Zijin Mining to extend probe into waste leak
Updated: 2010-07-15 07:07
(HK Edition)
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Zijin Mining Group Co, the largest gold producer on the mainland, said that its explanation for an acid spill that polluted a river and poisoned 1,890 tons of fish in Fujian province was incomplete, and that it will extend an investigation.
"The accident reflects some deeper issues about the company," Zhao Jugang, a spokesman, said by phone from Shanghang Wednesday. "We earlier said that the accident was a result of heavy rains, but it's not just that. We think closure of the plant and an investigation are very necessary."
Zijin, which had initially blamed rains for the leakage near Shanghang county, where about half a million people live, delayed disclosure of the incident for nine days. Listed companies should disclose complete, accurate information on a timely basis, China's environmental protection ministry said in a statement dated July 8.
"The company is under huge pressure from the media and investors for the disclosure delay, and luckily for them, there has been no death or poisoning of human beings," said Owen Liang, a Shenzhen-based analyst at Guotai Junan Securities Co. "Some small investors complained via the Internet that Zijin's disclosure delay has caused them to lose a lot of money, and they wanted compensation."
Zijin's share price rebounded 1.8 percent Wednesday after dropping 12 percent Tuesday to the lowest level in more than 15 months in Hong Kong trading.
The Chinese government may make an example of Zijin as it seeks to highlight a more serious stance toward environmental issues, Timothy Bush from Bank of America Corp's Merrill Lynch said July 12.
Waste water containing acidic copper seeped into the Ting River on July 3, the company said in a filing to the Hong Kong exchange Monday. Copper production at Zijinshan mine accounts for about 15 percent of its annual output of the metal, according to Guotai.
"The board of directors decided not to make the accident public on July 3 on the consideration that we didn't want to cause a panic to local residents without a clear understanding of the leakage impact," Zhao said. "We discovered the reason with the assistance of local authorities on July 6 and, after the weekend, we made the announcement."
The company, which closed its copper smelter at Zijinshan after the accident, said it will improve emergency and contingency plans to prevent future pollution.
The plant produces 12,800 tons of copper a year, and will only reopen after checks by environmental authorities, Zhao said. Products are normally sold on the spot market, he said.
About 1.89 million kilograms of fish in the Mianhuatan reservoir were found dead or poisoned, Xinhua News Agency said on July 12.
Bloomberg News
(HK Edition 07/15/2010 page3)