NDRC Approves Zhanjiang Project To Carry Out The Preparatory Work

In the morning of March 20, Chairman Xu Lejiang of Baosteel Group Corporation announced on the extended learning meeting of Party Committee Central Team that National Development & Reform Commission (NDRC) had approved Guangdong Zhanjiang Iron & Steel Base Project to carry out the preparatory work. According to the state's requirements, Baosteel will build a 10 million ton steel base in Zhanjiang on the basis of merging and restructuring Shaoguan Iron & Steel Group (SGIS) and Guangzhou Iron & Steel Enterprises Group (GISE), the existing steel enterprises in Guangdong Province, to eliminate the outdated capacity.

In order to restructure Chinese steel industry, expedite the elimination of outdated capacity, optimize the industrial layout, promote the trans-regional merger and reshuffle of steel enterprises, implement the relocation of urban steel mills for environmental protection and enhance the competitiveness of Chinese steel enterprises, NDRC issued a document on March 17 after approval by the State Council, to approve the Development & Reform Commission of Guangdong Province and Baosteel to carry out the preparatory work of Guangdong Zhanjiang Iron & Steel Base Project.

The construction of Guangdong Zhanjiang Iron & Steel Base Project will be combined with the consolidation and restructuring of the steel enterprises in Guangdong Province. In principle, no new steel production capacity will be increased, and the main scheme is that Baosteel merges and restructures SGIS and GISE, Baosteel contributes the capital in cash to set up a new company controlled by Baosteel and headquartered in Guangzhou, while SGIS and GISE participate the equity with net assets.

GISE will eliminate all the iron-making, steel-making and rolling capacity and move out of Guangzhou; SGIS will carry out technical revamping, eliminate the outdated blast furnaces and small converters, and implement restructuring, industrial optimization and upgrading. In combination with the construction of Zhanjiang Iron & Steel Base Project, Guangdong Province will eliminate 10 million tons of outdated steel-making capacity.

The preliminary planning of Zhanjiang Iron & Steel Base Project is 10 million tons of steel production and 9.4 million tons of steel products. The main facilities include two 5700 m3 blast furnaces, four 300t converters, two sets of hot rolling lines and three sets of cold rolling lines. The products are mainly the high value-added products that are urgently needed in Guangdong and domestic markets. Presently, Baosteel has set about the preparatory work such as environmental appraisal, pre-review of land for construction and use of sea area.

Xu Lejiang pointed out that, the state's approval of the preparatory work of Zhanjiang Iron & Steel Base Project is just the beginning, since we are also confronted with the arduous task of restructuring the steel enterprises in Guangdong Province, just like the consolidation and restructuring of the steel enterprises in Shanghai ten years ago. He wishes that Baosteel staff can exert the spirit of secondary enterprising and create another splendor in the Pearl River Delta.