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The State Environmental Protection Administration (SEPA), the nation's environment watchdog, recently ordered administrative sanctions slapped on the Shanxi Zhenxing Group. They are alleged to have committed numerous legal violations.

The environment watchdog issued their administrative sanctions on July 24, charging that the company should discontinue building two 200,000 kw thermal power generating sets. Without environmental approval they may not resume construction in the future.

An insider from the environment watchdog agency told the China Business News that the Zhenxing Group began unapproved construction of the two thermal power-generating sets in June 2004. Another unauthorized project of 100kt/a electrolytic aluminum which begun in 1999 and went into operation in April 2002 was uncovered, compounding the existing problems. Residents around the factory reported to the SEPA that the factory has greatly jeopardized not only the environment but also public health. Weak protective measures, combined with unmonitored fluorine discharges, have been reported.

In January 2002 and February 2006 the SEPA sent two notices to the Zhenxing Group, ordering it to halt construction in a bid to address the issue. But as of July 2007, of the 82 illicit projects listed by the EPA the Zhenxing Group's projects were still listed. The Zhenxing Group had continued their projects despite the agency's warnings.

On June 12, the State Environmental Protection Administration imposed administrative sanctions ordering the project halted. The company could have made an application for an environmental appraisal, but the law permits appeals only within a seven-day grace period of the date they are issued.

The Zhenxing Group is part of the Hejin Aluminum Zone, located at the junction of the Yellow River and the Fenhe River in southwest Shanxi Province. A sizeable, privately owned but diverse enterprise, the Zhenxing Group mainly processes coal to produce electricity and aluminum, among other things.

According to public statistics, with an investment of 6.8 billion yuan, the Zhenxing Group has achieved production capability of 1.2 million tons of raw coal and 120,000 tons of electrolytic aluminum. With an installed capacity of 120,000 kw, the group was once named as a "national large-sized private-owned enterprise" and "the highest yielding privately-owned enterprise."

Electrolytic aluminum is the foundation of the group. The two planned 200,000 kw thermal power generating sets would facilitate the production of electrolytic aluminum. Dedicated to making itself a conglomerate of diversified production, the group's goal is an estimated amount of profits and taxes of 10 billion yuan around 2010. In order to bolster the huge production, the group is contemplating a technological update. Phase Two would be two 50,000 kw thermal power generating sets; Phase Three would be two 200,000 kw thermal power generating sets, with an installed capacity capable of achieving 2.4 million kw in the near future.

Zhu Xingxiang, an official from the State Environmental Protection Administration, told China Business News that some power plants still start projects before obtaining official approval. Even worse, some official government departments have compromised on approval standards. Surveys at both the provincial and municipal levels have revealed only 30 percent to 40 percent of township enterprises have acted in ways adhering to the appraisals regarding unsatisfactory environmental situations.

(China.org.cn by He Shan, July 30, 2007)