Baosteel said earlier preparations for its Zhanjiang steel project are still under way on schedule, which is expected to be completed by the end of 2011 and designed to produce 9.2 million tons of pig iron, 10 million tons of steel and 9.4 million tons of steel products.

Construction of the Zhanjiang project had been ordered to suspend by the Chinese government in an apparent action to curb excess overcapacity in the steel industry. A senior official said on October 29 the project has been listed as a target under a nationwide production control campaign until further notice according to the development of market conditions even if it intends to produce high-end steel products.

However, the group disclosed it has almost finished all the feasibility studies related to the project and is beginning to work on a preliminary engineering program, which will be reviewed in the first half of next year. Negotiations with potential suppliers have commenced on 36 outsourcing projects. The Zhanjiang government is also planning to invest about 13.56 billion yuan in relevant infrastructure construction such as railways, roads, bridge.