Beijing govt, Shougang to set up fund to redevelop old steel mill site

by Reuters
Friday, 26 September 2014 09:06 GMT

BEIJING, Sept 26 (Reuters) - The Beijing municipal government and China's fifth biggest steel producer are setting up a joint fund to finance redevelopment of a closed steel mill and a new industrial zone.

State-owned Shougang Group's mill on the outskirts of western Beijing shut down nearly four years ago to help cut smog in the Chinese capital, but no redevelopment has been done at the 8.6 square kilometre (3.3 square mile) site.

Squabbling over who should pick up the bill has also delayed clean-up of the site's toxic soil. The site is one of thousands across China that has left soil useless from industrial and agricultural pollution.

The Beijing city government on Thursday said it would use money from selling the land at the Shougang site for use by some 43 new development projects to help pay the soil pollution clean-up costs.

The city and company did not provide details on how much each would put into the joint redevelopment fund.

Shougang, parent of Shenzhen-listed Shougang Corp , was originally expected to bear the estimated 200 billion yuan ($33 billion) cost of cleaning up and redeveloping the site. The new funds will help ease the burden on Shougang, which is struggling amid a weak steel market.

The steel company and the Beijing government are also looking for their joint fund to attract private investment in redevelopment of the old mill site, as well as in Shougang's new production zone in Caofeidian in neighbouring Hebei province.

The hope is that the old steel mill can become a hub of green development in Beijing's Jingxi district, with stringent environmental regulations and a modernised industrial system, according to the Beijing Development and Reform Commission.

The joint redevelopment fund initiative comes as China is facing a triple environmental disaster with large swathes of its air, water and soil heavily polluted.

Farming has been banned on 3.3 million hectares (8.15 million acres) of farmland across the nation. Reuters has calculated it would cost some 5 trillion yuan ($800 billion) to clean up this land, more than the combined money China has set aside to solve its air and water pollution problems. ($1 = 6.1255 Chinese yuan) (Reporting by David Stanway, Stian Reklev and Kathy Chen; Editing by Tom Hogue)

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