TIANJIN CYANIDE EXPLOSION:

 THE TIBET CONNECTIONS

Why were 700 tons of sodium cyanide sitting in a Tianjin warehouse waiting to explode? What was all that cyanide for?

Tianjin is a very long way from Tibet, yet they are historically connected, and the cyanide, primarily used in gold extraction, adds another link.

Tianjin is China’s  entry point for imported sodium cyanide, but its main use is well inland, as far upriver as Tibet. Tianjin also stores sodium cyanide made in China, sometimes hundreds of kilometres away. The use of cyanide to extract rock  gold has long been regarded as a nasty, highly dangerous but cheap, labour-saving way of aggregating gold  from rock  deposits.

The twin banes of gold extraction are mercury and cyanide. Mercury is associated with poor miners standing in streambeds panning for flecks of gold which adheres to the mercury. This is such a dangerous practice, to both the panhandlers and to rivers, that the world now has a treaty specifically banning mercury, while attempting to transition poor, or artisanal miners, into the slower but simpler and safer method of just relying on gravity, as gold is so heavy.

There is no such treaty banning cyanide, which is used more by large scale miners working the rocks that may hold gold invisible to the human eye, but which can be crushed and then the gold leached out with cyanide.

Artisanal miners are worldwide, and swarmed across Tibet in the 1980s and 1990s, while helpless Tibetan communities faced the wrath of the security state if they protested against widespread use of cyanide, mercury and dredging machines that all trashed river banks, river beds and with frequent toxic spills that poisoned livestock.

Those were the bad decades for Tibet, as China’s “opening up” opened Tibet to immigrants seeking quick fortunes, with no concern for long term consequences, or for Tibetan livelihoods and land. Those days are supposedly over, as the TAR regional government has announced, on more than one occasion, a ban on such small-scale mineral extraction.

Small-scale artisanal mining goes on, despite the official ban; most readily in depopulated areas where Tibetan pastoralists have been removed –in the name of conservation, growing more grass and repairing the damage done by past rapacious mining.

Officially, we are now in an era of large-scale mining, done by modern corporations using scientific methods, with sufficient capital to invest in technologies of extraction that do away with cheap and crude methods such as cyanide (and mercury).

Yet one of the biggest corporations owning major deposits of the Tibetan Plateau is Zijin, which boasts of being China’s biggest gold miner. Zijin keeps its costs down by continuing to use cyanide, at its main mine in Fujian province, as Bloomberg Businessweek reported in 2010: Use of leaching at the Zijinshan mine enables Zijin to achieve gold extraction costs of Yuan 60/g compared to Yuan 110/g for rival firms, but the downside is the generation of cyanide waste.”[1]

Cyanide, as a method of leaching gold from crushed rock, remains common, although there are many alternative technologies for extracting gold. The cyanide industry worldwide has its own voluntary code of conduct for the safe use of cyanide, but no Chinese mining companies have signed onto it.

Zijin hit the headlines in 2010 because of a major toxic spill: “The July 3 discharge of more than 9,000 tonnes of wastewater killed thousands of fish and polluted the Ting river in Fujian province, on which 60,000 people depend for drinking water. Tailings reservoirs are supposed to be lined so that water seeping out of waste ore, which may contain heavy metals and toxic chemicals, does not enter the local water supply. But it has run into trouble with tailings dams before. Late in 2006, a dam breach at Zijin’s Shuiyindong mine in Guizhou province dumped cyanide-laced residue into a stream.”[2]

The reason Zijin was able to get away with cutting corners and reliance on cyanide will sound familiar to those following how a Tianjin warehousing company got away with storing hundreds of tons of cyanide so close to city residents. An investigative report by South China Morning Post said: “The scandal of Zijin Mining’s toxic spill has shocked the nation, not only because of its devastating consequences for the environment, but also because the incident once again exposed collusion between big business and local authorities.

“We’ve seen many examples of collusion between government officials and businesses, but the scale of the local government’s involvement in the Zijin case is still shocking,” said Zhu Lijia, a professor at the National School of Administration.

“The company’s deputy Communist Party chief, Wen Wenbiao, is chairman of the county branch of the Chinese People’s Political Consultative Conference, the mainland’s top political advisory body. Zijin also employs one of the county’s top graft busters. The company’s deputy chairman, Liu Xiaochu, is a retired senior official who used to be in charge of economic planning for the provincial government. Its independent directors include Chen Yuchuan, a former chief engineer of the now-defunct ministry of geology and mineral resources, and Lin Yingjing, a former bureau head of the provincial state-owned assets administration.

