Zijin triples production at Serbian copper complex
Bor, in north-eastern Serbia, is one of the country’s most polluted cities. While local people protest their toxic air and water, Chinese mining company Serbia Zijin Copper, which runs the city’s large-scale copper mining and smelting complex, is expanding its operations without permits, local consent or transparency. Zijin is one of the many highly polluting Chinese investments undertaken without the necessary environmental and social due diligence.
Since 2018, when the new owner of Bor smelter complex, the Chinese-owned Serbia Zijin Copper started its operations, the lives of the citizens in at least five villages in this area of Serbia have been upended. In an open letter this March the villagers of Ostrelj state that the two companies, Serbia Zijin Copper and Serbia Zijin Mining, are expanding their activities threatening their health, private property, and livelihood.
The villagers are calling on the authorities to stop unauthorized construction and find a solution for all the residents who are trapped between the old and new mines and hills of tailings. When winds blow, the Ostrelj village is coated in toxic dust.
The villagers claim that the authorities have not developed a master spatial plan that would describe the future of their village and delineate the mining complex on their territory and describe the environmental impact and the purpose of facilities that Chinese had been building without permits. An environmental impact assessment for just one facility was put out for public consultations after it had already been built.
According to the villagers and research conducted by the Serbian Renewables and Environmental Regulatory Institute (RERI), the Chinese investors have been getting away with construction conducted without legally required documents and permits.
Meanwhile, Zijin’s mining operations are extending its reach on their territory while the local community representatives say that they are kept in the dark by the local as well as national authorities.
The villagers therefore demand a moratorium on further mining activities before the authorities have created a master spatial plan for relocation of their and six other affected villages and called on Zijin to undertake all protection measures to prevent their further poisoning by toxic dust.
“The Serbian state should stop all the mining activities in Bor and all the constructions that have been implemented without a permit. We also need adequate resettlement plans for the villagers before the work can continue”, said Zvezdan Kalmar, director of the Serbian environmental organizations the Centre for Ecology and Sustainable Development (CEKOR).
The gradual weakening of legal requirements for Chinese investments in Serbia is alarming.
A legal analysis by RERI and Just Finance International shows that China’s influence had an overall negative impact on the legal system in the country. Its business activities increased the number of loopholes in the law, which made exceptions for highly polluting large-scale infrastructure investments, predominantly from Chinese enterprises or financed by Chinese state loans.
The problems have also been addressed in a resolution from the European Parliament 2021.The European Parliament called on Serbia to strengthen its legal compliance standards for Chinese business activities and sent a warning to Belgrade that its behavior is jeopardizing the country’s European accession process.
For several years now, both the Serbian government and the Chinese company have ignored the legal irregularities of the Zijin copper mining and smelter projects. However, some attempts have been made to address the problems in Bor.
For example, in April 2021, Serbian authorities suspended construction work at the Jama mine, core to Bor’s operations, after the company failed to comply with environmental standards. In April 2022, after thousands gathered to protest the project in Belgrade, Serbian authorities halted the operations of Zijin citing environmental pollution. But the attempts did not satisfy the protesting citizens and are regarded as temporary solutions without dealing with the fundamental problem of the operations.
The affected villagers call the government for transparency. They claim that the monitoring of ongoing mining and production activities that could put their lives in peril remain to be ignored by both the Serbian authority and the Chinese who operate Bor cooper mine.
One major uncertainty is what impact the Zijin operations will have on the Krivelj river. The river is of utmost importance for the livelihood of the farming community and the villagers’ fears that Zijin is actively working to change the course of the river since it is blocking their way for a new tailing dam.
The waste from Serbia Zijin Copper operations is deposited on an old dam under which was built a tunnel that secures the Krivelj river’s flow to Ostrelj village. In the end of 2021, the drainage tunnel showed cracks and local media report that toxic substances have leaked into the river. This weakness in critical structure have been identified more than a decade ago, but the authorities failed to tackle them.
In 2007 Serbia started negotiations with the World Bank to build a new drainage system for wastewater to clean that dam. But the country never took to the loan and the project was shelved by 2015. Now, with Zijin expanding its operations more than two times compared with the past and the problem with the dam is still not solved.
