Sunlight Foundation Reporting Group

As Renco lobbies and Peru deliberates, Doe Run Peru remains idle

Doe Run Peru, a subsidiary of U.S.-based Renco Group and the subject of an ongoing battle between that firm and the government of Peru, has a bumpy history in La Oroya since it acquired smelting operations from the government of Peru there in 1997. The firm directly provided 3,500 jobs in Peru, gained the support of many workers and local people, and claims to be a more responsible environmental caretaker than its state-owned predecessor.

Yet emissions of lead, sulfur dioxide, and other chemicals were far above the Peruvian air standard while the smelter was operating. In 2005, scientists from St. Louis University concluded that 97 percent of the children there under the age of six had toxic levels of lead in their blood. A 1999 study by the Peruvian Ministry of Health, cited by St. Louis University researchers, found that lead levels were so high in nearly 20 percent of children that urgent medical attention was warranted.

Some of those contaminants were there long before Doe Run Peru purchased the smelter, which was built in 1922. When the La Oroya smelter was privatized in 1997, Doe Run Peru agreed to a plan to clean up its operations. The Blacksmith Institute, which labeled the town one of the ten most polluted places on earth in 2006, offered a generally favorable report on the company’s efforts in 2008, though other experts were critical of the report’s conclusions, which were based on a single visit to the facility.

Doe Run Peru shut down the smelter, which produces copper, lead, zinc and other metals, in La Oroya in mid-2009 and the firm has not reopened it since, citing financial problems associated with the global recession. Before the stoppage, the company said it needed yet another extension on the environmental cleanup contract to secure financing from creditors—after Lima already granted it one in 2006. Despite being accorded the 2009 extension, the company did not secure the $150 million needed to finish the environmental cleanup or reach a deal on the $110 million it owed its mining suppliers.

Since mid-2009, Doe Run Peru has announced its intention to restart operations multiple times and even declared it secured a creditor in March 2010. Yet the facility never reopened, sparking worker protests. Then the government revoked the company’s license last July and will decide soon whether to liquidate Doe Run Peru.

The company has claimed that it is in compliance with  “its obligations to complete various environmental projects.” Renco claims that the Peruvian government, by not cleaning up the soil around the site, has neglected to follow the contractual cleanup contract. The company has reported spending over $300 million on environmental mitigation.

As part of the environmental cleanup agreement, the company planned to open a third sulfuric acid plant; however, according to the most recent monitoring report from Peru’s mining regulatory body, it was little more than halfway finished as of last year. The facility would vastly reduce emissions, said Anna Cederstav, a scientist at nonprofit law firm Earthjustice. She has been monitoring the situation in La Oroya since 1997.

“The third acid plant, if built, would indeed take care of a very substantial portion of the remaining emissions,” she wrote in an email.

From Cederstav’s discussions with Doe Run Peru about five years before the company shut down operations, she observed, “I didn’t see any intention on their part to actually build the plant.”

When asked about the plant not being finished, Renco’s spokesman Jim McCarthy said he would look into the matter. He did not provide a comment for this article.