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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 its pollution 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 smsll 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 extraodinary 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
Doe Run bought a run-down, semi-obsolescent and very complicated smelter complex in La Oroya. 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 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.

The La Oroya smelter is extremely complex. As the plant has grown and byproduct refineries have been added, the various sections have become closely interdependent so that alterations in any one part of the plant can have substantial effect elsewhere. Another problem is that much of the equipment is obsolescent as a result of seventy five years of  squeezing the last dollar out of the plant by both Cerro de Pasco Corp and Centromin.

The plant was established as a copper smelter in 1922, a lead smelter was added in 1928 and a zinc refinery in 1952. An anode residue plant treats refinery slimes for gold and silver. Annual capacities are 69,900 tonnes copper, 121,600 tonnes lead, 45,300 tonnes zinc, 37 million ounces of silver and 64,000 ounces of gold although environmental limits and occasional temperature inversions that trap gasses around the plant tend to keep actual production below these levels. Over the years additional byproduct refineries have been added to treat the other metals in the "dirty" local concentrates and the plant now produces antimony, arsenic trioxide, bismuth, cadmium, indium, selenium, tellurium, sulfuric acid and oleum.

Unfortunately the smelter was established when regard for the environment was virtually nil and Cerro de Pasco did little to curb emissions of any kind. Sulfur dioxide fumes stripped the adjoining hills of all vegetation and soil, elevated lead levels in blood were and are still common as are bronchial diseases. It was no accident that the quarters for the American staff were built several miles upstream away from the smelter. Cero de Pasco did virtually nothing combat pollution and very little was done by the state owned Centromin but at least they were being recognised during the state-owned company's tenure and plans to alleviate them were taking shape in the form of a basic PAMA (see below)though lack of capital allowed little to be done. The last three year's accounts for Centromin showed virtually no capital expenditures (check and find reference in early S-4s)

Pollution Alleviation
When Doe Run Peru finally took over in 1997, 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. 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.

Centromin's PAMA is to clean up the lead pollution in the city - check

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.

Improvements have also been reported with air pollution and on Jan 24 2008 the company announced a 61.7% decrease in the average level of lead in the air compared with 2006 due to remedial work on the lead plant, including  enclosure work around the lead and dross furnaces and the installation of bag houses.

However, two important improvements remain to be done, namely the acid plants for the lead and copper circuits to eliminate injurious sulfur dioxide emissions. The company caused a considerable stir in 2004, particularly amongst NGOs, when it said that it would not be able to complete these by the previous deadline of end 2006 and asked for an extension to Sep 2008 for the zinc circuit acid plant and Oct 2009 for the copper circuit acid plant. 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 sulfur dioxide off gas that is far more suitable for sulfuric acid production. .

Doe Run Peru's Financial Position
The following data were collected from Doe Run's Securities and Exchange Commission (SEC) 10K returns, all available from the SEC web site, http://www.sec.gov/cgi-bin/srch-edgar?text=&first=2008&last=2008. All figures are to the nearest million US dollars

For the period 1999 to end April 2006 (the last available reports), the company reported total net profits of US$27 million. Total available cash generated was US$117 million, which was absorbed by US$173 million of capital expenditure on the plant, including the PAMA. The shortfall was made up by US$64 million of extra long term debt, the sale and lease-back of plant and other sources. At the end of April 2006 the company had net current assets of US$8m and total long term debt of US$161 million.