A letter of thanks on November 25, 2003 from Beijing was an inspiration to every employee of the Jinchuan Group Ltd, one of China's leading nonferrous metal producers based in Northwest China's Gansu Province.

Sent by Beijing Shougang Metallurgical Research Institute, the letter praised the efforts made by the company in supplying a dozen "special materials" for China's first manned spaceflight, Shenzhou V, which had blasted into orbit a few weeks earlier, on October 15.

"The letter has undoubtedly inspired each of us in Jinchuan," said Ma Huzhong, an employee with 15-year experience in the company.

"We have been proud of being the biggest nickel producer in China for decades, but never expected to be connected with the glory of Shenzhou V."

Located in Jinchang , Gansu Province, the company is considered to be the city's economic driving force, contributing about 70 per cent of its gross domestic product every year, said Song Guangfu, an official with Jinchang city government.

As 90 per cent of China's nickel is produced here, Jinchang has earned the nickname "City of Nickel."

It is one of dozens of well-performing enterprises in China's vast western region, most of which are heavy industries, a success much owed to the abundant energy and natural resources there.

Another example is Jiayuguan, also a city in Gansu, pillared by its rich steel resources.

"The two cities have thrived as a result of the development of the industries," said Song.

In 1958 a 6,500-metre-long by 500- metre-wide seam of ore was found at the foot of Longshou Mountain .

Official data shows that its general ore reserves have surpassed 520 million tons, including 5.5 million tons of nickel and 3.43 million tons of copper, ranking it the third largest ore deposits in the world.

However, for a long time it was not fully explored and developed.

Ma Huzhong told China Daily that the first 22 tons of nickel was extracted in 1964, some five years after the company was founded in 1959.

After 35 years of development, the company's annual nickel production capacity reached the milestone figure of 40,000 tons in 1999.

Something of a "miracle" was achieved in the ensuing five years after China's "go west" policy was adopted.

For the 2000-04 period, Jinchuan's annual nickle production capability increased by 33,000 tons. In 2004, Jinchuan yielded 73,000 tons of nickel, ranking it fourth in the world, after Russia, Canada and Australia.

In addition, copper yield increased from 19,000 tons in 1999 to 130,000 in 2004, said Ma.

Jinchuan has gained much from its exploitation of the metal, with sales jumping from 3 billion yuan (US$370 million) in 1999 to 15 billion yuan (US$1.8 billion) in 2004, and tax payments and profits up from 330 million yuan (US$40 million) to 2.38 billion yuan (US$290 million) during the five years.

Jinchuan alone contributed one fifth of the province's industrial profit in 2004, yielding 1.2 billion yuan (US$145 million) of the total 6 billion yuan (US$730 million).

The recent rise in the unit price of nickel on the international market has brought even more rewards than expected.

But, rapid expansion of the company has proved a mixed blessing.

One of the major problems has been the high discharge of sulphur dioxide.

"Jinchuan is charged over tens of thousands yuan each year for discharging pollutants," an official surnamed Qi with the Gansu Provincial Administration for Environment Protection said.

"I saw some sky-blue particles flying in the air, and it was an irritant to my nose, when I first arrived in the city three years ago," said R.C Lao, a Canadian of Chinese origin working as an environmental expert in China.

Lao, resident project manager of the Canada-China project on cleaner production, is introducing a pollution-control technical programme to Jinchuan in a bid to cut emissions.

Under the programme, tens of thousands of tons of water resources can be saved, and the production capacity for nickel will be raised. "But how to deal with discharged pollutants tops our production agenda," said Liu Suguang, director of the air safety office of the Jinchuan Group.

(China Daily 01/17/2005 page5)