Gold company 'responded quickly to contamination'

08:18, July 14, 2010      

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The country's top gold producer defended its handling of a toxic spill that killed off vast numbers of fish, saying heavy rains were to blame, as the company's shares slumped.

Pollution from Zijinshan Copper Mine, owned by Zijin Mining Group Co, has contaminated the Tingjiang River, a major waterway in East China's Fujian province, leading to the poisoning of up to 1,890 tons of fish, local environmental authorities said on Monday.

The spill happened on July 3, but the company did not announce the incident until a press briefing on Monday afternoon.

"There has been no cover-up, no misrepresentation of the facts and no important omissions," the company said in a statement.

"Zijin Mining... will take full responsibility for the truthfulness and accuracy of its statements."

A press officer for Zijin Mining told China Daily that the company reported the spill to the local government immediately.

Heng Kun, an analyst with Essence Security, told China Daily that sources from Zijin Mining had informed him that the Fujian investigation team had suggested Zijin Mining hold back news of the incident to prevent causing any public panic over drinking water.

China Daily contacted the Fujian environmental protection department but there was no response forthcoming.

The company, China's third largest copper producer, blamed the mishap on torrential rains that have pounded Fujian for the past few weeks, saying it had responded immediately to the incident and controlled the spill within 24 hours.

Shares in Zijin Mining dived 4.68 percent to 5.70 yuan ($0.84) at midday on Tuesday in Shanghai. Analysts said stockholders of Zijin Mining were likely to "face higher risks.

"The company did not suspend its stock transaction immediately after so serious an incident, this is so irresponsible," an unnamed analyst was quoted by Economic Daily as saying on Tuesday.

While the company denied "covering up the incident for nine days", local villagers said the secret was hidden even longer.

"The fish began to die more than 20 days ago after a rainstorm on June 20," said Huang Zongqiang, 35, a fisherman from Hetoucun village in Fengshi town of Fujian province.

The copper mine was closed after the spill and will not be reopened before modifications required by the government have been completed.

According to Heng Kun, the copper mine might lose 100 million yuan of profit in the second half of this year, counting for 1.8 percent of Zijin Mining's annual net profit.

Wei Xiaoshung, an analyst with the China Merchants Securities company, said the gold output there was "crucial to the group", which counts for about 60 percent of its total gold production.

The company will also have to pay for the fish that died from the water pollution.

The local government of Shanghang county was buying the fish at 12 yuan a kilogram and the fish fry at 24 yuan a kilogram. However, fish keepers said they were still losing money.

Huang said his fish refused to eat and was losing weight, and the government told him that he would not allowed to raise fish in the river in the coming years.

AFP contributed to this story.

Source:China Daily


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