On April 12, Li Xianglin, the secretary of the Communist Party of China for Yili autonomous prefecture, met with the investigation team led by Li Zhiqiang, president of Shougang Holding Company and board chairman of Shougang Group Yili Steel Corporation. After negotiations, both parties agreed that the time for the development of the steel industry in Yili has come.
Mr. Li Xianglin stated that with the completion of one year of preparations overall development would commerce. Li Zhiqiang said that at the end of 2008 Shougang Group had signed a framework agreement with Xinjiang Uighur Autonomous Region to integrate the iron ore resources in the area. Now, he said, Shougang was entering Yili autonomous prefecture to integrate iron ore resources in this area.
Shougang Group plans to establish a steelmaking facility at Yili with an annual capacity of 5 million mt of premium steel. The 2 million output capacity in phase 1 is expected to start construction this year, with an investment of RMB 2 billion (approx. $293 million). Next year the planned investment is expected to be about RMB 1.3 billion (approx. $190.4 million).
Both parties also held in-depth discussions about environmental impact, land acquisition, resource distribution and industry integration.