Chinese miner Zijin ignored repair orders last yr-filing

BEIJING, July 17 Sat Jul 17, 2010 1:24pm EDT

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BEIJING, July 17 (Reuters) - 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 (2899.HK)(601899.SS) 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. [ID:nTOE66E03D]

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.

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