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Doe Run Peru Says 'Significant' Progress Made On Restart
Jul 27,2010 10:10CST
industry news

LIMA, Jul 26, 2010 (Dow Jones Commodities News Select via Comtex) -- In a statement late Monday, Doe Run Peru, a unit of the U.S.-based Renco Group Inc., said it had made "significant progress" towards restarting operations at its shuttered smelter. It said, however, it would not meet the Peruvian government's Tuesday restart deadline.

Doe Run's polymetallic smelter, which normally produces copper, lead and zinc, was closed over a year ago following a cutoff in bank loans that prevented it paying for metal concentrates.

Doe Run's statement said its repayment plan, presented to creditors earlier this month, had been generally well received. Among other debts, Doe Run is estimated to owe about $160 million to metal concentrate providers.

The statement said, however, there were still outstanding issues that needed to be solved in order to assure the long term sustainability of its smelter in the town of La Oroya, east of Peru's capital Lima. It did not give further details of what these issues were.

A source at the company said earlier Monday that Doe Run wanted all its creditors to agree they would not enter any formal debt recovery process with Indecopi, the Peruvian government agency which handles intellectual property and bankruptcies.

In the last few months, the company has also been at odds with the Peruvian government over its long delayed environmental cleanup program. Last month Doe Run suggested in a statement it could not reopen until the government took responsibility for cleaning up La Oroya's contaminated soil. The town of La Oroya is described by environmentalists as one of the most polluted places on earth.

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