HONG KONG, Mar. 12 -- China's Dongling Group is preparing to restart a 100,000-tonne-a-year lead and zinc smelter this month shut since August last year following accusations by locals that it was a source of lead poisoning.
"Yes we are working on it. But (we) don't know exactly which day it will be reopened," a senior executive told Reuters when asked whether the company planned to restart the smelter this month.
The lead and zinc smelter in Changqing in Fengxiang county, close to Baoji city in Shaanxi province, has about 33,000 tonnes of annual lead capacity and 66,000 tonnes of zinc capacity.
The smelter was closed by authorities in August last year after hundreds of villagers broke into the plant to protest the alleged lead poisoning. In response, the local government later relocated villagers that lived near the smelter.
He said production at another plant owned by the company, the fourth biggest zinc maker in China, of 150,000 tonnes capacity a year remained normal.
The incident in Fengxiang county also caused authorities to tighten controls and checks on lead smelters nationwide and close three smelting facilities in Jiyuan city in neighbouring Henan province, the top producing area in China, which is the world's top maker of metal widely used in batteries.
Dongling's smelter was scheduled to reopen on March 15, Hong Kong-based English-language newspaper South China Morning Post reported over the weekend quoting a local villager Ma Changxiong.
But three smelters in Jiyuan in neighbouring Henan province have remained closed and the city government has not given a timeframe to restart the capacity, a smelter source in the city said.
"The thing is not over yet. The city government is cautious about letting the shut capacity reopen," the source said, who asked not to be named.
China's top lead producer, Yuguang Gold and Lead (600531.SS: Quote), as well as Wanyang Lead and Jinli Lead in Jiyuan have each closed a 50,000-tonne-a-year designed sintering and smelting capacity since Aug. 24. The facilities ran above capacity and produced nearly 240,000 tonnes a year before the closures.
Yuguang may give up the shut capacity in Jiyuan permanently to avoid further accusations, the smelting source said.
But that would not affect the lead producer much because it planned to start production at a new, environmental-friendly 100,000 tonne-a-year lead plant next month, the source added.
The new plant would boost Yuguang's annual lead smelting capacity to about 330,000 tonnes, excluding the shut 50,000 tonne of capacity, and to 400,000 tonnes of lead refining capacity.
Yuguang is also a zinc producer and plans to start building a third 100,000-tonne-capacity unit by late 2010, boosting the company's annual zinc capacity to 300,000 tonnes, the source said.