User:Egoli/sandbox2

La Oroya, (Huanco language: Uru Lla "Man / Characteristic") is a city of about 33,000 people on the River Mantaro in central Peru. It is situated on the Altiplano some 176 km east-north-east of the capital, Lima, and is capital of the Yauli Province. It is famous for its smelter and infamous for the pollution that it produces which earned it the title of one ot the ten most polluted towns in the world in 2006 from a group of American environmentalists called the Blacksmith Institute.

History
There has been a settlement at La Oroya that has been dated back to about 10,000 years BC. In 1533 the Spanish established a small settlement and started mining in the area on a small scale in their quest for precious metals but isolation and transport difficulties prevented work on any scale. At the time of the War of Independence, the area became a centre of guerilla activity because of its strategic position. In fact, one of the decisive battles of the war, Chacamarca (Junin), took place not far to the north and the victor, Simón Bolívar, passed through the town afterwards. In 1861 the settlement was named San Jeronímo de Callapampa and in 1893 it became La Oroya. In 1925 it was made the capital of the Yauli province and finally. in 1942, it was elevated to city status.

Mining in the area had started to develop once again in the XIX century but did not really get going until the arrival of the railway from Lima in 1893. This was an extraordinary feat of engineering, planned and started by the American railway builder Henry Meiggs, though he died before its completion. It passes over El Ticlio, where it reaches an altitude of 4781 metres, making it the highest standard gauge railway in the world.

The smelter, which dominates the city and is the main employer, was established in 1922 by the American Cerro de Pasco Corporation, who ran it until 1974 when Cerro was nationalised and became part of the state owned Empresa Minera del Centro del Peru S A, otherwise known as Centromin. In 1993 the Peruvian government decided to privatise Centromin and in 1997 99.97% of the smelter was acquired by Doe Run Peru, a subsidiary (now an affiliate) of the Renco Group, for approximately $247.0 million, which consisted of a capital contribution to Centromin's Metaloroya of $126.5 million and a purchase price payment of $120.5 million. Doe Run Peru also bought the Cobriza copper mine for US$7.5 million to maintain concentrate supplies to the copper smelter.

The Smelter
When they bought La Oroya, Doe Run bought themselves a run-down, semi-obsolescent and very complicated smelter complex. It had suffered from years of underinvestment under the control of both Cerro de Pasco and Centromin and little attention to pollution had been paid by either company. As a result the hills immediately around the smelter have been completely denuded, the river has been become more polluted and the health of the inhabitants of the city has suffered, with alarmingly high concentrations of lead in their blood and in the drinking water and often serious bronchial troubles as well. Studies (in 1999, 2 years after Doe Run took over) showed high levels of air pollution, with 85 times more arsenic, 41 times more cadmium and 13 times more lead than amounts considered safe. . It was no accident that Cerro de Pasco built its houses for its American employees two miles upstream and well away from the smelter fumes and dust.

First to be built was the copper smelter in 1922, followed by the lead smelter in 1928 and the zinc refinery in 1952. Annual capacities were 70,000 tonnes copper, 122,000 tonnes lead andd 45,000 tonnes zinc although environmental limits and temperature inversions that trap gasses around the plant and city have tended to keep actual production below these levels. . Because many of the metal concentrates produced by the local Peruvian mines are "dirty", i.e. they contain many other metals as impurities, La Oroya has developed a particular expertise in treating them and is one of the very few smelters in the world with such capability. Over the years the La Oroya metallurgists have devised methods to recover many of these impurities and many interlocking circuits have been installed between the three main smelters for this purpose. The advantage of this has been to reduce the emission of these noxious and often toxic metals but the disadvantage has been to make it difficult to modify any one part of the complex without affecting other areas. La Oroya also produces gold and silver (mainly from refinery residues), antimony, arsenic trioxide, bismuth, cadmium, indium, selenium, tellurium, sulphuric acid and oleum]]

This complexity is one of the main reasons why La Oroya is vital to the Peruvian mining industry and is probably a factor in Doe Run's apparent dilatoriness in reducing pollution from the smelter.

Pollution alleviation
When Doe Run bought La Oroya, it took over Centromin's PAMA, (Programa de Adecuación y Manejo Ambiental or Environmental Remediation and Management Program), an environmental contract in which it undertook a program of environmental amelioration measures over the following 10 years. This arose because in the early Nineties the Peruvian Government started to take a harder line on pollution after years of neglect.

