Zijin Mining has been forced to shut two gold mines in Shandong province due to a fire at a nearby mine, a month after a toxic waste spill curbed gold output and suspended copper production at its mainstay mine in Fujian.
The mainland's largest gold miner said in a statement to the stock exchange yesterday that its Longkou Jinfeng and Longkou Jintai mines in Shandong had ceased production since Saturday.
This was due to an order from the local government to close all non-coal underground mines in Yantai city, after a fire caused by overheated power cables at the Luoshan gold mine in Zhaoyuan city 100 kilometres west of Yantai, resulted in at least 16 deaths.
The mines were asked to undergo 'self-examination' and 'self-correction'. Production can only be resumed after passing inspection.
Longkou Jinfeng's planned output this year is 340 kilograms of gold, 1.1 per cent of Zijin's latest output target. Longkou Jintai is in exploration stage and has no production plan.
CLSA analyst Richard Leung expected the incident's impact to be small, estimating the closure to last 13 to 15 days based on a 15-day shut-down two years ago in Shandong caused by a mine waste spill.
'Prolonged shutdown is unlikely as it will have a major impact on the local economy,' he said. 'However, the post-accident region-wide shutdown is more severe than what we have seen before.'
