China Metallurgical Group Corporation (MCC), the country's leading mining and smelting operator, and Baotou Iron and Steel Group (Baogang) plan to invest 8 billion yuan (US$1.17 billion) in a polysilicon-manufacturing project, taking advantage of the consolidation of their respective industries.

The two sides signed an agreement last Thursday but details of the project are still being worked out, China Business Journal reported. The project, if completed, will produce 5,000 tons of polysilicon a year.

The price of polysilicon, a major material used in producing solar panels, has dipped to 1,000 yuan per ton from 5,000 yuan per ton earlier this year while capability increased in the country, a development that experts say indicates an imminent industry consolidation.

Yang Yu'an, an industry expert, was quoted by Chinese Business Journal as saying that MCC has been involved in the sector for years but that Baogang will take the initiative for strategic planning.

(China Daily December 15, 2008)