China's leading steel maker to set up plant in South Africa

China's largest steel maker Hebei Iron & Steel Group is planning to set up a high-volume joint venture in South Africa.

The first phase of the project with a three-million-tonne capacity will start construction in 2015 and be put into use in 2017. The second phase with two million tonnes of capacity will start production in 2019. The project is expecting a total annual capacity of five million tonnes upon completion.

Hebei Iron & Steel Group, the Industrial Development Corporation (IDC) of South Africa and the China-Africa Development Fund, signed the cooperation memorandum for the project on Wednesday in Beijing.

Hebei Iron & Steel Group will have a 51-percent stake in the joint venture, a manager of the company told Xinhua, who declined to reveal the total investment for the project.

It is an important move for the group to implement the country's industrial restructuring and the "go abroad" strategy of the iron and steel sector, said Yu Yong, president of Hebei Iron & Steel Group.

Geoffrey Qhena, IDC's chief executive officer, said the project will help lower the high prices of steel products, boost downstream industries of the steel sector in South Africa and bring more jobs.

Hebei Iron and Steel Group, acquired a 74.5 percent stake in a South African mining company in August 2013.

Heavily-polluted Hebei province, which neighbors Beijing, faces the tough task of cutting its excessive iron and steel capacities in line with the country's economic restructuring and air pollution treatment efforts.