According to Luo, the major iron and steel producer will relocate its sintering plant to Qian'an, a city in neighboring Hebei Province. The facility, which is the company's No 1 pollution source, handles 6 million tons of iron ore a year.

The firm's raw material yard will also be shut down and be replaced with a metallurgy museum or a tropical botanical garden, Luo said.

Shougang's five coking furnaces will also be moved to Qian'an within five years.

Over the past few years, Shougang has faced increasing pressure to move its pollution-producing facilities out of Beijing and carry out more environment friendly practices.

The company's relocation plan, under consideration for years, is now high on the agenda after Beijing's successful bid to host the 2008 Olympic Games.

Shougang will restructure its current production - with a priority on high-tech and service sectors, real estate and overseas industry - to further strengthen its anti-pollution strategy, Luo said.

The company plans to reduce its annual steel output to 6 million tons from the current 8 million tons by the end of 2002. Stress will be placed on its high-tech sector so that it will contribute more than 50 percent of the company's total income by 2010, Luo added.

Last year, sales on steel products accounted for 45 percent of the company's total income, with the remaining 55 percent coming from sales on non-steel industries.

The company aims to cut its discharge of smoke and dust by 85.5 percent and the discharge of sulfur dioxide by 89.3 percent by 2005.

"By then, our steel production process will be completely pollution-free and the air quality around Shougang will be as good as that of the city," Luo said.

Between 1996 and 2000, Shougang spent 906 million yuan (US$110 million) on 189 pollution control projects.

Over the next five years, the company expects to spend another 1.25 billion yuan (US$152 million) on environmental protection, with an emphasis on fighting "white pollution" caused by non-degradable materials such as plastic bags and disposable food containers.

Starting in November, the company will begin to use its furnaces to melt styrofoam and take-away plastic containers. The discarded plastics take as long as 200 years to decompose under normal circumstances.