Like Chairman Zhu Jimin, most of the staff in Shougang see the relocation as an opportunity for the steelmaker to upgrade its technology and optimize the product mix.

With a total investment of 67.7 billion yuan, Shougang has launched Shougang Jingtang Iron and Steel Corporation (SJISC) with Tangshan Iron and Steel Group. The first phase of the new project, scheduled to start operation on Oct 18, is projected to produce 4.85 million tons of steel.

The corporation is expected to make 9.7 million tons of steel, 8.98 million tons of iron and 9.13 million tons of steel products per year when the project is finished by 2010.

"The 5,500 cu m blast furnace, the largest in China, will adopt state-of-the-art technologies to ensure the lowest level of emissions so that the pollution is not merely transferred (from Beijing) to Tangshan," says Qiang Wei, vice-general manager of SJISC.

An evaluation by the country's environment watchdog shows the new plant will ensure 99.5 percent of the solid waste and 97.5 percent of wastewater are recycled.

Caofeidian, located offshore to the south of Tangshan, was a belt-like alluvial isle formed more than 5,000 years ago. Hebei provincial government started the largest land-reclaiming project ever in China in the early 1990s, aiming to turn the natural harbor into a deepwater port.

According to geological surveys, 500 m offshore, the depth of the water could reach 25 m while the trough in front of the island, the lowest point of the Bohai Sea, could be as deep as 36 m, allowing for the construction of a 300,000-ton terminal without the need to dredge a channel.

The rich port resources will help cut logistics costs remarkably, as SJISC, the new joint venture, will have its own terminal for finished products.

"The terminal for finished products is located only about 500 m from our cold rolling mill," says Yang Chunhua, director of the transportation department at SJISC, "and the terminals for iron ore are not far away. It will help save at least 170 yuan in logistics costs on every ton of steel produced."

The spokesman refuses to reveal the joint venture's long-term plan as the company is focusing on the relocation and construction of the new furnace.

But there is still some 20 sq km of vacant space around it - enough for the rebirth of a world-class steelmaker with the capacity to satisfy the huge demand resulting from North China's rapid urbanization.