Gold miner apologizes for fatal dam breach

16:59, December 28, 2010      

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China's largest gold miner Zijin Mining has expressed "deep sorrow and regret" and decided to donate 50 million yuan ($7.5 million) regarding the casualties and loss of property following a dam overflow in September when a typhoon hit southern Guangdong province, the company said on Tuesday.

In statements filed to the Hong Kong stock exchange, Zijin Mining said the dam breach tragedy was aggravated by the collapse of Gaoqiling tailing pool dam of Yinyan Tin Mine, which was owned by Zijin Mining's subsidiary Xinyi Zijin.

"In order to assist victims in the downstream of Xinyi Zijin Yinyan Tin Mine for them to be able to carry out production independently and to rebuild, and to fulfill the Company's social responsibility, the Board has decided to donate 50 million yuan to the Bureau of Civil Affairs of Xinyi city," Zijin Mining said in a statement.

The dam breach accident had left 22 people dead and 523 houses destroyed in Xinyi city. Guangdong provincial authorities said in a statement on Dec 21 that Xinyi Zijin, owner of the breached dam, held direct liability for the accident.

The dam held the tailings of Xinyi Zijin Yinyan Tin Mine. Its contents overflowed on the morning of Sept 21, as rainstorms associated with typhoon Fanapi pounded the area. Grayish mud and rocks from the dam flattened part of a village.

The reason for the dam breach was the non-standard construction of the dam's catchpit, thus lowering the dam's flood control standard, according to the provincial authorities statement.

Thirty-six people, including the director of Xinyi city's work safety bureau, the director of Xinyi city's land and resources bureau, and the general manager of Xinyi Zijin Mining, were believed to be responsible for the accident due to their dereliction of duty, Guangdong provincial authorities said in its statement.

Fifteen people among the 36 were transferred to the judiciary for further possible penalties, it added.

Zijin Mining said it respected the findings of the Guangdong provincial government over the accident.

The company said Xinyi Zijin itself had suffered losses and damage in the severe natural disaster associated with typhoon Fanapi, and it had already donated 1.5 million yuan to Xinyi city.

Zijin Mining said it supported its subsidiary to take all measures, including disposal of assets and equity, to raise funds to settle claims lodged by the victims of the disaster.

Xinyi Zijin Mining, which currently has insufficient cash or cash convertible assets and has about 200 million debt, has decided to sell Yinyan Tin Mine, including the mining right, and used the proceeds to settle claims made by the victims, it said.

The government of Xinyi city has filed a lawsuit against Xinyi Zijin for the purpose of confirmation relevant liability and compensation. Both parties will resolve the matter judicially or by negotiations, Zijin Mining added in the statement.

Source: Xinhua
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