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Print Edition> Business
UPDATED: October 18, 2010 NO.42 OCTOBER 21, 2010
Messing Up and Fessing Up
Zijin Mining Group admits responsibility for river contaminations and accepts penalties

KEEPING IT CLEAN: The Zijin Mining Group's copper hydro metallurgical plant responsible for polluting the Tingjiang River was closed on July 13 (JIANG KEHONG)

Following two leakages of acidic copper solution from its copper and gold mine facilities into the Tingjiang River in Fujian Province last July, the Zijin Mining Group Co. Ltd. was fined 9.56 million yuan ($1.43 million) and ordered to implement rectification measures and clean up the polluted area. The decision, made by the Bureau of Environment Protection of the Government of Fujian Province, was announced by Zijin on October 8.

Instead of challenging the decision, Zijin has decided not to file an application for an administrative reconsideration or initiate administrative litigation, and will comply with the punishment in a timely manner and make adjustments to prevent future contaminations.

The leakages occurred on July 3 and July 16, releasing 9,100 cubic meters of waste water into the Tingjiang River. The water in Shanghang and Yongding counties along the river was polluted, killing much aquatic life in the river.

Metal giant

As one of China's largest state-owned mining groups, Zijin holds many ranks in the country's mineral industry: It is the biggest owner of metal mineral resources, the largest gold producer, the second largest copper producer and the sixth largest zinc producer. It also ranked 243rd among the Financial Times' global top 500 in terms of market value in 2009.

Formerly known as Shanghang County Mining Co., the company was renamed Shanghang County Zijin Mining Corp. in August 1993, when its major business operations shifted to develop gold mines in the Zijin Mountains. In 1994 and 2000, the company was restructured into the joint stock Fujian Zijin Mining Co. Ltd. In 2004, it was renamed the Zijin Mining Group Co. Ltd.

The company was listed on the Hong Kong Stock Exchange in December 2003 and began issuing A shares in Shanghai in April 2008. It was the first Chinese company to issue shares at the face value of 0.1 yuan (1.5 cents) per share.

In March 2008, the China Gold Association listed Zijinshan Gold-Copper Mine, the company's core business, as China's largest gold mine for its largest usable reserves, largest mining and dressing scale, largest output, lowest grade of crude ore, lowest per-unit processing cost and best economic returns.

At present, the Zijin Mining Group Co. Ltd. has established a product structure of gold, copper, zinc, lead, tungsten and iron, with subsidiary businesses spreading in more than 20 Chinese provinces, autonomous regions and municipalities and seven other countries. In the first half of 2010, the company generated 13.46 billion yuan ($2.02 billion) in business revenue and 2.7 billion yuan ($404.8 million) in net profits, up 39.78 percent and 40 percent, respectively, year on year.

Though the largest gold producer in China with expanding operational scale and profits, Zijin had been facing challenges, like reports of intentional and secretive pollutant discharges in Shanghang County, prior to the accident.

Originating in the Wuyi Mountains in Fujian Province, the Tingjiang River runs through Fujian and Guangdong provinces and empties into the South China Sea. The Zijinshan mining area affiliated with the Zijin Mining Group Co. Ltd. lies along the Tingjiang River. Residents of the Caikeng Village across the river said in November 2008 there were a number of abnormal fish deaths in the village's nine fish ponds, but the Zijin Mining Group Co. Ltd. would not take responsibility for the incident.

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