CEOL
Hungary launches claim in Australia

PERTH, Jul 11, 2000 -- (AFP) A 182 million dollar (109 million US) compensation claim by the Hungarian government against an Australian mining company blamed for one of Europe's worst environmental disasters was expected to be lodged at a creditors' meeting of the company in Peth on Tuesday.

Esmeralda Exploration Ltd., based in Western Australia, was suspended from share trading and went into administration after the accident on January 30.

Cyanide-contaminated water was released into the Tisza River from a dam used to contain waste from the company's gold mining operation at Baia Mare in Romania

Hungary claims the spill, which allegedly polluted rivers in Romania, Hungary, Yugoslavia and the Ukraine, killed 1241 tones of fish in Hungary alone.

Lawyer Hayden Stephens, from Melbourne company Slater and Gordon, representing the Hungarian Government, said Tuesday he would try to lodge the claim at the meeting, though he expected it would be rejected by the company's administrator.

Stephens said the sum claimed could be recovered only through Esmeralda's insurance policies.

"We feel that Esmeralda have the relevant insurance policies to cover this type of risk and I must say that we've called upon the administrator to hand to us those policies, but at this stage they have not been forthcoming," he told Australian Broadcasting Corporation (ABC) radio.

Stephens said if the compensation claim was rejected at the meeting, local legal proceedings would be instituted against the company.

He said the claim covered compensation for the "environmental catastrophe" the spill caused, including remedial action needed to restore the river and its surroundings.

"There is enormous resentment in Europe over this spill and a spill which, in one view, has been caused by the project manager in Esmeralda," he said.

Stephens said there were no plans, at present, to pursue the Romanian Government over the spill, even though that Government holds a 50 per cent stake in the Baia Mare mine.

"Certainly the documentation that we've found, and Esmeralda's own documentation, shows that they (Esmerelda) were the project manager, and we say the cyanide spill was caused by their conduct," he said.

Esmeralda announced last month it had resumed operations at the tailings project, assuring its safety and promising to make environmental concerns a top priority.

The Hungarian Government expressed doubt over the decision to resume operations at Baia Mare, vowing closely to monitor operations.



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