The Shougang Group, a major Beijing-based iron and steel producer, has been ordered to phase out smelting operations in Beijing and completely stop them by theend of 2010.

"The iron and steel smelting capacity must be reduced by 4 million tons by the end of 2007," Chinese vice premier Zeng Peiyan said Thursday at a meeting held in Shougang.

According to a plan approved by the State Council, Shougang will relocate most of its existing production facilities to Caofeidian in Hebei Province. Meanwhile, it can go ahead with its cold-rolled steel sheet production project in Beijing.

"The relocation of Shougang is a major measure to improve the environmental quality of the capital city, adjust its industrial structure and realize comprehensive, coordinated and sustainable economic and social development in the city," said Zeng.

He said the more than 80-year-old company had made great contributions to the national construction and development of Beijing. It has spent "huge sums of money" on pollution control but still cannot meet the requirements raised by the hosting of the Olympic Games in the city.

"Shougang annually discharges 18,000 tons of solid particulate matter, accounting for more than 40 percent of that discharged by the whole industrial sector of the city," said Zeng. "That has putheavy pressure on environmental protection.

"In addition, Beijing lacks water resources and faces rising traffic problems. That's not good for the long-term growth of Shougang," he said.

The new location in Hebei has access to fine harbors and is near rich iron ore reserves, with a proven reserve of 4.4 billion tons.

Zeng asked the capital city to take the relocation of Shougang,an import source of revenue for the city, as a major junction to speed up adjustment of industrial structures and boost the growth of the modern service industry, new and hi-tech industry and modern manufacturing industry.

Source: Xinhua