The mining town of La Oroya has lifted its protest strike for eight days, opening up the central highway for traffic between Lima and the central highlands and jungle.
The town, with the possible closing of the La Oroya Metallurgical Complex, faces the loss of over 3,400 jobs and its main livelihood.
While soldiers, brought in to back the police force, cleared the highway at three key points, the minister of Energy and Mines, Rosa Maria Ortiz, met with the regional governor of Junin, Angel Unchupaico, and union leaders to set up a technical committee that will seek solutions to the situation.
The technical committee also includes representatives from the ministries of Environment and Labor and the national office for dialogue and sustainability, ONDS.
The latest attempt to auction the La Oroya Metallurgical Complex was unsuccessful, with no bidders on August 6, despite an interest shown by nine companies late last year.
Under the program organized by the creditors of Doe Run, if there were no bidders for the refineries or for the Cobriza mine, the company would go into liquidation as of August 27.
The refinery workers and the town are demanding that the government lower the environmental standards to make the sale more feasible, but the government argues that this is not possible —in this particular case, because it would undermine the government’s legal case against Doe Run for not meeting environmental standards.
The Renco Group, owners of Doe Run Peru, are suing the Peruvian government for $500 mn for closing the La Oroya operations because it did not meet environmental standards.
“It is a perfectly reasonable standard,” said Environment minister Manuel Pulgar-Vidal. “The 2001 standard cannot be adjusted, because of the arbitration [case] and because it is the State’s responsibility to protect the health of its citizens.”
Doe Run bought the heavily polluted refineries complex and the Cobriza mine in 1997 in a privatization bid — the state-owned Centromin had operated the complex for almost 30 years following the nationalization of the Cerro de Pasco Corporation in the military regime of General Juan Velasco.
The company made notable improvements in cleaning up the river, the tailings ponds and other areas but by 2007 was having financial problems and said it could not meet the major investment required for the smokestack.
Relations between Doe Run, the government, the company’s creditors and the National Mining Society deteriorated considerably over the next two years.
The town of La Oroya , with a population of around 30,00, grew up around the smelter and will collapse financially if the company goes into liquidation.
For earlier stories, click here.