"The Heshan government respects the public's opinion and will not apply for approval for the project," Wu Yuxiong, the mayor of Heshan, the city in Guangdong province where the facility was to be located, was quoted as saying Friday by China's official news agency Xinhua.
Hundreds of people attended Friday's protest in Jiangmen, which lies downstream from the proposed facility, the Financial Times reports. It was organized mostly via Twitter-like microblogging site Sina Weibo and text messaging services, although censors had attempted to delete posts about the planned demonstration.
"Not-in-my-backyard" activism is on the rise in China, with protests typically organized by middle class residents against a project they consider environmentally risky.
The plant, about 60 miles from Hong Kong, was to have a capacity for 1,000 tons of uranium, featuring facilities for uranium conversion, enrichment and manufacturing of nuclear fuel equipment and would have supplied fuel to nuclear power plants in Dayawan, Taishan and Yangjiang, says the Xinhua report.
Zhao Yamin, a researcher with the Ministry of Environmental Protection, told Xinhua the nuclear fuel would not have produced much radiation and the manufacturing process will not create pollution.
The facility was to be built by China's two largest state-owned nuclear companies, China National Nuclear Corporation and China Guangdong Nuclear Power Corp, and would have been the first such plant in China's southeastern coastal area.
After Japan's Fukushima nuclear power plant disaster in March 2011, Beijing suspended approvals for new nuclear plants for 18 months before resuming its nuclear program with new safeguards in place.
China in a white paper last October said it had 15 nuclear power-generating units in operation with a total installed capacity of 12.54 gigawatts and another 30 units under construction that will add another 32.81 gigawatts.
The National Development and Reform Commission, China's economic planner, earlier this year said that nuclear power totaling 3.24 gigawatts would be added in 2013.
Chi Xuefeng, a nuclear expert, said Heshan was chosen as a site because a number of nuclear power plants are near the city and it has stable geological conditions, Xinhua reports.
The 565-acre proposed site for the nuclear fuel processing facility would have involved the relocation of 160 villagers, reports the South China Morning Post.
The report said that an up-front payment was to be distributed among the families, who were also expected to receive construction subsidies and farmland compensation and be moved to a new site the same size as their village.
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