Peru govt seizes $14m Doe Run financial guarantee

As pressure mounts on Doe Run Peru to reopen its La Oroya smelter, the government of Peru has seized the zinc and lead refiner's $14-million financial guarantee to make sure the company fulfils its environmental clean-up responsibilities.
Doe Run Peru announced a week ago that the smelter would not reopen in January as planned, drawing criticism from local authorities and workers.
The guarantee will be held until the company finishes the environmental remediation it is obliged to do, the country's Energy and Mines Ministry said in a statement on Thursday.
Once the work has been completed, the government will give the money back to the company.
The Ministry said it had also seized a $4-million guarantee in 2009 for the same reasons.
Up to now, Doe Run Peru has executed 52% of the environmental clean up project (known in Spanish as PAMA).
The remaining 48% requires a $160-million investment.
On September 24, Peru's Congress approved a law that extended to 30 months the term for the mining company to complete the PAMA programme, which includes the construction of a sulphuric acid plant, to reduce emissions, and the improvement of the copper circuit in the La Oroya plant.
The Archbishop of Huancayo, Pedro Barreto, criticized the company's decision to postpone the smelter´s inauguration, which means workers continue to endure “forced vacations”, he told local news radio station CNR.
On Thursday, Doe Run Peru, controlled by billionaire Ira Rennert, said it is seeking a “strategic partner” to finance the reopening of its shuttered smelter, Bloomberg News reported. “There’s a lot of speculation right now,” Doe Run Peru vice-president Jose Mogrovejo said.
Lima-based newspaper Caretas reported that Rennert is holding negotiations to sell the La Oroya smelter to Glencore International AG. Mogrovejo told Bloomberg that Doe Run does not plan to sell 100% of the smelter.