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Peru smelter may process copper with high arsenic content - Kuczynski

LIMA, Aug 5 (Reuters) - Peru’s centrist President Pedro Pablo Kuczynski said in comments broadcast on Friday that the country’s shuttered polymetallic smelter La Oroya could process copper concentrates with high levels of arsenic if reopened.

Smelting so-called dirty copper concentrates at La Oroya might reduce costs for the nearby Chinese-owned Toromocho deposit, which produces concentrates with arsenic content that exceed limits for Chinese smelters.

Toromocho, operated by Chinalco Mining Corp International , is about an hour’s drive from the nearly 100-year-old La Oroya smelter in central Peru that Kuczynski hopes to revive to boost jobs and add value to the country’s mineral exports.

While Kuczynski did not mention Toromocho by name, he told broadcaster RPP that he was optimistic La Oroya would find a new buyer because “next door we have one of the biggest copper mines in the world and it’s exporting dirt, or concentrates, to China today when it could be processing its metals right here.”

“What’s more, since it’s a mine with high arsenic content ... the (La Oroya) copper circuit could strip out the arsenic to give it much more value,” said Kuczysnki, a 77-year-old former investment banker who took office last week.

Peru does not have limits on arsenic content for minerals processed by smelters. It is unclear if processing concentrates with high levels of arsenic, a toxic element often found with copper ore, would require adjusting environmental rules.

Last month, Kuczynski proposed lowering air quality standards to spur investments in smelters, though he later said he would not relax environmental rules for La Oroya.

The town of La Oroya was ranked as one of the 10 most polluted places in the world in a 2007 report by the environmental group the Blacksmith Institute.

The former operator of the La Oroya smelter, Doe Run Peru, owned by U.S.-based Renco Group Inc, halted operations in 2009 after it ran out of money to pay for concentrates and an environmental cleanup.

Kuczynski wants Congress to extend the Aug. 27 date for the liquidation of the smelter to give companies interested in buying it more time.

Chinese smelters are now banned from using concentrates with more than 0.5 percent arsenic content, but the copper industry has been urging China to allow the blending of raw material concentrate imports at port, which would allow for a cheaper but more toxic supply.

Peru is on track to become the world’s second biggest copper supplier this year. (Reporting by Mitra Taj; Editing by Jonathan Oatis)