The dam holding the toxic waste represent environmental hazard that could not only endanger villages around Bor such as Ostrelj, but also regional capital Zajecar and the town of Negotin. The spill could roll further downstream into the Timok river and all the way to Danube, causing transboundary pollution in Romania and Bulgaria.
So far, the Serbian government, which owns a stake in one of the two locally owned companies has turned a blind eye to various violations of the procedures and Zijin is not making any serious attempts to mediate with the citizens in Bor. Now the pollution is reaching new records in Bor. The expansion of smelter activities has led to an average annual increase of carcinogenic arsenic in air for 10 times over the threshold, according to Serbian experts.
The open letter from the villagers in the Zijin-affected communities Ostrelj was addressed to all the major stakeholders in Serbia including the president Aleksandar Vucic. The villagers feel they have been kept in the dark from the decisions for the expansion of Zijin’s mining operations, fearing the impacts, as well as how they feel as “foreigners in their own country”.
Zijin´s operations in Serbia are among the biggest copper mining operations in Europe and the copper is the number one export product from Serbia to China. Yet, Serbia is only getting 5 percent royalties from Zijin´s revenues which is one of the lowest royalties for mining operations in Europe.
Zvezdan Kalmar believe that the lack of royalties is a problem for Serbia.
“Without this money we won’t be able to regulate and control the negative impact of the mining activities at all”, he said, Just Finance International writes.
Zijin Mining project is one of the many highly polluting Chinese investments
China’s Zijin Mining is polluting a village in southeastern Europe’s Serbia without permits, local consent or transparency, an environmental activist group claims.
Bor, in northeastern Serbia, is one of the Balkan country’s most polluted cities, according to Just Finance, a Dutch group that advocates for public budgets spent on development and infrastructure finance to contribute to sustainability.
The group said China’s Zijin Mining, which runs the city’s large-scale copper mining and smelting complex, is one of the many highly polluting Chinese investments undertaken “without the necessary environmental and social due diligence”.
“Since 2018, when the new owner of Bor smelter complex, the Chinese-owned Serbia Zijin Copper started its operations, the lives of the citizens in at least five villages in this area of Serbia have been upended,” the group said.
In an open letter this March the villagers of Ostrelj said Serbia Zijin Copper and Serbia Zijin Mining are expanding their activities, which threatens their health, private property, and livelihood.
In 2016, Zijin agreed to pump nearly $1.5 billion into the Serbian copper and gold project and paid $350 million for 63% of state-run Serbian miner RTB Bor Group.
The villagers are calling on the authorities to stop unauthorised construction and find a solution for residents living between old and new mines and hills of tailings. “When winds blow, the Ostrelj village is coated in toxic dust,” Just Finance said.
The villagers claim that the authorities have not developed a master plan that takes into account environmental impact.
Just Finance said an environmental impact assessment for one facility was put out for public consultation after it had already been built, Asia Financial writes.
Zijin investing in water supply in Serbian village
New Zijin’s project in Serbia will provide clean drinking water to all households in the village Metovnica by the beginning of November 2021. This was confirmed by a signature from the Mayor of Bor, Aleksandar Milikic, and representatives from Zijin Mining.
Mining Supports The Local Economy
According to Serbia’s Deputy Prime Minister, Zorana Mihajlovic, “mining isn’t just about the or” and that the donation from the mining company will go a long way to improving the lives of local people. Zijin has remained present in Bor since 2019 and has played an important role in the increased tax income, allow the city to increase its annual budget – by 40% and created around 1,500 jobs for local young people.
This has also positively impacted the education system and local infrastructure. “Around 300 children attending the village school will have a future, and in this future, they will have water, electricity, roads, and the opportunity to get employed,” says Mihajlovic.
Dejan Markovic, a representative of the local council, has expressed his gratitude for the opportunities provided by the collaboration of the Serbian state authorities and Zijin Mining. “This time, they are helping us build a water supply system, which is of historical importance for us because Metovnica has never had a water supply system, so we had major problems with obtaining water.”
