China Hongda: Halt of Metals Plant Construction To Affect Earnings-Shanghai Metals Market

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China Hongda: Halt of Metals Plant Construction To Affect Earnings

Industry News 03:30:17PM Jul 05, 2012 Source:SMM

Jul 04, 2012 (Dow Jones) SHANGHAI--China's Sichuan Hongda Co. (600331.SH), which was at the center of recent protests in the southwestern province of Sichuan, said Thursday that a halt in the construction of its metals project in the province will have an impact on its earnings.

Hongda's statement comes two days after leaders in Shifang, a largely poor city in Sichuan, pledged to scrap the plan to build a molybdenum-copper alloy factory by the Shanghai-listed company.

"As of now, construction of the facility has yet to start. The money we've spent on the project includes expenditure on research, an environmental impact assessment, employee remunerations and the purchase of fixed assets, as well as a downpayment on land," said Hongda.

"If construction is terminated, it will have a certain impact on the company's earnings performance," it added.

The company didn't specify how significant the impact would be or how much it has spent on the project.

The project, which the local government said is intended to boost growth, has caused a backlash among local residents due to environmental concerns.

Earlier this week, thousands of protesters rallied against the project following violent clashes with police, according to eyewitness accounts from residents.

On Tuesday, the Shifang government said the project was being canceled because it had been opposed by many local residents.

 

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China Hongda: Halt of Metals Plant Construction To Affect Earnings

Industry News 03:30:17PM Jul 05, 2012 Source:SMM

Jul 04, 2012 (Dow Jones) SHANGHAI--China's Sichuan Hongda Co. (600331.SH), which was at the center of recent protests in the southwestern province of Sichuan, said Thursday that a halt in the construction of its metals project in the province will have an impact on its earnings.

Hongda's statement comes two days after leaders in Shifang, a largely poor city in Sichuan, pledged to scrap the plan to build a molybdenum-copper alloy factory by the Shanghai-listed company.

"As of now, construction of the facility has yet to start. The money we've spent on the project includes expenditure on research, an environmental impact assessment, employee remunerations and the purchase of fixed assets, as well as a downpayment on land," said Hongda.

"If construction is terminated, it will have a certain impact on the company's earnings performance," it added.

The company didn't specify how significant the impact would be or how much it has spent on the project.

The project, which the local government said is intended to boost growth, has caused a backlash among local residents due to environmental concerns.

Earlier this week, thousands of protesters rallied against the project following violent clashes with police, according to eyewitness accounts from residents.

On Tuesday, the Shifang government said the project was being canceled because it had been opposed by many local residents.