* Lawyer says Doe Run Peru has 30 days to revise plan
* Workers, government ultimately want smelter to reopen
(Adds quotes from government, workers)
By Patricia Velez
LIMA, April 12 Creditors rejected on Thursday a
restructuring plan from Doe Run Peru, a unit of U.S.-based Renco
Group, casting doubt on the future of the La Oroya smelter.
Doe Run Peru's board of creditors voted to start an
"operational liquidation" process that could result in the
smelter being operated by a new company, Doe Run Peru revising
its restructuring plan to hang on to the smelter, or outright
liquidation of the plant.
La Oroya, once one of the largest smelters in Peru, has been
shut since 2009 because of protracted financial problems and a
stalled environmental cleanup in what has been ranked as one of
the 10 most polluted places in the world.
Under Doe Run Peru's "operational liquidation," the unit
controlled by U.S. billionaire Ira Rennert will remain in charge
of La Oroya for up to a year and is required to pay its workers.
"In principal there will be a six-month period that could be
extended by another six months. The question is whether Doe Run
Peru presents a plan that is acceptable to the creditors," Diego
Calmet, president of the board, told reporters.
Another board member said creditors would start looking for
a new company to operate La Oroya, which processed copper, lead
and other metals.
A Doe Run Peru manager confirmed that the restructuring plan
had been rejected, but said the company would fight to hold on
to the smelter.
"We are going to find a solution so that the Doe Run Peru
plan is approved," manager Juan Carlos Huyhua said.
A lawyer for Peruvian mining company Buenaventura
said Doe Run Peru had 30 days to revise its restructuring plan
or the board of creditors would likely choose a new operator or
liquidate the plant entirely.
The Peruvian government, Doe Run Peru's main creditor, did
not consider the initial restructuring plan viable. It would
have relied in part on $200 million in credit from commodities
Minister of Energy and Mines Jorge Merino Tafur has said the
plan would have made the Peruvian state assume potential
liabilities for environmental lawsuits.
The Peruvian government holds 36 percent of Doe Run Peru's
debt, while Doe Run Cayman, a special unit of the Renco Group,
has 35 percent. The other creditors are mostly mineral traders
and suppliers. The company owes creditors at least $100 million.
Doe Run Peru inherited the La Oroya smelter from state
control in 1997. It had operated with few environmental controls
and had contaminated the city and surrounding area with toxic
amounts of lead.
Former President Alan Garcia revoked Doe Run Peru's license
to operate in July 2010 after it failed to meet an environmental
cleanup deadline, but said the future of the company was in the
hands of a board of creditors.
In January, creditors voted not to outright liquidate Doe
Run Peru, which was once the sixth largest metals exporter in
While the government opposed Doe Run Peru's restructuring
plan, President Ollanta Humala, who took office in July, has
said he favors reopening the La Oroya smelter. It provides jobs
for some 3,500 workers.
"No workers will be fired because this process allows the
company to keep operating as a business unit," the Ministry of
Energy and Mines said in a communique on Thursday.
Mining workers, however, condemned the government for
opposing the restructuring plan, which if approved would have
led the way to resumed operations at La Oroya.
"We have been betrayed by the ministry of energy and mines,"
said Luis Castillo, president of the Federation of Mining
Workers of Peru.
(Reporting By Patricia Velez; Writing by Caroline Stauffer)