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DE RUEHPE #0953/01 0691735
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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 
 
 
¶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