Tuesday, April 29, 2008

China closing steel mills for a blue sky Olympics

Chinese steel mills around Beijing are holding out for subsidies in return for agreeing to shut down or reduce operations during the Olympic Games in August, the head of the China Iron and Steel Association said on Tuesday.

Determined to crown the Games with blue skies, Beijing has already ordered its top polluter, Shougang Steel, as well as other factories and power units to shut for two months from late July to late September.

Although authorities have said emissions restrictions would apply to six surrounding regions, with further measures to come if smog fails to clear, they have yet to release any detailed shutdown orders. "The mills are doing this as part of their responsibility to serve the national need, so it's natural they should get something as compensation," the association's secretary general Luo Bingsheng said.

Mills were seeking direct subsidies, he said, adding that he could not yet estimate how much production capacity would be shut during those two months.

Widespread closures of steel mills and other heavy polluters could reduce electricity demand in the north and cause prices for iron ore and other raw materials to dip.

Read the full story at Reuters

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