<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 11, 1998
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
THE DOE RUN RESOURCES CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
NEW YORK 1031, 3339, 3341 13-1255630
(State or other jurisdiction of (Primary Standard Industrial (I.R.S.Employer
incorporation or organization) Classification Code Number) Identification No.)
FABRICATED PRODUCTS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 1799, 2819, 3356, 3442 43-1755268
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
DOE RUN CAYMAN LTD.
(Exact name of registrant as specified in its charter)
CAYMAN ISLANDS 3331, 3339 98-0177422
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
DOE RUN MINING S.R. LTDA.
(Exact name of registrant as specified in its charter)
PERU 3331, 3339 98-0180347
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
DOE RUN PERU S.R. LTDA.
(Exact name of registrant as specified in its charter)
PERU 3331, 3339 98-0180348
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
------------------------------
<TABLE>
<S> <C>
MARVIN K. KAISER
1801 PARK 270 DRIVE 1801 PARK 270 DRIVE
ST. LOUIS, MISSOURI 63146 ST. LOUIS, MISSOURI 63146
(314) 453-7100 (314) 453-7100
(Address, including zip code, and telephone number, including (Name, address, including zip code, and telephone number,
area code, of registrant's principal executive offices) including area code, of agent for service)
</TABLE>
COPIES TO:
MICHAEL C. RYAN, ESQ.
CADWALADER, WICKERSHAM & TAFT
100 MAIDEN LANE
NEW YORK, NEW YORK 10038
(212) 504-6177
------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
If the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER NOTE OFFERING PRICE+ REGISTRATION FEE
<S> <C> <C> <C> <C>
11 1/4% Senior Notes due 2005, Series B........... $200,000,000 100% $200,000,000 $59,000
Floating Interest Rate Senior Notes due 2003,
Series B........................................ $ 55,000,000 100% $ 55,000,000 $16,225
</TABLE>
+ Estimated solely for purposes of computing the registration fee pursuant to
Rule 457(f).
------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
(CONTINUATION OF COVER)
PROSPECTUS
[LOGO]
OFFER TO EXCHANGE ITS 11 1/4% SENIOR NOTES DUE 2005, SERIES B AND FLOATING
INTEREST RATE SENIOR NOTES DUE 2003, SERIES B, WHICH HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, FOR ANY AND ALL OF ITS
OUTSTANDING 11 1/4% SENIOR NOTES DUE 2005, SERIES A AND
FLOATING INTEREST RATE SENIOR NOTES DUE 2003,
SERIES A, RESPECTIVELY
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON ,
1998, UNLESS EXTENDED
The Doe Run Resources Corporation, a New York corporation ("Doe Run" and
together with its subsidiaries, the "Company"), hereby offers, upon the terms
and subject to the conditions set forth in this Prospectus and the accompanying
letter of transmittal (the "Letter of Transmittal" and together with this
Prospectus, the "Exchange Offer"), to exchange its 11 1/4% Senior Notes due
2005, Series B (the "Fixed Rate Exchange Notes") and Floating Interest Rate
Senior Notes due 2003, Series B (the "Floating Rate Exchange Notes" and together
with the Fixed Rate Exchange Notes, the "Exchange Notes"), which have been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
pursuant to a Registration Statement (as defined) of which this Prospectus is a
part, for an equal principal amount of its outstanding 11 1/4% Senior Notes due
2005, Series A (the "Fixed Rate Old Notes" and together with the Fixed Rate
Exchange Notes, the "Fixed Rate Notes") and Floating Interest Rate Senior Notes
due 2003, Series A (the "Floating Rate Old Notes" and together with the Fixed
Rate Old Notes, the "Old Notes," and together with the Floating Rate Exchange
Notes, the "Floating Rate Notes"), respectively, of which $200.0 million and
$55.0 million principal amount, respectively, is outstanding. The Exchange Notes
and the Old Notes are collectively referred to herein as the "Notes."
Doe Run will accept for exchange any and all Old Notes that are validly
tendered and not withdrawn on or prior to 5:00 p.m., New York City time, on
, 1998, unless the Exchange Offer is extended (the "Expiration
Date"). Tenders of Old Notes may be withdrawn at any time prior to 5:00 p.m.,
New York City time, on the Expiration Date. The Exchange Notes will be issued
and delivered promptly after the Expiration Date. The Exchange Offer is not
conditioned upon any minimum principal amount of Old Notes being tendered for
exchange. See "The Exchange Offer." Old Notes may be tendered only in integral
multiples of $1,000. The Company has agreed to pay the expenses of the Exchange
Offer.
The Exchange Notes will be obligations of Doe Run evidencing the same debt
as the Old Notes and will be entitled to the benefits of the same indenture,
dated as of March 12, 1998 (the "Indenture"), by and among Doe Run, as issuer,
and certain of Doe Run's existing subsidiaries, Fabricated Products, Inc., a
Delaware corporation ("FPI"), Doe Run Cayman Ltd., a Cayman Islands company
("Doe Run Cayman"), Doe Run Mining S.R. Ltda., a Peruvian company ("Doe Run
Mining"), and Doe Run Peru S.R. Ltda., a Peruvian company (together with its
predecessors, "Doe Run Peru"), as guarantors (the "Guarantors"), and State
Street Bank and Trust Company, as trustee (the "Trustee"). The form and terms of
the Exchange Notes are substantially the same as the form and terms of the Old
Notes except that the Exchange Notes have been registered under the Securities
Act. See "The Exchange Offer."
The Exchange Notes will bear interest from March 12, 1998. Holders of Old
Notes whose Old Notes are accepted for exchange will be deemed to have waived
the right to receive any payment in respect of interest on the Old Notes accrued
up
(COVER CONTINUES ON FOLLOWING PAGE)
------------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 22 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED IN EVALUATING AN INVESTMENT IN THE EXCHANGE NOTES.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS , 1998.
2
<PAGE>
(CONTINUATION OF COVER)
until the date of the issuance of the Exchange Notes. Such waiver will not
result in the loss of interest income to such holders because the Exchange Notes
will bear interest from the issue date of the Old Notes.
The Fixed Rate Exchange Notes will mature on March 15, 2005. The Floating
Rate Exchange Notes will mature on March 15, 2003. Interest on the Exchange
Notes will be payable semi-annually in arrears on March 15 and September 15 of
each year, commencing on September 15, 1998, at the rate of 11 1/4% per annum in
the case of the Fixed Rate Exchange Notes, and at a rate per annum equal to
LIBOR (as defined) plus 6.29% (currently, 12.00875%) in the case of the Floating
Rate Exchange Notes. Interest on the Floating Rate Exchange Notes will be reset
semi-annually. The Fixed Rate Exchange Notes will be redeemable, in whole or in
part, at the option of Doe Run, on or after March 15, 2002, and the Floating
Rate Exchange Notes will be redeemable, in whole or in part, at the option of
Doe Run, at any time, in each case at the redemption prices set forth herein,
plus accrued interest to the date of redemption. In addition, at any time on or
prior to March 15, 2001, Doe Run may redeem up to 35% of the aggregate principal
amount of the Fixed Rate Exchange Notes with the net cash proceeds of one or
more Equity Offerings (as defined), at the redemption price set forth herein,
plus accrued interest to the date of redemption, PROVIDED that at least 65% of
the aggregate principal amount of the Fixed Rate Exchange Notes remains
outstanding immediately following such redemption. Upon a Change of Control (as
defined), each holder of Exchange Notes will have the right to require Doe Run
to repurchase such holder's Exchange Notes at a price equal to 101% of the
principal amount thereof, plus accrued and unpaid interest to the repurchase
date. In addition, Doe Run will be obligated to offer to repurchase the Exchange
Notes at 100% of the principal amount thereof plus accrued and unpaid interest
to the date of repurchase in the event of certain Asset Sales (as defined). See
"Description of the Notes."
The Exchange Notes will be unconditionally guaranteed (the "Guarantees") by
the Guarantors. The Exchange Notes and the Guarantees will be general unsecured
obligations of Doe Run and the Guarantors, respectively, and will rank senior in
right of payment to all existing and future subordinated indebtedness of Doe Run
and the Guarantors, respectively, and PARI PASSU in right of payment with other
senior indebtedness of Doe Run and the Guarantors, respectively, subject, in the
case of the Guarantees of Doe Run Mining and Doe Run Peru, to statutorily
preferred exceptions and statutorily mandated priorities based on the date of
issuance with respect to payment of obligations under applicable Peruvian law.
However, Doe Run's indebtedness under its new $100 million revolving credit
facility (the "New Doe Run Revolving Credit Facility") is secured by
substantially all of the current assets of Doe Run. In addition, Doe Run Peru
expects to enter into a new $40.0 million revolving credit facility (the "New
Doe Run Peru Revolving Credit Facility"), which will be secured by substantially
all of the current assets of Doe Run Peru. Holders of such secured indebtedness,
and any other secured indebtedness of Doe Run and the Guarantors, will have
claims that effectively rank prior to those of holders of Exchange Notes with
respect to the assets securing such indebtedness. In addition, the Guarantee of
Doe Run Peru will be contractually subordinated to the indebtedness of Doe Run
Peru under the New Doe Run Peru Revolving Credit Facility. As of January 31,
1998, on a pro forma consolidated basis, the Company would have had
approximately $380.9 million of indebtedness outstanding (exclusive of
anticipated aggregate commitments of $140 million under the New Doe Run
Revolving Credit Facility and the New Doe Run Peru Revolving Credit Facility
(collectively, the "New Revolving Credit Facilities").
Each broker-dealer that receives Exchange Notes for its own account in
exchange for Old Notes, where such Old Notes were acquired by such broker-dealer
as a result of market-making or other trading activities, must acknowledge that
it will deliver a Prospectus in connection with any resale of such Exchange
Notes. The Letter of Transmittal states that, by so acknowledging and by
delivering a Prospectus, a broker-dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act. This Prospectus, as
it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of Exchange Notes received in exchange
for Old Notes where such Old Notes were acquired by such broker-dealer as a
result of market-making or other trading activities. Doe Run has agreed that for
a period of 180 days after consummation of the Exchange Offer, it will make this
Prospectus, as it may be amended or supplemented from time to time, available to
any broker-dealer for use in connection with any such resale. See "Plan of
Distribution."
There has been no public market for the Old Notes. If a market for the
Exchange Notes should develop, the Exchange Notes could trade at a discount from
their principal amount. Doe Run does not intend to list the Exchange Notes on a
national securities exchange or quotation system. There can be no assurance that
an active public market for the Exchange Notes will develop.
3
<PAGE>
AVAILABLE INFORMATION
Doe Run and the Guarantors have filed with the Securities and Exchange
Commission (the "Commission") a Registration Statement on Form S-4 (together
with all amendments, exhibits, schedules and supplements thereto, the
"Registration Statement") under the Securities Act with respect to the Exchange
Notes offered hereby. This Prospectus, which forms a part of the Registration
Statement, does not contain all the information set forth in the Registration
Statement, certain parts of which have been omitted in accordance with the rules
and regulations of the Commission. For further information with respect to Doe
Run, and the Exchange Notes offered hereby, reference is made to the
Registration Statement. Statements contained in this Prospectus as to the
contents of certain documents filed as exhibits to the Registration Statement
are not necessarily complete and, in each case, are qualified by reference to
the copy of the document so filed. The Registration Statement can be inspected
and copied at the public reference facilities maintained by the Commission at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's regional offices at 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661 and 7 World Trade Center, 13th Floor, New York, New York 10048.
Copies of such material may be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. Such material also can be reviewed through the Commission's Electronic
Data Gathering, Analysis, and Retrieval System, which is publicly available
through the Commission's web site (http://www.sec.gov).
Doe Run intends to furnish to each holder of the Exchange Notes annual
reports containing audited financial statements and quarterly reports containing
unaudited financial information for the first three quarters of each fiscal
year. Doe Run also will furnish to each holder of the Exchange Notes such other
reports as may be required by applicable law.
The principal executive offices of Doe Run and the Guarantors are located at
1801 Park 270 Drive, Suite 300, St. Louis, Missouri 63146, telephone number:
(314) 453-7100.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus includes "forward-looking statements." All statements other
than statements of historical facts included in this Prospectus, including
without limitation, certain statements under the captions "Prospectus Summary,"
"Management's Discussion and Analysis of Financial Condition and Results Of
Operations," "Industry" and "Business" and located elsewhere herein regarding
the financial position and business strategy of the Company, may constitute
forward-looking statements. In addition, forward-looking statements generally
can be identified by the use of forward-looking terminology such as "may,"
"will," "expect," "intend," "estimate," "anticipate," "believe" or "continue" or
the negatives thereof or variations thereon or similar terminology. Although the
Company believes that the expectations reflected in such forward-looking
statements are reasonable, it can give no assurance that such expectations will
prove to have been correct. Important factors that could cause actual results to
differ materially from Doe Run's expectations ("Cautionary Statements") are
disclosed in this Prospectus, including, without limitation, in conjunction with
the forward-looking statements included in this Prospectus and under "Risk
Factors." All subsequent written and oral forward-looking statements
attributable to the Company or persons acting on its behalf are expressly
qualified in their entirety by the Cautionary Statements. These forward-looking
statements speak only as of the date of this Prospectus. The Company expressly
disclaims any obligation or undertaking to disseminate any updates or revisions
to any forward-looking statement contained herein to reflect any change in their
expectations with regard thereto or any change in events, conditions or
circumstances on which any such statement is based.
ENFORCEABILITY OF CIVIL LIABILITIES
Each of Doe Run Peru and Doe Run Mining is organized under the laws of the
Peru. Doe Run Cayman is incorporated under the laws of the Cayman Islands.
Certain experts named herein with respect
3
<PAGE>
to Doe Run Peru and Doe Run Mining reside outside of the United States, and
substantially all of the assets of such persons and of Doe Run Peru and Doe Run
Mining are located outside of the United States. As a result, it may not be
possible for investors to effect service of process upon such persons or Doe Run
Peru, Doe Run Cayman and Doe Run Mining or to enforce against them in the United
States, or to realize judgments of courts located outside of the Cayman Islands
or Peru predicated upon civil liability provisions of the federal or state
securities laws of the United States. The Company believes that there are
potential defenses to the enforceability, in original actions in Cayman Islands
or Peruvian courts, of liabilities predicated solely on the U.S. federal and
state securities laws and as to the enforceability in Cayman Islands or Peruvian
courts of judgments of U.S. courts obtained in actions predicated upon the civil
liability provisions of the U.S. federal and state securities laws.
PRESENTATION OF CERTAIN FINANCIAL INFORMATION
Unless otherwise specified or the context otherwise requires, references to
"$," "US$," "U.S.$," "dollars," and "U.S. dollars" are to United States dollars
and references to "S/.," "nuevo sol" or "nuevos soles" are to Peruvian nuevos
soles. Each nuevo sol is divisible into 100 centimos. See "Exchange Rates."
The financial statements of Empresa Minera del Centro Peru S.A.--Centromin
Peru S.A., La Oroya Division included herein are prepared in U.S. dollars and in
accordance with generally accepted accounting principles in the United States
("U.S. GAAP").
Doe Run Peru and Doe Run Mining maintain their financial records in nuevos
soles, prepare financial information in accordance with generally accepted
accounting principles in Peru ("Peruvian GAAP") and report such information to
the Peruvian government on this basis for purposes of calculating its Peruvian
tax liability. These amounts are calculated on the basis of Peruvian GAAP and,
therefore, cannot be directly derived from the consolidated financial statements
appearing in this Prospectus, which are prepared in accordance with U.S. GAAP.
Peruvian GAAP requires the inclusion in the financial statements of Doe Run Peru
and Doe Run Mining the Resultado de Exposicion a la Inflacion which seeks to
account for the effects of inflation by adjusting the value of non-monetary
assets and liabilities and equity by a factor corresponding to Peruvian
wholesale price inflation rates during the period covered by the financial
statements. Monetary assets and liabilities are not adjusted.
EXCHANGE RATES
During the last two decades, the Peruvian government has imposed various
exchange controls ranging from strict control over exchange rates to market
determination of rates. Prior to early 1991, the Peruvian foreign exchange
market consisted of multiple exchange rates. Since early 1991, there have been
no exchange controls in Peru and all foreign exchange transactions are based on
free market exchange rates. Current Peruvian regulations on foreign investment
allow foreign investors to receive and repatriate all earnings and investments
in Peru. Investors are allowed to purchase foreign currency at free market
exchange rates through any member of the Peruvian banking system and transfer
such foreign currency outside Peru without restriction.
A portion of Doe Run Peru's operating costs are denominated in nuevos soles.
Because substantially all the revenues of Doe Run Peru are denominated in U.S.
dollars, when inflation in Peru is not offset by a corresponding devaluation of
the nuevo sol versus the U.S. dollar, the financial position, results of
operations and cash flows of Doe Run Peru will be adversely affected. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources--Inflation and Seasonality." Doe Run
Peru has not in the past entered into any foreign exchange hedging arrangements.
4
<PAGE>
The following table sets forth the high and low month-end, average month-end
and end of period noon buying rates in New York City for customs purposes as set
forth in INTERNATIONAL FINANCIAL STATISTICS published by the International
Monetary Fund of nuevo soles for U.S. dollars for the periods indicated:
<TABLE>
<CAPTION>
MONTH-END
--------------------------------- END OF
YEAR ENDED DECEMBER 31, HIGH LOW AVERAGE PERIOD
- ------------------------------------------------ --------- --------- ----------- ---------
(PER $)
<S> <C> <C> <C> <C>
1992............................................ S/.1.468 S/.0.960 S/.1.211 S/.1.468
1993............................................ 2.196 1.710 2.008 2.196
1994............................................ 2.250 2.160 2.193 2.180
1995............................................ 2.320 2.190 2.252 2.310
1996............................................ 2.600 2.360 2.460 2.600
1997............................................ 2.730 2.640 2.673 2.730
</TABLE>
The noon buying rate in New York City for customs purposes as set forth in
INTERNATIONAL FINANCIAL STATISTICS published by the International Monetary Fund
as of October 31, 1997 and January 31, 1998 was S/.2.720 and S/.2.770,
respectively, per $1.00.
5
<PAGE>
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION, FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO, AND OTHER DATA
APPEARING ELSEWHERE IN THIS PROSPECTUS. UNLESS THE CONTEXT OTHERWISE REQUIRES,
AS USED HEREIN: "OUNCE" MEANS A TROY OUNCE (1.09 OUNCES); "TON" MEANS A SHORT
TON (2,000 POUNDS); AND "WESTERN WORLD" MEANS THE ENTIRE WORLD EXCLUDING EASTERN
EUROPE, THE FORMER SOVIET UNION AND CHINA. THE COMPANY'S FISCAL YEAR ENDS
OCTOBER 31, AND THUS, FOR EXAMPLE, "FISCAL 1997" REFERS TO THE FISCAL YEAR ENDED
OCTOBER 31, 1997. PRIOR TO THE ACQUISITION (AS DEFINED), DOE RUN PERU'S FISCAL
YEAR ENDED DECEMBER 31. THE COMPANY MAINTAINS ITS PRINCIPAL EXECUTIVE OFFICES AT
1801 PARK 270 DRIVE, ST. LOUIS, MISSOURI 63146, AND ITS TELEPHONE NUMBER IS
(314) 453-7100.
THE COMPANY
Doe Run is the largest fully-integrated lead producer in North America and
the second largest primary lead producer in the western world. Through its
subsidiary Doe Run Peru, Doe Run operates one of the largest polymetallic
processing companies in the world offering an extensive product mix of non-
ferrous and precious metals, including copper, silver, zinc, lead and gold. The
combined capabilities of Doe Run and Doe Run Peru represent the largest primary
lead producer in the western world.
On October 23, 1997, Doe Run Peru acquired (the "Acquisition") Empresa
Metalurgica La Oroya S.A. ("Metaloroya") from Empresa Minera del Centro del Peru
S.A., a Peruvian government-owned conglomerate ("Centromin"), as part of the
ongoing privatization program sponsored by the government of the Republic of
Peru ("Peru"). On December 30, 1997, Metaloroya was merged into Doe Run Peru
(the "Merger").
The Company had pro forma net sales and EBITDA (as defined) of $709.8
million and $74.5 million, respectively, for the twelve months ended October 31,
1997 and net sales and EBITDA of $169.1 million and $17.7 million, respectively,
for the three months ended January 31, 1998.
DOE RUN
Doe Run's integrated operations permit Doe Run to participate in and manage
the entire lead life cycle, including the mining of lead ore, the production of
refined lead metal, the fabrication of value-added lead products and the
secondary recycling of spent lead-acid batteries and other lead-bearing
materials. Doe Run believes its reputation for excellent service, product
quality and timely delivery permits it to consistently realize premiums for its
products, resulting in sales prices above the market price for lead quoted on
the London Metal Exchange (the "LME").
In fiscal 1997, Doe Run shipped approximately 350,000 tons of refined lead
metal and lead alloy products, including recycled lead, representing
approximately 19% of North American consumption and 6% of western world
consumption. Doe Run had net sales and EBITDA of $277.9 million and $31.9
million, respectively, for fiscal 1997, excluding the results of operations of
Doe Run Peru for the eight-day period from October 23, 1997 (the date of
consummation of the Acquisition) through October 31, 1997 and net sales and
EBITDA of $59.8 million and $1.7 million, respectively, for the three months
ended January 31, 1998.
Refined lead product sales accounted for approximately 67% and 68% of Doe
Run's total net sales, or $185.1 million and $41.0 million, respectively, in
fiscal 1997 and for the three months ended January 31, 1998, respectively. The
balance of Doe Run's net sales resulted from (i) tolling services provided to
major U.S. lead-acid battery manufacturers, (ii) lead production by-products,
including zinc and copper concentrates, and (iii) value-added fabricated lead
products, such as lead sheet and bricks. These net sales from tolling services,
by-products and fabricated products provide sources of revenue largely
independent of lead prices.
Western world lead consumption in 1997 was estimated at 5.8 million tons
which represents a total market of approximately $3.2 billion. Approximately 4.2
million tons, or 72%, of this lead was used in the production of lead-acid
batteries, approximately 75% of which was for starting-lighting-ignition ("SLI")
6
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batteries. Approximately 83% of SLI battery sales are in the automotive
replacement market, a market with stable demand characteristics, which is
dependent upon the number of automobiles in service and battery life.
Doe Run's customers include six of the seven largest lead-acid battery
manufacturers in the world. The lead-acid battery remains the most cost
competitive battery technology for SLI batteries, which management believes will
not change in the foreseeable future. Other uses for refined lead include
computer and television screens, ammunition, stationary batteries used as backup
power sources and rolled and extruded lead products used in radiation shielding
and roofing materials.
The market for refined lead continues to grow primarily as a result of
increasing demand for lead-acid batteries used for automobiles and other
vehicles as a result of worldwide economic growth. As a result, western world
lead consumption grew at a compound annual growth rate ("CAGR") of 2.0% between
1987 and 1997, growing 0.75% from 1996 to 1997. Doe Run believes that this
growth rate will accelerate in the future as batteries become an even larger
portion of the lead market, particularly in light of expected economic growth
leading to increased vehicle population in developing economies.
Approximately 45% of annual worldwide lead consumption is supplied from
newly mined or "primary" ore, and the balance is supplied from secondary
sources, principally the recycling of spent lead-acid batteries and other
lead-bearing materials. Since 1990, primarily due to heightened environmental
awareness, secondary lead capacity has increased, whereas primary lead capacity
has remained relatively constant. Management believes that secondary sources of
lead will continue to account for an increasing share of the total worldwide
lead market.
The average LME price for refined lead was $.29 per pound in fiscal 1997. As
of March 31, 1998, the LME price for lead was $.26 per pound, which was below
the ten-year average price of $.28 per pound. Management believes that lead
prices will remain relatively stable or will modestly increase for the remainder
of fiscal 1998 and over the long term will reflect the historical industry
average. As a result of the recent lead price decreases, the Company expects
that it will incur an operating loss in its U.S. operations that will adversely
affect its EBITDA in fiscal 1998.
Doe Run conducts its mining operations along approximately 40 miles of the
Viburnum Trend in Southeastern Missouri, one of the world's most productive lead
deposits. Doe Run operates six production shafts, four processing mills, one
primary smelter and one secondary smelter. During fiscal 1997, Doe Run mined in
excess of 5.0 million tons of ore containing average grades of 5.17% lead, 1.02%
zinc and 0.27% copper. At the end of fiscal 1997, Doe Run's proven and probable
reserves consisted of approximately 70 million tons, containing approximately
3.8 million tons of recoverable lead or approximately fourteen years of
production at current mining rates.
Doe Run's primary smelter in Herculaneum, Missouri is the largest in North
America and the second largest in the world, with an annual production capacity
of approximately 250,000 tons of refined lead. Since entering the recycling
business in 1992, Doe Run has become a leading producer of secondary lead at its
Buick recycling facility and secondary smelter located in Boss, Missouri. At
this facility, Doe Run is reclaiming at a rate of approximately 105,000 tons of
refined lead per year, approximately 60% of which is derived from tolling
arrangements with major U.S. battery manufacturers.
DOE RUN PERU
Doe Run Peru's unique combination of base metal smelters, refineries and
by-product circuits enable Doe Run Peru to process complex polymetallic
concentrates and to recover base metals and by-products at international quality
standards. Doe Run Peru's location in central Peru, approximately 110 miles from
Lima, allows Doe Run Peru to source concentrates advantageously from mines
located throughout the central Andes mountains, particularly in Peru. Moreover,
Doe Run Peru's proximity to Lima's Callao port provides it ready access to major
world markets for its products.
For the twelve months ended October 31, 1997 and the three months ended
January 31, 1998, Doe Run Peru shipped approximately 70,000 tons and 18,000
tons, respectively, of refined copper, 107,000 tons
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and 27,000 tons, respectively, of refined lead, 71,000 tons and 18,000 tons,
respectively, of refined zinc, 20.5 million ounces and 6.5 million ounces,
respectively, of refined silver and 42,000 ounces and 13,000 ounces,
respectively, of gold bullion. In addition, Doe Run Peru shipped various
by-products including bismuth, indium, tellurium, antimony, cadmium and copper
blister. Doe Run Peru had net sales and Adjusted EBITDA (as defined) of $431.9
million and $50.7 million, respectively, for the twelve months ended October 31,
1997, including the period from October 23, 1997 through October 31, 1997, and
net sales and EBITDA (excluding intercompany transactions) of $109.2 million and
$16.0 million, respectively, for the three months ended January 31, 1998.
Of Doe Run Peru's net sales, refined copper, silver, zinc, lead and gold
accounted for 35%, 23%, 19%, 15% and 3%, respectively, for the twelve months
ended October 31, 1997, and 26%, 32%, 18%, 13% and 3%, respectively, for the
three months ended January 31, 1998, with the balance of net sales derived from
sales of various by-products. For the twelve months ended December 31, 1997, Doe
Run Peru was Peru's second largest exporter, exporting approximately 80% of its
total shipments to North America, Europe and Asia, as well as other Latin
American countries. Doe Run Peru's customers include end-users of base metals
and metal by-products, as well as international metal trading companies.
Doe Run Peru's operations consist of smelting and refining complex
concentrates that it purchases from unaffiliated mining operations. Doe Run Peru
typically purchases concentrate feedstock pursuant to annual contracts at a
price based on a percentage of the payable base metal and precious metal content
of the concentrates. The price is reduced by processing fees or treatment
charges to refine the concentrates, as well as by penalties charged to remove
impurities within the concentrates, such as arsenic, antimony and bismuth. Base
metal prices, treatment charges and penalties are generally established based
upon prevailing market conditions by reference to prices in the world market,
including on the LME. Currently, Doe Run Peru has entered into supply contracts,
primarily with one-year terms, that meet approximately 95% of its concentrate
requirements for fiscal 1998.
Doe Run Peru pays concentrate suppliers for the majority of the metal
content of the concentrates purchased and, thus, derives its operating profit
primarily from treatment charges and penalties. In addition, Doe Run Peru
generates operating profit from the sale of by-products, as well as from metals
sold at a premium to the price paid for such metal. Moreover, since Doe Run
Peru's metallurgical recoveries are typically in excess of the paid metal
percentages, Doe Run Peru further increases its operating profit from the sale
of the metal produced from such recoveries.
The markets for Doe Run Peru's products are global and continue to grow as a
result of worldwide economic growth. Given the diversity of its products and
by-products, Doe Run Peru's financial performance is not solely dependent upon
the prospects for any one of its products or by-products. Moreover, since Doe
Run Peru is a processor of complex concentrates and does not presently own any
mines from which it sources concentrates, Doe Run Peru's financial performance
is less sensitive to the volatility of base metal prices.
COMPETITIVE STRENGTHS
The Company believes that its competitive strengths include the following:
FOCUSED BUSINESS STRATEGY
The production of lead and related products is Doe Run's primary business,
whereas lead generally represents a small percentage of its competitors' overall
operations. As a result, Doe Run believes that its ability to quickly recognize
and respond to various trends that affect the lead industry and its customers
provides Doe Run with a preferred status with its customers. This
responsiveness, along with its reputation for excellent service, product quality
and timely delivery, permits Doe Run to consistently realize premiums for its
products, resulting in sales prices above the market price for lead quoted on
the LME.
With the assistance and direction provided by Doe Run, Doe Run Peru, as a
private enterprise, is well positioned to recognize and respond to various
trends that affect the smelting and refining industry, as well as its customers.
Doe Run Peru will implement its business strategy with the operating flexibility
to
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(i) make discretionary capital expenditures and (ii) purchase an optimum mix of
concentrate feedstock from a wider range of suppliers than it could under the
constraints that existed as a government-owned enterprise.
DIVERSE PROCESSING CAPABILITIES
The combination of Doe Run's and Doe Run Peru's processing capabilities
provides the Company greater diversity in its net sales and EBITDA.
Specifically, with the Acquisition, approximately 74% and 75% of the Company's
net sales for the twelve months ended October 31, 1997 and the three months
ended January 31, 1998, respectively, were derived from (i) the treatment and
processing of base metal concentrates, including copper, silver, zinc, lead and
gold, (ii) the fabrication of lead and lead related products, (iii) the tolling
of spent lead-acid batteries for major U.S. lead-acid battery manufacturers and
(iv) the sale of zinc and copper concentrates. Such value-added tolling and
other products and services are less sensitive to base metal price fluctuations.
FAVORABLE ACCESS TO RAW MATERIALS
Peru and its neighboring Latin American countries, primarily Bolivia, are
significant producers of complex concentrates that contain multiple metals and
high levels of impurities. Doe Run Peru obtains substantially all of its lead
and zinc concentrates and approximately 80% of its copper concentrates from
Peruvian sources. Since Doe Run Peru operates one of the few complex concentrate
processing facilities in the world, Doe Run Peru obtains favorable pricing terms
from its concentrate suppliers due to the complex nature of the concentrates and
its proximity to the producing mines. As a result, Doe Run Peru believes that it
operates at a geographic competitive advantage to comparable facilities located
farther from their sources of complex concentrates. Currently, Doe Run Peru has
entered into supply contracts, primarily with one-year terms, that meet
approximately 95% of its concentrate requirements for fiscal 1998.
FLEXIBLE MINING OPERATIONS
Due to its extensive polymetallic ore resources, Doe Run has flexibility in
developing its mining and milling plans to take advantage of prevailing market
conditions for lead, zinc and copper. Depending on lead, zinc and copper prices,
Doe Run has the ability, to a certain extent, to optimize its mine production by
targeting certain ore grades in order to enhance operating margins. By
maintaining such flexibility, Doe Run is able to reduce its exposure to the
volatility of base metal prices.
U.S. DOLLAR-BASED REVENUES
The mining industry in which Doe Run Peru is a major participant is Peru's
largest export industry, representing approximately 45% of Peru's total export
sales in 1997. For the twelve months ended October 31, 1997 and the three months
ended January 31, 1998, exports accounted for 78% and 77%, respectively, of Doe
Run Peru's shipments and more than 79% and 72%, respectively, of its net sales.
In addition, substantially all of Doe Run Peru's net sales are denominated in
U.S. dollars. As a result, Doe Run Peru's net sales are less sensitive to
foreign currency fluctuations.
EXPERIENCED MANAGEMENT AND LABOR FORCE
Doe Run's management team has extensive experience in the mining and metals
production industry with an average of 23 years in the industry. The extensive
experience of the Doe Run management team complements the skills of Doe Run
Peru's executive personnel to provide Doe Run Peru with the strong management
team necessary to compete as a private enterprise in the world markets. In
addition, the Company employs a highly skilled workforce whose average tenure
with the Company is more than 20 years.
HIGH BARRIERS TO ENTRY
Management believes that the capital costs and environmental requirements
associated with constructing facilities comparable to those of the Company
result in high barriers to entry for prospective
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entrants. Management estimates that it would cost approximately $700 million to
establish mining, milling and smelting operations with the production capacity
and efficiency of Doe Run. Moreover, management is not aware of any significant
mineral deposit in North America with lead grades and reserves similar to that
of the Viburnum Trend. With respect to Doe Run Peru, management estimates that
it would cost approximately $950 million to establish smelting and refining
operations with the production capacity and efficiency of Doe Run Peru.
Management believes that the cost and time commitment required to achieve
commercial production for any new mining, milling, smelting or processing
operation, including regulatory approvals, heightens the barriers to entry.
BUSINESS STRATEGY
The Company's business strategy is to improve its operations and financial
performance by focusing on the following principal elements:
INCREASE CAPACITY AND IMPROVE OPERATING EFFICIENCIES
Doe Run is committed to improving its operating efficiencies through focused
capital investments that increase capacity utilization, enhance productivity and
lower costs. Since the acquisition of Doe Run by The Renco Group, Inc. ("Renco")
in April 1994, Doe Run has completed approximately $34.4 million of capital
investments through January 31, 1998 designed in part to reduce production costs
and improve product quality. Additionally, Doe Run seeks to identify non-capital
cost reduction opportunities throughout its operations. Doe Run has increased
its primary lead production capacity from the original annual capacity of
225,000 tons to approximately 250,000 tons presently with minimal capital
investment. In addition, Doe Run has increased its secondary lead production
capacity from the original annual capacity of 60,000 tons to approximately
105,000 tons presently with minimal capital investment.
The Company has identified a number of strategic initiatives designed to
improve Doe Run Peru's operating efficiencies and its competitive position
within the industry through focused capital investment. In furtherance of this
strategy, Doe Run Peru has adopted a ten-year capital investment program of
approximately $300.0 million (the "Capital Investment Program") in an effort to
enhance various elements of Doe Run Peru's operations. The Capital Investment
Program will target specific areas of Doe Run Peru's facilities, such as the
copper and lead circuits, to improve product quality, increase capacity, improve
productivity and reduce costs in the targeted area, thereby enhancing Doe Run
Peru's net sales and EBITDA. In addition, the Capital Investment Program is
designed to help achieve compliance with applicable environmental standards in
Peru.
MAINTAIN AND BUILD STRONG RELATIONSHIPS WITH STRATEGIC CUSTOMERS
Through its ongoing research and development efforts and customer service
initiatives, Doe Run strives to build and maintain strong relationships with its
customers. Since lead is Doe Run's principal business, Doe Run sales and
technical professionals are dedicated to working closely with Doe Run's
customers to be responsive to their needs, such as small order quantities,
specialized shapes, sizes and alloys, technical assistance and flexible
deliveries.
As a private enterprise, Doe Run Peru is implementing many of the successful
customer service initiatives utilized by Doe Run to build and maintain strong
relationships with its customers. Such initiatives will include ongoing research
and development efforts, technical assistance and other customer service
practices that will encourage a close working relationship with Doe Run Peru's
customers. In addition, Doe Run Peru is shifting the focus of its marketing
efforts to end users of its products from international trading companies.
OPTIMIZE CONCENTRATE SUPPLY AT DOE RUN PERU
As a private enterprise, Doe Run Peru is endeavoring to optimize the mix of
complex concentrates from a wider range of suppliers than it purchased as a
government-owned enterprise. Historically, Doe Run Peru obtained the vast
majority of its concentrate requirements from Centromin mines, typically
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pursuant to annual contracts. Given Doe Run Peru's unique position as one of the
few processing facilities in the world for complex concentrates, Doe Run Peru
will source its raw materials on a competitive basis within Peru from both
Centromin mines and private mines, as well as from other Latin American
suppliers. Currently, Doe Run Peru has entered into supply contracts, primarily
with one-year terms, that meet approximately 95% of its concentrate requirements
for fiscal 1998.
GROW DOE RUN'S CORE LEAD BUSINESS
Doe Run seeks to increase sales and operating cash flow through the growth
of its core lead operations. Such efforts include increased sales of refined
lead resulting from the expansion of its primary lead production capacity. In
addition, Doe Run strives to expand its product offerings of value-added
fabricated products including various shapes, sizes and alloys. Margins on
fabricated products are relatively insensitive to lead price fluctuations
because such fluctuations are generally reflected in the price of the end
product. Doe Run is also growing its recycling and related tolling business with
U.S. lead-acid battery manufacturers pursuant to contractual agreements under
which recycled lead is returned to the supplier in exchange for a processing
fee. Such processing fee is generally independent of lead prices.
BROADEN REVENUE SOURCES THROUGH STRATEGIC ACQUISITIONS
The Company seeks to broaden its revenue sources through the acquisition of
related resource assets or businesses that capitalize on the combined experience
of Doe Run and Doe Run Peru in mining, milling, smelting and refining base and
precious metals. With respect to Doe Run, such opportunities, domestic or
international, could be operations in primary or secondary lead production, lead
fabrication or non-lead resource businesses. With respect to Doe Run Peru, such
opportunities could include the acquisition of mining assets in Peru or other
Latin American countries, including, without limitation, those presently
undergoing privatization in Peru.
The Acquisition reflects the Company's business strategy of broadening its
revenue sources through a strategic acquisition, focusing on treatment and
processing of base metal concentrates, as well as other metal related services.
In particular, Doe Run Peru represented a unique opportunity for Doe Run to
capitalize on Doe Run's extensive experience in efficiently managing mature
smelter operations. Through the focused investment of capital and the
implementation of Doe Run's operating practices, Doe Run Peru believes that it
will increase its refined metals capacities and improve product quality, thereby
enhancing financial performance through increased revenues and EBITDA.
In April, 1998, Doe Run entered into a letter of intent with ASARCO
Incorporated ("ASARCO") to purchase certain assets relating to the ASARCO's lead
business in Missouri, including a smelter and refinery and two mines. The
anticipated purchase price for these assets is approximately $50.0 million, plus
contingent deferred purchase price payments over a period not to exceed five
years, in an aggregate amount not to exceed $12.5 million. This transaction is
subject to satisfactory completion of Doe Run's due diligence review and
negotiation of a definitive agreement, as well as obtaining certain governmental
and third party approvals. Doe Run has only recently commenced its due diligence
review and currently cannot assess the likelihood that this transaction will be
consummated. Accordingly, there can be no assurance that a definitive agreement
related to this transaction will be entered into or that the required
governmental approvals will be obtained.
CONTROL OF THE COMPANY
All of Doe Run's issued and outstanding capital stock is owned indirectly by
Renco. In excess of 99% of the interests in Doe Run Peru is indirectly owned by
Doe Run through Doe Run Cayman and Doe Run Mining (with a DE MINIMIS number of
shares owned by employees of Doe Run Peru and Centromin pursuant to Peruvian
law).
Renco is 97.9% owned by Mr. Ira Leon Rennert, the Chairman of Doe Run and
Chairman and Chief Executive Officer of Renco, and by trusts established for
himself and members of his family (but of which he is not a trustee). As a
result of such ownership, Mr. Rennert controls the Company.
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THE EXCHANGE OFFER
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The Exchange Offer.................. $1,000 principal amount of Fixed Rate Exchange Notes
and Floating Rate Exchange Notes will be issued in
exchange for each $1,000 principal amount of Fixed
Rate Old Notes and Floating Rate Old Notes,
respectively, validly tendered pursuant to the
Exchange Offer. As of the date hereof, $200.0 million
and $55.0 million in aggregate principal amount of
Fixed Rate Old Notes and Floating Rate Old Notes,
respectively, are outstanding. Doe Run will issue the
Exchange Notes to tendering holders of Old Notes
promptly after the Expiration Date.
Resales............................. Based on an interpretation by the staff of the
Commission set forth in Morgan Stanley & Co.
Incorporated, SEC No-Action Letter (available June 5,
1991) (the "Morgan Stanley Letter"), Exxon Capital
Holdings Corporation, SEC No-Action Letter (available
May 13, 1988) (the "Exxon Capital Letter") and
similar letters, Doe Run believes that Exchange Notes
issued pursuant to the Exchange Offer in exchange for
Old Notes may be offered for resale, resold and
otherwise transferred by any person receiving such
Exchange Notes, whether or not such person is the
holder (other than any such holder or other person
which is (i) a broker-dealer that receives Exchange
Notes for its own account in exchange for Old Notes,
where such Old Notes were acquired by such
broker-dealer as a result of market-making or other
trading activities, or (ii) an "affiliate" of Doe Run
within the meaning of Rule 405 under the Securities
Act (collectively, "Restricted Holders")) without
compliance with the registration and prospectus
delivery provisions of the Securities Act, provided
that (a) such Exchange Notes are acquired in the
ordinary course of business of such holder or other
person (b) neither such holder nor such other person
is engaged in or intends to engage in a distribution
of such Exchange Notes and (c) neither such holder
nor other person has any arrangement or understanding
with any person to participate in the distribution of
such Exchange Notes. If any person were to be
participating in the Exchange Offer for the purposes
of participating in a distribution of the Exchange
Notes in a manner not permitted by the Commission's
interpretation, such person (a) could not rely upon
the Morgan Stanley Letter, the Exxon Capital Letter
or similar letters and (b) must comply with the
registration and prospectus delivery requirements of
the Securities Act in connection with a secondary
resale transaction. Each broker or dealer that
receives Exchange Notes for its own account in
exchange for Old Notes, where such Old Notes were
acquired by such broker or dealer as a result of
market-making or other activities, must acknowledge
that it will deliver a Prospectus
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in connection with any sale of such Exchange Notes.
See "Plan of Distribution."
Expiration Date..................... 5:00 p.m., New York City time, on , 1998,
unless the Exchange Offer is extended, in which case
the term "Expiration Date" means the latest date and
time to which the Exchange Offer is extended.
Accrued Interest on the Exchange
Notes and Old Notes............... The Exchange Notes will bear interest from March 12,
1998. Holders of Old Notes whose Old Notes are
accepted for exchange will be deemed to have waived
the right to receive any payment in respect of
interest on such Old Notes accrued to the date of
issuance of the Exchange Notes.
Conditions to the Exchange Offer.... The Exchange Offer is subject to certain customary
conditions. The conditions are limited and relate in
general to proceedings which have been instituted or
laws which have been adopted that might impair the
ability of Doe Run to proceed with the Exchange
Offer. As of the date of this Prospectus, none of
these events had occurred, and Doe Run believes their
occurrence to be unlikely. If any such conditions
exist prior to the Expiration Date, Doe Run may (a)
refuse to accept any Old Notes and return all
previously tendered Old Notes, (b) extend the
Exchange Offer or (c) waive such conditions. See "The
Exchange Offer-- Conditions."
Procedures for Tendering Old
Notes............................. Each holder of Old Notes wishing to accept the
Exchange Offer must complete, sign and date the
Letter of Transmittal, or a facsimile thereof, in
accordance with the instructions contained herein and
therein, and mail or otherwise deliver such Letter of
Transmittal, or such facsimile, together with the Old
Notes to be exchanged and any other required
documentation to the Exchange Agent (as defined) at
the address set forth herein and therein. Tendered
Old Notes, the Letter of Transmittal and accompanying
documents must be received by the Exchange Agent by
5:00 p.m. New York City time, on the Expiration Date.
See "The Exchange Offer-- Procedures for Tendering."
By executing the Letter of Transmittal, each holder
will represent to Doe Run that, among other things,
the Exchange Notes acquired pursuant to the Exchange
Offer are being obtained in the ordinary course of
business of the person receiving such Exchange Notes,
whether or not such person is the holder, that
neither the holder nor any such other person is
engaged in or intends to engage in a distribution of
the Exchange Notes or has an arrangement or
understanding with any person to participate in the
distribution of such Exchange Notes, and that neither
the holder nor any such other person is an
"affiliate," as defined under Rule 405 of the
Securities Act, of Doe Run.
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Special Procedures for Beneficial
Holders........................... Any beneficial holder whose Old Notes are registered
in the name of his broker, dealer, commercial bank,
trust company or other nominee and who wishes to
tender in the Exchange Offer should contact such
registered holder promptly and instruct such
registered holder to tender on his behalf. If such
beneficial holder wishes to tender on his own behalf,
such beneficial holder must, prior to completing and
executing the Letter of Transmittal and delivering
his Old Notes, either make appropriate arrangements
to register ownership of the Old Notes in such
holder's name or obtain a properly completed bond
power from the registered holder. The transfer of
record ownership may take considerable time. See "The
Exchange Offer--Procedures for Tendering."
Guaranteed Delivery Procedures...... Holders of Old Notes who wish to tender their Old
Notes and whose Old Notes are not immediately
available or who cannot deliver their Old Notes and a
properly completed Letter of Transmittal or any other
documents required by the Letter of Transmittal to
the Exchange Agent prior to the Expiration Date may
tender their Old Notes according to the guaranteed
delivery procedures set forth in "The Exchange
Offer--Guaranteed Delivery Procedures."
Withdrawal Rights................... Tenders may be withdrawn at any time prior to 5:00
p.m., New York City time, on the Expiration Date.
Acceptance of Old Notes and Delivery
of Exchange Notes................. Subject to certain conditions, Doe Run will accept
for exchange any and all Old Notes which are properly
tendered in the Exchange Offer prior to 5:00 p.m.,
New York City time, on the Expiration Date. The
Exchange Notes issued pursuant to the Exchange Offer
will be delivered promptly after the Expiration Date.
See "The Exchange Offer--Terms of the Exchange
Offer."
Certain U.S. Federal Income Tax
Considerations.................... The exchange of Old Notes for Exchange Notes pursuant
to the Exchange Offer will not be a taxable event for
federal income tax purposes. A holder's holding
period for Exchange Notes will include the holding
period for Old Notes. For a discussion summarizing
certain U.S. federal income tax consequences to
holders of the Exchange Notes, see "Certain U.S.
Federal Income Tax Considerations."
Exchange Agent...................... State Street Bank and Trust Company is serving as
exchange agent (the "Exchange Agent") in connection
with the Exchange Offer. The mailing address of the
Exchange Agent is State Street Bank and Trust
Company, Two International Place, 4th Floor, Boston,
Massachusetts 02110, Attention: Claire
Young--Corporate Trust Department. Deliveries by hand
or overnight courier should be addressed to State
Street Bank and Trust Company, 61 Broadway, 15th
Floor, New
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York, New York 10016, Attention: Corporate Trust
Department. For information with respect to the
Exchange Offer, call the Exchange Agent at telephone
number: (860) 244-1846 or facsimile number: (860)
244-1881.
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SUMMARY OF TERMS OF EXCHANGE NOTES
The Exchange Offer constitutes an offer to exchange up to $200.0 million and
$55.0 million aggregate principal amount of the Fixed Rate Exchange Notes and
Floating Rate Exchange Notes, respectively, for up to an equal aggregate
principal amount of Fixed Rate Old Notes and Floating Rate Old Notes,
respectively. The Exchange Notes will be obligations of Doe Run evidencing the
same indebtedness as the Old Notes, and will be entitled to the benefit of the
same Indenture. The form and terms of the Fixed Rate Exchange Notes and Floating
Rate Exchange Notes are substantially the same as the form and terms of the
Fixed Rate Old Notes and Floating Rate Old Notes, respectively, except that the
Exchange Notes have been registered under the Securities Act. See "Description
of the Notes."
COMPARISON WITH OLD NOTES
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Freely Transferable................. The Exchange Notes will be freely transferable under
the Securities Act by holders who are not Restricted
Holders. Restricted Holders are restricted from
transferring the Exchange Notes without compliance
with the registration and prospectus delivery
requirements of the Securities Act. The Fixed Rate
Exchange Notes and Floating Rate Exchange Notes will
be identical in all material respects (including
interest rate, maturity and restrictive covenants) to
the Fixed Rate Old Notes and Floating Rate Old Notes,
respectively, with the exception that the Exchange
Notes will be registered under the Securities Act.
See "The Exchange Offer--Terms of the Exchange
Offer."
Registration Rights................. The holders of Old Notes currently are entitled to
certain registration rights pursuant to the
Registration Rights Agreement, dated as of March 12,
1998 (the "Registration Rights Agreement"), by and
among Doe Run, the Guarantors and BT Alex. Brown
Incorporated, Donaldson, Lufkin & Jenrette Securities
Corporation and UBS Securities LLC, the initial
purchasers of the Old Notes (the "Initial
Purchasers"), including the right to cause Doe Run
and the Guarantors to register the Old Notes under
the Securities Act if the Exchange Offer is not
consummated prior to the Exchange Offer Termination
Date (as defined). See "The Exchange
Offer--Conditions." However, pursuant to the
Registration Rights Agreement, such registration
rights will expire upon consummation of the Exchange
Offer. Accordingly, holders of Old Notes who do not
exchange their Old Notes for Exchange Notes in the
Exchange Offer will not be able to reoffer, resell or
otherwise dispose of their Old Notes unless such Old
Notes are subsequently registered under the
Securities Act or unless an exemption from the
registration requirements of the Securities Act is
available.
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TERMS OF THE EXCHANGE NOTES
Securities Offered.................. $200.0 million aggregate principal amount of 11 1/4%
Senior Notes due 2005, Series B.
$55.0 million aggregate principal amount of Floating
Interest Rate Senior Notes due 2003, Series B.
Issuer.............................. The Doe Run Resources Corporation
Guarantors.......................... Fabricated Products, Inc., Doe Run Cayman Ltd., Doe
Run Mining S.R. Ltda. and Doe Run Peru S.R. Ltda.
Maturity Date....................... The Floating Rate Exchange Notes will mature on March
15, 2003, and the Fixed Rate Exchange Notes will
mature on March 15, 2005.
Interest Payment Dates.............. Interest on the Exchange Notes will be payable
semi-annually on each March 15 and September 15,
commencing September 15, 1998. The Fixed Rate
Exchange Notes will bear interest at a rate of
11 1/4% per annum. The Floating Rate Exchange Notes
will bear interest at a rate per annum equal to LIBOR
plus 6.29% (currently, 12.00875%). Interest on the
Floating Rate Exchange Notes will be reset semi-
annually.
Ranking............................. The Exchange Notes and the Guarantees will be general
unsecured obligations of Doe Run and of the
Guarantors, respectively, and will rank senior in
right of payment to all existing and future
subordinated indebtedness of Doe Run and the
Guarantors, respectively, and PARI PASSU in right of
payment with other senior indebtedness of Doe Run and
the Guarantors, respectively, subject, in the case of
the Guarantees of Doe Run Mining and Doe Run Peru, to
statutorily preferred exceptions and statutorily
mandated priorities based on the date of issuance
with respect to payment of obligations under
applicable Peruvian law. However, Doe Run's
indebtedness under the New Doe Run Revolving Credit
Facility is secured by substantially all of the
current assets of Doe Run. In addition, Doe Run Peru
expects to enter into the New Doe Run Peru Revolving
Credit Facility, which will be secured by
substantially all of the current assets of Doe Run
Peru. Holders of such secured indebtedness, and any
other secured indebtedness of Doe Run and the
Guarantors, will have claims that effectively rank
prior to those of holders of Exchange Notes with
respect to the assets securing such indebtedness. In
addition, the Guarantee of Doe Run Peru will be
contractually subordinated to the indebtedness of Doe
Run Peru under the New Doe Run Peru Revolving Credit
Facility. As of January 31, 1998, on a pro forma
basis, the Company would have had approximately
$380.9 million of indebtedness outstanding (exclusive
of anticipated aggregate commitments of $140.0
million under the New Revolving Credit Facilities).
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Optional Redemption................. The Fixed Rate Exchange Notes will be redeemable, in
whole or in part, at the option of Doe Run, on or
after March 15, 2002, and the Floating Rate Exchange
Notes will be redeemable, in whole or in part, at the
option of Doe Run, at any time, in each case at the
redemption prices set forth herein, plus accrued and
unpaid interest to the date of redemption. In
addition, at any time on or prior to March 15, 2001,
Doe Run may redeem up to 35% of the aggregate
principal amount of the Fixed Rate Exchange Notes
with the net cash proceeds of one or more Equity
Offerings, at a redemption price equal to 111.25% of
the principal amount thereof, plus accrued interest
to the date of redemption; PROVIDED that at least 65%
of the aggregate principal amount of Fixed Rate Notes
remains outstanding immediately after any redemption.
See "Description of the Notes-- Redemption."
Change of Control................... Upon a Change of Control, each holder of Exchange
Notes will have the right to require Doe Run to
repurchase such holder's Exchange Notes at a price
equal to 101% of the principal amount thereof, plus
accrued and unpaid interest to the date of
repurchase. See "Description of the Notes-- Certain
Covenants--Change of Control."
Certain Covenants................... The Indenture contains certain covenants that limit
the ability of Doe Run and its Restricted
Subsidiaries (as defined) to, among other things,
incur additional indebtedness, pay dividends or make
certain other restricted payments, consummate certain
asset sales, enter into certain transactions with
affiliates, incur liens, impose restrictions on the
ability of a subsidiary to pay dividends or make
certain payments to Doe Run and its Restricted
Subsidiaries, merge or consolidate with any other
person or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of the
assets of Doe Run and its Restricted Subsidiaries.
These restrictions and qualifications are subject to
a number of important qualifications and exceptions.
See "Description of the Notes--Certain Covenants."
</TABLE>
For additional information regarding the Exchange Notes, see "Description of
the Notes."
USE OF PROCEEDS
Doe Run will not receive any proceeds from the Exchange Offer. See "Use of
Proceeds." Doe Run has agreed to bear the expenses of the Exchange Offer
pursuant to the Registration Rights Agreement (as defined). No underwriter is
being used in connection with the Exchange Offer.
See "--Recent Transactions--Old Notes Offering" for a description of the use
of proceeds from the Old Notes Offering.
17
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RECENT TRANSACTIONS
THE ACQUISITION
Doe Run Peru consummated the Acquisition on October 23, 1997 pursuant to the
terms of the Contract of Stock Transfer, Capital Increase and Stock Subscription
(the "Subscription Agreement") whereby Doe Run Peru acquired in excess of 99.97%
of Metaloroya's shares for approximately $247.0 million, which consisted of a
capital contribution to Metaloroya of $126.5 million and a purchase price
payment of $120.5 million. The Acquisition was structured as a direct
subscription and payment for newly issued shares of Metaloroya representing a
51% ownership interest in Metaloroya and a contemporaneous purchase from
Centromin of substantially all the previously outstanding shares, except for a
DE MINIMIS number of shares purchased from Centromin pursuant to Peruvian law by
employees of Centromin.
In order to finance the Acquisition, Doe Run Mining borrowed $225.0 million
in term loans under the Credit Agreement, dated as of October 23, 1997 (the
"Existing Doe Run Mining Credit Facility"), among Doe Run Mining, as borrower,
Doe Run, Doe Run Cayman, Doe Run Peru and Metaloroya, each as guarantors, and
various financial institutions. In addition, Doe Run Mining received a $2.0
million capital contribution from Doe Run Cayman and a $23.0 million
subordinated loan from Doe Run (the "Subordinated Loan"). Doe Run Mining used
the foregoing funds to make a capital contribution to Doe Run Peru of
approximately $248.0 million which was used to complete the Acquisition and for
general corporate purposes. On December 30, 1997, the Merger of Metaloroya into
Doe Run Peru was consummated with the surviving company being named Doe Run Peru
S.R. Ltda.
As part of the Subscription Agreement, Doe Run Peru is obligated to invest
$120.0 million through October 23, 2002 (the "Investment Commitment") to expand
and modernize Doe Run Peru's operations, including certain expenditures to
comply with environmental regulations within Peru as set forth in the Programa
de Adecuacion y Manejo Ambiental (Environmental Remedy and Management Program)
(the "PAMA"), an environmental adjustment and management program. In the event
that Doe Run Peru does not fulfill its obligations under the Investment
Commitment, Doe Run Peru will be obligated to pay in 2002 a penalty payment to
Centromin equal to 30% of any shortfall (a maximum of $36.0 million if none of
the Investment Commitment is made during the five year period) (the "Penalty
Payment"). As of March 31, 1998, Doe Run Peru had expended $1.2 million toward
fulfillment of the Investment Commitment.
In addition to term loans, the Existing Doe Run Mining Credit Facility
provides for a working capital facility of $50.0 million, of which $3.0 million
was drawn on the closing date of the Acquisition. As of October 31, 1997, Doe
Run Mining had outstanding borrowings of $103.0 million under the Existing Doe
Run Mining Credit Facility, $100.0 million in term loans and $3.0 million under
the working capital facility. In addition, Doe Run Mining has an intercompany
payable due to Doe Run Peru reflecting an interest free loan of $125.0 million
made by Metaloroya to Doe Run Mining on the closing date of the Acquisition. The
proceeds of the intercompany payable were used to reduce the outstanding term
loans obtained by Doe Run Mining under the Existing Doe Run Mining Credit
Facility to consummate the Acquisition.
DOE RUN FINANCING
As part of Renco's acquisition of Doe Run from Fluor Corporation ("Fluor")
in April 1994, Doe Run undertook certain obligations to Fluor. These obligations
included annual payments by Doe Run in exchange for an eight-year covenant not
to compete, a profit participation arrangement and promissory notes
(collectively, the "Fluor Indebtedness").
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Doe Run borrowed $130.0 million under a term loan (the "Doe Run Term Loan")
pursuant to the Credit Agreement, dated as of October 23, 1997, among Doe Run,
as borrower, DR Acquisition Corp. ("DRA"), as parent guarantor, Fabricated
Products, Inc., as subsidiary guarantor, and various financial institutions. Doe
Run used the net proceeds of the Doe Run Term Loan to pay $60.0 million to Fluor
in full settlement of the Fluor Indebtedness, to make the Subordinated Loan and
to make a $2.0 million capital contribution to Doe Run Cayman. In addition, Doe
Run used a portion of the net proceeds of the Doe Run Term Loan to repay all
amounts outstanding under Doe Run's then existing revolving credit facility and
entered into a $100.0 million revolving credit facility (the "Existing Doe Run
Revolving Credit Facility").
