- Title: In Peru, a smelter's future stirs fears of its toxic past
- Date: 12th January 2017
- Summary: JUNIN, PERU (FILE - OCTOBER 20, 2016) (REUTERS) GENERAL VIEW OF SMELTING COMPLEX OWNED BY DOE RUN PERU CHIMNEY AT SMELTING COMPLEX WITH SMOKE COMING OUT VARIOUS OF OROYA CITY VIEWS, WITH POWER LINES, DOWNTOWN SITES AND HOUSES AMID MOUNTAINS VARIOUS OF CHILDREN PLAYING AT A SCHOOL LA OROYA RESIDENT, SONIA PONCE, INSIDE HOME (SOUNDBITE) (Spanish) LA OROYA RESIDENT SONIA PONC
- Embargoed: 26th January 2017 14:21
- Keywords: Peru smelter toxic Kuczynski revive auction companies bids
- Location: JUNIN AND LIMA, PERU
- City: JUNIN AND LIMA, PERU
- Country: Peru
- Topics: Pollution,Environment
- Reuters ID: LVA0015YRZYGZ
- Aspect Ratio: 16:9
- Story Text: Peruvian President Pedro Pablo Kuczynski's efforts to revive a nearly 100-year-old smelting complex could overcome a crucial hurdle at a coming auction where five companies have shown interest in placing bids.
But celebration over the prospect is far from universal given the sprawling smelter's toxic legacy and Kuczynski's criticism of environmental rules.
Reviving La Oroya, nestled in a destitute region in Peru's central Andes at nearly 3,800 meters (12,500 feet), would mark an early victory in Kuczynski's plan to ramp up the country's smelting capacity to wring more value from mineral shipments that make up at least half of overall export earnings.
Such exalted goals are of little comfort to some La Oroya residents like Sonia Ponce, who worries the government will not do enough to prevent a repeat of the smelter's dirty past. Its smokestacks once spewed so much smoke that midday sometimes appeared to be evening, lacing soils with heavy metals two feet deep in some places.
Hundreds of children in La Oroya have been found to have dangerous levels of lead in their blood, including Ponce's grandchildren, who once had to spend their days in a different town to reduce their exposure and today cannot keep up with schoolwork.
"We are very sad, it's very sad to see young people grow up sick, contaminated to the bone and no one cures them, no one can give our children their health back. And every government in history, nobody has taken this into account, nobody has taken an interest in the life or health of Oroya. And now they say they want to sell it. God knows who will come to buy it and we will see for what purpose they come and also suddenly it will be another irresponsible company that will not do anything for the people. So we really, as a people, do not want the complex to open," Ponce, 56, said from her home in a hillside slum in La Oroya.
Experts at the unit acknowledged the risks.
"They are mainly exposed, nowadays, they are exposed to lead but also to general environmental liabilities. As we know we do not have a macro emitters but yes we have micro emitters," said Betty Oscanoa, the head of the heavy metals risk monitoring and control unit in La Oroya.
At the same time, scores of La Oroya residents have been agitating for a full revival of the smelter, which ground to a halt in 2009 but has since restarted some zinc production.
Dismissing pollution concerns as exaggerated, they say the town that has already lost a quarter of its population will wither away without it.
"It is a smelting complex that we have never thought would close. It is a tough circumstance, it is a rather devastating situation for the whole population of La Oroya to live under these circumstances. There is no work, there is no mining, there is nothing, business is collapsing," said Marisela Perez as she waited for customers in her grocery shop.
Finding a new owner for the smelter while ensuring a cleaner operation will be a key test for Kuczynski, 78, who once ran a mine in West Africa for Alcoa Corp, as he seeks to "modernize" the Andean country to cap an illustrious career in finance and public administration.
"La Oroya is dying and we have to change this. We have to give it a lifeline. A lifeline through investment," he said over the summer.
In total, five companies, including Chinese steel waste recycler GreenNovo Environmental Technology, have signaled interest in buying the smelter in three days of auctions starting March 10, said Luis Castillo, a workers' representative in the group of creditors overseeing the sale.
Kuczynski said last year that Chinese miner Chinalco might want to invest in the project so it can process copper concentrates from its nearby Toromocho mine whose arsenic levels surpass Chinese import limits - forcing it to pay special fees.
When the smelter's most recent owner, Doe Run Peru, controlled by New York billionaire Ira Rennert's Renco Group, operated La Oroya, sulfur dioxide emissions sometimes surpassed the daily limit of 365 grams by a factor of ten, according to a report by the environment ministry.
Doe Run Peru went bankrupt without finishing mandatory environmental upgrades, saying it had invested heavily to try to transform a creaking unit that had previously been under state control for decades.
A 2015 auction failed to draw any bidders as potential buyers fretted over liability for lingering pollution, some 2,200 labour contracts and an estimated $700 million needed to clean up the copper circuit, said Pablo Peschiera, the director of consulting firm Dirige, which is in charge of the bidding.
Interest he told Reuters in a recent interview.
"Since there emerged interested buyers, I have to say, we signed confidentiality agreements with them that prevent us from revealing details about them and the process we are having with each of them, but there are a certain numbers of stakeholders in this investment," he said.
Kuczynski, who declined interview requests, has said it would be cheaper to revive La Oroya if emission limits were looser, calling current standards an obstacle to investments in smelters.
While Peru's national sulfur dioxide limit is far stricter than in Canada, current law allows La Oroya to comply with a much looser standard until 2029.
Kuczynski's government said it was revising environmental rules. - Copyright Holder: FILE REUTERS (CAN SELL)
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