BAOSTEEL Group Corp has started commercial production of its environmentally-friendly Corex iron-making plant, the first of its kind in China and the world's largest.

The company said it had plans to build another plant with the same capacity.

Corex is a smelting process which gasifies non-coking coal to produce pig iron. It can reduce pollution and lower costs. Baosteel said sulfur dioxide emission in its new Corex facility was only 4.9 percent of what a conventional blast furnace would produce.

The Baosteel facility can produce 1.5 million tons of pig iron a year. The world's previous capacity record for a Corex facility was 750,000 tons a year, according to Baosteel, which started commercial production on Saturday.

Baosteel, the nation's largest steel mill, said it would double the capacity by building another Corex facility of the same size. The National Development and Reform Commission has approved construction of the second Corex plant, but Baosteel didn't give a time frame for it.

The launch of the Corex plant is part of the relocation project of Pudong Iron & Steel, a Baosteel subsidiary.

Pudong Steel was rebuilt in Luojing in Baoshan District, home to Baosteel's key production base. It was removed from its original site along the Huangpu River to make way for the 2010 World Expo.