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 How Du Shuanghua Engineered The Steel Titan Shandong Iron and Steel Group

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Among the largest private steel companies in China is Rizhao Steel Holding. The Shandong Iron & Steel Group holds the majority ownership in Rizhao Iron & Steel. In 2019, Rizhao Steel produced *14 million tonnes (mt) of liquid steel, making it the 26th largest steelmaker in the world. Rizhao Steel sold 67% of its ownership stake to Shandong Steel in 2009.

Through this process, a state-owned company called Shandong Iron and Steel Group was formed. Combined with Laiwu Steel Group Corp, the company became China’s sixth- and seventh-largest steel producer. Shandong owns all three companies.

In October 2010, Du Shuanghua sold 33% of Rizhao to Shandong. This Major move was followed up with Primetals signing two more contracts in 2014, adding to the 15-year contract that was signed between Rizhao Steel and Mount Gibson in 2007.

Mount Gibson produces 5 million tons of iron ore annually. The Take over of Rizhao Iron & Steel by Shandong Steel Group in 2009 raised concerns about ‘creeping renationalization’ at the time. One of China’s richest men, Du Shuanghua, owned the majority of Rizhao Steel prior to the acquisition. The original 2009 plan called for a merger between Rizhao Steel and Shandong Iron & Steel, followed by a restructuring.

Shandong Steel Group would own 67% of the restructured company, and Du Shuanghua 33%. In 2010, an arbitrator determined that Rizhao failed to fulfill its obligations under the 2007 iron ore supply agreement with Mount Gibson, resulting in a $114 million loss for Mount Gibson. As of 2020, Rizhao Steel will achieve a steelmaking capacity of 17 mt / year with an expansion project beginning in 2020. By 2021, Rizhao had acquired a 54% stake in Minmetals Yingkou, giving it 100% ownership.

Shandong Iron and Steel, a wholly state-owned enterprise with a registered capital of 10 billion yuan ($1.4 billion), is a wholly state-owned enterprise.

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