May 3, 2018 / 11:56 PM / 6 months ago

Workers seek partner to buy and operate aging Peru smelter

LIMA, May 3 (Reuters) - Workers at Peru’s La Oroya polymetallic smelter are in talks with more than two companies interested in partnering with them to restart operations at the nearly 100-year-old plant, a union leader said on Thursday.

La Oroya had been operated by Doe Run Peru, a unit of the U.S.-based Renco Group, from 1997 until the company went bankrupt in 2009 and its assets were transferred to a group of former creditors.

The group of creditors agreed this week that the workers union could buy the smelter along with a small copper mine, Cobriza, which had also been owned by Doe Run, in order to keep the two assets from being liquidated.

The union has until mid-June to find an investor to pay $90 million to help them buy the smelter and Cobriza, said Luis Castillo, the head of the union.

Castillo said workers had already started negotiations with two Peruvian companies and foreign investors. “It won’t be easy but we think that we’ll have the money and an investor by June 15,” Castillo said by phone, declining to name the companies.

A further $100 million in upgrades would be needed so lead and zinc smelting can resume, Castillo said. Copper smelting would need more in investments and time to restart, he added.

The town of La Oroya where the smelter is located in Peru’s central Andes was once named one of the 10 most polluted places in the world by the Blacksmith Institute environmental group. Hundreds of children in La Oroya have been found to have dangerous levels of lead in their blood.

Former President Pedro Pablo Kuczynski, who resigned amid corruption allegations last month, relaxed sulfur dioxide emission limits to cut the cost of investing in upgrades in smelters. But six attempts to sell La Oroya in an auction failed to draw any offers.

Reporting by Marco Aquino; Writing by Mitra Taj; Editing by Peter Cooney

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