The stated tasks were new sulfuric acid plants, elimination of fugitive gases from the coke plant, use of oxygenated gases in the anodic residue plant, water treatment plant for the copper refinery, recirculation system for cooling waters at the smelter, management and disposal of acidic solutions at the silver refinery, industrial waste water treatment plant for the smelter and refinery, containment dam for the lead muds near the zileret plant, granulation process water at the lead smelter, anode washing system at the zinc refinery, management and disposal of lead and copper slag wastes, domestic waste water treatment and domestic waste disposal. However it should be noted that Doe Run Peru has been indemnified by Centromin (and guaranteed by the Peruvian Government) against any environmental liability arising out of Centromin's prior operations and its share of any other liabilities related to emissions mentioned above Doe Run's original committment to this program was US$107 million but it is now expected that it will cost at least US$244 million.

The PAMA has since been modified to include the reduction of stack and fugitive emissions to meet air quality objectives, certain additional pollution controls and the protection of public health including the reduction of lead levels in blood and special health programs for children and expectant mothers Reports indicate that the liquid effluent problems have now been greatly improved and Doe Run Peru announced on Feb 5 2008 that liquid discharges from both the smelter and town were having no measurable impact on the water quality of the Yauli or Mantaro Rivers and this was confirmed by state health officials and OSINGERMIN, an independent Peruvian regulatory agency. However this does not mean that the river is now clean because it is still polluted by the mines above La Oroya.

Other improvements have been achieved and on March 19th 2008, the company announced a 60% improvement in particulate emissions, a 61.7% reduction in air lead levels, 72% reductionn in cadmium levels and 81% decrease in arsenic levels and the virtual elimination of polluting liquid discharges from the smelter into the Mantaro and Yauli rivers. There is still much to be done but at least improvements are being made.

The main problem still to be overcome is sulphur dioxide emission which apparently reached record levels in August 2008. However this should improve considerably over the next year with the commissioning of the lead plant acid plant in October 2008 which is now operating according to the Wall Street Journal. Still to be completed is the copper plant acid plant, due to come into operation in October 2009, after which sulphur dioxide emissions should fall significantly.

The company caused a considerable stir in 2004, particularly amongst NGOs, when it said that it would not be able to complete the PAMA by the previous deadline of end 2006 and asked for an extension. On Dec 29, 2004, the Peruvian Government issued a Supreme Decree No. 046-2004-EM, which recognized that exceptional circumstances may justify an extension of the time to complete one or more projects within the scope of a PAMA. Doe Run Peru was granted such an extension. The exact reason for the request was not given but appears to have been a combination of cash flow availability, additional PAMA requirements and additional upgrading. This includes the replacement of the reverbatory furnace with a submerged lanced reactor furnace at a cost of US$57 million that will reduce gas volume and provide a much richer sulphur dioxide off gas that is far more suitable for sulphuric acid production

Financial
It was estimated in 1997 that the cost of implementing the PAMA would be US$ 107.5 million. In the event Doe Run had spent US$157 million on it by the end of 2007 and expects to have to have to pay out over US$244 million before it is complete. At the time of writing (October 2008) the last published accounts for Doe Run Peru were for the six months to end April 2006 showed a heavily indebted company (total long term debt US$207 million) with a cash flow that will probably not be enough to complete the PAMA without further borrowing.

The most significant item was that Doe Run Peru has set up an environmental trust into which it is required to pay sufficient cash each month to cover PAMA expenditure for the next month. (At the end of October 2006, the remaining amount to be spent on the PAMA was approximately US$115 million). It has also undertaken not to make any payments to any shareholder or affiliate that might affect the completion of the PAMA. Renco has confirmed that it understands that Doe Run Peru would lose the benefit of the PAMA extension if any such payment is made

Outlook
Any smelter owner knows that it faces a constant battle to keep noxious emissions under control for the health of its workers and the surrounding land and people and to satisfy the environmental lobby because it is an inherently dirty operation even though vital to modern life. La Oroya faces a particularly hard battle because of its situation, the accumulated problems of the past eighty years and the old fashioned plant, although this should now be much better considering the amount of money it has spent and plans to do. It is going to be a hard slog to remedy all these problems but progress is being made despite an apparent reluctance in some quarters to acknowledge the improvements made so far e.g. the report mentioned above about record sulphur dioxide levels makes no mention of other improvements that have been made in othr areas. Also environmental requirements are being tightened all the time which often mean expensive plant modifications or new plant altogether.