OLD NOTES OFFERING
On March 12, 1998, Doe Run sold and issued the Old Notes (the "Old Notes
Offering"). The net proceeds from the Old Notes Offering were approximately
$248.6 million. Doe Run used $125.0 million of such net proceeds to make a
deposit (the "Special Term Deposit") in a bank, which in turn loaned such amount
(the "Back-to-Back Loan") to Doe Run Mining. The Special Term Deposit and the
Back-to-Back Loan have payment terms that match the timing and amount of the
payments on $125.0 million of the Fixed Rate Notes, except that additional
interest of 0.50% for the first six months and 0.25% thereafter through
September 2004 is payable on the Back-to-Back Loan. The Back-to-Back Loan is
secured by the Special Term Deposit. Doe Run Mining used the proceeds of the
Back-to-Back Loan to (i) repay amounts outstanding under the Existing Doe Run
Mining Credit Facility and (ii) repay the Subordinated Loan to Doe Run of $23.0
million. Doe Run used the remaining approximately $123.6 million of the net
proceeds from the Old Notes Offering, together with the proceeds from the
repayment of the Subordinated Loan, to (i) repay amounts outstanding under the
Doe Run Term Loan, (ii) repay amounts under the Existing Doe Run Revolving
Credit Facility, (iii) redeem all of Doe Run's preferred stock held by Renco and
pay accrued dividends thereon and (iv) pay related fees and expenses, including
a transaction fee to Renco. The Old Notes Offering and the application of the
proceeds therefrom are collectively referred to herein as the "Transactions."
RISK FACTORS
See "Risk Factors" for a discussion of certain factors that should be
considered in evaluating an investment in the Exchange Notes.
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SUMMARY HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL DATA
The following tables set forth historical financial data of (i) the Company
for each of the three fiscal years ended October 31, 1997, which have been
derived from the Company's audited consolidated financial statements, and for
the three months ended January 31, 1997 and 1998 and as of January 31, 1998,
which are unaudited, (ii) Doe Run Peru's predecessors ("Doe Run Peru's
Predecessor") for each of the two fiscal years ended December 31, 1996, which
have been derived from Doe Run Peru's Predecessor's audited consolidated
financial statements, and for the period November 1, 1996 to October 23, 1997
(the date of consummation of the Acquisition) and the three months ended January
31, 1997, which are unaudited, (iii) Doe Run Cayman for the three months ended
January 31, 1998, which are unaudited, and (iv) pro forma financial data of the
Company for the fiscal year ended October 31, 1997 and the three months ended
January 31, 1998 and as of January 31, 1998. The pro forma balance sheet data
give effect to the Transactions as if they had occurred on January 31, 1998, and
the pro forma statement of operations data and financial ratios and other data
for the fiscal year ended October 31, 1997 and the three months ended January
31, 1998 give effect to the Acquisition and the Transactions as if they had
occurred on November 1, 1996. The information contained in this table should be
read in conjunction with "Unaudited Pro Forma Consolidated Financial Data,"
"Selected Historical Consolidated Financial Data," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the audited
financial statements of Doe Run and Doe Run Peru's Predecessor, and the notes
thereto, included elsewhere herein.
THE COMPANY
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31, THREE MONTHS ENDED JANUARY 31,
-------------------------------------------- ---------------------------------
1995 1996 1997 1997 1998
--------- --------- ---------------------- --------- ----------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ACTUAL PRO FORMA ACTUAL PRO FORMA
--------- ----------- --------- -----------
<CAPTION>
(DOLLARS AND TONS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales.................................... $ 225,143 $ 274,930 $ 280,467 $ 709,780 $ 65,751 $ 169,086 $ 169,086
Cost of sales................................ 180,398 215,489 234,351 608,812 52,944 143,547 143,547
Depletion, depreciation and amortization..... 12,486 13,654 14,718 21,460 3,663 5,714 5,714
Selling, general and administrative
expenses................................... 8,405 10,079 10,959 26,169 2,906 7,471 7,471
Exploration expense.......................... 1,926 2,912 2,705 2,705 481 484 484
--------- --------- --------- ----------- --------- --------- -----------
Operating income............................. 21,928 32,796 17,734 50,634 5,757 11,870 11,870
FINANCIAL RATIOS AND OTHER DATA:
EBITDA(a).................................... $ 34,282 $ 46,805 $ 32,415 $ 74,479 $ 9,317 $ 17,719 $ 17,719
Capital expenditures......................... 5,377 10,534 13,476 13,476 1,518 3,416 3,416
Pro forma cash interest expense(b)........... 29,672 7,378
Pro forma net debt(c)........................ 238,099
Ratio of EBITDA to pro forma cash interest
expense.................................... 2.51x 2.40 x
Ratio of pro forma net debt to EBITDA........ 3.20 x
OTHER OPERATING DATA:
Average LME lead price per pound(d).......... $ .28 $ .35 $ .29 $ .32 $ .25
Tons of primary lead metal sold.............. 218.0 228.9 245.1 57.2 85.3
Tons of secondary lead metal sold............ 27.9 39.7 44.1 4.5 12.6
Tons of secondary lead metal tolled.......... 52.4 51.7 60.9 15.6 12.7
Tons of zinc concentrates sold............... 55.5 68.3 69.7 17.5 14.8
Tons of copper concentrates sold............. 23.9 31.3 26.6 3.0 5.8
Tons of copper metal sold.................... -- -- 0.8 -- 17.9
Ounces of silver metal sold (in millions).... -- -- 0.1 -- 6.5
Tons of zinc metal sold...................... -- -- -- -- 18.4
Primary smelter lead tons per manshift(e).... 2.1 2.2 2.4 2.3 2.5
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
AS OF JANUARY 31, 1998
----------------------
ACTUAL PRO FORMA
--------- -----------
<S> <C> <C>
(DOLLARS IN THOUSANDS)
BALANCE SHEET DATA:
Cash...................................................................................................... $ 15,645 $ 11,232
Working capital........................................................................................... 91,478 105,606
Property, plant and equipment, net........................................................................ 203,984 203,984
Total assets.............................................................................................. 403,862 525,951
Total debt (including current portion).................................................................... 244,986 380,895
Shareholders' equity...................................................................................... 16,148 8,606
</TABLE>
DOE RUN PERU'S PREDECESSOR AND DOE RUN CAYMAN
<TABLE>
<CAPTION>
DOE RUN
DOE RUN PERU'S PREDECESSOR(F) CAYMAN(G)
---------------------------------------------- -----------
PERIOD THREE THREE
YEAR ENDED NOVEMBER 1, MONTHS MONTHS
DECEMBER 31, 1996 TO ENDED ENDED
-------------------- OCTOBER 23, JANUARY 31, JANUARY 31,
1995 1996 1997(H) 1997 1998(I)
--------- --------- ----------- ----------- -----------
(DOLLARS AND TONS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales............................................ $ 450,929 $ 456,797 $ 429,313 $ 108,151 $ 111,811
Cost of sales........................................ 397,524 397,158 364,901 86,323 90,924
Depreciation and amortization........................ 4,729 5,353 5,623 1,358 1,699
Selling, general and administrative expenses......... 15,950 17,420 18,524 5,966 4,697
--------- --------- ----------- ----------- -----------
Operating income..................................... 32,726 36,866 40,265 14,504 14,491
OTHER DATA:
EBITDA(a)............................................ $ 35,657 $ 18,702 $ 45,025 $ 15,953 16,316
Adjusted EBITDA(j)................................... 38,161 47,716 50,190 17,250
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C>
OTHER OPERATING DATA:
Tons of lead metal sold.............................. 98.7 104.1 106.7 26.1 26.9
Tons of copper metal sold............................ 70.0 71.3 68.9 17.5 17.9
Ounces of silver metal sold (in millions)............ 19.6 21.2 20.4 5.0 6.5
Tons of zinc metal sold.............................. 74.3 77.6 71.0 18.3 18.4
Average LME copper price per pound................... $ 1.33 $ 1.04 $ 1.07 $ 1.05 $ .81
Average LBMA silver price per ounce(k)............... 5.20 5.10 4.79 4.79 5.53
Average LME zinc price per pound..................... .47 .47 .59 .48 .51
</TABLE>
- ------------------------------
(a) EBITDA is defined as net income (loss) before extraordinary item plus the
sum of net interest expense, income taxes and depletion, depreciation and
amortization. The trends of EBITDA generally follow the trends of operating
income. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations" for a discussion of the recent trends of operating
income. Information regarding EBITDA is presented because management
believes that certain investors use EBITDA as one measure of an issuer's
ability to service its debt. EBITDA should not be considered an alternative
to, or more meaningful than, operating income or cash flow as an indicator
of an issuer's operating performance. Furthermore, caution should be used in
comparing EBITDA to similarly titled measures of other companies as the
definitions of these measures may vary.
(b) Pro forma cash interest expense is computed by removing substantially all
historical cash interest expense due to the retirement of substantially all
of the existing debt obligations of the Company and adding cash interest
expense on the Old Notes, the Back-to-Back Loan and other obligations of
$29.1 million, $14.5 million and $.1 million, respectively, net of cash
interest income on the Special Term Deposit of $14.1 million, for the year
ended October 31, 1997 and cash interest expense on the Old Notes and the
Back-to-Back Loan of $7.3 million and $3.6 million, respectively, net of
cash interest income on the Special Term Deposit of $3.5 million, for the
three months ended January 31, 1998.
(c) Pro forma net debt is pro forma total debt (including current portion), net
of pro forma cash of $18.6 million and the $125.0 million Special Term
Deposit. Pro forma total debt is computed by removing all of the existing
debt obligations of the Company (except the industrial revenue bonds) and
adding the Old Notes and the Back-to-Back Loan.
(d) The average lead price per pound realized by Doe Run generally is at a
premium over the average LME price.
(e) Primary smelter lead tons per manshift is computed by dividing metal
produced at Doe Run by the shifts required to produce the related tons.
Shifts are computed by dividing the sum of actual hours worked during the
period for hourly employees and 52 hours per week for salaried employees by
eight hours.
(f) Metaloroya was acquired by Doe Run Peru effective October 23, 1997.
(g) Doe Run Cayman, a wholly-owned subsidiary of Doe Run, is the parent company
of Doe Run Mining and currently has no independent operations.
(h) Doe Run Cayman's net sales, operating income and EBITDA for the eight-day
period October 23, 1997 to October 31, 1997 were $2.6 million, $.4 million
and $.5 million, respectively.
(i) These results include intercompany transactions. Net sales and cost of sales
excluding the effects of intercompany transactions were $109.2 million and
$88.7 million, respectively.
(j) Adjusted EBITDA is defined as EBITDA adjusted for the following
non-recurring charges: (i) for 1995, $2.5 million relating to personnel
reduction costs, (ii) for 1996, $3.9 million relating to personnel reduction
costs, $21.6 million relating to one-time environmental expenses and $3.6
million relating to privatization costs, (iii) for the period November 1,
1996 to October 23, 1997, $3.2 million relating to privatization costs and
$2.0 million relating to personnel reduction costs and (iv) for the three
months ended January 31, 1997, $.8 million relating to privatization costs
and $.5 million relating to personnel reduction costs.
(k) "LBMA" means the London Bullion Market Association.
21
<PAGE>
RISK FACTORS
PROSPECTIVE INVESTORS IN THE EXCHANGE NOTES SHOULD CONSIDER CAREFULLY THE
RISK FACTORS SET FORTH BELOW, AS WELL AS THE OTHER INFORMATION APPEARING IN THIS
PROSPECTUS, BEFORE MAKING AN INVESTMENT IN THE EXCHANGE NOTES.
SUBSTANTIAL INDEBTEDNESS
The Company has substantial indebtedness and debt service requirements. As
of January 31, 1998, on a pro forma consolidated basis, the Company would have
had $380.9 million of indebtedness outstanding (exclusive of anticipated
aggregate commitments of $140.0 million under the New Revolving Credit
Facilities). In addition, the Indenture permits the Company to incur certain
other indebtedness. See "Description of the Notes--Certain Covenants--Limitation
on Indebtedness."
The Company's level of indebtedness will have several important effects on
its future operations, including the following: (a) a significant portion of the
Company's cash flow from operations will be dedicated to the payment of interest
on its indebtedness and will not be available for other purposes, (b) the
financial covenants and other restrictions contained in the New Revolving Credit
Facilities require Doe Run and Doe Run Peru, as applicable, to meet certain
financial tests and limit their ability to borrow additional funds or to dispose
of assets and (c) the Company's ability to obtain additional financing in the
future for working capital, capital expenditures, acquisitions, general
corporate purposes or other purposes may be impaired. In addition, the ability
of the Company to meet its debt service obligations and to reduce its total debt
will be dependent upon its future performance, which will be subject to general
economic conditions and to financial, business and other factors affecting its
operations, many of which are beyond their control. Moreover, an inability of
Doe Run or Doe Run Peru to meet the financial covenants contained in the New
Revolving Credit Facilities or other indebtedness could result in an
acceleration of amounts due thereunder. Doe Run was not in compliance with the
minimum net worth and maximum leverage ratio covenants under the Doe Run Term
Loan and the Existing Doe Run Revolving Credit Facility for the fiscal quarter
ended January 31, 1998, for which Doe Run received waivers.
RESTRICTIONS IMPOSED BY TERMS OF THE COMPANY'S INDEBTEDNESS
The terms and conditions of the New Revolving Credit Facilities and the
Indenture impose restrictions that affect, among other things, the ability of
the Company to incur debt, pay dividends, make acquisitions, create liens, make
capital expenditures and make certain investments.
The ability of the Company to comply with the foregoing provisions can be
affected by events beyond the Company's control. The breach of any of these
covenants could result in a default under the Company's indebtedness, including
the New Revolving Credit Facilities and the Indenture. In the event of any such
default, depending on the actions taken by the lenders under the New Revolving
Credit Facilities, Doe Run may be unable to make any payments of principal or
interest on the Exchange Notes for a period of time. In addition, the lenders
under the New Revolving Credit Facilities could elect to declare all amounts
borrowed, together with accrued and unpaid interest, to be due and payable. If
Doe Run or Doe Run Peru, as the case may be, were unable to repay such amounts,
the lenders under the New Revolving Credit Facilities could proceed against
certain collateral. If such indebtedness under the New Revolving Credit
Facilities were to be accelerated, there can be no assurance that the assets of
the Company would be sufficient to repay in full such indebtedness and the other
indebtedness of the Company, including the Exchange Notes. See "Description of
New Revolving Credit Facilities" and "Description of the Notes."
DEPENDENCE ON CASH FLOW FROM PERUVIAN SUBSIDIARIES
The Company is dependent upon payments from Doe Run Mining and Doe Run Peru,
including loans, advances, distributions and dividends from Doe Run Peru, to
meet a portion of its debt service requirements. Doe Run, Doe Run Mining and Doe
Run Peru have entered into various intercompany agreements which provide for
certain payments to Doe Run. See "Certain Transactions--Intercompany
22
<PAGE>
Transactions." The Company believes that these intercompany agreements and the
availability of dividends, distributions, loans or advances from Doe Run Mining
or Doe Run Peru will provide Doe Run sufficient funds, combined with Doe Run's
available resources, to adequately service Doe Run's debt service requirements.
However, no assurance can be given that such amounts will be sufficient or that
changes in the laws of Peru will not adversely affect such payments, loans,
advances, distributions or dividends. See "--Governmental Regulation."
VOLATILITY OF BASE METAL PRICES; TREATMENT CHARGES AND PENALTIES
Base metal prices fluctuate and are affected by numerous factors beyond the
Company's control, including expectations for inflation, speculative activities,
global and regional demand and production, political and economic conditions and
production costs in major producing regions. The aggregate effect of these
factors is impossible for the Company to predict; however, these factors could
have a material adverse effect on the results of operations, financial condition
and liquidity of the Company.
If the market price for lead falls below Doe Run's production costs and
remains at such level for a sustained period, Doe Run will experience losses and
may curtail or discontinue the development of a project or mining at one or more
of its properties. In fiscal 1992 and 1993, Doe Run experienced operating losses
due in part to unfavorable lead prices. As of March 31, 1998, the LME price for
lead was $.26 per pound, which was below the ten-year average price of $.28 per
pound. As a result of the recent lead price decreases, the Company expects that
it will incur an operating loss in its U.S. operations that will adversely
affect its EBITDA in fiscal 1998. There can be no assurance that lead prices
will not decrease further in the future to levels resulting in operating losses
for Doe Run.
If base metal prices, treatment charges or penalties fall to such levels
that Doe Run Peru cannot cover its production costs and remain at such levels
for a sustained period, or result in the closure of the mines providing
concentrate feedstock, Doe Run Peru will experience losses. There can be no
assurance that base metal prices, treatment charges or penalties will not
decrease in the future to levels resulting in operating losses for Doe Run Peru.
While the Company may periodically use hedging techniques to reduce a
portion of its exposure to the volatility of base metal prices, there can be no
assurance that it will be able to do so effectively. See and "Management's
Discussion and Analysis of Results of Operations and Financial
Condition--Liquidity and Capital Resources--Hedging Activities."
GOVERNMENTAL REGULATION
The mining operations of Doe Run are subject to inspection and regulation by
the Mine Safety and Health Administration of the Department of Labor ("MSHA")
under provisions of the Federal Mine Safety and Health Act of 1977. All other
operations of Doe Run are subject to inspection and regulation by the
Occupational Safety and Health Administration of the Department of Labor
("OSHA") under the provisions of the Occupational Safety and Health Act of 1970.
It is Doe Run's policy to comply with the directives and regulations of MSHA and
OSHA. In addition, Doe Run takes such necessary actions as, in its judgment, are
required to provide for the safety and health of its employees. MSHA and OSHA
directives have had no material adverse impact on Doe Run's results of
operations or financial condition, and Doe Run believes that it is substantially
in compliance with the regulations promulgated by MSHA and OSHA; however,
compliance with new, more stringent MSHA and/or OSHA directives could have a
material adverse effect on results of operations, financial condition and
liquidity of Doe Run.
In connection with the Acquisition, Doe Run Peru, Doe Run Mining and Doe Run
Cayman entered into a series of agreements (the "Stabilization Agreements") with
two Peruvian government agencies, the Ministry for Energy and Mines (the "MEM")
and the National Commission for Foreign Investments. Pursuant to terms of the
Stabilization Agreements, the Peruvian government has guaranteed that, for a
period of ten years from the date of the Acquisition, Doe Run Peru, Doe Run
Mining and Doe Run
23
<PAGE>
Cayman will not be adversely affected by changes in Peruvian legal regimes
relating to, among other things, income tax, employment, free access to foreign
exchange, right to remit investments and profits outside Peru and
non-discrimination based on non-Peruvian ownership. No assurance can be given
that the Peruvian government will not impose other conditions that may adversely
affect Doe Run Peru's business, financial condition or results of operations or
that there will not be changes in Peruvian legal regimes that will adversely
affect Doe Run Peru, Doe Run Mining or Doe Run Cayman after the expiration of
the Stabilization Agreements.
ENVIRONMENTAL MATTERS AND CLAIMS
Doe Run is subject to numerous federal, state and local environmental laws
and regulations governing, among other things, air emissions, waste water
discharge, solid and hazardous waste storage, treatment and disposal, and
remediation of releases of hazardous materials. Doe Run also is a defendant in
four lawsuits filed in 1995 claiming property damage and personal injury from
alleged releases of lead from the Herculaneum smelter. Punitive damages are also
being sought in these cases. Environmental laws and regulations have changed
rapidly in recent years and may become more stringent in the future. Insurance
against environmental risks (including potential for pollution or other hazards
as a result of disposal of waste products occurring from mining, milling and
smelting) is not generally available to Doe Run or to other companies within the
industry. Should Doe Run be unable to fund fully the cost of compliance or of
remediating an environmental problem, Doe Run might be required to suspend
operations or enter into interim compliance measures requiring additional
expenditures pending completion of the required remedy. Compliance with
environmental laws and regulations, as well as personal injury and property and
other damage claims, could have a material adverse effect on Doe Run's results
of operations, financial condition and liquidity. See "Business--Doe
Run--Environmental Matters."
Doe Run Peru is subject to numerous environmental laws and regulations
enacted in the last ten years in Peru governing, among other things, air
emissions, waste water discharge, solid and hazardous waste storage, treatment
and disposal, and remediation of releases of hazardous materials. The current
and future application of these laws and regulations to Doe Run Peru is modified
by certain agreements with the MEM, a Peruvian governmental agency. Given the
developing nature of environmental law and enforcement policies in Peru,
however, there can be no assurance that the Peruvian government will not in the
future require compliance with additional environmental requirements that could
adversely affect Doe Run Peru's business, financial condition or results of
operations. Further, there can be no assurance that the Peruvian government or
other interested persons will not seek changes in the future to the terms and
conditions of any of the agreements made by Doe Run Peru with the MEM that may
adversely affect Doe Run Peru's business, financial conditions or results of
operations. Doe Run Peru also is subject to claims for alleged personal injury
and property and other damages resulting from release of certain substances into
the environment, including lead, to the extent such liabilities were not
retained and are not satisfied by Centromin. Compliance with environmental laws
and regulations, as well as personal injury and property and other damage
claims, could have a material adverse effect on Doe Run Peru's business,
financial condition or results of operations. Insurance against environmental
risks (including potential for pollution or other hazards as a result of
disposal of waste products occurring from exploration and production) is not
generally available to Doe Run Peru or to other companies within the industry.
To the extent Doe Run Peru is subject to environmental liabilities, the payment
of such liabilities would reduce its available funds. Should Doe Run Peru be
unable to fund fully the cost of remediating an environmental problem, it could
be required to suspend operations or take interim compliance measures pending
completion of the required remedy. See "Business--Doe Run Peru--Environmental
Matters."
OPERATING RISKS
The business of mining is generally subject to a number of risks and
hazards, including environmental hazards, industrial accidents, labor disputes,
encountering unusual or unexpected geologic formations,
24
<PAGE>
cave-ins, rockbursts, flooding and periodic interruptions due to inclement or
hazardous weather conditions. Such risks could result in damage to, or
destruction of, mineral properties or producing facilities, personal injury,
environmental damage, delays in mining, monetary losses and possible legal
liability. Although Doe Run maintains insurance within ranges of coverage
consistent with industry practice, no assurance can be given that such insurance
will be available at economically feasible premiums. In July 1992, Doe Run
experienced a strike by the workers at the Herculaneum smelter resulting in
metal output significantly lower than planned levels and higher operating
expenses due to increased security costs and outside services. Although Doe
Run's work force is no longer significantly unionized, there can be no assurance
that Doe Run will not experience labor disputes in the future. In July and
August 1993, production at the Herculaneum smelter was curtailed significantly
due to flooding of the Mississippi River. There can be no assurance that Doe
Run's operations will not be adversely affected in the future by flooding or
other adverse conditions beyond Doe Run's control. See "Management's Discussion
and Analysis of Results of Operations and Financial Condition."
The business of smelting and refining complex concentrates generally is
subject to a number of risks and hazards, including environmental hazards,
industrial accidents and labor disputes. Such risks could result in personal
injury, environmental damage, delays in operation, monetary losses and possible
legal liability. Although Doe Run Peru maintains insurance within ranges of
coverage consistent with industry practice, no assurance can be given that such
insurance will be available at economically feasible premiums. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."
FACTORS RELATING TO DOE RUN
DEPENDENCE ON A LIMITED NUMBER OF CUSTOMERS
Doe Run relies heavily on a small number of customers which purchase a
significant portion of its lead to produce lead-acid batteries. Johnson
Controls, Inc. ("JCI") purchased lead and tolling services representing
approximately 12% of Doe Run's fiscal 1997 net sales. In addition, Big River
Zinc Corporation ("Big River") purchased zinc concentrates representing
approximately 10% of Doe Run's fiscal 1997 net sales. The loss of any of Doe
Run's largest customers or curtailment of purchases by such customers could have
a material adverse effect on the results of operations, financial condition and
liquidity of Doe Run.
DEPENDENCE ON LEAD-ACID BATTERY USE
Doe Run sells a significant portion of its lead production for use in
lead-acid batteries. Lead-acid battery producers or their suppliers accounted
for approximately 63% of Doe Run's fiscal 1997 net sales. The obsolescence of,
or any curtailment in the use of, lead-acid batteries could have a material
adverse effect on the results of operations, financial condition and liquidity
of Doe Run.
RESERVES
The ore reserve figures presented in this Prospectus are, in large part,
estimates made by Doe Run's technical personnel, and no assurance can be given
that the indicated level of recovery of these metals will be realized. Market
price fluctuations of lead, as well as increased production costs or reduced
recovery rates, may render ore reserves containing relatively lower grades of
mineralization uneconomic and may ultimately result in a restatement of
reserves. Moreover, short-term operating factors relating to the ore reserves,
such as the need for sequential development of ore bodies and the processing of
new or different ore grades, may adversely affect Doe Run's results of
operations in any particular accounting period. Doe Run assumes certain metal
prices for its mineral reserve calculations, which approximate current market
prices, but these lead prices may vary from current market prices based on a
number of factors likely to influence lead prices over the near term. See
"Business--Doe Run--Reserves."
25
<PAGE>
EXPLORATION AND DEVELOPMENT
Doe Run competes to acquire properties producing or capable of producing
lead and other minerals, conducts exploration activities and engages in
development projects. As a result of the competition for property, some of which
is with companies with greater financial resources than Doe Run, Doe Run may be
unable to acquire attractive mining properties on terms it considers acceptable.
Mineral exploration is highly speculative in nature, involves many risks and
frequently is nonproductive, and there can be no assurance that Doe Run's
mineral exploration efforts will be successful. Once mineralization is
discovered, it may take a number of years from the initial phases of drilling
until production is possible, during which time the economic feasibility of
production may change. Doe Run's ability to increase its production longevity is
dependent on the successful development of new ore bodies and/or expansion of
existing mining operations. It is possible that actual cash operating costs and
economic returns of any and all development projects may materially differ from
the estimated costs and returns. Accordingly, there can be no assurance that Doe
Run's programs will yield new reserves to expand and replace existing reserves
that are being depleted by current production.
FACTORS RELATING TO DOE RUN PERU
EXPANSION AND MODERNIZATION PROGRAM
Doe Run Peru is undertaking an expansion and modernization program to
enhance its competitive position and financial performance and to comply with
certain environmental regulatory requirements (see "Business--Doe Run
Peru--Environmental Matters") and the Subscription Agreement related to the
Acquisition. Doe Run Peru believes that it will invest approximately $195.0
million over ten years in order to comply with such environmental requirements.
Under the Subscription Agreement, Doe Run Peru has five years to fulfill its
$120.0 million Investment Commitment. The maximum penalty that may be assessed
for failure to comply with the Investment Commitment of the Subscription
Agreement is 30% of the unfulfilled Investment Commitment. Doe Run Peru has
developed a ten-year Capital Investment Program of approximately $300.0 million
designed to improve its operations, as well as to address these environmental
requirements and fulfill the Investment Commitment.
Although management expects that cash from existing and future operations
and available borrowings under the New Doe Run Peru Revolving Credit Facility
and from anticipated borrowings in the future will be sufficient to cover the
costs of Doe Run Peru's Capital Investment Program, there can be no assurance
that Doe Run Peru will not be required to seek additional funds in order to
complete its expansion and modernization program. Upon the incurrence of any
borrowings under the New Doe Run Peru Revolving Credit Facility, there can be no
assurance that Doe Run Peru's increased leverage will not have an adverse impact
on Doe Run Peru's liquidity. If additional funds are necessary, there can be no
assurance that Doe Run Peru will be able to obtain the required funds on terms
and conditions acceptable to it. If such additional financing is unavailable,
Doe Run Peru may have to delay completion of the expansion and modernization
program until additional financing or sufficient internally generated funds
become available, and any such delay could have a material adverse effect on the
business, financial condition or results of operations of Doe Run Peru.
AVAILABILITY OF CONCENTRATES
Doe Run Peru, as presently constituted, does not own any of the mines from
which it sources concentrates. Accordingly, Doe Run Peru purchases all of its
concentrates feedstock requirements from unaffiliated mining operations. Doe Run
Peru obtains approximately 84% of its copper concentrates, as well as all of its
lead and zinc concentrates from the Peruvian domestic market. Doe Run Peru's
current concentrate contracts are predominately for one-year terms expiring
December 31, 1998. There can be no assurance that these contracts will be
renewed or that, if renewed, they will not be on terms less favorable to Doe Run
Peru. The closure of mines supplying concentrates due to exhaustion of reserves,
low metals
26
<PAGE>
prices or otherwise or the inability of Doe Run Peru to obtain concentrates, or
to obtain them on favorable terms, could have a material adverse effect on the
business, financial condition or results of operations of Doe Run Peru.
SUPPLY AND COST OF RAW MATERIALS
In addition to concentrates feedstock, Doe Run Peru's operations are heavily
dependent on the supply of various raw materials, including water, hydroelectric
power, oxygen, coal and fluxes. Doe Run Peru produces its oxygen requirements
from its oxygen plant and extracts limestone and silica fluxes from deposits
close to its facility. Doe Run Peru purchases its coal requirements through
annual contracts based on market prices. Doe Run Peru has entered into a
long-term contract with Empresa de Electricidad de Los Andes, S.A.
("Electroandes") to supply its electricity needs on satisfactory terms, though
at costs higher than those paid by Doe Run Peru's Predecessor. The availability
of raw materials could be affected by natural disasters or other factors beyond
Doe Run Peru's control. Any protracted interruption in the availability of any
raw materials could have a material adverse effect on the business, financial
condition or results of operations of Doe Run Peru.
LABOR MATTERS
Approximately 89% of Doe Run Peru's workforce is represented by labor
unions. Doe Run Peru recently entered into new one-year collective bargaining
agreements with its labor unions. There can be no assurance that these
short-term collective bargaining agreements will be renewed on terms as
favorable to Doe Run Peru. Although management believes its present labor
relations are generally good, in the past, work stoppages and strikes have
occurred. There can be no assurance that a work stoppage or strike will not
occur prior to the expiration of the current labor agreements or during
negotiations for new labor agreements (including extensions of the existing
labor agreements) or as to the effect of any such work stoppage or strike on Doe
Run Peru's production levels. Work stoppages or other labor-related developments
affecting Doe Run Peru could have a material adverse effect on the business,
financial condition or results of operations of Doe Run Peru. See "Business--Doe
Run Peru--Employees" and "--Benefit Plans."
ENFORCEABILITY OF JUDGMENTS UNDER PERUVIAN LAW
Substantially all of the assets of Doe Run Peru are located in Peru. In the
event that the holders of Exchange Notes were to obtain a judgment in the United
States against Doe Run Mining or Doe Run Peru and seek to enforce such judgment
in Peru, the holders' ability to enforce the judgment in Peru would be subject
to Peruvian laws regarding recognition and enforcement of foreign judgments.
According to the rules of recognition and enforcement of foreign judgments
provided by the Peruvian Civil Code, a judgment issued by a competent court
outside Peru would be recognized and enforced by Peruvian courts provided that
there is in effect a treaty between the country where said foreign court sits
and Peru, regarding the recognition and enforcement of foreign judgments. In the
absence of such treaty, as is the case between the United States and Peru,
Peruvian courts will give to the foreign judgment the same force and treatment
that is given by the country where such foreign court sits to the judgments
enacted by Peruvian courts, PROVIDED that the foreign judgment complies with the
following statutory limitations set forth in Article 2104 of the Peruvian Civil
Code: (i) the judgment must not resolve matters for which exclusive jurisdiction
of Peruvian courts applies (I.E., disputes relating to real estate located in
Peru); (ii) the competence of the foreign court which issued the judgment must
be recognized by Peruvian conflicts of law rules; (iii) the party against whom
the judgment was obtained must have been properly served in connection with the
foreign proceedings; (iv) the judgment of the foreign court must be a final
judgment, not subject to any further appeal; (v) no pending proceedings may
exist in Peru among the same parties and on the same subject; (vi) the judgment
by the foreign court cannot be in violation of public policy; and (vii) the
foreign court must grant reciprocal treatment to judgments issued by Peruvian
courts.
27
<PAGE>
FACTORS RELATING TO PERU
POLITICAL AND ECONOMIC SITUATION IN PERU
During the past 30 years, Peru has experienced political instability under
both civilian and military governments. These governments have pursued various
policies, including frequent intervention in the economic and social structure.
Past governments have imposed controls on prices, exchange rates, local and
foreign investment and international trade, restricted the ability of companies
to dismiss employees, expropriated private sector assets, and prohibited the
remittance of profits to foreign investors and payments to foreign creditors. In
1974, the government of Peru expropriated the assets of Doe Run Peru's
Predecessor and transferred them to Centromin, a government-owned conglomerate.
Since the current administration took office in July 1990, the Peruvian
government has implemented a broad-based reform of Peru's political system,
economy and social conditions, aimed at stabilizing the economy, restructuring
the national government by reducing bureaucracy, privatizing state-owned
companies, promoting private investment, developing and strengthening free
markets, institutionalizing democratic representations, and enacting programs
for the strengthening of basic services related to education, health, housing
and infrastructure. Its then existing congressional body was dissolved in April
1992, and a new democratically elected congressional body was established in
November 1992. A new Constitution was enacted and ratified in the fourth quarter
of 1993. Under the current administration, inflation, as measured by the
Peruvian Banco Central de Reserva (the "Central Bank"), has decreased from
7,649.7% in 1990 to 11.8% for 1996 and 6.5% for 1997. In addition, Peru's gross
domestic product ("GDP"), as measured by the Central Bank, in real terms
increased by 6.4% in 1993, 13.1% in 1994, 7.2% in 1995, 2.6% in 1996 and 7.4% in
1997.
Notwithstanding the progress achieved in restructuring Peru's political
institutions and revitalizing the economy during the administration's first
term, there can be no assurance that the current administration or future
administrations can sustain such progress. While the Peruvian economy has
experienced strong growth in recent years, there can be no assurance that such
growth will continue at similar rates in the future or at all. Doe Run Peru's
financial condition and results of operations could be adversely affected by
changes in economic or other policies of the Peruvian government, including the
trend toward privatization, or other political or economic developments in Peru.
EXCHANGE CONTROLS
During the 1970s and 1980s, government policies restricted the ability of
companies in Peru to, among other things, repatriate funds and import products,
including oil, from abroad. In addition, currency exchange rates were strictly
controlled and all export sales revenues were required to be deposited in the
Central Bank where they were exchanged from U.S. dollars to the then local
currency at less-than-market rates of exchange. The current Peruvian legal
framework imposes no restrictions on the ability of a company operating in Peru
to transfer foreign currency from Peru to other countries or to convert Peruvian
currency into foreign currency or foreign currency into Peruvian currency. Prior
to 1991, Peru had restrictive exchange controls and exchange rates. In the 1970s
and 1980s, all foreign exchange proceeds were required to be deposited with the
Central Bank. There can be no assurance that the Peruvian government will
continue its current policy of permitting currency transfers and conversions
without restriction or that Doe Run Peru would be able to service its debt
obligations in a timely manner were the Peruvian government to reinstitute
exchange controls. Notwithstanding the foregoing, certain of the Stabilization
Agreements relate to free access to foreign exchange. However, no assurance can
be given that there will not be changes in the Peruvian legal regimes that could
adversely effect Doe Run Peru, Doe Run Mining or Doe Cayman upon expiration of
the Stabilization Agreements.
28
<PAGE>
TERRORIST ACTIVITY
Peru experienced significant terrorist activity in the 1980s and early
1990s, during which period terrorist groups escalated their acts of violence
against the government, the private sector and Peruvian residents. According to
Peruvian government estimates, terrorist activity in Peru during the last
sixteen years has resulted in an estimated 25,000 deaths and damage to property
and the economy estimated at $25 billion.
There has been substantial progress in suppressing terrorist activity since
1990, in part as a result of the arrest of the leaders and approximately 2,000
members of the two principal terrorist groups. Approximately 6,000 additional
persons have agreed to cooperate with the government under an amnesty law.
Notwithstanding the success achieved, some incidents of terrorist activity
continue to occur, including the recently resolved hostage incident at the
residence of the ambassador of Japan to Peru. Although Doe Run Peru has
implemented certain anti-terrorist practices, there can be no assurance that
future terrorist activity will not have a material adverse effect on the
business, financial condition or results of operations of Doe Run Peru.
INFLATION AND CURRENCY DEVALUATION
Peru has in the past experienced high levels of inflation. However, the
inflation rate in Peru, as measured by the Central Bank consumer price index,
has fallen from 7,649.7% in 1990 to 139.2% in 1991, 56.7% in 1992, 39.5% in
1993, 15.4% in 1994, 10.2% in 1995, 11.8% in 1996 and 6.5% in 1997. Although the
Peruvian government's stabilization plan has reduced inflation significantly,
there can be no assurance that domestic inflation will not increase from its
current level. In addition, the Peruvian currency has been devalued numerous
times during the last twenty years. The devaluation rate, as measured by the
Central Bank, was 4,012.9% in 1990, 77.0% in 1991, 69.8% in 1992, 31.9% in 1993,
1.4% in 1994, 6.0% in 1995, 12.6% in 1996 and 5.9% in 1997. A portion of the
operating costs of Doe Run Peru are denominated in nuevos soles and therefore
could be significantly affected by the rate of inflation in Peru. If inflation
in Peru were to increase significantly without a corresponding devaluation of
the nuevo sol, the financial condition and results of operations of Doe Run Peru
could be materially and adversely affected.
CONTROL BY RENCO
Doe Run and the Guarantors are indirect subsidiaries of Renco, of which Mr.
Ira Leon Rennert is the controlling shareholder. As a result of his indirect
ownership of Doe Run and the Guarantors, Mr. Rennert is, and will continue to
be, able to direct and control the policies of Doe Run and the Guarantors,
including mergers, sales of assets and similar transactions.
ABSENCE OF A PUBLIC MARKET
The Exchange Notes will be new securities for which there is currently no
public market. Doe Run does not intend to list the Exchange Notes on any
national securities exchange or quotation system. The Initial Purchasers have
advised Doe Run that they currently intend to make a market in the Exchange
Notes, but they are not obligated to do so and, if commenced, may discontinue
such market making at any time. Accordingly, there can be no assurance as to the
development of any market or liquidity of any market that may develop for the
Exchange Notes. To the extent that Old Notes are tendered and accepted in the
Exchange Offer, the aggregate principal amount of Old Notes outstanding will
decrease, with a resulting decrease in the liquidity of the market therefor.
CONSEQUENCES OF FAILURE TO EXCHANGE
Holders of Old Notes who do not exchange their Old Notes for Exchange Notes
pursuant to the Exchange Offer will continue to be subject to the restrictions
on transfer of the Old Notes set forth in the legend thereon as a consequence of
the issuance of the Old Notes pursuant to an exemption from, or in a
29
<PAGE>
transaction not subject to, the registration requirements of the Securities Act.
In general, Old Notes may not be offered or sold, unless registered under the
Securities Act, except pursuant to an exemption from, or in a transaction not
subject to, the Securities Act and applicable state securities laws. Doe Run
currently does not anticipate that it will register the Old Notes under the
Securities Act.
USE OF PROCEEDS
Doe Run will not receive any proceeds from the Exchange Offer. In
consideration for issuing the Fixed Rate Exchange Notes and Floating Rate
Exchange Notes as contemplated in this Prospectus, Doe Run will receive in
exchange Fixed Rate Old Notes and Floating Rate Old Notes, respectively, of like
principal amount, the terms of which are identical in all material respects to
the Fixed Rate Exchange Notes and Floating Rate Exchange Notes, respectively.
The Old Notes surrendered in exchange for Exchange Notes will be retired and
canceled and cannot be reissued. Accordingly, issuance of the Exchange Notes
will not result in any increase in the indebtedness of Doe Run. Doe Run has
agreed to bear the expenses of the Exchange Offer pursuant to the Registration
Rights Agreement. No underwriter is being used in connection with the Exchange
Offer.
See "Prospectus Summary--Recent Transactions--Old Notes Offering" for a
description of the use of proceeds from the Old Notes Offering.
30
<PAGE>
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Company as of January 31, 1998 on an actual basis and as adjusted for the
Transactions. This table should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the consolidated financial statements and the related notes thereto appearing
elsewhere herein.
<TABLE>
<CAPTION>
AS OF JANUARY 31,1998
-----------------------
<S> <C> <C>
ACTUAL AS ADJUSTED
---------- -----------
<CAPTION>
(DOLLARS IN THOUSANDS,
EXCEPT PER SHARE
AMOUNTS)
<S> <C> <C>
Long-term debt (including current portion):
Doe Run Term Loan................................................................... $ 130,000 --
New Doe Run Revolving Credit Facility(a)............................................ -- --
Existing Doe Run Revolving Credit Facility.......................................... 14,091 --
New Doe Run Peru Revolving Credit Facility(b)....................................... -- --
Existing Doe Run Mining Credit Facility............................................. 100,000 --
Fixed Rate Old Notes................................................................ -- $ 200,000
Floating Rate Old Notes............................................................. -- 55,000
Back-to-Back Loan(c)................................................................ -- 125,000
Industrial Revenue Bonds............................................................ 895 895
---------- -----------
Total long-term debt.................................................................. $ 244,986 $ 380,895
Shareholders' equity:
Preferred stock, par value $1,000 per share, 2,500 shares authorized, issued and
outstanding (liquidation and redemption value of $2,668 on January 31, 1998) and
none issued and outstanding as adjusted........................................... 2,500 --
Common stock, par value $.10 per share, 1,000 shares authorized, 1,000 shares issued
and outstanding and 1,000 shares issued and outstanding,
as adjusted....................................................................... 0 0
Additional paid-in capital.......................................................... 5,000 5,000
Retained earnings................................................................... 8,648 3,606
---------- -----------
Total shareholders' equity............................................................ 16,148 8,606
---------- -----------
Total capitalization.................................................................. $ 261,134 $ 389,501
---------- -----------
---------- -----------
</TABLE>
- ------------------------
(a) Represents the $100 million New Doe Run Revolving Credit Facility which will
expire in March 2001. See "Description of New Revolving Credit
Facilities--New Doe Run Revolving Credit Facility."
(b) Represents the anticipated $40 million New Doe Run Peru Revolving Credit
Facility. See "Description of Revolving Credit Facilities--New Doe Run Peru
Revolving Credit Facility."
(c) Represents a $125.0 million loan to Doe Run Mining from proceeds of the Old
Notes Offering deposited in a bank by Doe Run. See "Prospectus
Summary--Recent Transactions--Old Notes Offering."
31
<PAGE>
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA
The following unaudited pro forma consolidated financial data has been
prepared to give effect to the Acquisition and the Transactions. The unaudited
pro forma balance sheet data as of January 31, 1998 give effect to the
Transactions as if they had occurred on such date. The unaudited pro forma
consolidated statement of operations and other data for the year ended October
31, 1997 and the three months ended January 31, 1998 give effect to the
Acquisition and the Transactions as if they had occurred on November 1, 1996.
The pro forma adjustments are based upon available information and certain
assumptions that the Company believes are reasonable under the circumstances.
Pro forma adjustments are applied to account for the Acquisition under the
purchase method of accounting. Under the purchase method of accounting, the
total purchase price was allocated to Doe Run Peru's assets and liabilities
based on their relative fair values.
The pro forma consolidated financial information has been prepared in
accordance with U.S. GAAP and should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations," the
audited financial statements of Doe Run and Doe Run Peru's Predecessor, and the
notes thereto, and the other financial information included elsewhere herein.
The unaudited pro forma consolidated financial data do not purport to be
indicative of the results which would have actually been obtained had the
Acquisition and the Transactions been consummated on the dates indicated or
which may be expected to occur in the future.
32
<PAGE>
THE DOE RUN RESOURCES CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
JANUARY 31, 1998
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
ADJUSTMENTS
FOR THE
HISTORICAL TRANSACTIONS PRO FORMA
---------- ------------ -----------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash....................................................................... $ 15,645 $ (4,413)(a) $ 11,232
Trade accounts receivable, net of allowance for doubtful accounts of $735
at January 31, 1998...................................................... 57,261 -- 57,261
Inventories................................................................ 88,323 -- 88,323
Prepaid expenses and other current assets.................................. 18,703 763(b) 19,466
Net deferred tax assets.................................................... 5,091 -- 5,091
---------- ------------ -----------
Total current assets..................................................... 185,023 (3,650) 181,373
Property, plant and equipment, net........................................... 203,984 -- 203,984
Other noncurrent assets, net................................................. 14,855 125,739(b) 140,594
---------- ------------ -----------
Total assets............................................................. $ 403,862 $ 122,089 $ 525,951
---------- ------------ -----------
---------- ------------ -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt....................................... $ 12,395 $ (11,500)(c) $ 895
Accounts payable........................................................... 44,346 -- 44,346
Accrued liabilities........................................................ 36,804 (6,278)(d) 30,526
---------- ------------ -----------
Total current liabilities................................................ 93,545 (17,778) 75,767
Long-term debt, less current maturities...................................... 232,591 147,409(c) 380,000
Net deferred tax liabilities................................................. 4,205 -- 4,205
Postretirement benefits...................................................... 12,512 -- 12,512
Reclamation and environmental costs.......................................... 31,390 -- 31,390
Other noncurrent liabilities................................................. 13,471 -- 13,471
---------- ------------ -----------
Total liabilities........................................................ 387,714 129,631 517,345
Shareholders' equity:
Preferred stock, par value $1,000 per share, 2,500 shares authorized,
issued and outstanding; liquidation and redemption value of $2,668 on
January 31, 1998......................................................... 2,500 (2,500)(e) --
Common stock, par value $.10 per share, 1,000 shares authorized, issued and
outstanding.............................................................. 0 -- 0
Additional paid in capital................................................... 5,000 -- 5,000
Retained earnings............................................................ 8,648 (5,042)(f) 3,606
---------- ------------ -----------
Total shareholders' equity............................................... 16,148 (7,542) 8,606
---------- ------------ -----------
Total liabilities and shareholders' equity................................... $ 403,862 $ 122,089 $ 525,951
---------- ------------ -----------
---------- ------------ -----------
</TABLE>
33
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
JANUARY 31, 1998
(a) The net decrease in cash reflects the following (in millions):
<TABLE>
<S> <C>
Source:
Old Notes................................................................. $ 255.0
Back-to-Back Loan......................................................... 125.0
---------
$ 380.0
---------
---------
Uses:
Repayment of existing indebtedness and related interest................... $ 247.7
Special Term Deposit...................................................... 125.0
Redeem preferred stock and pay preferred stock dividends in arrears....... 2.7
Estimated fees and expenses............................................... 9.0
---------
$ 384.4
---------
---------
Net decrease in cash........................................................ $ (4.4)
---------
---------
</TABLE>
(b) Reflects the $125.0 million Special Term Deposit, the write-off of deferred
financing costs relating to the existing indebtedness in the amount of $7.5
million, and the payment of estimated deferred financing costs associated
with the Old Notes Offering in the amount of $9.0 million. These costs will
be amortized using the interest method over the respective terms of the Old
Notes.
(c) Reflects the repayment of substantially all of the Company's outstanding
indebtedness totaling $244.1 million and the gross proceeds from the
issuance of the Old Notes of $255.0 million and the $125.0 million
Back-to-Back Loan.
(d) Reflects payment of $3.6 million of accrued interest related to existing
indebtedness and a decrease in income taxes payable of $2.6 million, as a
result of the income tax benefit on the write-off of deferred financing fees
of $7.5 million, calculated at a statutory rate of 35%.
(e) Reflects the redemption of preferred stock held by Renco.
(f) Reflects the write-off of deferred financing costs, net of income tax
benefit, of $4.9 million, and the payment of dividends in arrears on
preferred stock of $.2 million.
34
<PAGE>
THE DOE RUN RESOURCES CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
THREE MONTHS ENDED JANUARY 31, 1998
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ADJUSTMENTS
FOR THE
HISTORICAL TRANSACTIONS(A) PRO FORMA
---------- --------------- -----------
<S> <C> <C> <C>
Net sales............................................................... $ 169,086 $ -- $ 169,086
Costs and expenses:
Cost of sales......................................................... 143,547 -- 143,547
Depletion, depreciation and amortization.............................. 5,714 -- 5,714
Selling, general and administrative expenses.......................... 7,471 -- 7,471
Exploration expense................................................... 484 -- 484
---------- ------- -----------
Total costs and expenses.......................................... 157,216 -- 157,216
---------- ------- -----------
Income from operations............................................ 11,870 -- 11,870
Other income (expense):
Interest expense...................................................... (5,869) (5,392) (11,261)(b)
Interest income....................................................... 365 3,516(c) 3,881
Other, net............................................................ 135 -- 135
---------- ------- -----------
(5,369) (1,876) (7,245)
---------- ------- -----------
Income before income taxes........................................ 6,501 (1,876) 4,625
Income tax expense (benefit)............................................ 4,527 (657)(d) 3,870
---------- ------- -----------
Income (loss) before extraordinary item........................... $ 1,974 $ (1,219) $ 755
---------- ------- -----------
---------- ------- -----------
Other data:
EBITDA(e)............................................................. $ 17,719
Pro forma cash interest expense(f).................................... 7,378
Ratio of EBITDA to pro forma cash interest expense.................... 2.40x
</TABLE>
35
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
THREE MONTHS ENDED JANUARY 31, 1998
(a) Nonrecurring charges consisting of a $2.3 million transaction fee payable to
Renco were charged to operations upon the closing of the Transactions and
are not reflected in the unaudited pro forma consolidated statements of
operations.
(b) Pro forma interest expense reflects the elimination of historical interest
expense due to the retirement of substantially all of the existing debt
obligations. Interest expense, as adjusted, includes interest of $7.3
million on the Old Notes, interest on the Back-to-Back Loan of $3.6 million
and amortization of debt issuance costs totaling $.3 million.
(c) Represents interest income on the $125.0 million Special Term Deposit.
(d) Reflects the income tax effect of the pro forma adjustments at an assumed
statutory tax rate of 35%.
(e) EBITDA is defined as net income (loss) before extraordinary item plus the
sum of net interest expense, income taxes and depletion, depreciation and
amortization. The trends of EBITDA generally follow the trends of operating
income. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations" for a discussion of recent trends of operating
income. Information regarding EBITDA is presented because management
believes that certain investors use EBITDA as one measure of an issuer's
ability to service its debt. EBITDA should not be considered an alternative
to, or more meaningful than, operating income or cash flow as an indicator
of an issuer's operating performance. Furthermore, caution should be used in
comparing EBITDA to similarly titled measures of other companies as the
definitions of these measures may vary.
(f) Pro forma cash interest expense is computed by removing substantially all
historical cash interest expense due to the retirement of substantially all
of the existing debt obligations of the Company and adding cash interest
expense on the Old Notes and the Deposit Term Loan of $7.3 million and $3.6
million, respectively, net of cash interest income on the Special Term
Deposit of $3.5 million.
36
<PAGE>
THE DOE RUN RESOURCES CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DOE RUN ADJUSTMENTS ADJUSTMENTS
PERU'S FOR THE FOR THE
HISTORICAL PREDECESSOR(A) ACQUISITION TRANSACTIONS(B) PRO FORMA
---------- ------------- ----------- -------------- -----------
<S> <C> <C> <C> <C> <C>
Net sales........................................ $ 280,467 $ 429,313 -- -- $ 709,780
Costs and expenses:
Cost of sales.................................. 234,351 364,901 $ 9,560(c) -- 608,812
Depletion, depreciation and amortization....... 14,718 5,623 1,119(d) -- 21,460
Selling, general and administrative expenses... 10,959 18,524 (3,314)(e) -- 26,169
Exploration expense............................ 2,705 -- -- -- 2,705
---------- ------------- ----------- -------------- -----------
Total costs and expenses..................... 262,733 389,048 7,365 -- 659,146
---------- ------------- ----------- -------------- -----------
Income from operations....................... 17,734 40,265 (7,365) -- 50,634
Other income (expense):
Interest expense............................... (13,740) (1,211) -- (30,297) (45,248)(f)
Interest income................................ 21 -- -- 14,063(g) 14,084
Other, net..................................... (37) (863) 3,285(h) -- 2,385
---------- ------------- ----------- -------------- -----------
(13,756) (2,074) 3,285 (16,234) (28,779)
---------- ------------- ----------- -------------- -----------
Income before income taxes................... 3,978 38,191 (4,080) (16,234) 21,855
Income tax expense (benefit)..................... 4,331 11,513 482(i) (5,682)(j) 10,644
---------- ------------- ----------- -------------- -----------
Income (loss) before extraordinary item...... $ (353) $ 26,678 $ (4,562) $ (10,552) $ 11,211
---------- ------------- ----------- -------------- -----------
---------- ------------- ----------- -------------- -----------
Other data:
EBITDA(k)...................................... $ 32,415 $ 45,025 $ (2,961) -- $ 74,479
Pro forma cash interest expense(l)............. 29,672
Ratio of EBITDA to pro forma cash interest
expense...................................... 2.51x
Ratio of pro forma net debt to
EBITDA(m).................................... 3.20x
</TABLE>
37
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1997
(a) Represents the historical results of operations for Doe Run Peru's
Predecessor for the period from November 1, 1996 through October 23, 1997.
(b) Non-recurring charges consisting of a $2.3 million transaction fee payable
to Renco were charged to operations upon the closing of the Transactions and
are not reflected in the unaudited pro forma consolidated statements of
operations.
(c) Represents a $9.6 million increase in power costs associated with a
market-price contract negotiated in conjunction with the Acquisition.
(d) Reflects the increase in depreciation and amortization, based upon
allocating the effective purchase price to the fair values of the assets
purchased in the Acquisition.
(e) Represents the elimination of $2.0 million of unusual personnel reduction
costs related to the privatization program and a decrease of $1.3 million in
workers' profit sharing expense as a result of the adjustments.
(f) Pro forma interest expense reflects the elimination of historical interest
expense due to the retirement of substantially all of the existing debt
obligations. Interest expense, as adjusted, includes interest of $29.1
million on the Old Notes, interest on the Back-to-Back Loan of $14.5
million, amortization of debt issuance costs totaling $1.5 million and $.1
million on other obligations.
(g) Represents interest income on the $125.0 million Special Term Deposit.
(h) Represents the elimination of $3.2 million of costs related to the
privatization program and $.1 million of tax fines and penalties that would
not have been incurred had the Acquisition occurred on November 1, 1996.
(i) Represents the income tax effects of the above adjustments at the U.S.
statutory rate, which reduced income tax expense by $1.4 million. The
adjustment also reflects the incremental U.S. tax at a rate of 5% on the
income before taxes of Doe Run Peru's Predecessor for the period from
November 1, 1996 to October 23, 1997, which increased income tax expense by
$1.9 million.
(j) Reflects the income tax effect of the pro forma adjustments at an assumed
statutory tax rate of 35%.
(k) EBITDA is defined as net income (loss) before extraordinary item plus the
sum of net interest expense, income taxes and depletion, depreciation and
amortization. The trends of EBITDA generally follow the trends of operating
income. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations" for a discussion of the recent trends of operating
income. Information regarding EBITDA is presented because management
believes that certain investors use EBITDA as one measure of an issuer's
ability to service its debt. EBITDA should not be considered an alternative
to, or more meaningful than, operating income or cash flow as an indicator
of an issuer's operating performance. Furthermore, caution should be used in
comparing EBITDA to similarly titled measures of other companies as the
definitions of these measures may vary.
(l) Pro forma cash interest expense is computed by removing substantially all
historical cash interest expense due to the retirement of substantially all
of the existing debt obligations of the Company and adding cash interest
expense on the Old Notes, the Deposit Term Loan and other obligations of
$29.1 million, $14.7 million and $.1 million, respectively, net of cash
interest income on the Special Term Deposit of $14.1 million.
(m) Pro forma net debt is pro forma total debt (including current portion), net
of pro forma cash of $18.6 million and the $125.0 million Special Term
Deposit. Pro forma total debt is computed by removing all of the existing
debt obligations of the Company (except the industrial revenue bonds) and
adding the Old Notes and the Back-to-Back Loan.
38
<PAGE>
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
The following tables set forth historical financial data of (i) Doe Run's
predecessor ("Doe Run's Predecessor") as of and for the year ended October 31,
1993 and for the five months ended March 31, 1994, which have been derived from
Doe Run's Predecessor's unaudited consolidated financial statements, (ii) the
Company as of and for the seven months ended October 31, 1994 and as of and for
each of the three fiscal years ended October 31, 1997, which have been derived
from the Company's audited consolidated financial statements, and for the three
months ended January 31, 1997 and as of and for the three months ended January
31, 1998, which are unaudited, (iii) Doe Run Peru's Predecessor as of and for
each of the three fiscal years ended December 31, 1996 and for the period
January 1, 1997 to October 23, 1997 (the date of consummation of the
Acquisition), which have been derived from Doe Run Peru's Predecessor's audited
consolidated financial statements, and for the period November 1, 1996 to
October 23, 1997 and the three months ended January 31, 1997, which are
unaudited, and (iv) Doe Run Cayman as of and for the three months ended January
31, 1998, which are unaudited. The information contained in this table should be
read in conjunction with "Unaudited Pro Forma Consolidated Financial Data,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the audited financial statements of Doe Run and Doe Run Peru's
Predecessor, and the notes thereto, included elsewhere herein.