Zijin Mining’s General Manager, Fu Feilong, is certain that future developments within the company will benefit society. “In the future, we will continue to realize the vision of Zijin Mining to develop mining to the benefit of the whole society, actively engaging in social responsibility, giving back to the community, contributing to the society and undertaking all practical activities in order to promote the common development of both the company and the community,” Feilong says.
Mijhajlovic has also spoken about the further energy and mining developments in the area. In Autumn this year, a major mining project is set to open – called Cukaru Peki – and will be one of Europe’s largest copper and gold extraction sites – also declared the first “green mine” in Serbia.
Zijin expects huge net profit jump
Chinese mining giant Zijin Mining owns significant mining investment projects in 12 overseas countries and 14 provinces in China. It is one of the Chinese companies owning the largest metal resources volume, controlling the largest reserve volumes of copper and gold resources overseas and having the largest output of mine-produced products with the highest efficiency.
Zijin Mining announced that for the period between January and June 2021 (H1 2021), the company expects a 156%-172% year-on-year increase in net profit attributable to shareholders of the parent company, to reach 6.2 to 6.6 billion yuan (~$957 to $1,019 million), which is more or less equivalent to its net attributable profit in 2020 (6.5 billion yuan or ~$1,004 million). The company said that in H1 2021, copper and zinc prices surged while gold price remains high, and that it seized the opportunity, worked on increasing production, and improved internal management and efficiency. Zijin added that it realized a year-on-year increase in the output of gold, copper and zinc, which boosted the company’s performance.
Meanwhile, the company touted significant progress with Zijin’s key construction projects which has been made during the period.
In the DRC, the company said that the Kamoa-Kakula copper mine’s Phase I Project has commenced production in May ahead of schedule. After reaching its full capacity, the mine will deliver an annual output of around 200,000 tonnes of copper. This year, it will produce copper concentrate containing 80,000 to 95,000 tonnes of copper. To be further expanded in phases, the Kamoa-Kakula copper mine is eventually expected to process 19 million tonnes of ore per annum and become the 2nd largest copper mine on the planet with a peak output of over 800,000 tonnes of copper. The mine is ramping up the capacity its Phase I operation, while pushing to commerce production at Phase II in Q3 2020.
Additionally, Zijin noted that the upper zone of the Čukaru Peki copper and gold mine in Serbia began trial production in June. The operation will transition from mine construction to production in September. On average, it is expected to produce 91,000 tonnes of copper and 2.5 tonnes of gold per annum.
Zijin Copper in Serbia wants to be an example of green mining
The filtration system has already been put into operation at the Serbia Zijin Copper mine, which returns 95 percent of the process water back to flotation, and in the field of environmental protection, numerous works have been done regarding afforestation and greening of mining areas, it is stated in the announcement. The company Serbia Zijin Copper announced that the working group of the Government of Serbia for the supervision of all potential polluters of the river Pek determined that Zijin fulfilled all the requirements of the inspection team on time.
“It was stated that Serbia Zijin Copper has implemented the necessary measures to increase the efficiency of water treatment in the Majdanpek mine, but also that the company is taking other measures to reduce the impact of its activities on the environment and step by step solve the accumulated inherited problems in this area,” it is stated in the announcement.
The project that was not part of the ordered measures was praised, and it refers to the return of 95% of process water from filtration to the flotation plant of the Majdanpek mine, they say in Zijin.
The working group of the Government of Serbia for the supervision of all potential pollutants of the Pek River and the inspection team checked the day before the deadline (April 29) whether the Majdanpek Copper Mine met all requirements related to eliminating the impact on water quality in the river.
“The working group, which included, among others, Assistant Minister of Mining and Energy Dejan Milijanovic, Assistant Minister of Environmental Protection Dejan Furjanovic, as well as mining, water and environmental inspector, was convinced that the Majdanpek mine did everything for consistent implementation of the imposed measures,” they say in Zijin.
The company, as stated, cleaned the existing sedimentation tanks for receiving atmospheric water and built new ones for the mechanical treatment of waste, muddy water, as well as for the laundry of heavy and other vehicles.
