On April 25, Huang Han, the deputy secretary of Zhanjiang municipal government in the southern Chinese province of Guangdong, stated that construction of the Zhanjiang steel project of Chinese steelmaker Baosteel is to be launched in June this year. The total project investment is RMB 30 billion ($4.398 billion), while construction is expected to be completed in 2013.
Mr. Huang stated that the project is not a brand-new project, but simply involves the relocation of old mills for environmental protection purposes. According to the document entitled ‘Guangdong Province Key Project Construction Plan in 2010', the relocation in question involves 5 million mt capacity each of Guangzhou Steel and Shaoguan Steel, while a total of 10 million mt capacity of backward mills in the province of Guangdong is to be phased out.
Previously, Li Miaojuan, a director of the Development and Reform Commission of Guangdong Province, had specified that the Zhanjiang project does not mean an increase in the steel production capacity of the province, but would mean the elimination of backward mills and the establishment of plants with large capacities and advanced facilities. Preparations have long been continuing for Baosteel's 10 million mt plus-capacity Zhanjiang project. After Baosteel acquired Guangzhou Steel and Shaoguan Steel in 2008, it then established a new joint venture group, Guangzhou Iron and Steel Enterprise Group, with the Guangzhou government. The Zhanjiang project was expected to be launched quickly after these acquisitions and subsequent restructuring; however, due to national macroeconomic measures, the project was postponed.