Collapsed dams… polluted rivers… Chinese company buying Guyana Goldfields has horrifying environmental track record

Jun 14, 2020 News

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– Papua New Guinea refused to renew licence three months ago

By Kiana Wilburg

Pull quote: In 2010, Reuters also reported that a dam at a tin mine run by a Zijin subsidiary collapsed during heavy rains, burying a nearby village in the Guangdong province. The landslide of waste from the mine left 28 people dead or missing…

Canadian mining company, Guyana Goldfields Inc. recently hit the jackpot. It was able to entice one of China’s top producers of gold and other metals into a relatively short bidding round for its assets. And the Chinese state-company’s offer of C$323 million was simply too superior for an initial suitor, Canadian mining company, Silvercorp metals to top.
Guyana Goldfields subsequently inked a binding agreement with Zijin and now stands to benefit from a whopping US$30 million loan facility to finance the ongoing operations of the Aurora gold mine and other liquidity needs. But who exactly is this company that will be entering Guyana’s mining industry by way of this new arrangement? What skeletons, if any, hide in its closet? Is there any reason for the under-staffed and under-resourced Environmental Protection Agency (EPA) to be concerned?
To paraphrase an old movie quote: Be afraid. Be very afraid.
Extensive research by Kaieteur News on the track record of Zijin shows that there is sufficient reason for Guyana’s authorities to be wary of Guyana Goldfields’ new partner.
Numerous international reports note that on July 3 and July 16, 2010, acid waste had escaped the company’s copper plant in China’s Fujian province and contaminated the Ting River. The accident was said to be the size of the BP deep-water oil spill, one

of the largest in the history of the petroleum industry. The copper plant manager, deputy manager and head of environment were detained and subsequently sent to jail because the company waited nine days before revealing the incident.
In 2011, a court in the southeastern Fujian province ordered the Zijin Mining Group to pay a criminal fine of USD $4.6 million for the 2.4 million gallon toxic spill that contaminated the local river and poisoned 2,000 metric tons of fish, enough to feed 72,000 residents for a year. As a result of the spill, 210,000 residents of the area were without potable water and there were notable increases in cancer cases. (https://steelguru.com/steel/zijin-mining-fined-usd-5-million-for-toxic-spill-at-copper-mine/203663)

COLLAPSED DAMS
In 2010, Reuters also reported that a dam at a tin mine run by a Zijin subsidiary collapsed during heavy rains, burying a nearby village in the Guangdong province. The landslide of waste from the mine left 28 people dead or missing.
Reuters noted that Zijin had run into trouble with collapsed dams before. Late in 2006, a tailings dam breach at Zijin’s Shuiyindong mine in Guizhou province dumped cyanide-laced residue into a stream, and forced the mine to close for months.
Kaieteur News also found that a mining boom, thanks to the Chinese economy’s insatiable demand for metals, left the countryside studded with unsafe tailings dams that liquefy under pounding rains. In the worst such accident, 276 people were killed when a tailings dam at an iron mine gave way in Shanxi Province in September, 2008. A similar collapse the previous month in the same province killed 43 people, but was covered up ahead of the 2008 Olympic Games in Beijing.
NO RENEWAL
The purchase of Guyana Goldfields is integral to Zijin’s search for more gold after it lost a key licence in Papua New Guinea about three months ago. International news agency, Reuters in an April 29 news article, reported that Papua New Guinea said it would not renew a 20-year mining lease with Zijin at its Porgera gold mine, citing environmental damage and social unrest even as gold prices have soared to more than seven-year highs. (See link: https://www.reuters.com/article/us-barrick-gold-png-china/zijin-says-papua-new-guinea-ending-gold-mine-lease-may-hurt-bilateral-ties-idUSKBN22B2C0)
Dongxing Securities Co., Ltd., a Chinese investment bank and brokerage firm had said that without the Porgera mine, Zijin’s 2020 gold production is expected to decline by 37 tons, or 9.3%. (https://www.caixinglobal.com/2020-04-29/chinas-zijin-mining-seeks-gold-elsewhere-after-losing-papua-new-guinea-mine-101548312.html).
Following the move to not renew the lease, Zijin warned the administration of Papua New Guinea that it should be mindful of taking such a course of action as it could damage bilateral relations. It is important to note that China has been one of Papua New Guinea’s largest creditors over the years.
The previous administration for Papua New Guinea was warned in 2015 about the horrible track record of the Chinese state-company but did nothing. The new government led by Prime Minister, James Marape is now adamant about taking action to protect his people.

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