DOE RUN'S PREDECESSOR AND THE COMPANY
<TABLE>
<CAPTION>
DOE RUN'S
PREDECESSOR(A) THE COMPANY
<S> <C> <C> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------
<CAPTION>
FIVE SEVEN THREE MONTHS ENDED
YEAR MONTHS MONTHS
ENDED ENDED ENDED YEAR ENDED OCTOBER 31, JANUARY 31,
OCTOBER 31, MARCH 31, OCTOBER 31, ------------------------------- --------------------
1993(B) 1994 1994 1995 1996 1997 1997 1998
----------- ----------- ----------- --------- --------- --------- --------- ---------
(DOLLARS AND TONS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales............................ $ 121,101 $ 70,668 $ 123,335 $ 225,143 $ 274,930 $ 280,467 $ 65,751 $ 169,086
Cost of sales........................ 140,107 65,511 102,582 180,398 215,489 234,351 52,944 143,547
Depletion, depreciation and
amortization....................... 22,515 8,808 6,251 12,486 13,654 14,718 3,663 5,714
Selling, general and administrative
expenses........................... 8,243 3,295 4,360 8,405 10,079 10,959 2,906 7,471
Exploration expense.................. 1,525 271 912 1,926 2,912 2,705 481 484
----------- ----------- ----------- --------- --------- --------- --------- ---------
Operating income (loss).............. (51,289) (7,217) 9,230 21,928 32,796 17,734 5,757 11,870
Interest expense..................... 206 65 8,375 14,361 14,348 13,740 4,280 5,869
Interest income...................... 404 31 12 140 113 21 1 365
Other income (expense)............... 1,684 (652) 151 (132) 355 (37) (103) 135
----------- ----------- ----------- --------- --------- --------- --------- ---------
Income (loss) before income tax
expense and extraordinary item..... (49,407) (7,903) 1,018 7,575 18,916 3,978 1,375 6,501
Income tax expense................... -- -- 2,523 3,252 6,451 4,331 430 4,527
----------- ----------- ----------- --------- --------- --------- --------- ---------
Income (loss) before extraordinary
item............................... (49,407) (7,903) (1,505) 4,323 12,465 (353) 945 1,974
Extraordinary item net of income tax
benefit............................ -- -- -- -- -- (1,062) (314) --
----------- ----------- ----------- --------- --------- --------- --------- ---------
Net income (loss).................... $ (49,407) $ (7,903) $ (1,505) $ 4,323 $ 12,465 $ (1,415) $ 631 $ 1,974
----------- ----------- ----------- --------- --------- --------- --------- ---------
----------- ----------- ----------- --------- --------- --------- --------- ---------
FINANCIAL RATIOS AND OTHER DATA:
EBITDA(c)............................ $ (27,090) $ 939 $ 15,632 $ 34,282 $ 46,805 $ 32,415 $ 9,317 $ 17,719
Capital expenditures................. 9,487 2,146 1,599 5,377 10,534 13,476 1,518 3,416
Ratio of earnings to fixed
charges(d)......................... -- -- 1.11x 1.48x 2.18x 1.23x 1.26x 1.99x
</TABLE>
39
<PAGE>
<TABLE>
<CAPTION>
DOE RUN'S
PREDECESSOR(A) THE COMPANY
<S> <C> <C> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------
<CAPTION>
FIVE SEVEN THREE MONTHS ENDED
YEAR MONTHS MONTHS
ENDED ENDED ENDED YEAR ENDED OCTOBER 31, JANUARY 31,
OCTOBER 31, MARCH 31, OCTOBER 31, ------------------------------- --------------------
1993(B) 1994 1994 1995 1996 1997 1997 1998
----------- ----------- ----------- --------- --------- --------- --------- ---------
(DOLLARS AND TONS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OTHER OPERATING DATA:
Average LME lead price per
pound(e)........................... $ .19 $ .21 $ .25 $ .28 $ .35 $ .29 $ .32 $ .25
Tons of primary lead metal sold...... 169.2 92.4 134.5 218.0 228.9 245.1 57.2 85.3
Tons of secondary lead metal sold.... 39.1 18.9 22.1 27.9 39.7 44.1 4.5 12.6
Tons of secondary lead metal
tolled............................. 26.4 15.1 23.3 52.4 51.7 60.9 15.6 12.7
Tons of zinc concentrates sold....... 35.9 20.1 23.3 55.5 68.3 69.7 17.5 14.8
Tons of copper concentrates sold..... 17.5 11.9 15.5 23.9 31.3 26.6 3.0 5.8
Tons of copper metal sold............ -- -- -- -- -- 0.8 -- 17.9
Ounces of silver metal sold (in
millions).......................... -- -- -- -- -- 0.1 -- 6.5
Tons of zinc metal sold.............. -- -- -- -- -- -- -- 18.4
Primary smelter lead tons per
manshift(f)........................ 2.0 2.0 2.0 2.1 2.2 2.4 2.3 2.5
</TABLE>
<TABLE>
<CAPTION>
DOE RUN'S
PREDECESSOR(A) THE COMPANY
<S> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------
<CAPTION>
THREE
MONTHS
AS OF AS OF OCTOBER 31, ENDED
OCTOBER 31, ------------------------------------------ JANUARY 31,
1993 1994 1995 1996 1997 1998
------------- --------- --------- --------- --------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash................................................ -- -- -- -- $ 8,943 $ 15,645
Working capital..................................... $ 51,057 $ 35,373 $ 32,571 $ 33,989 76,951 91,478
Property, plant and equipment, net.................. 131,926 109,700 102,606 104,162 206,348 203,984
Total assets........................................ 212,993 197,563 195,246 203,914 380,841 403,862
Total debt (including current portion).............. 4,952 98,834 90,645 82,791 234,740 244,986
Shareholders' equity................................ 122,536 5,995 10,318 20,830 14,174 16,148
</TABLE>
40
<PAGE>
DOE RUN PERU'S PREDECESSOR AND DOE RUN CAYMAN
<TABLE>
<CAPTION>
DOE RUN
DOE RUN PERU'S PREDECESSOR(G) CAYMAN(H)
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
<CAPTION>
PERIOD PERIOD THREE THREE
JANUARY 1, NOVEMBER 1, MONTHS MONTHS
YEAR ENDED DECEMBER 31, 1997 TO 1996 TO ENDED ENDED
------------------------------- OCTOBER 23, OCTOBER 23, JANUARY 31, JANUARY 31,
1994 1995 1996 1997 1997(I) 1997 1998(J)
--------- --------- --------- ----------- ----------- ----------- -----------
(DOLLARS AND TONS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Net sales................ $ 367,057 $ 450,929 $ 456,797 $ 352,805 $ 429,313 $ 108,151 $ 111,811
Cost of sales............ 339,302 397,524 397,158 305,959 364,901 86,323 90,924
Depreciation and
amortization........... 4,448 4,729 5,353 4,730 5,623 1,358 1,699
Selling, general and
administrative
expenses............... 11,097 15,950 17,420 13,805 18,524 5,966 4,697
--------- --------- --------- ----------- ----------- ----------- -----------
Operating income......... 12,210 32,726 36,866 28,311 40,265 14,504 14,491
Interest expense......... 6,784 2,100 3,332 832 1,211 523 2,924
Interest income.......... -- -- -- -- -- -- 342
Other income (expense)... (402) (1,798) (23,517) (1,217) (863) 91 126
--------- --------- --------- ----------- ----------- ----------- -----------
Income before income
tax.................... 5,024 28,828 10,017 26,262 38,191 14,072 12,035
Income tax............... 2,803 10,332 4,128 7,879 11,513 4,277 4,446
--------- --------- --------- ----------- ----------- ----------- -----------
Net income............... $ 2,221 $ 18,496 $ 5,889 $ 18,383 $ 26,678 $ 9,795 $ 7,589
--------- --------- --------- ----------- ----------- ----------- -----------
--------- --------- --------- ----------- ----------- ----------- -----------
OTHER DATA:
EBITDA(c)................ $ 16,256 $ 35,657 $ 18,702 $ 31,824 $ 45,025 $ 15,953 $ 16,316
Adjusted EBITDA(k)....... 16,256 38,161 47,716 36,514 50,190 17,250
OTHER OPERATING DATA:
Tons of lead metal
sold................... 95.1 98.7 104.1 87.1 106.7 26.1 26.9
Tons of copper metal
sold................... 65.6 70.0 71.3 56.7 68.9 17.5 17.9
Ounces of silver metal
sold (in millions)..... 18.5 19.6 21.2 17.3 20.4 5.0 6.5
Tons of zinc metal
sold................... 72.6 74.3 77.6 58.4 71.0 18.3 18.4
Average LME copper price
per pound.............. $ 1.05 $ 1.33 $ 1.04 $ 1.07 $ 1.07 $ 1.05 $ .81
Average LBMA silver price
per ounce.............. 5.28 5.20 5.10 4.77 4.79 4.79 5.53
Average LME zinc price
per pound.............. 0.45 0.47 0.47 0.61 0.59 .48 .51
</TABLE>
<TABLE>
<CAPTION>
DOE RUN PERU'S PREDECESSOR(G) DOE RUN CAYMAN(H)
<S> <C> <C> <C> <C> <C>
---------------------------------------------------------
<CAPTION>
AS OF DECEMBER 31, AS OF AS OF
------------------------------- OCTOBER 31, JANUARY 31,
1994 1995 1996 1997 1998
--------- --------- --------- ----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash..................................................... $ 61 $ 62 $ 582 $ 7,364 $ 14,679
Working capital.......................................... 6,081 54,208 44,319 7,713 14,294
Property, plant and equipment, net....................... 46,092 55,557 50,814 97,739 95,962
Total assets............................................. 146,482 188,474 148,314 170,969 195,551
Total debt (including current portion)................... 23,160 19,626 15,068 103,000 100,000
Net assets............................................... 51,481 107,667 78,575 1,729 9,318
</TABLE>
(FOOTNOTES COMMENCE ON FOLLOWING PAGE)
41
<PAGE>
(a) Doe Run was acquired by Renco effective as of April 1, 1994.
(b) Results for fiscal 1993 were affected by a strike at the Herculaneum smelter
and curtailment of production at the Herculaneum smelter due to flooding of
the Mississippi River. See "Management's Discussion and Analysis of Results
of Operations and Financial Condition."
(c) EBITDA is defined as net income (loss) before extraordinary item plus the
sum of net interest expense, income taxes and depletion, depreciation and
amortization. The trends of EBITDA generally follow the trends of operating
income. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations" for a discussion of the recent trends of operating
income. Information regarding EBITDA is presented because management
believes that certain investors use EBITDA as one measure of an issuer's
historical ability to service its debt. EBITDA should not be considered an
alternative to, or more meaningful than, operating income or cash flow as an
indicator of an issuer's operating performance. Furthermore, caution should
be used in comparing EBITDA to similarly titled measures of other companies
as the definitions of these measures may vary.
(d) Fixed charges consist of interest expense, capitalized interest,
amortization of deferred financing costs and the portion of rental expense
that is representative of interest expense. Earnings consist of income
before taxes plus fixed charges less capitalized interest.
(e) The average lead price per pound realized by Doe Run generally is at a
premium over the average LME price.
(f) Primary smelter lead tons per manshift is computed by dividing metal
produced at Doe Run by the shifts required to produce the related tons.
Shifts are computed by dividing the sum of actual hours worked during the
period for hourly employees and 52 hours per week for salaried employees by
eight hours.
(g) Metaloroya was acquired by Doe Run Peru effective October 23, 1997.
(h) Doe Run Cayman, a wholly-owned subsidiary of Doe Run, is the parent company
of Doe Run Mining and currently has no independent operations.
(i) Doe Run Cayman's net sales, operating income and EBITDA for the eight-day
period October 23, 1997 to October 31, 1997 were $2.6 million, $.4 million
and $.5 million, respectively.
(j) These results include intercompany transactions. Net sales and cost of sales
excluding the effects of intercompany transactions were $109.2 million and
$88.7 million, respectively.
(k) Adjusted EBITDA is defined as EBITDA adjusted for the following
non-recurring charges: (i) for 1995, $2.5 million relating to personnel
reduction costs, (ii) for 1996, $3.9 million relating to personnel reduction
costs, $21.6 million relating to one-time environmental expenses and $3.6
million relating to privatization costs, (iii) for the period January 1,
1997 to October 23, 1997, $3.2 million relating to privatization costs and
$1.5 million relating to personnel reduction costs, (iv) for the period
November 1, 1996 to October 23, 1997, $3.2 million relating to privatization
costs and $2.0 million relating to personnel reduction costs and (v) for the
three months ended January 31, 1997, $.8 million relating to privatization
costs and $.5 million relating to personnel reduction costs.
42
<PAGE>
THE EXCHANGE OFFER
TERMS OF THE EXCHANGE OFFER
GENERAL
In connection with the sale of Old Notes to the Initial Purchasers pursuant
to the Purchase Agreement, dated March 6, 1998, among Doe Run, the Guarantors
and the Initial Purchasers, the holders of the Old Notes became entitled to the
benefits of the Registration Rights Agreement.
Under the Registration Rights Agreement, Doe Run became obligated to (a)
file a registration statement in connection with a registered exchange offer
within 60 days after March 12, 1998, the date the Old Notes were issued (the
"Issue Date"), and (b) cause the registration statement relating to such
registered exchange offer to become effective within 150 days after the Issue
Date. The Exchange Offer being made hereby, if consummated within the required
time periods, will satisfy Doe Run's obligations under the Registration Rights
Agreement. Doe Run understands that there are approximately beneficial
owners of such Old Notes. This Prospectus, together with the Letter of
Transmittal, is being sent to all such beneficial holders known to Doe Run.
Upon the terms and subject to the conditions set forth in this Prospectus
and in the accompanying Letter of Transmittal, Doe Run will accept all Old Notes
properly tendered and not withdrawn prior to 5:00 p.m., New York City time, on
the Expiration Date. Doe Run will issue $1,000 principal amount of Fixed Rate
Exchange Notes and Floating Rate Exchange Notes in exchange for each $1,000
principal amount of outstanding Fixed Rate Old Notes and Floating Rate Old
Notes, respectively, accepted in the Exchange Offer. Holders may tender some or
all of their Old Notes pursuant to the Exchange Offer.
Based on an interpretation by the staff of the Commission set forth in the
Morgan Stanley Letter, the Exxon Capital Letter and similar letters, Doe Run
believes that Exchange Notes issued pursuant to the Exchange Offer in exchange
for Old Notes may be offered for resale, resold and otherwise transferred by any
person who received such Exchange Notes, whether or not such person is the
holder (other than Restricted Holders) without compliance with the registration
and prospectus delivery provisions of the Securities Act, provided that such
Exchange Notes are acquired in the ordinary course of such holder's or other
person's business, neither such holder nor such other person is engaged in or
intends to engage in any distribution of the Exchange Notes and such holders or
other persons have no arrangement or understanding with any person to
participate in the distribution of such Exchange Notes.
If any person were to be participating in the Exchange Offer for the
purposes of participating in a distribution of the Exchange Notes in a manner
not permitted by the Commission's interpretation, such person (a) could not rely
upon the Morgan Stanley Letter, the Exxon Capital Letter or similar letters and
(b) must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with a secondary resale transaction.
Each broker-dealer that receives Exchange Notes for its own account in
exchange for Old Notes, where such Old Notes were acquired by such broker-dealer
as a result of market-making or other trading activities, must acknowledge that
it will deliver a prospectus in connection with any resale of such Exchange
Notes. The Letter of Transmittal states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act. This Prospectus, as
it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of Exchange Notes received in exchange
for Old Notes where such Old Notes were acquired by such broker-dealer as result
of market-making activities or other trading activities. Doe Run has agreed
that, for a period of 180 days after consummation of the Exchange Offer, it will
make this Prospectus, as it may be amended or supplemented from time to time,
available to any broker-dealer for use in connection with any such resale. See
"Plan of Distribution."
43
<PAGE>
Doe Run will not receive any proceeds from the Exchange Offer. See "Use of
Proceeds." Doe Run has agreed to bear the expenses of the Exchange Offer
pursuant to the Registration Rights Agreement. No underwriter is being used in
connection with the Exchange Offer.
Doe Run shall be deemed to have accepted validly tendered Old Notes when, as
and if Doe Run has given oral or written notice thereof to the Exchange Agent.
The Exchange Agent will act as agent for the tendering holders of Old Notes for
the purposes of receiving the Exchange Notes from Doe Run and delivering
Exchange Notes to such holders.
If any tendered Old Notes are not accepted for exchange because of an
invalid tender or the occurrence of certain conditions set forth herein under
"--Conditions" without waiver by Doe Run, certificates for any such unaccepted
Old Notes will be returned, without expense, to the tendering holder thereof as
promptly as practicable after the Expiration Date.
Holders of Old Notes who tender in the Exchange Offer will not be required
to pay brokerage commissions or fees or, subject to the instructions in the
Letter of Transmittal, transfer taxes with respect to the exchange of Old Notes
pursuant to the Exchange Offer. Doe Run will pay all charges and expenses, other
than certain applicable taxes in connection with the Exchange Offer. See "--Fees
and Expenses."
In the event the Exchange Offer is consummated, Doe Run will not be required
to register the Old Notes. In such event, holders of Old Notes seeking liquidity
in their investment would have to rely on exemptions to registration
requirements under the securities laws, including the Securities Act. See "Risk
Factors--Consequences of Failure to Exchange."
EXPIRATION DATE; EXTENSIONS; AMENDMENT
The term "Expiration Date" shall mean the expiration date set forth on the
cover page of this Prospectus, unless Doe Run, in its sole discretion, extends
the Exchange Offer, in which case the term "Expiration Date" shall mean the
latest date to which the Exchange Offer is extended.
In order to extend the Expiration Date, Doe Run will notify the Exchange
Agent of any extension by oral or written notice and will issue a public
announcement thereof, each prior to 9:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date. Such announcement
may state that Doe Run is extending the Exchange Offer for a specified period of
time.
Doe Run reserves the right (a) to delay accepting any Old Notes, to extend
the Exchange Offer or to terminate the Exchange Offer and not accept Old Notes
not previously accepted if any of the conditions set forth herein under
"--Conditions" shall have occurred and shall not have been waived by Doe Run (if
permitted to be waived by Doe Run), by giving oral or written notice of such
delay, extension or termination to the Exchange Agent, or (b) to amend the terms
of the Exchange Offer in any manner deemed by it to be advantageous to the
holders of the Old Notes. Any such delay in acceptance, extension, termination
or amendment will be followed as promptly as practicable by oral or written
notice thereof. If the Exchange Offer is amended in a manner determined by Doe
Run to constitute a material change, Doe Run will promptly disclose such
amendment in a manner reasonably calculated to inform the holders of the Old
Notes of such amendment, and Doe Run may extend the Exchange Offer for a period
of up to ten business days, depending upon the significance of the amendment and
the manner of disclosure to holders of the Old Notes, if the Exchange Offer
would otherwise expire during such extension period.
Without limiting the manner in which Doe Run may choose to make public
announcement of any extension, amendment or termination of the Exchange Offer,
Doe Run shall have no obligation to publish, advertise, or otherwise communicate
any such public announcement, other than by making a timely release to the Dow
Jones News Service.
44
<PAGE>
INTEREST ON THE EXCHANGE NOTES
The Exchange Notes will bear interest from March 12, 1998, payable
semiannually on March 15 and September 15 of each year, commencing September 15,
1998, at the rate of 11 1/4% per annum in the case of the Fixed Rate Exchange
Notes and at a rate per annum equal to LIBOR plus 6.29% in the case of the
Floating Rate Exchange Notes. Interest on the Floating Rate Exchange Notes will
be reset semi-annually. Holders of Old Notes whose Old Notes are accepted for
exchange will be deemed to have waived the right to receive any payment in
respect of interest on the Old Notes accrued up until the date of the issuance
of the Exchange Notes.
PROCEDURES FOR TENDERING
To tender in the Exchange Offer, a holder must complete, sign and date the
Letter of Transmittal, or a facsimile thereof, have the signatures thereon
guaranteed if required by instruction 3 of the Letter of Transmittal, and mail
or otherwise deliver such Letter of Transmittal or such facsimile, together with
the Old Notes and any other required documents. To be validly tendered, such
documents must reach the Exchange Agent on or before 5:00 p.m., New York City
time, on the Expiration Date.
The tender by a holder of Old Notes will constitute an agreement between
such holder and Doe Run in accordance with the terms and subject to the
conditions set forth herein and in the Letter of Transmittal.
Delivery of all documents must be made to the Exchange Agent at its address
set forth below. Holders may also request their respective brokers, dealers,
commercial banks, trust companies or other nominees to effect such tender for
such holders.
The method of delivery of Old Notes and the Letter of Transmittal and all
other required documents to the Exchange Agent is at the election and risk of
the holders. Instead of delivery by mail, it is recommended that holders use an
overnight or hand delivery service. In all cases, sufficient time should be
allowed to assure timely delivery to the Exchange Agent on or before 5:00 p.m.
New York City time, on the Expiration Date. No Letter of Transmittal or Old
Notes should be sent to Doe Run or the Guarantors.
Only a holder of Old Notes may tender such Old Notes in the Exchange Offer.
The term "holder" with respect to the Exchange Offer means any person in whose
name Old Notes are registered on the books of Doe Run or any other person who
has obtained a properly completed bond power from the registered holder.
Any beneficial holder whose Old Notes are registered in the name of his
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact such registered holder promptly and instruct such
registered holder to tender on his behalf. If such beneficial holder wishes to
tender on his own behalf, such registered holder must, prior to completing and
executing the Letter of Transmittal and delivering his Old Notes, either make
appropriate arrangements to register ownership of the Old Notes in such holder's
name or obtain a properly completed bond power from the registered holder. The
transfer of record ownership may take considerable time.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the case
may be, must be guaranteed by a member firm of a registered national securities
exchange or of the National Association of Securities Dealers, Inc. or a
commercial bank or trust company having an office or correspondent in the United
States (an "Eligible Institution") unless the Old Notes tendered pursuant
thereto are tendered (a) by a registered holder who has not completed the box
entitled "Special Issuance Instructions" or "Special Delivery Instructions" on
the Letter of Transmittal or (b) for the account of an Eligible Institution. In
the event that signatures on a Letter of Transmittal or a notice of withdrawal,
as the case may be, are required to be guaranteed, such guarantee must be by an
Eligible Institution.
If the Letter of Transmittal is signed by a person other than the registered
holder of any Old Notes listed therein, such Old Notes must be endorsed or
accompanied by appropriate bond powers and a proxy
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which authorizes such person to tender the Old Notes on behalf of the registered
holder, in each case signed as the name of the registered holder or holders
appears on the Old Notes.
If the Letter of Transmittal or any Old Notes or bond powers are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and unless waived by Doe Run, evidence
satisfactory to Doe Run of their authority so to act must be submitted with the
Letter of Transmittal.
All questions as to the validity, form, eligibility (including time of
receipt), and withdrawal of the tendered Old Notes will be determined by Doe Run
in its sole discretion, which determination will be final and binding. Doe Run
reserves the absolute right to reject any and all Old Notes not properly
tendered or any Old Notes Doe Run's acceptance of which would, in the opinion of
counsel for Doe Run, be unlawful. Doe Run also reserves the right to waive any
irregularities or conditions of tender as to particular Old Notes. Doe Run's
interpretation of the terms and conditions of the Exchange Offer (including the
instructions in the Letter of Transmittal) will be final and binding on all
parties. Unless waived, any defects or irregularities in connection with tenders
of Old Notes must be cured within such time as Doe Run shall determine. None of
Doe Run, the Guarantors, the Exchange Agent or any other person shall be under
any duty to give notification of defects or irregularities with respect to
tenders of Old Notes, nor shall any of them incur any liability for failure to
give such notification. Tenders of Old Notes will not be deemed to have been
made until such irregularities have been cured or waived. Any Old Notes received
by the Exchange Agent that are not properly tendered and as to which the defects
or irregularities have not been cured or waived will be returned without cost to
such holder by the Exchange Agent to the tendering holders of Old Notes, unless
otherwise provided in the Letter of Transmittal, as soon as practicable
following the Expiration Date.
In addition, Doe Run reserves the right in its sole discretion to (a)
purchase or make offers for any Old Notes that remain outstanding subsequent to
the Expiration Date or, as set forth under "-- Conditions," to terminate the
Exchange Offer in accordance with the terms of the Registration Rights Agreement
and (b) to the extent permitted by applicable law, purchase Old Notes in the
open market, in privately negotiated transactions or otherwise. The terms of any
such purchases or offers will differ from the terms of the Exchange Offer.
By tendering, each holder will represent to Doe Run that, among other
things, (a) the Exchange Notes acquired pursuant to the Exchange Offer are being
obtained in the ordinary course of business of such holder or other person, (b)
neither such holder nor such other person is engaged in or intends to engage in
a distribution of the Exchange Notes (c) neither such holder or other person has
any arrangement or understanding with any person to participate in the
distribution of such Exchange Notes, and (d) such holder or other person is not
an "affiliate," as defined under Rule 405 of the Securities Act, of Doe Run or,
if such holder or other person is such an affiliate, will comply with the
registration and prospectus delivery requirements of the Securities Act to the
extent applicable.
Each broker-dealer that receives Exchange Notes for its own account in
exchange for Old Notes, where such Old Notes were acquired by such broker-dealer
as a result of market-making or other trading activities, must acknowledge that
it will deliver a prospectus in connection with any resale of such Exchange
Notes. The Letter of Transmittal states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act. This Prospectus, as
it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of Exchange Notes received in exchange
for Old Notes where such Old Notes were acquired by such broker-dealer as result
of market-making activities or other trading activities. Doe Run has agreed
that, for a period of 180 days after consummation of the Exchange Offer, it will
make this Prospectus, as it may be amended or supplemented from time to time,
available to any broker-dealer for use in connection with any such resale. See
"Plan of Distribution."
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Doe Run will not receive any proceeds from the Exchange Offer. See "Use of
Proceeds." Doe Run has agreed to bear the expenses of the Exchange Offer
pursuant to the Registration Rights Agreement. No underwriter is being used in
connection with the Exchange Offer.
The Old Notes were issued on March 12, 1998 and there is no public market
for them at present. To the extent Old Notes are tendered and accepted in the
Exchange Offer, the principal amount of outstanding Old Notes will decrease with
a resulting decrease in the liquidity in the market therefor. Following the
consummation of the Exchange Offer, holders of Old Notes will continue to be
subject to certain restrictions on transfer. Accordingly, the liquidity of the
market for the Old Notes could be adversely affected.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Old Notes and (a) whose Old Notes are not
immediately available or (b) who cannot deliver their Old Notes, the Letter of
Transmittal or any other required documents to the Exchange Agent prior to the
Expiration Date, may effect a tender if: (i) the tender is make through an
Eligible Institution; (ii) prior to the Expiration Date, the Exchange Agent
receives from such Eligible Institution a properly completed and duly executed
Notice of Guaranteed Delivery (by facsimile transmission, mail or hand delivery)
setting forth the name and address of the holder of the Old Notes, the
certificate number or numbers of such Old Notes and the principal amount of Old
Notes tendered, stating that the tender is being made thereby, and guaranteeing
that, within three business days after the Expiration Date, the Letter of
Transmittal (or facsimile thereof) together with the certificate(s) representing
the Old Notes to be tendered in proper form for transfer and any other documents
required by the Letter of Transmittal will be deposited by the Eligible
Institution with the Exchange Agent; and (iii) such properly completed and
executed Letter of Transmittal (or facsimile thereof) together with the
certificate(s) representing all tendered Old Notes in proper form for transfer
and all other documents required by the Letter of Transmittal are received by
the Exchange Agent within three business days after the Expiration Date.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Old Notes may be withdrawn
at any time prior to 5:00 p.m., New York City time, on the Expiration Date,
unless previously accepted for exchange.
To withdraw a tender of Old Notes in the Exchange Offer, a written or
facsimile transmission notice of withdrawal must be received by the Exchange
Agent at its address set forth herein prior to 5:00 p.m., New York City time, on
the Expiration Date. Any such notice of withdrawal must (a) specify the name of
the person having deposited the Old Notes to be withdrawn (the "Depositor"), (b)
identify the Old Notes to be withdrawn (including the certificate number or
numbers and principal amount of such Old Notes), (c) be signed by the Depositor
in the same manner as the original signature on the Letter of Transmittal by
which such Old Notes were tendered (including any required signature guarantees)
or be accompanied by documents of transfer sufficient to have the Trustee with
respect to the Old Notes register the transfer of such Old Notes into the name
of the Depositor withdrawing the tender and (d) specify the name in which any
such Old Notes are to be registered, if different from that of the Depositor.
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by Doe Run, whose
determination shall be final and binding on all parties. Any Old Notes so
withdrawn will be deemed not to have been validly tendered for purposes of the
Exchange Offer and no Exchange Notes will be issued with respect thereto unless
the Old Notes so withdrawn are validly retendered. Any Old Notes which have been
tendered but which are not accepted for exchange will be returned to the holder
thereof without cost to such holder as soon as practicable after withdrawal,
rejection of tender or termination of the Exchange Offer. Properly withdrawn Old
Notes may be retendered by following one of the procedures described above under
"--Procedures for Tendering" at any time prior to the Expiration Date.
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CONDITIONS
Notwithstanding any other term of the Exchange Offer, Doe Run will not be
required to accept for exchange, or exchange Exchange Notes for, any Old Notes
not theretofore accepted for exchange, and may terminate or amend the Exchange
Offer as provided herein before the acceptance of such Old Notes, if Doe Run or
the holders of at least a majority in principal amount of Old Notes reasonably
determine in good faith that any of the following conditions exist: (a) the
Exchange Notes to be received by such holders of Old Notes in the Exchange
Offer, upon receipt, will not be tradable by each such holder (other than a
holder which is an affiliate of Doe Run at any time on or prior to the
consummation of the Exchange Offer) without restriction under the Securities Act
and the Exchange Act and without material restrictions under the blue sky or
securities laws of substantially all of the states of the United States, (b) the
interests of the holders of the Old Notes, taken as a whole, would be materially
adversely affected by the consummation of the Exchange Offer or (c) after
conferring with counsel, the Commission is unlikely to permit the making of the
Exchange Offer prior to August 7, 1998.
Pursuant to the Registration Rights Agreement, if an Exchange Offer shall
not be consummated prior to the Exchange Offer Termination Date, Doe Run will be
obligated to cause to be filed with the Commission a shelf registration
statement with respect to the Old Notes (the "Shelf Registration Statement") as
promptly as practicable after the Exchange Offer Termination Date and thereafter
use its best efforts to have the Shelf Registration Statement declared
effective.
"Exchange Offer Termination Date" means the date on which the earliest of
any of the following events occurs: (a) applicable interpretations of the staff
of the Commission do not permit Doe Run to effect the Exchange Offer, (b) any
holder of Notes notifies Doe Run that either (i) such holder is not eligible to
participate in the Exchange Offer or (ii) such holder participates in the
Exchange Offer and does not receive freely transferable Exchange Notes in
exchange for tendered Old Notes or (c) the Exchange Offer is not consummated
within 150 days after the Issue Date.
If any of the conditions described above exist, Doe Run will refuse to
accept any Old Notes and will return all tendered Old Notes to exchanging
holders of the Old Notes.
EXCHANGE AGENT
State Street Bank and Trust Company has been appointed as Exchange Agent for
the Exchange Offer. Questions and requests for assistance and requests for
additional copies of this Prospectus or of the Letter of Transmittal and
deliveries of completed Letters of Transmittal with tendered Old Notes should be
directed to the Exchange Agent addressed as follows:
<TABLE>
<S> <C>
BY MAIL BY HAND/OVERNIGHT DELIVERY
State Street Bank and Trust Company State Street Bank and Trust Company
Two International Place, 4th Floor 61 Broadway, 15th Floor
Boston, Massachusetts 02110 New York, New York 10006
Attention: Claire Young--Corporate Trust Attention: Corporate Trust Department
Department
</TABLE>
Doe Run will indemnify the Exchange Agent and its agents for any loss,
liability or expense incurred by them, including reasonable costs and expenses
of their defense, except for any such loss, liability or expense caused by
negligence or bad faith.
FEES AND EXPENSES
The expenses of soliciting tenders pursuant to the Exchange Offer will be
borne by Doe Run. The principal solicitation for tenders pursuant to the
Exchange Offer is being made by mail. Additional
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solicitations may be made by officers and regular employees of Doe Run and its
affiliates in person, by telephone or facsimile.
Doe Run will not make any payments to brokers, dealers, or other persons
soliciting acceptances of the Exchange Offer. Doe Run, however, will pay the
Exchange Agent reasonable and customary fees for its services and will reimburse
the Exchange Agent for its reasonable out-of-pocket expenses in connection
therewith. Doe Run may also pay brokerage houses and other custodians, nominees
and fiduciaries the reasonable out-of-pocket expenses incurred by them in
forwarding copies of this Prospectus, Letters of Transmittal and related
documents to the beneficial owners of the Old Notes, and in handling or
forwarding tenders for exchange.
The expenses to be incurred in connection with the Exchange Offer, including
fees and expenses of the Exchange Agent and Trustee and accounting and legal
fees and expenses, will be paid by Doe Run, and are estimated in the aggregate
to be approximately $500,000.
Doe Run will pay all transfer taxes, if any, applicable to the exchange of
Old Notes pursuant to the Exchange Offer. If, however, certificates representing
Exchange Notes (or Old Notes for principal amounts not tendered or accepted for
exchange) are to be delivered to, or are to be registered or issued in the name
of, any person other than the registered holder of the Old Notes tendered, or if
tendered Old Notes are registered in the name of any person other than the
person signing the Letter of Transmittal, or if a transfer tax is imposed for
any reason other than the exchange of Old Notes pursuant to the Exchange Offer,
then the amount of any such transfer taxes (whether imposed on the registered
holder or any other persons) will be payable by the tendering holder. If
satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with the Letter of Transmittal, the amount of such transfer taxes will
be billed directly to such tendering holder.
ACCOUNTING TREATMENT
Doe Run will not recognize any gain or loss for accounting purposes upon the
consummation of the Exchange Offer. The expense of the Exchange Offer will be
amortized by Doe Run over the term of the Exchange Notes under U.S. GAAP.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Doe Run is the largest fully-integrated lead producer in North America and
the second largest primary lead producer in the western world. Renco acquired
Doe Run on April 1, 1994. Through its subsidiary Doe Run Peru, Doe Run operates
one of the largest polymetallic processing companies in the world offering an
extensive product mix of non-ferrous and precious metals, including copper,
silver, lead, zinc and gold. Doe Run acquired Doe Run Peru on October 23, 1997.
The combined capabilities of Doe Run and Doe Run Peru represent the largest
primary lead producer in the western world.
The following discussion and analysis of Doe Run and Doe Run Peru should be
read in conjunction with the historical and pro forma financial statements of
Doe Run and Doe Run Peru, and the notes thereto, and other financial information
included elsewhere herein.
DOE RUN
Doe Run is engaged in exploration, development, mining and processing of
base metals, primarily lead, and recycling of spent lead-acid batteries and
other lead-bearing materials. Doe Run also fabricates and repairs lead-lined
process equipment and lead products used in radiation shieldings, pollution
control devices and medical equipment, and produces lead oxide for use in
automotive batteries.
Doe Run's principal product, refined lead, is actively quoted and traded on
the LME. The LME provides an efficient and orderly market on which to trade lead
and other non-ferrous metals. The market provides reference prices for worldwide
pricing of activities relating to non-ferrous metals and provides for storage
facilities to enable market participants to make or take physical delivery of
approved brands of metals, such as Doe Run lead. Lead options and futures are
also traded on the LME which enable participants to hedge against risks arising
from price fluctuations.
During fiscal 1993, Doe Run experienced certain non-recurring events, which
contributed to Doe Run's operating losses during this period. Beginning in July
1992, Doe Run experienced a 29-month labor strike at its primary smelter.
Although Doe Run was able to keep the smelter operational and satisfy most of
its obligations during the strike by utilizing salaried employees from
throughout Doe Run, as well as outside contractors, metal output fell
significantly short of planned levels. Despite lower production levels,
operating expenses increased due to substantially increased security costs and
outside services. These factors combined to increase the conversion cost per ton
of metal by approximately 25%. In July and August 1993, flooding of the
Mississippi River caused Doe Run to shut down the Herculaneum smelter, thereby
reducing fiscal 1993 production by approximately 10%. During the shut down, Doe
Run continued to incur full production level costs.
In addition to the non-recurring events at Doe Run, Doe Run's results of
operations were adversely affected by lower lead prices for a portion of the
period from 1993 to 1994. These lower lead prices were primarily a result of an
increased supply of lead due to increased net exports of lead from Eastern
Europe, the former Soviet Union and China. See "Industry--Lead."
Subsequent to these events and its acquisition by Renco in April 1994, Doe
Run undertook various changes to improve profitability under all market
conditions and diversify its revenue sources. Specifically, as part of its
program to improve profitability, Doe Run has increased production at both its
Herculaneum and Buick smelting facilities. Primary lead production at
Herculaneum grew from approximately 162,000 tons per year in fiscal 1993 to
approximately 241,000 tons in fiscal 1997, while secondary production at Buick
grew from approximately 66,000 tons per year in fiscal 1993 to approximately
102,000 tons in fiscal 1997. Recent blast furnace productivity improvements have
increased the annual production capacity at Herculaneum from the original
capacity of approximately 225,000 tons to approximately 250,000 tons presently.
Increased production capacity enables Doe Run to lower unit costs by better
leveraging its fixed cost base.
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In recent years, Doe Run has made two strategic acquisitions of lead
fabrication operations. Margins on these products are relatively insensitive to
lead price fluctuations as Doe Run is generally able to reflect such
fluctuations in the price of the end product. In addition, Doe Run has a growing
tolling business with major U.S. lead-acid battery manufacturers pursuant to
contractual agreements under which recycled lead is returned to the supplier in
exchange for a processing fee which is largely independent of lead prices.
The average LME price for refined lead was $.29 per pound in fiscal 1997. As
of March 31, 1998, the LME price for lead was $.26 per pound, which was below
the ten-year average price of $.28 per pound. Management believes that lead
prices will remain relatively stable or will modestly increase for the remainder
of fiscal 1998 and over the long term will reach historical industry averages.
As a result of the recent lead price decreases, the Company expects that it will
incur an operating loss in its U.S. operations that will adversely affect its
EBITDA in fiscal 1998.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JANUARY 31, 1998 COMPARED TO THREE MONTHS ENDED JANUARY
31, 1997
NET SALES for the three months ended January 31, 1998 (the "first quarter
1998") were $169.1 million compared to $65.8 million in the three months ended
January 31, 1997 (the "first quarter 1997"). Of this increase, $109.2 million is
attributable to the addition of Doe Run Peru resulting from the Acquisition on
October 23, 1997. See "--Doe Run Peru--Results of Operations." Lead metal net
sales decreased from $43.1 million to $41.0 million, a decrease of 4.9%. This
change is attributable to an increase in lead metal sales volume of 10,322 tons,
or 17.2%, resulting from improved production volume at both the primary and
secondary smelters, offset by a $9.5 million reduction due to lower realized
prices. The average LME price for lead metal decreased by $.0721 per pound, or
22.7%, from the first quarter 1997 to the first quarter 1998. As a result, Doe
Run's net realized price was 18.9% lower in the first quarter of 1998 (realized
prices are net of hedge transactions, see "--Liquidity and Capital
Resources--Hedging Activities"). Sales by Seafab Metals Company ("Seafab") were
$2.4 million lower in the first quarter 1998 compared to the first quarter 1997,
primarily as a result of the planned relocation of the fabrication plant from
Seattle, Washington to Casa Grande, Arizona which required approximately four
weeks of down time. A slow down in oxide sales due to lower battery demand also
contributed to the reduction. Tolling net sales for the first quarter 1998
decreased $1.1 million from the first quarter 1997 due to an 18.8% decrease in
volume, which was the result of a drawdown in toll balances due to customers and
a shift to metal sales. Other net sales were lower by $.3 million primarily due
to lower zinc and lead concentrate volume, lower copper prices and reduced
demand for large scale lead related maintenance and construction work at Lone
Star Lead Construction Company ("Lone Star"), partially offset by improved
copper concentrate volume, sales of imported zinc metal and improved zinc
prices.
COST OF SALES for the first quarter 1998 was $143.5 million compared to
$52.9 million for the first quarter 1997. Of this increase, $88.7 million is
attributable to the addition of Doe Run Peru. See "--Doe Run Peru--Results of
Operations." Increased volumes of lead metal and copper concentrates offset by
lower zinc and lead concentrate and toll volumes accounted for $5.2 million of
the cost of sales increase. The cost of purchased lead concentrates and higher
costs for salaries and fringe benefits, purchased lead metal, and purchased feed
were more than offset by reduced purchased services and the impact of an 18.3%
increase in lead metal production volume. As a result, the average cost per ton
produced was approximately 0.9% lower in the first quarter 1998, reducing cost
of sales by $2.2 million from the first quarter 1997. Lower volume at Seafab,
primarily related to the relocation of the fabrication plant reduced cost of
sales by $1.8 million. The sale of imported zinc metal increased cost of sales
by $.8 million while other costs were lower by $.1 million.
DEPLETION, DEPRECIATION AND AMORTIZATION for the first quarter 1998
increased by $2.1 million compared to the first quarter 1998. The addition of
Doe Run Peru accounts for $1.7 million of the increase, while the
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remainder of the increase is primarily due to depreciation of plant and
equipment on recent capital additions. See "--Doe Run Peru--Results of
Operations."
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES increased by $4.6 million in
the first quarter 1998 compared to the first quarter 1997. The addition of Doe
Run Peru accounts for an increase of $4.7 million, while other selling, general
and administrative expenses were lower by $.1 million. See "--Doe Run Peru--
Results of Operations."
OPERATING INCOME for the first quarter 1998 was $11.9 million compared to
$5.8 million for the first quarter 1997. An increase of $14.2 million is
attributable to the addition of Doe Run Peru. See "--Doe Run Peru--Results of
Operations." The remaining change, a decrease of $8.1 million, is due to the
factors discussed above.
INTEREST EXPENSE for the first quarter 1998 was $5.9 million compared to
$4.3 million for the first quarter 1997. The increase in indebtedness related to
the Acquisition accounted for $2.6 million of this increase. The remaining
decrease of $1.0 million was due to the refinancing of certain debt at more
favorable interest rates and the impact of principal payments made during the
first quarter 1997.
INCOME TAX EXPENSE for the first quarter 1998 was $4.5 million compared to
$.4 million for the first quarter 1997. Of this increase, $4.4 million is
attributable to higher pretax earnings due to the Acquisition, offset by losses
experienced domestically in the first quarter 1998. See "--Doe Run Peru--Results
of Operations." In the first quarter 1998, Doe Run was unable to utilize all of
its foreign tax credits relating to Peruvian tax provided for by Doe Run Peru.
Management has recorded a valuation allowance against its net domestic deferred
tax assets, including alternative minimum tax and foreign tax credit
carryfowards, as it is uncertain, to the extent deferred tax assets exceed
deferred tax liabilities, that the benefits will be realized.
FISCAL 1997 COMPARED TO FISCAL 1996
NET SALES in fiscal 1997 (including the results for Doe Run Peru for the
eight-day period October 23, 1997 (the date of the Acquisition) to October 31,
1997 (the "Acquisition Stub Period")) were $280.5 million compared to $274.9
million in fiscal 1996, an increase of 2.0%. Lead metal net sales decreased from
$195.7 million to $185.1 million, a decrease of 5.4%. This change is
attributable to an increase in lead metal sales volume of 17,046 tons or 6.4%
offset by a $23.1 million reduction due to lower realized prices. The average
LME price for lead metal decreased by $.0577 per pound or 16.4% from fiscal 1996
to fiscal 1997. As a result, the Company's net realized price was 11.1% less
than fiscal 1996 (realized prices are net of hedge transactions; see
"--Liquidity and Capital Resources--Hedging Activities"). Net sales of lead
concentrates to third parties were reduced by $8.3 million in fiscal 1997 from
fiscal 1996, as these lead concentrates were used in Doe Run's production.
Tolling net sales for fiscal 1997 increased $7.3 million from fiscal 1996 due to
a 17.9% increase in volume, as well as 25.5% increase in tolling processing
charges per ton. Zinc concentrate net sales in fiscal 1997 increased $2.4
million or 10.8% from fiscal 1996 due primarily to higher realized prices.
Copper concentrate net sales in fiscal 1997 decreased $3.6 million or 29.0% from
fiscal 1996, and $1.8 million of this decrease is attributable to lower realized
prices and $1.8 million is due to lower volume resulting from an emphasis on
production of lead/zinc ore. The addition of Seafab, resulting from the
acquisition of the assets of Seafab Metal Corporation in August 1996 added $15.9
million to net sales and the inclusion of Doe Run Peru from October 23, 1997,
the acquisition date, through October 31, 1997 added $2.6 million. Other net
sales were lower by $.1 million accounting for the remainder of the change.
COST OF SALES for fiscal 1997 (including the results for Doe Run Peru for
the Acquisition Stub Period) was $234.4 million, an increase of $18.9 million or
8.8% compared to fiscal 1996. Increased volumes of lead metal, tolling and zinc
concentrates offset by lower copper and lead concentrate volumes accounted for
$6.8 million of the increase. Higher costs of salaries and wages, materials and
supplies, and purchased feed,
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primarily related to increased production, were more than offset by reduced
costs of purchased lead and the impact of greater production volume. As a
result, the average cost per ton produced was approximately 1.1% lower than the
prior year reducing cost of sales by $3.1 million. The addition of Seafab
contributed $13.0 million to the cost of sales increase while the inclusion of
Doe Run Peru added $2.0 million to cost of sales. Other costs of sales were
higher by $.2 million accounting for the remainder of the change.
DEPLETION, DEPRECIATION AND AMORTIZATION for fiscal 1997 (including the
results for Doe Run Peru for the Acquisition Stub Period) increased by 7.8%
primarily due to depreciation of property, plant and equipment on recent capital
additions.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES for fiscal 1997 (including the
results for Doe Run Peru for the Acquisition Stub Period) increased by $.9
million or 8.7% compared to fiscal 1996, primarily due to the addition of
Seafab.
EXPLORATION EXPENSE for fiscal 1997 (including the results for Doe Run Peru
for the Acquisition Stub Period) was $2.7 million, a decrease of 7.1% from
fiscal 1996. This change is attributable to less drilling on potential mineral
properties.
OPERATING INCOME for fiscal 1997 (including the results for Doe Run Peru for
the Acquisition Stub Period) was $17.7 million compared to $32.8 million for
fiscal 1996. This decrease is attributable to the factors discussed above.
INTEREST EXPENSE for fiscal 1997 (including the results for Doe Run Peru for
the Acquisition Stub Period) was $13.7 million or 4.2% less than fiscal 1996.
Lower interest on subordinated notes of $.9 million was offset by the interest
under the Existing Doe Run Mining Credit Facility entered into in connection
with the acquisition of Doe Run Peru which added $.3 million to interest
expense.
INCOME TAX EXPENSE reflected an effective tax rate of 109% in fiscal 1997
and 34% in fiscal 1996. In both years, the income tax expense was provided on
the basis of alternative minimum taxes paid, which exceeded the income tax
provision based on pre-tax book income. Higher pre-tax book income in fiscal
1996 reduced the impact of the alternative minimum taxes paid on the effective
tax rate for that year. Because of the uncertainty of the future benefit of net
deferred tax assets, Doe Run has recorded a valuation allowance against its net
deferred tax assets.
FISCAL 1996 COMPARED TO FISCAL 1995
NET SALES in fiscal 1996 were $274.9 million compared to $225.1 million in
fiscal 1995, an increase of 22.1%. Lead metal net sales increased from $167.2
million to $195.7 million, an improvement of 17.0%. The average LME price for
lead metal was $.3524 per pound during fiscal 1996, $.0716 per pound greater
than the average during fiscal 1995. The higher LME price and more favorable
market conditions improved Doe Run's net realized price for both lead metal and
lead concentrates generating increases in net sales of $13.7 million and $2.9
million, respectively. An increase in mine output along with production
improvements at Doe Run's smelters generated a $14.8 million and $5.1 million
increase in net sales from lead metal and lead concentrate volume, respectively.
Zinc and copper concentrate net sales increased by $4.1 million and $3.6
million, respectively, primarily as a result of increased sales volume. The
addition of Lone Star, resulting from the acquisition of the assets of Lone Star
Lead Construction Corp. in August 1995, and the addition of Seafab in August
1996 contributed $7.7 million to the increase in net sales. Such increases were
offset by a $2.1 million decrease in net sales due to lower realized prices on
copper concentrates and changes in other by-products.
COST OF SALES for fiscal 1996 was $215.5 million, an increase of $35.1
million or 19.5% over fiscal 1995. The greater production volume, primarily of
lead metal and lead, copper and zinc concentrates, accounts for $20.3 million of
this increase. Higher costs for certain raw materials, supplies, purchased
services, and increased incentive compensation of $1.9 million resulting from
significantly improved profitability were partially offset by the impact of
greater production volume. As a result, the average cost per ton produced
53
<PAGE>
in fiscal 1996 was approximately 2.6% higher than the prior year, adding $6.1
million to cost of sales. The inclusion of Lone Star and Seafab contributed $6.4
million to the increase, while changes in other costs, primarily smelter
by-products, account for the remaining $.4 million increase.
DEPLETION, DEPRECIATION AND AMORTIZATION for fiscal 1996 increased by $1.2
million or 9.4% from fiscal 1995 primarily due to depreciation of property,
plant and equipment related to recent capital expenditures.
SELLING, GENERAL AND ADMINISTRATIVE expenses increased by $1.7 million or
19.9% from fiscal 1995 to fiscal 1996. Higher incentive compensation as a result
of higher profitability accounts for $1.1 million of this increase. Increased
legal costs associated with various defenses of lawsuits (see
"Business-Environmental Matters") and consulting costs for operational
efficiency studies initiated during fiscal 1996 account for the remainder of
this increase.
EXPLORATION EXPENSE increased by $1.0 million or 51.2% in fiscal 1996
compared to fiscal 1995 due primarily to increased drilling on potential mineral
properties.
OPERATING INCOME for fiscal 1996 was $32.8 million compared to $21.9 million
for fiscal 1995. This increase is attributable to the factors discussed above.
INCOME TAX EXPENSE reflected an effective tax rate of 34% in fiscal 1996 and
43% in fiscal 1995. In both years, income tax expense was provided on the basis
of alternative minimum taxes paid, which exceeded the income tax provision based
on pre-tax book income. Higher pre-tax book income in fiscal 1996 reduced the
impact of the alternative minimum taxes paid on the effective tax rate for that
year. Because of the uncertainty of the future benefit of net deferred tax
assets, Doe Run has recorded a valuation allowance against its net deferred tax
assets.
DOE RUN PERU
Doe Run Peru is engaged in the smelting and refining of concentrates of
polymetallic ores, including copper, silver, zinc, lead and gold, which are sold
primarily to customers outside of Peru. These activities are the same as those
that were carried out by Metaloroya and Centromin. Metaloroya was established on
September 20, 1997, and commenced operations on October 23, 1997, as the
successor company to the operations of the former La Oroya Metallurgical Complex
of Centromin, pursuant to the Subscription Agreement.
Given the diversity of its products and by-products, Doe Run Peru's
financial performance is not solely dependent upon the prospects for one of its
products or by-products. Moreover, since Doe Run Peru is a processor of complex
concentrates and does not presently own any mines from which it sources
concentrates, Doe Run Peru's financial performance is less sensitive to the
volatility of base metal prices. The primary factors affecting Doe Run Peru's
results of operations are (i) commercial terms under which Doe Run Peru
purchases concentrates and (ii) Doe Run Peru's operating costs and other
expenses.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JANUARY 31, 1998 COMPARED TO THREE MONTHS ENDED JANUARY
31, 1997
NET SALES increased 3.3% from $108.2 million in the first quarter 1997 to
$111.8 million in the first quarter 1998. Net sales of copper decreased 20.9%
from $36.7 million in the first quarter 1997 to $29.0 million in the first
quarter 1998, due to a decrease in the average price per pound of 22.9% from
$1.05 in the first quarter 1997 to $.81 in the first quarter 1998, offset by an
increase in the volume of 2.1% from 17,515 tons in the first quarter 1997 to
17,883 tons in the first quarter 1998. Net sales of silver increased 43.7% from
$24.5 million in the first quarter 1997 to $35.2 million in the first quarter
1998, due to a volume increase of 30.0% from 5.0 million ounces in the first
quarter 1997 to 6.5 million ounces in the first quarter 1998, as well as an
increase in the average price per ounce of 10.6% from $4.89 in the first quarter
1997 to $5.41 in the first quarter 1998. Net sales of gold increased 2.7% from
$3.7 million in the
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<PAGE>
first quarter 1997 to $3.8 million in the first quarter 1998, due to a volume
increase of 30.3% from 9,870 ounces in the first quarter 1997 to 12,860 ounces
in the first quarter 1998, offset by a decrease in the average price per ounce
of 21.2% from $377.1 in the first quarter 1997 to $297.2 in the first quarter
1998. Refined lead net sales decreased 16.3% from $17.2 million in the first
quarter 1997 to $14.4 million in the first quarter 1998, due to a decrease in
the average price per pound of 18.2% from $.33 in the first quarter 1997 to $.27
in the first quarter 1998, offset by a volume increase of 3.1% from 26,093 tons
in the first quarter 1997 to 26,905 tons in the first quarter 1998. Refined zinc
net sales increased 12.0% from $17.5 million in the first quarter 1997 to $19.6
million in the first quarter 1998, due primarily to an increase in the average
price per pound of 10.4% from $.48 in the first quarter 1997 to $.53 in the
first quarter 1998 and a volume increase of 0.6% from 18,264 tons in the first
quarter 1997 to 18,368 tons in the first quarter 1998. By-products net sales
increased by 14.1% from $8.5 million in the first quarter 1997 to $9.7 million
in the first quarter 1998 primarily due to the sale of 2,230 tons of bullion
lead for $2.1 million in the first quarter 1998. No bullion lead was sold in the
first quarter 1997. This increase was offset by a decrease in net sales of
blister copper of 18.8% from $6.4 million in the first quarter 1997 to $5.2
million in the first quarter 1998, due to a decrease in the average price per
pound of 10.6% from $1.32 in the the first quarter 1997 to $1.18 in the first
quarter 1998 and a volume decrease of 9.6% from 2,438 tons in the first quarter
1997 to 2,203 tons in the first quarter 1998.
COST OF SALES increased 5.3% from $86.3 million in the first quarter 1997 to
$90.9 million in the first quarter 1998 due to higher power costs resulting from
a new contract as of October 23, 1997, and an increase in production volume of
approximately 6.0% and the inclusion of $1.1 million of workers' profit sharing
expense which was classified as cost of sales in the first quarter 1997. These
increases were partially offset by the impact of improved metallurgical
recoveries.
DEPRECIATION AND AMORTIZATION EXPENSES increased 21.4% from $1.4 million in
the first quarter 1997 to $1.7 million in the first quarter 1998, primarily due
to the change in asset bases in connection with the Acquisition.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (INCLUDING MARKETING EXPENSE)
decreased 21.7% from $6.0 million in the first quarter 1997 to $4.7 million in
the first quarter 1998. Selling expenses decreased 25.0% from $1.6 million in
the first quarter 1997 to $1.2 million in the first quarter 1998, due to a
decrease in freight expenses and sales commissions based on new terms agreed
with third parties. General and administrative expenses increased 30.8% from
$2.6 million in the first quarter 1997 to $3.4 million in the first quarter 1998
primarily due to audit and legal fees and other expenses related to the Old
Notes Offering. Of the decrease in selling, general and administrative expenses,
$.5 million was due to personnel reduction costs in the first quarter 1997
related to the personnel reduction program undertaken by Centromin, which was
completed during 1997. Workers' profit sharing cost, which was $1.2 million in
the first quarter 1997, was classified in costs of sales in the first quarter
1998.
OPERATING INCOME was $14.5 million in each of the first quarter 1997 and
1998. The factors discussed above yielded no net change in operating income.
INTEREST AND BANK CHARGES increased from $.5 million in the first quarter
1997 to $2.9 million in the first quarter 1998, due primarily to the loans
obtained to finance the Acquisition.
INCOME TAX increased 2.3% from $4.3 million in the first quarter 1997 to
$4.4 million in the first quarter 1998 as a result of the inclusion of
non-deductible expenses to the pretax income in accordance with Peruvian tax
regulations.
NET INCOME decreased 22.5% from $9.8 million in the first quarter 1997 to
$7.6 million in the first quarter 1998 as a result of the factors discussed
above.
55
<PAGE>
PERIOD FROM JANUARY 1, 1997 TO OCTOBER 23, 1997 COMPARED TO YEAR ENDED
DECEMBER 31, 1996
The results of operations for the period January 1, 1997 to October 23, 1997
are not necessarily comparable with the results of operations for the year ended
December 31, 1996 due to the shorter period included in the 1997 results.
NET SALES decreased 22.8% from $456.8 million in 1996 to $352.8 million in
the 1997 period, due principally to the shorter period in 1997, changes in the
mix of existing products and a significant blister copper sale made in 1996. Net
sales of copper decreased 17.8% from $148.4 million in 1996 to $122.0 million in
the 1997 period, due to a volume decrease of 20.4% from 71,287 tons in 1996 to
56,725 tons. This decrease included a volume decrease of 96.6% from 5,537 tons
in 1996 to 186 tons in the 1997 period, when two years' of accumulated stock of
copper blister was sold. The volume changes were offset partially by an increase
in the average price per pound of 3.8% from $1.04 in 1996 to $1.08 in the 1997
period. Net sales of silver decreased 25.9% from $111.0 million in 1996 to $82.2
million in the 1997 period, due to a volume decrease of 18.4% from 21.2 million
ounces in 1996 to 17.3 million ounces in the 1997 period as well as a decrease
in the average price per ounce of 10.2% from $5.23 in 1996 to $4.70 in the 1997
period. Net sales of gold decreased 42.2% from $20.4 million in 1996 to $11.8
million in the 1997 period, due to a volume decrease of 34.4% from 52,277 ounces
in 1996 to 34,305 ounces in the 1997 period and a decrease in the average price
per ounce of 11.9% from $389.5 in 1996 to $342.9 in the 1997 period. Refined
lead net sales decreased 31.6% from $76.3 million in 1996 to $52.2 million in
the 1997 period, due to a volume decrease of 16.3% from 104,063 tons in 1996 to
87,135 tons in the 1997 period and a decrease in the average price per pound of
18.9% from $.37 in 1996 to $.30 in the 1997 period. Refined bismuth net sales
increased 37.5% from $4.8 million in 1996 to $6.6 million in the 1997 period,
due primarily to a volume increase of 53.0% from 660 tons in 1996 to 1,010 tons
in the 1997 period and a decrease in the average refined bismuth price per pound
of 10.3% from $3.30 to $2.96.
