China Gold shares may suffer after fatal landslide in Tibet
Tragedy at Tibetan mine could have further repercussions in the market as operation may be closed until it is found to be safe
The shares of Toronto and Hong Kong-listed China Gold International Resources will be under pressure today, the first trading day on the stock exchange, for the ultimate owner of the disaster-hit copper-and-gold mine in Tibet , where as many as 83 workers may have been killed by a landslide.
An analyst said China Gold's share price would be tested as mainland mining firms that had major accidents typically were asked to suspend operations to undergo safety checks and revamp. Operations can resume only after they pass inspections.
Twenty-one bodies have been recovered after 70 hours of rescue efforts, with 62 others still missing, China National Radio reported yesterday. More than one million cubic metres of earth have been excavated since the landslide struck at 6am on Friday.
Jiama mine is located at an average altitude of 4,780 metres and the chances of survival for those still trapped are slim. Altitude sickness and cold and damp weather are adding to the difficulties faced by the emergency workers.
The mine, operated by China Gold's wholly owned Tibet Huatailong Mining Development, is 68 kilometres from the regional capital, Lhasa .
Phase one began in the second-half of 2010 with an annual mining and processing capacity of 6,000 tonnes a day.
A C$705-million (HK$5.38 million) phase-two expansion, which is undergoing a pre-feasibility study, would see this rise to 40,000 tonnes per day by 2015, China Gold said last week.
The firm said in a statement to the Toronto stock exchange on Saturday that chairman Sun Zhaoxue was on site to assist the rescue operation. Its spokesman would not comment on the status of the mine's operation. The mine recorded US$108.6 million of revenue last year.
China Gold said its management team, which was travelling to major international financial centres to discuss results and future prospects with investors, had returned to the mainland.
The Vancouver, Canada-based firm is the overseas-listed flagship of the central government-administered mining major China National Gold Group.
Besides the Jiama mine, which contributed one-third of its revenues last year, it also operates the Chang Shan Hao gold mine in Inner Mongolia .
Two days before Friday's disaster, China Gold chief executive Song Xin told the South China Morning Post, both mines had been recognised as "green mines," because they adhered to high standards of occupational health, safety and environmental protection.
"We especially emphasise process management," he said. "We investigate small incidences seriously since otherwise, they can add up to a big incident."
China Gold's shares closed at HK$28.35 on Thursday, 25 per cent lower than a year earlier.