Companies

China's Zhongjin says closed lead, zinc smelter

(Agencies)
Updated: 2010-10-22 15:33

Shenzhen Zhongjin Lingnan Nonfemet, China's third-largest zinc producer, closed its Shaoguan lead and zinc smelter completely on Oct 21 to comply with a provincial government pollution investigation.

The closure will cost the firm 27 million yuan ($4.06 million) in reduced profits per month of closure, the company said in a statement filed to the Shenzhen exchange on Friday, without saying when the smelter would reopen.

Trading of the firm's shares was suspended on Thursday.

Shanghai zinc rose by near its daily limit to a nine-month high on Friday on the news, outpacing gains for other base metals futures.

"We have heard the smelter will be closed until the end of this year," said Li You, analyst at Minmetals Star Futures in Shenzhen, Guangdong province, where Zhongjin is located.

"The closure will not have a big impact on zinc because its monthly production accounts for less than 5 percent of the country's zinc production. Shaoguan's lead production is about 10,000 tons a month, too little to affect the market," he said.

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Shaoguan smelter has two facilities with a total designed capacity of 330,000 tons of lead and zinc a year. Zinc accounts for two-thirds of the total.

Excessive levels of poisonous thallium had been detected in the Beijiang river in the southern Guangdong province and the finding was that its Shaoguan smelter in Shaoguan was the source, Zhongjin said in the statement. The closure was requested by the provincial government.

The smelter has previously been closed between December 2005 and February 2006 following a toxic spill of cadmium.

In 2010, Zhongjin planned to produce a total 325,300 tons of lead and zinc in concentrate and 420,000 tons of refined lead and zinc of which 350,000 tons would come from Shaoguan smelter, the firm said.

In the first 9 months of the year it produced 232,600 tons of lead and zinc in concentrate, and 312,300 tons of refined lead and zinc of which Shaoguan produced 256,200 tons.

Zhongjin also owns another zinc smelter in Shaoguan city with a designed capacity of 90,000 tons a year, and is building a 120,000-ton-a-year lead smelter next to it.