COST OF SALES decreased 23.0% from $397.2 million in 1996 to $305.9 million
in the 1997 period, due principally to the shorter period, 18.1%, as well as
lower labor expenses resulting from the personnel reduction costs carried out in
1996.
DEPRECIATION AND AMORTIZATION EXPENSES decreased 13.0% from $5.4 million in
1996 to $4.7 million in the 1997 period, due primarily to the shorter period in
1997 as well as the adjustment to the depreciation of initial balances of fixed
assets made in 1996.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (INCLUDING MARKETING EXPENSE)
decreased 20.7% from $17.4 million in 1996 to $13.8 million in 1997. Personnel
reduction costs decreased 61.5% from $3.9 million in 1996 to $1.5 million in the
1997 period, as Doe Run Peru had substantially completed its personnel reduction
program in 1996. Selling, marketing and administrative expenses were lower by
$2.3 million, or 18.6%, in the 1997 period, primarily due to the shorter period
in 1997. Worker's profit sharing was greater by $1.1 million, or 91%, in the
1997 period due primarily to improved profitability.
OPERATING INCOME declined from $36.9 million in 1996 to $28.3 million in the
1997 period due to the factors discussed above.
INTEREST AND BANK CHARGES decreased 75.8% from $3.3 million in 1996 to $0.8
million in the 1997 period, due primarily to a decrease of debt levels through
1997, which was offset by the effects of a slight increase in the weighted
average interest rate in the 1997 period.
OTHER, NET decreased 94.9% from $23.5 million in 1996 to $1.2 million in the
1997 period. In 1996, the Company incurred special charges related primarily to
(i) costs related to relocating residents away from the metallurgical complex of
La Oroya, such as demolition, and construction of apartments, schools and parks
at a new location and (ii) an accrual to provide for estimated future
expenditures under the PAMA of $21.5 million.
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<PAGE>
INCOME TAX increased 92.7% from $4.1 million in 1996 to $7.9 million in the
1997 period as a result of the increase in pretax income due to reasons
discussed above.
NET INCOME increased 212.2% from $5.9 million in 1996 to $18.4 million in
the 1997 period, due to reasons discussed above.
YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995
NET SALES increased 1.3% from $450.9 million in 1995 to $456.8 million in
1996, due principally to sale of a new product and changes in the mix of
existing products. In 1996, Doe Run Peru commenced sale of a new product,
blister copper, amounting to $14.0 million. Refined lead net sales increased
29.4% from $58.9 million in 1995 to $76.3 million in 1996, due to a volume
increase of 5.4% from 98,746 tons in 1995 to 104,063 tons in 1996 and an
increase in the average price per pound of 23.3% from $.30 in 1995 to $.37 in
1996. Refined bismuth net sales also increased 17.1% from $4.1 million in 1995
to $4.8 million in 1996, due primarily to a volume increase of 26.7% from 574
tons in 1995 to 728 tons in 1996 and a decrease in the average price per pound
of 6.8% from $3.54 in 1995 to $3.30 in 1996. Although the volume of refined
copper sold in 1996 increased 1.8% from 70,006 tons in 1995 to 71,287 tons in
1996, the decrease in the price per pound of refined copper of 21.8% from $1.33
in 1995 to $1.04 in 1996 resulted in a decrease in net sales of refined copper
of 20.6% from $186.9 million in 1995 to $148.4 million.
COSTS OF SALES decreased 0.1% from $397.5 million in 1995 to $397.2 million
in 1996, due to the effects of the 1996 personnel reduction program, which was
offset by the additional cost related to the use of independent contractors in
place of terminated employees. This reduction in cost was achieved despite a
moderate increase in the volume of concentrates processed in 1996.
DEPRECIATION AND AMORTIZATION EXPENSES increased 14.9% from $4.7 million in
1995 to $5.4 million in 1996 due primarily to adjustment of the depreciation of
the initial balances of the fixed assets.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (INCLUDING MARKETING EXPENSE)
increased by 8.8% from $16.0 million in 1995 to $17.4 million in 1996. Personnel
reduction costs increased 56.0% from $2.5 million in 1995 to $3.9 million in
1996 due to the implementation of a second personnel reduction program of 600
workers in 1996. Administrative expenses increased 26.7% from $4.5 million in
1995 to $5.7 million in 1996 primarily due to the shift to use of independent
contractors in place of employees. Selling and marketing expenses increased
11.7% from $6.0 million in 1995 to $6.7 million in 1996 due to the increased
volume of metal sold in 1996 as discussed above.
OPERATING INCOME increased from $32.7 million in 1995 to $36.9 million in
1996 due to the factors discussed above.
INTEREST AND BANK CHARGES increased 57.1% from $2.1 million in 1995 to $3.3
million in 1996, due primarily to higher average borrowings, which was offset by
the effects of a slight decrease in the weighted average interest rate in 1996.
OTHER, NET increased from $1.8 million in 1995 to $23.5 million in 1996. In
1996, Doe Run Peru incurred special charges related primarily to (i) costs
related to relocating residents away from the metallurgical complex of La Oroya,
such as demolition, and construction of apartments, schools and parks at a new
location and (ii) an accrual to provide for estimated future expenditures under
the PAMA of $21.5 million.
INCOME TAX decreased 60.2% from $10.3 million in 1995 to $4.1 million in
1996 as a result of the decrease in pretax income due primarily to the special
charges discussed above.
NET INCOME decreased 68.1% from $18.5 million in 1995 to $5.9 million in
1996, due to reasons discussed above. As a percentage of net sales, net income
was 4.1% in 1995 compared to 1.3% in 1996.
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<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company's liquidity requirements arise from working capital
requirements, capital investments and interest payment obligations. Doe Run's
primary available sources of liquidity are cash provided by operating activities
and existing cash balances in the United States, as well as cash receipts from
certain management services and sales agency agreements, loans, advances,
distributions or dividends between Doe Run and Doe Run Peru. See "Certain
Transactions--Intercompany Transactions." Doe Run also has available the New Doe
Run Revolving Credit Facility that provides for advances by the lender to a
maximum of $100.0 million less outstanding letters of credit, based on specific
percentages of eligible receivables and inventories. As of March 31, 1998, $5.0
million was outstanding, exclusive of $4.3 million of letters of credit, under
the New Doe Run Revolving Credit Facility. See "Description of New Revolving
Credit Facilities--New Doe Run Revolving Credit Facility." Doe Run was not in
compliance with the minimum net worth and maximum leverage ratio covenants under
the Doe Run Term Loan and the Existing Doe Run Revolving Credit Facility for the
fiscal quarter ended January 31, 1998, for which Doe Run received waivers. Doe
Run repaid all amounts outstanding under the Existing Doe Run Credit Facility
with the net proceeds of the Old Notes Offering.
Doe Run Peru's primary available source of liquidity is cash provided by
operating activities. Doe Run Peru will also have available the New Doe Run Peru
Revolving Credit Facility that will provide for advances by the lender to a
maximum of $40.0 million less outstanding letters of credit, based upon specific
percentages of eligible receivables and inventories. Upon consummation of the
Transactions, no amounts are expected to be outstanding under the New Doe Run
Peru Revolving Credit Facility, other than existing letters of credit. See
"Description of New Revolving Credit Facilities--New Doe Run Peru Revolving
Credit Facility."
With respect to Doe Run, in the first quarter 1998, $10.2 million was used
in operating activites, $3.4 million was used in investing activities and $13.0
million was provided by financing activities, and in fiscal 1997, $18.0 million
was provided by operating activities, $141.7 million was used in investing
activities and $132.6 million was provided by financing activities. As part of
its financing activities, Doe Run borrowed $130.0 million under the Doe Run Term
Loan to finance, in part, the Acquisition. The net proceeds of the Doe Run Term
Loan were used to pay $60.0 million to Fluor in full settlement of the Fluor
Indebtedness, to make the $23.0 million Subordinated Loan, to make a $2.0
million capital contribution to Doe Run Cayman and to repay all amounts
outstanding under Doe Run's then existing revolving credit facility.
Doe Run has budgeted approximately $13.3 million for capital expenditures
for fiscal 1998, primarily for replacement and maintenance of operations, and
environmental improvements. In addition to ongoing capital investments, Doe Run
has expended an average of approximately $59.5 million per year on maintenance
from fiscal 1995 through fiscal 1997. As a result of these expenditures and
ongoing efforts, Doe Run believes that it operates and will continue to maintain
modern and efficient facilities.
With respect to Doe Run Peru, in the first quarter 1998, $10.3 million was
provided by operating activities and $3.0 million was used in financing
activities, and for the period January 1, 1997 to October 23, 1997, $28.1
million was provided by operating activities and $28.6 million was used in
financing activities. Historical cash flows from Doe Run Peru's operating and
investing activities for the period January 1, 1997 to October 23, 1997 are not
necessarily comparable with the historical cash flows for the year ended
December 31, 1996 due to the shorter period included in the 1997 period. As a
division of Centromin, Doe Run Peru's Predecessor was historically dependent on
Centromin for its working capital management and liquidity requirements.
As part of the Acquisition, Doe Run Peru will undertake over a ten-year
period the Capital Investment Program of approximately $300.0 million, in part
to satisfy its Investment Commitment of $120.0 million as set forth in the
Subscription Agreement. Doe Run Peru has budgeted approximately
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<PAGE>
$16.0 million for capital expenditures for fiscal 1998, primarily for
replacement and maintenance of operations, and environmental improvements.
The Company has significant indebtedness outstanding. See "Risk
Factors--Substantial Indebtedness." Management believes that cash flow from
operations at Doe Run and Doe Run Peru, in addition to availability under the
New Revolving Credit Facilities, will be sufficient to provide for the Company's
liquidity needs for the foreseeable future.
The New Revolving Credit Facilities, as well as the Indenture, contain
numerous covenants and prohibitions that impose limitations on the liquidity of
the Company, including requirements that Doe Run and Doe Run Peru satisfy
certain financial ratios and limitations on the incurrence of additional
indebtedness. See "Risk Factors--Restrictions Imposed by Terms of the Company's
Indebtedness," "Description of New Revolving Credit Facilities" and "Description
of the Notes--Certain Covenants." The ability of the Company to meet its debt
service requirements and to comply with such covenants will be dependent upon
future operating performance and financial results which will be subject to
financial, economic, political, competitive and other factors affecting the
Company, many of which are beyond the Company's control.
INFLATION AND SEASONALITY
In general, the Company's cost of sales and selling, general and
administrative expenses are affected by inflation and the effects of inflation
may be experienced by the Company in future periods. Management believes,
however, that such effects have not been material to Doe Run during the past
three years. With respect to Doe Run Peru, its labor costs and selling, general
and administrative expenses, are denominated in local currency, whereas
substantially all of its net sales are denominated in U.S. dollars. Doe Run's
business is somewhat seasonal; typically in excess of 60% of annual lead metal
shipments are made in the months of July through December as a result of
seasonal demand from battery manufacturers. Doe Run Peru's business is generally
not affected by seasonal factors.
ENVIRONMENTAL MATTERS
The Company has incurred and will continue to incur capital and operating
expenditures for matters relating to environmental control and monitoring.
Capital expenditures by Doe Run for environmental control and monitoring were
$1.8 million, $6.8 million and $7.3 million for the fiscal years 1995, 1996 and
1997, respectively. Due to the pending sale and associated uncertainties,
Metaloroya environmental expenditures in 1995, 1996 and 1997 were modest. Doe
Run and Doe Run Peru estimate their environmental capital expenditures will be
approximately $4.8 million and $2.7 million, respectively, in fiscal 1998, and
$3.3 and $3.7, respectively, in fiscal 1999. See "Business--Doe
Run--Environmental Matters" and "--Doe Run Peru--Environmental Matters."
Doe Run expended on all environmental matters, which includes amounts
capitalized, amounts charged to operating expense and amounts charged to
reserves, approximately $17.5 million in fiscal 1997, and the Company estimates
such expenditures will be $18.0 million and $18.2 million in fiscal 1998 and
1999, respectively.
Environmental laws and regulations have changed rapidly in recent years, and
the Company may become subject to more stringent environmental laws and
regulations in the future. Compliance with more stringent environmental laws and
regulations could have a material adverse effect on the Company's consolidated
financial position, results of operations and liquidity. The Environmental
Protection Agency (the "EPA") has asserted certain alleged environmental
violations against Doe Run, which are described in "Business--Doe
Run--Environmental Matters."
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<PAGE>
HEDGING ACTIVITIES
In the normal course of its business, Doe Run has used in the past and may
use in the future forward sales commitments and commodity put and call option
contracts to manage its exposure to fluctuations in the prices of lead, copper,
zinc and silver. Contract positions are designed to ensure that the Company will
receive a defined minimum price for certain quantities of its production. Gains
and losses, and the related costs paid or premiums received, for option
contracts which hedge the sales prices of commodities are recognized in net
sales when the related production is sold. None of the aforementioned activities
have been entered into for speculative purposes.
Metaloroya, as a government-owned enterprise, did not undertake hedging
activities. Doe Run contemplates using hedging activities on behalf of Doe Run
Peru in the future consistent with past practices at Doe Run.
YEAR 2000 BUSINESS MATTERS
Many information and process control systems used in the current business
environment were designed to use only two digits in the date field, and thus may
not function properly in the year 2000. The Company has conducted a
comprehensive review of its computer systems to identify the systems that could
be affected by the "year 2000 problem" and has implemented a plan to resolve the
issues identified. Any of the Company's programs that have date-sensitive
software may recognize a date using "00" as the year 1900 rather than the year
2000, which could result in a major system failure or in miscalculation.
Currently, most of the major systems of the Company have been modified to be
year 2000 compliant. The Company anticipates that the appropriate modifications
to all information and process control systems will be completed by the end of
1998. The cost of achieving year 2000 compliance is included in the Company's
operating and administrative expenses. The Company does not currently expect
year 2000 issues to have any material effect the Company's costs or to cause any
significant disruption in operations.
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INDUSTRY
Doe Run's principal product is refined lead, and Doe Run Peru's principal
products include base metals, copper, lead and zinc, and precious metals, silver
and gold. Market prices for these metals tend to be cyclical and reflect a
combination of factors, including prevailing economic conditions, market demand,
prevailing trends of inventory levels and, to a lesser extent, inventory
carrying costs (primarily interest rates), international exchange rates and the
actions of participants in the commodity markets. These factors have been of
varying importance in influencing the prevailing metal prices and often have had
divergent impacts on such price. Lead, copper, silver, zinc and gold are all
publicly traded on one or more commodity exchanges, including the LME. The LME
provides an efficient and orderly market on which to trade non-ferrous metals.
The market provides reference prices for worldwide pricing of activities
relating to non-ferrous metals, and it provides storage facilities to enable
market participants to make or take physical delivery of approved brands of
metals. Summarized below is a general overview of the lead, copper, zinc and
silver markets.
LEAD
Lead is a versatile metal used in both its pure form and in alloys, due to
its electrochemical characteristics, density, malleability and corrosion
resistance. Primary uses for refined lead include lead-acid batteries, lead
pigments and compounds, rolled and extruded products, cable sheathing and
ammunition.
Similar to other base metals, lead prices fluctuate generally based on world
supply and demand. Western world consumption of lead for 1997 was estimated at
5.8 million tons, which represents a total market of approximately $3.2 billion.
The following table sets forth western world lead consumption by end use for the
period 1960 through 1997:
WESTERN WORLD LEAD CONSUMPTION BY END USE
<TABLE>
<CAPTION>
1960 1970 1980 1990 1997
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
(TONS IN THOUSANDS)
Batteries.............................................................. 767 1,305 2,046 3,124 4,120
Pigments and Compounds................................................. 251 440 740 645 598
Rolled and Extruded Products........................................... 285 280 392 496 464
Cable Sheathing........................................................ 474 430 350 248 141
Gasoline............................................................... 206 422 348 50 50
Other.................................................................. 459 962 478 396 439
--------- --------- --------- --------- ---------
Total.............................................................. 2,442 3,839 4,354 4,959 5,812
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
<CAPTION>
CAGR
1960 TO
1997
-----------
<S> <C>
Batteries.............................................................. 4.6%
Pigments and Compounds................................................. 2.4
Rolled and Extruded Products........................................... 1.3
Cable Sheathing........................................................ (3.2)
Gasoline............................................................... (3.8)
Other.................................................................. (0.1)
Total.............................................................. 2.4%
</TABLE>
Lead demand has increased consistently at a CAGR of approximately 2.4% for
the period 1960 to 1997 and approximately 2.0% for the period 1987 to 1997,
growing 0.75% from 1996 to 1997, driven primarily by demand for lead-acid
batteries. Approximately 4.2 million tons, or 72%, of the lead consumed in 1997
was used in the production of lead-acid batteries, 75% of which was for SLI
batteries. Approximately 83% of SLI battery sales are in the automotive
replacement market, a market with stable demand characteristics, which is
dependent upon the number of automobiles in service and battery life.
Lead pigments and compounds are the second largest use of lead and include
such end uses as computer and television screens, leaded glass and crystal and
printed circuit boards. Uses of rolled and extruded lead products include lead
anode plates used in the production of refined copper, radiation shielding for
health care applications and roof flashings construction applications.
Historically, lead has also been used as an additive in gasoline to reduce
engine knock and for insulation of underground cables.
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<PAGE>
Environmental concerns arising in the early 1980s, however, caused a significant
reduction in the amount of lead utilized for gasoline, and technical
considerations have reduced usage of lead in cable sheathings.
The western world supply of refined lead is dependent upon the availability
of lead ore, the principal raw material for primary smelters, secondary sources
and net exports of lead from non-western world countries, such as the former
Soviet Union and China. The following table summarizes western world refined
lead supply for the period 1988 to 1997:
WESTERN WORLD REFINED LEAD SUPPLY
<TABLE>
<CAPTION>
1988 1989 1990 1991 1992 1993 1994 1995
--------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(TONS IN THOUSANDS)
Western World:
Primary Production....................... 2,628 2,583 2,431 2,503 2,563 2,550 2,540 2,531
Secondary Production..................... 2,308 2,489 2,495 2,385 2,369 2,316 2,528 2,722
Non-Western World Net Exports.............. (44) (31) 88 75 205 165 255 241
--------- --------- --------- --------- --------- --------- --------- ---------
Total supply........................... 4,892 5,041 5,014 4,963 5,137 5,031 5,323 5,494
--------- --------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- --------- ---------
<CAPTION>
1996 1997
--------- ---------
<S> <C> <C>
Western World:
Primary Production....................... 2,477 2,562
Secondary Production..................... 2,858 2,981
Non-Western World Net Exports.............. 328 243
--------- ---------
Total supply........................... 5,663 5,786
--------- ---------
--------- ---------
</TABLE>
Since 1991, primary lead production has remained relatively constant.
Management believes that due to capital costs and environmental concerns, no new
primary smelting capacity will be added in the world in the foreseeable future.
As a result, primary production is expected to remain relatively constant, with
any increase resulting from operational improvements at existing facilities.
Refined lead supply is also affected by the availability of lead ore which
is the principal raw material for primary production facilities throughout the
world. The following table summarizes western world lead mine production for the
period 1988 to 1997:
WESTERN WORLD LEAD MINE PRODUCTION
<TABLE>
<CAPTION>
1988 1989 1990 1991 1992 1993 1994 1995
--------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(TONS IN THOUSANDS)
North America.............................. 820 745 779 804 769 548 558 624
Australia.................................. 482 517 592 588 582 548 528 485
Latin America.............................. 425 462 459 442 427 428 472 455
Western Europe............................. 411 381 374 335 306 276 301 270
Africa..................................... 216 192 181 187 185 213 203 200
Asia....................................... 131 123 119 121 115 91 86 98
--------- --------- --------- --------- --------- --------- --------- ---------
Total.................................. 2,485 2,420 2,504 2,477 2,384 2,104 2,148 2,132
--------- --------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- --------- ---------
<CAPTION>
1996 1997
--------- ---------
<S> <C> <C>
North America.............................. 707 665
Australia.................................. 540 535
Latin America.............................. 477 486
Western Europe............................. 267 289
Africa..................................... 202 194
Asia....................................... 109 91
--------- ---------
Total.................................. 2,302 2,260
--------- ---------
--------- ---------
</TABLE>
Although primary production has remained relatively constant, lead
production from secondary sources has increased, driven primarily by the greater
availability of spent lead-acid batteries and other lead-bearing materials. Due
to heightened environmental awareness, stockpiling of lead-bearing materials
such as batteries became economically unviable during the early 1990s. As a
result, battery manufacturers established outlets for spent batteries returned
in connection with replacement battery sales, which has resulted in the
development of secondary facilities throughout the world. By 1997, approximately
3.0 million tons of lead were being converted from secondary materials.
Secondary processing of lead results in approximately 98% recovery of lead from
the lead-bearing materials. Battery manufacturers have increasingly integrated
their operations into the secondary market in addition to purchasing primary and
secondary lead from third parties such as Doe Run. Management estimates that the
secondary supply of lead will continue to increase in the foreseeable future, as
the availability of spent lead-acid batteries and
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other lead bearing materials requiring recycling increases. This trend is
expected to result in a more predictable pattern of lead supply.
Lead supply in the western world is also impacted by net exports of lead
from Eastern Europe, the former Soviet Union and China. Prior to 1990, these
regions were net importers of refined lead. In the early 1990s, these regions
experienced adverse economic conditions and consequently began exporting lead
and other metals to build hard currency reserves. Since 1994, exports from
Eastern Europe and the former Soviet Union have declined, which management
believes reflects both a reduction in inventories and production capabilities
resulting from the closure of inefficient facilities. Increased exports from
China have more than offset this reduction, resulting in an increase of net
exports to the western world in 1996. Preliminary industry data for 1997
indicates that net exports from China declined 30.0%, whereas consumption
increased 5.6%.
The price of refined lead in the western world reflects a combination of
factors including prevailing economic conditions, lead demand and the
availability of refined lead in the market. Lead prices are also affected by
international trade with non-western world producers that export lead into the
western world. The following table sets forth the average LME prices for lead
during each of the years 1988 to 1997.
<TABLE>
<CAPTION>
1988 1989 1990 1991 1992 1993 1994 1995
--------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
LME Prices (per pound)..................... $ .30 $ .31 $ .37 $ .25 $ .24 $ .18 $ .25 $ .29
<CAPTION>
1996 1997
--------- ---------
<S> <C> <C>
LME Prices (per pound)..................... $ .35 $ .28
</TABLE>
The LME price for lead as of March 31, 1998 was $.26 per pound. Management
attributes the decline from 1997 levels to a general slowdown in replacement
battery sales resulting from more moderate weather conditions in late 1996 and
early 1997 in North America and Europe.
COPPER
Copper ranks second to aluminum as the most widely used non-ferrous metal in
the world. Recognized for its metallurgical and physical properties, including
high electrical and thermal conductivity, corrosion resistance, ductility,
malleability and strength, copper is a versatile metal, used in its pure form
and in alloys in a variety of industrial markets. These markets include
construction, electrical and electronic parts, industrial machinery and
equipment, transportation and consumer products.
From 1987 to 1997, western world copper demand grew at a CAGR of
approximately 3.3%, during which time copper prices averaged $1.08 per pound. In
1997, western world copper consumption was estimated at 12.3 million tons, a
record level for the twelfth consecutive year, which represents a total market
of $25.3 billion. The following table sets forth the average LME prices for
copper during each of the years 1988 to 1997.
<TABLE>
<CAPTION>
1988 1989 1990 1991 1992 1993 1994 1995
--------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
LME Prices (per pound)..................... $ 1.18 $ 1.29 $ 1.21 $ 1.06 $ 1.04 $ .87 $ 1.05 $ 1.33
<CAPTION>
1996 1997
--------- ---------
<S> <C> <C>
LME Prices (per pound)..................... $ 1.04 $ 1.03
</TABLE>
The LME price for copper as of March 31, 1998 was $.79 per pound. Management
attributes the decline from 1997 levels to a general increase in metal
inventories following higher production levels against softening demand in Asia.
ZINC
Zinc is the third most widely used non-ferrous metals in the world, with
annual consumption exceeded only by aluminum and copper. Zinc is principally
used as an anti-corrosive coating to produce galvanized steel, which ultimately
is consumed in the automotive and construction industries. The galvanizing of
steel sheet and strip accounts for approximately 50% of annual zinc consumption
and is the largest growth sector for zinc. Other uses for zinc include alloys,
such as brass, used in a variety of consumer products and zinc-aluminum used in
the production of pressure die cast parts. From 1987 to 1997, western world zinc
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demand grew at a CAGR of approximately 2.4%, during which time zinc prices
averaged $.53 per pound. In 1997, western world zinc consumption was estimated
at 7.0 million tons, which represents a total market of $8.4 billion. The
following table sets forth the average LME prices for zinc during each of the
years 1988 to 1997.
<TABLE>
<CAPTION>
1988 1989 1990 1991 1992 1993 1994 1995
--------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
LME Prices (per pound)..................... $ .56 $ .78 $ .69 $ .51 $ .56 $ .44 $ .45 $ .47
<CAPTION>
1996 1997
--------- ---------
<S> <C> <C>
LME Prices (per pound)..................... $ .47 $ .60
</TABLE>
The LME price for zinc as of March 31, 1998 was $.50 per pound. Management
attributes the decline from 1997 levels to an increase in the availability of
zinc concentrates in the market.
SILVER
Silver historically has been used principally in coinage, reflecting its
monetary value as a precious metal. Presently, however, demand for silver is
predominately commercial, with uses in photography, electrical and electronic
products, tableware, jewelry, medicine and dentistry. Industrial demand, which
accounts for approximately 98% of total silver demand, increased 5.5% in 1997 to
799 million ounces, which represents a total market of $3.9 billion. From 1987
to 1996, western world silver demand grew at a CAGR of approximately 4.8%,
during which time silver prices averaged $5.19 per ounce. The following table
sets forth the average LBMA prices for silver during each of the years 1988 to
1997.
<TABLE>
<CAPTION>
1988 1989 1990 1991 1992 1993 1994 1995
--------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
LBMA Prices (per ounce).................... $ 6.53 $ 5.50 $ 4.83 $ 4.05 $ 3.95 $ 4.30 $ 5.28 $ 5.20
<CAPTION>
1996 1997
--------- ---------
<S> <C> <C>
LBMA Prices (per ounce).................... $ 5.20 $ 4.90
</TABLE>
The LBMA silver price as of March 31, 1998 was $6.33 per ounce. Management
believes that increases for 1997 reflects an imbalance between supply and demand
for silver, with the demand for silver for commercial applications exceeding the
available supply from producers.
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<PAGE>
BUSINESS
GENERAL
Doe Run is the largest fully-integrated lead producer in North America and
the second largest primary lead producer in the western world. Through its
subsidiary Doe Run Peru, Doe Run operates one of the largest polymetallic
processing companies in the world offering an extensive product mix of non-
ferrous and precious metals, including copper, silver, zinc, lead and gold. The
combined capabilities of Doe Run and Doe Run Peru represent the largest primary
lead producer in the western world.
On October 23, 1997, Doe Run Peru acquired Metaloroya from Centromin, a
Peruvian government-owned conglomerate, as part of the ongoing privatization
program sponsored by the government of Peru. On December 30, 1997, Metaloroya
was merged into Doe Run Peru.
The Company had pro forma net sales and EBITDA of $709.8 million and $74.5
million, respectively, for the twelve months ended October 31, 1997 and net
sales and EBITDA of $169.1 million and $17.7 million, respectively, for the
three months ended January 31, 1998.
DOE RUN
Doe Run's integrated operations permit Doe Run to participate in and manage
the entire lead life cycle, including the mining of lead ore, the production of
refined lead metal, the fabrication of value-added lead products and the
secondary recycling of spent lead-acid batteries and other lead-bearing
materials. Doe Run believes its reputation for excellent service, product
quality and timely delivery permits it to consistently realize premiums for its
products, resulting in sales prices above the market price for lead quoted on
the LME.
In fiscal 1997, Doe Run shipped approximately 350,000 tons of refined lead
metal and lead alloy products, including recycled lead, representing
approximately 19% of North American consumption and 6% of western world
consumption. Doe Run had net sales and EBITDA of $277.9 million and $31.9
million, respectively, for fiscal 1997, excluding the results of operations of
Doe Run Peru for the eight-day period from October 23, 1997 (the date of
consummation of the Acquisition) through October 31, 1997 and net sales and
EBITDA of $59.8 million and $1.7 million, respectively, for the three months
ended January 31, 1998.
Refined lead product sales accounted for approximately 67% and 68% of Doe
Run's total net sales, or $185.1 million and $41.0 million, respectively, in
fiscal 1997 and for the three months ended January 31, 1998, respectively. The
balance of Doe Run's net sales resulted from (i) tolling services provided to
major U.S. lead-acid battery manufacturers, (ii) lead production by-products,
including zinc and copper concentrates, and (iii) value-added fabricated lead
products, such as lead sheet and bricks. These net sales from tolling services,
by-products and fabricated products provide sources of revenue largely
independent of lead prices.
Western world lead consumption in 1997 was estimated at 5.8 million tons
which represents a total market of approximately $3.2 billion. Approximately 4.2
million tons, or 72%, of this lead was used in the production of lead-acid
batteries, approximately 75% of which was for SLI batteries. Approximately 83%
of SLI battery sales are in the automotive replacement market, a market with
stable demand characteristics, which is dependent upon the number of automobiles
in service and battery life.
Doe Run's customers include six of the seven largest lead-acid battery
manufacturers in the world. The lead-acid battery remains the most cost
competitive battery technology for SLI batteries, which management believes will
not change in the foreseeable future. Other uses for refined lead include
computer and television screens, ammunition, stationary batteries used as backup
power sources and rolled and extruded lead products used in radiation shielding
and roofing materials.
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<PAGE>
The market for refined lead continues to grow primarily as a result of
increasing demand for lead-acid batteries used for automobiles and other
vehicles as a result of worldwide economic growth. As a result, western world
lead consumption grew at a CAGR of 2.0% between 1987 and 1997, growing 0.75%
from 1996 to 1997. Doe Run believes that this growth rate will accelerate in the
future as batteries become an even larger portion of the lead market,
particularly in light of expected economic growth leading to increased vehicle
population in developing economies.
Approximately 45% of annual worldwide lead consumption is supplied from
newly mined or "primary" ore, and the balance is supplied from secondary
sources, principally the recycling of spent lead-acid batteries and other
lead-bearing materials. Since 1990, primarily due to heightened environmental
awareness, secondary lead capacity has increased, whereas primary lead capacity
has remained relatively constant. Management believes that secondary sources of
lead will continue to account for an increasing share of the total worldwide
lead market.
The average LME price for refined lead was $.29 per pound in fiscal 1997. As
of March 31, 1998, the LME price for lead was $.26 per pound, which was below
the ten-year average price of $.28 per pound. Management believes that lead
prices will remain relatively stable or will modestly increase for the remainder
of fiscal 1998 and over the long term will reflect the historical industry
average. As a result of the recent lead price decreases, the Company expects
that it will incur an operating loss in its U.S. operations that will adversely
affect its EBITDA in fiscal 1998.
Doe Run conducts its mining operations along approximately 40 miles of the
Viburnum Trend in Southeastern Missouri, one of the world's most productive lead
deposits. Doe Run operates six production shafts, four processing mills, one
primary smelter and one secondary smelter. During fiscal 1997, Doe Run mined in
excess of 5.0 million tons of ore containing average grades of 5.17% lead, 1.02%
zinc and 0.27% copper. At the end of fiscal 1997, Doe Run's proven and probable
reserves consisted of approximately 70 million tons, containing approximately
3.8 million tons of recoverable lead or approximately fourteen years of
production at current mining rates.
Doe Run's primary smelter in Herculaneum, Missouri is the largest in North
America and the second largest in the world, with an annual production capacity
of approximately 250,000 tons of refined lead. Since entering the recycling
business in 1992, Doe Run has become a leading producer of secondary lead at its
Buick recycling facility and secondary smelter located in Boss, Missouri. At
this facility, Doe Run is reclaiming at a rate of approximately 105,000 tons of
refined lead per year, approximately 60% of which is derived from tolling
arrangements with major U.S. battery manufacturers.
DOE RUN PERU
Doe Run Peru's unique combination of base metal smelters, refineries and
by-product circuits enable Doe Run Peru to process complex polymetallic
concentrates and to recover base metals and by-products at international quality
standards. Doe Run Peru's location in central Peru, approximately 110 miles from
Lima, allows Doe Run Peru to source concentrates advantageously from mines
located throughout the central Andes mountains, particularly in Peru. Moreover,
Doe Run Peru's proximity to Lima's Callao port provides it ready access to major
world markets for its products.
For the twelve months ended October 31, 1997 and the three months end
January 31, 1998 Doe Run Peru shipped approximately 70,000 tons and 18,000 tons,
respectively, of refined copper, 107,000 tons and 27,000 tons, respectively, of
refined lead, 71,000 tons and 18,000 tons, respectively, of refined zinc, 20.5
million ounces and 6.5 million ounces, respectively, of refined silver and
42,000 ounces and 13,000 ounces, respectively, of gold bullion. In addition, Doe
Run Peru shipped various by-products including bismuth, indium, tellurium,
antimony, cadmium and copper blister. Doe Run Peru had net sales and Adjusted
EBITDA of $431.9 million and $50.7 million, respectively, for the twelve months
ended October 31, 1997, including the period from October 23, 1997 through
October 31, 1997, and net sales and
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<PAGE>
EBITDA (excluding intercompany transactions) of $109.2 million and $16.0
million, respectively, for the three months ended January 31, 1998.
Of Doe Run Peru's net sales, refined copper, silver, zinc, lead and gold
accounted for 35%, 23%, 19%, 15% and 3%, respectively, for the twelve months
ended October 31, 1997, and 26%, 32%, 18%, 13% and 3%, respectively, for the
three months ended January 31, 1998, with the balance of net sales derived from
sales of various by-products. For the twelve months ended December 31, 1996, Doe
Run Peru was Peru's second largest exporter, exporting approximately 80% of its
total shipments to North America, Europe and Asia, as well as other Latin
American countries. Doe Run Peru's customers include end-users of base metals
and metal by-products, as well as international metal trading companies.
Doe Run Peru's operations consist of smelting and refining complex
concentrates that it purchases from unaffiliated mining operations. Doe Run Peru
typically purchases concentrate feedstock pursuant to annual contracts at a
price based on a percentage of the payable base metal and precious metal content
of the concentrates. The price is reduced by processing fees or treatment
charges to refine the concentrates, as well as by penalties charged to remove
impurities within the concentrates, such as arsenic, antimony and bismuth. Base
metal prices, treatment charges and penalties are generally established based
upon prevailing market conditions by reference to prices in the world market,
including on the LME. Currently, Doe Run Peru has entered into supply contracts,
primarily with one-year terms, that meet approximately 95% of its concentrate
requirements for fiscal 1998.
Doe Run Peru pays concentrate suppliers for the majority of the metal
content of the concentrates purchased and, thus, derives its operating profit
primarily from treatment charges and penalties. In addition, Doe Run Peru
generates operating profit from the sale of by-products, as well as from metals
sold at a premium to the price paid for such metal. Moreover, since Doe Run
Peru's metallurgical recoveries are typically in excess of the paid metal
percentages, Doe Run Peru further increases its operating profit from the sale
of the metal produced from such recoveries.
The markets for Doe Run Peru's products are global and continue to grow as a
result of worldwide economic growth. Given the diversity of its products and
by-products, Doe Run Peru's financial performance is not solely dependent upon
the prospects for any one of its products or by-products. Moreover, since Doe
Run Peru is a processor of complex concentrates and does not presently own any
mines from which it sources concentrates, Doe Run Peru's financial performance
is less sensitive to the volatility of base metal prices.
COMPETITIVE STRENGTHS
The Company believes that its competitive strengths include the following:
FOCUSED BUSINESS STRATEGY
The production of lead and related products is Doe Run's primary business,
whereas lead generally represents a small percentage of its competitors' overall
operations. As a result, Doe Run believes that its ability to quickly recognize
and respond to various trends that affect the lead industry and its customers
provide Doe Run with a preferred status with its customers. This responsiveness,
along with its reputation for excellent service, product quality and timely
delivery, permits Doe Run to consistently realize premiums for its products,
resulting in sales prices above the market price for lead quoted on the LME.
With the assistance and direction provided by Doe Run, Doe Run Peru, as a
private enterprise, is well positioned to recognize and respond to various
trends that affect the smelting and refining industry, as well as its customers.
Doe Run Peru will implement its business strategy with the operating flexibility
to (i) make discretionary capital expenditures and (ii) purchase an optimum mix
of concentrate feedstock from a wider range of suppliers than it could under the
constraints that existed as a government-owned enterprise.
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<PAGE>
DIVERSE PROCESSING CAPABILITIES
The combination of Doe Run's and Doe Run Peru's processing capabilities
provides the Company greater diversity in its net sales and EBITDA.
Specifically, with the Acquisition, approximately 74% and 75% of the Company's
net sales for the twelve months ended October 31, 1997 and the three months
ended January 31, 1998, respectively, were derived from (i) the treatment and
processing of base metal concentrates, including copper, silver, zinc, lead and
gold, (ii) the fabrication of lead and lead related products, (iii) the tolling
of spent lead-acid batteries for major U.S. lead-acid battery manufacturers and
(iv) the sale of zinc and copper concentrates. Such value-added tolling and
other products and services are less sensitive to base metal price fluctuations.
FAVORABLE ACCESS TO RAW MATERIALS
Peru and its neighboring Latin American countries, primarily Bolivia, are
significant producers of complex concentrates that contain multiple metals and
high levels of impurities. Doe Run Peru obtains substantially all of its lead
and zinc concentrates and approximately 80% of its copper concentrates from
Peruvian sources. Since Doe Run Peru operates one of the few complex concentrate
processing facilities in the world, Doe Run Peru obtains favorable pricing terms
from its concentrate suppliers due to the complex nature of the concentrates and
its proximity to the producing mines. As a result, Doe Run Peru believes that it
operates at a geographic competitive advantage to comparable facilities located
farther from their sources of complex concentrates. Currently, Doe Run Peru has
entered into supply contracts, primarily with one-year terms, that meet
approximately 95% of its concentrate requirements for fiscal 1998.
FLEXIBLE MINING OPERATIONS
Due to its extensive polymetallic ore resources, Doe Run has flexibility in
developing its mining and milling plans to take advantage of prevailing market
conditions for lead, zinc and copper. Depending on lead, zinc and copper prices,
Doe Run has the ability, to a certain extent, to optimize its mine production by
targeting certain ore grades in order to enhance operating margins. By
maintaining such flexibility, Doe Run is able to reduce its exposure to metal
price volatility.
U.S. DOLLAR-BASED REVENUES
The mining industry in which Doe Run Peru is a major participant is Peru's
largest export industry, representing approximately 45% of Peru's total export
sales in 1997. For the twelve months ended October 31, 1997 and the three months
ended January 31, 1998, exports accounted for 78% and 77%, respectively, of Doe
Run Peru's shipments and more than 79% and 72%, respectively, of its net sales.
In addition, substantially all of Doe Run Peru's net sales are denominated in
U.S. dollars. As a result, Doe Run Peru's net sales is less sensitive to foreign
currency fluctuations.
EXPERIENCED MANAGEMENT AND LABOR FORCE
Doe Run's management team has extensive experience in the mining and metals
production industry with an average of 23 years in the industry. The extensive
experience of the Doe Run management team complements the skills of Doe Run
Peru's executive personnel to provide Doe Run Peru with the strong management
team necessary to compete as a private enterprise in the world markets. In
addition, the Company employs a highly skilled workforce whose average tenure
with the Company is more than 20 years.
HIGH BARRIERS TO ENTRY
Management believes that the capital costs and environmental requirements
associated with constructing facilities comparable to those of the Company
result in high barriers to entry for prospective entrants. Management estimates
that it would cost approximately $700 million to establish mining, milling
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<PAGE>
and smelting operations with the production capacity and efficiency of Doe Run.
Moreover, management is not aware of any significant mineral deposit in North
America with lead grades and reserves similar to that of the Viburnum Trend.
With respect to Doe Run Peru, management estimates that it would cost
approximately $950 million to establish smelting and refining operations with
the production capacity and efficiency of Doe Run Peru. Management believes that
the cost and time commitment required to achieve commercial production for any
new mining, milling, smelting or processing operation, including regulatory
approvals, heightens the barriers to entry.
BUSINESS STRATEGY
The Company's business strategy is to improve its operations and financial
performance by focusing on the following principal elements:
INCREASE CAPACITY AND IMPROVE OPERATING EFFICIENCIES
Doe Run is committed to improving its operating efficiencies through focused
capital investments that increase capacity utilization, enhance productivity and
lower costs. Since the acquisition of Doe Run by Renco in April 1994, Doe Run
has completed approximately $34.4 million of capital investments through January
31, 1998 designed in part to reduce production costs and improve product
quality. Additionally, Doe Run seeks to identify non-capital cost reduction
opportunities throughout its operations. Doe Run has increased its primary lead
production capacity from the original annual capacity of 225,000 tons to
approximately 250,000 tons presently with minimal capital investment. In
addition, Doe Run has increased its secondary lead production capacity from the
original annual capacity of 60,000 tons to approximately 105,000 tons presently
with minimal capital investment.
The Company has identified a number of strategic initiatives designed to
improve Doe Run Peru's operating efficiencies and its competitive position
within the industry through focused capital investment. In furtherance of this
strategy, Doe Run Peru has adopted a ten-year Capital Investment Program of
approximately $300.0 million in an effort to enhance various elements of Doe Run
Peru's operations. The Capital Investment Program will target specific areas of
Doe Run Peru's facilities, such as the copper and lead circuits, to improve
product quality, increase capacity, improve productivity and reduce costs in the
targeted area, thereby enhancing Doe Run Peru's net sales and EBITDA. In
addition, the Capital Investment Program is designed to help achieve compliance
with applicable environmental standards in Peru.
MAINTAIN AND BUILD STRONG RELATIONSHIPS WITH STRATEGIC CUSTOMERS
Through its ongoing research and development efforts and customer service
initiatives, Doe Run strives to build and maintain strong relationships with its
customers. Since lead is Doe Run's principal business, Doe Run sales and
technical professionals are dedicated to working closely with Doe Run's
customers to be responsive to their needs, such as small order quantities,
specialized shapes, sizes and alloys, technical assistance and flexible
deliveries.
As a private enterprise, Doe Run Peru is implementing many of the successful
customer service initiatives utilized by Doe Run to build and maintain strong
relationships with its customers. Such initiatives will include ongoing research
and development efforts, technical assistance and other customer service
practices that will encourage a close working relationship with Doe Run Peru's
customers. In addition, Doe Run Peru is shifting the focus of its marketing
efforts to end users of its products from international trading companies.
OPTIMIZE CONCENTRATE SUPPLY AT DOE RUN PERU
As a private enterprise, Doe Run Peru is endeavoring to optimize the mix of
complex concentrates from a wider range of suppliers than it purchased as a
government-owned enterprise. Historically, Doe
69
<PAGE>
Run Peru obtained the vast majority of its concentrate requirements from
Centromin mines, typically pursuant to annual contracts. Given Doe Run Peru's
unique position as one of the few processing facilities in the world for complex
concentrates, Doe Run Peru will source its raw materials on a competitive basis
within Peru from both Centromin mines and private mines, as well as from other
Latin American suppliers. Currently, Doe Run Peru has entered into supply
contracts, primarily with one-year terms, that meet approximately 95% of its
concentrate requirements for fiscal 1998.
GROW DOE RUN'S CORE LEAD BUSINESS
Doe Run seeks to increase sales and operating cash flow through the growth
of its core lead operations. Such efforts include increased sales of refined
lead resulting from the expansion of its primary lead production capacity. In
addition, Doe Run strives to expand its product offerings of value-added
fabricated products including various shapes, sizes and alloys. Margins on
fabricated products are relatively insensitive to lead price fluctuations
because such fluctuations are generally reflected in the price of the end
product. Doe Run is also growing its recycling and related tolling business with
U.S. lead-acid battery manufacturers pursuant to contractual agreements under
which recycled lead is returned to the supplier in exchange for a processing
fee. Such processing fee is generally independent of lead prices.
BROADEN REVENUE SOURCES THROUGH STRATEGIC ACQUISITIONS
The Company seeks to broaden its revenue sources through the acquisition of
related resource assets or businesses that capitalize on the combined experience
of Doe Run and Doe Run Peru in mining, milling, smelting and refining base and
precious metals. With respect to Doe Run, such opportunities, domestic or
international, could be operations in primary or secondary lead production, lead
fabrication or non-lead resource businesses. With respect to Doe Run Peru, such
opportunities could include the acquisition of mining assets in Peru or other
Latin American countries, including, without limitation, those presently
undergoing privatization in Peru.
The Acquisition reflects the Company's business strategy of broadening its
revenue sources through a strategic acquisition, focusing on treatment and
processing of base metal concentrates, as well as other metal related services.
In particular, Doe Run Peru represented a unique opportunity for Doe Run to
capitalize on Doe Run's extensive experience in efficiently managing mature
smelter operations. Through the focused investment of capital and the
implementation of Doe Run's operating practices, Doe Run Peru believes that it
will increase its refined metals capacities and improve product quality, thereby
enhancing financial performance through increased revenues and EBITDA.
In April 1998, Doe Run entered into a letter of intent with ASARCO to
purchase certain assets relating to ASARCO's lead business in Missouri,
including a smelter and refinery and two mines. The anticipated purchase price
for these assets is approximately $50.0 million, plus contingent deferred
purchase price payments over a period not to exceed five years in an aggregate
amount not to exceed $12.5 million. This transaction is subject to satisfactory
completion of Doe Run's due diligence review and negotiation of a definitive
agreement, as well as obtaining certain governmental and third party approvals.
Doe Run has only recently commenced its due diligence review and currently
cannot assess the likelihood that this transaction will be consummated.
Accordingly, there can be no assurance that a definitive agreement related to
this transaction will be entered into or that the required governmental
approvals will be obtained.
DOE RUN
PRODUCTS AND SERVICES
Doe Run's principal products include refined lead from primary and secondary
sources, fabricated products, zinc and copper concentrates and other
by-products. In addition, Doe Run provides tolling
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services where it receives a processing fee for recycling spent lead-acid
batteries and other lead-bearing materials. The following table sets forth net
sales for each of Doe Run's products and services:
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
----------------------------------
1995 1996 1997
---------- ---------- ----------
<S> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Primary Lead................................................................. $ 148,067 $ 165,932 $ 156,077
Secondary Lead: Tolling...................................................... 14,435 15,119 22,369
Metal Sales................................................... 19,156 29,782 29,039
Other......................................................... 3,175 3,910 6,063
Fabricated Products.......................................................... 1,643 9,294 24,121
Zinc Concentrates............................................................ 17,694 22,363 24,772
Copper Concentrates.......................................................... 11,619 12,431 8,822
Other........................................................................ 9,354 16,099 6,633
---------- ---------- ----------
Total.................................................................... $ 225,143 $ 274,930 $ 277,896
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
PRIMARY LEAD
Doe Run produces high quality refined lead products at its primary
Herculaneum smelter, including 99.99% pure lead, the purest commercial lead
available. Doe Run also provides a wide variety of product shapes and sizes, as
well as a complete series of lead alloys to meet the specialty demands of its
customers. Primary lead is used in automotive batteries, computer and television
screens, forklift, marine and golfcart batteries, stationary batteries used as
backup power sources, as well as rolled and extruded lead products in radiation
shielding and roofing materials. High purity lead is required for newer high
technology batteries, and is preferred by battery manufacturers for lead oxide,
the electrically active component of lead-acid batteries. Doe Run's lead alloy
products are used in the manufacture of numerous fabricated products, as well as
for ammunition.
SECONDARY LEAD
Doe Run produces secondary lead at its recycling facility located in Boss,
Missouri, where it recycles spent lead-acid batteries and other lead-bearing
materials. Of Doe Run's secondary lead production, approximately 60% is derived
from tolling arrangements with battery manufacturers. Under such multi-year
arrangements, manufacturers send spent batteries to Doe Run, which recovers the
lead and returns it to the battery manufacturer for a processing fee. As part of
such arrangements, Doe Run offers its tolling customers the opportunity to
purchase or receive primary lead or lead alloys in exchange for their spent
lead-acid batteries at specified economic terms. Due to the terms of these
arrangements, Doe Run's operating profits from this service are largely
unaffected by lead price fluctuations. In addition to revenues resulting from
tolling services, Doe Run directly sells secondary lead and recycles other
lead-bearing materials for which it receives processing fees.
FABRICATED LEAD PRODUCTS
Doe Run processes lead metal into custom products such as: lead oxide, the
key ingredient in lead-acid batteries; lead anode plates used in copper
refining; x-ray and radiation shields for the medical profession; roof flashings
for the construction industry; and lead for ammunition. Doe Run also installs
radiation shielding in hospitals and cancer treatment centers and installs and
maintains lead-lined storage tanks and pollution control devices for the
chemical, petroleum and smelting industries. Margins on Doe Run's sales of
value-added products are relatively insensitive to lead price fluctuations, as
Doe Run generally is able to reflect such fluctuations in the price of the end
product.
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ZINC CONCENTRATES
Doe Run mines zinc as a by-product of its lead-mining operations. Zinc
concentrates are sold on the open market or to zinc smelters. In fiscal 1997,
Doe Run produced approximately 70,000 tons of zinc concentrates, with an average
metal content of 59.6% zinc.
COPPER CONCENTRATES
Doe Run mines copper as a by-product of its lead operations. Copper
concentrates are sold on the open market or to copper smelters. In fiscal 1997,
Doe Run produced approximately 27,000 tons of copper concentrates, with an
average metal content of 29.1% copper.
OTHER PRODUCTS AND SERVICES
Doe Run produces various other by-products resulting from the production of
lead. Such products include sulfuric acid which is sold to fertilizer
manufacturers, as well as primary and secondary furnace drosses, which are sold
to custom smelters for further recovery of various minerals. The secondary
facility also sells polypropylene and sodium sulfate and provides other
services, including stripping of lead-sheathed cable and recycling of various
hazardous materials.
MARKETING AND SALES
Doe Run's marketing and sales strategy is to maximize the net realized
selling prices for its products. In furtherance of this strategy, Doe Run
provides its customers small order quantities, specialized shapes, sizes and
alloys, technical assistance and flexible deliveries.
Doe Run generally sells lead on a delivered basis with freight charges
included. Doe Run's central U.S. location allows it to have transportation costs
significantly lower than its major competitors with operations outside of North
America. Moreover, due to its location, Doe Run is able to provide its customers
just-in-time delivery at a lower cost than most of its competitors.
Doe Run is actively involved with several customers in developing new uses
for lead. Such uses include lead foil for advanced lead-acid batteries, low
radiation lead solder for printed circuit boards and superior lead alloys for
optimizing battery performance.
Zinc and copper concentrates generally are sold to North American smelters
pursuant to multi-year (typically three year) contracts awarded under a bid
process. Due to Doe Run's geographic location, transportation costs for its zinc
and copper concentrates are low relative to its competitors' costs. Similar to
lead, transportation costs are a significant factor in selling concentrates.
Doe Run's sales of lead metal, concentrates and by-products are handled by
Doe Run's staff of direct sales people assisted by customer service
representatives. Technical assistance is provided by plant operating personnel.
CUSTOMERS
Doe Run had approximately 160 lead metal customers in fiscal 1997, of which
the five largest accounted for approximately 41% of Doe Run's lead metal net
sales. Approximately 70% of Doe Run's lead sales were pursuant to contractual
agreements, typically one year or less. Such contracts generally set forth
minimum volume and pricing terms. Exports represented approximately 7% of Doe
Run's net sales in fiscal 1997.
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Doe Run's customers include six of the seven largest lead-acid battery
manufacturers in the world. JCI purchased lead and tolling services representing
approximately 12% of Doe Run's fiscal 1997 net sales. In addition, Big River
purchased zinc concentrates, which represented approximately 10% of Doe Run's
net sales in fiscal 1997.
COMPETITION
Doe Run is the largest fully-integrated lead producer in North America and
the second largest primary lead producer in the western world. The leading
producer of lead in the world is Quexco Incorporated ("Quexco"), with operations
in Europe, as well as North America where Quexco operates secondary operations
under the name of RSR Corporation ("RSR"). Metaleurop S.A. is a significant
European producer of both primary and secondary lead. In North America, Doe
Run's principal competitors in primary lead include Cominco Ltd., ASARCO,
Noranda Inc. and Industrias Penoles S.A. In secondary recycling of lead, Doe Run
competes with Exide, which is also a customer of Doe Run, GNB Inc., RSR and
several other smaller industry participants.
PRODUCTION PROCESS
Doe Run produces refined lead metal from its primary processing facility, as
well as through its secondary recycling operations. Summarized below is a
description of the production process for primary and secondary lead production.
PRIMARY
The production of lead involves three major stages: mining, milling and
smelting.
MINING AND MILLING. Doe Run operates six production shafts and four
processing mills, including one mill presently maintained on a stand-by basis.
Doe Run's polymetallic ore bodies are mined using the "room and pillar" method.
With this method, ore is removed by blasting in a manner that leaves pillars to
support the rooms created by the removed ore. Mining involves drilling and
blasting limestone rock 500 to 1,000 feet below the earth's surface. The ore is
hauled by large, diesel-powered equipment before being hoisted above ground to
the mill. During fiscal 1997, Doe Run's mining operations produced in excess of
5.0 million tons of ore, containing average grades of 5.17% lead, 1.02% zinc and
0.27% copper.
The milling process includes further crushing and grinding, subsequent to
which the ore is treated in a flotation process to separate and concentrate the
minerals. The milling process recovers payable minerals from the ore. The
remaining materials, or tailings, are sent to settling ponds near the mill
sites, which are operated and maintained to ensure groundwater purity.
The final products are lead, zinc and copper concentrates that are shipped
off-site for smelting. The lead concentrates are shipped to the Herculaneum
smelter, while zinc and copper concentrates are marketed to other firms.
SMELTING. Located on the Mississippi River, south of St. Louis, the
Herculaneum smelter is the largest lead smelter in North America and the second
largest in the world. The smelter commenced operations in 1892 and has been in
continuous operation since that time, processing lead concentrates from Doe
Run's mining and milling operations. The smelter has a capacity of 250,000 tons
per year and utilizes a pyrometallurgical process to produce 99.99% refined
lead.
The annual capacity of the smelter was recently upgraded to approximately
250,000 tons following the introduction of certain process control improvements
at the blast furnace and other plant modifications. Doe Run is in the process of
further increasing the capacity to approximately 270,000 tons per year. Doe Run
recently completed construction of a $7.2 million 550-foot tall emissions stack
that has allowed
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production capacity to increase at its primary smelter and improved the
facility's environmental performance.
Consistent with Doe Run's commitment to product quality and customer
service, in January 1998, Doe Run's Herculaneum facility obtained ISO 9002
certification, an internationally recognized quality system standard.
SECONDARY
Located in Boss, Missouri, Doe Run's recycling facility processes spent
lead-acid batteries and other lead-bearing materials. The facility is a Resource
Conservation Recovery Act approved site. The facility employs a sophisticated
monitoring system to prevent leaks from penetrating the surrounding environment.
In fiscal 1997, the facility reclaimed approximately 105,000 tons of refined
lead. Approximately 60% of this total results from tolling contracts, while 53%
of the total supply resulted from automobile batteries. Production capacity has
been increased to approximately 110,000 tons currently from the original
capacity of 60,000 tons with minimal capital investment.
At Doe Run's recycling facility, whole batteries are dismantled in a hammer
mill, and the components are recovered by a combination of screening and gravity
separation in water columns. Grids and posts are collected in a bin,
polypropylene is loaded into trucks and lead paste is separated for further
treatment. Grids and posts are melted in a rotary furnace to produce antimonial
lead alloys. The paste is processed in a reverberatory furnace to produce pure
lead and a high antimony slag which is further processed in a blast furnace to
recover additional lead, antimony and tin. The remaining slag is disposed of as
a non-hazardous material at a licensed facility. Management believes this
recycling facility generates two-thirds less waste than traditional battery
recycling facilities.
Consistent with Doe Run's commitment to product quality and customer
service, in April 1997, Doe Run's recycling facility obtained ISO 9002
certification.
MINING OPERATIONS
GEOLOGY
Doe Run's operations are centered around the ore-rich Viburnum Trend in
Southeastern Missouri. Approximately 500 million years ago, the Precambrian core
of the St. Francois Mountains formed a group of islands. The water around these
islands was shallow, and algae formed a reef around them. Over time, the islands
and the reef were covered by sea water and layers of sediment. These layers
eventually hardened into rock. Mineral-bearing fluids flowed through the rock,
depositing substantial amounts of lead, zinc and copper near and in the reef.
Portions of this reef and surrounding areas contain valuable mineral deposits
now known as the Viburnum Trend.
Doe Run's Viburnum Trend ore body is predominantly in the Bonne Terre
geologic formation, which is dolomitic limestone. The principal metallic
constituents are lead, zinc and copper, with trace amounts of silver. The ore
body being mined is an irregular mass of sulfide ores, principally lead, zinc
and copper sulfides, approximately 1,000 feet in depth and with varying widths
of up to 2,000 feet.
PRODUCTION SHAFTS
Doe Run's mining operations utilize six production shafts that form a
north-south line along approximately 40 miles of its Viburnum Trend ore body.
Three production shafts, Viburnum-28, Viburnum-29 and Viburnum-35, lie within a
five-mile radius east, north and south, respectively, of Viburnum, Missouri. The
Buick, Brushy Creek and Fletcher production shafts are five miles, sixteen miles
and twenty miles, respectively, south of Viburnum, Missouri. All of Doe Run's
mining and milling facilities are
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accessible by state or county roads or Company-owned haul roads. Products are
shipped by truck over public roads or by rail, with rail loading capabilities at
two of Doe Run's mining facilities.
Five of the production shafts, Viburnum-28, Viburnum-29, Viburnum-35, Brushy
Creek and Fletcher, were developed by predecessors of Doe Run. The sixth
production shaft, Buick, was developed and initially operated by a joint venture
of Homestake Mining Company and American Metal Climax (the "Homestake Joint
Venture") in the 1960s. In 1986, the Buick mining operations became part of Doe
Run's Predecessor.
