Others News
- Shandong proposes coastal steel mill
Date: 28-Dec-2007 Sources: (Shenzhen Daily)
THE Shandong Provincial Government is planning a 10-million-ton steel complex near Rizhao as part of the government's move to modernize and consolidate the fragmented steel sector, according to industry sources.
Jinan Iron and Steel Group and Laiwu Iron and Steel Group will be major investors in the new project, which could eventually reach 20 million tons.
Details including the shareholding structuring and size of investment were still undecided, while the Central Government had yet to give its approval, a source in Shandong said yesterday.
The government has dawdled on approving two other similarly sized greenfield mills on the southern coast, proposed by Wuhan Iron and Steel Group and Baosteel Group, because so far it has been unable to force mills with outdated or polluting capacity to stop operations.
The Rizhao project is part of the Shandong Provincial Government's plan to merge the operating assets of its two largest steelmakers into Shandong Iron and Steel Group. The plan has had a generally unenthusiastic reception from city governments and from the two steel groups eager to keep their independence.
In return for getting the greenfield project, the parents of Laiwu Steel Corp. and Jinan Iron and Steel Co. would have to cut their existing capacity by half, to 6 million tons and 5.6 million tons respectively, within five years.
The proposed hot-rolling mill could later be joined by a cold-rolling mill to be funded by another Shandong steel mill, Qingdao Iron and Steel Group.
Qingdao had earlier failed to get government approval for a different expansion plan, which would have permitted it to move out of its blackened campus in the city, which is hosting the 2008 Olympic sailing competition, said a source involved in vetting the project.
The government is to try to coerce its hundreds of steel mills into forming a few globally competitive giants, while keeping foreign investors at bay.
It earlier blocked a plan by Laiwu to sell a stake to the world's largest steel maker, ArcelorMittal, which has instead bought most of the shares of China Oriental, a much smaller private player with mills in Hebei and Guangdong.
Jinan Iron and Steel Group and Laiwu Iron and Steel Group ranked China's seventh and ninth-largest steel mills in 2006 with output at 11.24 million tons and 10.79 million tons respectively.
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