July 12 (Bloomberg) -- Waste from a copper and gold mine owned by Zijin Mining Group Co. has contaminated a river and killed fish in Fujian province, Xinhua News Agency said today, citing local environmental authorities.
An initial investigation found the leakage came from a plant of Zijinshan mine, Xinhua said. About 1.89 million kilograms of fish in a reservoir on the Tingjiang River were poisoned or found dead, it said. Zijinshan, which accounts for 59 percent of Zijin's bullion mine output, is China's largest gold producer.
The leakage may pose a test for China's environment ministry, which has been seeking to impose higher standards on commodity producers after thousands of children suffered metal poisoning in four provinces last year. Zijin, China's largest gold producer, in May said it took corrective measures on plants and mines, including on Zijinshan, after criticism from environmental protection agencies.
"The environmental issue is always at the back of our mind," Owen Liang, a Shenzhen-based analyst at Guotai Junan Securities Co., said by phone today. "It's like a ticking bomb that exploded this time."
Zijin suspended trading of its shares in Hong Kong and Shanghai today. The suspension is related to the contamination, and the company will issue a statement later with details, said Fan Cheung Man, a Hong Kong-based spokesman.
Zijinshan mine was discharging its tailings directly into the tailing reservoir without treatment, and the sewage treatment system lacked operational approval from the environmental protection department, Zijin said in its May statement. Corrective measures were taken, it had said.
Zijinshan produced 18 metric tons of gold in 2009, out of the company's total bullion mine output of 30.65 tons, according to Liang. It also produced 12,800 tons of copper, or 15 percent of Zijin's 84,800 tons of annual production, he said.
The county government mobilized soldiers, civil servants and villagers to help net the dead fish, Xinhua said today. Villagers want Zijin to compensate them for their losses, the news agency said.
Operations run by units of Zijin, including Funin Zhenglong Gold Mine Resources Development Co., Longkou Jinfeng Co. and Xinjiang Jinbao Mining Co., were also cited for complaints by environmental protection agencies in China last year, according to Zijin's statement in May.