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August 16, 2009

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Factory deal protest breaks up

STEEL workers dispersed yesterday after a second mass protest against the purchase of their plant by a private company in Henan Province.

Up to 400 workers and their relatives gathered in the morning inside and outside the compound of Linzhou Steel Corporation (LSC), pressing for suspension of the purchase by Fengbao Iron & Steel Co Ltd, said Zhang Quanfu, a representative of the workers.

The workers also demanded higher redundancy compensation and resolution of issues concerning unpaid wages during the plant's restructuring.

The crowds dispersed after a government mediation team, comprising Communist Party of China and government officials, reiterated the decision to temporarily call off the takeover, Zhang said.

The protest followed a mass demonstration that began at the site on Tuesday and ended at 3am yesterday which involved up to 3,000 people, said Li Rongsheng, another workers' representative.

Dong Zhangyin, sent by the local state-owned assets supervision and administration branch to oversee the takeover, left the site yesterday morning after demonstrators had blocked his exit, according to Linzhou City government.

The state-owned LSC, established in 1969, has 5,122 workers and pensioners on the regular payroll and 2,995 workers on the job.

Pig iron, cement

It produces about 400,000 tonnes of pig iron and 100,000 tonnes of cement a year and was China's only production base for low-titanium iron.

Although LSC is in Anyang City, authorities in Puyang, which was formed from part of Anyang, own and administer its operations.

Restructuring of the plant along commercial lines began in August 2008 with Puyang government approval and the factory suspended all operations in March, sending all employees home.

Workers had tried to resist the privatization by blocking traffic twice since March.

LSC was sold to Fengbao, based just 1 kilometer from LSC, at auction for 259 million yuan (US$37.9 million) on July 24. The deal triggered the mass demonstration by workers dissatisfied with proposed compensation of 1,090 yuan for each year of service, according to Li.

Many workers also believed LSC was worth 330 million yuan, but was undervalued at the auction, he said.

They also said Fengbao had a bad reputation for unpaid wages and lack of work insurance.

However, Fengbao had insisted the deal was conducted legally and should be honored, said Liu Haiying, director of Linzhou publicity department.

The mediation team was holding meetings yesterday with representatives from LSC and employees about the future of the reform.


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