China's Hebei vows more heavy industry capacity cuts by 2020

FILE PHOTO: Chinese national flags are flying near a steel factory in Wu'an, Hebei province, China, February 23, 2017. REUTERS/Thomas Peter/File Photo

SHANGHAI (Reuters) - The smog-prone northern Chinese province of Hebei on Thursday said it plans to slash steel capacity by 50 percent in some of its major cities by 2020, and will also shut coal mines, coking plants and cement factories to upgrade its industrial economy.

Hebei, a major source of the air pollution drifting over neighboring Beijing, produces about a quarter of the country’s total steel output, and it has been on the front line in China’s ‘war on pollution’, now in its fifth year.

According to an article published by the Hebei provincial environmental bureau, the province will aim to cut a total of around 40 million tonnes of steel smelting capacity from 2018 to 2020.

It aims to have just 60 steel enterprises by the end of the decade, with 90 percent of capacity controlled by its top 15 firms, it said, citing senior government officials at a meeting on Wednesday.

The cities of Baoding, Langfang and Zhangjiakou - a host city for the 2022 Winter Olympics - will shut all their steel mills by 2020. Chengde and Qinhuangdao will close half. Chengde, Zhangjiakou and Baoding will also eliminate all their coal mines by the end of 2020.

Hebei will also shut another 5 million tonnes of annual cement capacity, 10 million tonnes of coking capacity and 1.5 gigawatts of thermal power capacity by 2020, the provincial Communist Party secretary Wang Dongfeng was quoted as saying.

Hebei closed more than 60 million tonnes of steel capacity and slashed coal use by 40 million tonnes over the 2013-2017 period, though critics complained that some of the shuttered mills were already bankrupt “zombie” firms.

The province had 286 million tonnes of annual steel capacity in 2013, and it is aiming to bring that figure down to 200 million tonnes by the end of the decade.

Reporting by David Stanway; Editing by Joseph Radford