Beijing to stop producing iron, steel in 2010

UPDATED: 16:56, March 09, 2006

Beijing's mammoth steel maker is beginning to phase out production here as one of the city's worst polluters moves toward ending all production in the capital by 2010.

According to Shougang's relocation plan, the company will cut the annual output of its Beijing facilities from the current 8 million tons to 4 million tons by 2008 and stop production altogether in Beijing by 2010, company president Zhu Jimin was quoted as saying on Wednesday during the annual National People's Congress (NPC) session.

By 2010, all production facilities of Shougang Group, also known as Capital Iron and Steel Group Co., will have been moved to Tangshan, a city in the neighboring Hebei Province, the Beijing News reported Thursday.

The new Shougang Group will employ 15,000 people and be named "Capital Steel Beijing-Tangshan Iron Steel Joint Co. Ltd.", the metropolitan newspaper quoted Zhu as saying.

Zhu, who is also a deputy of the NPC, said the steel maker will do its best to avoid laying off employees during the relocation, the largest move by any state firm.

"For current employees based in Beijing, there are jobs available at all divisions, and our business development will create new jobs, too," Zhu was quoted as saying.

A new cold rolling mill and a logistic base in Shunyi District in the northeastern suburbs of Beijing will have at least 1,000 openings.

"Besides, the new facilities in Tangshan can employ more than 10,000 technical workers from Beijing and a number of people to fill posts in the service sector."

During the relocation process, Zhu promised the company will closely follow state regulations and openly solicit bids, ensure fair competition and avoid devaluation of state assets.

Founded in 1919, Shougang is widely considered the flagship of China's industry. Its production base in the western suburbs of Beijing, however, has long been blamed for causing heavy air pollution as the plant's chimneys belch out thick clouds of smoke.

Despite the city's efforts to curb pollution and improve air quality in the recent decade, environment experts say unless Shougang moves, Beijing's air quality will not meet the standard the government promised in its bid to host the 2008 summer Olympics. Shougang is expected to cease production during the Olympic Games period.

Shougang has also promised its new facility will use new technologies to reduce environmental impact.

The new steel plant will operate in an environmental-friendly way with new equipment and technologies to improve efficiency and cut waste, Zhu said.

The new base covering about 20 square kilometers will be located in Caofeidian, an island 80 km south of Tangshan in Hebei.

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