“Lin Shuiqing, a former chief of the county’s United Front Work Office – a Communist Party unit – and Lin Xinxi, one of the county’s top graft busters both joined the company’s supervisory committee in November, according to the company’s annual report. “Apparently, laws and regulations are rendered useless in Shanghang as the company has clearly stayed above the law,” said Zhu. Professor Wang Jianxun , a law expert at the China University of Political Science and Law in Beijing, said government officials routinely traded their power for kickbacks and handsome economic returns. “This is especially commonplace in resource-intensive industries that are mostly controlled by monopolised enterprises,” he said.

“The China Business Journal said many of the officials responsible had yet to be punished, with authorities fearful that investigations by mainland media would deal a further blow to the county’s biggest cash cow and one of the province’s biggest cash cows. Zijin Mining contributed over 60 per cent of the county’s taxation income last year.

“The fact that the probe was wrapped up so quickly signals that the provincial government wants to contain the implications on the business operations of Zijin Mining, the top enterprise in Fujian,” the newspaper quoted an unnamed local cadre as saying.

“County party chief Lai Jiqiu was quoted as pledging at a recent closed-door meeting that no other officials would be implicated, including those incumbent and retired officials who work for the company. Fisherman Xue Tianfa says he now understands why the villagers’ repeated protests against pollution have been ignored over the years and why the polluter has managed to escape scrutiny, despite several accidents. Villagers recalled authorities’ cover-up of an accident a few years ago in which a truckload of sodium cyanide was dumped into the Ting River, where it caused severe contamination.

“The county government has covered up pollution for Zijin and turned a deaf ear to our huge losses and suffering so far,” he said. Zijin Mining has earned notoriety among its competitors for its use of the highly toxic sodium cyanide in its gold refining, according to China Business News. The method may have cut costs, but it is very dangerous and has enormous environmental risks.”[3]

But the spill was too big, especially after almost 2000 tons of dead fish washed up downstream of the spill. For a while it became a top story, even an issue for a government wanting to be seen to be tough on polluters. As lawyer Christine Loh said; “Zijin’s story follows a well-trodden path. It first tried to hide and fudge, then claimed its silence was for good reason. Only when the problem was too big to disappear did it capitulate. A number of its executives have been detained, and three local government officials have been sacked. Zijin has a history of environmental violations, according to official records. Yet, it was lauded by Forbes magazine last year as a candidate to enter its “Fab 50” list of Asia’s top private companies with the best long-term prospects. Only since the spill are investment analysts starting to report that the company’s low-cost and old mining methods pose significant environmental risks to investors. Before its fall, such inappropriate practices boosted profits, and investors and analysts didn’t seem to care. Now it is fashionable for them to talk about the importance of environmental protection and corporate social responsibility. Zijin’s scandalous behaviour is not unusual on the mainland. Well-connected companies often ignore environmental and safety rules. How many similar accidents are waiting to happen?”[4]

Zijin owns and operates a major copper mine in Xinjiang called Ashele, and in Inner Mongolia its Bayin Nur non ferrous mine is a major revenue earner. Around the world, Zijin owns mines in Peru, Africa and Australia. The company boasts: “From 2003 to 2012, the company’s profit ranked No.1 for 9 consecutive years in China gold industry, and its total assets, sales revenue and profit increased dozens of times, the annual compound growth rate of its main economic figures was 60%.”[5]

 

TIBET TO TIANJIN; TIANJIN TO TIBET

Almost a century ago the wool of Tibet, especially from Amdo, made its way down the Yellow River to global markets –chiefly New York- via the port city of Tianjin. In those days, when Tibet was plugged into the global economy more than now, the wool of central Tibet went south, via Kalimpong and Calcutta to English woollen mills, while Amdowa wool went slowly downriver to Tianjin. To this day, if you look at the label inside the brim of a Tibetan nomad cowboy felt hat, you’ll see: made in Tianjin. Why Tibetan wool has to go all the way to Tianjin to be beaten into felt for hatting is a mystery, one of many mysteries of contemporary market capitalism with Chinese characteristics.

 

ZIJIN IN TIBET

In Tibet, Zijin’s most recent venture is joint ownership, with Jinchuan Nickel, of the Shetongmon Xiongcun 雄村铜(金)矿, 谢通门县 (བཞད་མཐོང་སྨོན་རྫོང་), 日喀则地区 (གཞིས་ཀ་རྩེ་ས་ཁུལ།), 西藏自治区, 中国 copper, gold and zinc deposit 60 kms west of Shigatse, and only 3 kms from the Yarlung Tsangpo river. Geologists are confident that as much as three million tons of copper can be extracted, and 100 tons of gold from this deposit,[6] which is often called the Shetongmon mine, after the county name. It is conveniently  close to the Shigatse railhead available to take copper concentrates all the way to Jinchuan Nickel’s smelters in Gansu.

