Identifier
Created
Classification
Origin
06LIMA953
2006-03-10 17:35:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Lima
Cable title:  

ENVIRONMENTAL CLEANUP PLAN FOR LA OROYA SMELTER

Tags:  SENV ECON EMIN EINV ETRD SOCI PGOV PE 
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ZNR UUUUU ZZH
R 101735Z MAR 06
FM AMEMBASSY LIMA
TO RUEHC/SECSTATE WASHDC 9116
INFO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RUEHBO/AMEMBASSY BOGOTA 3100
RUEHCV/AMEMBASSY CARACAS 9157
RUEHLP/AMEMBASSY LA PAZ MAR QUITO 0111
RUEHSG/AMEMBASSY SANTIAGO 0279
RUEHBU/AMEMBASSY BUENOS AIRES 2299
UNCLAS LIMA 000953 

SIPDIS

STATE FOR WHA/AND, WHA/EPSC AND EB/IFD/OMA
STATE PASS USTR (BHARMAN)
COMMERCE FOR 4331/MAC/WH/MCAMERON
DEPT PASS TO INT/USGS/RESTON FOR DMENZIE/AGURMENDI

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: SENV ECON EMIN EINV ETRD SOCI PGOV PE
SUBJECT: ENVIRONMENTAL CLEANUP PLAN FOR LA OROYA SMELTER


UNCLAS LIMA 000953

SIPDIS

STATE FOR WHA/AND, WHA/EPSC AND EB/IFD/OMA
STATE PASS USTR (BHARMAN)
COMMERCE FOR 4331/MAC/WH/MCAMERON
DEPT PASS TO INT/USGS/RESTON FOR DMENZIE/AGURMENDI

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: SENV ECON EMIN EINV ETRD SOCI PGOV PE
SUBJECT: ENVIRONMENTAL CLEANUP PLAN FOR LA OROYA SMELTER



1. (SBU) Summary: U.S. firm Doe Run requested in December
to extend timetable for implementing its Environmental
Compliance Plan (PAMA) sulfur dioxide (SO2) treatment
project at the La Oroya copper smelter. Heavy metal and
sulfur dioxide emissions have plagued La Oroya since its
1922 startup, although NGO scrutiny began after Doe Run's
1997 acquisition. Some NGO's and media are campaigning to
have the Mine Ministry (MEM) deny the request (citing heavy
metals, not the issue in Doe Run's request),while
residents surrounding la Oroya overwhelmingly support Doe
Run's Request. Under the existing regulatory framework,
the MEM Minister will issue a decision sometime after the
April 9 presidential election. A recent tour of la Oroya
by USG and NGO visitors found SO2 work in progress,
significant operational changes as well as a number of
community service projects. End Summary.


REQUEST FOR EXTENSION OF SULFUR EMISSIONS PLAN
-------------- -

2. (U) On December 20, 2005, U.S. mining firm Doe Run Peru
filed with the Ministry of Energy and Mines (MEM) a request
to postpone the compliance date for reducing sulfur dioxide
(SO2) emissions at the La Oroya smelter. Located 150 km NE
of Lima, La Oroya uses complex smelting/refining techniques
to produce copper, zinc, gold, silver, lead and other
metals. The request involves extending one of the nine
remediation and management projects that comprise the
Environmental Compliance Plan (PAMA is the Spanish acronym)
that Doe Run undertook when it acquired La Oroya during the
GOP's privatization campaign in 1997. The La Oroya complex
has been operated continuously since 1922 (expropriated in
1974),with SO2 and heavy metals (lead, cadmium and others)
as smelting byproducts. Doe Run's detailed PAMA
highlighted health issues that had been ignored throughout
La Oroya's history.



3. Under a 2004 GOP decree, any metallurgical firm's PAMA
may be amended. Doe Run's current PAMA for SO2 emissions
contemplated reaching MEM emission levels by the end of

2006. With new plans to build more complex SO2 emissions
facilities (three instead of one),Doe Run requested to
amend the PAMA to extend the time for achieving reduction
of SO2 emissions until 2010. The MEM reviewed the request
and on February 17 requested 90 clarifications; Doe Run has
30 days to answer. The MEM has 45 days from receipt of Doe
Run's answers to issue its decision. Even under the
quickest possible timeline, the MEM would not have to issue
a decision until after the April 9 elections.


