Company Fined $647M For Toxic Sludge Flood

MAL Rt.'s broken reservoir killed 10 people as it flooded several Hungarian towns with toxic red sludge.

BUDAPEST, Hungary (AP) -- The metals company whose broken reservoir killed 10 people as it flooded several Hungarian towns with toxic red sludge has been fined 135.1 billion forints (euro472 million, $647 million) for environmental damages.

A 10-hectare (25-acre) reservoir at the MAL Rt. metals plant collapsed Oct. 4 and released a torrent of some 700,000 cubic meters (184 million gallons) of red sludge, a byproduct of aluminum production, on three towns in western Hungary -- Kolontar, Devecser and Somlovasarhely. The highly caustic material also injured more than 150 people, many of whom suffered chemical burns.

Environmental State Secretary Zoltan Illes will hold a news conference Thursday about the fine, which is over four times more than the $158 million (euro115 million) the government said in July it had spent on cleanup and reconstruction projects.

The fine levied took into account the "unprecedented" amount of hazardous material released during the incident, Hungary's Ministry of Rural Development said Wednesday.

The plant's sludge and caustic water also inundated local streams and even reached the Danube River but did not cause significant damages to one of Europe's main waterways.

MAL can appeal the fine, the ministry said.

MAL managing director Zoltan Bakonyi was unavailable for comment.

More than 300 families lost their homes in the flood. To replace them, the government built new 112 houses in the three towns, while 125 families bought other homes in the area and some 80 others chose to receive cash compensation.

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