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La Oroya smelter, Cobriza mine to be auctioned in Q1'17

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La Oroya smelter, Cobriza mine to be auctioned in Q1'17

The La Oroya smelter and the nearby Cobriza copper mine will likely be auctioned off in the first quarter of 2017, Reuters reported Oct. 5, citing Pablo Peschiera, director of consulting firm Dirige.

The two Peruvian assets will likely fetch at least US$100 million, but the smelter could cost US$700 million to upgrade, Peschiera said.

President Pedro Pablo Kuczynski's vow to revive La Oroya has sparked fresh interest from investors, but sales prospects could be hurt by a workers' strike that is scheduled next week to demand the restart of the rest of the smelter. Peschiera is hoping to convince the union to call off the stoppage.

An August 2015 auction failed to draw offers amid concerns over environmental standards, past pollution and demands from workers.

La Oroya was closed in 2009 when smelter owner Doe Run Peru SRL ran out of money to buy concentrates and pay for environmental upgrades. Some US$650 million in debts were left unpaid, including between US$90 million and US$100 million owed to workers.

The smelter now only processes some zinc and employs a fraction of about 2,200 mostly furloughed workers.

Renco Group Inc. owns Doe Run Peru and Cobriza. Dirige is tasked with finding a buyer for the two assets.