August 20, 2014 / 12:40 AM / 3 years ago

Mexico minister says Grupo Mexico account of toxic spill 'totally false'

MEXICO CITY (Reuters) - Mexico’s environment secretary said on Tuesday that Grupo Mexico gave false information about a toxic spill at its Buenavista mine in northern Mexico, a day after the environmental authority said it would file a criminal complaint against the company.

In a statement on Aug. 12, Grupo Mexico said that “unusual rainfall” had caused the spill.

But Environment Secretary Juan Jose Guerra told local radio on Tuesday that this was “totally false” and that there was zero precipitation on Aug. 6, the day the spill was detected.

“They unfortunately did not have dams. They hadn’t put infrastructure there to contain leached (fluids) in case of a spill,” he said.

Grupo Mexico did not immediately respond to a request for comment on Tuesday regarding the criminal complaint or the minister’s comments.

Mexico’s President Enrique Pena Nieto said that the damage done by the spill to the surrounding population and environment was high.

“I assume that here, small sanctions will not do,” he said in a Tuesday night television interview than ran into early Wednesday.

The federal attorney general’s office for environmental protection (Profepa) said in a statement on Monday night it would bring charges against Buena Vista del Cobre, the Grupo Mexico subsidiary that operates the copper mine.

Profepa said the spill pumped 40,000 cubic meters of toxic mining acid into the Bacanuchi river in northern Sonora state.

The agency said the fine for the spill could reach up to 40 million Mexican pesos, or about $3 million.

Grupo Mexico shares fell by as much as 2.5 percent on Tuesday, before recovering to close down 0.63 percent at 46.83 pesos.

Earlier in the day, traders attributed the share price drop to the charges being announced.

“Everyone knew about the spill, but now we know about the size of the fine,” said Gerardo Roman, head of stock trading at Actinver brokerage in Mexico City. “It’s not so much the economic impact, it’s that people don’t look kindly on them contaminating.”

Reporting by Tomas Sarmiento, Christine Murray, Gabriel Stargardter and Noe Torres; Editing by Diane Craft and Simon Gardner

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