October 7, 2010 / 5:29 PM / 8 years ago

China's Zijin fined $1.4 million for toxic leaks

BEIJING (Reuters) - Chinese gold miner Zijin Mining said on Thursday it would be fined 9.56 million yuan ($1.43 million) for waste water leaks this summer, in a statement to the Hong Kong stock exchange carried by the Xinhua news agency.

Poor maintenance of the linings of the waste reservoir at the Zijinshan copper and gold mine led to two breaches in July, dumping toxic waste into Fujian province’s Ting river, killing fish and polluting drinking water for tens of thousands of people.

In addition to the fine, Zijin would have to implement rectification measures and clear up pollution, it said, citing a decision by Fujian environmental authorities.

The ruling came after a tailings dam at a tin mine run by a Zijin subsidiary collapsed during heavy rains in September, burying a nearby village in Guangdong province. The landslide of waste from the mine left 28 people dead or missing.

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, and forced the mine to close for months.

A mining boom thanks to the Chinese economy’s insatiable demand for metals has left the countryside studded with unsafe tailings dams, that liquefy under pounding rains.

In the worst such accident, 276 people were killed when a tailings dam at an iron mine gave way in Shanxi Province in September, 2008. A similar collapse the previous month in the same province killed 43 people, but was covered up ahead of the 2008 Olympic Games in Beijing.

Mining dam collapses are not unique to China. In Hungary this week, the collapse of a waste reservoir at an alumina plant flooded the village of Kolontar with a toxic red sludge, and killed at least four people.

Zijin shares have been suspended since Monday, and resume trading on Friday. They last closed at HK$6.60, having gained nearly 15 percent since the beginning of July.

($1=6.689 Yuan)

Reporting by Lucy Hornby

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