Shares in JinkoSolar Holdings (JKS) fell a full 28% today after the company was forced to idle its manufacturing facility in Haining following three days of protests over allegations that the facility has been polluting the local river.
The difficulties relate to one of the company’s wholly-owned subsidiaries, Zhejiang Jinko, and the company has now admitted that the local environmental protection authority is investigating the allegations that the company has been discharging hazardous waste into a river:
“There have been reports that Zhejiang Jinko Co., Ltd. (“Zhejiang Jinko”), a wholly owned subsidiary of JinkoSolar in Haining, Zhejiang Province, China, discharged hazardous waste into a river, prompting local residents to protest at its facility from September 15 to September 17, 2011. The local environmental protection authority is investigating the incident. In response to the concerns of local residents and in full cooperation with the local government’s investigation, Zhejiang Jinko has suspended operations at its facility in Haining until the impact of any potential environmental damage has been assessed and remedied. An initial investigation conducted by the local environmental protection authority indicates that the pollution may have been caused by the improper storage of waste containing fluoride”.
The company has, however, said that it expects the plant to be shut down temporarily for only a few days. Much will no doubt depend on the result of the investigation. However, clearly the last thing that the solar industry needs is to be seen as a cause of pollution.
I continue to have no positions in solar or clean energy in general whilst the overall macroeconomic environment seems difficult – for a recap, see my article on general market risk from the beginning of the month.
Disclosure: I have no positions in the stocks discussed.