Environmental Regulators Order China Hongqiao to Close Over Half its Aluminium Capacity: SCMP

Environmental Regulators Order China Hongqiao to Close Over Half its Aluminium Capacity: SCMP

China Hongqiao found itself on the wrong side of the government of the People’s Republic of China this weekend due to alleged environmental violations at its plant in Shandong province. Over half of the firm’s capacity has been ordered to close as a result.

According to reports, regulators from Binzhou have ordered Hongqiao to suspend production of 3.61 million metric tons per annum of capacity due to “failure to obtain environmental protection approvals before building and operating the facilities.” Hongqiao was also ordered to halt construction on a plant with a planned nameplate capacity of 1.32 million metric tons due to the government’s allegation that the firm failed to obtain appropriate environmental impact assessment approval prior to making changes to a downstream plant.

In addition to the above, Hongqiao was also ordered to stop construction of a 4,800 mW power plant, close down a 1,320 mW power and heat co-generation plant, and an alumina refinery of unspecified capacity due to lack of environmental approvals.

The above sanctions were outlined in eleven penalty announcements posted to the agency’s website between late May and mid-September of this year. The announcements also disclosed the fact that Hongqiao is liable for an undisclosed amount of fines.

According to Hongqiao’s head of finance Christine Wong, the company did not announce the agency’s orders to shutter certain of the firm’s facilities because they simply did not believe it was necessary.

“We know that all of these issues are a result of a tightening environmental protection requirements from the government, which we can and will meet,” she told the South China Morning Post in an interview on the subject. She went on to say that Hongqiao hasn’t paid fines nor stopped production at the facilities subject to sanction.

“There is no need to make an announcement,” she went on, “if we have to pay any fine or stop production, we will certainly make an announcement.”

To bolster her argument she produced an order by the Shandong government listing over seven thousand projects in the province built without proper permits. Wong claimed that Hongqiao’s operations in question fall into a government category that requires only reductions in carbon emissions to bring it into compliance with future standards, but the article states that she put forth no supporting documentation that Hongqiao’s sanctioned capacity was part of this category.

Wong went on to say that the rectification work has already been completed, and that the facilities in question needed only an official inspection to put the matter to rest.

Hongqiao is no stranger to environmental enforcements. Two years ago the firm was ordered by the city government to bring over a dozen power generating units into compliance with emissions regulations and was fined for failing to carry out mandated environmental impact assessments at ten aluminium smelting facilities.