Doe Run owns the property where the necessary surface structures for mining
and milling are located. The mineral rights are held either by fee title or
mineral leases with either private landowners or the federal government. There
are numerous mineral exploration leases, most of which are for exploration of
new mineral ore deposits. Four of the production leases are private leases, and
nine are government leases. The mineral leases with private landowners have no
expiration periods. The government leases are for a period of ten years and are
renewable. The related mining operations are conducted pursuant to four
development contracts, which also are for ten years subject to renewal. The
Viburnum, Fletcher, Buick and Brushy Creek development contracts consist of
four, two, one and two leases, respectively, which are due for renewal March 31,
2018, May 31, 2003, October 31, 2004 and May 31, 2003, respectively. Doe Run is
required to make royalty payments under the leases.
The production shafts are approximately 1,000 feet deep, with the exception
of Viburnum-28 and Viburnum-29 which are 800 feet and 500 feet deep,
respectively. All mining by Doe Run is performed underground on one level by the
room and pillar method. Blasting typically is accomplished by using an ammonium
nitrate fuel oil mix; however, dynamite is used under wet conditions. Front-end
loaders are used to load the blasted ore onto trucks that haul the ore from the
production face to the production shaft.
Doe Run maintains fleets of trucks, drilling equipment and loading
equipment, which generally are rubber-tired and diesel-powered, at each of its
production shafts. The equipment is of various ages, and much of the older
equipment has been upgraded or rebuilt. Doe Run employs a computerized
maintenance scheduling and tracking system that directs and monitors preventive
maintenance and repair activities of all equipment. In addition to maintaining
its existing equipment, Doe Run has recently acquired or leased new equipment
which enhances operating efficiencies, such as low-profile equipment capable of
operating in ten-foot openings rather than the standard twelve-foot openings and
drilling equipment for removal of pillars in excess of 40 feet in height.
EXPLORATION
Doe Run continues to explore actively within the Viburnum Trend and
historically has replaced a significant portion of annual production with new
reserves. A development project is on-going in the northern section of the
Viburnum-28 mining area with a view to opening additional ore reserves. In
addition, limited surface exploration drilling is being conducted in this area.
Doe Run is engaged in limited surface diamond drilling beyond the extreme north
and south ends of the Viburnum-29 mining area. At Viburnum-35, development
activity is focused on developing the eastern blanket ore body access, and in
the northern section of the mining area, following the main mineralization
trend. Doe Run has initiated a 4,500-foot drift from the northern end of the
Brushy Creek mining area to the southern extremity of the Buick mining area.
Surface exploration drilling continues in areas south of the present Brushy
Creek mining area. Exploration is being actively pursued south of the Fletcher
mining area, where mineralization is present but not yet delineated sufficiently
to constitute ore reserves. Doe Run also holds exploration tracts outside the
Viburnum Trend, which are being actively explored. In fiscal 1997, Doe Run spent
$6.2 million on exploration activities, including $2.6 million outside the
Viburnum Trend.
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FACILITIES
The following table sets forth the location of and certain other information
about Doe Run's facilities:
<TABLE>
<CAPTION>
SIZE
-------------------------
FACILITY LOCATION LAND FACILITY
- -------------------------------------------------------------- -------------------------- ----------- ------------
<S> <C> <C> <C>
(SQUARE
(ACRES) FEET)
MINING AND MILLING:
Viburnum (three production shafts)............................ Viburnum, Missouri 679 139,000
Buick......................................................... Boss, Missouri 82 144,000
Brushy Creek.................................................. Bunker, Missouri 400 92,000
Fletcher...................................................... Bunker, Missouri 162 88,000
SMELTING:
Herculaneum--Primary.......................................... Herculaneum, Missouri 235 365,000
Buick--Secondary.............................................. Boss, Missouri 193 200,000
FABRICATING:
Seafab(a)..................................................... Casa Grande, Arizona (b) 75,000
Seattle, Washington (b) 43,000
Vancouver, Washington (b) 15,000
Lone Star..................................................... Houston, Texas (b) 33,000
</TABLE>
- ------------------------
(a) FPI is currently relocating its remaining lead oxide manufacturing
operations from the Seattle facility to Vancouver, Washington. Upon
completion of the relocation, the Seattle facility will be closed.
(b) This facility is leased.
Doe Run operates three mills and maintains one on stand-by status. The
Viburnum mill is located on the eastern edge of Viburnum, Missouri, and has the
largest capacity of any mill in the area with its 12,000 ton per day
concentrator. Ores from Viburnum-28, Viburnum-29 and Viburnum-35 are processed
at the Viburnum mill. The Buick mill is located at the site of the Buick
production shaft, and its concentrator has a capacity of 7,200 tons per day.
Ores from Buick and Brushy Creek are processed at the Buick mill. The Fletcher
mill is located at the site of the Fletcher production shaft, and its
concentrator has a capacity of 5,000 tons per day. The Fletcher mill processes
ores from the Fletcher production shaft. The Brushy Creek mill is located at the
site of the Brushy Creek production shaft, and its concentrator has a capacity
of 5,000 tons per day. This mill presently is on stand-by. At the Viburnum mill
and Buick mill, lead concentrates are placed in rail cars for transport to the
Herculaneum smelter; however, the Fletcher mill does not have rail access, and
accordingly, lead concentrates are first trucked to the Buick mill for transport
by rail. Zinc and copper concentrates are shipped from the mills to smelter
customers by rail or truck.
The Herculaneum primary lead smelter is located approximately 35 miles south
of St. Louis on the Mississippi River in Herculaneum, Missouri. The St. Joseph
Lead Company, a predecessor of Doe Run, built the first smelting operation on
the property in 1892. The last reconstruction of the smelter facility was in the
mid-1960's. Doe Run owns the smelter property.
The recycling facility, with its secondary smelter, located in Boss,
Missouri, was constructed in 1991, on the site of a former primary lead smelter.
The recycling facility utilizes some of the existing structures and equipment
from the primary lead smelter. The primary smelter was originally owned and
operated by the Homestake Joint Venture. This property was also acquired
initially by Doe Run's Predecessor.
In addition to ongoing capital investments, Doe Run has expended an average
of approximately $59.5 million per year on maintenance during fiscal 1995
through 1997. As a result of these expenditures and
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ongoing efforts, Doe Run believes that it operates and will continue to maintain
modern and efficient facilities.
ELECTRICAL POWER
The electric power source for all the facilities, except Viburnum-35, is
Union Electric Company, a public utility headquartered in St. Louis, Missouri.
Viburnum-35 obtains its electric power from Black River Co-op.
RESERVES
As of March 31, 1998, Doe Run's Viburnum Trend ore reserves consisted of
approximately 8.9 million proven tons and 55.2 million probable tons, containing
approximately 3.5 million tons of recoverable lead or approximately fourteen
years of production at current mining rates. The term "proven reserves" means
ore reserves for which (a) quantity is computed from dimensions revealed in
outcrops, trenches, workings or drill holes; grade and/or quality are computed
from the results of detailed sampling and (b) the sites for inspection, sampling
and measurement are spaced so closely and the geologic character is so well
defined that size, shape, depth and mineral content of reserves are
well-established. The term "probable reserves" means ore reserves for which
quantity and grade and/or quality are computed from information similar to that
used for proven reserves, but the sites for inspection, sampling and measurement
are farther apart or otherwise less adequately spaced. The degree of assurance,
although lower than that for proven reserves, is high enough to assume
continuity between points of observation.
The following table sets forth the mineral inventory and mineable reserves
as of March 31, 1998 for Doe Run's Viburnum Trend ore body, which have been
audited by Pincock, Allen & Holt, Lakewood, Colorado, an international mineral
industry consulting firm. The term "mineral inventory" applies to the mineral
zone that has been defined by extensive sampling to define grade and tonnage and
can be classified as to various confidence categories, but excludes
consideration of recoverability or how the mineralization will be extracted. The
term "mineable reserves" refers to the portion of the mineralization that has
been defined as extractable for mining purposes, including provision for mining
dilution and losses that may occur during extraction, as containing ore of
sufficient grade, thickness and tonnage to be economically mineable under normal
circumstances, provided reserves are sufficient to justify development costs.
RESERVE AUDIT--MINEABLE RESERVES
AS OF MARCH 31, 1998
<TABLE>
<CAPTION>
GRADE
---------------------------------
TONS LEAD ZINC COPPER
------------- --------- --------- -----------
<S> <C> <C> <C> <C>
(IN
THOUSANDS)
Mineral Inventory........................................................ 121,960 4.76% 0.93% 0.23%
Mineable Reserves: Proven................................................ 8,916 8.50 1.72 0.40
Probable................................................ 55,150 4.97 1.05 0.24
------------- --------- --- ---
Total................................................ 64,065 5.46 1.20 0.28
------------- --------- --- ---
------------- --------- --- ---
</TABLE>
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MINING AND MILLING
The following table sets forth production information for Doe Run's mining
and milling operations for the three years ended October 31, 1997.
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
-------------------------------
1995 1996 1997
--------- --------- ---------
<S> <C> <C> <C>
Wet tons (in thousands) of ore milled.................................................... 3,956 4,869 5,168
No. of operating days.................................................................... 252 253 252
Average tons (in thousands) per operating day............................................ 16 19 21
Average ore grade:
Lead................................................................................... 5.7% 5.2% 5.2%
Zinc................................................................................... 1.1% 1.1% 1.0%
Copper................................................................................. 0.3% 0.3% 0.3%
Lead concentrate:
Tons (in thousands).................................................................... 267 303 314
Average Lead grade..................................................................... 76% 77% 79%
Tons (in thousands) of lead metal contained in concentrate............................. 204 234 247
Zinc concentrate:
Tons (in thousands).................................................................... 54 69 70
Average Zinc grade..................................................................... 59% 59% 60%
Tons (in thousands) of zinc metal contained in concentrate............................. 32 40 42
Copper concentrate:
Tons (in thousands).................................................................... 25 31 27
Average Copper grade................................................................... 29% 28% 29%
Tons (in thousands) of copper metal contained in concentrate........................... 7 9 8
</TABLE>
RAW MATERIALS
Doe Run's operations utilize various raw materials, principally coke,
electricity, natural gas, propane and spent batteries. Doe Run believes that it
has adequate sources of these raw materials to meet its present production
needs.
ENVIRONMENTAL MATTERS
Doe Run is subject to numerous federal, state and local environmental laws
and regulations governing, among other things, air emissions, waste water
discharge, solid and hazardous waste treatment, and storage, disposal and
remediation of releases of hazardous materials. In common with much of the
mining industry, Doe Run's facilities are located on sites that have been used
for heavy industrial purposes for decades and may require remediation.
Environmental laws and regulations may become more stringent in the future which
could increase costs of compliance.
Doe Run is a defendant in several lawsuits alleging certain damages from
lead emission stemming from the operations at the Herculaneum smelter. The cases
brought in the Circuit Court, 23rd Judicial Circuit at Hillsboro, Jefferson
County, Missouri are: KARLA RICHARDSON, ET AL. V. THE DOE RUN RESOURCES CORP.,
ET AL., Case No. 195-5492-CC-J4, filed September 12, 1995; SARA DIXON, ET AL. V.
THE DOE RUN RESOURCES CORP., Case No. 195-5112 CC-J1, filed August 25, 1995;
RONALD HEATH, ET AL. V. THE DOE RUN RESOURCES CORP. ET AL., Case No.
195-6936-CC-J2, filed November 20, 1995; and ANDREA MASSA, ET AL. V. THE DOE RUN
RESOURCES, ET AL., Case No. 195-7290-CC-J3, filed December 8, 1995. Two of these
cases are class action lawsuits. In one case, the plaintiffs seek to have
certified two separate classes. The first class would consist of property owners
in a certain section of Herculaneum, alleging that property values have been
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damaged due to the operations of the smelter. The second class alleged is
children who lived in Herculaneum during a period of time when they were six
months to six years old, and the remedy sought is medical monitoring for the
class. The second class action similarly is seeking certification of a class of
property owners allegedly damaged by operations from the smelter, but the
potential size of the class is every home in Herculaneum, Missouri. The other
two cases are personal injury actions by fourteen individuals who allege damages
from the effects of lead poisoning due to operations at the smelter. Punitive
damages also are being sought in each case. Doe Run is vigorously defending all
of these claims. Preliminary investigation and research by Doe Run indicates
property values in Herculaneum are consistent with those of surrounding
communities and have not been affected by the smelter. Finally, based on rules
for class certification, Doe Run believes class certification is not
appropriate. However, because the cases are in the early stages of discovery,
Doe Run is unable at this time to state with certainty the expected outcome of
and the final costs of any of these cases. Therefore, there can be no assurance
that these cases would not have a material adverse effect on the results of
operations, financial condition and liquidity of Doe Run.
Primary smelter slag produced by and stored at the Herculaneum smelter is
currently exempt from hazardous waste regulation under the Resource Conservation
and Recovery Act of 1976, as amended ("RCRA"). However, the EPA recently
published a proposed rule which, if adopted, would require this slag to be
managed as a hazardous waste. Certain other waste materials, including baghouse
dust, generated at the smelter and now recycled in the smelter may also become
regulated as hazardous wastes. At this time, Doe Run cannot predict the final
outcome of the EPA's proposed rule. However, if the slag or other wastes at the
smelter are regulated as hazardous waste, Doe Run may be required to take
corrective action under RCRA at the smelter, as well as to adopt stricter
management practices for these wastes, which could have a material adverse
effect on the results of operations, financial condition and liquidity of Doe
Run. Disposal of the slag at the plant site as a hazardous waste could result in
potential capital and operating costs of approximately $1.0 million per year.
The area surrounding the Herculaneum smelter currently is out of compliance
with the ambient air quality standard for lead promulgated under the federal
Clean Air Act. Doe Run is working with regulators to develop a new three-year
compliance plan to begin after fiscal 1998 to implement identified control
measures. Under the Clean Air Act, there are no penalties for failure to meet
the ambient air quality standard. Nevertheless, penalties could be imposed
should Doe Run fail to meet the terms of the new three-year compliance plan. Doe
Run expects to make capital expenditures for additional control measures
totaling approximately $2.8 million for fiscal 1998 while the plan is developed
and anticipates a minimum total amount of $3.0 million for the three-year plan.
Doe Run has received notice that it is a potentially responsible party
("PRP") subject to liability under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA"), at the following
sites: four sites in St. Francois County, Missouri, including the Big River Mine
Tailings site, the Bonne Terre site, the Federal site and the National site; the
Oronogo-Durenweg site in Jasper County, Missouri; the Cherokee County site in
Cherokee County, Kansas; the Tar Creek site in Ottawa County, Oklahoma; the
Block "P" site in Cascade County, Montana; and the Missouri Electric Works site
in Cape Girardeau, Missouri. There are four additional sites in St. Francois
County for which the EPA has indicated it will issue notice. These sites involve
historical operations of predecessors of Doe Run. CERCLA provides for strict
and, in certain circumstances, joint and several liability for response costs
and natural resource damages. Doe Run has a reserve as of October 31, 1997 of
$17.8 million for these sites, including the four additional sites in St.
Francois County, which Doe Run believes is adequate based on its investigations
to date. However, depending upon the types of remediation required and certain
other factors, costs at these sites, individually or collectively, could have a
material adverse effect on the results of operations, financial condition and
liquidity of Doe Run.
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Doe Run signed a voluntary Administrative Order of Consent ("AOC") in 1994
with the EPA to remediate the Big River Mine Tailings Site. In February 1997,
Doe Run signed an AOC to perform an Engineering Evaluation/Cost Analysis on the
Bonne Terre Site. In addition to remediating the mine waste areas at these
sites, Doe Run has signed an AOC with the EPA to conduct a Remedial
Investigation/ Feasibility Study ("RIFS") to assess potential off-site impacts
of site operations on and the need for remediation regarding groundwater,
residential soils, several creeks and a river. The RIFS is being conducted by a
third party and is approximately one-half complete, with completion expected
within one year. Doe Run believes the current reserves assigned to these sites
are adequate. However, should remediation goals or areas change, requiring
substantially increased measures, there can be no assurance that the reserves
would be adequate.
The Block "P" site in Montana was a polymetallic mine with a waste facility
located on U.S. Forest Service land. Studies of the tailings site, mine and
potential impacts on surface water have been requested by the State of Montana.
Doe Run has been sued for contribution for superfund remediation costs in
RSR CORPORATION AND QUEMETCO V. AVANTI, ET AL., filed on October 11, 1995 in the
United States District Court for the Southern District of Indiana. The site in
question, known as the Avanti Site located in Indianapolis, Indiana, was a
secondary smelter formerly owned by a subsidiary of Doe Run which was sold to
RSR in 1972. RSR has entered into an AOC with the EPA to remediate the Avanti
Site and claims that Doe Run should reimburse a portion of its costs. It is Doe
Run's position that RSR assumed the liabilities of Doe Run's former subsidiary
and, in any event, Doe Run has no liability for any acts of its former
subsidiary. In June 1996, the EPA issued an order under Section 106 of CERCLA to
Doe Run requesting it to make a good faith offer of participation to RSR.
Although Doe Run believes it has no liability to RSR, and there are other PRPs
named by the EPA and by RSR as defendants in the litigation, Doe Run made what
it considers to be a good faith participation offer to RSR of $112,500 which was
not accepted. The estimated cost of the selected remedy for the site is $7.0 to
10.0 million. Doe Run does not believe that resolution of this matter will have
a material adverse effect on the results of operations, financial condition and
liquidity of Doe Run.
Doe Run's recycling facility is subject to corrective action requirements
under RCRA, as a result of a storage permit for certain wastes issued in 1989.
This has required and may involve future remediation of solid waste management
units at the site. Although it is not possible to predict whether completed
actions will be approved or new actions required, Doe Run has reserves as of
October 31, 1997 of $1.9 million for future corrective actions and $2.6 million
for closure costs for the permitted storage area.
Under the Clean Air Act Amendments of 1990, Congress required the EPA to
study certain industry sectors to determine Maximum Achievable Control
Technology ("MACT") for each sector. A MACT rule has been adopted which could
require substantial capital and operating expenses for the recycling facility.
Doe Run challenged the rule by filing a petition for review with the United
States Court of Appeals, D.C. Circuit, on August 21, 1995. A settlement with the
EPA was reached and published in the Federal Register, which diminishes the need
for additional compliance costs. The EPA is also reviewing MACT for primary
smelters and in April 1998 proposed a rule to regulate air toxics from primary
lead smelters. In the event a MACT rule for primary smelters is adopted by the
EPA, the rule could increase compliance costs at the Herculaneum smelter by
increasing the costs of administrative reporting requirements. The proposed MACT
will also impose additional storage costs.
Doe Run's operating facilities have waste water discharge permits issued
under the federal Clean Water Act, as amended. It is expected that stricter
discharge limits than previously in effect will be included in permits now
subject to renewal. As a result, there will be additional treatment facilities
required with an anticipated total capital expenditure of $4.0 million over the
next five years to meet applicable permit requirements. There will be no
appreciable increase in operating costs.
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Doe Run's mining and milling operations include five mine waste disposal
facilities that are subject to Missouri mine closure permit requirements. Doe
Run has begun certain closure requirements ahead of closure and is also accruing
for the cost of ultimate closure at a rate of approximately $.3 million per year
and has a reserve as of October 31, 1997 of $4.8 million.
Doe Run has a total reserve as of October 31, 1997 of $28.3 million for
CERCLA response costs, corrective action and closure costs as discussed above,
$17.8 million of which is for CERCLA response costs.
Doe Run expended on all environmental matters, which includes amounts
capitalized, amounts charged to operating expense and amounts charged to
reserves, approximately $17.5 million in fiscal 1997, and estimates such
expenditures will be $16.0 million and $14.5 million in fiscal 1998 and 1999,
respectively.
SAFETY
Throughout its operations, Doe Run strongly emphasizes providing employees a
safe working environment through extensive training of employees to ensure safe
work practices and worker knowledge of proper equipment operation. Doe Run's
mining and milling operations are regulated by MSHA and its smelting and
fabricating operations by OSHA.
Doe Run believes it has achieved safety results that are among the best in
its industry classifications. Each year since 1973, one of Doe Run's mining
units has been named either the safest or second safest underground metal mine
in the United States by MSHA. Doe Run has achieved the top award ten times in
the last 22 years. Doe Run's smelting operations have achieved a strong safety
record as well, with typical loss rates averaging approximately three to four
times better than industry averages in recent years.
EMPLOYEES
As of December 31, 1997, Doe Run had 345 active salaried employees and 1,015
active hourly employees. As of December 31, 1997, 13 active hourly employees at
Seafab were represented by the Sheet Metal Workers' Union, Local No. 66.
Management believes that its labor relations are good.
BENEFIT PLANS
PENSION
Doe Run has defined benefit retirement plans for all salaried employees,
hourly employees in Viburnum and Boss and hourly employees in Herculaneum. An
investment committee establishes a funding policy for each plan and determines
the contributions to be made to each plan by Doe Run. An eligible salaried
employee who reaches age 65 receives a right to a nonforfeitable normal
retirement annuity equal to 1.5% of his final average salary multiplied by the
number of years of his service; eligible hourly employees in Southeast Missouri
and in Herculaneum receive a nonforfeitable pension equal to a monthly amount of
$25 for each year of service. Salaried employees and hourly employees at both
sites who work past the age of 70 1/2 will receive an in-service retirement
annuity (based on the same formula) and an in-service monthly pension,
respectively. The amount payable under each plan is reduced by the value of
benefits each employee received or is entitled to receive under another
retirement plan of Doe Run, under retirement plans of Doe Run's Predecessor and
certain companies acquired by Doe Run's Predecessor or under any other plan to
which Doe Run has contributed other than profit sharing or stock bonus plans.
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SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN
Doe Run has a supplemental retirement plan for employees who participate in
Doe Run's pension plans but whose benefits are reduced by the Internal Revenue
Code (the "Code"). Under this plan, Doe Run pays eligible employees a benefit
equal to the difference between the retirement benefit the employee would have
received under the pension plan if the Code were disregarded and the retirement
benefit the employee actually is entitled to receive under the pension plan.
PROFIT SHARING PROGRAM
Eligible employees participate in a Profit Sharing Program under which Doe
Run pays 15% of pre-tax income, as defined in the Profit Sharing Program, into a
profit sharing pool at the conclusion of each fiscal year. If pre-tax income
does not exceed $10.0 million, the profit sharing pool will be distributed to
eligible employees in the form of a contribution to Doe Run's Savings Resource
Plan (the "401(k) Plan"). If pre-tax income exceeds $10.0 million, the first
$1.5 million of the pool will be distributed as a contribution to the 401(k)
Plan, and the remaining amount will be distributed in two phases to eligible
employees in the form of cash payments. The first phase is a partial
distribution based on a preliminary pool calculated from Doe Run's unaudited
fiscal year-end financial information, and the second phase is a distribution of
any remainder based on a final pool calculated from Doe Run's final audited
fiscal year-end financial information. Allocation of the cash payments shall be
on the basis of each eligible employee's total fiscal year base pay as a
percentage of all eligible employees' total fiscal year base pay. Every employee
on the payroll of Doe Run is eligible to participate in any cash distribution;
however, participation in a distribution to the 401(k) Plan shall be in
accordance with the 401(k) Plan.
GAINSHARING PLAN
Doe Run's employees participate in a gainsharing plan under which Doe Run
pays a bonus based on performance in key result areas. On a monthly and yearly
basis, Doe Run determines an improvement factor based on performance in areas
such as production (volumes, costs and efficiencies), profit margins, safety and
environmental, as well as other key operating areas. Each individual
participant's profit share is determined by multiplying this factor by a salary
component.
PENDING LITIGATION
Doe Run is involved in various claims and lawsuits incidental to the
ordinary course of its business that are not expected to have a material adverse
effect on the results of operations and financial condition of Doe Run.
For a description of pending litigation related to environmental matters,
see "--Environmental Matters."
DOE RUN PERU
PRODUCTS
Doe Run Peru's principal products include refined copper, silver, zinc, lead
and gold. In addition, Doe Run Peru produces a variety of by-products, including
bismuth, indium, tellurium, antimony, cadmium,
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selenium, sulfuric acid, zinc-silver concentrate, zinc sulfate, copper sulfate,
arsenic trioxide and others. The following table sets forth net sales for each
of Doe Run Peru's principal products.
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED
YEAR ENDED DECEMBER 31, OCTOBER 31,
---------------------------------- ----------------------
<S> <C> <C> <C> <C> <C>
1994 1995 1996 1996 1997
---------- ---------- ---------- ---------- ----------
<CAPTION>
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Copper............................................... $ 129,007 $ 186,905 $ 148,426 $ 155,641 $ 148,898
Silver............................................... 97,311 100,853 110,967 114,544 98,006
Zinc................................................. 62,507 72,599 73,753 74,855 83,521
Lead................................................. 45,259 58,999 76,353 74,648 65,385
Gold Bullion......................................... 21,383 19,619 20,361 21,084 14,605
By-Products.......................................... 11,590 11,954 26,937 19,869 21,469
---------- ---------- ---------- ---------- ----------
Total.......................................... $ 367,057 $ 450,929 $ 456,797 $ 460,641 $ 431,884
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
</TABLE>
COPPER
Doe Run Peru produces refined copper cathodes with a purity level of
99.975%. Copper sales accounted for $148.9 million of Doe Run Peru's net sales
for the twelve months ended October 31, 1997. Peru represented the largest
market for Doe Run Peru's copper shipments in 1997, which accounted for 30% of
total shipments, followed by the United States and Hong Kong which represented
27% and 16% of total shipments, respectively. In 1997, approximately 38% of the
copper cathode production was further processed at the adjacent fabricating
facility for the production of copper wirebars and wirerods. The largest market
for refined copper, accounting for over 50% of western world copper consumption,
is wirerod, which is used almost exclusively in the production of insulated wire
and cable. Other important markets for refined copper include copper sheet and
strip and tube used in the construction and transportation industries.
As part of Doe Run Peru's Capital Investment Program, investments are
planned through fiscal 1999 which will improve the cathode quality from standard
grade to LME Grade A. In addition, such program will increase the capacity of
the copper refinery to match copper anode output from the smelter. Doe Run Peru
currently produces standard copper.
SILVER
Refined silver produced by Doe Run Peru is good delivery 99.996% pure as
registered by the LBMA and COMEX. Silver sales accounted for $98.0 million of
net sales for the twelve months ended October 31, 1997. Doe Run Peru also
produces small amounts of sterling silver directed to the domestic jewelry
market. The United States, accounting for 38% of total shipments, represented
the largest market for Doe Run Peru's silver, followed by Brazil and Great
Britain at 23% and 16% of total shipments, respectively. The photographic film
industry accounts for one-third of western world silver demand, and jewelry and
silverware also account for one-third. Other important uses for silver include
electronics and silver-minted coins.
With the additional lead production from the operations of Doe Run Peru, Doe
Run is the world's largest primary lead producer. Doe Run Peru and Doe Run
intend to work together to take advantage of opportunities to optimize lead
marketing efforts.
ZINC
Doe Run Peru produces LME-registered refined zinc with a purity level of
99.996%. Zinc sales accounted for $83.5 million of Doe Run Peru's net sales for
the twelve months ended October 31, 1997. During 1997, Peru represented the
largest single market for Doe Run Peru's zinc output, accounting for
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31% of total shipments, as a result of strong local demand from export-oriented
industries with applications for steel coatings, specialized alloys and dry
battery plates. The United States represented 25% of total shipments that were
primarily exported to manufacturers of coatings, paints and protectants, casters
of auto parts and toy manufacturers.
LEAD
Doe Run Peru produces LME-registered 99.997% pure refined lead ingots and
blocks. Lead sales accounted for $65.4 million of net sales for the twelve
months ended October 31, 1997. Doe Run Peru also provides antimonial lead alloys
to meet the specialty demands of certain customers. The three largest markets
for Doe Run Peru's lead production in 1997 were Taiwan, accounting for 14% of
total shipments, followed by Brazil and Korea which each represented 10% of
total shipments. The largest market for refined lead remains lead-acid batteries
used in automobiles, forklifts, golf carts, marine applications and stationary
applications for backup power sources. Other markets for refined lead include
lead compounds used in the manufacture of computer and television screens and
rolled and extruded lead products for radiation shielding and roofing materials.
GOLD BULLION
Doe Run Peru produces 99.8% pure gold bullion bars exported primarily to
Europe and the United States. Gold bullion sales accounted for $14.6 million of
net sales for the twelve months ended October 31, 1997. During 1997, the United
States represented 44% of total shipments, followed by Germany and Peru,
accounting for 40% and 16% of total shipments, respectively.
BY-PRODUCTS
Principal by-products produced by Doe Run Peru include bismuth, indium,
tellurium, antimony and cadmium. Sales of these by-products totaled $21.5
million for the twelve months ended October 31, 1997. Bismuth, the largest
by-product revenue generator, is exported primarily to Europe. Bismuth has a
wide variety of uses including pharmaceutical compounds, chemicals, low melting
alloys and pigments. Pharmaceutical uses include the treatment of stomach ulcers
and over-the-counter products.
Indium is consumed primarily in the flat-panel display industry, as well as
in aerospace products, architectural glass, solar energy and lighting
applications. Indium is a difficult metal to extract because of its considerable
chemical affinity to other elements. Japan is estimated to account for more than
50% of the world indium market for use in the thin-film industry.
Tellurium is used to improve the machining quality of copper and stainless
steel products and to color glass and ceramics. Other industrial uses include
thermoelectric devices, rubber compounds and blasting caps.
Antimony is used with lead in alloys for battery production in flame
retardants, fabrics, plastics and ammunition. Cadmium is used primarily for
battery production, as well as in pigments, coating and plating of iron, plastic
and synthetic products and alloys.
MARKETING AND SALES
Doe Run Peru's marketing and sales strategy is to maximize the net realized
selling prices for all its products. In addition, Doe Run Peru is shifting the
focus of its marketing efforts to end users of its products from international
trading companies. In furtherance of this strategy, Doe Run Peru plans to
provide customers flexible quantities and deliveries, additional metal alloy
choices and technical assistance.
Doe Run Peru generally exports metal on a delivered basis with freight
charges included. In many of the foreign markets, sales agents are utilized to
ensure smooth delivery and to help further develop the local market. Doe Run
Peru's location in the central Andes of Peru and its proximity to the Callao
port
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position it favorably for shipment to major world markets and to the emerging
Latin American market. Metal sales within Peru are sold both on a delivered and
"free on board" basis from facilities in Callao. Doe Run Peru plans to market
additional metal into the Latin American market in order to take advantage of
lower freight costs and strong metal premiums.
Doe Run currently is actively involved in several industry associations
promoting and developing lead consumption. Through Doe Run Peru, Doe Run plans
to gain membership and or to continue membership in other metal industry
associations.
CAPITAL INVESTMENT PROGRAM
Doe Run Peru will undertake over a ten-year period the Capital Investment
Program of approximately $300.0 million to enhance various elements of Doe Run
Peru's operations. The objective of the Capital Investment Program is to
increase net sales and EBITDA by improving product quality, increasing
production capacity and reducing unit costs. In addition, through the
environmental expenditures described below, Doe Run Peru will endeavor to
achieve compliance with environmental regulations in Peru. See "--Environmental
Matters."
Management believes that cash flow from operations in addition to
availability under the New Doe Run Peru Revolving Credit Facility will be
sufficient to fund the Capital Investment Program. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations." The following
summarizes the Capital Investment Program including expenditures planned for
each metal circuit.
COPPER CIRCUIT
Doe Run Peru has identified the copper circuit as the most important of the
strategic initiatives to improve its operations, requiring total expenditures,
including sustaining capital requirements, of approximately $60.0 million
through fiscal 2007. Current projects are designed to increase capacity and
reduce energy costs through oxygen injection into the furnaces. These projects
will be supplemented in the near term with investments to replace production of
copper blister with higher quality fire-refined copper anodes prior to the
electrolytic refining process. With the introduction of anode casting, Doe Run
Peru anticipates that the refined copper produced will meet the LME-registered
quality standards (commonly known as Grade A) as opposed to the standard grade
presently produced. As of March 31, 1998, the price for Grade A copper was $.79
per pound, with the price for standard grade copper at a discount to the Grade A
price. Doe Run Peru also believes that, as a result of these projects, refined
copper production capacity will increase from approximately 73,000 tons to
88,000 tons per year by the year 2000, thereby more closely matching refinery
capacity with smelter output. The production of Grade A copper will allow Doe
Run Peru to sell to a wider range of customers. Moreover, since the prices
realized for Grade A copper are greater than those realized for standard grade
copper, Doe Run Peru will be able to realize greater net sales.
LEAD CIRCUIT
Utilizing Doe Run's extensive experience in lead operations, Doe Run Peru
has identified several opportunities to introduce Doe Run operating procedures
to increase production capacity and reduce costs. Specific projects include
improving oxygen availability to the sinter plant and blast furnaces, enlarging
one blast furnace and refurbishing the refinery cell blocks. The combination of
these capital projects are expected to increase lead production capacity from
approximately 110,000 tons to 127,000 tons per year by the year 2000. Doe Run
Peru anticipates that the cost of the lead circuit improvements, including
sustaining capital requirements, will be approximately $20.0 million through
fiscal 2007.
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ZINC CIRCUIT
Doe Run Peru anticipates investing approximately $18.0 million, including
sustaining capital requirements, in the zinc circuit through fiscal 2007,
primarily to improve metallurgical recoveries and to retrofit an existing
sulfuric acid plant. The installation of an additional purification stage prior
to electrowinning will improve the removal of copper, cadmium, cobalt and other
impurities, thereby increasing overall zinc recoveries, allowing greater feed
flexibility and reducing concentrate purchases and unit operating costs.
Presently, Doe Run Peru's zinc production capacity is approximately 77,000 tons
which will remain relatively stable in the forseeable future.
ENVIRONMENTAL IMPROVEMENTS
As part of the Acquisition, Doe Run Peru entered certain agreements with the
MEM. Under these agreements, Doe Run Peru is required to make the Investment
Commitment that includes expenditures to comply with environmental regulations
in Peru, including those governing the treatment, handling and disposal of solid
wastes, liquid effluent discharges and gaseous emissions. Principal projects
related to environmental matters include building sulfuric acid plants for the
metal circuits, new converter and roaster technology for the copper circuit,
replacement of the roaster equipment for the zinc circuit, water and sewage
treatment facilities, and slag and slimes handling equipment and disposal
facilities. Doe Run Peru estimates that expenditures related to environmental
matters will be approximately $195.0 million through fiscal 2007. See
"--Environmental Matters."
OTHER
Doe Run Peru will invest approximately $7.0 million over the ten-year period
for various other projects, including phone and computer system upgrades,
expenditures related to employee health and safety, and other miscellaneous
capital expenditures.
CUSTOMERS
Doe Run Peru had approximately 421 customers in 1997, of which the five
largest accounted for approximately 28% of its net sales. Doe Run Peru's
customers include a wide variety of industrial and international trading
companies with the two largest, Engelhard Corporation and Tecnofil S.A.,
accounting for approximately 9.8% and 5.1%, respectively, of Doe Run Peru's 1997
net sales. Approximately 78% of total shipments and approximately 79% of net
sales were exported outside of Peru, with Latin American countries representing
the largest destination in 1997 with approximately 47% of net sales, followed by
North America, Asia and Europe with 26%, 18% and 9% of net sales, respectively.
Approximately 80% in 1997 of Doe Run Peru's metal sales were pursuant to
contractual agreements, typically one year or less. Such contracts generally set
forth minimum volumes and pricing mechanisms.
COMPETITION
Doe Run Peru is among the largest metal processing companies in the world
with the unique combination of base metal smelters, refineries and by-product
circuits capable of processing complex concentrates into base and precious
metals and various by-products to international quality standards. Only three
other facilities in the western world, Union Miniere S.A.'s facility in Hoboken,
Belgium, Boliden Limited's facility in Ronnskar, Sweden and The Goldfield
Corporation's facility in Tsumeb, Namibia, have the capability to treat lead and
copper concentrates containing high antimony, arsenic, bismuth and precious
metal values in addition to a variety of residues. Unlike Doe Run Peru, none of
the facilities listed above have a dedicated zinc production circuit. Given Doe
Run Peru's access to complex concentrates in Peru and neighboring Latin American
countries, Doe Run Peru believes it operates at a geographic competitive
advantage to comparable facilities located farther from their sources of complex
concentrates.
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Although there are other facilities throughout the world that process
complex concentrates, those operations do not have Doe Run Peru's capability to
process complex concentrates which contain high levels of impurities, such as
bismuth, arsenic and cadmium. Such facilities include Industrias Penoles S.A.'s
facility in Torreon, Mexico and Dowa Mining Co. Ltd.'s facility in Kosaka,
Japan.
RAW MATERIALS
Doe Run Peru's primary raw material is concentrate feedstock. In addition to
concentrate feedstock, Doe Run Peru utilizes various raw materials, principally
water, electricity, oxygen, coal and fluxes.
CONCENTRATE FEEDSTOCK
Doe Run Peru is located in the central Andes of Peru, which is among the
most productive mining regions in the world. Peruvian concentrates typically
contain high levels of precious metals in addition to impurities such as
arsenic, antimony, bismuth and others, that increase the complexity of the
metallurgical processes required to separate impurities from base and precious
metals. Doe Run Peru's operations were designed and customized since its
construction in 1922 to handle the characteristics of raw materials available in
the region.
COPPER. During 1997, approximately 84% of the copper concentrates processed
at Doe Run Peru were supplied from the Peruvian domestic market, with
Centromin's mines accounting for a substantial portion of the total feedstock.
Contained copper production by Peruvian mines totaled approximately 529,000 tons
in 1996 and increased to approximately 579,000 tons in 1997. The complexity of
some concentrates from the domestic market result in favorable concentrate
pricing terms for Doe Run Peru and increased revenues from the recovery and
commercialization of by-products. In addition, due to its location close to the
mines of Peru, the smelter is able to save substantially on concentrate freight
charges. These savings typically are shared between Doe Run Peru and the
concentrate suppliers. Doe Run Peru obtains the balance of its copper
concentrate requirements from neighboring Latin American countries. Such
concentrates share similar metallurgical characteristics as Peruvian
concentrates. Imported concentrates reflect international market terms and are
purchased to produce the appropriate concentrate blend for the smelter.
ZINC. During 1997, all of the zinc concentrates processed at Doe Run Peru
were supplied from the Peruvian domestic market, with Centromin's mines
accounting for approximately 94% of the total feedstock. The disadvantage of
consuming concentrates from certain of the Centromin mines is the high level of
contained iron. Zinc ferrites form in the leaching phase in an amount
proportional to the iron content in the feedstock. These ferrites capture
approximately 10% to 13% of the zinc contained in the concentrate feedstock and
effectively reduce the metallurgical recovery of the circuit. As a private
enterprise, Doe Run Peru will not face any limitations with respect to sources
of concentrate and, thus, will have an opportunity to obtain concentrates with
reduced iron content.
Zinc metal contained in concentrates produced by Peruvian mines was
approximately 804,000 tons in 1996 and increased substantially to approximately
961,000 tons in 1997. Doe Run Peru requires approximately 70,000 tons of zinc
metal contained in concentrates per year. With present mine production, Doe Run
Peru believes that sufficient concentrates will be available to meet its
requirements for the foreseeable future.
LEAD. During 1997, approximately 99% of the lead concentrates processed at
Doe Run Peru were supplied from the Peruvian domestic market, with Centromin's
mines accounting for approximately half of the total feedstock. Contained lead
metal production by Peruvian mines totaled approximately 273,000 tons in 1996
and increased to approximately 287,000 tons in 1997. Since Doe Run Peru has no
local Peruvian competitor in lead smelting, all of the concentrates, the total
of which far exceeds Doe Run Peru's requirements, are available to Doe Run Peru.
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A majority of the lead concentrates purchased by Doe Run Peru contain
certain impurity levels that result in lower concentrate prices due to penalties
imposed on such concentrates. In addition, such concentrates increase revenues
for Doe Run Peru due to the recovery and marketing of silver and by-products.
WATER
Water is utilized throughout Doe Run Peru's operations, particularly for:
(i) slag granulation in copper and lead processes; (ii) cooling systems of the
sulfuric acid plant, lead blast furnaces, compressors and rectifiers; (iii)
steam generation; and (iv) hydrometallurgical and electrometallurgical
processes. Water for the Doe Run Peru facility is obtained from three main
sources: the Mantaro River; the Tishgo River; and the Cuchimachay Spring. Doe
Run Peru believes these three sources, in addition to numerous adjacent springs
and wells, provide adequate water supply for the facility.
ELECTRICITY
The Doe Run Peru facility receives electric power from Centromin's
Electroandes hydroelectric division and consumes approximately 63 megawatts
ongoing load, which represents approximately one-third of the division's
capacity. Doe Run Peru recently signed a ten-year power supply contract with
Centromin and Electroandes. Doe Run Peru believes that the contract provides
sufficient power to Doe Run Peru over the life of the contract at satisfactory
long-term rates. Such rates, however, are above what Doe Run Peru's Predecessor
historically paid.
OTHER
Doe Run Peru installed an oxygen plant in 1994 that, with a capacity of 353
tons per day. The oxygen plant supplies oxygen for the oxy-fuel burners of the
reverberatory furnace of the copper smelter and for the blast furnaces of the
lead smelter. Coal is imported from Colombia to produce metallurgic coke for the
lead circuit blast furnaces. Fluxes consumed in the smelting process are
supplied from Doe Run Peru's limestone and silica deposits adjacent to the
facility. Both coal and fluxes are transported to the smelter by rail.
PRODUCTION PROCESS
Doe Run Peru utilizes conventional pyrometallurgical processes for smelting
or roasting concentrates followed by hydrometallurgical refining processes.
Summarized below is a description of the production process for copper, silver
and gold, zinc and lead.
COPPER CIRCUIT
The copper circuit consists of the smelter, responsible for processing
copper concentrates into a 98.6% pure copper blister, and the refinery,
responsible for upgrading copper blister into 99.975% pure refined copper metal.
Current estimated annual capacity at the refinery is 73,000 tons. Production of
refined copper reached approximately 71,000 tons for 1997. Doe Run Peru's
overall metallurgical recovery of copper is approximately 96.5%.
Copper concentrates are mixed with fluxes and inter-plant transfers in the
preparation plant prior to entering the roasting section. The roasters produce a
calcine from the copper concentrates that is transported to the oxygen-fuel
reverberatory furnace. The reverberatory furnace produces two products: a heavy
matte containing the recoverable metals and a slag waste-product that is
granulated in water and transported to a slag disposal area. The hot matte is
then ladled to the converter section where a two step process converts the matte
into 98.6% copper blister that is directly cast into 584 pound blister anodes.
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The copper refinery is located three kilometers west of the smelter where
blister anodes are received from the smelter by rail. The refinery utilizes an
electrolytic process whereby the copper in the blister anode is transferred to a
cathode starting sheet. As the copper anode dissolves, gold, silver, and other
impurities are deposited at the bottom of the cells as an insoluble slime that
is collected at the end of the anode cycle. Copper cathodes, which are 99.975%
refined copper metal, are collected from the tankhouse every seven days.
ZINC CIRCUIT
The zinc circuit employs conventional roasting, leaching and electrowinning
technologies. During 1997, the circuit produced approximately 75,000 tons of
refined zinc. Current estimated capacity of the zinc refinery is approximately
77,200 tons of refined zinc with an overall metallurgical recovery of 88%. The
roasting plant produces a calcine that is processed continuously in a
hydrometallurgical leaching and purification section that dissolves the zinc
oxides and sulfates contained in the calcine. The zinc sulfate solution is
separated from solid residues by thickening and filtering processes. After
purification, the solution is pumped to the electrowinning section. The zinc
refinery is adjacent to the roaster and utilizes an electrolytic process whereby
zinc from the sulfate solution is transferred to a cathode starting sheet. Solid
residues from the leaching process are processed in a flotation plant to produce
a zinc-silver concentrate sold to international markets. Certain remaining
unprocessed zinc ferrites are sent to a disposal pond. Zinc cathodes, which are
99.996% refined zinc metal, are collected from the tankhouse every sixteen
hours.
LEAD CIRCUIT
The lead circuit consists of the smelter, responsible for processing lead
concentrates into 96% pure lead bullion, and the refinery, responsible for
upgrading lead bullion into 99.997% pure refined lead metal. Current estimated
annual capacity of the lead refinery is approximately 110,000 tons of lead
metal. Production of refined lead metal reached approximately 108,000 tons for
1997. Doe Run Peru's overall metallurgical recovery of lead is approximately
95%.
Lead concentrates are mixed with inter-plant transfers and other lead
bearing materials in the preparation plant prior to entering the sinter plant.
The sinter plant utilizes an up-draft sinter machine that removes a majority of
the sulfur from the feedstock. Following sintering, the processed material is
blended with coke and fed to the blast furnace to produce two products: a heavy
bullion containing the recoverable metals and a slag waste-product that is
granulated in water and transported to a slag disposal area. The hot bullion is
then transferred to the dross plant for further processing prior to casting into
lead bullion anodes.
The lead refinery is located three kilometers west of the smelter where
bullion anodes are received from the smelter by rail. The refinery utilizes an
electrolytic process whereby the lead in the blister anode is transferred to a
cathode starting sheet. As the lead anode dissolves, gold, silver, and other
impurities are deposited at the bottom of the cells as an insoluble slime that
is collected at the end of the anode cycle. Lead cathodes, which are 99.995%
refined lead metal, are collected from the tankhouse every four days.
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<PAGE>
ANODE BY-PRODUCTS CIRCUIT AND SILVER REFINING
The anode residue plant treats insoluble slimes remaining from the copper
and lead refining processes. The plant processes these slimes to recover
bismuth, selenium, tellurium and a metal ore that is further upgraded in the
silver refinery. The estimated capacity of the silver refinery is approximately
26.2 million ounces per year of refined silver and approximately 76,000 ounces
of gold bullion. During 1997, the silver refinery produced approximately 22.4
million ounces of silver and approximately 44,000 ounces of gold bullion.
Presently, the capacity of the silver refinery is being increased to 32.2
million ounces per year.
FACILITIES
Doe Run Peru's operations are located in the town of La Oroya, located
approximately 110 miles from the Peruvian capital of Lima, approximately 75
miles from the Cerro de Pasco mine and approximately 78 miles from the city of
Huancayo, at an altitude of approximately 2.3 miles above sea level. The complex
is linked to these locations by highway and railroad service. The principal
operations reside in two areas within La Oroya. The copper smelter, lead smelter
and zinc refinery, in addition to the antimony plant, arsenic plant, coke plant,
cadmium plant and maintenance shops are located on the southern bank of the
Mantaro River directly behind the central offices (the "Smelter Location"). The
copper refinery, lead refinery, copper fabricating plant and several storage
yards are located three kilometers west of the smelter facilities at Huaymanta
(the "Refinery Location").
The following table sets forth the total land area and facility size of Doe
Run Peru's facilities:
<TABLE>
<CAPTION>
SIZE
-------------------------
<S> <C> <C>
FACILITY LAND FACILITY
- ---------------------------------------------------------------------- ----------- ------------
<CAPTION>
(SQUARE
(ACRES) FEET)
<S> <C> <C>
Copper Smelter........................................................ 3.5 302,000
Lead Smelter.......................................................... 3.1 262,000
Copper and Lead Refinery.............................................. 6.9 311,000
Zinc Refinery......................................................... 4.3 258,000
Solid Disposal Area................................................... 110.3 --
Other Areas........................................................... 11.4 554,000
</TABLE>
Operations at the Smelter Location began in 1922 under the Cerro de Pasco
Copper Corporation, and the Smelter Location continues to utilize many of the
original structures. Additions to the Smelter Location include a new lead sinter
plant installed in 1983 and the oxygen plant completed in 1994. Operations at
the Refinery Location also began in 1922, and many of the existing structures
remain in use. Other major additions to the Refinery Area include the wirerod
plant constructed in 1966 and additional refinery cell blocks added in the
mid-1970s.
SAFETY
Doe Run Peru's safety performance has improved significantly since 1990, and
with further assistance and direction provided by Doe Run, Doe Run Peru will
continue to maintain a high regard for safety and hygiene. Recently, Peru's
Ministerio de Trabajo y Promocion Social (the Industrial Safety Department) has
been enforcing measures to minimize any work-related illnesses or accidents
through continuous inspections to ensure compliance with numerous safety
standards.
EMPLOYEES
As of December 31, 1997, Doe Run Peru employed 846 active salaried employees
and 2,060 active hourly employees. In addition, Doe Run Peru employed 895 people
on a contract basis for production work-orders, maintenance and other tasks.
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There are two unions for hourly employees and two unions for salaried
employees. The principal union representing 90.4% of the hourly employees is the
Sindicato de Trabajadores Metalurgicos La Oroya (La Oroya Metallurgic Workers
Union). The Sindicato de Trabajadores Ferroviarios La Oroya (La Oroya Railway
Workers Union) represents 3.8% of the hourly workers, and the remainder of the
hourly workers (5.8%) are not affiliated with either union. Historically, as a
government-owned enterprise, Doe Run Peru entered into twelve-month labor
agreements, which end on July 25 of each year. Upon the expiration of the
previous contract on July 25, 1997, there was no interruption of work, and Doe
Run Peru's Predecessor successfully concluded negotiations and reached an
agreement on September 21, 1997 that will expire on July 25, 1998.
The salaried employees are represented by the Sindicato de Empleados
Yauli-La Oroya (Yauli-La Oroya Employees Union), representing 64.9% of the
salaried employees and by the Sindicato de Empleados Ferroviarios La Oroya (La
Oroya Railway Employees Union), representing 9.0% of salaried employees. The
remainder of salaried employees, 26.1%, are not affiliated with either union.
The salaried employees' labor agreement expired on December 31, 1997, and
negotiations are in progress for a new agreement for 1998. Management believes
that Doe Run Peru's labor relations have been good as evidenced by three
consecutive years of labor harmony without strikes and likewise three
consecutive years of solution without conflict of the labor agreements with
workers and employees. As a private enterprise, management contemplates
negotiating longer-term labor agreements in 1998 satisfactory to both management
and labor.
BENEFIT PLANS
The benefit plan for Doe Run Peru is centered around a severance payment, a
social benefit directed by the Compensacion por Tiempo de Servicios, a Peruvian
labor legislative decree. This benefit includes a money reserve established by
the employer and deposited in a banking entity for the benefit of the worker
when the employment relationship ends. Deposits are made twice a year and equal
one month's salary. Other benefits include a social security system operated by
the Peruvian government which provides benefits for both health and pensions. In
addition to social security, Doe Run Peru maintains a private system of private
pension, the cost of which is paid by the employee through paycheck deductions.
ENVIRONMENTAL MATTERS
LEGAL FRAMEWORK
Modern environmental legislation has been introduced only in the last decade
in Peru. For mining and metallurgical activities, the MEM is the principal
regulatory authority. The MEM has issued "maximum permissible limits" for liquid
effluent, air emissions and ambient air quality. In addition, the Consejo
Nacional del Ambiente (National Environmental Council) coordinates government
regulations and policies. The Direccion General de Salud Ambiental (Directorate
General of Environmental Health) (the "DIGESA"), a division of the Ministerio de
Salud (Ministry of Health), issues waste water discharge permits based on
standards governing receiving water quality. Peruvian law requires all new
mining or metallurgical operations, and existing operations that are undergoing
an expansion of over 50% of installed capacity, to submit to the MEM an Estudio
de Impacto Ambiental (Environmental Impact Study).
As to mining and metallurgical operations in existence prior to 1994,
concession holders (i.e. owner/ operators) were required to submit to the MEM an
Evaluacion Ambiental Preliminar (Preliminary Environmental Assessment) (the
"EVAP") that identified environmental impacts and twelve months of baseline
monitoring. Based on the results of the EVAP, the operator was to submit to the
MEM a PAMA that consisted of an environmental impact analysis, monitoring plan,
and data, mitigation measures and closure plan. The PAMA also sets forth the
actions and corresponding annual investments the concession holder agrees to
undertake in order to achieve compliance with the maximum applicable limits
prior to
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expiration of the PAMA (ten years for smelters, such as Doe Run Peru's
operations, and five years for any other type of mining or metallurgical
operation). The required amount of annual investment must not be less than one
percent of annual sales. Once approved, the PAMA functions as the equivalent of
an operating permit with which the operator must comply. After expiration of the
PAMA, the operator must comply with all applicable standards and requirements.
Mining, metallurgical and processing operators must present annual sworn
statements to the MEM that describe their operations and resultant emissions. In
addition, Peruvian environmental law allows operators to enter into a Contrato
de Estabilidad Administrativa Ambiental (Contract for Administrative
Environmental Stabilization) ("Environmental Stabilization Agreement") in order
to provide some potential limit to the applicability of new laws during the life
of the PAMA.
PAMA AND ENVIRONMENTAL STABILIZATION AGREEMENT
The initial PAMA for Doe Run Peru's Predecessor was submitted by Centromin
and approved by the MEM on January 13, 1996. The PAMA was modified in connection
with the Acquisition to reflect a reallocation of environmental responsibilities
between Centromin and Doe Run Peru, and corresponding revisions were made to the
investment schedule. The MEM approved separate PAMAs for Centromin and Doe Run
Peru and an Environmental Stabilization Agreement for Doe Run Peru. Centromin
has committed under its PAMA to implement the following projects over the next
nine years, estimated to cost approximately $24 million: (i) remediation of
areas impacted by emissions during its period of operations; (ii) closure of the
lead and copper slag deposits (at Huanchan); (iii) improved management of the
Huanchan deposit (E.G. storm water diversion and slope stability); and (iv)
closure of the arsenic trioxide deposits (at Malpaso and Vado).
Doe Run Peru has committed under its PAMA to implement the following
projects over the next nine years, estimated in the PAMA to cost approximately
$107.5 million: (i) new sulfuric acid plants; (ii) elimination of fugitive gases
from the coke plant; (iii) use of oxygenated gases in the anodic residue plant;
(iv) water treatment plant for the copper refinery; (v) a recirculation system
for cooling waters at the smelter; (vi) management and disposal of acidic
solutions at the silver refinery; (vii) industrial waste water treatment plant
for the smelter and refinery; (viii) containment dam for the lead muds near the
zileret plant; (ix) granulation process water at the lead smelter; (x) anode
washing system at the zinc refinery; (xi) management and disposal of lead and
copper slag wastes; and (xii) domestic waste water treatment and domestic waste
disposal. The actual current estimate for the environmental projects and related
process changes for Doe Run Peru is $195.0 million.
Doe Run Peru's operations historically and currently exceed some of the
applicable MEM maximum permissible limits pertaining to air emissions, ambient
air quality and waste water effluent quality. The PAMA projects, which are more
fully discussed below, have been designed to achieve compliance with such
requirements prior to the expiration of the PAMA on January 13, 2007. No
assurance can be given that implementation of the PAMA projects is feasible or
that their implementation will achieve compliance with the applicable legal
requirements by the end of the PAMA period. Doe Run Peru has advised the MEM
that it intends to seek changes in certain PAMA projects that it believes will
more effectively achieve compliance. However, there can be no assurance that the
MEM will approve proposed changes to the PAMA or that implementation of the
changes will not increase the cost of compliance. Further, there can be no
assurance that the Peruvian government will not in the future require compliance
with additional environmental obligations that could adversely affect Doe Run
Peru's business, financial condition or results of operations. Under the
Subscription Agreement, Centromin agreed to indemnify Metaloroya against
environmental liability arising out of its prior operations, and performance of
the indemnity has been guaranteed by the Peruvian government through the
enactment of the Supreme Decree No. 042-97-PCM. However, there can be no
assurance that Centromin will satisfy its environmental obligations and
investment requirements, including those in its PAMA, or that the guarantee will
be honored. Any
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failure by Centromin to satisfy its environmental obligations could adversely
affect Doe Run Peru's business, financial condition or results of operations.
ENVIRONMENTAL CONSIDERATIONS
GASEOUS EMISSIONS. Doe Run Peru is required to control gaseous emission to
meet ambient air quality standards and the applicable emissions rate by January
2007. In 1997, sulfur dioxide emissions from the smelter complex amounted to
approximately 990 tons per day. The MEM has established a maximum sulfur dioxide
rate for Doe Run Peru of 17% of incoming sulfur based on current production
levels.
Dust emissions currently total approximately 9.8 tons per day, consisting of
approximately 2.5 tons of lead, 2.0 tons of arsenic, 0.3 tons of zinc and
smaller quantities of other metals. Although the main stack is the largest
source of gaseous emissions, significant quantities of the same effluents are
issued from the numerous smaller stacks, as well as from many non-stack sources.
LIQUID EFFLUENTS. Doe Run Peru is required to control liquid effluents to
meet the MEM's discharge limits and DIGESA's water quality standards. Forty
individual discharge sources were identified by the monitoring program of the
EVAP as releases from Doe Run Peru to the Yauli and Mantaro Rivers. Liquid
effluents contain metals in solution and solids in suspension. Five liquid
effluent discharges account for 90% of the total discharge volume from the
smelter and refinery facilities. The highest volumetric discharge of the total
includes a combination of effluents from the copper-lead slag granulation
process and cooling water from the powerhouse.
SOLID RESIDUES. The principal solid residues generated by Doe Run Peru's
facility are shown below:
<TABLE>
<CAPTION>
RESIDUE ESTIMATED VOLUME
- ---------------------------------------------------------------------------- -----------------
<S> <C>
(TONS PER MONTH)
Copper Slag................................................................. 22,000
Lead Slag................................................................... 14,000
Zinc Ferrites............................................................... 2,400
Arsenic Trioxide............................................................ 280
</TABLE>
Granulated copper and lead slag is transported across the Mantaro River by
aerial tram and stockpiled at Huanchan. Zinc leaching residue, consisting mainly
of zinc ferrites, is pumped into ponds in the same area. Arsenic trioxide is
transported by rail to the Vado site, where it is stored under water spray for
dust suppression.
