MAC: Mines and Communities

China: pollution and protests increase

Published by MAC on 2010-07-17
Source: AFP, Bloomberg

Mining spill kills numerous fish in Fujian

China's huge Zijin mining group has been indicted for causing pollution from a copper sludge waste pond, thus killing numerous fish and contaminating a reservoir in Fujian province.

Within a few days of the incident, more than a thousand villagers in Guanxi province erupted in anger at alleged contamination by an aluminium plant.

A Chinese government mininster has declared that public demonstrations against environmental pollution in the country have been increasing at the rate of 30% a year.

Among Zijin's global operations is the hugely controversial Rio Blanco copper mine in Peru, which also encroaches into Ecuador.


Top China miner pollutes river: report


13 July 2010

BEIJING - Pollution from a mine owned by a top gold producer has severely contaminated a river in southeastern China, leading to a massive fish kill, the government and state media said Monday.

Seepage from a mining waste pond owned by the Zijinshan Copper Mine has contaminated the Ding River and a reservoir in Fujian, the province's environmental protection bureau said in a statement.

The leak was first detected on July 3, prompting the bureau to issue an emergency order to begin monitoring it, the statement said.

Xinhua news agency said the mine is owned by the Hong Kong-listed Zijin Mining Group Co, China's largest gold producer.

Pollution from the sludge pond has killed or poisoned 1.89 million kilogrammes (4.2 million pounds) of fish on the Ding River and in the Mianhuatan reservoir, the report said.

The smell of dead fish was discernible 10 kilometres (six miles) from the reservoir, it added.

"The county government has issued a circular asking residents to turn in poisoned fish for collective disposal," the report quoted local villagers as saying, adding that villagers would be compensated for the fish they collect.

One villager said he lost 25,000 kilogrammes of fish that he was raising on his fish farm, it said.

Neither the government statement nor Xinhua made mention of any possible impact the spill was having on local drinking and irrigation water.

Years of unbridled economic growth have left most of China's lakes and rivers heavily polluted. More than 200 million Chinese currently do not have access to safe drinking water, according to government data.

Zijin Shares Drop After Closing Plant on Waste Leaks

Bloomberg News

13 July 2010

Zijin Mining Group Co., China's largest gold producer, fell to the lowest level in more than 15 months in Hong Kong trading after it was forced to shut a copper smelter that leaked acidic water and killed fish.

The plant, which produces 12,800 metric tons of copper a year at Zijinshan mine, will only be reopened after checks by local environmental authorities, spokesman Zhao Jugang said today in an interview. About 1.89 million kilograms of fish in the Mianhuatan reservoir in Fujian province were found dead or poisoned, Xinhua News Agency said yesterday.

The leakage comes as China, the world's largest metal consumer, is seeking to impose higher environmental standards and the government may make an example of Zijin, Bank of America Corp.'s Merrill Lynch said. Zijin in May said it took corrective measures on plants and mines after a clampdown.

"Today's tumble further reflects investor concerns about Zijin's attitude toward social responsibility issues such as the environment," Helen Lau, a Hong Kong-based analyst at UOB-Kay Hian Ltd., said today.

The shares dropped 12.2 percent to HK$4.90, the lowest level since March 2009, In Shanghai trading, the stock closed 3.7 percent lower at 5.76 yuan.

"We expect the plant suspension to last two months," Heng Kun, an analyst at Essence Securities Co., said by phone from Shanghai. Earnings may decline 1.8 percent based on that assumption, he said. Copper production at the mine accounts for 15 percent of Zijin's total annual output, Guotai Junan Securities Co. said yesterday.

Waste water containing acidic copper seeped into the Ting River in Fujian province on July 3, the company said in a filing to the Hong Kong exchange yesterday. Heavy rainfall led to the leakage, according to initial investigations, Zijin said.

The company has carried out emergency measures to address the leakage, it said. The effect on drinking water is "limited" and the water supply normalized a few days after the incident, Zhao said from Shanghang city.

The incident "could put Zijin in the cross-hairs as it would give the government an opportunity to highlight a more serious stance towards environmental issues," Merrill Lynch's Timothy Bush and Liying Du wrote in a July 12 note.

