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Ex-Chemours employee charged with stealing cyanide secrets

Grand jury charges former employee with planning to sell trade secrets to Chinese investors

by Marc S. Reisch
October 16, 2017 | APPEARED IN VOLUME 95, ISSUE 42

Credit: Mediacolor's/Alamy Stock Photo
Sodium cyanide is used to extract gold from ore.

A federal grand jury has charged a former Chemours employee with stealing trade secrets related to sodium cyanide and trying to sell them to Chinese investors.

The indictment charges that marketing professional Jerry Jindong Xu, who worked for Chemours and its former parent DuPont between 2004 and 2016, intended to use the stolen information to convince Chinese investors to export sodium cyanide and later build a competing plant in North America.

Sodium cyanide is widely used to extract gold from ore. Demand for the potentially deadly chemical has been on the rise as consumption of the precious metal increases.

Earlier this year, Evonik Industries and Grupo Idesa opened a 40,000-metric-ton-per-year sodium cyanide facility in Mexico. Chemours announced plans for a $150 million plant in the Mexican state of Durango.

The indictment charges Xu with conspiracy to commit theft of trade secrets. If convicted, he faces 10 years in jail and a $250,000 fine. “We are committed to prosecuting anyone—be they rogue actors or foreign nations—who tries to line their pockets” by stealing trade information, says David Weiss, acting U.S. attorney for the District of Delaware. Xu’s lawyer tells C&EN he has no comment.

According to the indictment, Xu told one Chinese correspondent that he launched the sodium cyanide project as “a long-term investment for himself and not to slave away at this only to benefit someone else.”

Going for gold
Credit: C&EN/Shutterstock

Crushed rock is mixed into a water slurry and treated with sodium cyanide, which compledxes with gold in the ore. Electroextraction removes gold from the solution.

Xu’s plans began to take shape in 2015 when he began downloading proprietary spreadsheets from Chemours onto his personal computer and corresponding with contacts in China. He also formed an alliance with a now-retired DuPont sodium cyanide expert. The veteran, now a consultant, is only identified as an “unindicted coconspirator” in court documents.

To compete with Chemours, the world’s largest maker of sodium cyanide, Xu told a contact in China that he had obtained “complete” sales plans, including pricing information, on the U.S. and Mexican gold mining market, according to the indictment. He also possessed “confidential and proprietary system diagrams.”

DuPont and Dow Chemical, now part of DowDuPont, have long had problems with trade secret theft. In 2014, a federal jury convicted former DuPont engineer Robert Maegerle of stealing secrets related to the firm’s titanium dioxide production process and selling them to a firm controlled by the Chinese government. Chemours operates the titanium dioxide business today.

In 2011, former Dow Chemical scientist Kexue Huang pleaded guilty in federal court to stealing trade secrets related to Dow’s Spinosad insecticide. Congress made trade secrets theft a federal crime in 1996.

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