http://news.bbc.co.uk/hi/english/world/europe/newsid_679000/679498.stm

Hungary has accused an Australian mining company of going into receivership to avoid taking responsibility for a cyanide spill affecting rivers across Eastern Europe.

Esmeralda Exploration has been blamed for the first of three chemical spills in the area in the last six weeks.

It went into receivership - the first step in bankruptcy proceedings - in anticipation of multi-million dollar compensation claims.

A spokesman for administrators Hall Chadwick said on Thursday that while no claims had yet been filed, threats had been made.

The head of the Hungarian Parliament's environmental protection committee, Zoltan Illes, said: "This is just a trick on their side to not pay compensation."

He said that if the company could not or would not pay up, his government would pursue through international courts the banks and investors who backed those responsible.

Taking action

One of the administrators, Kim Strickland, later denied that the company was moving towards bankruptcy to avoid paying compensation.

"Some people have said the company is trying to hide from its responsibility but it's the opposite, we're trying to bring it to a head," he said.

Esmeralda was a 50% partner in the Baia Mare gold tailings mine along with Romanian state firm Remin.

The mine spilled 100,000 cubic metres of cyanide-tainted water into river systems in Romania, Hungary, Yugoslavia and the Ukraine six weeks ago.

Thousands of fish died and the drinking water of more than two million people was poisoned.

Unique species of birds and insects could become extinct because of the spill.

'Not responsible'

Esmeralda has consistently denied any direct link with the fish and pollution.

The spokesman for Hall Chadwick said liability would become clearer once environmental reports, by the United Nations and European Union, had been completed.

Hungarian officials have called the spills the worst ecological disaster in the region since the 1986 Chernobyl nuclear plant accident.

The latest spill into the River Tisza on Wednesday was believed to contain heavy metals, which dyed the river black for at least 20km.

-- Jim McAteer (jim_mcateer@hotmail.com), March 16, 2000