It is reported that Baosteel Group signed a cooperative agreement with Zhanjiang government on the Guangzhou Steel Moving and Zhanjiang Steel Base Project. The two sides promised that they will jointly push forward the project.

In June 2008, Baosteel, State Assets Administration Committees of Guangdong Province and Guangzhou jointly funded to establish Guangdong Iron and Steel Group aiming to build a 5 million tonnes quality steel base in Zhanjiang mainly for the production of auto steel plate, household electronic steel which are in dire need in Guangdong.

As per the requirement of National Development and Reform Commission, Guangdong has to shake off 10 million tonnes of backward capacity as a cost for Zhanjiang Project. Specifically, Guangzhou Steel has to wash out all of its iron and steel-smelting capacities and steel rolling capacity, Shaogang Steel has to perform technique improvement and meanwhile remove obsolete BFs and small converters.

Mr Yu Ziquan President of Shaogang said the preliminary work for Zhanjiang Project has been injected over CNY 6 billion and now the expropriation of land and dismantling work have been finished. Besides, the dock for unloading during the construction period has been built up.

Although an enormous fund has been put into the Zhanjiang project, NDRC has not so far approved it owing to the eruption of 2009 global financial crisis and domestic overcapacity.

(Sourced from www.cscet.com)