In Tibet Zijin also owns Qinghai West Copper Mining Company, a substantial contributor to parent company profitability.

According to Zijin’s own publicity: “Zijin produced less than 10%  of China’s gold production while achieving over one third of total profits in the industry. It is evident that Zijin’s profitability is quite outstanding among the industry”.

 

ZIJIN AS A GLOBAL PLAYER

Zijin’s biggest global acquisition of 2015 has been in Papua New Guinea, buying the Porgera mine. This copper mine, high in the mountains, dumps all of its wastes into a nearby river, its successive owners arguing that building an effective tailings dam to forever secure the waste, in steep terrain and a high rainfall area, is impossible, or at the least far too expensive.[7]  Zijin’s 2014 annual report says: “The Group has managed to bring important construction projects within and outside the country including Inner Mongolia Sanguikou zinc and multi-metals 10,000 tonnes/day mining and processing project, Xinjiang Wulagen lead and zinc mine 10,000 tonnes/day technological innovation project, Russian Tuva zinc and multi-metals mine 5,000 tonnes/day project, Kyrgyzstan Zuoan gold mine 2,500 tonnes/day mining, processing and refining project, and Tajikistan Jilau gold mine 10,000 tonnes/day mining and processing project, etc., overcame all levels of difficulties, basically completed the constructions and the projects were put into production.”

Zijin’s partner, Jinchuan, based in Gansu has been physically closer to Tibet, but has global reach, several mines in Congo and Zambia. Shares in both Zijin and Jinchuan are listed on the Hong Kong Stock Exchange, which requires detailed reporting of corporate activities.

 

HOW MUCH GOLD IN TIBET?

The gold China extracts from Tibet is a lot, and extraction has persisted for decades, initially by local enterprises controlled by local cadres; these days by big corporations as well. Yet China has never published statistics on how much gold is extracted from Tibet Autonomous Region; it is missing from all statistical yearbooks.

Qinghai is a little less reticent, listing 18 gold mining companies in the province, with a combined income of RMB 1.06 billion in 2013, of which RMB 240 million was profit.[8] But there is no figure for the actual amount of gold metal produced.

When China’s real estate prices boom, or the stock market booms, gold loses its attraction, and in recent times the gold price has slumped, encouraging China’s central bank to buy more gold, while prices are cheap. Now the gold price seems to be on the rise again, after the collapse of the stock market bubble and a slump in real estate.

The slide in gold prices has delayed the exploitation of Tibet on a more intensive scale, but maybe not for much longer. As uncertainty rises, many newly rich Chinese want to get their wealth out of the country, to somewhere safer, and gold, physical bricks of gold, are a highly portable way of transferring capital abroad. The flight of capital from China seems to be accelerating, as nervous investors seek to protect their wealth.

 

DOES IT MATTER?

Tibet is geologically a young land, its rocks uplifted recently, exposing much that usually is well hidden. This includes heavy metals and the arsenic found in the rocks of western or upper Tibet.  Tibetan rivers naturally carry a noticeable burden of toxic metals, from wearing away at the rock the rivers flow over. Any additional burden, from mining, has serious consequences far downstream. To add to this natural burden the cyanide and mercury used by gold miners small and big, is an insult to the health of rivers that directly water one billion people across Asia.

 

[1] Mining: a China miner in a heap of trouble, Bloomberg Businessweek, 26 July 2010

[2] Second Zijin mine spill in China hits export hub, Reuters 20 July 2010

[3]Shi Jiangtao in Shanghang, Fujian:  Sludge, sludge, wink, wink: how collusion abets pollution, South China Morning Post, 27 July 2010

[4] Christine Loh, Toxic Fallout, August 2, 2010,

[5] Zijin Mining Group Co., Ltd Top 10 Events in 2013, Zijin corporate press release, 18 January 2014

[6] Fuwei XIE, Juxing TANG and Xinghai LANG, The Genetic Types of Mineral Deposits of Xiongcun District, Gangdese Porphyry Copper Belt, Tibet, PRC; Acta Geologica Sinica, Volume 88, Issue s2, pages 629–630, December 2014

[7] Stuart Kirsch, Mining Capitalism: The relationship between corporations and their critics, U California Press, 2014, 47

[8] Qinghai Statistical Yearbook 2014, table 3-20: Utilization situation of mineral resources.

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