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China Metals-Nonferrous industry gears up for Y2K

By Nailene Chou Wiest


SHANGHAI, June 21 (Reuters) - China will hold nonferrous metals companies accountable for economic losses due to failure to comply with Y2K guidelines, officials and industry sources said on Monday.

A set of guidelines on ensuring "security and functioning of technology" was issued after officials of the State Bureau of Non-ferrous Metals Industries (SBNMI) met with major producers on June 11, an SBNMI official said.

"It is up to the enterprises to implement the guidelines and face the consequences," the official said.

The State Bureau, under the policy of separating the state and the enterprises, had no authority to order compliance, he said.

Top managers at state-owned non-ferrous metals companies were told they would be putting their careers on the line if Y2K negligence damaged plant and equipment, the official said.

"The state has made serious investments in the non-ferrous metals sector," he said. "Plant managers must do everything in their power to protect those valuable assets."

Among the largest 500 state-owned enterprises, 28 are non-ferrous metals companies, he said.

Industry sources said Y2K compliance mainly affected computerised production control process.

"Many state owned producers underwent large-scale expansions and automated their production processes in the past 10 years," an official of a major copper producer said.

"The flush-out of the millennium computer bug is a major undertaking."

Some companies were spurred into action in March after China's securities industry simulated trading over the Chinese New Year holiday recess, he said.

"We went through mathematical models and changed not only softwares but also some hardwares," the company official said.

The cost was running to the tune of 600,000 to 800,000 yuan ($72,500 to $96,000), he said.

An official at an aluminium producer said the likelihood of Y2K disruption was greater in processing than in smelting, although a smelter problem could severely damage pipes and take months to repair.

"We do what we can, including asking for advice from foreign experts," he said.

Industry sources said the burden of inoculating metal producers and processors against the millennium computer bugs could be particularly onerous for some of the struggling state enterprises.

"Company officials are in quandary," an analyst said. "They can ill afford to allocate the scarce resources to comply with the guidelines, but if they don't they may be losing their jobs, or even ending up in jails, if something goes wrong."

($1=8.28 yuan)

06:06 06-21-99