At Invitation of Police, China’s Top Potash Producer to Hand Over Millions Earned by Alleged Illegal Mining
What’s new: China’s largest potash producer warned of a hit to its annual profits after voluntarily returning 357 million yuan ($55.4 million) of income generated from alleged illegal mining in Northwest China.
In a Tuesday filing (link in Chinese) to the Shenzhen bourse, Qinghai Salt Lake Industry Co. Ltd. (000792.SZ) said it received a notice on Monday from the public security bureau of Qinghai province’s Haixi Mongol and Tibetan autonomous prefecture. The notice alleged that one of the company’s wholly owned subsidiaries had conducted mining operations in the Muli coalfield, the largest open-cast coal mine in the province, between 2013 and 2014 without obtaining the necessary licenses.
The notice invited the company to “promptly return” the income to “reduce the social and legal impacts” of the operations.
The company said it had stopped all coal mining activities in the area and would offer compensation for environmental damages.
Although the exact amount is yet to be confirmed by authorities, the income refund is about 17% of Salt Lake’s first-half net profit of 2.11 billion yuan.
The background: This isn’t the state-owned company’s first run-in with authorities. On Sept. 27, it was fined 160 million yuan for violating China’s Price Law after it substantially raised prices on potash products despite little change in production costs.
The firm is China’s largest potash fertilizer producer, with an annual potassium chloride production capacity of 5 million tons, or about two-thirds of domestic capacity.
Following years of declining revenue and poor management of projects, the company went into court-ordered bankruptcy restructuring in January 2020, which led to a 15-month suspension of its shares on the Shenzhen Stock Exchange. Trading resumed in August.
Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full story in Chinese, click here.
Contact reporter Kelsey Cheng (firstname.lastname@example.org) and editor Joshua Dummer (email@example.com)
Download our app to receive breaking news alerts and read the news on the go.
Get our weekly free Must-Read newsletter.
- MOST POPULAR
- Exclusive: In Mortgage Boycott Hotspot, Some Home Builders Are Only Pretending to Restart Construction