Zijin Mining Says Four Dead After Heavy Rain Causes Tin-Mine Dam Collapse

SHANGHAI, Sep. 27 -- Zijin Mining Group Co. said four people died after a tailings dam collapsed, adding to safety concerns at China’s biggest gold producer two months after another accident poisoned almost 2,000 metric tons of fish.

The dam at Zijin Mining’s Xinyi Yinyan tin mine broke on Sept. 21 after a landslide triggered by heavy rains from Typhoon Fanapi, the Fujian-based company said in a statement yesterday. The Guangdong provincial government is investigating, it said.

The incident comes after Zijin Mining pledged to improve its management and invest more on safety measures after toxic waste from a copper mine leaked into the Ting River in Fujian province, leading to investigations by the securities regulator and the police. A safety permit was obtained from the Guangdong province for its tin tailing pool, the company said yesterday.

“We lack the official investigation results to know what happened,” Heng Kun, a Shanghai-based analyst at Essence Securities Co., said by phone. “This time it may just be an accident caused by the landslide. The July toxic spill was not purely an accident.”

Zijin rose 1.6 percent to HK$5.91 at 11:29 a.m. in Hong Kong. The shares gained 3.4 percent to 6.47 yuan in Shanghai trading.

The break in the tin mine dam “resulted in damages to some houses, farmland and water facilities downstream and caused casualties,” Zijin said in the statement. Four deaths were reported in Dadong village located downstream, according to the local government, it said.

Company Loss

The latest accident would lead to a loss of 19 million yuan ($2.8 million), the company said. The tin mine was in trial production, Zijin Mining said.

More than 100 metric tons of fish were found dead at farms in China’s Hunaghua river basin downstream from the dam, China Daily said today.

Zheng Yuqiang, company secretary, said he wasn’t aware of the death of the fish.

Zijin was forced to shut its copper plant at the Zijinshan mine in Fujian after its July spill, the worst accident in the Chinese gold mining industry since July 2008, when runoff from a Zhongjin Gold Corp. site in Dandong poisoned the water supply of 210,000.

Police detained some of Zijin’s managers, and the China Securities Regulatory Commission was investigating a possible breach of information disclosure rules related to the July spill.