Gold miner Zijin Mining Group, which was embroiled in a major pollution incident last year, says its net profit rose 36 per cent, thanks to higher prices for the precious metal.
The country's largest gold producer by output, which also mines copper, zinc and iron, expects its gold output to reach 29.76 tonnes this year, an increase of 2 per cent from 29.18 tonnes in 2010 but lower than the 30.65 tonnes in 2009. The production target set for copper is 87,800 tonnes, 2.8 per cent lower than last year's 90,287 tonnes.
The decrease in copper output is due to its Zijinshan mine's failure to resume normal production after a pollution spill. Gold output from that mine would also decrease 5 per cent this year from 17 tonnes to 16 tonnes, according to vice-chairman Lan Fusheng.
The production of copper at Zijinshan mine was stopped after the incident last July when the miner was found dumping toxic waste into Fujian's Ting River, killing a large number of fish. Zijin has paid out 10 million yuan (HK$11.85 million) as compensation and according to a verdict of a Fujian court in January, it still needs to pay another 20 million yuan in fines.
It was also deprived of its 'new hi-tech enterprise' designation and would not be able to apply again in five years, according to government regulations. The consequence is Zijin has to pay a higher tax rate of 25 per cent, rather than the 15 per cent rate enjoyed by new hi-tech enterprises.
Lam said Zijin had been paying tax at the higher rate since the latter half of last year.
However, helped by a bullish gold price, Zijin reported a net profit of 4.83 billion yuan in 2010, compared with 3.54 billion yuan the year before.