Wed, Sep 12, 2018 - Page 6 News List

Smog law tests PRC’s steel heartland

Reuters, TANGSHAN, China

Men walk past the Hebei Zongheng Iron and Steel plant that is under construction at the Tangshan Fengnan Economic Development Zone in China’s Hebei Province on Aug. 22.

Photo: Reuters

“Push the steel mills out of the city center and turn it into a modern, habitable place to live in,” reads a banner hung across the boarded-up offices of Guofeng Iron and Steel in the center of Tangshan, China’s top steelmaking city.

Behind the gates of the factory, surrounded by a hospital, a shopping mall and high-rise apartment blocks, workers and bulldozers were busy tearing down furnaces as part of a 38 billion yuan (US$5.5 billion) plan to move to a new industrial park 60km away.

Meanwhile, six hours drive away to the southwest, executives at Hebei Xinjin Iron and Steel, a Handan-based medium-size mill, are scrambling to find a new site in the south after being served notice last month to leave their home province.

The two steelmakers are among the first producers in Hebei Province to comply with the local government’s latest audacious plan to make its smoke-stack industries more efficient and clean the notoriously toxic air of the northern industrial heartland.

Provincial authorities ordered mills, including some owned by HBIS Group, the world’s fourth-largest steelmaker, in almost a dozen of its smoggiest cities to shut, move to a new industrial park on the coast or get out.

The moves, detailed in a document published on the province’s Web site in July but not previously reported, mark a new front in the government’s years-long war on pollution and outdated excess capacity in heavy industry, heralding even more upheaval for the debt-laden steel sector.

After years of weeding out “zombie” mills and permanently shutting idled plants, these are some of the toughest steps yet as provincial administrators confront the challenge of meeting tougher central government emissions targets.

“Mills in Handan are now scrambling to look for a new place to move,” Yuan Zhanpeng, a manager at Xinjin, told reporters.

Tangshan missed its air quality goals last year, during which the city produced more steel than the whole of the US.

Hebei’s aim is to cut steel capacity to 200 million tonnes per year by 2020, down 20 percent from last year. Jiangsu, China’s second-largest steelmaking region, issued a similar plan in August.

However, the strategy will come at a huge financial cost to the mills, and environmental experts have questioned whether moving them to the coast would improve the region’s air. Those leaving Hebei and Jiangsu might simply shift the problem south.

“All steel mills in this region will be shut. When that day comes, I will shut my business and move to somewhere else as well,” said a resident, who has run a small restaurant near Guofeng’s factory for 14 years. She declined to give her name.

Many saw the writing on the wall. The biggest steel mill in provincial capital Shijiazhuang, Hebei Jingye Steel Group started looking for a new home before the plan came out.

“Even though our mill is far from the city center and has adopted sophisticated environmental equipment, we thought that sooner or later we would have to move,” firm manager Zhang Lijie said.

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