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Regulator probes Zijin's acid leak disclosure

(Agencies)
Updated: 2010-07-15 13:46
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Zijin Mining Group Co, China's largest gold producer, said the nation's securities regulator will investigate its disclosure of an acid leak at a plant in Fujian province.

The company will cooperate with the China Securities Regulatory Commission, spokesman Zhao Jugang said by phone today.

Zijin, which had initially blamed rains for the July 3 leak at its copper smelter near Shanghang county, delayed disclosure of the incident for nine days. Listed companies should disclose complete, accurate information on a timely basis, China's environmental protection ministry said in statement dated July 8.

"Zijin may be fined 400 million yuan ($59 million) to 500 million yuan for the pollution," said Wu Kan, a Shanghai-based fund manager at Dazhong Insurance Co, which oversees $285 million. "CSRC's investigation will probably focus on whether Zijin has delayed disclosure of the incident. A punishment on this won't cause a large fine."

Zijin, based in Fujian province, dropped 12 percent on July 13 after the announcement to the lowest level in more than 15 months in Hong Kong trading. In Shanghai trading, the stock fell 3.3 percent to 5.57 yuan at 9:44 am.

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"We're giving the local regulatory authorities the rundown on what happened from July 3 to now," Zhao said.

Zijin plans to spend 200 million yuan on environmental and risks measures within a year as part of its restructuring plan after the incident, Zhao said.

Copper production at Zijinshan mine accounts for about 15 percent of Zijin's annual output of the metal, according to Guotai Junan Securities Co.

The plant produces 12,800 metric tons of copper a year, and will only reopen after checks by environmental authorities. A restart may not take place for at least six months, the South China Morning Post reported today, citing company secretary Zheng Yuqiang. Zheng today denied making those comments.

The company can't determine when it can reopen the plant because that's dependent on the conclusion of various government investigations, Zhao said today.