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MAL declines to reveal size of liability coverage in wake of industrial disaster

Lajos Tolnay, the chairman of MAL Hungarian Aluminium Producing and Trading Company, the owner of a reservoir at an alumina plant in W Hungary that ruptured on Monday, flooding nearby villages with sludge and killing at least four, declined to reveal the amount of coverage the company has under its liability insurance policy when asked by MTI on Wednesday, but he said the information would be announced in the near future.

Insurer Allianz Hungária told MTI earlier Wednesday that MAL had authorized it to announce it has a liability insurance policy with MAL valid for 2010. MAL did not authorize it to reveal the amount of coverage under the policy, Allianz Hungária said.

Experts have estimated the damage caused by the disaster to be HUF 10 billion.

MAL had a loss of about HUF 100 million on revenue of HUF 34.0 billion in 2009.

Tolnay told InfoRadio on Wednesday that MAL wished to restart production at its plant in Ajka at the weekend, using another sludge reservoir. The company has asked Environmental Protection State Secretary Zoltán Illés in a letter to return its operating permit, he said. The plant employs 3,000 people and plays an important role at the regional level as well as in the case of exports, he added.

Illés ordered MAL to cease production on Tuesday and repair the ruptured reservoir.

Speaking in Kolontár, one of the villages hit by the flood of sludge, Illés told MTI that MAL had continued production after the reservoir was breached. It is suspected the reservoir ruptured because it was too full and the way its cells were connected was not up to code, he added. (MTI-Econews)