SHARES in Zijin Mining Group Co, China's largest gold producer, fell to a 17-month low in Shanghai trading after the company was forced to shut a copper smelter that caused a massive fish kill after contaminating a river in southeast China's Fujian Province.
The company has suspended production at Zijinshan mine and begun rectifying the copper mine. The plant's reopening is dependent on checks by local environmental authorities, company spokesman Zheng Yuqiang told Shanghai Daily yesterday.
The penalty and compensation for local fisheries will also be decided upon the investigation results by authorities, he said.
Some 9,100 cubic meters of wastewater - containing acidic copper - entered the nearby Tingjiang River from a sudden leakage at the Zijinshan Copper Mine.
About 1.9 million kilograms of fish in the Mianhuatan Reservoir in Yongding County were found dead or poisoned, environmental authorities said on Monday. The penetration started at around 4pm on July 3 and ended at 2:30pm on July 4.
The company didn't announce the pollution until Monday, nine days after the leaking started. A company official explained that they first had to find out what caused the pollution.
"We had to make a quick conclusion on the cause of the incidence," Zhao Jugang, head of Zijin's stocks department, told China National Radio yesterday. "We had to make a clear judgement before telling the residents to avoid triggering panic (among them).''
The mining company's President Luo Yingnan told China News Service that "the leakage has exposed problems and defects in Zijinshan mine in terms of operation, production management and environmental protection."
"The designs of relevant facility and the emergency mechanisms for accidents have flaws," Luo added. "The leakage was severely underestimated, as it was taken as a partial leakage when the incident first emerged."
The company suspended stock piling of additional ore and diverted the flow of the solution in the copper site. This incident has had a substantial effect on the copper production of the Zijinshan plant, Zijin said in a statement released late Monday.
Credit Suisse estimated the incident would reduce the Zijin's copper output by 1.7 percent and revenue by 0.9 percent. Zijinshan mine contributes to 20 percent of the company's total production.
Zijin, China's second largest copper producer, is expected to report 5.1 billion yuan (US$753 million) in profits this year, Credit Suisse said.
Shares of the company tumbled as much as 8 percent to 5.5 yuan, lowest level since February 2009, during Shanghai trading and closed 3.68 percent lower yesterday.
Initial investigations attributed the leakage mainly to continuous heavy rainfall, which caused the underground water level in the solution pond to rise rapidly above the normal level. Uneven pressure at the top and bottom tore the waterproofing layer in many places at the bottom of the waste water pond, which led to a leakage in the waste water pond, according to Zijin.