Those in charge of an iron project in east China's Jiangsu Province that is illegally using 436 hectares of land and loans of billions of yuan will be punished, according to a State Council executive meeting chaired by Premier Wen Jiabao Wednesday.

A special group has been sent by the State Council to investigate the construction of the iron project, located in Changzhou city and Yangzhong city of the province.

The iron project, with an expected production capacity of 8.4 million tons and total investment of 10.6 billion yuan (1.27 billion US dollars), was initiated by Jiangsu Tieben Iron Co., Ltd in 2002 and was put in construction in June of 2003.

The investigation showed that the project illegally occupied land of 6,541 mu (436 hectares), and began construction without approval of the local environmental protection department.

The project also got a large amount of loans from banks by forging documents, and local officials have been found malfeasant in the illegal actions, according to the report.

The meeting required Jiangsu provincial and financial supervision departments to punish severely local officials in relevant governmental and financial organizations, and judicial departments are investigating the illegal and criminal activities by the Tieben Iron Company.

The meeting underscored the strict supervision over the land market so as to make reasonable use of precious land resources in China and protect the shrinking farmland.

Considering the rapid loss of its valuable 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.