BEIJING - Beijing Shougang Group, one of China's leading steel manufacturers and also the city's major polluter, extinguished the fire in one of its four blast furnaces on Saturday, as part of its pledge to cut its normal output by half during the Olympics.

The fire was quenched in the No. 4 blast furnace, which had been in operation for more than 35 years.

"Following the No. 4 furnace, operation of the No. 2 blast furnace and two sintering machines will cease by the end of March this year," said Li Yan, head of the production department.

"During the third quarter when the Olympic Games are held, we will suspend the operation of the No. 3 blast furnace and two sintering machines while only maintaining the work of the No. 1 blast furnace. During that period, the monthly production output will be 200,000 tons, less that 30 percent of the normal output," said Li.

Li said all the production in Beijing plants will be stopped by 2010.

Shougang plans to reduce emissions of sulfur dioxide, soot and dust by 49.18 percent, 50.32 percent and 49.22 percent respectively in 2008, compared with that of 2007. All the pollutants are expected to plunge by more than 70 percent during the Olympics.

"The company will suffer an economic loss of 2.6 billion yuan (350 million U.S. dollars) from production reduction," said Zhu Jimin, president of Shougang.

"However, we can make it up through producing high value-added and high-tech products, and raising work efficiency."

"Cutting production is the first step," said Liao Hongqiang, chief engineer of the environmental protection department of Shougang. "We have been increasing investment in environmental protection to ensure a stable improvement of Beijing's air quality during the Olympics."

The Chinese government promised to make Beijing an "ecological city" with "green hills, clear water, grass and blue skies" after it won the 2008 Olympic bid.

As one of the efforts made by the Chinese government to improve Beijing's air quality, Shougang Group began in 2005 to relocate its facilities to Hebei Province, some 200 km east of Beijing. The new plant will be completed in 2010.

After the removal, the old factory site will be developed into a complex for tourism and entertainment, cultural business, commercial and residential compound with an expanded area of 856 hectares from 707 hectares, according to the blueprint.

Some landmark industrial constructions and facilities will be remained as a record for the "steel city", said Zhu.

The detailed plan for the reconstruction is yet to be worked out, but it will be an effective way to relocate excessive employees, said Zhu.

The steel maker will have to relocate 64,700 employees between 2005 to 2010, including more than 8,400 who have no work to do after Saturday's blast furnace shut-down.

The group plans to move 80 percent of the workers to its new plants, some may choose early retirement, others have to seek jobs on their own after receiving occupational trainings.