<TABLE>
<CAPTION>
DISTANCE FROM
DEPOSIT DOE RUN PERU ESTIMATED SIZE
- --------------------------------------------------------------- ----------------- --------------
<S> <C> <C>
(MILES) (TONS)
Huanchan copper and lead slag.................................. 2.5 11,000,000
Zinc Ferrites.................................................. 1.2 1,400,000
Vado arsenic trioxide slag..................................... 5.6 180,000
Malpaso arsenic trioxide slag (historical)..................... 8.7 Unknown
</TABLE>
OVERVIEW OF THE ENVIRONMENTAL PROJECTS
In accordance with the PAMA, Doe Run Peru has included in its capital
expenditure plans specific capital projects to accomplish the goals of the PAMA.
Excluding the process-related projects which assist in meeting the environmental
requirements, Doe Run Peru's major environmental projects include slag handling,
industrial wastewater treatment, sulfur dioxide capture and recovery as sulfuric
acid, and sewage and garbage management. The total costs of these projects and
associated process changes and other environmental control projects are expected
to approach $195.0 million over the next nine years starting in 1998.
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SLAG HANDLING AND DISPOSAL. A new mechanical slag handling system will be
installed for the 1,100 tons of copper and lead slag per day to either dewater
granulated slag and deliver it to the ultimate disposal site or to deliver the
hot slag to its ultimate disposal site. The objective of the project is to
replace the undersized tramway slag system, which currently loses 30% to 40% of
the slag into the Mantaro River, with a system capable of safely delivering all
slag to its final disposition site and to minimize any discharge of heavy metals
into the river.
A number of mechanical systems will be evaluated both for continuing
granulation and for delivering the material hot. A Trommel dewatering system was
outlined in the PAMA. Installation of the dewatering system, when selected, is
expected to occur in fiscal 1999. The capital cost for the project is estimated
to be $6.0 million. If a new slag site is developed, approximately $3.0 to $5.0
million is expected to be expended in preparing the site.
ZINC FERRITE DISPOSAL
Doe Run Peru has the option to continue to use the existing disposal site
for three years and then either take ownership of it or develop a new site and
pay Centromin $7.2 million for closure costs. It is probable that Doe Run Peru
will retain ownership of the disposal site and develop a new disposal site on
property currently owned for that purpose. The cost of developing this site is
expected to be approximately $3.0 to 5.0 million.
INDUSTRIAL WASTEWATER TREATMENT. Recycling projects will be implemented to
recirculate and reuse wastewater after cooling or intermediate treatment. The
water recycling project for slag handling will reduce the 20,000 gallons per
minute rate to approximately 3,000 gallons per minute for discharge. An
industrial sewer network will be constructed to drain effluent from
approximately 35 outfalls to several pumping stations, which, after solids
removal, will be treated and discharged to the river. The purpose of this
project is to eliminate the untreated discharge of metal bearing wastes into the
Mantaro River. This system is different from and more costly than the project
set forth in the PAMA. The system will be designed to meet the MEM's discharge
limits and DIGESA's water quality standards. However, there can be no assurance
that the MEM will approve this project, or that DIGESA will not require
additional actions at increased cost.
The recycling and pre-treatment steps are expected to be installed in fiscal
1999. The collection systems and sedimentation tanks are expected to be
installed in fiscal 2000, and the first stage treatment plant is expected to be
installed in fiscal 2001. If a second stage treatment is required, it will be
deferred for three to four years. The estimated cost of the project is $25.0
million which reflects local labor rates and the deferral of the second stage
treatment, which may not prove to be necessary. Addition of the second stage
could cost approximately $2.0 million.
SULFUR DIOXIDE CAPTURE AND LEAD EMISSION REDUCTION. The PAMA provides for
process gas from the copper, zinc and lead process circuits to be treated in two
sulfuric acids plants for the conversion of sulfur dioxide to sulfur trioxide
and the recovery as sulfuric acid, a by-product that Doe Run Peru expects to
sell. The objective of this project is to increase the capture of sulfur dioxide
from approximately 11% to a minimum of 83%, which is the MEM standard. The
second objective is to reduce the sulfur dioxide and metal emissions in the
ambient air surrounding the plant to within MEM standards. The acid plants will
be installed in fiscal 2005 and 2006. The estimated costs of each of the two
plants is approximately $39.0 million.
The PAMA also provides for replacement of the existing lead circuit with a
new technology to assist in insuring at least 83% capture. However, Doe Run Peru
does not believe that this process has been adequately demonstrated and likely
will seek a change to the PAMA to avoid this process change. Other options are
available if needed to meet the sulfur dioxide emission limit, which are
estimated to cost in the range of $50.0 to $80.0 million.
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Given the complex terrain and valley configuration of the Doe Run Peru
facility, there can be no assurance that the measures contemplated in the PAMA
will achieve compliance with the ambient air quality standard for sulfur dioxide
or for lead, particularly during inversion conditions. Other actions, such as
altering the present main stack configuration and increased efforts to reduce
fugitive emissions, may be necessary at significant increased costs to achieve
compliance commencing during the later years of or after the nine-year PAMA
compliance period.
SEWAGE/GARBAGE MANAGEMENT. Two conventional sewage treatment systems and
collection systems will be installed to service the 3,000 employees of Doe Run
Peru living in company housing in La Oroya. A garbage collection system and
disposal landfill also will be developed. This project is designed to comply
with the PAMA and will improve living conditions in La Oroya. The project is
intended to eliminate the discharge of raw sewage and garbage by Doe Run Peru to
the Yauli and Mantaro Rivers. Planning and design work will begin in fiscal
1998, and construction will follow in the next two years at an estimated cost of
$3.0 million.
PENDING LITIGATION
All existing litigation of Doe Run Peru at the time of the Acquisition was
retained by Centromin. Doe Run Peru is involved in various claims and lawsuits
incidental to the ordinary course of its business that are not expected to have
a material adverse effect on the business, financial condition and results of
operations of Doe Run Peru.
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MANAGEMENT
DIRECTORS AND OFFICERS
The following table sets forth certain information regarding the directors
and executive officers of the Company:
<TABLE>
<CAPTION>
NAME AGE POSITION
- --------------------------------------- --- ------------------------------------------------------------------
<S> <C> <C>
Ira Leon Rennert....................... 63 Chairman and Director of Doe Run, Doe Run Cayman and FPI.
Jeffrey L. Zelms....................... 54 President and Chief Executive Officer of Doe Run and President of
Doe Run Cayman
Marvin K. Kaiser....................... 56 Vice President and Chief Financial Officer of Doe Run and FPI,
Vice President of Doe Run Cayman and Finance Manager of Doe Run
Mining and Doe Run Peru
Richard L. Amistadi.................... 53 Vice President--Sales and Marketing of Doe Run
Gary E. Boyer.......................... 56 Vice President--Mining of Doe Run
Kenneth R. Buckley..................... 59 Vice President--Primary and Secondary Smelting of Doe Run and
General Manager of Doe Run Mining and Doe Run Peru
David A. Chaput........................ 39 Treasurer of Doe Run and President of FPI
Juan Carlos Huyhua, Ph.D. ............. 45 Operations Manager of Doe Run Peru
Anthony W. Worcester................... 56 Technical Manager of Doe Run Mining and Doe Run Peru
</TABLE>
IRA LEON RENNERT has been Chairman, Chief Executive Officer and principal
shareholder of Doe Run's and the Guarantors' parent company, Renco (including
predecessors), since Renco's first acquisition in 1975, Chairman and Director of
Doe Run since April 1994, Chairman and Director of Doe Run Cayman since October
1997 and Chairman and Director of FPI since August 1996. Renco holds controlling
interests in a number of manufacturing and distribution concerns operating in
businesses not competing with Doe Run including, WCI Steel, Inc., Renco Metals,
Inc., AM General Corporation and Lodestar Energy, Inc.
JEFFREY L. ZELMS has served as President and Chief Executive Officer of Doe
Run's Predecessor and Doe Run since August 1984 and President of Doe Run Cayman
since October 1997. Mr. Zelms has over 30 years of experience in the mining
industry. Mr. Zelms serves on the boards of directors of BW/IP International,
Inc. and Homestake Mining Company.
MARVIN K. KAISER has served as Vice President and Chief Financial Officer of
Doe Run's Predecessor and Doe Run since January 1994 and of FPI since April
1998, Vice President of Doe Run Cayman since October 1997 and Finance Manager of
Doe Run Mining and Doe Run Peru since October 1997. From June 1989 to December
1993, Mr. Kaiser was the Chief Financial Officer of AMAX Gold, Inc., a gold
producing company. Mr. Kaiser is a Certified Public Accountant.
RICHARD L. AMISTADI has served as Vice President--Sales and Marketing of Doe
Run's Predecessor and Doe Run since November 1986. Mr. Amistadi has over twenty
years of experience in sales, marketing and product development of lead metal,
lead alloys, zinc metal, lead, zinc and copper concentrates and associated
by-products.
GARY E. BOYER has been Vice President-Mining at Doe Run since January 1993.
He served as General Manager of mining and smelting operations of Doe Run's
Predecessor and Doe Run from January 1988 to
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April 1997. From January 1990 to January 1993, he served as Vice
President-Smelting of Doe Run's Predecessor.
KENNETH R. BUCKLEY has served as Vice President--Primary and Secondary
Smelting of Doe Run since September 1996 and General Manager of Doe Run Mining
and Doe Run Peru since October 1997. From January 1996 until September 1996, Mr.
Buckley was Vice President--Smelting of Doe Run. Mr. Buckley served as General
Manager--Resource Recycling Division of Doe Run's Predecessor and Doe Run from
September 1988 until January 1996. Mr. Buckley has over 34 years of experience
in managing metal milling and smelting operations in five countries.
DAVID A. CHAPUT has served as Treasurer of Doe Run's Predecessor and Doe Run
since February 1993 and as President of FPI since September 1996. Mr. Chaput has
been employed by Doe Run's Predecessor and Doe Run since 1987 in various
financial management positions.
JUAN CARLOS HUYHUA, PH.D., has been Operations Manager of Doe Run Peru since
October 1997. From January 1995 to June 1997, Dr. Huyhua was Chief Operating
Officer of Centromin. Dr. Huyhua has served in various capacities for Centromin
since 1978, including as Assistant General Manager--Metallurgical Operations,
General Superintendent--Smelting and Refining Department and
Manager--Metallurgical Operations. Dr. Huyhua received his doctorate in
Extractive Metallurgy from the New Mexico Institute of Mining and Technology in
1989.
ANTHONY W. WORCESTER has served as Technical Manager of Doe Run Mining and
Doe Run Peru since October 1997. From January 1991 to October 1997, Mr.
Worcester was Technical Service Manager at Doe Run's lead smelter for Doe Run
and its predecessor. Mr. Worcester has held various other positions with Doe
Run's Predecessor since 1960.
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning compensation
of the named executive officers by Doe Run for services rendered to it in all
capacities:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
-------------
ANNUAL COMPENSATION(A) PAYOUTS
-------------
FISCAL ---------------------- LTIP ALL OTHER
NAME AND POSITION YEAR SALARY BONUS PAYOUTS(B) COMPENSATION(C)
- ------------------------------------------------ ----------- ---------- ---------- ------------- ---------------
<S> <C> <C> <C> <C> <C>
Ira Leon Rennert(d)............................. 1997 -- -- -- $ 1,200,000
Chairman of the Board
Jeffrey L. Zelms................................ 1997 $ 240,000 $ 100,000 $ 262,068 34,885
President and Chief Executive Officer
Marvin K. Kaiser................................ 1997 156,000 74,000 52,414 22,164
Chief Financial Officer
Richard L. Amistadi............................. 1997 163,248 60,000 78,620 23,197
Vice President--Sales and Marketing
Gary E. Boyer................................... 1997 135,216 60,000 52,414 5,492
Vice President--Mining
Kenneth R. Buckley.............................. 1997 142,132 60,000 26,207 21,657
Vice President--Primary and Secondary Smelting
</TABLE>
- ------------------------------
(a) Value of perquisites and other personal benefits did not exceed the lesser
of $50,000 or 10% of total salary and bonus per named executive officer.
(b) The amounts shown as "LTIP Payouts" in the table for each named executive
officer represent contractual payments under such officer's net worth
appreciation agreements. See "--Net Worth Appreciation Agreements."
(c) The amounts shown as "All Other Compensation" in the table for each named
executive officer, except Mr. Rennert, represent payments to Messrs. Zelms,
Kaiser, Amistadi, Boyer and Buckley under the Profit Sharing Program of
$2,688, $1,747, $1,828, $2,028 and $1,592, respectively, and under the
gainsharing plan of $31,416, $20,420, $21,369, $3,464 and $20,065,
respectively, and $781 of life insurance premiums for Mr. Zelms. See
"Business--Doe Run--Benefit Plans--Profit Sharing Program" and "--
Gainsharing Plan."
(d) Mr. Rennert receives no compensation directly from Doe Run. He is Chairman
of the Board and the principal stockholder of Renco which receives a
management fee from Doe Run pursuant to the Management Consultant Agreement
(as defined). The amount shown as all other compensation to Mr. Rennert are
the management fees paid by Doe Run to Renco for fiscal 1997. See "Certain
Transactions--Transactions with Renco and its Affiliates."
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NET WORTH APPRECIATION AGREEMENTS
The named executive officers (with the exception of Mr. Rennert) and six
other employees of Doe Run are each parties to net worth appreciation agreements
with Doe Run, pursuant to which, upon termination of each person's employment
with Doe Run, he is entitled to receive a fixed percentage of the increase in
the net worth of Doe Run, as defined, from a base date until the end of the
fiscal quarter preceding the date of his termination. Such amount is payable
without interest in 40 equal quarterly installments, commencing three months
after the termination of each person's employment, and at three month intervals
thereafter. It is anticipated that certain key employees of Doe Run Peru will
enter into net worth appreciation agreements with Doe Run Peru comparable to Doe
Run's net worth appreciation agreements.
The following table summarizes the net worth appreciation agreements now
held by the named executive officers and the amounts earned thereunder.
<TABLE>
<CAPTION>
ACCUMULATED
AS OF
NET WORTH OCTOBER 31,
PERCENTAGE(A) BASE DATE 1997(B)
----------------- ----------- -----------------
<S> <C> <C> <C>
Jeffrey L. Zelms................................. 5.0 % 4/7/94 $ 333,700
Marvin K. Kaiser................................. 1.0 4/7/94 66,740
Richard L. Amistadi.............................. 1.5 4/7/94 100,110
Gary E. Boyer.................................... 1.0 4/7/94 66,740
Kenneth R. Buckley............................... 0.5 4/7/94 33,370
</TABLE>
- ------------------------
(a) Vested for each participant as to 80% as of March 31, 1998 and vesting for
an additional 20% on March 31, 1999, provided that the respective
participant remains in the employ of Doe Run until such date.
(b) Represents the gross aggregate amount that each participant is entitled to
receive as of October 31, 1997, subject to the vesting terms of the
applicable agreement.
The net worth appreciation agreements also provide that, in the event of
payment of a dividend or a sale of Doe Run, the active participants will be
entitled to receive a percentage of the dividend or the net proceeds of the sale
equal to their maximum percentages under the agreements. Upon consummation of
the Transactions, approximately $264,000 was paid to Messrs. Zelms, Kaiser,
Amistadi, Buckley, Boyer and other employees of Doe Run, pursuant to the net
worth appreciation agreements.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Doe Run, Doe Run Cayman, Doe Run Mining and Doe Run Peru have no
compensation committee. The compensation for the executive officers is fixed by
negotiations between such executive officers and Mr. Rennert on behalf of Renco.
EMPLOYMENT AGREEMENTS
The named executive officers are parties to employment agreements with Doe
Run. Set forth below is a brief description of each such agreement.
JEFFREY L. ZELMS entered into an Employment Agreement with Doe Run effective
as of April 7, 1994, with an initial term continuing until October 31, 1999 and
automatically renewable thereafter for additional one-year terms. Pursuant to
the terms of his agreement, Mr. Zelms's compensation is composed of (a) a base
annual salary, (b) a year-end bonus of not less than $50,000 nor more than
$100,000 as may be
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determined by Doe Run in its sole discretion and (c) such additional amounts, if
any, as the Board of Directors may determine from time to time in its
discretion.
MARVIN K. KAISER entered into an Employment Agreement with Doe Run effective
as of April 7, 1994, with an initial term continuing until October 31, 1999 and
automatically renewable thereafter for additional one-year terms. Pursuant to
the terms of his agreement, Mr. Kaiser's compensation is composed of (a) a base
annual salary, (b) a year-end bonus of not less than $30,000 nor more than
$60,000 as may be determined by Doe Run in its sole discretion and (c) such
additional amounts, if any, as the Board of Directors may determine from time to
time in its discretion.
RICHARD L. AMISTADI entered into an Employment Agreement with Doe Run
effective as of April 7, 1994, with an initial term continuing until October 31,
1999 and automatically renewable thereafter for additional one-year terms.
Pursuant to the terms of his agreement, Mr. Amistadi's compensation is composed
of (a) a base annual salary, (b) a year-end bonus of not less than $30,000 nor
more than $60,000 as may be determined by Doe Run in its sole discretion and (c)
such additional amounts, if any, as the Board of Directors may determine from
time to time in its discretion.
GARY E. BOYER entered into an Employment Agreement with Doe Run effective as
of April 7, 1994, with an initial term continuing until October 31, 1999 and
automatically renewable thereafter for additional one-year terms. Pursuant to
the terms of his agreement, Mr. Boyer's compensation is composed of (a) a base
annual salary, (b) a year-end bonus of not less than $30,000 nor more than
$60,000 as may be determined by Doe Run in its sole discretion and (c) such
additional amounts, if any, as the Board of Directors may determine from time to
time in its discretion.
KENNETH R. BUCKLEY entered into an Employment Agreement with Doe Run
effective as of January 1, 1996 (replacing a prior agreement), with an initial
term continuing until December 31, 2000, and automatically renewable thereafter
for additional one-year terms. Pursuant to the terms of his agreement, Mr.
Buckley's compensation is composed of (a) a base annual salary, (b) a year-end
bonus of not less than $30,000 nor more than $60,000 as may be determined by Doe
Run in its sole discretion and (c) such additional amounts, if any, as the Board
of Directors may determine from time to time in its discretion.
Each of the above described employment agreements require that, during the
term of their employment, each of the above executive officers not, directly or
indirectly, engage in any aspect of the business of lead mining, milling,
recycling or sale within the continental United States as an officer, director,
partner, proprietor, investor, associate, employee or consultant except with Doe
Run. In addition, each of the above executive officers have agreed to maintain
the confidentiality of information obtained during their employment with Doe
Run.
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SECURITY OWNERSHIP
The following table sets forth certain information as of the date hereof
with respect to beneficial ownership of Doe Run's common stock by each
beneficial owner of 5% or more of the common stock, each director and each named
executive officer of Doe Run during the last fiscal year, and by all directors
and executive officers of Doe Run as a group. Except as otherwise noted, the
persons named in the table below have sole voting and investment power with
respect to all shares or interests, as applicable, shown as beneficially owned
by them.
<TABLE>
<CAPTION>
NUMBER OF
NAME SHARES PERCENT
- --------------------------------------------------------------------------------------------- ----------- -----------
<S> <C> <C>
The Renco Group, Inc.(a)(b).................................................................. 1,000 100.0%
DR Acquisition Corp.(a)...................................................................... 1,000 100.0
Ira Leon Rennert(a)(c)....................................................................... 1,000 100.0
Jeffrey L. Zelms............................................................................. -- --
Marvin K. Kaiser............................................................................. -- --
Richard L. Amistadi.......................................................................... -- --
Gary E. Boyer................................................................................ -- --
Kenneth R. Buckley........................................................................... -- --
All directors and executive officers of Doe Run as a group (7 persons)....................... 1,000 100.0
</TABLE>
- ------------------------
(a) The address of this beneficial owner is c/o The Renco Group, Inc., 30
Rockefeller Plaza, Suite 4225, New York, New York 10112.
(b) Renco is deemed to beneficially own the shares owned by DRA due to Renco's
ownership of all of the outstanding capital stock of DRA.
(c) Mr. Rennert is deemed to beneficially own the interests and shares owned by
Renco due to the ownership by himself and trusts established by him (but of
which he is not a trustee) for himself and members of his family of a total
of 97.9% of the outstanding common stock of Renco.
By virtue of Renco's indirect ownership of 100.0% of the outstanding common
stock of Doe Run, and Mr. Rennert's ownership of a majority of the stock of
Renco, Mr. Rennert is in position to control actions that require the consent of
a majority of the holders of equity interests in Doe Run and its subsidiaries.
The 2,500 shares of preferred stock of Doe Run, all of which were held by
Renco, were redeemed as part of the Transactions.
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CERTAIN TRANSACTIONS
TRANSACTIONS WITH RENCO AND ITS AFFILIATES
Under a management consultant agreement, dated as of April 7, 1994, as
amended (the "Management Consultant Agreement"), between Renco and Doe Run, Doe
Run pays an annual fee of $2.4 million to Renco. The Management Consultant
Agreement provides that Doe Run shall not make any payment thereunder which
would violate any of its agreements with respect to any of its outstanding
indebtedness. The Management Consultant Agreement extends to October 31, 2000
and thereafter shall continue for additional terms of three years each unless
sooner terminated by either party by giving six months prior written notice. In
the year ended October 31, 1997, Doe Run paid management fees to Renco in the
amount of $1.2 million. The Company believes that the cost of obtaining the type
and quality of services rendered by Renco under the Management Consultant
Agreement was, and continues to be, no less favorable than that at which the
Company could obtain such services from unaffiliated entities.
To obtain the advantages of volume, Renco purchases certain insurance
coverages for its subsidiaries, including Doe Run and Doe Run Peru, and the cost
of such insurance, without markup, is reimbursed by the covered subsidiaries.
Currently, the major areas of insurance coverage obtained under the Renco
programs for Doe Run are property, business interruption and fidelity and for
Doe Run Peru are foreign general liability and fidelity, and the premiums for
property, business interruption, fidelity and foreign general liability (as
applicable) are allocated by Renco to its covered subsidiaries, substantially as
indicated in the underlying policies. Renco also purchases and administers
certain insurance policies exclusively for Doe Run, including fiduciary, general
and product liability, workers' compensation, political risk, automobile
liability, and casualty umbrella, and for Doe Run Peru, including property,
business interruption, general and product liability, workers' compensation,
automobile liability and casualty umbrella. The cost of such insurance, without
markup, is reimbursed by Doe Run and Doe Run Peru (as applicable) as incurred.
The total insurance cost under the Renco insurance programs incurred in fiscal
1997 by Doe Run was approximately $2.5 million and by Doe Run Peru was DE
MINIMIS. Doe Run and Doe Run Peru believe that their insurance costs were less
than they would have incurred if they had obtained their respective insurance
directly.
Pursuant to a tax sharing agreement between Doe Run and Renco, Doe Run pays
to Renco an amount equal to the amount Doe Run would have been required to pay
for taxes on a stand-alone basis to the Internal Revenue Service and the
applicable state taxing authority, as the case may be, except that Doe Run will
not have the benefit of any of its tax loss carryforwards unless such tax losses
were a result of timing differences between Doe Run's accounting for tax and
financial reporting purposes. This agreement also provides that transactions
between Doe Run and Renco and its other subsidiaries are accounted for on a cash
basis and not on an accrual basis.
Beginning in fiscal 1998, Doe Run sold, and may from time to time in the
future sell, zinc and other alloys to WCI Steel, Inc., an indirect subsidiary of
Renco. Doe Run believes that such sales were on an arm's length basis at a price
no less favorable than that at which Doe Run could have sold to unaffiliated
entities.
INTERCOMPANY TRANSACTIONS
Doe Run Peru will pay a sales agency commission to Doe Run Mining pursuant
to a sales agency contract, dated as of March 9, 1998, by and between Doe Run
Peru and Doe Run Mining. The initial term will be for a period of two years,
automatically renewable for additional one-year terms. Under this agreement, Doe
Run Mining acts as the sales agent for Doe Run Peru with respect to all sales of
Doe Run Peru's products within Peru and receives a commission of 3% of such
sales.
Doe Run Peru will pay a sales agency commission to Doe Run pursuant to an
international sales agency and hedging services contract, dated as of March 9,
1998, by and between Doe Run Peru and Doe
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Run. The initial term will be for a period of two years, automatically renewable
for additional one-year terms. Under this agreement, Doe Run will act as the
sales agent for Doe Run Peru with respect to all sales of Doe Run Peru's
products outside of Peru and receive a commission of 3% of such sales.
Doe Run Peru will pay a fee to Doe Run Mining pursuant to a technical,
managerial and professional services agreement, dated as of March 9, 1998, by
and between Doe Run Peru and Doe Run Mining. The initial term will be for a
period of two years, automatically renewable for additional one-year terms.
Under this agreement, Doe Run Mining will provide technical, managerial and
professional services to Doe Run Peru with respect to its day-to-day operations
and the Capital Investment Program. As its technical, managerial and
professional services fee, Doe Run Mining will receive 2% of Doe Run Peru's cash
operating expenses (excluding the sales agency commissions to Doe Run and Doe
Run Mining) and 10% of Doe Run Peru's capital expenditures.
Doe Run Mining will pay a fee to Doe Run pursuant to a United States
services agreement, dated as of March 9, 1998, by and between Doe Run Mining and
Doe Run. The initial term will be for a period of two years, automatically
renewable for additional one-year terms. Under this agreement, Doe Run will
provide professional services with respect to U.S. related matters and will
receive an annual fee of between $4.0 and $5.0 million.
Doe Run Mining will pay a fee to Doe Run pursuant to a technical, managerial
and professional services agreement, dated as of March 9, 1998, by and between
Doe Run Mining and Doe Run. The initial term will be for a period of two years,
automatically renewable for additional one-year terms. Under this agreement, Doe
Run will provide technical, managerial and professional assistance with respect
to all aspects to Doe Run Peru's operations for an annual fee of $500,000.
Doe Run Mining will pay a fee to Doe Run pursuant to a Peruvian professional
services agreement, dated as of March 9, 1998, by and between Doe Run Mining and
Doe Run. The initial term will be for a period of two years, automatically
renewable for additional one-year terms. Under this agreement, Doe Run will
provide all technical, managerial and professional services within and partially
outside of Peru that Doe Run Mining will provide to Doe Run Peru in their
agreement, and Doe Run will receive an annual fee of $350,000.
Doe Run Mining will pay a fee to Doe Run pursuant to a technology assistance
agreement, dated as of March 9, 1998, by and between Doe Run Mining and Doe Run.
The initial term will be for a period of two years, automatically renewable for
additional one-year terms. Under this agreement, Doe Run will provide technology
assistance for an annual fee of $250,000.
Doe Run and Doe Run Peru have negotiated a fee of approximately $5.0 million
payable to Doe Run for management services provided by Doe Run for the period
October 23, 1997 through March 8, 1998.
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DESCRIPTION OF NEW REVOLVING CREDIT FACILITIES
NEW DOE RUN REVOLVING CREDIT FACILITY
The following description of the $100.0 million New Doe Run Revolving Credit
Facility does not purport to be complete and is subject to, and qualified in its
entirety by reference to, all of the provisions of the loan and security
agreement relating to the New Doe Run Revolving Credit Facility, a copy of which
is filed as an exhibit to the Registration Statement. Capitalized terms used
herein and not otherwise defined have the meanings ascribed to such terms in the
loan and security agreement relating to the New Doe Run Revolving Credit
Facility.
GENERAL
The New Doe Run Revolving Credit Facility is provided pursuant to a Loan and
Security Agreement, dated March 12, 1998, by and among Doe Run, FPI and Congress
Financial Corporation ("Congress"). As of March 31, 1998, $5.0 million
(exclusive of outstanding letters of credit) was outstanding under the New Doe
Run Revolving Credit Facility. Under the New Doe Run Revolving Credit Facility,
Congress will, in its discretion, lend on a revolving basis to Doe Run and/or
FPI up to the sum of (a) 85% of the Net Amount of Eligible Accounts plus (b) 60%
of the Value of Eligible Inventory (but not more than a loan value of $50.0
million) and (c) 25% of the Value of Eligible Stores Inventory of Doe Run (but
not more than a loan value of $2.5 million). Collections from accounts are
applied to reduce the loan balance, which may be reborrowed up to the aforesaid
limits. Congress may extend up to $10.0 million of letter of credit
accommodations within the limits set forth above.
INTEREST
Interest on the loan balance is payable monthly at the prime rate plus 0.75%
per annum. The interest rate on January 31, 1998 would have been 9.25%. In the
event of a default under the New Doe Run Revolving Credit Facility, the interest
rate will be 2.75% per annum in excess of such prime rate.
SECURITY
As security for the indebtedness under the New Doe Run Revolving Credit
Facility, Doe Run and FPI have granted to Congress a first security interest in
all (a) accounts, (b) certain general intangibles, (c) inventory, (d) all
present and future books and records relating to the foregoing and (e) all
products and proceeds of the foregoing.
TERM
The New Doe Run Revolving Credit Facility has a three-year term and
beginning on March 2001, can be renewed from year to year thereafter, PROVIDED
that the agreement may be terminated by any party as of March 2001 or any
subsequent anniversary date on 60 days advance written notice.
CERTAIN COVENANTS
In addition to customary covenants, the New Doe Run Revolving Credit
Facility requires that Doe Run and FPI be subject to certain covenants,
including, but not limited to, a restriction on the incurrence of additional
indebtedness, a restriction on the creation of additional liens, compliance with
certain financial covenants, certain restrictions on dividends, loans and
investments, restrictions on mergers and sales of assets and certain
restrictions on capital expenditures.
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EVENTS OF DEFAULT
The New Doe Run Revolving Credit Facility contains certain events of
default, including, without limitation, the following: (i) the failure of Doe
Run or FPI to pay any of its obligations under the New Doe Run Revolving Credit
Facility within three days after the due date; (ii) certain defaults by Doe Run
or FPI under various other indebtedness, in each case after any applicable grace
period; (iii) any default by Doe Run or FPI in the performance or observance of
the conditions and covenants of the New Doe Run Revolving Credit Facility or
related agreements, beyond any applicable cure period; (iv) any representation
or warranty made by Doe Run or FPI to Congress under the New Doe Run Revolving
Credit Facility proved to be false in any material respect; (v) certain
judgments against Doe Run or FPI; (vi) certain events of bankruptcy or
insolvency of Doe Run or FPI; or (vii) the occurrence of any change in the
control or ownership of Doe Run.
NEW DOE RUN PERU REVOLVING CREDIT FACILITY
The following is a general description of the anticipated terms of the $40.0
million New Doe Run Peru Revolving Credit Facility. Doe Run Peru currently is
negotiating the New Doe Run Peru Revolving Credit Facility. No assurances can be
given that Doe Run Peru will be able to enter into such facility on the terms
currently anticipated or at all.
It is expected that the New Doe Run Peru Revolving Credit Facility will
provide for borrowings of up to $40.0 million, which will be based upon certain
advance rates regarding eligible receivables and inventory and will be secured
by such receivables and inventory and funds deposited in a cash collection
account. The New Doe Run Peru Revolving Credit Facility is expected to have a
term of four years, with the option, at the sole discretion of the lenders
thereunder, to adjust the interest rate thereunder every twelve months. It is
expected that the New Doe Run Peru Revolving Credit Facility will contain
representations and warranties, covenants and events of default, in each case
customary for transactions of this type.
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DESCRIPTION OF THE NOTES
The Old Notes are and the Exchange Notes will be issued under the Indenture
among Doe Run, the Guarantors and State Street Bank and Trust Company, as
trustee (the "Trustee"). The following summary of the material provisions of the
Indenture does not purport to be complete and is subject to, and qualified in
its entirety by reference to, the provisions of the Indenture, including the
definitions of certain terms contained therein and those terms made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended (the
"TIA"), as in effect on the date of the Indenture. A copy of the Indenture is
filed as an exhibit to the Registration Statement. The definitions of certain
capitalized terms used in the following summary are set forth below under
"--Certain Definitions."
GENERAL
The Notes are general unsecured obligations of Doe Run limited to $355.0
million in aggregate principal amount, of which $200.0 million are Fixed Rate
Notes and $55.0 million are Floating Rate Notes. Additional amounts of Notes in
an aggregate principal amount of up to $100.0 million may be issued under the
Indenture in one or more series from time to time, subject to the limitations
set forth under "--Certain Covenants--Limitation on Indebtedness." The Fixed
Rate Notes will mature on March 15, 2005. The Floating Rate Notes will mature on
March 15, 2003.
Principal of, premium, if any, and interest on the Notes will be payable,
and the Notes will be exchangeable and transferable, at the office or agency of
Doe Run in New York City maintained for such purposes (which initially is the
Trustee or its agent); PROVIDED that payment of interest may be made at the
option of Doe Run by check mailed to the registered holders of the Notes
("Holders") at their registered addresses. The Notes will be issued only in
fully registered form without coupons, in denominations of $1,000 and any
integral multiple thereof. No service charge will be made for any registration
of transfer, exchange or redemption of Notes, except in certain circumstances
for any tax or other governmental charge that may be imposed in connection
therewith.
INTEREST
Interest on the Notes will be payable semi-annually in cash on each March 15
and September 15 (each an "Interest Payment Date") commencing on September 15,
1998, for the period commencing on and including the immediately preceding
Interest Payment Date and ending on and including the day next preceding the
Interest Payment Date (an "Interest Period"), with the exception that the first
Interest Period shall commence on and include March 12, 1998 and end on and
include September 14, 1998. Interest is payable to the persons who are
registered Holders at the close of business on the March 1 and September 1
immediately preceding the applicable Interest Payment Date.
FIXED RATE NOTES
Interest on the Fixed Rate Notes accrues at the rate of 11 1/4% per annum.
Interest on the Fixed Rate Notes will be computed on the basis of a 360 day year
composed of twelve 30 day months.
FLOATING RATE NOTES
The Floating Rate Notes accrues interest at a rate per annum, reset
semi-annually, equal to LIBOR plus 6.29%, as determined by the calculation agent
(the "Calculation Agent"), which is the Trustee.
"LIBOR," with respect to an Interest Period, shall be the rate (expressed as
a percentage per annum) for deposits in United States dollars for a six-month
period beginning on the second London Banking Day (as defined) after the
Determination Date (as defined) that appears on Telerate Page 3750 (as defined)
as of 11:00 a.m., London time, on the Determination Date. If Telerate Page 3750
does not include such a rate or is unavailable on a Determination Date, LIBOR
for the Interest Period shall be the arithmetic mean of
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the rates (expressed as a percentage per annum) for deposits in a Representative
Amount (as defined) in U.S. dollars for a six-month period beginning on the
second London Banking Day after the Determination Date that appears on Reuters
Screen LIBO Page (as defined) as of 11:00 a.m., London time, on the
Determination Date. If Reuters Screen LIBO Page does not include two or more
rates or is unavailable on a Determination Date, the Calculation Agent will
request the principal London office of each of four major banks in the London
interbank market, as selected by the Calculation Agent, to provide such bank's
offered quotation (expressed as a percentage per annum), as of approximately
11:00 a.m., London time, on such Determination Date, to prime banks in the
London interbank market for deposits in a Representative Amount in U.S dollars
for a six-month period beginning on the second London Banking Day after the
Determination Date. If at least two such offered quotations are so provided,
LIBOR for the Interest Period will be the arithmetic mean of such quotations. If
fewer than two such quotations are so provided, the Calculation Agent will
request each of three major banks in New York City, as selected by the
Calculation Agent, to provide such bank's rate (expressed as a percentage per
annum), as of approximately 11:00 a.m., New York City time, on such
Determination Date, for loans in a Representative Amount in U.S. dollars to
leading European banks for a six-month period beginning on the second London
Banking Day after the Determination Date. If at least two such rates are so
provided, LIBOR for the Interest Period will be the arithmetic mean of such
rates. If fewer than two such rates are so provided, then LIBOR for the Interest
Period will be LIBOR in effect with respect to the immediately preceding
Interest Period.
"Determination Date," with respect to an Interest Period, will be the second
London Banking Day preceding the first day of the Interest Period.
"London Banking Day" is any day in which dealings in U.S. dollars are
transacted or, with respect to any future date, are expected to be transacted in
the London interbank market.
"Representative Amount" means a principal amount of not less than U.S.
$1,000,000 for a single transaction in the relevant market at the relevant time.
"Telerate Page 3750" means the display designated as "Page 3750" on the Dow
Jones Telerate Service (or such other page as may replace Page 3750 on that
service).
"Reuters Screen LIBO Page" means the display designated as page "LIBO" on
The Reuters Monitor Money Rates Service (or such other page as may replace the
LIBO page on that service).
The amount of interest for each day that the Floating Rate Notes are
outstanding (the "Daily Interest Amount") will be calculated by dividing the
interest rate (expressed as a percentage per annum) in effect for such day by
360 and multiplying the result by the principal amount of the Floating Rate
Notes. The amount of interest to be paid on the Floating Rate Notes for each
Interest Period will be calculated by adding the Daily Interest Amounts for each
day in the Interest Period.
All percentages resulting from any of the above calculations will be
rounded, if necessary, to the nearest one hundred-thousandth of a percentage
point, with five one-millionths of a percentage point rounded upwards (E.G.,
9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)) and all dollar
amounts used in or resulting from such calculations will be rounded to the
nearest cent (with one-half cent being rounded upwards).
The interest rate on the Floating Rate Notes will in no event be higher than
the maximum rate permitted by New York law as the same may be modified by U.S.
law of general application. Under current New York law, the maximum rate of
interest is 25% per annum on a simple interest basis. This limit may not apply
to Floating Rate Notes in which $2,500,000 or more has been invested.
The Calculation Agent will, upon the request of the Holder of any Floating
Rate Note, provide the interest rate then in effect with respect to the Floating
Rate Notes. All calculations made by the Calculation Agent in the absence of
manifest error shall be conclusive for all purposes and binding on Doe Run and
the Holders of the Floating Rate Notes.
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OPTIONAL REDEMPTION
The Fixed Rate Notes will be subject to redemption, in whole or in part, at
the option of Doe Run, at any time on or after March 15, 2002, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued interest to the redemption date, if redeemed during the twelve month
period beginning on March 15 of the years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---------------------------------------------------------------------------------- -----------
<S> <C>
2002.............................................................................. 105.625%
2003.............................................................................. 102.813%
2004 and thereafter............................................................... 100.000%
</TABLE>
The Floating Rate Notes are subject to redemption, in whole at any time or
in part from time to time, at the option of Doe Run, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued
interest to the redemption date, if redeemed during the twelve month period
beginning on March 15 of the years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---------------------------------------------------------------------------------- -----------
<S> <C>
1998.............................................................................. 104.000%
1999.............................................................................. 103.000%
2000.............................................................................. 102.000%
2001.............................................................................. 101.000%
2002 and thereafter............................................................... 100.000%
</TABLE>
OPTIONAL REDEMPTION OF FIXED RATE NOTES UPON EQUITY OFFERINGS
In addition, at any time prior to March 15, 2001, Doe Run may redeem up to
35% of the sum of (x) the aggregate principal amount of the Fixed Rate Notes
issued in the Old Notes Offering plus (y) any additional Fixed Rate Notes issued
after the Issue Date pursuant to the Indenture, with the proceeds of one or more
Equity Offerings at a redemption price (expressed as a percentage of principal
amount) of 111.25% plus accrued interest to the redemption date; PROVIDED that
at least 65% of the sum of (x) the aggregate principal amount of Fixed Rate
Notes issued in the Old Notes Offering plus (y) any additional Fixed Rate Notes
issued after the Issue Date pursuant to the Indenture remains outstanding
immediately after any such redemption. In order to effect the foregoing
redemption with the proceeds of any Equity Offering, Doe Run shall make such
redemption not more than 120 days after the consummation of any such Equity
Offering. "Equity Offering" means an offering of Qualified Capital Stock of Doe
Run (other than to any Subsidiary of Doe Run).
SINKING FUND
There will be no mandatory sinking fund payments for the Notes.
SELECTION AND NOTICE OF REDEMPTION
In the event that less than all of the Notes are to be redeemed at any time,
selection of such Notes for redemption will be made by the Trustee in compliance
with the requirements of the principal national securities exchange or quotation
system, if any, on which such Notes are listed or, if such Notes are not then
listed on a national securities exchange or quotation system, on a PRO RATA
basis, by lot or by such method as the Trustee shall deem fair and appropriate;
PROVIDED, HOWEVER, that (i) no Notes of a principal amount of $1,000 or less
shall be redeemed in part and (ii) a redemption of Fixed Rate Notes with the net
cash proceeds of an Equity Offering shall be made on a PRO RATA basis unless
such method is otherwise prohibited. Notice of redemption shall be mailed by
first-class mail at least 30 but not more than 60 days before the redemption
date to each Holder of Notes to be redeemed at its registered address. If any
Note
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is to be redeemed in part only, the notice of redemption that relates to such
Note shall state the portion of the principal amount thereof to be redeemed. A
new Note in a principal amount equal to the unredeemed portion thereof will be
issued in the name of the Holder thereof upon cancellation of the original Note.
On and after the redemption date, interest will cease to accrue on Notes or
portions thereof called for redemption.
GUARANTEES
Doe Run's obligations under the Notes are guaranteed in the manner described
below by the following Subsidiaries of Doe Run, FPI, Doe Run Cayman, Doe Run
Mining and Doe Run Peru, and, in the future, may be guaranteed by certain of Doe
Run's Restricted Subsidiaries. See "--Certain Covenants--Future Guarantees." The
only existing Subsidiary of Doe Run that is not a Guarantor is DR Exploration.
The laws of South Africa, DR Exploration's jurisdiction of organization, may not
permit DR Exploration to be a Guarantor.
Each Guarantor unconditionally guarantees, on a senior basis (except as
described below under "--Ranking" with respect to the Guarantee of Doe Run
Peru), jointly and severally, to each Holder and the Trustee, the full and
prompt performance of Doe Run's obligations under the Indenture and the Notes,
including the payment of principal of and interest on the Notes. The obligations
of each Guarantor are limited to the maximum amount which, after giving effect
to all other contingent and fixed liabilities of such Guarantor and after giving
effect to any collections from or payments made by or on behalf of any other
Guarantor in respect of the obligations of such other Guarantor under its
Guarantee or pursuant to its contribution obligations under the Indenture, will
result in the obligations of such Guarantor under the Guarantee not constituting
a fraudulent conveyance or fraudulent transfer under federal or state law, in
the case of domestic Guarantors, or any applicable foreign law, in the case of
foreign Guarantors. Each Guarantor that makes a payment or distribution under a
Guarantee shall be entitled to a contribution from each other Guarantor in an
amount PRO RATA, based on the net assets of each Guarantor determined in
accordance with GAAP.
Each Guarantor may consolidate with or merge into or sell its assets to Doe
Run or to another Guarantor that is a Wholly-Owned Restricted Subsidiary without
limitation, or with other persons upon the terms and conditions set forth in the
Indenture. See "--Certain Covenants--Merger, Consolidation and Sale of Assets."
In the event that either all of the Capital Stock of a Guarantor is sold by Doe
Run or one of the Restricted Subsidiaries (whether by merger, stock purchase or
otherwise) or all or substantially all of the assets of a Guarantor are sold by
such Guarantor and such sale complies with the provisions set forth in
"--Certain Covenants--Limitation on Sale of Assets" and "--Change of Control"
and any other applicable provisions in the Indenture, the Guarantor's Guarantee
will be released.
RANKING
Except as described below with respect to the Guarantee of Doe Run Peru, the
indebtedness of Doe Run and the Guarantors evidenced by the Notes and the
Guarantees rank senior in right of payment to all future unsecured senior
subordinated and subordinated indebtedness of Doe Run and the Guarantors,
respectively, and PARI PASSU with all other existing and future unsubordinated
indebtedness of Doe Run and the Guarantors. However, holders of secured
indebtedness of Doe Run and the Guarantors will have claims that effectively
rank prior to those of the Holders with respect to the assets securing such
indebtedness.
Notwithstanding the foregoing, the indebtedness of Doe Run Peru evidenced by
its Guarantee will be contractually subordinated to the indebtedness under the
Peruvian Revolving Credit Facility. In addition, except as described in the
preceding sentence, the indebtedness of Doe Run Mining and Doe Run Peru
evidenced by their Guarantee rank senior in right of payment to all future
unsecured indebtedness of Doe Run Mining and Doe Run Peru, respectively, subject
to statutorily preferred exceptions and statutorily
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mandated priorities based on the date of issuance with respect to payment of
obligations under applicable Peruvian law.
CERTAIN COVENANTS
The Indenture contains, among others, the following covenants:
LIMITATION ON INDEBTEDNESS
(a) Doe Run will not, and will not cause or permit any of the Restricted
Subsidiaries to, directly or indirectly, create, incur, assume, guarantee,
become liable, contingently or otherwise, with respect to, or otherwise become
responsible for the payment of (collectively "incur") any Indebtedness
(including Acquired Indebtedness) other than Permitted Indebtedness; PROVIDED
that Doe Run and the Guarantors may incur Indebtedness (including Acquired
Indebtedness) if: (A) no Default or Event of Default shall have occurred and be
continuing at the time of the proposed incurrence thereof or shall occur as a
result of such proposed incurrence, and (B) after giving effect to such proposed
incurrence, the Consolidated Fixed Charge Coverage Ratio of Doe Run is at least
equal to 2.25 to 1.0. Notwithstanding the foregoing, a Restricted Subsidiary
that is not a Guarantor may incur Acquired Indebtedness to the extent such
Indebtedness could have been incurred by Doe Run and the Guarantors pursuant to
the proviso in the immediately preceding sentence.
(b) Doe Run and the Guarantors shall not, directly or indirectly, in any
event incur any Indebtedness which by its terms (or by the terms of any
agreement governing such Indebtedness) is subordinated to any other Indebtedness
of Doe Run or such Guarantor unless such Indebtedness is also by its terms (or
by the terms of any agreement governing such Indebtedness) made expressly
subordinated to the Notes or the Guarantee of such Guarantor, as the case may
be, to the same extent and in the same manner as such Indebtedness is
subordinated to such other Indebtedness of Doe Run or such Guarantor.
LIMITATION ON RESTRICTED PAYMENTS
Doe Run will not, and will not permit any of the Restricted Subsidiaries to,
directly or indirectly, after the Issue Date (a) declare or pay any dividend or
make any distribution on Doe Run's Capital Stock or make any payment to holders
of such Capital Stock (other than dividends or distributions payable in
Qualified Capital Stock of Doe Run), (b) purchase, redeem or otherwise acquire
or retire for value any Capital Stock of Doe Run or any warrants, rights or
options to purchase or acquire shares of any class of such Capital Stock, (c)
purchase, redeem, prepay, defease or otherwise acquire or retire for value,
prior to any scheduled maturity, scheduled repayment or scheduled sinking fund
payment, Indebtedness of Doe Run or any of the Guarantors that is expressly
subordinate in right of payment to the Notes or the Guarantee of such Guarantor,
as the case may be, or (d) make any Investment (excluding any Permitted
Investment) (each of the foregoing actions set forth in clauses (a), (b), (c)
and (d) being referred to as a "Restricted Payment"), if at the time of such
Restricted Payment or immediately after giving effect thereto, (i) a Default or
an Event of Default shall have occurred and be continuing or (ii) Restricted
Payments made subsequent to the Issue Date (the amount expended for such
purposes, if other than in cash, shall be the Fair Market Value of such property
proposed to be transferred by Doe Run or such Restricted Subsidiary, as the case
may be, pursuant to such Restricted Payment) shall exceed the sum of:
(w) 50% of the cumulative Consolidated Net Income (or if cumulative
Consolidated Net Income shall be a loss, minus 100% of such loss) of Doe Run
earned subsequent to the Issue Date and prior to the date the Restricted
Payment occurs (treating such period as a single accounting period);
(x) 100% of the aggregate net proceeds, including the Fair Market Value
of property other than cash, received by Doe Run from any person (other than
a Subsidiary of Doe Run) from the issuance and sale subsequent to the Issue
Date of Qualified Capital Stock of Doe Run (excluding (A) Qualified Capital
Stock paid as a dividend on any Capital Stock or as interest on any
Indebtedness, (B) any net
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proceeds from issuances and sales financed directly or indirectly using
funds borrowed from Doe Run or any Subsidiary of Doe Run, until and to the
extent such borrowing is repaid and (C) any net proceeds from any Equity
Offering which are used to redeem Fixed Rate Notes pursuant to, and in
accordance with, the provisions described under the caption "--Optional
Redemption--Optional Redemption upon of Fixed Rate Notes Equity Offerings"
above);
(y) 100% of the aggregate net proceeds, including the Fair Market Value
of property other than cash, received by Doe Run from any person (other than
a Subsidiary of Doe Run) from the issuance and sale of Disqualified Capital
Stock and/or Indebtedness, in each case that has been converted into or
exchanged for Qualified Capital Stock of Doe Run after the Issue Date; and
(z) without duplication, the sum of (1) the aggregate amount returned in
cash on or with respect to Investments (other than Permitted Investments)
made subsequent to the Issue Date whether through interest payments,
principal payments, dividends or other distributions or payments, (2) the
net cash proceeds received by Doe Run or any Restricted Subsidiary from the
disposition of all or any portion of such Investments (other than to a
Subsidiary of Doe Run) and (3) upon redesignation of an Unrestricted
Subsidiary as a Restricted Subsidiary, the Fair Market Value of such
Subsidiary; PROVIDED, HOWEVER, that the sum of clauses (1),(2) and (3) above
shall not exceed the aggregate amount of all such Investments made
subsequent to the Issue Date.
The foregoing provisions shall not prohibit:
(1) the payment of any dividend within 60 days after the date of its
declaration if the dividend would have been permitted on the date of
declaration;
(2) the acquisition of Capital Stock of Doe Run or Indebtedness of Doe
Run or any Guarantor either (i) solely in exchange for shares of Qualified
Capital Stock of Doe Run or (ii) through the application of net proceeds of
a substantially concurrent sale for cash (other than to a Subsidiary of Doe
Run) of shares of Qualified Capital Stock of Doe Run;
(3) the acquisition of Indebtedness of Doe Run or any Guarantor that is
expressly subordinate in right of payment to the Notes or such Guarantor's
Guarantee, as the case may be, either (i) solely in exchange for
Indebtedness of Doe Run or such Guarantor which is expressly subordinate in
right of payment to the Notes or such Guarantor's Guarantee, as the case may
be, at least to the extent that the Indebtedness being acquired is
subordinated to the Notes or such Guarantor's Guarantee, as the case may be,
and has no scheduled principal prepayment dates prior to the scheduled final
maturity date of the Indebtedness being exchanged or (ii) through the
application of net proceeds of a substantially concurrent sale for cash
(other than to a Subsidiary of Doe Run) of Indebtedness of Doe Run or such
Guarantor which is expressly subordinate in right of payment to the Notes or
such Guarantor's Guarantee, as the case may be, at least to the extent that
the Indebtedness being acquired is subordinated to the Notes or such
Guarantor's Guarantee, as the case may be, and has no scheduled principal
prepayment dates prior to the scheduled final maturity date of the
Indebtedness being refinanced;
(4) the making of payments by Doe Run or any of the Restricted
Subsidiaries to DRA or Renco (A) no earlier than ten days prior to the date
on which Renco is required to make its payments to the Internal Revenue
Service or the applicable state taxing authority, as the case may be,
pursuant to a tax sharing agreement (which tax sharing agreement provides
that the payments thereunder shall not exceed the amount Doe Run and its
subsidiaries would have been required to pay for taxes on a stand-alone
basis, except that Doe Run and its Subsidiaries will not have the benefit of
any of its tax loss carryforwards unless such tax losses were a result of
timing differences between Doe Run's and its Subsidiaries' accounting for
tax and financial reporting purposes, and which tax sharing agreement also
provides that transactions between Doe Run, DRA and Renco and Renco's other
Subsidiaries are accounted for on a cash basis and not on an accrual basis)
and (B) to reimburse DRA or Renco for out of pocket insurance payments made
by DRA or Renco on behalf of Doe Run and its Subsidiaries;
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(5) the payment by Doe Run or any of the Restricted Subsidiaries of a
management fee to Renco in an amount not to exceed $200,000 in any month;
(6) the repurchase from Renco on the Issue Date of Doe Run's outstanding
2,500 shares of preferred stock, par value $1,000 per share, including the
payment of accrued and unpaid dividends thereon, in an aggregate amount of
approximately $2.8 million; and
(7) the payment on the Issue Date of a transaction fee to Renco in an
amount of approximately $2.2 million;
PROVIDED that in the case of clauses (2), (3) and (5), no Default or Event of
Default shall have occurred and be continuing at the time of such payment or as
a result thereof.
In determining the aggregate amount of Restricted Payments permissible under
clause (ii) of the first paragraph of this section, amounts expended, incurred
or outstanding pursuant to clauses (1) and (2) (but not pursuant to clauses (3),
(4), (5), (6) or (7)) of the second paragraph of this section shall be included
as Restricted Payments; PROVIDED that any proceeds received from the issuance of
Qualified Capital Stock pursuant to clause (2) of the second paragraph of this
section shall be included in calculating the amount referred to in clause (x) or
clause (y), as the case may be, of the first paragraph of this section.
LIMITATION ON SALE OF ASSETS
Doe Run will not, and will not permit any of the Restricted Subsidiaries to,
consummate any Asset Sale unless (i) such Asset Sale is for at least Fair Market
Value, (ii) at least 80% of the consideration therefrom received by Doe Run or
such Restricted Subsidiary is in the form of cash or Cash Equivalents and (iii)
Doe Run or such Restricted Subsidiary shall apply the Net Cash Proceeds of such
Asset Sale within 270 days of receipt thereof, as follows:
(a) first, to repay (and, in the case of any revolving credit facility,
effect a permanent reduction in the commitment thereunder) any Indebtedness
secured by the assets involved in such Asset Sale or otherwise required to
be repaid with the proceeds thereof; and
(b) second, with respect to any Net Cash Proceeds remaining after
application pursuant to the preceding paragraph (a) (the "Available
Amount"), Doe Run shall make an offer to purchase (the "Asset Sale Offer")
from all Holders of Notes, up to a maximum principal amount (expressed as a
multiple of $1,000) of Notes equal to the Available Amount at a purchase
price equal to 100% of the principal amount thereof plus accrued and unpaid
interest thereon, if any, to the date of purchase; PROVIDED, HOWEVER, that
Doe Run will not be required to apply pursuant to this paragraph (b) Net
Cash Proceeds received from any Asset Sale if, and only to the extent that,
such Net Cash Proceeds are applied to a Related Business Investment within
270 days of such Asset Sale; PROVIDED, FURTHER, that if at any time any
non-cash consideration received by Doe Run or any Restricted Subsidiary, as
the case may be, in connection with any Asset Sale is converted into or sold
or otherwise disposed of for cash, then such conversion or disposition shall
be deemed to constitute an Asset Sale under the Indenture and the Net Cash
Proceeds thereof shall be applied in accordance with this "Limitation on
Sale of Assets" covenant; and PROVIDED, FURTHER, that Doe Run may defer the
Asset Sale Offer until there is an aggregate unutilized Available Amount
equal to or in excess of $5 million resulting from one or more Asset Sales
(at which time, the entire unutilized Available Amount, and not just the
amount in excess of $5 million, shall be applied as required pursuant to
this paragraph). To the extent the Asset Sale Offer is not fully subscribed
to by Holders of the Notes, Doe Run and the Restricted Subsidiaries may
retain such unutilized portion of the Available Amount and use it for any
purpose not prohibited by the Indenture.
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In the event of the transfer of substantially all (but not all) of the
property and assets of Doe Run and the Restricted Subsidiaries as an entirety to
a person in a transaction permitted under "--Merger, Consolidation, Etc." below,
the successor corporation shall be deemed to have sold the properties and assets
of Doe Run and the Restricted Subsidiaries not so transferred for purposes of
this covenant, and shall comply with the provisions of this covenant with
respect to such deemed sale as if it were an Asset Sale. In addition, the Fair
Market Value of such properties and assets of Doe Run or the Restricted
Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for
purposes of this covenant.
Notice of an Asset Sale Offer will be mailed to the record Holders as shown
on the register of Holders not less than 30 days nor more than 60 days before
the payment date for the Asset Sale Offer, with a copy to the Trustee, and shall
comply with the procedures set forth in the Indenture. Upon receiving notice of
the Asset Sale Offer, Holders may elect to tender their Notes in whole or in
part in integral multiples of $1,000 principal amount at maturity in exchange
for cash. To the extent Holders properly tender Notes in an amount exceeding the
Available Amount, Notes of tendering Holders will be repurchased on a PRO RATA
basis (based on amounts tendered). An Asset Sale Offer shall remain open for a
period of 20 business days or such longer period as may be required by law.
If an offer is made to repurchase the Notes pursuant to an Asset Sale Offer,
Doe Run will comply with all tender offer rules under state and Federal
securities laws, including, but not limited to, Section 14(e) under the Exchange
Act and Rule 14e-1 thereunder, to the extent applicable to such offer.
CHANGE OF CONTROL
Upon the occurrence of a Change of Control, Doe Run shall be obligated to
make an offer to purchase (a "Change of Control Offer"), and shall, subject to
the provisions described below, purchase, on a business day (the "Change of
Control Purchase Date") not more than 60 nor less than 45 days following the
occurrence of the Change of Control, all of the then outstanding Notes at a
purchase price (the "Change of Control Purchase Price") equal to 101% of the
principal amount of the Notes plus accrued and unpaid interest thereon to the
date of purchase. Doe Run shall, subject to the provisions described below, be
required to purchase all Notes validly tendered into the Change of Control Offer
and not withdrawn. The Change of Control Offer is required to remain open for at
least 20 business days and until the close of business on the Change of Control
Purchase Date.
In order to effect such Change of Control Offer, Doe Run shall, not later
than the 30th day after the Change of Control, mail to each Holder of Notes
notice of the Change of Control Offer, which notice shall govern the terms of
the Change of Control Offer and shall state, among other things, the procedures
that Holders of Notes must follow to accept the Change of Control Offer.
If a Change of Control Offer is made, there can be no assurance that Doe Run
will have available funds sufficient to pay the Change of Control Purchase Price
for all of the Notes that might be delivered by Holders of Notes seeking to
accept the Change of Control Offer. Doe Run shall not be required to make a
Change of Control Offer upon a Change of Control if a third party makes the
Change of Control Offer in the manner, at the times and otherwise in compliance
with the requirements applicable to a Change of Control Offer made by Doe Run
and purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.
