According to Mr Cui Chen secretary of CPC committee of Baotou Steel, Baosteel, Baotou Steel and the local government haven’t made an agreement on the regrouping of Baotou Steel yet. The three sides are still around the bargaining table.

 

Mr Cui the former chairman of Baotou Steel, descended to the second chief of the mill in June 2009. It’s rumored that Mr Cui demotion might relate to his supportive altitude on Baosteel regrouping of Baotou Steel.

 

According to what happened in the past, Baosteel might face difficulties in regrouping Baotou Steel. The history tells that it is because Basteel got Xinjiang government support that Baosteel succeeded in regrouping Bayi Steel. But, Baosteel failed in regrouping Jinan Steel, Handan Steel and Maanshan Steel as local governments showed intention to strengthen up their steel industry independently.

 

The secretary reveals that “The investor, the government and Baotou Steel are negotiating the case. The three sides didn’t reach an agreement in the two and half years after July 2007 when Baosteel and Boutou Steel signed a strategic alliance framework agreement.”

 

He introduces Baotou Steel is the largest state owned steelmaker of Inner Mongolia and owns huge resources of iron ore and rare earth. The steelmaker is able to produce 10 million tonnes of crude steel per annum at present.

 

Mr Cui said “Baotou Steel’s export still shows decline, compared with the time before the financial crisis. However, the mill isn’t likely to have much pressure from iron ore price rise, since ores from its own mines can meet some 50% of the demand. It seems that Baotou Steel is expected to have a bright future, even if the price of iron ore will go up.”

 

Sourced from MySteel.net