WISCO Begins Construction of Mega-Steel Mill Complex in China

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Researched by Industrial Info Resources (Sugar Land, Texas)--Following the receiving of final approval from the National Development and Reform Commission (NDRC) on May 24, 2012, construction of Wuhan Iron and Steel Corporation's (WISCO) (SHA: 600005) 10 million metric ton (MMT) Fangchenggang Iron & Steel Complex Project was officially kicked off in Guangxi on May 28, 2012. Mr Ma Biao, Chairman of Guangxi Autonomous Region, Mr Deng Qilin, Chairman of WISCO, among other leaders and representatives, attended the kick off ceremony, the WISCO announced on May 29, 2012.

Fangchenggang Iron & Steel Complex occupies an area of about 12 square kilometers in the Qisha Industrial Park of Fangchenggang City. According to the approval of the NDRC, the Fangchenggang Project will be built by Guangxi Iron and Steel Group Company Limited, a subsidiary of WISCO, with a total investment of about $10.2 billion. The project will have an initial production capacity of 10 MMT per year with space reserved for future expansion. The construction period of initial stage will be 4 years. Upon completion, the project will have an annual production capacity of 8.5 MMT of iron, 9.2 MMT of steel (billet), 8.6 MMT of steel materials, 2.8 MMT of hot rolled product steel sheets, 4.4 MMT of cold rolled steel sheets, and 1.4 MMT of wide and thick steel plates. As the associated support facilities, the project will also be furnished with 14 berths with a total annual turnover of 41.67 MMT and a batch of common and auxiliary facilities required for the project.

Early in December 2005, WISCO signed the Agreement with the State Assets Supervision Commission of Guangxi (SASCG), to jointly build a large-scaled iron and steel complex in Fangchenggang, a port city in southwest China's Guangxi Autonomous Region. In March 2008, the project, together with Baosteel's Zhanjiang Iron and Steel Complex received consent from the NDRC to kick off pre-stage preparation for the proposed project at the same time. However, due to the impact of the international financial crisis, the project was run into a hard situation of whether to continue or not. The official publication of the "Twelfth Five-Year" Development Plant for Iron and Steel Industry by the Ministry of Industry and Information Technology in November 2011 brought new hope to WISCO. Half a year later, the project together with Baosteel's Zhanjiang Project received final approval from the NDRC at the same time.

According to the requirement of the NDRC, the project will be implemented based on the accumulative elimination of totally 10.7 MMT of inefficient production capacity in WISCO and Guangxi. Of which, WISCO and Guangxi shall eliminate 5 MMT and 5.7 MMT of crude steel production capacity respectively.

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