Doe Run Peru: Peruvian Government Obstructs Fundamental Programs In La Oroya

LA OROYA, Peru, Jan. 3, 2011 /PRNewswire/ -- The Peruvian Government's Ministry of Energy and Mines continued refusal to fulfill its contractual commitments, which include among others to remediate La Oroya, could make it impossible for Doe Run Peru to resume operations, ending the array of company-sponsored social and environmental programs that are having a positive impact on the local community.  

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Since 1997, Doe Run Peru has invested over $300 million in local environmental improvements, and implemented a series of initiatives to improve the health and welfare of the La Oroya population.  These include the financial support of local soup kitchens, such as Soup Kitchen No. 5 of La Oroya Antigua, which is helping on average more than one hundred children every day since the year 2000.

The company has co-sponsored important health programs, such as the Cleft Palate Surgery Campaign, which has restored smiles to more than five hundred children affected by this challenging condition from several regions of the country, mainly from the Central Andes.

Doe Run Peru has invested in local farming, agricultural and ecological preservation programs, and has financed new technology to improve the safety of La Oroya's water supply.  These efforts, which have exceeded 150 million Soles, exemplify the company's long-standing commitment to serving many of the needs of La Oroya.

Doe Run Peru remains committed to continuing these important initiatives for the betterment of the La Oroya people for years to come. Sadly, these projects are at risk of being shut down if the Peruvian Government continues to deny its obligation for the legal claims by the people of La Oroya, and continues to misplace blame on Doe Run Peru for remediation activities in La Oroya that are the clear and contractual responsibility of the Peruvian government itself.

AGREEMENT SPECIFICS

In 1997, Doe Run Peru acquired substantially all of the shares in the La Oroya Complex from Centromin, a Peruvian state-owned entity.   As an important part of the sale, Centromin and the Republic of Peru agreed to take full responsibility for remediating the soil in La Oroya.  The government also agreed to indemnify Doe Run Peru from claims of injury or damage relating to contamination emanating from the La Oroya complex.

The stock transfer agreement of the La Oroya Metallurgical Complex (LOMC) was executed on October 23, 1997 by Doe Run Peru S.R.L., The Doe Run Resources Corporation (USA), The Renco Group, Inc. (USA) and The Peruvian State through CENTROMIN PERU. It provides that the Peruvian government will:

• Remediate the areas affected by the gaseous emissions and particulate matter from the start of operations of LOMC until the completion of the PAMA by DRP. (Section 6.1.C of the Agreement); and

• Legally release, protect and hold Doe Run Peru S.R.L. (DRP), its affiliates and owners harmless against third party claims and indemnify them for any damage, liability or obligation that may arise for which it has assumed liability and obligation.  (Sections 6.2 and 6.5 of the Agreement)

The Peruvian government has fulfilled none of its commitments.   The list below provides an overview of the responsibilities agreed to by the Peruvian government and Doe Run Peru, and the status of their completion:

Doe Run Peru's parent company, The Renco Group, released a statement on October 15, 2010 calling on the Peruvian Government to honor its obligations to the people of La Oroya and immediately remediate the soil in La Oroya. The Ministry of Energy and Mines has chosen to ignore this request.  Further delays and continued refusals by the government could significantly impact Doe Run Peru's ability to continue operations and advance its local community improvement initiatives.  The Renco Group and Doe Run Peru renew their call on the government to step forward and meet its contractual responsibilities. Quick action in this regard will enable Doe Run Peru to continue its efforts to resume operations, stimulate continued job growth, and further improve the social and environmental condition of the La Oroya community.

SOURCE Doe Run Peru