From: Rick Vecchio, Associated Press
Published December 30, 2004 12:00 AM

Peru Offers U.S.-Based Metals Producer More Time to Clean Up Toxic Contamination

LIMA, Peru — The Peruvian government on Wednesday published a decree that could give U.S.-based Doe Run Co. more time to clean up toxic emissions from a metallurgical plant that has contaminated La Oroya, a bleak, smoke-choked town high in the central Andes.


The decree, published in El Peruano, the official gazette, will allow companies to modify their environmental clean-up programs for "exceptional reasons," and receive specific project extensions for three years, with the possibility of an additional year.


Doe Run Peru, owned by the St. Louis-based Doe Run Co., has threatened to close its operations if the government does not grant a five-year extension to complete an environmental upgrade that includes construction of a US$100 million (euro73.5 million) sulfuric acid plant by 2007.


The privately held company is the largest integrated lead producer in North America. The company says sales from its Peru operation totaled US$423.7 million (euro338 million) in 2003.


Company officials were not immediately available for comment Wednesday, but Doe Run Executive President Jeffrey Zelms last week said he was unhappy with the terms of the decree, which had been published in a draft form earlier in the month.


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The decree calls for the deposit of a financial guarantee equivalent to 20 percent of the amount remaining to be invested in mandated environmental programs.


In Doe Run's case, that would be "more than US$20 million (euro14.7 million)," Zelms told leading newspaper El Comercio in an interview published Friday.


Zelms said that Doe Run was being squeezed by competition from China and that the company would not be asking for a five-year extension "if we did not have money problems."


"The possibility of taking US$20 million (euro14.7 million) and placing it as part of a guarantee that cannot be touched is totally counterproductive," he said. "You can't spend what you don't have, and you can't get blood from a stone."


Doe Run extension request has been widely supported by the inhabitants of La Oroya and workers at the complex, who earlier this month blocked highways and clashed with police in protests supporting the company's demands.


La Oroya is a town of 30,000 people, wedged into a narrow gorge 12,300 feet (3,750 meters) high in the thin air of the Andes, 140 kilometers (90 miles) east of Lima. Doe Run's facility produces copper, lead, zinc and smaller amounts of gold, silver and other metals.


The company agreed to a clean-up program when it purchased the 82-year-old smelter in 1997 from state-owned Centromin, which ran the facility from 1974.


In a 2000-01 study, the company found that average lead levels in the blood of 1,198 residents tested were 2.5 times above World Health Organization limits.


In 1999, Peru's Health Ministry determined that 99 percent of the children in the area suffered from lead poisoning, with nearly 20 percent in need of urgent hospitalization.


Lead poisoning can cause behavior disorders, slow growth, impaired learning, anemia and kidney damage. All ages are susceptible, but children tend to be hit harder because they play outside in contaminated dust.


Source: Associated Press


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