According to an official with the Department of Raw Materials under the MIIT, China Ministry of Industry and Information Technology will soon release a file granting land, credit and project access supports for on scale Chinese cement producers to conduct M&As.

Mr Xin Renzhou vice secretary with Industrial Policy Department of the MIIT said that the ministry had drafted guidelines to eliminate backward capacities and conduct corporate M&As. However, the document is still subject to seven ministries opinions and was supposed to go public before the year end.

The raw materials official said "The backward production method by mid and small cement producers is the major reason behind the repeated construction in domestic cement production. The official said by this year's closing, 40 cement production lines now under construction will complete. This means 600 million tonnes of new capacity and lead to one billion tons of capacity excess, pushing up China's production capacity to 2.8 billion tonnes."

In view of the current growth of cement investment, overcapacity will become worse three or five years later as cement demands in China's mid- and western regions will be satisfied.

Mr Gao Qinghui a senior economist with China State Information Center the government policy making think tank said further, demand in China's developed eastern region has been well supported.

(Sourced from www.chinamining.org)