Aug 6 2010
Doe Run Peru (DRP) announced today that it is intensifying its efforts for the global solution to re-start operations at the La Oroya Metallurgical Complex.
DRP previously signed a letter of intent which provides a $100 million line of credit and the supply of concentrates with Glencore International AG as announced on March 1st of this year. The global solution requires, in part, that DRP provide appropriate guarantees not only to Glencore but also to creditors and the Peruvian government.
However, DRP unexpectedly ran into difficulties in finalizing the financing as a result of a pending bankruptcy process. The Company is working with its creditors to resolve these issues through an accelerated restructuring to secure a viable and sustainable business plan for the good of all stakeholders. This necessary support of the creditors is within reach, and DRP continues to work closely with its creditors to resolve the current issues in our efforts to re-start La Oroya operations through the restructuring process.
DRP has hired local and international experts to assess the implementation of the remaining Environmental Adjustment and Management Plan (PAMA) project at La Oroya. These experts are analyzing and updating the technical and financial timelines to compensate for the delay in the re-opening the facility. DRP remains committed to completing the last of nine environmental projects following the re-start of La Oroya.
During the interim period, until any bankruptcy proceedings are resolved, DRP has announced that the company would continue paying La Oroya workers 70% of salaries during the shutdown, just as it has been doing to date.
The Company's plan is based on very strong business fundamentals including integrated technology to maximize added value at the La Oroya Metallurgical Complex, our highly-skilled workforce, and significant increases of ore reserves recently discovered at the Cobriza copper mine which will increase current concentrate production to more than 100,000 metric tons per year. These competitive advantages will secure the completion of the environmental projects and the full payment to our creditors in a short period of time.
DRP appreciates the continued patience of its valued workers, La Oroya residents and their surrounding communities, central regions and the country of Peru as DRP continues to work with its strategic partner, creditors and the Peruvian government to resume operations at La Oroya. Resolution of these issues will enable the company to complete the environmental projects in a timely manner, return jobs to the local community and continue contributing to the economy and development of Peru.