A special group sent by the StateCouncil to investigate an iron project in east China's Jiangsu Province has found illegal land use of 436 hectares and loans of billions of yuan.

The project has been suspended after being charged with illegaluse of land, obtaining loans through forgery and negatively affecting environmental protection, sources with the provincial government said.

The preliminary investigation shows that the construction of the iron project, located in Changzhou city and Zhenjiang city of the province, is a serious incident involving malfeasant activities of local officials and illegal operation of enterprises,sources with the group said.

The investigating group consists of officials from the State Development and Reforming Commission, Supervision Ministry, Land and Resources Ministry, People's Bank of China, State Environmental Protection Administration and other related central government departments.

The iron project, with an expected production capacity of 8.4 million tons and total investment of 10.5 billion yuan (1.27 billion US dollars), was initialed by Jiangsu Tieben Iron Co., Ltdin 2002 and was put in construction in June of 2003.

The investigation shows that the project illegally occupied land of 6,541 mu (436 hectares) including farmland of 4585 mu (310hectares), and began construction without approval of the local environmental protection department. It also got a large amount ofloans from banks by forging documents.

The investigation also shows that local officials have been found malfeasant in the illegal issues.

The Supervision Ministry is working with related departments toconfirm which officials should be responsible for the illegal project, whose names will be publicized and who will be punished, the group said.

Considering the rapid loss of its precious farmland, the Chinese government has vowed to strengthen its efforts to crack down on crimes involving land and resources, including officials' profiteering from illegal land projects and approving projects illegally reducing cropland.

In 2003, China's land acreage used for industrial development increased by 427,800 hectares, indicating a rise of 80,000 hectares over the annual average of such land use in the past six years since 1997. Of the total, 229,133 hectares were farmland, a rise of 17 percent over the previous year.

Meanwhile, statistics from the Ministry of Land and Resources show that in 2003 alone, China's farmland acreage decreased by 2.67 million hectares to 123.4 million hectares.

Source: Xinhua