Environmental protection policy curbs small-sized mills

SteelOrbis Shanghai In order to rein in the increasingly serious pollution problem, Chinese central government has strengthened its environmental protection inspections and punished those causing severe pollution - most of which are small-sized mills. There are 42 blast furnaces in total in Xiangfen County, Shanxi Province, among which only 5 have the legal environmental protection documents, while the other 37 all belong in the category of unapproved illegal constructions. The environmental protection bureau determined to shut down 35 blast furnaces (<200 m3) before 2007. As regards the other 2 furnaces (<200 m3), they will have to be equipped with additional environmental protection facilities and will have to pass the environmental protection acceptance test by the end of 2006. If they do not pass the acceptance test as scheduled or the test result is disqualified, then they are to be shut down together with the others. As regards the five furnaces (>500 m3), 2 of them have been obliged to immediately stop production in order to improve environmental protection facilities and to be ready for the acceptance test before October 31. One mill may not start trial runs unless it gets approval from the environmental protection authority. The other two will have to cease illegal construction at once and accept punishment according to the relevant laws and rules. Liaoning Liaoyang Municipal Government has sent “notice of environmental protection rectification” to the small-sized mills in their city, specifying that if they cannot reach the required level within the time limit, the government will then shut down their mills. Steel mills located in the Fengnan District of Tangshan also accepted an overall inspection. The top 10 largest mills are required to implement rectifications within the specified time period. Those mills and equipment that cannot be improved were shut down promptly. Right now, 21 blast furnaces, 12 sintering machines and other out-of-date equipment from 42 mills have already been shut down. In July 2005, the China Iron & Steel Association (CISA) released its new industry policy, requiring the shutting down of blast furnaces (<200 m3). However influenced by economic benefits and employment pressure, the order from the top cannot be acted on efficiently. This time, the central government began to tackle environmental protection. Support was won from the local government and people, leading to better achievements. Since the restricted companies are all small-sized mills in part of China, the impact on Chinese steel production will not be big. However, the decreasing number of mills will benefit the stability of local market prices. With the further strengthening of enforcement of environmental protection laws, the problem of low centralization in the Chinese steel industry is expected to be relieved gradually.