BEIJING, March 9 (Xinhua) -- Beijing Capital Iron and Steel Group Co - known as Shougang - will start work next Monday on the construction of a new plant in northern Hebei Province, the group has confirmed.

"It is time for us to begin building the infrastructure such as production lines and plants," Shougang's board chairman Zhu Jimin said at the ongoing National People's Congress.

The new company, designed to produce 9.75 million tons of steel every year, will be put into operation by the end of next year, hesaid.

He also said all of the new company's assets would be injected into its listed unit by 2010.

Widely accused of playing a major role in polluting Beijing's air, the group started to relocate the steel plant in 2005 to Caofeidian, an island between Tanggu New Port and Qinhuangdao Port, 225 km southeast of Beijing and 85 km south of Tangshan in Hebei.

According to a plan approved in 2005 by the State Council, China's Cabinet, the steel company is expected to move all its Beijing-based production facilities to Caofeidian by 2010.

Only the headquarters, research and development sections, sales departments and logistical center will remain in the capital.

Shougang is expected to cease production during the Olympic Games period. It has also promised its new facility will use new technologies to reduce environmental damage.

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