Although it was not the obligation of the company, the bed of the river Mali Pek was cleaned from the material that had been deposited for decades, in the part that is not in the mining zone, in the length of almost 300 meters. The company also accepted the obligation to build another additional sedimentation tank, as suggested during the control supervision, and it also undertook the obligation to regularly examine and keep a diary on the quality of wastewater.
Assistant Minister of Mining and Energy Dejan Milijanovic expressed satisfaction that Zijin and the Ministry of Mining and Energy are “on the same path” when it comes to environmental protection:
“We want Serbia Zijin Copper to be an example that mining in Serbia can be green, because that is the basic meaning of progress when it comes to this industry. Not mining at any cost, but one that can be sustainable and that must be green and in accordance with the laws of nature and the laws of environmental protection,” Milijanovic emphasized.
Representatives of the Working Group indicated their more frequent presence in this environment and active monitoring of potential polluters of the Pek River, all with the aim of achieving zero pollution.
Representatives of Zijin stated that they will strictly implement the ordered measures of the inspection team, but also that they will continuously work in the field of environmental protection. The problems of the historical heritage will, as promised, be solved step by step until the final idea “that the waters be clearer and the mountains greener”. Work will be done according to the standards of improving the environment to the “green mine” and the plan for the mine to later become a garden, and mining a green industry.
Zijin estimates 340,000 tons of copper and 12 tons of gold discovered in Serbia
According to geologists’ estimates, there are about 340,000 tons of copper and 12 tons of gold, Zijin company said in a statement. Geological research and investments in this set, but in the long run a profitable job, continue this year as well, so a new drill for exploratory drilling has recently arrived in the Majdanpek mine for that reason.
In the last two years, the Geology Sector has used RC exploratory drilling as part of exploitation research at surface mines, but an external contractor has been hired for that. The dynamics of excavation at surface mines requires constant monitoring and planning of the quantity and quality of the useful component, which can be a problem in less explored parts of the deposit. The new machine will help in such situations, because geologists will get more precise geological information in a fast, relatively cheap and efficient way in the future.
The new drill will also enable better control of the content of useful components, e.g. copper and gold (grade control), which is already a common practice in the world.
The new “epirok” drill, which records the first working hours and meters in the Majdanpek mine, has a simple design, adapted for work on inaccessible terrain, and at the same time it is reliable and easy to service. It can reach up to 250 meters in depth, although the largest in surface mines are 100 to 150 meters. The wells that it makes, if they are not very deep, can also serve as mines in the preparatory drilling and mining works, it was announced.
Last year, the company Zijin Copper invested around 5.55 million US dollars in geological research. The investment paid off, as the company is on track to increase its resources by an additional 57.76 million tons, with a copper content of over 0.3 percent.
Additional Zijin investment of 408 million dollars in mines in Serbia
This year, as it was emphasized by Zijin will be “a year of opportunities and challenges in which, with the planned investments of about 408 million dollars, 74,010 tons of copper in concentrate should be produced, ie 38.91 percent more than last year.”
The company Zijin plans to invest 408 million dollars in production and started projects in Bor and Majdenapek during 2021, the company announced.
That means that the company will realize more than 1.1 billion dollars of investments in just three years, it is stated in the announcement. It is added that during the two-and-a-half-year strategic partnership with Serbia, 700 million dollars were invested, which is twice as much as the price at which the company recapitalized the mining and metallurgical plant in December 2018.
The company reminds that with the Strategic Partnership Agreement at the end of 2018, Zijin undertook to invest 1.26 billion dollars in the next six years in improving production, increasing efficiency, opening new mines, but also significantly increasing productivity.
“In the technical renovation and expansion of four mines and smelters in Bor, as well as in numerous safety and environmental protection projects, 360 million dollars were invested last year alone,” the statement reads.
It is added that this year, it is planned to invest about fifty million dollars more in the continuation of the started projects and production than in 2020.
“The goal is to produce 83,450 tons of cathode copper, which is 18 percent more than in 2020, about two and a half tons of gold and about 10 tons of silver, which is a year-on-year increase of 45.14 percent on gold and 10.12 percent on silver,” it is stated in the announcement.
