China's Yunnan province starts safety checks on metals plants

[BEIJING] China's south-western Yunnan province said on Tuesday it is launching safety inspections on iron, steel and aluminium plants as part of a crackdown on outdated capacity.

The Production Safety Supervision and Administration Department of Yunnan Province said in a notice on its website that it would start the checks from Sept 11, after first drawing up a list of local producers.

Those that do not pass the tests will have to make necessary improvements by the end of December or face closure, according to the notice.

The checks by Yunnan are separate from the national Ministry of Environmental Protection inspections that have roiled metals markets in recent months amid expectations of cuts to production capacity and tighter supply.

Yunnan has aluminium smelting capacity of around 1.7 million tonnes per year, compared with China's total of just over 45 million tonnes per year, according to consultancy CRU.

Nearly all of Yunnan's capacity is held by provincial government-controlled Yunnan Aluminium.

In March, Yunnan province said it planned to close 500,000 tonnes of annual steelmaking capacity this year.

REUTERS