Beijing Shougang Group, one of China's leading steel makers and the capital's major polluter, is fulfilling its commitment to cut output and pollution by 70 percent for the Olympic Games, a company source said Friday.

The Beijing plants of the group have slashed monthly production to 200,000 tonnes in the third quarter, said the group's president Zhu Jimin. "This is about 29 percent of our normal output."

Through June, Shougang had extinguished the fires in three of its four blast furnaces at its Beijing plants.

These plants, which formerly produced 8.2 million tonnes of steel a year, would almost halve their output this year to 4.2 million tonnes, before all their Beijing production was stopped by 2010.

This year's output cut will put the group's Beijing plants in the red and slash the group's annual profits by at least 2 billion yuan ($285 million), Zhu said.

He said the losses would hopefully be offset by the group's new steel projects, notably its new plant in Caofeidian, an islet in the neighboring Hebei province that will turn out 4.85 million tonnes of steel a year after its first phase starts operation in October. In two years, the new plant will be producing up to 10 million tonnes a year.

Meanwhile, Shougang's new cold rolling mill in Shunyi District in northeastern Beijing is producing 1.5 million tons a year.

"We'll also exploit our advantages in other sectors," Zhu said. These will include tourism, entertainment and other tertiary industries.

After the relocation, the old factory site in western Beijing will be developed into a complex for tourism and entertainment, cultural business, and commercial and residential compound with an expanded area of 856 hectares from 707 hectares.

"We'll be responsible for our shareholders and will protect their practical and long-term interests," Zhu said.

Shougang's efforts will hopefully pay off with pollution cuts, as it plans to reduce emission of sulfur dioxide, soot and dust by 49.18 percent, 50.32 percent and 49.22 percent, respectively, this year.

Further output cuts in the third quarter will hopefully bring down emissions of the three major pollutants by 70 percent compared with last year, Zhu added.

Founded in 1919, Shougang is widely considered the flagship of China's heavy industry. With its production base just 17 km west of Tian'anmen Square in central Beijing, it has long been blamed for causing heavy pollution as the plant's chimneys belch out thick clouds of smoke.

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 about 200 km east of Beijing.

Shougang has promised its new facility would use advanced technologies to reduce environmental impact.