Doe Run halts La Oroya smelter

Wednesday, June 3, 2009

US company Doe Run halted its La Oroya smelter in Peru completely on Wednesday due to its financial and environmental challenges.

In April the company was on the brink of halting La Oroya almost entirely due to the cancellation of the company's credit, which it needed to continue purchasing mineral concentrates from its mining providers in central Peru in order to process them at La Oroya.

But the miners pooled efforts to co-sign on US$175mn in fresh credit to keep La Oroya open. In exchange, the company agreed to put its assets up as a guarantee with the state that it would meet a deadline at the end of October to conclude environmental obligations under an agreement called PAMA, put in place when La Oroya was privatized into Doe Run's hands in 1997.

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However, the company has opted to close down the smelter, citing its inability to continue running in light of the present financial and environmental obstacles. The company said its Cobriza copper mine in Peru will continue to operate normally.

Despite the stoppage of La Oroya, Peru's energy and mining investment regulator Osinergmin said that it still aims to hold Doe Run responsible for noncompliance with the PAMA agreement if it is not completed by the deadline, according to a report by state news agency Andina.

La Oroya was expected to produce 130,000t lead, 55,500t zinc and 66,000t copper this year.