Union supports Doe Run Peru's restructuringPublished by MAC on 2010-10-10
Source: Business News Americas (2010-10-04)
Union supports Doe Run Peru's restructuring - Peru
By Ryan Dube
Business News Americas
4 October 2010
Union workers at Lima-based Doe Run Peru's polymetallic smelter in La Oroya continue to support a restructuring plan for the company as it awaits confirmation of the firm's total debts from competition regulator Indecopi, the head of national mining, metals and steelworkers federation FNTMMSP, Luis Castillo, told BNamericas.
"We are supporting [the company's] restructuring and the quick restart of operations at La Oroya. That is our objective," Castillo said.
Meanwhile, the government is waiting to see the full extent of Doe Run Peru's debt before deciding whether to support a plan to restructure or liquidate the company, according to paper La Republica.
Indecopi is currently reviewing some 2,000 requests to be included in Doe Run Peru's list of creditors. The regulator received requests from Doe Run Peru's concentrate providers, workers and government agencies.
Government agencies that have applied to be creditors include the mines and energy ministry (MEM), tax regulator Sunat, energy and mining investment regulator Osinergmin and environmental remediation firm Activos Mineros, a source linked to the company told BNamericas previously.
Once the regulator confirms the debts, which is expected to take 90 days, the creditors will decide whether to liquidate or restructure the company. A decision will require the support of two-thirds of the voting rights in the creditors meeting.
The company suspended operations at the smelter in La Oroya last year when it ran into financial difficulties as a result of the global financial crisis.
Built in 1922 by the Cerro de Pasco Corporation and acquired in 1997 in a privatization process by St Louis-based Doe Run, the plant is known for having caused serious lead contamination around La Oroya.
Doe Run Peru is an affiliate of the New York-based Renco Group.
Doe Run smelter closure leaves local economy devastated
By Francisca Pouiller
13 September 2010
More than 70% of the 3 500 people who were employed by Doe Run Peru in the region of Junin have returned to their home towns or have gone seeking work elsewhere, according to local newspaper El Comercio.
General economic activity in the city of La Oroya, where life has revolved around metallurgical activity for almost 90 years, has all but ground to a halt, with the market now closed and banks left empty, the report says.
Production at the Doe Run Peru smelter was halted in June last year, after banks froze its accounts in February, because of weak metals prices. Without credit, the company could not pay for the concentrate that it buys from mines.
It also needs to come up with funds for its environmental clean-up obligations at La Oroya, which is one of the most polluted cities in the world.
Doe Run has been trying to put together a plan to reopen the smelter.
According to El Comercio, around 80% of the 67,700 living in the city engaged in economic activity, but the percentage has dropped to less than 30% of the 32 000 people who remained.
As a result, the local municipality has seen its income slashed 60%, the article quotes mayor Cesar Gutierrez Revilla as saying.
"We do not have an income to finance services and to finish the construction we started," he said.
Without the smelter operating, the city has almost no earnings "and there are hundreds of claims for welfare and social compensation, so we have not any money left", El Comercio quoted a city manager as saying.
The new economic centre now has become the city of Morococha, where the Toromocho copper mining project will be developed, and that is where many people are moving.
The Ministry of Labor and Employment Promotion (MTPE, in Spanish) has also begun a programme to train the former workers of Doe Run smelter.
"The employees can register in our offices and have access to training programmes; this way, they will acquire new skills", Manuela García, who is responsible for the programs, said.
According to news website Terra Peru, at least 2 500 Dow Run workers will be able to enrol in courses and activities under the Revalue Peru programme.