Chinese Government Orders Closure Of Outdated Facilities

According to a circular issued by Gov.cn, the official Web portal of the Chinese government, China will shortly begin to eliminate outdated production facilities in industries such as power, coal, iron, steel, cement, nonferrous metals, coke, paper making, leather, printing, and dyeing to allow market forces to determine better resource allocation.

The circular from the State Council on Further Eliminating Outdated Production Facilities states that, by the end of 2010, China will eliminate over 5 gigawatts of small thermal power generation plants; close down 8,000 small coal mines that are not qualified for safe production or are a environmental hazard; and shut down small coking enterprises whose coal furnaces are under 4.3 meters in height.

In addition, by the end of 2010, China will remove furnaces with capacities of less than 6,300 kilovolt-amperes from the ferrous-alloy industry and the carbide industry. In addition, by the end of 2011 it will ban furnaces with capacities of less than 400 cubic meters from the steel industry and shut down blast furnaces with less than 30 tons of steel-making capacity.

The circular also sets forth the tasks of eliminating outdated facilities in the nonferrous metals industry, light industry, and the textile industry by the end of 2011, and removing outdated facilities from the building material industry by the end of 2012.

The circular stresses that joint efforts of all the departments concerned are needed to fulfill these tasks.

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