The government has issued new environmental standards for commodity producers including steelmakers and lead plants in the past year, threatening closures if they weren't met. Thousands of children were poisoned by lead, zinc and manganese plants in Yunnan, Henan, Shaanxi and Hunan provinces last year.

Zijin will likely have to pay a penalty, and compensation for local fisheries may reach about 5 million yuan ($738,000), Zhao said. The government had asked the company to pay villagers 3 yuan for each kilogram of dead fish, he said. Zhao said the number of fishes affected were still been counted.

"We estimate for each month of production disruption, Zijin's FY10 copper output would be affected by 1.7 percent and earnings to be affected by 0.9 percent," Trina Chen, an analyst at Credit Suisse Group AG, wrote in a note today.

The Shanghang county government mobilized soldiers, civil servants and villagers to help net the dead fish, Xinhua said yesterday. Calls to the Shanhang county government communications office were not answered.

Environmental authorities ordered the closure of the Five Dragon Gold Mine in Dandong city, Liaoning province, owned by Zhongjin Gold Corp. in July 2008, after tailings polluted the drinking water of 210,000 people in a nearby city, Xinhua News Agency said then.

In 2005, the nation's environmental protection chief resigned after an explosion at a PetroChina Co. plant spilled toxic chemicals into the Songhua River, poisoning the drinking water of 3 million people.

China's Zijin defends handling of pollution spill


13 July 2010

BEIJING - China's top gold producer on Tuesday defended its handling of a toxic pollution spill that killed off vast numbers of fish, saying heavy rains were to blame, as the company's shares slumped.

Pollution from a copper mine owned by Zijin Mining Group Co. has contaminated the Ting river, a major waterway in the southeastern Fujian province, leading to the poisoning of up to 1,890 tonnes of fish, reports said.

"There has been no cover-up, no misrepresentation of the facts and no important omissions," the company said in a statement on the July 3 leak from the mine's sludge pond.

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

It said it would pay compensation to fish farmers who were affected.

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 leakage and controlled the spill within 24 hours.

Shares in Zijin Mining dived 4.68 percent to 5.70 yuan (84 US cents) at midday Tuesday in Shanghai. The company had suspended trading in its shares on Monday, when the pollution leak was first reported.

"The leak did not affect the drinking water quality in Shanghang county and the lower reaches (of the river)," the company said.

"A certain quantity of fish in fish farms were killed, leading to economic losses. The company apologises for this."

The company said it would compensate the fish farmers for their losses. Production at the mine has also been suspended.

According to the China Daily, the Ministry of Environmental Protection in May criticised 11 top enterprises for failing to protect the environment, placing Zijin Mining at the top of the list.

The ministry also ordered Zijin to make modifications at its copper mine in Fujian, it said.

Years of unbridled economic growth have left most of China's lakes and rivers heavily polluted. More than 200 million Chinese currently do not have access to safe drinking water, according to government data.

Chinese newspaper slams Zijin for its handling of copper mine waste leak


15 July 2010

BEIJING/HONG KONG - One of China's leading newspapers slammed Zijin Mining Group on Thursday for its poor handling of a poisonous leak at a copper mine, as the company said it would cooperate with regulators in an investigation.

Zijin suspended trading of its shares on Monday after news broke about the spill of wastewater containing acidic copper from its Zijinshan Copper Mine, into the Ting river in the southeastern province of Fujian.

But the contamination began much earlier, on the afternoon of July 3, and the public was initially kept in the dark about the spill, which went on for nearly 24 hours.

Communist Party mouthpiece the People's Daily said the company explained that it did not report the accident earlier as "they thought it was just as small matter".

"How can a company like Zijin Mining, which is an industry with a high risk of pollution, not take a 'small problem' seriously?" the newspaper said in a commentary.

"In industries with a high risk of pollution, small problems are the hidden dangers that lead to large accidents, and you can't ever just count on your luck," it added.

The company said it it would fully cooperate in a probe into the spill after receiving a notice from the Fujian Regulatory Bureau of the China Securities Regulatory Commission regarding the incident. It gave no other details.

Thousands of fish -- a total 1.89 million kg -- were killed by the 9,100 cubic metres of waste water that escaped from a mine containment tank, according to state media reports.

Though water from the river has been declared safe to drink, the 60,000 people affected by the spill are still wary, because the river is a chemical blue colour and smells unpleasant.

