China Ready to Start Laying Off Coal and Steel Workers

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South Korea’s POSCO announced a deal to build a $1.6 billion steel mill in Iran today and China is preparing to finally start layoffs of steel and coal workers.

Chinese Coal and Steel Layoffs

China expects to lay off 1.8 million workers in the coal and steel sectors as part of its efforts to reduce industrial overcapacity, an official at the Human Resources and Social Security Ministry said on Monday.

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Yin Weimin, minister of human resources and social security, said capacity cuts will lead to some layoffs in 2016, but added that he was confident of keeping employment stable this year despite downward pressure on the economy.

For China’s stability-obsessed government, keeping a lid on unemployment and any possible unrest that may follow has been a top priority.

The central government will allocate 100 billion yuan ($15.27 billion) over two years to relocate workers laid off as a result of China’s efforts to curb overcapacity, officials said last week.

POSCO to Build Steel Mill in Iran

South Korean steelmaker POSCO said on Monday that it has signed an initial agreement to help build a $1.6 billion steel mill in Iran, looking to tap rising demand in the recently unsanctioned Middle Eastern country as other markets falter.

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