4. (SBU) Doe Run has until March 20 to answer the MEM's 90
observations. The company's environmental director told
Econoff on March 1 that the company would use that time to
address all of the GOP's concerns. MEM Mining
Environmental Director told Econoff that the MEM also would
take the maximum time permitted by regulation to analyze
Doe Run documents, because of the important health concerns
involved. (Note: Doe Run and MEM environmental engineers
have been meeting over many weeks to refine the PAMA and
want to get the SO2 management process right. The World
Bank accepted the MEM's request to send experts to help
evaluate Doe Run's request.

CRITICISM FOCUSED ON LEAD LEVELS; RESIDENTS SUPPORT DOE RUN
-------------- --------------

5. (U) Health problems associated with La Oroya received
government, NGO and media attention after Doe Run's 1997
acquisition, focusing on high blood content levels of heavy
metals such as lead and cadmium in the local population
near or downwind of the complex. Media criticism of Doe
Run remediation efforts intensified following the release
of a preliminary 2005 health study by St. Louis University
(SLU),which indicated that resident children still had
high blood levels of lead (Note: the results did not link
heavy metal blood levels to Doe Run activity, nor did it
discuss the SO2 emissions that are the subject of the
current PAMA extension request. The SLU study's final
results are expected in July 2006. End Note.)

6. (U) A number of media articles and NGO press releases
have come out advocating that the MEM not approve Doe Run's
PAMA extension request. Most articles decry the historic
problem of heavy metals in residential health and do not
discuss the SO2 emissions that are the subject of the PAMA
request. Several of the leading Doe Run critics recently
called on Charge to explain why high metal blood levels
should convince the MEM to deny the extension request.
Some Peruvian Congressmen have repeatedly, but
unsuccessfully, introduced a motion to force the MEM to
deny the PAMA request. The La Oroya mayor and what appears
to be an overwhelming majority of local residents have
mounted a strident campaign to convince the MEM to accept
the Doe Run request.


7. (U) Doe Run begun its remediation efforts in 1997 as
part of its PAMA projects to reduce heavy metal emissions.
The firm initiated measures -- such as dust filters,
ensuring employees showered and did not wear contaminated
work clothes home -- that have reduced levels, although not
enough according to some NGO's. Doe Run maintains that it
will honor PAMA commitments on heavy metalsQ achieve
emission reductions by the end of 2006.

VISIT TO SMELTER
--------------

8. (U) Econoff and Regional Environmental Officer visited
the La Oroya works on February 17, along with Embassy USAID
environmental specialist and visitors from the Nature
Conservancy. The group toured the town, the smelter
complex and various satellite facilities. Work was in
progress to demolish one sulfur scrubbing facility in
preparation for construction of the new SO2 treatment
facility. The group also visited a small cheese factory
the Doe Run funded (with cows imported from the U.S.) to
provide employment for local residents and the school built
and operated by Doe Run for children at risk of heavy
metals contamination. Health workers briefed the visitors
at the town center jointly operated by Doe Run and the
Ministry of Health's Environmental Health agency DIGESA.

COMMENT
--------------

9. (SBU) Doe Run's PAMA extension request is
straightforward even though the scientific and technologic
details are complicated. The MEM's environmental division,
with assistance from the Ministry of Health and World Bank
experts, is capable of negotiating the appropriate
environmental management plan for Doe Run. Negative media
coverage and lobbying by NGOs, most of it tangential to the
PAMA extension request, is making it difficult for MEM
Minister Sanchez to make a technical, non-political
decision. He may very well try to delay a decision in
order to leave the decision to his successor. As with many
mining and environmental controversies in Peru,
misinformation in the media is common; to Doe Run's credit,
the La Oroya residents are overwhelmingly on the side of
the company. A recent accident along the Camisea natural
gas liquids pipeline has momentarily deflected hostile eyes
from Doe Run's PAMA.

POWERS