China is planning a major overhaul of its iron and steel industries that will concentrate production among top steel makers like Shanghai's Baosteel Group, state media reported Monday.

The plan, three years in the making, is aimed at curbing excessive investment, reducing waste of energy and cutting pollution, the state-run newspaper China Daily reported.

It said the State Council, China's cabinet, approved the plan last week but adjustments were being made based on feedback from various government departments, with a final version due within weeks.

China is the world's largest steel maker, turning out 270 million tons of steel in 2004, but much of its production is by small manufacturers whose output is of inferior quality. Output this year is forecast to be more than 300 million tons.

The plan calls for the country's 10 biggest manufacturers to increase their share of total output to 50 percent by 2010 and to 70 percent by 2020.

Last year, the 15 biggest steel companies accounted for 45 percent of total production, it said.

The report said many smaller steel factories would likely be shut down or acquired by larger companies, though some might get upgraded technology and equipment.

The draft policy includes new standards for production, efficiency, technology, energy consumption and environmental protection, it said. Other details were not given, but the plan reportedly covers all aspects of the industry, including management and government policy.

The plan was prompted by concerns over soaring investment in steel factories and excessive pollution.

China's biggest steelmaker, state-controlled Baoshan Iron & Steel, recently announced a plan to raise 25 billion yuan (US$3 billion; Â？2.3 billion) to acquire steel mills, raw materials, logistics and trading company assets from parent company, Baosteel Group. 
 

Source: Yahoo! Asia News