REFILE-Workers at Doe Run Peru say to block roads

Wed Aug 19, 2009 10:45am EDT

(Refiles story to correct typo in dateline)

LA OROYA, Peru, Aug 18 (Reuters) - Workers at Doe Run Peru's La Oroya smelter said on Tuesday they will block area roads starting August 31 to demand the government give the company more time to complete an environmental cleanup, which could clear the way for a restart of operations.

Production at the plant, which is located in the region of Junin, has been stopped since June because banks, worried about low metals prices, cut the company's credit lines.

Workers at the smelter said the protests will include a blockade of the area's east-west highway, the main road that connects the central part of Peru to its capital city, Lima.

The smelter's shutdown has become a major political thorn in the side of Peruvian President Alan Garcia, who is under pressure to show his investment-friendly policies are helping to lift incomes in a country with a 36 percent poverty rate.

"We want an extension of PAMA (the mandatory cleanup) because it is key to the restart of jobs. The banks are not going to lend money without it," union leader Royberto Guzman told Reuters.

The current cleanup deadline is October.

Doe Run Peru, which is a unit of the U.S.-based holding company holding Renco Group, filed for a government-monitored restructuring earlier this month to avoid creditors who said it might try to freeze its assets.

The process will likely take several months, as officials weigh whether to overhaul or liquidate the company.

Doe Run Peru owes some $110 million to its suppliers and needs to spend another $150 million to clean up La Oroya, which ranks as one of the world's most polluted sites.

The smelter typically buys concentrates from about a dozen or so miners with operations in central Peru and employs thousands of people.

Doe Run Peru, which processes lead, zinc and copper, is the country's No. 4 metals exporter. (Reporting by Terry Wade; Writing by Dana Ford)




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