In the event that a Change of Control occurs and Doe Run is required to
purchase the Notes as described above, Doe Run will comply with all tender offer
rules under state and Federal securities laws, including, but not limited to,
Section 14(e) under the Exchange Act and Rule 14e-1 thereunder, to the extent
applicable to such offer.
LIMITATION ON LIENS
Doe Run will not, and will not permit any of the Restricted Subsidiaries to,
directly or indirectly, create, incur, assume or suffer to exist any Liens upon
any properties or assets of Doe Run (including, without limitation, any Capital
Stock of a Restricted Subsidiary) or any of the Restricted Subsidiaries whether
owned on the Issue Date or acquired after the Issue Date, or on any income or
profits therefrom,
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or assign or otherwise convey any right to receive income or profits thereon
other than (i) Liens existing on the Issue Date to the extent and in the manner
such Liens are in effect on the Issue Date, (ii) Liens on the non-fixed assets
of Doe Run and the Restricted Subsidiaries securing Indebtedness under the
Revolving Credit Facilities and (iii) Permitted Liens.
LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED
SUBSIDIARIES
Doe Run will not, and will not permit any of the Restricted Subsidiaries to,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any Restricted
Subsidiary to: (a) pay dividends or make any other distributions on its Capital
Stock, or any other interest or participation in, or measured by, its profits,
owned by Doe Run or by any Restricted Subsidiary, or pay any Indebtedness owed
to Doe Run or any Restricted Subsidiary; (b) make loans or advances to Doe Run
or any Restricted Subsidiary; or (c) transfer any of its properties or assets to
Doe Run or to any Restricted Subsidiary, except for such encumbrances or
restrictions existing under or by reason of: (i) applicable law; (ii) the
Indenture; (iii) customary non-assignment provisions of any lease governing a
leasehold interest of Doe Run or any Restricted Subsidiary; (iv) any instrument
governing Indebtedness of a person acquired by Doe Run or any Restricted
Subsidiary at the time of such acquisition, which encumbrance or restriction is
not applicable to any person, or the properties or assets of any person, other
than the person or its Subsidiaries so acquired; (v) any written agreement
existing on the Issue Date or amendments or modifications thereto, PROVIDED that
no such agreement shall be modified or amended in such a manner as to make the
encumbrance or restriction more restrictive than as in effect on the Issue Date;
(vi) Indebtedness existing and as in effect on the Issue Date, including,
without limitation, the U.S. Revolving Credit Facility or any refinancing,
refunding, replacement or extensions thereof, PROVIDED that any such encumbrance
or restriction contained in any refinancing, refunding, replacement or extension
of the U.S. Revolving Credit Facility shall be no more restrictive than such
encumbrance or restriction contained in the U.S. Revolving Credit Facility as in
effect on the Issue Date; (vii) Indebtedness under the Peruvian Revolving Credit
Facility or any refinancings, refundings, replacements or extensions thereof,
PROVIDED that such restrictions do not prohibit payments pursuant to the
intercompany agreements between Doe Run and the Restricted Subsidiaries as in
effect on the Issue Date or pursuant to any replacements thereof or pursuant to
any comparable agreements thereto, in each case providing for the same or
similar payments; and (viii) Indebtedness incurred in accordance with the
Indenture, PROVIDED that such encumbrance or restriction shall be no more
restrictive than any encumbrance or restriction contained in the Revolving
Credit Facilities.
LIMITATION ON SALE/LEASEBACK TRANSACTIONS
Doe Run will not, and will not permit any of the Restricted Subsidiaries to,
enter into any Sale/ leaseback. Notwithstanding the foregoing, Doe Run and the
Restricted Subsidiaries may enter into a Sale/ leaseback if (i) after giving pro
forma effect to any such Sale/leaseback, Doe Run and the Restricted Subsidiaries
shall be in compliance with the "Limitation on Indebtedness" covenant described
above, (ii) the sale price in such Sale/leaseback is at least equal to the Fair
Market Value of such property and (iii) Doe Run or such Restricted Subsidiary
shall apply the Net Cash Proceeds of the sale as provided under "Limitation on
Sale of Assets" above, to the extent required by such covenant.
LIMITATION ON TRANSACTIONS WITH AFFILIATES
(a) Doe Run will not, and will not permit any of the Restricted Subsidiaries
to, directly or indirectly, enter into or permit to exist any transaction
(including, without limitation, the purchase, sale, lease or exchange of any
property or the rendering of any service) with or for the benefit of an
Affiliate of Doe Run or any Restricted Subsidiary (other than transactions
between Doe Run and a Wholly-Owned Restricted Subsidiary or between Wholly-Owned
Restricted Subsidiaries) (an "Affiliate Transaction"), other than (x) Affiliate
Transactions permitted under (b) below and (y) Affiliate Transactions (including
lease transactions) on terms that are no less favorable to Doe Run or the
relevant Restricted Subsidiary in the aggregate than those that might reasonably
have been obtained in a comparable transaction by Doe Run or
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such Restricted Subsidiary on an arm's-length basis (as determined in good faith
by the Board of Directors of Doe Run, as evidenced by a Board Resolution) from a
person that is not an Affiliate; PROVIDED that except as otherwise provided
under (b) below, neither Doe Run nor any of the Restricted Subsidiaries shall
enter into an Affiliate Transaction or series of related Affiliate Transactions
involving or having a value of more than $5.0 million unless Doe Run or such
Restricted Subsidiary, as the case may be, has received an opinion from an
Independent Financial Advisor, with a copy thereof to the Trustee, to the effect
that the financial terms of such Affiliate Transaction are fair and reasonable
to Doe Run or such Restricted Subsidiary, as the case may be, and such terms are
no less favorable to Doe Run or such Restricted Subsidiary, as the case may be,
than those that could be obtained in a comparable transaction on an arm's-length
basis with a person that is not an Affiliate.
(b) The foregoing provisions shall not apply to (i) any Restricted Payment
that is made in compliance with the covenant entitled "Limitation on Restricted
Payments," (ii) payments by Doe Run or any of the Restricted Subsidiaries to
Renco or DRA of the amounts set forth in clauses (4), (5), (6) and (7) of the
second paragraph of the covenant entitled "Limitation on Restricted Payments"
and (iii) reasonable and customary regular fees to directors of Doe Run and the
Restricted Subsidiaries who are not employees of Doe Run and the Restricted
Subsidiaries.
LIMITATION ON PREFERRED STOCK OF RESTRICTED SUBSIDIARIES
Doe Run will not permit any Restricted Subsidiary to issue any Preferred
Stock (except to Doe Run or a Wholly-Owned Restricted Subsidiary), nor will Doe
Run permit any person (other than Doe Run or a Wholly-Owned Restricted
Subsidiary) to hold any Preferred Stock of a Restricted Subsidiary.
QUALIFYING INVESTMENT REQUIREMENTS
At least semi-annually commencing April 30, 1998 until $120 million has been
expended by Doe Run Peru in the manner required by Section 4.5 of the
Subscription Agreement, (i) Doe Run Peru shall make Investments in Doe Run
Mining, which Investments, including any interest payable thereon, shall be
represented by promissory notes (the "Qualifying Investments Promissory Notes"),
in an amount equal to Doe Run Peru's expected Qualifying Investments for the
following six months and (ii) Doe Run Mining shall use the proceeds of each such
Qualifying Investment to prepay in part the promissory note issued by Doe Run
Mining to Metaloroya on October 23, 1997, the date of consummation of the
Acquisition; PROVIDED, FURTHER, that pending utilization of such proceeds for
Qualifying Investments, Doe Run Peru may repay outstanding loans under the
Peruvian Revolving Credit Facility.
FUTURE GUARANTEES
If Doe Run or any of the Restricted Subsidiaries transfers or causes to be
transferred, in one transaction or a series of related transactions, any
property to any Restricted Subsidiary that is not a Guarantor, or if Doe Run or
any of the Restricted Subsidiaries shall organize, acquire or otherwise invest
in another Restricted Subsidiary, in each case having total assets with a book
value in excess of $1 million, then such transferee or acquired or other
Restricted Subsidiary shall (i) execute and deliver to the Trustee a
supplemental indenture in form reasonably satisfactory to the Trustee pursuant
to which such Restricted Subsidiary shall unconditionally guarantee all of Doe
Run's obligations under the Notes and the Indenture on the terms set forth in
the Indenture and (ii) deliver to the Trustee an Opinion of Counsel that such
supplemental indenture has been duly authorized, executed and delivered by such
Restricted Subsidiary and constitutes a legal, valid, binding and enforceable
obligation of such Restricted Subsidiary. Thereafter, such Restricted Subsidiary
shall be a Guarantor for all purposes of the Indenture. Notwithstanding the
foregoing, the following Restricted Subsidiaries shall not be required to become
Guarantors under the Indenture: (i) DR Exploration; (ii) any Restricted
Subsidiary formed or acquired in connection with Related Business Investments
made by Doe Run or any of the Restricted Subsidiaries pursuant to clause (iii)
of the definition of "Permitted Investment"; and (iii) any Restricted Subsidiary
which is not permitted by law to become a Guarantor under the Indenture.
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CONDUCT OF BUSINESS
Doe Run and the Restricted Subsidiaries will not engage in any businesses
which are not the same, similar or reasonably related to the businesses in which
Doe Run and the Restricted Subsidiaries are engaged on the Issue Date.
REPORTS
So long as any Note is outstanding, Doe Run will file with the Commission
and, within 15 days after it files them with the Commission, file with the
Trustee and mail or cause the Trustee to mail to the Holders at their addresses
as set forth in the register of the Notes copies of the annual reports on Form
10-K and of the information, documents and other reports which Doe Run is
required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act or which Doe Run would be required to file with the Commission if
Doe Run then had a class of securities registered under the Exchange Act. Such
financial information shall include annual reports containing consolidated
financial statements and notes thereto, together with an opinion thereon
expressed by an independent public accounting firm, management's discussion and
analysis of financial condition and results of operations as well as quarterly
reports containing unaudited condensed consolidated financial statements for the
first three quarters of every fiscal year.
MERGER, CONSOLIDATION, ETC.
Doe Run will not, in a single transaction or series of related transactions,
consolidate or merge with or into, or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its assets to, any person or
adopt a Plan of Liquidation unless: (i) either (1) Doe Run shall be the
surviving or continuing corporation or (2) the person (if other than Doe Run)
formed by such consolidation or the person into which Doe Run is merged or the
person which acquires by sale, assignment, transfer, lease, conveyance or
otherwise all or substantially all of the assets of Doe Run or in the case of a
Plan of Liquidation, the person to which assets of Doe Run have been transferred
(x) shall be a corporation organized and validly existing under the laws of the
United States or any State thereof or the District of Columbia and (y) shall
expressly assume, by supplemental indenture (in form and substance satisfactory
to the Trustee), executed and delivered to the Trustee, the due and punctual
payment of the principal of, and premium, if any, and interest on, all of the
Notes, and the performance of every covenant of the Indenture, the Notes and the
Registration Rights Agreement on the part of Doe Run to be performed or
observed; (ii) immediately after giving effect to such transaction and the
assumption contemplated by clause (y) above (including giving effect to any
Indebtedness and Acquired Indebtedness incurred or anticipated to be incurred in
connection with or in respect of such transaction), Doe Run (in the case of
clause (1) of the foregoing clause (i)) or such person (in the case of clause
(2) thereof) (a) shall have a Consolidated Net Worth (immediately after the
transaction but prior to any purchase accounting adjustments relating to such
transaction) equal to or greater than the Consolidated Net Worth of Doe Run
immediately prior to such transaction and (b) shall be able to incur (assuming a
market rate of interest with respect thereto) at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) as if it were Doe Run under
paragraph (a) of "--Certain Covenants--Limitation on Indebtedness" above; (iii)
immediately before and after giving effect to such transaction and the
assumption contemplated by clause (y) above (including giving effect to any
Indebtedness and Acquired Indebtedness incurred or anticipated to be incurred in
connection with or in respect of the transaction), no Default or Event of
Default shall have occurred or be continuing; (iv) Doe Run or such person shall
have delivered to the Trustee (A) an Officers' Certificate and an Opinion of
Counsel (which counsel shall not be in-house counsel of Doe Run) each stating
that such consolidation, merger, conveyance, transfer or lease or Plan of
Liquidation and, if a supplemental indenture is required in connection with such
transaction, such supplemental indenture, comply with this provision of the
Indenture and that all conditions precedent in the Indenture relating to such
transaction have been satisfied and (B) a certificate from Doe Run's independent
certified public accountants stating that Doe Run has made the calculations
required by clause (ii) above in accordance with the terms of the Indenture; and
(v) neither Doe Run nor any Restricted Subsidiary nor such person, as the case
may be,
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would thereupon become obligated with respect to any Indebtedness (including
Acquired Indebtedness), nor any of its property or assets subject to any Lien,
unless Doe Run or such Restricted Subsidiary or such person, as the case may be,
could incur such Indebtedness (including Acquired Indebtedness) or create such
Lien under the Indenture (giving effect to such person being bound by all the
terms of the Indenture).
Notwithstanding the foregoing, (i) the merger of Doe Run with an Affiliate
incorporated solely for the purpose of incorporating Doe Run in another
jurisdiction shall be permitted and (ii) the merger of Doe Run and any
Restricted Subsidiary shall be permitted.
For purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more Restricted
Subsidiaries, the Capital Stock of which constitutes all or substantially all of
the properties and assets of Doe Run, shall be deemed to be the transfer of all
or substantially all of the properties and assets of Doe Run.
Each Guarantor (other than any Guarantor whose Guarantee is to be released
in accordance with the terms of the Guarantee and the Indenture in connection
with any transaction complying with the provisions of "--Limitation on Sale of
Assets") will not, and Doe Run will not cause or permit any Guarantor to,
consolidate with or merge with or into or sell, assign, transfer, lease, convey
or otherwise dispose of all or substantially all of its assets to any person
(other than a merger of Doe Run with any Guarantor or a merger of Guarantors)
unless: (i) the entity formed by or surviving any such consolidation or merger
(if other than the Guarantor) or to which such sale, lease, conveyance or other
disposition shall have been made is a corporation organized and validly existing
under the laws of the United States or any state thereof or the District of
Columbia or an entity organized and validly existing under the laws of the
foreign jurisdiction in which such Guarantor is organized; (ii) such entity
assumes by supplemental indenture all of the obligations of such Guarantor under
such Guarantee; and (iii) immediately after giving effect to such transaction,
no Default or Event of Default shall have occurred and be continuing.
Upon any such consolidation, merger, conveyance, lease or transfer in
accordance with the foregoing, the successor person formed by such consolidation
or into which Doe Run or any other Guarantor, as the case may be, is merged or
to which such conveyance, lease or transfer is made will succeed to, and be
substituted for, and may exercise every right and power of, Doe Run or such
Guarantor, as the case may be, under the Indenture with the same effect as if
such successor had been named as Doe Run or such Guarantor, as the case may be,
therein, and thereafter (except in the case of a sale, assignment, transfer,
lease, conveyance or other disposition) the predecessor corporation will be
relieved of all further obligations and covenants under the Indenture and the
Notes, in the case of Doe Run, or its Guarantee, in the case of any Guarantor.
EVENTS OF DEFAULT
The following are Events of Default under the Indenture:
(a) Doe Run defaults in the payment of interest on the Notes when the
same becomes due and payable and the Default continues for a period of 30
days;
(b) Doe Run defaults in the payment of the stated principal amount of
the Notes when the same becomes due and payable at maturity, upon
acceleration or redemption pursuant to an offer to purchase required under
the Indenture or otherwise;
(c) Doe Run or any of the Guarantors fails to comply in all material
respects with any of their other agreements contained in the Notes or the
Indenture (including, without limitation, under the provisions of "--Certain
Covenants--Change of Control," "--Certain Covenants--Limitation on Sale of
Assets" and "--Merger, Consolidation, Etc."), and the Default continues for
the period and after the notice specified below;
(d) there shall be any default or defaults in the payment of principal
or interest under one or more agreements, instruments, mortgages, bonds,
debentures or other evidences of Indebtedness
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under which Doe Run or any Restricted Subsidiary then has outstanding
Indebtedness in excess of $7.5 million, individually or in the aggregate;
(e) there shall be any default or defaults under one or more agreements,
instruments, mortgages, bonds, debentures or other evidences of Indebtedness
under which Doe Run or any Restricted Subsidiary then has outstanding
Indebtedness in excess of $7.5 million, individually or in the aggregate,
and such default or defaults have resulted in the acceleration of the
maturity of such Indebtedness;
(f) Doe Run or any of the Restricted Subsidiaries fails to perform
(after giving effect to any applicable grace periods) any term, covenant,
condition or provision of one or more agreements, instruments, mortgages,
bonds, debentures or other evidences of Indebtedness under which Doe Run or
any of the Restricted Subsidiaries then has outstanding Indebtedness in
excess of $7.5 million, individually or in the aggregate, and such failure
to perform results in the commencement of judicial proceedings to foreclose
upon any assets of Doe Run or any of the Restricted Subsidiaries securing
such Indebtedness or the holders of such Indebtedness shall have exercised
any right under applicable law or applicable security documents to take
ownership of any such assets in lieu of foreclosure;
(g) one or more judgments, orders or decrees for the payment of money
which either individually or in the aggregate at any one time exceed $7.5
million shall be rendered against Doe Run or any of the Restricted
Subsidiaries by a court of competent jurisdiction and shall remain
undischarged and unbonded for a period (during which execution shall not be
effectively stayed) of 60 consecutive days after such judgment becomes final
and nonappealable;
(h) Doe Run or any Significant Subsidiary (1) admits in writing its
inability to pay its debts generally as they become due, (2) commences a
voluntary case or proceeding under any Bankruptcy Law with respect to
itself, (3) consents to the entry of a judgment, decree or order for relief
against it in an involuntary case or proceeding under any Bankruptcy Law,
(4) consents to the appointment of a Custodian of it or for substantially
all of its property, (5) consents to or acquiesces in the institution of a
bankruptcy or an insolvency proceeding against it, (6) makes a general
assignment for the benefit of its creditors or (7) takes any corporate
action to authorize or effect any of the foregoing;
(i) a court of competent jurisdiction enters a judgment, decree or order
for relief in respect of Doe Run or any Significant Subsidiary in an
involuntary case or proceeding under any Bankruptcy Law which shall (1)
approve as properly filed a petition seeking reorganization, arrangement,
adjustment or composition in respect of Doe Run or any Significant
Subsidiary, (2) appoint a Custodian of Doe Run or any Significant Subsidiary
or for substantially all of its property or (3) order the winding-up or
liquidation of its affairs, and such judgment, decree or order shall remain
unstayed and in effect for a period of 60 consecutive days; or
(j) any of the Guarantees of any Significant Subsidiary ceases to be in
full force and effect or any of such Guarantees is declared to be null and
void and unenforceable or any of such Guarantees is found to be invalid or,
any such Guarantor denies its liability under its Guarantee (other than by
reason of release of a Guarantor in accordance with the terms of the
Indenture).
A Default under clause (c) above (other than in the case of any Default
under the provisions of "--Certain Covenants--Limitation on Sale of Assets,"
"--Certain Covenants--Change of Control" or "--Merger, Consolidation, Etc.,"
which Defaults shall be Events of Default without the notice and without the
passage of time specified in this paragraph) is not an Event of Default until
the Trustee notifies Doe Run, or the Holders of at least 25% in principal amount
of the outstanding Notes notify Doe Run and the Trustee, of the Default and Doe
Run does not cure the Default within 30 days after receipt of the notice. The
notice must specify the Default, demand that it be remedied and state that the
notice is a "Notice of Default." Such notice shall be given by the Trustee if so
requested by the Holders of at least 25% in principal amount of the Notes then
outstanding.
If an Event of Default (other than an Event of Default specified in clause
(h) or (i) above) occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than 25% in aggregate
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principal amount of the then outstanding Notes may declare the unpaid principal
of, premium, if any, and accrued and unpaid interest on, all the Notes then
outstanding to be due and payable, by a notice in writing to Doe Run (and to the
Trustee, if given by Holders) and upon such declaration such principal amount,
premium, if any, and accrued and unpaid interest will become immediately due and
payable, notwithstanding anything contained in the Indenture or the Notes to the
contrary. If an Event of Default specified in clause (h) or (i) above occurs,
all unpaid principal of, and premium, if any, and accrued and unpaid interest
on, the Notes then outstanding will IPSO FACTO become immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder.
Holders of the Notes may not enforce the Indenture or the Notes except as
provided in the Indenture. Subject to the provisions of the Indenture relating
to the duties of the Trustee, the Trustee is under no obligation to exercise any
of its rights or powers under the Indenture at the request, order or direction
of any of the Holders, unless such Holders have offered to the Trustee
reasonable indemnity. Subject to all provisions of the Indenture and applicable
law, the Holders of a majority in aggregate principal amount of the then
outstanding Notes have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee. The Trustee may withhold from
Holders notice of any continuing Default or Event of Default (except a Default
or Event of Default in the payment of principal of or premium, if any, or
interest on the Notes or that resulted from the failure to comply with the
provisions of "--Certain Covenants--Change of Control" or "--Merger,
Consolidation, Etc.") if it determines that withholding notice is in their
interest. The Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may rescind an acceleration and its
consequences if all existing Events of Default (other than the nonpayment of
principal of and premium, if any, and interest on the Notes which has become due
solely by virtue of such acceleration) have been cured or waived and if the
rescission would not conflict with any judgment or decree. No such rescission
shall affect any subsequent Default or impair any right consequent thereto.
The Holders of a majority in aggregate principal amount of the Notes then
outstanding may, on behalf of the Holders of all the Notes, waive any past
Default or Event of Default under the Indenture and its consequences, except a
Default in the payment of principal of or premium, if any, or interest on the
Notes or in respect of a covenant or provision of the Indenture which cannot be
modified or amended without the consent of all Holders.
Under the Indenture, Doe Run is required to provide an Officers' Certificate
to the Trustee promptly upon any such officer obtaining knowledge of any Default
or Event of Default (provided that such officers shall provide such
certification at least annually whether or not they know of any Default or Event
of Default) that has occurred and, if applicable, describe such Default or Event
of Default and the status thereof. In addition, for each fiscal year, Doe Run's
independent certified public accountants are required to certify to the Trustee
that they have reviewed the terms of the Indenture and the Notes as they relate
to accounting matters and whether, during the course of their audit examination,
any Default or Event of Default has come to their attention, and specifying the
nature and period of existence of any such Default or Event of Default.
AMENDMENT, SUPPLEMENT AND WAIVER
From time to time, Doe Run, the Guarantors and the Trustee may, without the
consent of the Holders, amend, waive or supplement the Indenture or the Notes
for certain specified purposes, including, among other things, curing
ambiguities, defects or inconsistencies, maintaining the qualification of the
Indenture under the TIA or making any change that does not adversely affect the
rights of any Holder. In addition, the Indenture contains provisions permitting
Doe Run, the Guarantors and the Trustee, with the consent of the Holders of not
less than a majority in aggregate principal amount of the then outstanding
Notes, to enter into any supplemental indenture for the purpose of adding,
changing or eliminating any of the provisions of the Indenture or of modifying
in any manner the rights of the Holders under the Indenture; PROVIDED that no
such supplemental indenture may without the consent of the Holder of each
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outstanding Note affected thereby: (i) reduce the amount of Notes whose Holders
must consent to an amendment or waiver; (ii) reduce the rate of, or extend the
time for payment of, interest, including defaulted interest, on any Note; (iii)
reduce the principal of or premium on or change the fixed maturity of any Note;
(iv) make the principal of, or interest on, any Note payable in money other than
as provided for in the Indenture and the Notes; (v) make any change in
provisions relating to waivers of defaults, the ability of Holders to enforce
their right under the Indenture or in the matters discussed in these clauses (i)
through (x); (vi) waive a default in the payment of principal of or interest on,
or redemption or repurchase payment with respect to, any Notes, including,
without limitation, a failure to make payment when required upon a Change of
Control or after an Asset Sale Offer; (vii) adversely affect the ranking of the
Notes or the Guarantees in any material respect; (viii) change the Maturity Date
or alter the redemption provisions in a manner adverse to Holders; (ix) after
Doe Run's obligation to purchase the Notes arises thereunder, amend, modify or
change the obligation of Doe Run to make and consummate a Change of Control
Offer in the event of a Change of Control or an Asset Sale Offer in the event of
an Asset Sale or waive any default in the performance thereof or modify any of
the provisions or definitions with respect to any such offers; or (x) release
the Guarantee of any Significant Subsidiary.
DISCHARGE; DEFEASANCE
The Indenture provides that Doe Run and the Guarantors may terminate their
obligations under the Notes, the Guarantees and the Indenture if: (i) all Notes
previously authenticated and delivered have been delivered to the Trustee for
cancellation or Doe Run and the Guarantors have paid all sums payable by them
thereunder, or (ii) Doe Run has irrevocably deposited or caused to be deposited
with the Trustee or the Paying Agent and conveyed all right, title and interest
for the benefit of the Holders of such Notes, under the terms of an irrevocable
trust agreement in form and substance satisfactory to the Trustee, as trust
funds in trust solely for the benefit of the Holders for that purpose, money or
U.S. government obligations maturing as to principal and interest in such
amounts and at such times as are sufficient without consideration of any
reinvestment of such interest to pay principal of, premium, if any, and interest
on such outstanding Notes to maturity; PROVIDED that, among other things, Doe
Run shall have delivered to the Trustee (i) either (a) in the case of a legal
defeasance, a ruling directed to the Trustee received from the Internal Revenue
Service to the effect that the Holders of such Notes will not recognize income,
gain or loss for Federal income tax purposes as a result of Doe Run's exercise
of its option under the defeasance provision of the Indenture and will be
subject to Federal income tax on the same amount and in the same manner and at
the same times as would have been the case if such option had not been exercised
or (b) an Opinion of Counsel to the same effect as the ruling described in
clause (a) above and, in the case of a legal defeasance, accompanied by a ruling
to that effect published by the Internal Revenue Service, unless there has been
a change in the applicable Federal income tax since the date of the Indenture
such that a ruling from the Internal Revenue Service is no longer required, and
(ii) an Opinion of Counsel to the effect that, assuming no intervening
bankruptcy of Doe Run between the date of deposit and the 91st day following the
date of deposit and that no Holder is an insider of Doe Run, after the passage
of 90 days following the deposit, the trust funds will not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally. Certain obligations of Doe Run and the
Guarantors under the Indenture or the Notes, including the payment of interest
and principal, shall remain in full force and effect until such Notes have been
paid in full. Notwithstanding the foregoing, the ruling of the Internal Revenue
Service and the Opinion of Counsel required by clause (i) above with respect to
a legal defeasance need not be delivered if all Notes not theretofore delivered
to the Trustee for cancellation (x) have become due and payable, (y) will become
due and payable on the maturity date within one year or (z) are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption by the Trustee in the name, and at the
expense, of Doe Run.
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GOVERNING LAW
The Indenture provides that it, the Notes and the Guarantees will be
governed by, and construed in accordance with, the laws of the State of New York
but without giving effect to applicable principles of conflicts of law to the
extent that the application of the law of another jurisdiction would be required
thereby.
THE TRUSTEE
State Street Bank and Trust Company is serving as Trustee under the
Indenture.
The Indenture provides that, except during the continuance of an Event of
Default, the Trustee will perform only such duties as are specifically set forth
in the Indenture. During the existence of an Event of Default, the Trustee will
exercise such rights and powers vested in it by the Indenture, and use the same
degree of care and skill in its exercise as a prudent person would exercise or
use under the circumstances in the conduct of such person's own affairs.
The Indenture and the provisions of the TIA contain certain limitations on
the rights of the Trustee, should it become a creditor of Doe Run or the
Guarantors, to obtain payments of claims in certain cases or to realize on
certain property received in respect of any such claim as security or otherwise.
Subject to the TIA, the Trustee will be permitted to engage in other
transactions; PROVIDED that if the Trustee acquires any conflicting interest as
described in the TIA, it must eliminate such conflict or resign.
CERTAIN DEFINITIONS
"Acquired Indebtedness" means Indebtedness of a person or any of its
Subsidiaries existing at the time such person becomes a Subsidiary (Restricted
Subsidiary, in the case of Doe Run) or assumed in connection with the
acquisition of assets from such person, including, without limitation,
Indebtedness incurred by such person in connection with, or in anticipation or
contemplation of, such person becoming a Subsidiary (Restricted Subsidiary, in
the case of Doe Run) or such acquisition.
"Acquisition" means the acquisition on October 23, 1997 by Doe Run Peru of
Metaloroya pursuant to the Subscription Agreement.
"Affiliate" of any specified person means any other person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control" when used with respect to any person means the power to direct the
management and policies of such person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"affiliated," "controlling" and "controlled" have meanings correlative of the
foregoing. For purposes of "--Certain Covenants--Limitation on Transactions with
Affiliates," the term "Affiliate" shall include any person who, as a result of
any transaction described therein, would become an Affiliate.
"Asset Acquisition" means (i) an Investment by Doe Run or any Restricted
Subsidiary in any other person pursuant to which such person shall become a
Restricted Subsidiary or a Subsidiary of a Restricted Subsidiary or shall be
merged with Doe Run or any Restricted Subsidiary or (ii) the acquisition by Doe
Run or any Restricted Subsidiary of the assets of any person which constitute
all or substantially all of the assets of such person or any division or line of
business of such person.
"Asset Sale" means any direct or indirect sale, issuance, conveyance,
transfer, lease, assignment or other transfer for value by Doe Run or any of the
Restricted Subsidiaries (including, without limitation, any Sale/leaseback) to
any person, in one transaction or a series of related transactions, of (i) any
Capital Stock of any Restricted Subsidiary; (ii) all or substantially all of the
properties and assets of any division or line of business of Doe Run or any
Restricted Subsidiary; or (iii) any other properties or assets of Doe Run or any
Restricted Subsidiary other than in the ordinary course of business. For the
purposes of this
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definition, the term "Asset Sale" shall not include (i) any sale, issuance,
conveyance, transfer, lease or other disposition of properties or assets that is
consummated in accordance with the provisions of "-- Merger, Consolidation,
Etc." above and (ii) the sale of inventory in the ordinary course of business.
"Bankruptcy Law" means Title 11 of the U.S. Code or any similar Federal,
state or foreign law for the relief of debtors.
"Capital Expenditures" shall mean payments for any assets, or improvements,
replacements, substitutions or additions thereto, that have a useful life of
more than one year and which, in accordance with GAAP consistently applied, are
required to be capitalized (as opposed to expensed in the period in which the
payment occurred).
"Capital Lease," as applied to any person, means any lease of (or any
agreement conveying the right to use) any property (whether real, personal or
mixed) by such person as lessee which, in conformity with GAAP, is required to
be accounted for as a capital lease on the balance sheet of such person.
"Capital Stock" means, with respect to any person, any and all shares,
interests, participation or other equivalents (however designated) of such
person's capital stock, whether outstanding at the Issue Date or issued after
the Issue Date, and any and all rights, warrants or options exchangeable for or
convertible into such capital stock (but excluding any debt security that is
exchangeable for or convertible into such capital stock).
"Capitalized Lease Obligation" means, as to any person, the obligations of
such person under a Capital Lease and, for purposes of the Indenture, the amount
of such obligations at any date shall be the capitalized amount of such
obligations at such date, determined in accordance with GAAP.
"Cash Equivalents" means (i) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within two years from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within two years from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc. ("S&P") or Moody's Investors Service, Inc.
("Moody's"); (iii) commercial paper maturing no more than two years from the
date of creation thereof and, at the time of acquisition, having a rating of at
least A-1 from S&P or at least P-1 from Moody's; (iv) certificates of deposit or
bankers' acceptances maturing within two years from the date of acquisition
thereof issued by any commercial bank organized under the laws of the United
States of America or any state thereof or the District of Columbia or any U.S.
branch of a foreign bank having at the date of acquisition thereof combined
capital and surplus of not less than $500,000,000; (v) repurchase obligations
with a term of not more than seven days for underlying securities of the types
described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (iv) above; and (vi) investments in money
market funds which invest substantially all their assets in securities of the
types described in clauses (i) through (v) above. Notwithstanding the foregoing,
for purposes of clause (i) of the definition of "Permitted Investment," 20% of
the Cash Equivalents may include securities having a rating of at least BBB by
S&P and Baa by Moody's.
"Centromin" shall mean Empresa Minera del Centro del Peru S.A.
"Change of Control" means the occurrence of one or more of the following
events: (i) any direct or indirect sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all or substantially all
of the assets of Doe Run, DRA or Renco to any person or group of related persons
for purposes of Section 13(d) of the Exchange Act (a "Group") (other than a
Permitted Holder or a Group controlled by a Permitted Holder), together with any
Affiliates thereof (whether or not otherwise in compliance with the provisions
of the Indenture); (ii) the approval by the holders of Capital Stock of Doe Run,
DRA or Renco, as the case may be, of any plan or proposal for the liquidation or
dissolution of Doe
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Run, DRA or Renco, as the case may be (whether or not otherwise in compliance
with the provisions of the Indenture); (iii) the acquisition in one or more
transactions of "beneficial ownership" (within the meaning of Rules 13d-3 and
13d-5 under the Exchange Act, except that a person shall be deemed to have
"beneficial ownership" of all securities that such person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time) by any person, entity or Group (other than a Permitted Holder or a
Group controlled by any Permitted Holder) of any Capital Stock of Doe Run, DRA
or Renco such that, as a result of such acquisition, such person, entity or
Group either (A) beneficially owns (within the meaning of Rules 13d-3 and 13d-5
under the Exchange Act), directly or indirectly, more than 50% of Doe Run's,
DRA's or Renco's then outstanding voting securities entitled to vote on a
regular basis in an election for a majority of the Board of Directors of Doe
Run, DRA or Renco or (B) otherwise has the ability to elect, directly or
indirectly, a majority of the members of Doe Run's, DRA's or Renco's Board of
Directors; or (iv) the shareholders of Renco as of the Issue Date and the
Permitted Holders shall cease to own at least 50% of the equity of Renco owned
by such shareholders on the Issue Date. Notwithstanding anything to the contrary
contained in this definition or in the Indenture, a merger of DRA with and into
Doe Run or Renco shall not constitute a "Change of Control" under the Indenture.
"Commission" means the Securities and Exchange Commission.
"Consolidated EBITDA" means, with respect to any person, for any period, the
sum (without duplication) of (i) Consolidated Net Income, (ii) to the extent
Consolidated Net Income has been reduced thereby, all income taxes of such
person and its Subsidiaries (Restricted Subsidiaries, in the case of Doe Run)
paid or accrued in accordance with GAAP for such period (other than income taxes
attributable to extraordinary, unusual or non-recurring gains or losses),
Consolidated Interest Expense (net of any interest income), amortization expense
(including amortization of deferred financing costs) and depletion and
depreciation expense and (iii) other non-cash items (other than non-cash
interest) reducing Consolidated Net Income (including, without limitation, any
non-cash charges in respect of post-employment benefits for health care, life
insurance and long- term disability benefits required in accordance with GAAP)
less other non-cash items increasing Consolidated Net Income, all as determined
on a consolidated basis for such person and its Subsidiaries (Restricted
Subsidiaries, in the case of Doe Run) in accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to any
person, the ratio of Consolidated EBITDA of such person during the four full
fiscal quarters (the "Four Quarter Period") ending on or prior to the date of
the transaction giving rise to the need to calculate the Consolidated Fixed
Charge Coverage Ratio (the "Transaction Date") to Consolidated Fixed Charges of
such person for the Four Quarter Period. For purposes of this definition, if the
Transaction Date occurs prior to the date on which four full fiscal quarters
have elapsed subsequent to the Issue Date and financial statements with respect
thereto are available, "Consolidated EBITDA" and "Consolidated Fixed Charges"
shall be calculated, in the case of Doe Run, after giving effect on a pro forma
basis to the issuance of the Notes and the application of the net proceeds
therefrom including the redemption of Doe Run's outstanding preferred stock on
the Issue Date as if the Notes were issued on the first day of the Four Quarter
Period. In addition to and without limitation of the foregoing, for purposes of
this definition, "Consolidated EBITDA" and "Consolidated Fixed Charges" shall be
calculated after giving effect on a pro forma basis for the period of such
calculation to (i) the incurrence of any Indebtedness (and the application of
the net proceeds therefrom) of such person or any of its Subsidiaries
(Restricted Subsidiaries, in the case of Doe Run) giving rise to the need to
make such calculation and any incurrence of other Indebtedness at any time on or
after the first day of the Four Quarter Period and on or prior to the
Transaction Date (the "Reference Period"), as if such incurrence occurred on the
first day of the Reference Period and (ii) any Asset Sales or Asset Acquisitions
(including, without limitation, any Asset Acquisition giving rise to the need to
make such calculation as a result of such person or one of its Subsidiaries
(Restricted Subsidiaries, in the case of Doe Run) (including any person who
becomes a Subsidiary (Restricted Subsidiary, in the case of Doe Run) as a result
of the Asset Acquisition) incurring, assuming or otherwise being liable for
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Acquired Indebtedness) occurring during the Reference Period, as if such Asset
Sale or Asset Acquisition (including the incurrence, assumption or liability for
any such Indebtedness or Acquired Indebtedness) occurred on the first day of the
Reference Period. If such person or any of its Subsidiaries (Restricted
Subsidiaries, in the case of Doe Run) directly or indirectly guarantees
Indebtedness of a third person, the preceding sentence shall give effect to the
incurrence of such guaranteed Indebtedness as if such person or any Subsidiary
(Restricted Subsidiary, in the case of Doe Run) of such person had directly
incurred or otherwise assumed such guaranteed Indebtedness. Furthermore, in
calculating "Consolidated Fixed Charges" for purposes of determining the
denominator (but not the numerator) of this "Consolidated Fixed Charge Coverage
Ratio," (1) interest on Indebtedness determined on a fluctuating basis as of the
Transaction Date and which will continue to be so determined thereafter shall be
deemed to have accrued at a fixed rate per annum equal to the rate of interest
on such Indebtedness in effect on the Transaction Date, and (2) notwithstanding
clause (1) above, interest on Indebtedness determined on a fluctuating basis, to
the extent such interest is covered by agreements relating to Interest Rate
Protection Obligations, shall be deemed to accrue at the rate per annum
resulting after giving effect to the operation of such agreements.
"Consolidated Fixed Charges" means, with respect to any person for any
period, the sum of, without duplication, the amounts for such period, taken as a
single accounting period, of (i) Consolidated Interest Expense of such person
(net of any interest income) less non-cash amortization of deferred financing
costs and (ii) the product of (x) the amount of all dividends declared, paid or
accrued on Preferred Stock of such person during such period times (y) a
fraction, the numerator of which is one and the denominator of which is one
minus the then current effective consolidated Federal, state, local and foreign
tax rate (expressed as a decimal number between 1 and 0) of such person during
such period (as reflected in the audited consolidated financial statements of
such person for the most recently completed fiscal year).
"Consolidated Interest Expense" means, with respect to any person for any
period, without duplication, the sum of (i) the interest expense of such person
and its Subsidiaries (Restricted Subsidiaries, in the case of Doe Run) for such
period as determined on a consolidated basis in accordance with GAAP
consistently applied, including, without limitation, (a) any amortization of
debt discount, (b) the net cost under Interest Rate Protection Obligations
(including any amortization of discounts), (c) the interest portion of any
deferred payment obligation and (d) all accrued interest, and (ii) the interest
component of Capitalized Lease Obligations paid, accrued and/or scheduled to be
paid or accrued by such person and its Subsidiaries (Restricted Subsidiaries, in
the case of Doe Run) during such period as determined on a consolidated basis in
accordance with GAAP consistently applied.
"Consolidated Net Income" means, with respect to any person for any period,
the net income (or loss) of such person and its Subsidiaries (Restricted
Subsidiaries, in the case of Doe Run), on a consolidated basis for such period
determined in accordance with GAAP; PROVIDED that (i) the net income of any
person in which such person or any Subsidiary (Restricted Subsidiary, in the
case of Doe Run) of such person has an ownership interest with a third party
(other than a person that meets the definition of a Wholly-Owned Subsidiary
(Wholly-Owned Restricted Subsidiary, in the case of Doe Run)) shall be included
only to the extent of the amount that has actually been received by such person
or its Wholly-Owned Subsidiaries (Wholly-Owned Restricted Subsidiaries, in the
case of Doe Run) in the form of dividends or other distributions during such
period (subject to, in the case of any dividend or distribution received by a
Wholly-Owned Subsidiary (Wholly-Owned Restricted Subsidiary, in the case of Doe
Run) of such person, the restrictions set forth in clause (ii) below) and (ii)
the net income of any Subsidiary (Restricted Subsidiary, in the case of Doe Run)
of such person that is subject to any restriction or limitation on the payment
of dividends or the making of other distributions shall be excluded to the
extent of such restriction or limitation; PROVIDED, FURTHER that there shall be
excluded (a) the net income (or loss) of any person (acquired in a pooling of
interests transaction) accrued prior to the date it becomes a Subsidiary
(Restricted Subsidiary, in the case of Doe Run) of such person or is merged into
or consolidated with such person or any Subsidiary (Restricted Subsidiary, in
the case of Doe Run) of such person, (b) any gain (or
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loss) (and related tax effects) resulting from an Asset Sale by such person or
any of its Subsidiaries (Restricted Subsidiaries, in the case of Doe Run), (c)
any extraordinary, unusual or nonrecurring gains or losses (and related tax
effects) in accordance with GAAP and (d) any compensation-related expenses
arising as a result of the application of the net proceeds from the issuance of
the Notes. For purposes of the "Limitation on Restricted Payments" covenant, the
amortization of deferred financing costs relating to the issuance of the Notes
shall be excluded from this definition of "Consolidated Net Income."
"Consolidated Net Worth" means, with respect to any person at any date, the
sum of (i) the consolidated shareholder's equity of such person less the amount
of such shareholder's equity attributable to Disqualified Capital Stock of such
person and its Subsidiaries (Restricted Subsidiaries, in the case of Doe Run),
as determined on a consolidated basis in accordance with GAAP consistently
applied and (ii) the amount of any Preferred Stock of such person not included
in the shareholder's equity of such person in accordance with GAAP, which
Preferred Stock does not constitute Disqualified Capital Stock.
"Default" means any event that is, or after notice or passage of time or
both would be, an Event of Default.
"Disqualified Capital Stock" means any class of Capital Stock which, by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable), or upon the happening of any event (other than a Change of
Control), matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder thereof,
in whole or in part, on or prior to the Maturity Date.
"Doe Run" means The Doe Run Resources Corporation, a New York corporation.
"Doe Run Cayman" means Doe Run Cayman Ltd., a Cayman Islands company.
"Doe Run Mining" means Doe Run Mining S.R. Ltda., a Peruvian company.
"Doe Run Peru" means Doe Run Peru S.R. Ltda., a Peruvian company.
"DRA" means DR Acquisition Corp., a Missouri corporation.
"DR Exploration" means Doe Run Exploration SA (Proprietary) Limited, a South
African corporation.
"Event of Default" has the meaning set forth under "--Events of Default"
herein.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means, with respect to any asset, the price which could
be negotiated in an arm's-length free market transaction, for cash, between a
willing seller and a willing buyer, neither of whom is under undue pressure or
compulsion to complete the transaction. Fair Market Value of any asset of Doe
Run or the Restricted Subsidiaries shall be determined by the Board of Directors
of Doe Run acting in good faith and shall be evidenced by a Board Resolution
thereof delivered to the Trustee; PROVIDED that with respect to any Asset Sale
which involves in excess of $5 million, the Fair Market Value of any such asset
or assets shall be determined by an Independent Financial Advisor.
"FPI" means Fabricated Products Inc., a Delaware corporation.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect as of the Issue Date.
"Guarantor" means each of FPI, Doe Run Cayman, Doe Run Mining, Doe Run Peru
and any Restricted Subsidiary that in the future executes a supplemental
indenture pursuant to the covenant
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entitled "Future Guarantees" or otherwise in which any such Restricted
Subsidiary agrees to be bound by the terms of the Indenture; PROVIDED that any
person constituting a Guarantor as described above shall cease to constitute a
Guarantor when its respective Guarantee is released in accordance with the terms
of the Indenture.
"Hedging Agreement" shall mean any agreement with respect to (i) the hedging
of price risk associated with the purchase or sale of lead, copper, zinc, gold
and silver under which Doe Run or any Restricted Subsidiary is a party or
beneficiary and (ii) the hedging of currency risks in connection with funding
payroll expenses, so long as any such agreement has been entered into in the
ordinary course of business consistent with past price risk or currency
management practices of Doe Run and the Restricted Subsidiaries and not for
purposes of speculation.
"Indebtedness" means with respect to any person, without duplication, (i)
all obligations of such person for borrowed money, (ii) all obligations of such
person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all Capitalized Lease Obligations (but not obligations under Operating Leases)
of such person, (iv) all obligations of such person issued or assumed as the
deferred purchase price of property or services, all conditional sale
obligations and all obligations under any title retention agreement (but
excluding trade accounts payable, accrued expenses and deferred taxes arising in
the ordinary course of business), (v) all obligations of such person for the
reimbursement of any obligor on any letter of credit, banker's acceptance or
similar credit transaction entered into in the ordinary course of business, (vi)
all obligations of any other person of the type referred to in clauses (i)
through (v) which are secured by any Lien on any property or asset of such first
person and the amount of such obligation shall be the lesser of the value of
such property or asset or the amount of the obligation so secured, (vii) all
guarantees of Indebtedness by such person, (viii) Disqualified Capital Stock
valued at the greater of its voluntary or involuntary maximum fixed repurchase
price plus accrued and unpaid dividends, (ix) all obligations under interest
rate agreements or hedging agreements of such person and (x) any amendment,
supplement, modification, deferral, renewal, extension or refunding of any
liability of the types referred to in clauses (i) through (ix) above. For
purposes hereof, the "maximum fixed repurchase price" of any Disqualified
Capital Stock which does not have a fixed repurchase price shall be calculated
in accordance with the terms of such Disqualified Capital Stock as if such
Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to the Indenture, and if such price
is based upon, or measured by, the Fair Market Value of such Disqualified
Capital Stock, such Fair Market Value to be determined in good faith by the
Board of Directors of the person issuing such Disqualified Capital Stock.
Notwithstanding anything to the contrary contained herein or in the Indenture,
any obligation of Doe Run or any Restricted Subsidiary in the form of an
earn-out arrangement undertaken in connection with any acquisition of property
or assets by Doe Run or such Restricted Subsidiary, which obligation shall be
based upon increases in metal prices above price levels existing on the date of
such acquisition, shall not constitute Indebtedness under the Indenture.
"Independent Financial Advisor" means an accounting, appraisal or investment
banking firm of nationally recognized standing that is, in the reasonable and
good faith judgment of the Board of Directors of Doe Run, qualified to perform
the task for which such firm has been engaged and disinterested and independent
with respect to Doe Run and its Affiliates.
"Interest Rate Protection Obligations" means the obligations of any person
pursuant to any arrangement with any other person, whereby, directly or
indirectly, such person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such other
person calculated by applying a fixed or a floating rate of interest on the same
notional amount and shall include, without limitation, interest rate swaps,
caps, floors, collars and similar agreements.
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"Investment" means, with respect to any person, any direct or indirect
advance, loan, guarantee or other extension of credit or capital contribution to
(by means of any transfer of cash or other property to others or any payment for
property or services for the account or use of others or otherwise), or any
purchase or acquisition by such person of any Capital Stock, bonds, notes,
debentures or other securities or evidences of Indebtedness issued by, any other
person. Investments shall exclude extensions of trade credit on commercially
reasonable terms in accordance with normal trade practices. For the purposes of
the "Limitation on Restricted Payments" covenant, the amount of any Investment
(other than an Investment covered by clause (z) of the first paragraph thereof)
shall be the original cost of such Investment plus the cost of all additional
Investments by Doe Run or any of the Restricted Subsidiaries, without any
adjustments for increases or decreases in value, or write-ups, write-downs or
write-offs with respect to such Investment, reduced by the payment of dividends
or distributions in connection with such Investment or any other amounts
received in respect of such Investment.
"Issue Date" means the date on which the Notes offered hereby are originally
issued under the Indenture.
"Lien" means (x) any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind including, without limitation, any
conditional sale or other title retention agreement, any lease in the nature
thereof, any option or other agreement to sell and any filing of or agreement to
file a financing statement as debtor under the Uniform Commercial Code or any
similar statute and (y) any agreement to enter into any of the foregoing.
"Maturity Date" means (i) with respect to the Floating Rate Notes, March 15,
2003 and (ii) with respect to the Fixed Rate Notes, March 15, 2005.
"Metaloroya" means Empresa Metalurgica La Oroya S.A., a Peruvian company,
prior to the merger of such entity with and into Doe Run Peru.
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds
thereof in the form of cash or Cash Equivalents including payments in respect of
deferred payment obligations when received in the form of cash or Cash
Equivalents (except to the extent that such obligations are financed or sold
with recourse to Doe Run or any Restricted Subsidiary) net of (i) brokerage
commissions and other fees and expenses (including fees and expenses of legal
counsel and investment bankers) related to such Asset Sale, (ii) provisions for
all taxes payable as a direct result of such Asset Sale and (iii) appropriate
amounts to be provided by Doe Run or any Restricted Subsidiary, as the case may
be, as a reserve required in accordance with GAAP consistently applied against
any liabilities associated with such Asset Sale and retained by Doe Run or any
Restricted Subsidiary, as the case may be, after such Asset Sale, including,
without limitation, pension and other post-employment benefit liabilities,
liabilities related to environmental matters and liabilities under any
indemnification obligations associated with such Asset Sale, all as reflected in
an Officers' Certificate delivered to the Trustee.
"Operating Lease" means, as applied to any person, any lease (including,
without limitation, leases that may be terminated by the lessee at any time) of
any property (whether real, personal or mixed) that is not a Capital Lease other
than any such lease under which that person is the lessor.
"Permitted Holders" means Ira Leon Rennert and his Affiliates, estate, heirs
and legatees, and the legal representatives of any of the foregoing, including,
without limitation, the trustee of any trust of which one or more of the
foregoing are the sole beneficiaries.
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"Permitted Indebtedness" means (i) any Indebtedness of Doe Run and the
Restricted Subsidiaries under (A) the U.S. Revolving Credit Facility in an
aggregate amount not to exceed $100.0 million in aggregate principal amount at
any time outstanding and (B) the Peruvian Revolving Credit Facility in an
aggregate principal amount not to exceed $60.0 million in aggregate principal
amount at any time outstanding, in each case plus any interest, fees and
expenses from time to time owed thereunder, (ii) the Notes issued in the Old
Notes Offering in an aggregate principal amount not to exceed $255.0 million and
the related Guarantees, (iii) any other Indebtedness of Doe Run and the
Restricted Subsidiaries outstanding on the Issue Date, (iv) purchase money
Indebtedness and any Indebtedness incurred for Capitalized Lease Obligations (A)
of Doe Run and the Restricted Subsidiaries (other than Doe Run Cayman and its
Subsidiaries) not to exceed $5.0 million in the aggregate at any time
outstanding and (B) of Doe Run Cayman and its Subsidiaries not to exceed $20.0
million in the aggregate at any time outstanding, (v) Interest Rate Protection
Obligations to the extent the notional principal amount of such Interest Rate
Protection Obligations does not exceed the principal amount of the Indebtedness
to which such Interest Rate Protection Obligations relate, and Hedging
Agreements, in each case entered into in the ordinary course of business, (vi)
additional Indebtedness of Doe Run and the Restricted Subsidiaries not to exceed
$25.0 million in the aggregate at any time outstanding, (vii) Indebtedness owed
by Doe Run or any of the Wholly-Owned Restricted Subsidiaries to Doe Run or any
Wholly-Owned Restricted Subsidiary; PROVIDED that this clause (vii) shall also
include Indebtedness indirectly between or among Doe Run and/or one or more of
the Wholly-Owned Restricted Subsidiaries through one or more financial
intermediaries, (viii) any renewals, extensions, substitutions, refundings,
refinancings or replacements of any Indebtedness described in the preceding
clauses (i), (ii) and (iii) above and this clause (viii), so long as such
renewal, extension, substitution, refunding, refinancing or replacement does not
result in an increase in the aggregate principal amount of the outstanding
Indebtedness represented thereby (except if such Indebtedness refinances
Indebtedness under the Revolving Credit Facilities or any other agreement
providing for subsequent borrowings, does not result in an increase in the
commitment available under the Revolving Credit Facilities or such other
agreement), and (ix) any guarantees of the foregoing.
"Permitted Investment" means (i) cash and Cash Equivalents, (ii) any
Investment by Doe Run or any of the Restricted Subsidiaries in Doe Run or any
Wholly-Owned Restricted Subsidiary; PROVIDED that this clause (ii) shall also
include indirect Investments by Doe Run and the Wholly-Owned Restricted
Subsidiaries in Doe Run or one or more of the Wholly-Owned Restricted
Subsidiaries through one or more financial intermediaries, (iii) Related
Business Investments by Doe Run or any of the Restricted Subsidiaries in joint
ventures, partnerships or persons (including Unrestricted Subsidiaries) that are
not Wholly-Owned Restricted Subsidiaries in an amount not to exceed $25.0
million in the aggregate at any one time outstanding, (iv) Investments by Doe
Run or any Restricted Subsidiary in another person, if as a result of such
Investment (a) such other person becomes a Wholly-Owned Restricted Subsidiary or
(b) such other person is merged or consolidated with or into, or transfers or
conveys all or substantially all of its assets to, Doe Run or a Wholly-Owned
Restricted Subsidiary, (v) Investments received in connection with the
bankruptcy or reorganization of suppliers and customers and in settlement of
delinquent obligations of, and other disputes with, customers and suppliers, in
each case arising in the ordinary course of business, (vi) the non-cash proceeds
of any Asset Sale, (vii) Investments under or pursuant to Interest Rate
Protection Obligations or Hedging Agreements, in each case in the ordinary
course of business, (viii) loans and advances to employees of Doe Run and the
Restricted Subsidiaries made in the ordinary course of business and (ix)
Investments represented by the Qualifying Investments Promissory Notes.
"Permitted Liens" means (i) pledges or deposits by such person under
worker's compensation laws, unemployment insurance laws or similar legislation,
or good faith deposits in connection with bids, tenders, contracts (other than
for the payment of Indebtedness) or leases to which such person is a party, or
deposits to secure public statutory obligations of such person or deposits to
secure surety or appeal bonds to which such person is a party, or deposits as
security for contested taxes or import duties or for the payment of rent, (ii)
Liens imposed by law, such as landlords', carriers', warehousemen's and
mechanics' Liens or bankers' Liens incurred in the ordinary course of business
for sums which are not yet due or are
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being contested in good faith and for which adequate provision has been made,
(iii) Liens for taxes not yet subject to penalties for non-payment or which are
being contested in good faith and by appropriate proceedings, if adequate
reserve, as may be required by GAAP, shall have been made therefor, (iv) Liens
in favor of issuers of surety bonds or appeal bonds issued pursuant to the
request of and for the account of such person in the ordinary course of its
business, (v) Liens to support trade letters of credit issued in the ordinary
course of business, (vi) survey exceptions, encumbrances, easements or
reservations of, or rights of others for, rights of way, sewers, electric lines,
telegraph and telephone lines and other similar purposes, or zoning or other
restrictions on the use of real property, (vii) Liens securing Indebtedness
permitted under clause (iv) of the definition of Permitted Indebtedness;
PROVIDED that the Fair Market Value of the asset at the time of the incurrence
of the Indebtedness subject to the Lien shall not exceed the principal amount of
the Indebtedness secured, (viii) Liens with respect to Acquired Indebtedness
permitted to be incurred in accordance with the provisions of "--Certain
Covenants--Limitation on Indebtedness" above; PROVIDED that such Liens secured
such Acquired Indebtedness at the time of the incurrence of such Acquired
Indebtedness by Doe Run or any of the Restricted Subsidiaries and were not
incurred in connection with, or in anticipation of, the incurrence of such
Acquired Indebtedness by Doe Run or any of the Restricted Subsidiaries;
PROVIDED, FURTHER, that such Liens do not extend to or cover any property or
assets of Doe Run or any of the Restricted Subsidiaries other than the property
or assets that secured the Acquired Indebtedness prior to the time such
Indebtedness became Acquired Indebtedness of Doe Run or any of the Restricted
Subsidiaries and are no more favorable to the lienholders than those securing
the Acquired Indebtedness prior to the incurrence of such Acquired Indebtedness
by Doe Run or any of the Restricted Subsidiaries, (ix) Liens arising from
judgments, decrees or attachments in circumstances not constituting an Event of
Default, (x) Liens on assets or property (including any real property upon which
such assets or property are or will be located) securing Indebtedness incurred
to purchase or construct such assets or property, which Indebtedness is
permitted to be incurred under the Indenture, (xi) Liens securing Indebtedness
which is incurred to refinance or replace Indebtedness which has been secured by
a Lien permitted under the Indenture and is permitted to be refinanced or
replaced under the Indenture, PROVIDED that such Liens do not extend to or cover
any property or assets of Doe Run or any of the Restricted Subsidiaries not
securing the Indebtedness so refinanced or replaced, and (xii) Liens securing
reimbursement obligations under letters of credit but only in or upon the goods
the purchase of which was financed by such letters of credit.
"person" means any individual, corporation, partnership, joint venture,
trust, estate, unincorporated organization or government or any agency or
political subdivision thereof or any similar entities.
"Peruvian Revolving Credit Facility" means one or more working capital
facilities or other working capital financings or programs entered into by Doe
Run Peru and its Subsidiaries from time to time as the same may be amended,
restated, supplemented or otherwise modified from time to time, and includes any
agreement renewing, refinancing or replacement of all or any portion of the
Indebtedness under such agreement.
"Plan of Liquidation" means, with respect to any person, a plan that
provides for, contemplates or the effectuation of which is preceded or
accompanied by (whether or not substantially contemporaneously, in phases or
otherwise) (i) the sale, lease, conveyance or other disposition of all or
substantially all of the assets of such person otherwise than as an entirety or
substantially as an entirety and (ii) the distribution of all or substantially
all of the proceeds of such sale, lease, conveyance or other disposition and all
or substantially all of the remaining assets of such person to holders of
Capital Stock of such person.
