Thursday, March 1, 2012

Govt supports resumption of operations at La Oroya despite Doe Run Perú lawsuit

Peru's government continues to support the resumption of operations at Lima-based Doe Run Perú's La Oroya metallurgical complex in Junín region despite the recent lawsuit filed by the latter in an effort to remove the government from its list of creditors.
Operations at the complex have to restart as soon as possible, according to mines and energy (MEM) minister Jorge Merino.

"We confirm the government's position... [which is] to support the resumption of operations at La Oroya because we believe that we need to protect the workers, to respect the environment and, above all, to ensure the health of La Oroya," Merino said in an interview on local channel TV Perú.

"We hope that the restructuring program that the creditors approve will contemplate those basic conditions," he added.

The lawsuit was a "surprise," according to the minister, who said he expects the company to withdraw the measure as a goodwill gesture.

"You can't have on the one hand a lawsuit for US$800mn and on the other have congress helping someone that is suing the state," Merino said.

Peru's congress is expecting to approve a legal measure in H1 to extend the timeline for Doe Run Perú's environmental cleanup plan (PAMA) at La Oroya.

Meanwhile, Doe Run Perú is suing the Peruvian government in the US for US$800mn for allegedly violating equal-treatment clauses in the US-Peru free trade agreement.

Operations at La Oroya were stopped in 2009 when the company ran into financial difficulties as a result of the global financial crisis. In September of the same year, congress approved a 30-month extension to the deadline to complete PAMA but this was not complied with.

La Oroya produced 11 different metals but mainly copper, zinc, lead and silver.
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 Perú is an affiliate of the New York-based Renco Group.