion) and have an annual capacity of 10 million tons.
The commission delayed approving such major projects at a time China's steel industry is struggling with overcapacity. But the recent slowdown in the economy has prompted the government to focus more on stimulating growth.
The central government said on Wednesday that it would speed up investment on a number of major infrastructure projects this year as part of efforts to facilitate growth.
The NDRC has also approved a plan by Wuhan Iron and Steel Group to build a steel mill in Fangchenggang, south China's Guangxi Zhuang Autonomous Region, which will have an annual capacity of 9.2 million tons and require 64 billion yuan in investment, according to a separate statement.
The two new modern steel projects have come to fruition only after local governments agreed to ditch some old capacity. The Guangdong government will close 16.14 million tons of obsolete crude steel annual capacity elsewhere in the province as part of its deal with Baosteel for the Zhanjiang project.
Baosteel is China's third-largest steel firm, producing 43.3 million tons of crude steel last year, after the Hebei Iron and Steel Group and the Anshan Iron and Steel Group. Baosteel Chairman Xu Lejiang said earlier this month that the company plans to reduce capacity on its home turf of Shanghai by 3 million tons within the decade.
In a separate development, three Chinese companies - Baosteel, Hunan Valin and Minmetals - have subscribed to become founder shareholders of globalORE, a Singapore-based electronic platform for physical iron ore trade. The platform is considered by some as a rival to a similar one just launched by the China Beijing International Mining Exchange.
A Baosteel representative said the two platforms could complement each other. It also backs the Beijing platform.
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