Chinese firm out of gold mining project after cyanide use rejection

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A Chinese investor has withdrawn from a gold excavation project in Phu Yen after authorities in the south-central province disapproved the use of cyanide.

Chung Thao Hang Tan Company, a joint venture between Kinh Mau Chung Thao Company from China and Vietnam's Duy Tan Mineral Development Company, got the province's approval in 2007 to excavate gold on 35 hectares in over 30 years.

The plan was to produce 99,000 tons of gold ore a year and process them into 999,9 gold bars.

But it was stopped after the provincial government did not allow the company to use cynanide in the mining process.

"Doing that will pollute local water sources" said Nguyen Chi Hien, director of Phu Yen Department of Investment and Planning.

Hien said the planned excavation area is located near the major Ba River, where several tap water plants have been built downstream.

He said using cyanide is an effective method in gold excavation as it saves time and money and helps collect all pure gold from the ores.

"Other methods are more costly and not as effective."

But the environmental damage from cyanide "is extremely huge" compared to its economic effects, the director said.

It's a good news that the Chinese investor decided to give up, he added.

Duy Tan, the Vietnamese company, had paid its partner VND7,2 billion (US$345,270) to take ownership of all equipment and constructions so far to continue the project.

Earlier, investors from Australia, Malaysia and Indonesia had visited the site, but they have left, saying the mine's capacity is low.

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