Villagers are now drawing their water from wells, but worry even those may be polluted. The firm has halted production and said it would compensate fish farmers for their losses.

The Chinese government has become increasingly worried about public anger at environmental problems, especially pollution.

"Mass incidents" -- or riots and protests -- sparked by environmental problems have been rising at a rate of 30 percent per year, according to China's environmental protection minister.

Earlier this week more than 1,000 people threw rocks at police and blocked roads in southern China in protest at pollution from a plant owned by one of the country's largest private aluminium producers.

(Reporting by Donny Kwok in Hong Kong and Ben Blanchard in Beijing; Editing by Sugita Katyal)

Filing shows Zijin ignored tailings reservoir repair order

Lucy Hornby


19 July 2010

BEIJING - Embattled Chinese gold miner Zijin ignored orders to repair a breach in a tailings reservoir last year, according to a stock exchange filing on a toxic wastewater discharge that polluted a river earlier in July.

Zijin Mining Group on Saturday issued the results of an investigation into the July 3 leak, when the lining of a tailings reservoir was breached after heavy rains.

Meanwhile, the Xinhua news agency said the company had plugged a new leak at a different waste reservoir late on Friday, citing a company statement. About 500 cubic metres of waste were discharged, it said.

The July 3 discharge of more than 9,000 tonnes of wastewater killed thousands of fish and polluted the Ting river in Fujian province, on which 60,000 people depend for drinking water.

Zijin has been ordered to halt operations pending a thorough check of all its facilities, according to the filing to the Shanghai Stock Exchange on Saturday, which followed a press conference by local officials late on Thursday.

The company had not previously confirmed the order to stop production, which was reported by a Chinese newspaper on Friday.

The local environmental bureau had ordered Zijin to repair the reservoir after an earlier breach in September, 2009, but the order had been ignored, according to the filing.

A damaged pollution monitor downstream from the Zijin mine prevented authorities from learning about and taking prompt action after the leak, the report said.

Tailings reservoirs are supposed to be lined so that water seeping out of waste ore from a mine does not enter the local water supply. The waste ore may contain heavy metals and toxic chemicals.

Three government officials were sacked in the scandal following the lead, including a deputy county head and two environment officials, the China Daily said on Saturday.

Zijin had enjoyed a reputation as one of China's premier mining firms, and has mining interests overseas.

But it has run into trouble with tailings dams before. Late in 2006, a tailings dam breach at Zijin's Shuiyindong mine in Guizhou province dumped cyanide-laced residue into a stream.

The local environmental bureau ordered an upgrade of tailings dam linings across the province after that incident, which forced the Shuiyindong mine to shut for four months.

Hundreds protest against metals plant in S.China


15 July 2010

BEIJING - More than 1,000 people threw rocks at police and blocked roads in southern China in protest at pollution from a plant owned by one of the country's largest private aluminium producers, state media said on Thursday.

The Chinese government has become increasingly worried about rising public anger at environmental problems, especially pollution.

The official China Daily said that in the latest incident, more than 1,000 villagers in Jingxi county, in Guangxi near the border with Vietnam, took to the streets on Tuesday to protest against the Shandong Xinfa Aluminum and Power Group plant.

"Almost all the residents in Lingwan village were involved in blocking the road to Jingxi county on Tuesday afternoon, and some villagers threw stones at police who had been sent by the Jingxi government," it cited a government statement as saying.

"One official hit by stones was sent to the hospital, but no other injuries were reported," the newspaper added.

Residents also blocked the gates to the plant and damaged some production facilities before dispersing.

"Villagers have been very unhappy for a long time about the pollution caused by the plant," it quoted local government official Qin Weifeng as saying.

The newspaper said the Xinfa is one of the three largest producers in Jingxi, in an area known for production of bauxite and alumina, the raw material for aluminium.

China's rapid growth has caused many environmental problems, and prompted growing concern among citizens about health problems caused by pollution.

Trading of shares in the country's largest gold producer, Zijin Mining Group Co (2899.HK), was suspended earlier this week after a leak of poisonous wastewater at a copper mine in the southeastern province of Fujian.

"Mass incidents" -- or riots and protests -- sparked by environmental problems have been rising at a rate of 30 percent per year, according to China's environmental protection minister. (Reporting by Ben Blanchard and Lucy Hornby; Editing by Alex Richardson)

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