EVERY time she meets guests from outside her village, 59-year-old Zhang Baihua asks the same question - would you dare to drink our water?

It is not a question that requires an answer, but more like a bitter joke for Zhang and her fellow villagers since their water is polluted and undrinkable.

The water from Zhang's well has turned yellow and smells foul; there's white foam on the surface.

"It's not drinkable but can be used to wash clothes after sedimentation," she said. A 120-meter-deep well provides water for the whole village.

Zhang lives in a small village called Xinguang Eight in suburban Baotou City of north China's Inner Mongolia Autonomous Region.

At the eastern end of the village, a tailings pond for the residue of ore covers more than 10 square kilometers and the water is six meters deep.

The tailings pond is an expanding man-made lake that holds by-products of rare earths and iron extraction processes, including leftover rare earth elements, heavy metals such as niobium and thorium, and other substances.

The pond, only one kilometer away from Zhang's home, has been collecting mine wastes produced by the Baotou Iron and Steel Group (Baogang) since 1965. The underground water in the areas around Baogang's tailings pond was polluted by leakage from the pond, the National Business Daily said, citing a report issued by the Baotou environmental monitoring station in 2006.

Poorly compensated

The report, based on testing of water samples from five wells in Dalahaishang Village in 1995, 2000 and 2006, said the water was not safe for drinking or irrigation. The water samples contained the same pollutants as in the tailings pond.

The Baogang Group drilled several deep wells to ensure safe drinking water for about 4,000 residents in Zhang's village, Dalahaishang Village and three other villages around the pond.

The steel maker also invested 300 million yuan (US45.39 million) to resettle these villagers. However, because of disputes about compensation, no one villagers agreed to move and completed apartments remained vacant.

"I have to pay extra charges for the resettlement housing if I move. Meanwhile, the new place is too far from my cropland and my son's working place," said 73-year-old Zhang Sanhu in Xinguang Three village.

Disputes over Baogang's tailings pond pollution have been going on for years, and this is neither unusual nor the most threatening one in China.

On September 8, 2008, an unlicensed iron ore tailings pond in north China's Shanxi Province burst, unleashing a wave of mud and mining wastes that inundated a downstream village with more than 1,000 residents.

The disaster resulted in at least 277 deaths and economic losses of more than 96 million yuan. The incident led to resignation of the provincial governor. This is still considered the world's largest disaster involving collapse of tailings dams.

A mining boom since 2000, fueled by the Chinese economy's increasing demand for metals, has left the country studded with unsafe tailings ponds, said Tian Wenqi, a tailings expert with China's State Administration of Work Safety. He is also a senior engineer at China Enfi Engineering Corp (Enfi), a company set up by China Nonferrous Engineering and Research Institute. "In terms of the pond numbers, China might top any other country in the world," Tian told Xinhua in an exclusive interview.

According to government figures, at the end of 2009 China had 12,523 tailings ponds, of which 2,098, or 16.8 percent, had various safety problems.

To make the situation worse, small ponds account for 95.4 percent of China's total. These ponds, designed with a storage capacity of less than 1 million cubic meters, are susceptible to damage from as earthquakes, hurricanes and floods.

"Tailings ponds are indispensable for the mining industry, since only a tiny fraction of mining ore contains useful metals and the rest is waste, or tailings, held in ponds," Tian said.

The ponds are major sources of environmental pollution and mining accidents. "The dams holding the tailings ponds are not always examples of high-level engineering and in some cases may be made by simply bulldozing the tailings themselves into an embankment," he said.

The majority of ponds are operated by small private mining companies, he said, and since they try to cut operating costs "they will not pay much attention to pond safety," he said.

China's huge number of inadequate tailings ponds have become a grave challenge for the country and there is a serious shortage of designers specializing in tailings ponds.

"China used to have 20 to 30 tailings pond design institutes, but that was far from enough for the growing demand," Tian said.

He warned that the scarcity of qualified designers meant that some small ponds are built without any design and others are designed by unqualified personnel and represent safety threats.

Another major problem is that pond sites are often unavoidably near populated places and ecologically fragile regions.

For example, the Majiatian tailings pond of Panzhihua Iron and Steel Group in Sichuan Province has a designed storage capacity of 187 million cubic meters. It is located on the upper reaches of the main stream of the Jinsha River, an important tributary of the Yangtze River.

Role of insurance

China has solicited public opinion on the revision of the 2006 regulation on safety management and supervision of tailing ponds.

According to Tian, the revised regulation would probably add specific rules about re-use of tailings and government monitoring.

Zhang Dezhou, a tailings pond expert at Enfi, said China should learn from foreign countries how to set up insurance systems for mining companies.

"Any mining company would have to receive an insurance company's guarantees before its operation begins," Zhang said. Under this system, if a mining company goes bankrupt, the insurance company would provide coverage for potential pollution problems that could occur and result in liabilities and expenses for the mine owner.

"The insurers would understand the mining company's technical and business conditions, as well as the potential risks. It's like arranging an examiner interview for students before they can start their tests," Zhang said.