China’s Baoshan Iron & Steel Co Ltd (Baosteel) is to launch a $10.78bn project in Zhanjiang, Guangdong province, later this year.

Zhanjiang is a natural deep-water port and the nearest in China to receive iron ore imported from Australian mines. The expansion plan was discussed for quite a few years, but overcapacity in the steel industry and the global recession hampered the progress of Baosteel's project.

Baosteel set up a joint venture with Guangzhou Iron & Steel Co Ltd (Guangzhou Iron) and SGIS Songshan Co Ltd in 2008 for the Zhanjiang project.

The project is designed with an annual production capacity of 5Mt/y of high-end steel and will expand to 10Mt/y in the future.