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Message: Fujian govt. to charge Zijin Mining, local officials over toxic leak
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Fujian govt. to charge Zijin Mining, local officials over toxic leak
Updated: 18 Jul 2010
Heavy rain broke a plastic barrier in a waste pit, allowing water containing copper acid to pollute the Ting River via an illegally built drain, Shanghang officials said July 15.
China's Fujian province will take legal action against government officials and executives of Zijin Mining Group Co., the country's largest gold producer, accountable for a toxic leak from a copper mine, state-run Xinhua News Agency said.
Police detained three Zijin managers on July 15 after waste water from the plant poisoned 1,890 tons of fish at a waterway near Shanghang county, home to half a million people. County chief Qiu Heqing and top environmental official Chen Junan were fired and two other officials were ordered to resign, Xinhua report yesterday.
Operations at the copper plant must remain halted until it meets safety and waste-management standards, Xinhua reported today, citing a ruling by provincial officials yesterday. Zijin must be punished and pay compensation for damages, the news agency cited the Fujian government as saying.
A nine-day delay in disclosing the July 3 spill prompted the China Securities Regulatory Commission to investigate. Zijin fell 13 percent in Shanghai trading and 17 percent in Hong Kong this week after the company reported the leak. It was the second-worst performer on the Hang Seng China Enterprise Index.
Zijin will withstand the fallout from the pollution, even as it has tarnished the company's reputation, the 21st Century Business Herald cited Chairman Chen Jinghe as saying in an interview.
'Tremendous Impact'
"This has had a tremendous impact on the company," spokesman Zhao Jugang said today by mobile phone. The company has disclosed relevant information and has no further comment, he said, confirming the interview with Chen. Zhao couldn't be reached later to comment on the Xinhua report.
Chin's government is making an example of Zijin as it seeks to cut pollution and emissions from smelters, said analysts including Guotai Junan Securities Co.'s Owen Liang. Officials tightened environmental standards in the past year and have threatened to close industrial plants that fail to measure up.
Zijin shut the copper plant near the Zijinshan mine, its biggest asset, pending completion of investigations. Copper production at the mine accounts for about 15 percent of Zijin's annual production.
Heavy rain broke a plastic barrier in a waste pit, allowing water containing copper acid to pollute the Ting River via an illegally built drain, Shanghang officials said July 15.
Zijin, which initially blamed the rain for the spill, failed to take corrective measures since September when the Fujian government found the waste discharge into the river contained copper acid exceeding a safety standard, the county said after an investigation.
Legal Case
The province will pursue "executives of the perpetrator company and relevant government officials in accordance with the law," according to Xinhua's report today.
Environmental agencies have asked Zijin to conduct a "complete overhaul" of existing mine and smelting plants to prevent further leaks, the government said.
Zijin said yesterday it will invest 100 million yuan ($15 million) in a water plant the government is building near its mine. That's in addition to 200 million yuan it plans to spend on environmental and risk measures within a year as part of its restructuring plan after the incident.
The company may be fined as much as 500 million yuan for the pollution, according to Wu Kan, a Shanghai-based fund manager at Dazhong Insurance Co. The regulatory probe will probably focus on whether Zijin delayed disclosure of the incident, he said.
Each month of disrupted production will cut Zijin's copper output by 1.7 percent and earnings by 0.9 percent, Trina Chen, a Hong Kong-based analyst at Credit Suisse Group AG, wrote in a note on July 13.
Zijin posted a 2009 net income of 3.6 billion yuan on sales of 20 billion yuan, according to Bloomberg data.
Police detained three Zijin managers on July 15 after waste water from the plant poisoned 1,890 tons of fish at a waterway near Shanghang county, home to half a million people. County chief Qiu Heqing and top environmental official Chen Junan were fired and two other officials were ordered to resign, Xinhua report yesterday.
Operations at the copper plant must remain halted until it meets safety and waste-management standards, Xinhua reported today, citing a ruling by provincial officials yesterday. Zijin must be punished and pay compensation for damages, the news agency cited the Fujian government as saying.
A nine-day delay in disclosing the July 3 spill prompted the China Securities Regulatory Commission to investigate. Zijin fell 13 percent in Shanghai trading and 17 percent in Hong Kong this week after the company reported the leak. It was the second-worst performer on the Hang Seng China Enterprise Index.
Zijin will withstand the fallout from the pollution, even as it has tarnished the company's reputation, the 21st Century Business Herald cited Chairman Chen Jinghe as saying in an interview.
'Tremendous Impact'
"This has had a tremendous impact on the company," spokesman Zhao Jugang said today by mobile phone. The company has disclosed relevant information and has no further comment, he said, confirming the interview with Chen. Zhao couldn't be reached later to comment on the Xinhua report.
Chin's government is making an example of Zijin as it seeks to cut pollution and emissions from smelters, said analysts including Guotai Junan Securities Co.'s Owen Liang. Officials tightened environmental standards in the past year and have threatened to close industrial plants that fail to measure up.
Zijin shut the copper plant near the Zijinshan mine, its biggest asset, pending completion of investigations. Copper production at the mine accounts for about 15 percent of Zijin's annual production.
Heavy rain broke a plastic barrier in a waste pit, allowing water containing copper acid to pollute the Ting River via an illegally built drain, Shanghang officials said July 15.
Zijin, which initially blamed the rain for the spill, failed to take corrective measures since September when the Fujian government found the waste discharge into the river contained copper acid exceeding a safety standard, the county said after an investigation.
Legal Case
The province will pursue "executives of the perpetrator company and relevant government officials in accordance with the law," according to Xinhua's report today.
Environmental agencies have asked Zijin to conduct a "complete overhaul" of existing mine and smelting plants to prevent further leaks, the government said.
Zijin said yesterday it will invest 100 million yuan ($15 million) in a water plant the government is building near its mine. That's in addition to 200 million yuan it plans to spend on environmental and risk measures within a year as part of its restructuring plan after the incident.
The company may be fined as much as 500 million yuan for the pollution, according to Wu Kan, a Shanghai-based fund manager at Dazhong Insurance Co. The regulatory probe will probably focus on whether Zijin delayed disclosure of the incident, he said.
Each month of disrupted production will cut Zijin's copper output by 1.7 percent and earnings by 0.9 percent, Trina Chen, a Hong Kong-based analyst at Credit Suisse Group AG, wrote in a note on July 13.
Zijin posted a 2009 net income of 3.6 billion yuan on sales of 20 billion yuan, according to Bloomberg data.
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