On December 24, giant Chinese steelmaker Baosteel Group made its first official announcement regarding the rumors that its Guangdong Province-based Zhanjiang project has been under investigation for going against official government policy aimed at curbing overcapacity in the domestic steel industry. According to Baosteel's announcement, following the receipt of approval from China's National Development and Reform Commission (NDRC), preparations for the Zhanjiang project still continue as scheduled.
Located on Donghai Island in Zhanjiang, Baosteel's new steel base will each year be able to produce 9.2 million mt of pig iron, 10 million mt of crude steel and 9.4 million mt of finished steel, on the back of a total investment of RMB 69 billion ($10.11 billion). The new complex is scheduled to start operations by the end of 2011 and will mainly produce high-grade steel products which China at present still needs to import from other countries.