Peru: No date set to resume La Oroya smelter as Glencore steps inPublished by MAC on 2010-03-18
Source: LivinginPeru.com, Reuters (2010-03-09)
Doe Run Peru says no date yet to resume smelter
9 March 2010
LIMA - Troubled metals producer Doe Run Peru said on Tuesday it does not know when it will restart its La Oroya smelter, which has been shut down for nine months, despite reaching a financial deal last week to resume operations.
In a March 1 statement, Doe Run said Swiss commodities trader Glencore would give it a credit line to restart operations al La Oroya. "Reaching an agreement with Glencore has been an important step. Now, we're focused on reaching an agreement with our mining suppliers," said Jose Mogrovejo, a Doe Run spokesman, adding that the company has not set a date to restart operations at the smelter.
The agreement with Glencore would also allow Doe Run Peru -- a unit of U.S.-based Renco Group -- to complete a cleanup plan in the town of La Oroya, in the central Andes.
Doe Run was supposed to finish the cleanup program in October, but last year the Peruvian Congress gave the company a 30-month extension.
The company, which employs some 20,000 people, has not been able to resume production at the smelter since last June because it failed to get loans from potential creditors after banks cut its credit.
A clash between protesters demanding the reopening of the plant and police left one policeman dead last year.
Doe Run halted work after banks cut off credit, arguing that it could not regain access to loans and restart production unless deadlines were extended.
Doe Run owes about $110 million to its suppliers. Company officials say Doe Run has spent $307 million scrubbing the smelter and may need up to $150 million more to complete the cleanup.
(Reporting by Patricia Velez; Writing by Luis Andres Henao; Editing by Lisa Shumaker)
Doe Run Peru signs Letter of Intent with Glencore to resume operations
1 March 2010
Doe Run Peru signed a Letter of Intent with Glencore, in order to support the resume of its metallurgic operations in La Oroya, informed the mining company in a press release printed in almost all Peruvian media.
According to this Letter of Intent, Glencore will give Doe Run Peru a credit that has also the possibility of being used as working capital, to contribute with the operations restart.
It will also be part of the necessary financing of Doe Run's environmental adjustment and management, according to Semana Económica.
Doe Run Peru has to invest US $150 million to complete the environmental cleanup and still has a total debt of some US $110 million dollars with its concentrate suppliers.