Today, Zijin says it is China’s top gold producer, No. 3 in copper and among the top six in zinc. Abroad, it also owns stakes in mining outfits in South Africa and Myanmar.
Credit Suisse says Zijin’s profits should jump 45 percent this year to 5.1 billion yuan (US$750 million) as Chinese demand rebounds from the global slump. Huatai’s Liu said it is among China’s five most profitable mining companies.
Zijin has been so profitable that one of its early investors, Chen Fashu (陳發樹), last year announced China’s biggest ever charitable gift — a 8.3 billion yuan (US$1.2 billion) donation to his own foundation. News reports and Internet chatter questioned whether he made the donation to avoid taxes.
Zijin’s overseas expansion has also stumbled. The company last month abandoned a planned US$470 million acquisition of Australia’s Indophil Resources Ltd after local Chinese officials delayed approval.
Officials in the Democratic Republic of Congo objected to a plan by Zijin and a Chinese government investment fund to buy Platmin Congo, a copper and cobalt miner.
Chinese media have questioned Zijin’s account of when the toxic leak began.
Zijin said heavy rain caused the improperly installed waterproof lining of a waste pond at the mine to rupture on July 3. It said 9,100m³ of tainted water — enough to fill four Olympic-size swimming pools — seeped into the ground and then into the nearby Ting River.
A smaller leak occurred July 16 but was quickly plugged, the company said.
Farmers cited by the China Daily said fish raised in pens on the Ting started dying on June 5, almost a month before the rainstorm.
Despite the bad publicity, Zijin’s financial losses should be limited, Credit Suisse said in a report. A copper smelter was temporarily shut down but Credit Suisse said fines should be no more than 50 million yuan — about 1 percent of this year’s profits.
Local leaders might have a conflict in overseeing Zijin because many own shares in the company and it hires retired officials, according to the Economic Information Daily, published by Xinhua news agency.
“The close relationship between the local government and Zijin Mining helps cover the environmental crises,” said an official quoted by the China Daily. “Some law enforcement actions may not be prosecuted fully either.”
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