Japan's Kobe Steel, embroiled in a data falsification scandal in its metals business, was dealt a fresh blow as a local government suspended an environmental assessment of its plans to build a large coal-fired plant on the site of an old steelworks.

The government of Hyogo in western Japan, where Kobe Steel plans to build the 1 300 MW coal station, delayed a scheduled meeting on Monday to discuss its data, Hiroo Iino, group leader in the prefecture's environmental assessment office, told Reuters by telephone.

A public hearing set for Friday has also been postponed, he said. No date has been set to resume the process.
"As Kobe Steel has announced it has falsified data, the credibility of the company is being questioned and its environmental assessment data has been put in doubt," Iino said.

Kobe Steel's power generation business is one of three growth pillars, along with materials and machinery, and is seen by the company as a source of steady income to help offset bumpy earnings from other businesses such as steel and aluminium.
Japan's retail electricity market was opened up to full competition last year, giving independent power producers like Kobe Steel more opportunities to sell power.
The country's third-biggest steelmaker plans to build two 650 MW coal-fired units at its old steelworks in the city of Kobe, where it is headquartered. It plans to have the units operational by 2022 and 2023.

Residential groups had objected to the project due to concerns over greenhouse gas emissions and the environmental impact, before the company's data tampering scandal, local media have reported.
Japan is the only major industrialized economy with a programme to build coal-fired power stations.
The Hyogo prefecture does not have the power to stop the project, but its environmental assessment could weigh on an approval from central government, Iino said.
Some of the station's application data relating to air and water quality was provided by Kobe Steel's Kobelco Research Institute, Iino said, one of the company's subsidiaries caught up in the data scandal.

In a series of revelations, Kobe Steel said it falsified data on product quality and specifications.