MAC: Mines and Communities

Peruvian organisation may expel polluting US firm

Published by MAC on 2010-01-11
Source: Reuters, Business News Americas

emporary suspension of Doe Run's membership in Peru's National Mining, Oil and Energy Society (SNMPE) was imposed by the organisation last June. See:

The action was taken after the company - operator of one of the world's most polluting metals smelters - failed to meet a "clean up" deadline.

Now, after Doe Run continues failing to meet its environmental obligations and to bring the smelter back intro production, the Society is threatening to make the suspension permanent.


SNMPE to consider expelling Doe Run over La Oroya - Peru

By Business News Americas staff reporters

7 January 2010

Peru's national mining, oil and energy society SNMPE will evaluate at the end of the month

the permanent exclusion of Doe Run Perú from the trade association, state news agency Andina reported.

SNMPE cites as the motive Doe Run's noncompliance with its environmental obligations at the La Oroya smelter in Junín and failing to bring La Oroya back into production as promised.

The company reportedly will not be able to bring the smelter online during January, the new deadline for restarting production that was approved by congress and signed into law in October.

"The board [of SNMPE] has agreed to maintain the suspension of Doe Run [as a member] until January 31, and then evaluate what is happening and at that time we will call on them to inform us of what they are doing and what they are going to do," SNMPE president Hans Flury was quoted as saying by Andina.

SNMPE suspended Doe Run's membership rights in July.

Doe Run stopped operations at La Oroya last year due largely to financial difficulties. The extension gave the company 10 more months to obtain the necessary financing to finish construction of a sulfuric acid plant and modifications to La Oroya's copper circuit, plus two months to renegotiate contracts with workers, 12 months to finish the works and six months for commissioning.

The environmental works are part of the contract Doe Run signed with the Peruvian government in 1997 when the smelter was privatized.

The nearly century-old smelter produces 11 different metals and is known for having caused serious lead contamination around the town of La Oroya.

Doe Run Peru says smelter unlikely to restart this month


La Oroya not likely to restart in January


7 January 2010

LIMA - Doe Run Peru said on Wednesday operations at its smelter, stopped since June because of financial and environmental troubles, would likely not restart this month as was predicted by the company late last year.

Doe Run Peru, a unit of U.S.-based Renco Group, had said in September that work at its La Oroya smelter would likely resume within "a few weeks." It later pushed the date to January.

The company has delayed the scheduled restart several times as Doe Run has struggled to reach an agreement with its suppliers and potential creditors.

Nearly 20,000 jobs are at stake at La Oroya, one of the most polluted towns in the world.

"It's unlikely (operations) could restart this month," Jose Mogrovejo, the company's vice president of environmental affairs, told Reuters.

"Up to now, we're continuing talks with our potential strategic associates," he said, adding that any agreement would need to be reviewed by the government.

"There have been advances, but unfortunately the negotiations have not ended. Once they're complete, we expect to have an estimate (for a restart)," said Mogrovejo.

The Peruvian Congress voted last year to give Doe Run Peru a 30-month extension on its environmental cleanup program.

The company, which halted work after banks cut its credit, had said it could regain access to loans and restart production at the world's most diversified smelter if the deadline were extended.

Doe Run Peru says it has spent $307 million scrubbing the smelter and may need to spend $150 million more to complete the cleanup. It owes some $110 million to its suppliers. (Reporting by Dana Ford; Editing by Marguerita Choy)

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