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Just three months later, in September 2010, a tailing pool dam in Maoming City in Guangdong Province owned by Xinyi Zijin Mining Company collapsed. The consequent flood of water killed 22 people and destroyed 523 homes. Xinyi Zijin Mining is a subsidiary of Zijin Mining. Authorities from the Guangdong Provincial government investigated the incident and found that non-compliance with regulations by Xinyi Zijin Mining directly contributed to the dam’s collapse.

Zijin Mining does not have either a risk management committee of the board or a committee responsible for environmental, health, and safety issues, and despite these disasters, the board has made no effort to establish such committees.

In case there is an impression that such occurrences are par for the course for a mining company, these disasters have had a significant adverse effect on the company’s stock price. Zijin Mining’s share price was HKD 3.93 in June 2010, prior to the toxic waste leak. On May 11, 2012, the shares traded at HKD 2.30, a 41percent decline.

Zijin Mining is currently rated as having a Very Aggressive AGR score of 7, indicating higher accounting and governance risk than 93 percent of companies in the Asia-Pacific. The company has an equity performance ranking of 2, indicating that we believe it will underperform the market.

GMI Ratings gives Zijin Mining an ESG rating of F.