The plan is for the number of injuries at work this year to be 30 percent lower than in 2020, for the realization of the training and education plan for employees to be 100%, as well as to continue the “green mines” project, ie to green an additional 250,000 square meters of degraded mining area.
The company invested 53.5 million dollars in environmental and work environment protection in 2020, the statement said, adding that “effective measures have been taken to dispose of solid and liquid waste, as well as to combat dust and flue gases.”
Priority has been given to the construction of a desulphurisation system and secondary chimneys, together with a new converter and a new anode furnace, and this comprehensive reconstruction should be completed by October this year.
The reconstruction includes the construction of a wastewater treatment system from “Jama”, for which preparatory work has begun, and the implementation of the wastewater treatment project from Lake “Robule”, as well as accompanying activities in the field of safety and environmental protection, according to companies.
Zijin in 2020 reached record profit
Zijin company is “pursuing the grand objective of becoming an extra-large scale international mining group with high technology and efficiency by 2030”.
Soaring commodity prices helped China-based Zijin Mining report record results for 2020, with net profit attributable to shareholders up 51.93% from the previous year to 6.5 billion yuan (US$1 billion). It was the company’s best annual result in Refinitiv Eikon records, beating the previous high of 5.71 billion yuan in 2011, Reuters reported. Zijin said the average gold price in 2020 was 26.77% higher than the previous year and copper was up 3.23%. Zijin also would establish an ESG system by international standards, chairman Chen Jinghe said.
His address outlined how “the warriors of Zijin” had fought their way to project sites to keep production and construction running in the face of the global COVID-19 pandemic. He said the company had attained fruitful results in its project development year, fostering a solid foundation for its “leaping growth endeavour”.
“The company’s copper production capacity sees an early momentum of exploding growth,” Zijin said.
It referred to construction at Kamoa-Kakula in the Democratic Republic of Congo as “beyond expectation” and said the construction at the Cukaru Peki copper-gold project in Serbia was encouraging.
“The company insists that mineral resources are of the utmost importance, therefore it significantly raises the amount of world-class mineral resources it owns,” Zijin said.
It said the acquisitions of the Buritica gold mine in Columbia and Aurora in Guyana, plus Julong copper in Tibet, had helped lift its reserves which now stood at more than 2,300 tonnes of gold, 62 million tonnes of copper, over 10Mt of zinc (lead) and 2,900t of silver.
Zijin produced 10.1 million ounces of gold in 2020, up 4.58% on the previous year, although mine-produced gold was down 0.79% to 1.3Moz. The company said it was striving to renew the mining lease and resume production at its Porgera joint venture in Papua New Guinea, which was mothballed almost 12 months ago. Porgera partner Barrick Gold said last week it was optimistic of a restart this year.
Copper production was up 18.12% to 1.03Mt of copper and mine-produced output was up 22.6% to 453,447t. The total market capitalisation of the company doubled from 114.8 billion yuan at the end of 2019 to 224.9 billion at the end of 2020, which Zijin said put it 12th among the world’s top 50 mining companies. Zijin has since risen to the second spot, as revealed in a Mining Journal report.
Zijin’s request for separate environment assessments rejected in Serbia
The two organizations Association of Young Researchers Bor and the Renewables and Environmental Regulatory Institute (RERI) have been raising the alarm in the public and with the Serbian Ministry of Environmental Protection, arguing that the Zijin attempted a case of salami slicing – artificial fragmentation of a project to hide the impact on the environment.
Based on objections from the Association of Young Researchers Bor and RERI, the Ministry of Environmental Protection of Serbia rejected the request by company Serbia Zijin Copper to decide on the need for an environmental impact assessment for a part of its project and ordered it to conduct a study for the entire complex.
Zijin wrote to the ministry in December with a claim that a study for the preparatory construction works within the expansion of its copper smelter in Bor isn’t necessary. They include excavation and the enlargement and reconstruction of existing structures.
Ministry changes course
Legal expert from RERI Hristina Vojvodić pointed out that the Chinese company already tried to break up the projects for increasing its output into smaller pieces and that the latest decision is “unique and made from a completely opposite standpoint” than in similar processes in Serbia lately.
