The construction of the 69.6 billion yuan ($10.93 billion) Baosteel Zhanjiang Iron & Steel Co project is under way as planned, said a person with the Zhanjiang city government on Monday.

The person, who refused to be identified, dismissed media reports last week that the huge project in Zhanjiang, Guangdong province, came to a stop because of over capacity in China's iron and steel industry.

An unidentified person with the media department of the Shanghai-based Baosteel Group Corp said the Zhanjiang project is in its preparatory stages, which is a normal process, reported International Finance News.

A person with the South China operation of Baosteel said the Zhanjiang project is progressing according to the plan.

Construction started on May 31. The plant is expected to go into operation in 2015. It is designed to turn out 9.2 million tons of iron and 10 million tons of steel annually.

liwenfang@chinadaily.com.cn