Kailuan Group positioned to replace Hebei Steel unit in Caofeidian project
Shanghai. March 3. INTERFAX-CHINA - State-owned coal company Kailuan Group may replace a subsidiary of Hebei Iron Steel Group (Hebei Steel Group) in the Caofeidian steel project, state media reported March 3.
The Hebei Province-based plant broke ground in 2008 and is run by Shougang Jintang United Iron Steel Co. Ltd., a joint venture (JV) set up between Shoudu Iron Steel Group (Shougang) and Hebei Steel Group subsidiary Tangshan Steel Group (Tanggang), according to previous Interfax reports.
Tangang is pulling out due to a shortage of funding, an anonymous source with the Hebei Steel Group said in a report on financial news portal Yicai.com.
Shougang had hoped to increase its 51 percent stake in the JV with the departure of Tanggang but was unable to raise sufficient funds.
The Hebei Steel Group source said that Kailuan Group is a likely candidate to assume Tanggang's position.
Total costs of the plant reached RMB 67.73 billion ($10.31 billion). It has a designed steel production capacity of 9.7 million tons per annum.
Kailuan Group is based in the city of Tangshan, Hebei Province. In 2010 it generated RMB 27.3 billion ($4.16 billion) in revenue from coal sales, RMB 11 billion ($1.67 billion) from coal chemical sales and RMB 45 billion ($6.85 billion) from its logistics sector.