She told Balkan Green Energy News it is the first time that an investor is trying to exclude preparatory works and said that the organization is looking into information that some of the planned structures have already been built.
“The construction permit can only be issued after the impact assessment study is approved. The project includes a desulfurization unit and a sulfuric acid plant and storage facility, making it potentially very dangerous for the environment. If Zijin obtained the permits, it would get the right to launch construction even though it wouldn’t know if it would be allowed to implement the entire endeavor. The ministry instructed the company that it can’t divide the project and it was a necessary move to get the whole picture,” Vojvodić stated.
Preparatory construction works have no independent purpose
According to the Law on Planning and Construction, the construction of a structure consists of preliminary works, the production and supervision of technical documentation, preparatory construction works, the construction itself and simultaneous professional oversight. It means that the aforementioned works aren’t a separate project and that they have no independent purpose, RERI said.
When the construction of the smelter in Serbia’s east is viewed as a whole, the negative environmental impact and the necessity of a study become obvious, the experts and activists said.
Hristina Vojvodić stressed the responsibility of state institutions and highlighted the attempts by investors to “copy, imitate the methods” that worked for other investors. On the other hand, citizens and activists now pay more attention and the public is interested in the information on infringements, she underscored.
Typical examples of salami slicing were registered in projects for Linglong’s tire factory in Zrenjanin and coal-fired thermal power plant Kostolac B3, Vojvodić said.
Zijin’s investments in mine in Bor, Serbia
In the coming years, the Chinese company Zijin will invest even more than before, it is stated in the notification sent to the employees of the company and the citizens of Bor and Majdanpek. This company took over the mine in Bor at the end of 2018. Since then, approximately $ 650 million has been invested in repaying all historical debts, improving safety and environmental protection, increasing production, as well as in technical renovation and expansion of mines and smelters, the company Srbija Zijin Koper announced. As stated, with more than 1,000 newly employed local citizens, the total number of members of the Zijin family has reached more than 5,500 employees to date.
“What makes us even happier is that the average monthly net income of employees increased by more than 34 percent, to over 90,000 dinars, compared to the level in 2018, which is 50 percent more than the average salary in the entire country.”, reports Tanjug.
The company Srbija Zijin Koper drafted a proposal for a new collective agreement for workers, in accordance with the Labour Law and other valid laws of Serbia, and initiated, as it announced, friendly talks with the unions. The new collective agreement will fully respect all valid laws and ensure the legal rights of our workers, said Zijin. As stated, the average income will not be reduced by an improved collective agreement.
“On the contrary, the company will, in parallel with the new collective agreement, establish an additional promising mechanism to ensure that employees who create greater value to the company are well recognized and financially rewarded,” Zijin said, reports Tanjug.
The collective agreement that RTB previously concluded with the unions is valid until the end of June 2021 at the latest.
“In order to make the company more energetic and protect the interests of its workers in the long run, the company has drafted a proposal for a new collective agreement,” they say in Zijin.
The company wants to thank the unions for their cooperative stance and appreciated efforts, the statement added. In addition, the new collective agreement aims to break egalitarianism and establish a competitive mechanism, which will significantly improve the enthusiasm, initiative and creativity of employees, and thus make the company more energetic and successful. They also say that they are glad to see that their employees and fellow citizens have realized the importance of renewed management and the value created by the new collective agreement for the sustainable development of the company.
“We are also convinced that, with the understanding and support of the public, together with the contribution of our associates, the company will definitely achieve better performance, create a brighter future and make a greater contribution to local economic and social development,” said Zijin.
They say that the average monthly net income of employees increased by more than 34 percent, to over 90,000 dinars, compared to the level from 2018, which is 50 percent more than the average salary in the entire country. Also, in Zijin, they point out that they are proud when they see that their employees can enjoy almost the highest average net income in Serbia, it is stated in the announcement. As a reminder, some media previously reported that about fifty workers from Zijin protested in front of the headquarters of that company, demanding better working conditions. Also, that the union Nezavisnost in the company Zijin warned that according to the new collective agreement, the management of that company plans to abolish numerous benefits for employees, reduce the price of night work and abolish recourses.