Interfax-China reported that Anshan Iron and Steel Group Corp aims to make a breakthrough in the ongoing merger with fellow Liaoning Province based steel mill Benxi Iron and Steel Group this year.

Mr Zhang Xiaogang general manager of Angang, and Mr Yu Tianchen, president of Bengang both expressed confidence in completing the merger between the two companies, saying that strategic cooperation is necessary and more likely to happen in the present climate.

An official surnamed Mr Wang from the Liaoning branch of the State-owned Assets Supervision and Administration Commission said "As far as I know, we have yet to finalize the details, including the time frame for the merger. The government as well as the two companies may resume merger discussions after China National People Congress and the Chinese People Political Consultative Conference."

Representatives from Angang were unavailable for comment when contacted by Interfax.

Mr Wei Zengmin an analyst from Mysteel Information said "It will not be easy for Angang and Bengang to complete the merger. As Angang is owned by the central government and Bengang is owned by the local government they need to agree on where tax revenue will go and how to redistribute their employees which will be complicated."

Mr Wei highlighted the violent protest in July 2009 at Tonghua Iron and Steel Group as an example of what can go wrong. When privately run Jianlong Steel Holdings Co Ltd attempted to take a controlling stake in Tonggang disgruntled employees staged a violent protest, causing the death of Mr Chen Guojun, a senior manager of Jianlong Steel. As a result Jianlong Steel pulled out of the deal.

Mr Song Hongbin a department manager from Mysteel Information said "Angang and Bengang began merger talks several years ago. In 2005, they consolidated financial statements, but they still have separate businesses. Now, as the steel industry consolidation in Shandong and Hebei provinces is advancing successfully, Angang may be feeling the heat."

(Sourced from Interfax-China)