Official Construction of Baosteel's Long-Planned Zhanjiang Iron & Steel Mill Begins

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Researched by Industrial Info Resources (Sugar Land, Texas)--After years of waiting, Baosteel Zhanjiang Iron and Steel Company Limited (Zhanjiang, Guangdong)'s Zhanjiang Iron & Steel Complex Project finally received approval on May 24, 2012, from the National Development and Reform Commission (NDRC) the top planning agency in China.

Baosteel's Zhanjiang Iron and Steel Complex Project is located at the Donghai Island in the coastal city of Zhanjiang in South China's Guangdong Province. The site is not only an ideal location with favorable deepwater port for imported iron ore, but also close to the consumption market. According to the approval, Baosteel will invest $11 billion to establish an annual steel production capacity of 10-million metric ton (MMT) in the initial stage with space reserved for future expansion to 20-MMT.

Early in March 2008, Baosteel received consent from the NDRC to kick off pre-stage preparation for the proposed project with high hopes to adjust the structure of iron and steel industry in China. In order to achieve the objective, Guangdong Iron and Steel Corporation (Guangzhou, China), a new company under the control of Baosteel through its merging with Shaoguan Iron and Steel Corporation (Guangdong, China) and Guangzhou Iron and Steel Corporation (Guangdong, China), the two major iron and steel producers existed in Guangdong, was established to responsible for the construction of the project in June 2008.

However, due to the serious surplus in steel production capacity, the project was suspended officially in 2009 after expenditure of more than $300 million in pre-stage preparations, including land acquisition, site dismantling and demolition as well as the construction of some auxiliary facilities.

In order to promote the implementing of the project, Guangdong Province has worked hard on eliminating of inefficient production capacity. Together with the relocation of Guangzhou Iron and Steel Works, totally 16.14 MMT of crude steel production capacity will be eliminated.

With approval from the NDRC, construction of the project officially kicked off on May 27, 2012. "The project will be an important battlefield for Baosteel's new round of business creation," said Baosteel in its announcement. Baosteel will firmly adhere on its development strategy of "quality products + large scale". Upon completion, the project will be able to meet the market demand in Guangdong as well as its surrounding area, and achieve the perfect coordination between market demand and Baosteel's capability.

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