"Preferred Stock" means, with respect to any person, any and all shares,
interests, participation or other equivalents (however designated) of such
person's preferred or preference stock, whether outstanding on the Issue Date or
issued thereafter, and including, without limitation, all classes and series of
preferred or preference stock of such person.
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"pro forma" means, with respect to any calculation made or required to be
made pursuant to the terms of the Indenture, a calculation in accordance with
Article 11 of Regulation S-X under the Exchange Act.
"Qualified Capital Stock" means, with respect to any person, any Capital
Stock of such person that is not Disqualified Capital Stock or convertible into
or exchangeable or exercisable for Disqualified Capital Stock.
"Qualifying Auditors" shall mean the firm of independent auditors of
acknowledged international prestige elected annually by Centromin in accordance
with Section 4.2 of the Subscription Agreement.
"Qualifying Investment" shall mean investments that meet the qualifications
of Section 4.5 of the Subscription Agreement, as determined in good faith by the
Qualifying Auditors.
"Qualifying Investments Promissory Notes" shall have the meaning given to
such term under the caption "Certain Covenants--Qualifying Investment
Requirements."
"Related Business Investment" means any Investment, Capital Expenditure or
other expenditure by Doe Run or any Restricted Subsidiary which is related to
the business of Doe Run and the Restricted Subsidiaries as it is conducted on
the Issue Date or any business which is the same, similar or reasonably related
to such business.
"Renco" means The Renco Group, Inc., a New York corporation, which is the
ultimate parent of Doe Run, or any successor thereto.
"Restricted Subsidiary" means any Subsidiary of Doe Run which at the time of
determination is not an Unrestricted Subsidiary. The Board of Directors of Doe
Run may designate any Unrestricted Subsidiary to be a Restricted Subsidiary only
if, immediately after giving effect to such designation, Doe Run and the
Guarantors could incur at least $1.00 of additional Indebtedness (other than
Permitted Indebtedness) pursuant to the "Limitation on Indebtedness" covenant,
on a pro forma basis taking into account such designation.
"Revolving Credit Facilities" means the U.S. Revolving Credit Facility and
the Peruvian Revolving Credit Facility.
"Sale/leaseback" means any lease, whether an Operating Lease or a Capital
Lease, whereby Doe Run or any of the Restricted Subsidiaries, directly or
indirectly, becomes or remains liable as lessee or as guarantor or other surety,
of any property (whether real or personal or mixed) whether now owned or
hereafter acquired, (i) that Doe Run or the Restricted Subsidiaries, as the case
may be, has sold or transferred or is to sell or transfer to any other person
(other than Doe Run or any Restricted Subsidiary), or (ii) that Doe Run or any
of the Restricted Subsidiaries, as the case may be, intends to use for
substantially the same purpose as any other property that has been or is to be
sold or transferred by Doe Run or any such Restricted Subsidiary to any person
(other than Doe Run or any Restricted Subsidiary) in connection with such lease.
"Significant Subsidiary" means any Restricted Subsidiary that satisfies the
criteria for a "significant subsidiary" set forth in Rule 1.02(w) of Regulation
S-X under the Exchange Act.
"Subsidiary" of any person means (i) any corporation of which the
outstanding capital stock having at least a majority of the votes entitled to be
cast in the election of directors under ordinary circumstances shall at the time
be owned, directly or indirectly, by such person or (ii) any other person of
which at least a majority of the voting interest under ordinary circumstances is
at the time owned, directly or indirectly, by such person. For purposes of this
definition, any directors' qualifying shares or investments by foreign nationals
mandated by applicable law shall be disregarded in determining the ownership of
a Subsidiary.
"Unrestricted Subsidiary" means (i) any Subsidiary of Doe Run which at the
time of determination is an Unrestricted Subsidiary (as designated by the Board
of Directors of Doe Run, as provided below) and
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(ii) any Subsidiary of an Unrestricted Subsidiary. The Board of Directors of Doe
Run may designate any Subsidiary of Doe Run (including any newly acquired or
newly formed Subsidiary) to be an Unrestricted Subsidiary, unless such
Subsidiary owns any Capital Stock of, or owns, or holds any Lien on, any
property of, any Restricted Subsidiary of Doe Run which is not a Subsidiary of
the Subsidiary to be so designated; PROVIDED that (a) Doe Run certifies that
such designation complies with the "Limitation on Restricted Payments" covenant
and (b) each Subsidiary to be so designated and each of its Subsidiaries has not
at the time of designation, and does not thereafter, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable with respect
to any Indebtedness pursuant to which the lender has recourse to any of the
assets of Doe Run or any of the Restricted Subsidiaries. The Board of Directors
of Doe Run may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary only if, immediately after giving effect to such designation, Doe Run
and the Guarantors could incur at least $1.00 of additional Indebtedness (other
than Permitted Indebtedness) pursuant to the "Limitation on Indebtedness"
covenant, on a pro forma basis taking into account such designation.
"U.S. Revolving Credit Facility" means the Loan and Security Agreement dated
as of the Issue Date, among Doe Run, FPI, and Congress Financial Corporation, as
Lender, as the same may be amended, restated, supplemented or otherwise modified
from time to time, and includes any agreement renewing, refinancing or
replacement of all or any portion of the Indebtedness under such agreement.
"Wholly-Owned Restricted Subsidiary" means any Restricted Subsidiary which
is a Wholly-Owned Subsidiary of Doe Run.
"Wholly-Owned Subsidiary" means any Subsidiary of such person to the extent
all of the Capital Stock or other ownership interests in such Subsidiary (other
than (x) directors' qualifying shares, (y) with respect to Doe Run Peru, any
shares purchased by employees of Doe Run Peru or Centromin in connection with
the Acquisition, which retained amount shall not exceed 1% of the total
interests in Doe Run Peru, and (z) an immaterial interest owned by other persons
solely to comply with applicable law) is owned directly or indirectly by such
person or a Wholly-Owned Subsidiary of such person.
130
<PAGE>
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following summary is based on the tax laws of the United States in
effect on the date of this Prospectus, as well as judicial and administrative
interpretations thereof (in final or proposed form) available on or before such
date. The foregoing laws and interpretations thereof are subject to change,
which could apply retroactively.
The exchange of Old Notes for Exchange Notes pursuant to the Exchange Offer
will not be a taxable event for federal income tax purposes. A holder's holding
period for Exchange Notes will include the holding period for Old Notes. HOLDERS
SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE FEDERAL, STATE, LOCAL AND
FOREIGN TAX CONSEQUENCES OF EXCHANGING OLD NOTES FOR EXCHANGE NOTES.
PLAN OF DISTRIBUTION
A broker-dealer that is the holder of Old Notes that were acquired for the
account of such broker-dealer as a result of market-making or other trading
activities (other than Old Notes acquired directly from Doe Run or any affiliate
of Doe Run) may exchange such Old Notes for Exchange Notes pursuant to the
Exchange Offer; provided, that each broker-dealer that receives Exchange Notes
for its own account in exchange for Old Notes, where such Old Notes were
acquired by such broker-dealer as a result of market-making or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Notes. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of Exchange Notes received in exchange for Old Notes where such Old
Notes were acquired as a result of market-making activities or other trading
activities. Doe Run has agreed that for a period of 180 days after consummation
of the Exchange Offer, it will make this Prospectus, as it may be amended or
supplemented from time to time, available to any broker-dealer for use in
connection with any such resale. In addition, until , 1998, all dealers
effecting transactions in the Exchange Notes may be required to deliver a
prospectus.
Doe Run will not receive any proceeds from any sale of Exchange Notes by
broker-dealers or any other holder of Exchange Notes. Exchange Notes received by
broker-dealers for their own account pursuant to the Exchange Offer may be sold
from time to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the Exchange Notes or
a combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer and/or the purchasers of any such
Exchange Notes. Any broker-dealer that resells Exchange Notes that were received
by it for its own account pursuant to the Exchange Offer and any broker or
dealer that participates in a distribution of such Exchange Notes may be deemed
to be an "underwriter" within the meaning of the Securities Act and any profit
on any such resale of Exchange Notes and any commissions or concessions received
by any such persons may be deemed to be underwriting compensation under the
Securities Act. The Letter of Transmittal states that by acknowledging that it
will deliver and by delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
For a period of 180 days after consummation of the Exchange Offer, Doe Run
will promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. Doe Run has agreed to pay all expenses incident to
the Exchange Offer and to Doe Run's performance of, or compliance with, the
Registration Rights Agreement (other than commissions or concessions of any
brokers or dealers) and will indemnify the holders of the Notes (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
131
<PAGE>
LEGAL MATTERS
Certain legal matters related to the Exchange Notes being offered hereby are
being passed upon for Doe Run and the Guarantors by Cadwalader, Wickersham &
Taft, New York, New York.
EXPERTS
The audited consolidated financial statements of the Company as of October
31, 1996 and 1997 and for each of the years in the three year period ended
October 31, 1997 have been included herein and in the Registration Statement in
reliance upon the report of KPMG Peat Marwick LLP and Medina, Zaldivar y
Asociados S. Civ. R.L., a member firm of Andersen Worldwide SC, independent
certified public accountants, appearing elsewhere herein, and upon the authority
of said firms as experts in accounting and auditing. The audited consolidated
financial statements of Doe Run Peru's Predecessor as of December 31, 1994, 1995
and 1996 and October 23, 1997 and for each of the three year periods ended
December 31, 1996 and the period January 1, 1997 to October 23, 1997, and of Doe
Run Peru as of October 31, 1997, and included herein have been audited by
Medina, Zaldivar y Asociados S. Civ. R.L., a member firm of Andersen Worldwide
SC, independent certified public accountants, as stated in their reports with
respect thereto and upon the authority of said firm as experts in accounting and
auditing.
132
<PAGE>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
THE DOE RUN RESOURCES CORPORATION
Independent Auditors' Report............................................................................... F-2
Report of Independent Public Accountants................................................................... F-3
Consolidated Balance Sheets as of October 31, 1996 and 1997 and unaudited as of January 31, 1998........... F-4
Consolidated Statements of Operations and Shareholders' Equity for the years ended October 31, 1995, 1996,
1997 and unaudited for the three months ended January 31, 1997 and 1998.................................. F-5
Consolidated Statements of Cash Flows for the years ended October 31, 1995, 1996, 1997 and unaudited for
the three months ended January 31, 1997 and 1998......................................................... F-6
Notes to Consolidated Financial Statements................................................................. F-7
EMPRESA MINERA DEL CENTRO DEL PERU S.A.--CENTROMIN PERU S.A., LA OROYA DIVISION
Report of Independent Public Accountants................................................................... F-35
Statements of Assets and Liabilities as of December 31, 1995 and 1996 and October 23, 1997................. F-36
Statements of Revenues and Expenses for the years ended December 31, 1994, 1995, 1996 and the period
January 1 to October 23, 1997............................................................................ F-37
Statements of Changes in Net Assets for the years ended December 31, 1994, 1995, 1996 and the period
January 1 to October 23, 1997............................................................................ F-38
Statements of Cash Flows for the years ended December 31, 1994, 1995, 1996 and the period January 1 to
October 23, 1997......................................................................................... F-39
Notes to Financial Statements.............................................................................. F-40
</TABLE>
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors
The Doe Run Resources Corporation and Subsidiaries:
We have audited the accompanying consolidated balance sheets of The Doe Run
Resources Corporation and subsidiaries as of October 31, 1996 and 1997, and the
related consolidated statements of operations, shareholders' equity, and cash
flows for each of the years in the three-year period ended October 31, 1997.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits. We did not audit the consolidated
financial statements of Doe Run Cayman Ltd., a wholly-owned subsidiary, which
statements reflect total assets constituting 45% and total revenues constituting
1% in 1997, of the related consolidated totals. Those consolidated statements
were audited by other auditors whose report has been furnished to us, and our
opinion, insofar as it relates to the amounts included for Doe Run Cayman Ltd.
and its subsidiaries, is based solely on the reports of the other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits and the reports of the other auditors provide a
reasonable basis for our opinion.
In our opinion, based on our audits and the report of the other auditors,
the consolidated financial statements referred to above present fairly, in all
material respects, the financial position of The Doe Run Resources Corporation
and subsidiaries as of October 31, 1996 and 1997, and the results of their
operations and their cash flows for each of the years in the three-year period
ended October 31, 1997, in conformity with generally accepted accounting
principles.
KPMG PEAT MARWICK LLP
December 19, 1997, except for
note 15 as to which the date is
March 12, 1998
F-2
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholder of
Doe Run Cayman Ltd.:
We have audited the accompanying consolidated balance sheet of Doe Run
Cayman Ltd. (a company incorporated in Cayman Islands) as of October 31, 1997
and the related consolidated statements of operations, changes in shareholder's
equity and cash flows for the period from October 23, 1997 (inception date) to
October 31, 1997. These consolidated financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these consolidated financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statements presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above,
present fairly, in all material respects, the consolidated financial position of
Doe Run Cayman Ltd. as of October 31, 1997, and its consolidated results of
operations and cash flows for the period from October 23, 1997 (inception date)
to October 31, 1997, in conformity with accounting principles generally accepted
in the United States of America.
MEDINA, ZALDIVAR Y ASOCIADOS
Countersigned by:
Marco Antonio Zaldivar
C.P.C. Register 12477
Lima, Peru
December 5, 1997
F-3
<PAGE>
THE DOE RUN RESOURCES CORPORATION
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
AS OF OCTOBER 31,
----------------------
1996 1997
---------- ---------- AS OF
JANUARY 31,
1998
-----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash....................................................................... -- $ 8,943 $ 15,645
Trade accounts receivable, net of allowance for doubtful accounts of $947,
$729 and $735 at October 31, 1996 and 1997 and January 31, 1998,
respectively............................................................. $ 54,493 52,470 57,261
Inventories................................................................ 30,019 88,648 88,323
Prepaid expenses and other current assets.................................. 2,919 5,263 18,703
Net deferred tax assets.................................................... 3,792 3,951 5,091
---------- ---------- -----------
Total current assets..................................................... 91,223 159,275 185,023
Property, plant and equipment, net........................................... 104,162 206,348 203,984
Other noncurrent assets, net................................................. 8,529 15,218 14,855
---------- ---------- -----------
Total assets............................................................. $ 203,914 $ 380,841 $ 403,862
---------- ---------- -----------
---------- ---------- -----------
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C> <C>
Current liabilities:
Current maturities of long-term debt....................................... $ 16,590 $ 12,345 $ 12,395
Accounts payable........................................................... 16,324 41,086 44,346
Accrued liabilities........................................................ 24,320 28,893 36,804
---------- ---------- -----------
Total current liabilities................................................ 57,234 82,324 93,545
Long-term debt, less current maturities...................................... 66,201 222,395 232,591
Net deferred tax liabilities................................................. 3,792 3,882 4,205
Postretirement benefits...................................................... 12,817 12,455 12,512
Reclamation and environmental costs.......................................... 26,773 31,685 31,390
Other noncurrent liabilities................................................. 16,267 13,926 13,471
---------- ---------- -----------
Total liabilities........................................................ 183,084 366,667 387,714
Shareholders' equity:
Preferred stock, $1,000 par value, 2,500 shares issued, authorized and
outstanding; liquidation and redemption value of $2,668, $2,618 and
$2,668 on October 31, 1996 and 1997 and January 31, 1998, respectively... 2,500 2,500 2,500
Common stock, $.10 par value, 1,000 shares authorized, issued, and
outstanding.............................................................. -- -- --
Additional paid in capital................................................. 5,000 5,000 5,000
Retained earnings.......................................................... 13,330 6,674 8,648
---------- ---------- -----------
Total shareholders' equity............................................... 20,830 14,174 16,148
---------- ---------- -----------
Total liabilities and shareholders' equity............................... $ 203,914 $ 380,841 $ 403,862
---------- ---------- -----------
---------- ---------- -----------
</TABLE>
See accompanying notes to consolidated financial statements.
F-4
<PAGE>
THE DOE RUN RESOURCES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS AND SHAREHOLDERS' EQUITY
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED OCTOBER 31, JANUARY 31,
---------------------------------- ----------------------
1995 1996 1997 1997 1998
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
(UNAUDITED)
Net sales............................................ $ 225,143 $ 274,930 $ 280,467 $ 65,751 $ 169,086
Costs and expenses:
Cost of sales...................................... 180,398 215,489 234,351 52,944 143,547
Depletion, depreciation and amortization........... 12,486 13,654 14,718 3,663 5,714
Selling, general and administrative expenses,
including related party management fees of $1,200
per year......................................... 8,405 10,079 10,959 2,906 7,471
Exploration expense................................ 1,926 2,912 2,705 481 484
---------- ---------- ---------- ---------- ----------
Total costs and expenses......................... 203,215 242,134 262,733 59,994 157,216
---------- ---------- ---------- ---------- ----------
Income from operations........................... 21,928 32,796 17,734 5,757 11,870
Other income (expense):
Interest expense................................... (14,361) (14,348) (13,740) (4,280) (5,869)
Interest income.................................... 140 113 21 1 365
Other, net......................................... (132) 355 (37) (103) 135
---------- ---------- ---------- ---------- ----------
(14,353) (13,880) (13,756) (4,382) (5,369)
---------- ---------- ---------- ---------- ----------
Income before income tax expense and
extraordinary item............................. 7,575 18,916 3,978 1,375 6,501
Income tax expense................................... 3,252 6,451 4,331 430 4,527
---------- ---------- ---------- ---------- ----------
Net income (loss) before extraordinary item...... 4,323 12,465 (353) 945 1,974
Extraordinary item related to early retirement of
debt, net of income tax benefit.................... -- -- (1,062) (314) --
---------- ---------- ---------- ---------- ----------
Net income (loss)................................ $ 4,323 $ 12,465 $ (1,415) $ 631 $ 1,974
----------
----------
Shareholders' equity, beginning of year............ 5,995 10,318 20,830 14,174
Less dividends declared and paid:
Preferred stock--$140 and $100 per share,
respectively................................... -- (350) (250) --
Common stock--$1,603 and $4,991 per share,
respectively................................... -- (1,603) (4,991) --
---------- ---------- ---------- ----------
Shareholders' equity, end of year.................. $ 10,318 $ 20,830 $ 14,174 $ 16,148
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
See accompanying notes to consolidated financial statements.
F-5
<PAGE>
THE DOE RUN RESOURCES CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED OCTOBER 31, JANUARY 31,
----------------------------------- ----------------------
1995 1996 1997 1997 1998
---------- ---------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
(UNAUDITED)
Cash flows from operating activities:
Net income (loss)............................................... $ 4,323 $ 12,465 $ (1,415) $ 631 $ 1,974
Extraordinary item related to retirement of debt................ -- -- 1,327 392 --
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation, depletion and amortization...................... 12,486 13,654 14,718 3,663 5,714
Amortization of deferred financing fees....................... 1,140 898 257 120 463
Imputed interest.............................................. 7,132 6,617 5,635 1,510 7
Increase (decrease) resulting from changes in assets and
liabilities, net of effects of business acquisitions:
Trade accounts receivable................................... (5,641) (10,291) 2,023 9,453 (4,791)
Inventories................................................. 665 3,209 (3,062) (6,251) 325
Prepaid expenses and other current assets................... (994) (339) (1,201) 1,220 (14,257)
Accounts payable............................................ 2,028 771 6,636 (2,029) 3,260
Accrued liabilities......................................... 3,955 1,492 (1,939) (4,870) 7,904
Other noncurrent assets and liabilities, net................ (5,028) (526) (4,959) (1,365) (449)
---------- ---------- ----------- ---------- ----------
Net cash provided by operating activities................. 20,066 27,950 18,020 2,474 150
Cash flows from investing activities:
Purchases of property, plant and equipment...................... (5,377) (10,534) (13,476) (1,518) (3,416)
Payments for acquisitions....................................... -- (1,742) (128,242) -- --
---------- ---------- ----------- ---------- ----------
Net cash used in investing activities..................... (5,377) (12,276) (141,718) (1,518) (3,416)
Cash flows from financing activities:
Proceeds from (payments on) revolving loan, net................. (5,139) 1,044 (6,399) 2,225 11,091
Proceeds from long-term debt.................................... -- -- 365,945 10,945 --
Payments on long-term debt...................................... (9,550) (14,765) (212,453) (10,865) (845)
Payment of deferred financing costs............................. -- -- (8,573) (20) (278)
Extraordinary item related to retirement of debt................ -- -- (638) -- --
Payment of dividends............................................ -- (1,953) (5,241) (3,241) --
---------- ---------- ----------- ---------- ----------
Net cash provided by (used in) financing activities....... (14,689) (15,674) 132,641 (956) 9,968
---------- ---------- ----------- ---------- ----------
Net increase in cash...................................... -- -- 8,943 -- 6,702
Cash at beginning of period....................................... -- -- -- -- 8,943
---------- ---------- ----------- ---------- ----------
Cash at end of period............................................. $ -- $ -- $ 8,943 $ -- $ 15,645
---------- ---------- ----------- ---------- ----------
---------- ---------- ----------- ---------- ----------
Supplemental disclosure of cash flow information--
Cash paid during the period for:
Interest, net of capitalized interest......................... $ 6,850 $ 6,575 $ 9,196 $ 2,119 $ 2,394
---------- ---------- ----------- ---------- ----------
---------- ---------- ----------- ---------- ----------
Income taxes.................................................. $ -- $ 6,787 $ 3,480 $ -- $ 4,204
---------- ---------- ----------- ---------- ----------
---------- ---------- ----------- ---------- ----------
</TABLE>
See accompanying notes to consolidated financial statements.
F-6
<PAGE>
THE DOE RUN RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
These consolidated financial statements include the accounts of The Doe Run
Resources Corporation and its wholly owned subsidiaries (the "Company"). All
material intercompany balances and transactions have been eliminated.
NATURE OF BUSINESS
The principal domestic business of the Company is the exploration,
development, mining and processing of base metals, primarily lead, and recycling
of lead-acid batteries and other lead-bearing materials. The Company's
fabrication businesses fabricate lead products used in radiation and X-ray
shielding, pollution control devices, and medical equipment, produce lead oxide
for use in automotive batteries, and fabricate and repair lead-lined process
equipment. In Peru, the Company is engaged in the smelting and refining of
polymetallic concentrates, mainly copper, lead and zinc, which are sold as
refined metals primarily to customers located outside of Peru.
FOREIGN CURRENCY TRANSLATION
The functional currency of the Company's foreign subsidiaries is the U.S.
Dollar. Accordingly, translation gains and losses are included in determining
net income.
USE OF ESTIMATES
The preparation of consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities at the date of the consolidated
financial statements, and the reported amounts of revenues and expenses during
the reporting periods. Actual results could differ from these estimates.
CASH
All of the Company's domestic accounts are zero balance accounts. Checks
cleared on domestic bank accounts are funded by advances drawn on revolving
loans. Cash received from domestic operations is transferred to the Company's
primary lender daily and applied to outstanding revolving loans, if any.
INVENTORIES
Finished metals and concentrates, metals and concentrates in process, and
raw materials are stated at the lower of cost or market. The last-in, first-out
("LIFO") method of determining cost is used for the majority of the Company's
U.S. inventories. Inventory costs of the Company's foreign subsidiaries are
determined using the first-in, first-out ("FIFO") method. Inventory costs
include labor, material and other production costs. Supplies and repair parts
are principally stated at average cost, net of reserves for obsolescence.
F-7
<PAGE>
THE DOE RUN RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are recorded at cost. Major additions and
improvements to property, plant and equipment are capitalized, at cost, when
they significantly increase the productive capacity or the life of the asset.
Routine or unanticipated repair and maintenance expenditures, which do not
extend the useful life or increase the productive capacity of the asset, are
charged to operations as incurred. Major expenditures required to maintain the
originally anticipated productive capacity and life of the asset (such as
furnace rebuilds), for which both the amount and timing can be reasonably
estimated, are accrued and charged to operations over the period through the
next anticipated maintenance date.
Mineral interests are amortized using the units of production method.
Depreciation is computed using the straight-line method over the estimated
useful lives of the assets, as follows:
<TABLE>
<S> <C>
3 to 20
Buildings and improvements.................................... years
2 to 15
Machinery and equipment....................................... years
</TABLE>
Facilities at which operations have temporarily ceased may be placed on a
standby care and maintenance basis. The Company continues to depreciate the
related assets during the standby period, however, the expected useful lives are
adjusted. During the standby period all care and maintenance expenditures
incurred are expensed.
IMPAIRMENT OF LONG-LIVED ASSETS
In fiscal 1997, the Company adopted SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."
The statement requires that long-lived assets, certain identifiable intangibles
and goodwill related to those assets be reviewed for impairment when events or
circumstances indicate that the carrying amount of the assets may not be
recoverable. The impairment loss on such assets, as well as long-lived assets
and certain identifiable intangibles to be disposed of, is measured as the
amount by which the carrying value of the assets exceeds the fair value of the
assets. No impairment losses have been recognized.
DEFERRED FINANCING COSTS
Deferred financing costs represent fees paid in conjunction with the
acquisition of long-term debt and are amortized using the interest method over
the term of the respective debt.
EXPLORATION AND DEVELOPMENT COSTS
Exploration and development costs incurred to maintain production at
operating mines are charged to operations as incurred. Mine development
expenditures on new mines and major development expenditures at operating mines
that are expected to benefit future production are capitalized and amortized
using the units of production method over the estimated proven ore reserves to
be benefited.
F-8
<PAGE>
THE DOE RUN RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
RECLAMATION COSTS
The Company's mines and related processing facilities are subject to
governance by various agencies that have established minimum standards for
reclamation. Company estimates of mine closure costs are accrued and charged to
expense using the units of production method during the estimated life of the
operations. A reserve for reclamation costs has been established for the
restoration of certain abandoned mining and processing sites based on current
estimates of the cost to comply with existing standards. Routine environmental
expenditures are expensed as incurred or capitalized and depreciated depending
on their future economic benefit.
COMMITMENTS AND CONTINGENCIES
The Company accrues for loss contingencies, including costs associated with
environmental remediation obligations, when such costs are probable and
reasonably estimable. Accruals are reviewed and adjusted as circumstances
change. Costs of future expenditures for environmental remediation obligations
are not discounted to their present value.
REVENUE RECOGNITION
Sales are recorded as products are shipped to customers. Concentrate and
certain smelter product sales are recorded based on estimated weights, metal
contents and prices using applicable customer agreements and hedge contracts.
All such sales are adjusted when final weights, metal contents and prices are
determined.
RISK MANAGEMENT
The Company's use of derivative financial instruments is limited to managing
well-defined commodity price risks related to future production. Derivative
financial instruments are not used for trading purposes. The Company may, from
time to time, enter into forward physical sales agreements with customers or
futures contracts, which fix prices for a portion of its anticipated future
production, generally for periods not exceeding twelve months. The Company may
also periodically buy futures contracts to offset the effect of certain
fixed-price forward physical sales commitments. In addition, the Company may
employ the use of commodity options to obtain the aforementioned transactions.
Since these transactions meet the requirements for hedge accounting, gains and
losses realized on such transactions, as well as any cost or revenue associated
therewith, are recognized in net sales when the related production is sold. If
an instrument does not meet the requirements for hedge accounting, gains and
losses are recognized immediately.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair values of the Company's long-term debt were estimated using
discounted cash flow analyses, based on the estimates of incremental borrowing
rates for similar types of borrowing arrangements. At October 31, 1996 and 1997,
the fair values of the Company's financial instruments, except for the hedge
positions described in Note 13, were not materially different from their
carrying amounts.
F-9
<PAGE>
THE DOE RUN RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
RESEARCH AND DEVELOPMENT
Research and development costs are expensed when incurred and are included
in selling, general and administrative expenses on the consolidated statements
of operations. Research and development costs are not significant.
INCOME TAXES
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.
UNAUDITED INTERIM FINANCIAL STATEMENTS
In the opinion of management, the interim consolidated financial statements
contain all adjustments, consisting of normal recurring accruals, necessary to
present fairly the consolidated financial position and results of operations for
the periods presented herein. Interim periods are not necessarily indicative of
results to be expected for the year
(2) BUSINESS ACQUISITION
Doe Run Cayman Ltd. ("Doe Run Cayman"), a Cayman Islands corporation and a
wholly owned subsidiary of the Company, was incorporated on September 10, 1997.
On October 23, 1997, Doe Run Cayman, through its subsidiary Doe Run Peru S.R.
Ltda., acquired substantially all of the outstanding shares of Empresa
Metalurgica La Oroya S.A. ("Metaloroya"). Metaloroya is a Peruvian corporation,
which was formed for purposes of consummating the sale of certain assets and
liabilities of La Oroya, a division of Empresa Minera del Centro del Peru S.A.,
an entity owned by the Peruvian government. Doe Run Cayman's operating
subsidiaries in Peru will herein be referred to as "Doe Run Peru."
The acquisition was made through a Contract of Stock Transfer, Capital
Increase and Stock Subscription (the "Contract"). Peruvian law required a
capital contribution to Metaloroya of $126,500 in exchange for 51% of the shares
and a payment of $120,515 for the transfer of the remaining 49%. Subsequent to
the acquisition, utilizing the proceeds from the capital contribution, Doe Run
Peru repaid $125,000 on the $225,000 term loan used to finance the transaction.
F-10
<PAGE>
THE DOE RUN RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(2) BUSINESS ACQUISITION (CONTINUED)
The acquisition has been accounted for as a purchase and the effective
purchase price of $123,015, including transaction costs of approximately $2,500,
was allocated to the fair value of the assets acquired and liabilities assumed
as follows:
<TABLE>
<S> <C>
Inventories....................................................... $ 55,567
Other current assets.............................................. 1,382
Property, plant and equipment..................................... 97,761
Accounts payable and other accrued liabilities.................... (24,495)
Environmental contingency......................................... (7,200)
---------
$ 123,015
---------
---------
</TABLE>
The excess of the fair value of the net assets acquired over the purchase
price, approximately $157,000, reduced the value of the fixed assets acquired.
The results of the operations of Doe Run Peru have been included with those of
the Company since the date of acquisition.
The following unaudited pro forma results of operations for the years ended
October 31, 1996 and 1997 assume that the acquisition of Doe Run Peru occurred
as of the beginning of the respective periods. The pro forma information does
not purport to be indicative of the results of operations that would have
occurred had the acquisition occurred at the beginning of the periods presented
or of the future results of operations.
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
----------------------
<S> <C> <C>
1996 1997
---------- ----------
<CAPTION>
(UNAUDITED)
<S> <C> <C>
Net sales............................................................. $ 731,727 $ 709,780
Net income before extraordinary item.................................. 22,649 15,195
Net income............................................................ 22,649 14,133
</TABLE>
(3) RELATED PARTY TRANSACTIONS
The Company has entered into a management consulting agreement with The
Renco Group, Inc. ("Renco"). Renco holds all of the preferred stock of the
Company, and Renco's subsidiary, DR Acquisition Corp. holds all of the Company's
common stock. Under the agreement, Renco will provide the Company with
management services for a fee of $1,200 annually. The agreement expires October
31, 2000. Fees expensed under this agreement were $1,200 for each of the years
ended October 31, 1995, 1996 and 1997.
To obtain the advantages of volume, Renco purchases certain categories of
property and casualty insurance for a number of its subsidiaries, including the
Company, and the actual cost of such insurance, without markup, is reimbursed by
the covered subsidiaries. For the years ended October 31, 1995, 1996 and 1997
the Company reimbursed Renco for costs of approximately $1,754, $1,821 and
$2,473 respectively, under the Renco insurance program.
F-11
<PAGE>
THE DOE RUN RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(4) INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
OCTOBER 31,
--------------------
1996 1997
--------- --------- JANUARY 31,
1998
-----------
(UNAUDITED)
<S> <C> <C> <C>
Finished metals and concentrates........................... $ 6,408 $ 11,460 $ 16,817
Metals and concentrates in process......................... 9,520 51,129 44,242
Materials, supplies and repair parts....................... 14,091 26,059 27,264
--------- --------- -----------
$ 30,019 $ 88,648 $ 88,323
--------- --------- -----------
--------- --------- -----------
</TABLE>
Materials, supplies and repair parts are stated net of reserves for
obsolescence of $4,866, $4,977 and $4,738 at October 31, 1996 and 1997 and
January 31, 1998, respectively.
The FIFO cost of inventories valued under the LIFO cost method were $19,508
and $20,311 at October 31, 1996 and 1997, respectively. If the FIFO cost method
had been used to determine cost, inventories would have been $3,242 and $5,996
higher at October 31, 1996 and 1997, respectively.
As a result of reducing certain inventory quantities valued on the LIFO
basis, lower inventory costs prevailing in previous years were charged to cost
of sales in 1995, 1996 and 1997. In 1996, the Company adopted a policy of
calculating the effect of LIFO liquidations on net income based on the current
cost method. The effect was an increase in net income of $111, $542, and $899
for the years ended October 31, 1995, 1996 and 1997, respectively.
(5) PROPERTY, PLANT AND EQUIPMENT, NET
Property, plant and equipment, net consists of the following:
<TABLE>
<CAPTION>
OCTOBER 31,
----------------------
<S> <C> <C>
1996 1997
---------- ----------
Land.................................................................. $ 3,347 $ 9,371
Buildings and improvements............................................ 27,054 45,286
Machinery and equipment............................................... 77,056 172,582
Mineral interests..................................................... 20,920 22,005
Construction in progress.............................................. 7,486 3,252
---------- ----------
135,863 252,496
Less accumulated depreciation and depletion 31,701 46,148
---------- ----------
$ 104,162 $ 206,348
---------- ----------
---------- ----------
</TABLE>
Rental expense applicable to minimum rentals under operating leases was
$1,460, $3,101 and $5,543 for the years ended October 31, 1995, 1996, and 1997,
respectively. Contingent rental payments, based primarily on equipment usage,
were $309, $554, and $674 for the same periods.
F-12
<PAGE>
THE DOE RUN RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(5) PROPERTY, PLANT AND EQUIPMENT, NET (CONTINUED)
The Company's operating leases relate primarily to operating equipment,
office facilities and office equipment. The minimum rental commitments under
noncancellable leases, with terms in excess of one year, are as follows:
<TABLE>
<CAPTION>
FISCAL YEAR ENDING OCTOBER 31,
- -----------------------------------------------------------------------------------
<S> <C>
1998............................................................................... $ 6,197
1999............................................................................... 4,486
2000............................................................................... 3,662
2001............................................................................... 2,924
2002............................................................................... 1,393
---------
$ 18,662
---------
---------
</TABLE>
F-13
<PAGE>
THE DOE RUN RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(6) ACCRUED LIABILITIES
Accrued liabilities consist of the following:
<TABLE>
<CAPTION>
OCTOBER 31,
--------------------
<S> <C> <C>
1996 1997
--------- ---------
Reclamation and environmental........................................... $ 4,393 $ 3,842
Property taxes.......................................................... 3,441 3,299
Compensated absences.................................................... 2,734 3,076
Salaries, wages, fringes................................................ 6,157 7,943
Other................................................................... 7,595 10,733
--------- ---------
$ 24,320 $ 28,893
--------- ---------
--------- ---------
</TABLE>
Reclamation and environmental costs represents the estimate of reclamation
and environmental spending for the following fiscal year. These costs relate
primarily to the historical operations of the Company. See Note 14.
F-14
<PAGE>
THE DOE RUN RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(7) LONG-TERM DEBT
Long-term debt consists of the following:
<TABLE>
<CAPTION>
AS OF OCTOBER 31,
---------------------
1996 1997
--------- ----------
<S> <C> <C>
$130,000 term loan--due quarterly in increasing amounts, with a balloon payment of $60,000
due October 31, 2003; effective rate of 8.64% at October 31, 1997........................ $ -- $ 130,000
$225,000 term loan--due quarterly in increasing amounts, with a balloon payment of $42,000
due October 23, 2002; effective rate of 9.14% at October 31, 1997........................ -- 100,000
Revolving loan dated October 23, 1997--expiring October 23, 2002, interest payable
quarterly at the Eurodollar rate, plus 2.5% (8.12% at October 31, 1997).................. -- 3,000
Pollution control financing--maturing December 15,1998, annual principal payments due on
December 15, interest at 5.75%, payable semi-annually.................................... 2,540 1,740
Revolving loan dated April 7, 1994--interest payable monthly at the prime rate (8.75% at
October 31, 1996) plus 1.75%, plus 0.5% on the unused portion of the loan................ 9,399 --
Term loan--payable in monthly installments of $256 plus interest at the prime rate plus
1.75%.................................................................................... 4,823 --
Senior note--maturing September 1, 1998, principal payments of $125 due quarterly, interest
payable monthly at a rate of 12%. Contingent interest is due quarterly, based on an
indexed market rate, 16.72% at October 31, 1996.......................................... 9,297 --
Promissory note--maturing February 28, 2002, principal payable as percentage of gross
margin over a specific base amount, plus interest due annually, bearing interest at 4%
through February 28, 1996 increasing 1% each year through February 28, 2001, face amount
of $50,000 discounted to effective interest rate of 15.5%................................ 36,772 --
Contract obligation--payable in annual principal payments of $5,100 and a balloon payment
of $15,100 due April 1, 1999 non-interest bearing, face amount of $35,500 discounted to
an effective interest rate of 14.5%...................................................... 19,960 --
--------- ----------
$ 82,791 $ 234,740
Less current maturities.................................................................... 16,590 12,345
--------- ----------
Long-term debt, less current maturities.................................................... $ 66,201 $ 222,395
--------- ----------
--------- ----------
</TABLE>
On October 23, 1997 the Company and Doe Run Peru borrowed $130,000 and
$225,000, respectively, under credit agreements with a group of financial
institutions. The proceeds were used to retire all of the Company's outstanding
debt, except for the Pollution Control Bonds, and to finance the acquisition and
capital contribution discussed in Note 2. The applicable interest rate on the
loans is the greater of the Eurodollar rate (adjusted for the maximum reserve
percentages as established by the Federal Reserve Board) or the ten-year U.S.
Treasury bond rate, plus an applicable margin: 2.5%, to increase 0.25% per
quarter on the $130,000 loan and 3%, to increase .25% annually, on the $225,000
loan.
The credit agreements also provided for borrowing under two credit
facilities. The first facility allows the Company to borrow up to $100,000 and
expires October 23, 2002. The availability of funds under the
F-15
<PAGE>
THE DOE RUN RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(7) LONG-TERM DEBT (CONTINUED)
facility is limited to a percentage of eligible accounts receivable and
inventories. Actual availability was $40,417 at October 31, 1997. The facility
bears interest at a base rate plus an applicable margin. The base rate is equal
to the greater of 1) the adjusted certificate of deposit rate plus .5%, 2) the
financial institutions' prime lending rate, or 3) the Federal funds rate plus
.5%; or the adjusted Eurodollar rate as specified by the Company. The applicable
margin is 2.5%, or .75% in the case of Eurodollar rate loans. The Company is
also obligated to pay an unused line fee equal to .375% on the amount by which
the maximum credit of $100,000 exceeds outstanding loans and letters of credit.
All cash received from the Company's domestic operations is wired daily to the
financial institutions to pay down the outstanding loan balance, if any.
Revolving loans and standby letters of credit outstanding under this facility
were $0 and $6,100, respectively, at October 31, 1997.
The second facility allows Doe Run Peru to borrow up to $50,000 and expires
October 23, 2002. The interest rate is due to increase .25% annually. An unused
line fee of .5% per annum on the average unused portion of the line is payable
quarterly, in arrears. Availability of funds under the facility is limited to a
percentage of eligible accounts receivable and inventories. Actual availability
was $29,332 at October 31, 1997. Revolving loans and standby letters of credit
outstanding under this facility were $3,000 and $3,300, respectively, at October
31, 1997.
Pollution control financing represents the outstanding balances of revenue
bonds issued to provide funding for pollution control facilities at the
Company's domestic primary lead smelter. The debt is guaranteed by the former
owner of the Company.
Effective January 31, 1997, the Company amended the terms of the revolving
and term loans dated April 7, 1994. The amendment reduced the interest rate
payable, increased the amount of the term loan, and extended the term of the
revolving and term loans, which were due to mature April 7, 1997 and April 7,
1998, respectively. Pursuant to the amendment, the Company borrowed an
additional $10,945 on the term loan, for a new principal balance of $15,000, due
in monthly installments, maturing January 2002. The proceeds were used to retire
the senior note balance of $9,172 on January 31, 1997 and pay contingent
interest of $1,426. These loans were retired with the proceeds of the $130,000
term loan as discussed above.
Virtually all of the Company's assets are pledged to secure long-term debt.
In conjunction with early extinguishments of long-term debt in 1997, the
Company recognized extraordinary charges of $1,062, net of income tax benefit of
$265.
The aggregate estimated amounts of long-term debt maturing after October 31,
1997 are as follows:
<TABLE>
<S> <C>
1998.............................................................. $ 12,345
1999.............................................................. 21,395
2000.............................................................. 35,500
2001.............................................................. 33,500
2002.............................................................. 72,000
Thereafter........................................................ 60,000
---------
$ 234,740
---------
---------
</TABLE>
F-16
<PAGE>
THE DOE RUN RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(7) LONG-TERM DEBT (CONTINUED)
In addition to scheduled principal payments on the term loans, additional
payments may be required based on cash flow for the previous fiscal year,
beginning with the year ended October 31, 1998.
The Company's various debt agreements contain certain requirements with
respect to net worth, leverage ratios, and coverage of fixed charges, which
begin in fiscal 1998. These agreements also place limitations on dividend
payments and other outside borrowings and restrict annual capital expenditures.
The Company was in compliance with all debt covenants at October 31, 1997, and
accordingly, the related debt is classified as long-term. As of January 31,
1998, the Company had received waivers from its lenders with respect to the net
worth and leverage ratio requirements under the $130,000 term loan and revolving
loan under the $100,000 credit facility. The waivers are effective for the
quarter ended January 31, 1998 with respect to the leverage ratio requirements
and for the two quarters ending April 30, 1998 with respect to the net worth
requirements. The Company refinanced all of the loans outstanding under the
credit agreements during the quarter ending April 30, 1998.
(8) INCOME TAXES
The Company files a consolidated federal income tax return with Renco.
Pursuant to a tax sharing agreement with Renco, the Company provides for federal
income taxes as if the Company filed separate income tax returns except that,
generally, no carryforward of net operating losses is permitted, unless such
losses are generated by net tax temporary differences. Under the terms of the
agreement, the Company is required to remit annually to Renco the amount of
federal income taxes provided. Renco files the Company's state income tax
returns, and the Company remits the resulting tax to Renco. Doe Run Peru and its
subsidiaries pay taxes directly to their respective jurisdictions in which
income and other similar taxes arise.
Doe Run Cayman is subject to the regulations of the Cayman Islands, which
currently have no corporate income or capital gains tax. Doe Run Cayman's
subsidiaries located in Peru are subject to Peruvian taxation. The statutory
income tax rate in Peru is 30%. Doe Run Peru is subject to a ten-year tax
stabilization agreement with the Peruvian government, which provides for
Peruvian taxation based on tax statutes and regulations prevailing on October
21, 1997. Metaloroya is subject to a tax stabilization agreement with the
Peruvian government, which provides for Peruvian taxation based on tax statutes
and regulations prevailing on April 25, 1994. This agreement was modified, and
an election was made to adopt the tax statutes and regulations as of November 6,
1997, beginning with the Peruvian tax year ending on December 31, 1997, through
December 31, 2006.
F-17
<PAGE>
THE DOE RUN RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(8) INCOME TAXES (CONTINUED)
Income tax expense is comprised of the following:
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
-------------------------------
1995 1996 1997
--------- --------- ---------
<S> <C> <C> <C>
Current:
Federal........................................................ $ 3,175 $ 6,383 $ 3,882
State.......................................................... 77 68 99
Foreign........................................................ -- -- 419
--------- --------- ---------
3,252 6,451 4,400
Deferred:
Foreign........................................................ -- -- (69)
--------- --------- ---------
$ 3,252 $ 6,451 $ 4,331
--------- --------- ---------
--------- --------- ---------
</TABLE>
Income tax expense differed from the amount computed by applying the
statutory federal corporate income tax rate of 35% to income before income tax
expense as a result of the following:
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
-------------------------------
1995 1996 1997
--------- --------- ---------
<S> <C> <C> <C>
Income tax expense at statutory rate.......................... $ 2,651 $ 6,620 $ 1,392
Increase (reduction) in income tax expense resulting from:
Percentage depletion in excess of basis..................... (2,344) (4,583) (2,532)
Change in the balance of the valuation allowance for
deferred tax assets....................................... 2,808 4,095 4,487
Nondeductible expenses...................................... 66 385 477
State income taxes, net of federal benefit.................. 64 56 64
Foreign income taxes at effective rates in excess of the
statutory rate............................................ -- -- 324
Other, net.................................................. 7 (122) 119
--------- --------- ---------
$ 3,252 $ 6,451 $ 4,331
--------- --------- ---------
--------- --------- ---------
</TABLE>
F-18
<PAGE>
THE DOE RUN RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(8) INCOME TAXES (CONTINUED)
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities are as follows:
<TABLE>
<CAPTION>
AS OF OCTOBER 31,
----------------------
1996 1997
---------- ----------
<S> <C> <C>
Deferred tax assets:
Inventories and other current assets................................ $ 364 $ 514
Accrued liabilities................................................. 3,268 3,099
Postretirement benefits............................................. 4,920 4,781
Reclamation and environmental costs................................. 10,278 9,399
Other noncurrent assets and liabilities............................. 11,924 14,346
---------- ----------
30,754 32,139
Less valuation allowance............................................ (8,841) (13,328)
---------- ----------
Total deferred tax assets......................................... 21,913 18,811
---------- ----------
Deferred tax liabilities:
Inventories and other current assets................................ (78) --
Property, plant and equipment....................................... (10,883) (11,557)
Percentage depletion................................................ (5,136) (4,856)
Pension asset....................................................... (2,630) (2,329)
Long-term debt...................................................... (3,186) --
---------- ----------
Total deferred tax liabilities.................................... (21,913) (18,742)
---------- ----------
Net deferred tax assets......................................... $ -- $ 69
---------- ----------
---------- ----------
</TABLE>
The deferred tax liabilities related to inventories, other current assets
and property, plant and equipment are principally due to differences in book and
tax allocations of the excess of the fair value of net assets acquired over the
purchase price paid. Accruals for financial reporting purposes, which have no
tax basis, gave rise to a significant portion of the other temporary
differences.
The Company recognized a deferred tax asset of $8,451 and $10,188 for an
alternative minimum tax carryforward at October 31, 1996 and 1997, respectively,
which is included above in other noncurrent assets and liabilities. The
alternative minimum tax carryforward is available to reduce future Federal
regular income taxes, if any, over an indefinite period.
Management has provided a valuation allowance against its net domestic
deferred tax assets, since it is unlikely, to the extent deferred tax assets
exceed deferred tax liabilities, that the benefits will be realized.
F-19
<PAGE>
THE DOE RUN RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(9) EMPLOYEE BENEFITS
DOMESTIC PLANS
DEFINED BENEFIT PLANS
The Company sponsors a non-contributory defined benefit plan.
Benefits provided to salaried employees under the defined benefit plan are
based on final average compensation and years of service. Benefits provided to
hourly employees are based on a flat rate and years of service. Net periodic
pension expense (income) is comprised of the following:
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
-------------------------------
1995 1996 1997
--------- --------- ---------
<S> <C> <C> <C>
Service cost.................................................. $ 865 $ 1,342 $ 1,439
Interest cost on projected benefit obligation................. 3,025 3,506 3,660
Actual return on assets....................................... (5,016) (4,168) (7,306)
Net amortization and deferral of unrecognized net losses...... 1,007 176 3,333
--------- --------- ---------
Net periodic pension expense (income)......................... $ (119) $ 856 $ 1,126
--------- --------- ---------
--------- --------- ---------
</TABLE>
The following assumptions were used in the determination of net periodic
pension expense (income):
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
-------------------------------
<S> <C> <C> <C>
1995 1996 1997
--------- --------- ---------
Discount rates................................................. 9.00% 7.50% 7.75%
Rate of increase in compensation levels........................ 3.00 3.00 3.00
Expected long-term rate of return on assets.................... 9.00 9.00 9.00
</TABLE>
The following table sets forth the funded status of the Company's defined
benefit plan:
<TABLE>
<CAPTION>
AS OF OCTOBER 31,
----------------------
1996 1997
---------- ----------
<S> <C> <C>
Actuarial present value of benefit obligations:
Vested benefit obligation........................................... $ (38,385) $ (43,417)
Non-vested obligation............................................... (2,261) (2,758)
---------- ----------
Accumulated benefit obligation.................................... $ (40,646) $ (46,175)
---------- ----------
---------- ----------
Projected benefit obligation.......................................... $ (46,758) (51,748)
Less plan assets at fair value, primarily investments in common stock
and corporate bonds................................................. 47,401 51,359
---------- ----------
Plan assets in excess of projected benefit obligation................. 643 (389)
Unrecognized net loss................................................. 6,207 6,457
---------- ----------
Pension asset, including in other noncurrent assets, net.......... $ 6,850 $ 6,068
---------- ----------
---------- ----------
</TABLE>
The weighted average discount rate used in determining the projected benefit
obligation was 7.75% and 7.5% as of October 31, 1996 and 1997, respectively. The
unrecognized net loss is amortized over the average remaining service period of
employees expected to receive benefits under the plan.
F-20
<PAGE>
THE DOE RUN RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(9) EMPLOYEE BENEFITS (CONTINUED)
The Company also adopted a supplemental defined benefit plan, The
Supplemental Employee Retirement Plan (SERP), effective November 1, 1996. The
SERP provides benefits to those participants of the defined benefit plan whose
benefits under the plan are limited by Sections 401(a)(17) or 415 of the
Internal Revenue Code. Benefits under the SERP represent the amount by which the
benefits under the defined benefit plan, if such benefits were not limited,
exceed those benefits the participants are entitled to receive. The SERP is
unfunded. The Company recorded pension expense of $259 for the year ended
October 31, 1997, an intangible pension asset of $624, and a pension liability
of $883 at October 31, 1997 with respect to the SERP plan.
POSTRETIREMENT BENEFIT PLANS
The Company sponsors three postretirement medical plans. The plans generally
cover medical expenses subject to deductibles, copayments and limits on
specified coverage. For persons retired on or before January 1, 1992, the
retiree's contribution to the cost of these plans varies primarily based upon
the date of retirement and the respective plan. Effective January 1, 1992, the
Company's contribution to the cost of coverage of employees retiring after that
date has decreased gradually, until, beginning in 1997, retirees pay 100% of the
cost of coverage. The Company maintains stop-loss insurance for claims exceeding
$200 per person in any calendar year.
The postretirement benefit plans are unfunded. The following illustrates the
Company's postretirement benefit obligation:
<TABLE>
<CAPTION>
AS OF OCTOBER 31,
--------------------
1996 1997
--------- ---------
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees.............................................................. $ 11,418 $ 10,169
Fully eligible active participants.................................... 171 135
Other actives......................................................... 257 248
--------- ---------
11,846 10,552
Unrecognized net gain................................................... 1,901 2,818
--------- ---------
Postretirement benefit obligation..................................... $ 13,747 $ 13,370
--------- ---------
--------- ---------
</TABLE>
Net periodic postretirement benefit cost includes the following components:
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
-------------------------------
1995 1996 1997
--------- --------- ---------
<S> <C> <C> <C>
Service cost........................................................ $ 33 $ 23 $ 34
Interest cost....................................................... 1,076 886 789
Amortization of gains............................................... -- (23) (104)
--------- --------- ---------
Net periodic postretirement benefit cost.......................... $ 1,109 $ 886 $ 719
--------- --------- ---------
--------- --------- ---------
</TABLE>
The weighted average annual assumed rate of increase in the per capita cost
of covered benefits (I.E., health care cost trend rate) for the medical plans is
8% for fiscal 1998, and is assumed to decrease gradually to 5% by the year 2001,
and remain at that level thereafter. A one-percentage point increase in
F-21
<PAGE>
THE DOE RUN RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(9) EMPLOYEE BENEFITS (CONTINUED)
each year would increase the accumulated postretirement benefit obligation and
the net periodic postretirement benefit cost by $612 and $48, respectively.
The weighted average discount rate used in determining the accumulated
postretirement benefit obligation was 7.75% and 7.50% at October 31, 1996 and
1997, respectively.
DEFINED CONTRIBUTION AND PROFIT SHARING PLANS
The Company sponsors a 401(k) plan that covers substantially all salaried
and hourly employees. Participants can contribute up to 15% of compensation on a
before-tax basis. The Company matches 25% of the first 6% of a participant's
before-tax contribution. The Company's expense representing its matching
contribution was $307, $360 and $499 for the years ended October 31, 1995, 1996
and 1997, respectively. Plan assets consist primarily of investments in common
stock and debt securities.
On February 28, 1995, the Company adopted a profit sharing program, which
covers substantially all salaried and hourly employees. The program provides for
a distribution to employees equal to 15% of income before income tax expense. At
management's discretion, a portion of the distribution may be made in the form
of a contribution to the 401(k) plan. The remainder is paid in cash to
employees. The Company's expense for the years ended October 31, 1995, 1996 and
1997 was $1,388, $3,492 and $493, respectively.
FOREIGN PLANS
In Peru, severance indemnities are determined according to governmental
regulations and provided for on an accrual basis for the amount that would be
paid if all personnel were to retire at each balance sheet date. These amounts
are deposited semi-annually into the workers' individual bank accounts.
In accordance with government regulations in Peru, employees are entitled to
receive 8% of the Doe Run Peru's taxable income, 50% of which is distributed to
employees based on number of days worked, and the remaining distributed in
proportion to their salaries.
(10) PREFERRED STOCK (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
The Company had 2,500 shares of preferred stock with a $1,000 par value
authorized, issued and outstanding at October 31, 1996 and 1997. The shares are
owned by Renco. The shares are redeemable solely at the option of the Company at
$1,000 per share plus any unpaid dividends.
Cumulative annual dividends of $80 per share are payable quarterly on the
first day of January, April, July and October and must be paid before dividends
on common stock can be paid. The Company declared and paid dividends of $100 per
share on each of its 2,500 shares on December 30, 1996. Dividends in arrears at
October 31, 1996 and 1997 were $168 and $118, respectively. At October 31, 1996
and 1997, no dividends were accrued as none had been declared.
F-22
<PAGE>
THE DOE RUN RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(11) BUSINESS AND CREDIT CONCENTRATIONS
Lead prices fluctuate and are affected by numerous factors beyond the
Company's control, including expectations for inflation, speculative activities,
the relative exchange rate of the U.S. dollar, global and regional demand and
production, political and economic conditions and production costs in major
producing regions. The aggregate effect of these factors makes it impossible for
the Company to predict lead prices. Fluctuations in the lead price could have a
material adverse effect on the results of operations, financial condition, and
liquidity of the Company.
For the years ended October 31, 1995, 1996 and 1997 approximately 59%, 67%
and 63%, respectively, of the Company's revenues were from U.S. battery
manufacturers (primarily automotive) or their suppliers. At October 31, 1996 and
1997, the accounts receivable balances related to these U.S. battery
manufacturers were $39,246 and $35,162, respectively.
For the years ended October 31, 1995, 1996 and 1997 the Company relied on
one battery customer, Johnson Controls, Inc., for approximately 13%, 14% and 12%
of its revenue, respectively. Related accounts receivable balances were $9,394
and $6,501 at October 31, 1996 and 1997, respectively. An additional 10% of
revenues were attributed to East Penn Manufacturing Co., Inc., a battery
manufacturer, for the year ended October 31, 1996, and Big River Zinc
Corporation for the year ended October 31, 1997. No other customer accounted for
greater than 10% of revenues for the year ended October 31, 1995.
(12) SEGMENT INFORMATION
The Company operates in one industry segment for financial reporting
purposes.
Doe Run Peru's net sales and income from operations were $2,571 and $359,
respectively, for the period from October 23 to October 31, 1997. There were no
intraenterprise sales between geographic segments during this period. Doe Run
Peru's identifiable assets were $171,000 at October 31, 1997.
(13) COMMITMENTS AND CONTINGENCIES
INVESTMENT COMMITMENT
According to the Contract described in Note 2, Doe Run Peru is obligated to
invest $120,000 through October 23, 2002 to expand and modernize its operations,
including certain expenditures to comply with environmental regulations in Peru,
as discussed in Note 14. In the event Doe Run Peru has not fulfilled its
obligations under the Contract, it will be obligated to pay in 2002 a penalty to
Centromin Peru S.A. equal to 30% of any shortfall. Management plans to fund its
commitments through future operating cash flows.
TOLLING
The Company has entered into a tolling arrangement with a major battery
manufacturer whereby the manufacturer will deliver spent lead-acid batteries and
other lead-bearing material to the Company's recycling facility and, for a
processing fee, the Company will return finished lead metal. The agreement,
which expires in September 1999, covers approximately 14% of the Company's
anticipated domestic lead metal production.
F-23
<PAGE>
THE DOE RUN RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(13) COMMITMENTS AND CONTINGENCIES (CONTINUED)
SALES
The Company has commitments to sell approximately 70% of its anticipated
domestic lead production under agreements, with terms of generally less than one
year. Sales prices are generally based on the London Metal Exchange prices at
the time of shipment, plus a premium.
HEDGING
The fair market value of the Company's hedging positions at October 31, 1996
and 1997, is the difference between quoted prices at the respective period-end
and the contract settlement value. The fair market value represents the
estimated net cash the Company would receive (pay) if the contracts were
canceled on the respective dates. As management has designated these contracts
as hedges, the related gains and losses will be recognized in net sales when the
related production is sold.
The Company's open hedging positions at January 31, 1998 (unaudited) were
(numbers not in thousands):
FUTURE SALES (PURCHASE) CONTRACTS
<TABLE>
<CAPTION>
METAL QUANTITY PRICE RANGE FAIR MARKET VALUE PERIOD
- ------------------------- --------------- --------------------------- ----------------- ---------------------
<S> <C> <C> <C> <C>
Lead..................... (13,338) tons $0.2354/lb. to $0.3069/lb. $ 225,387 Feb. 98 to Dec. 98
Copper................... 2,012 tons $0.7557/lb. to $0.9684/lb. $ 49,053 Feb. 98 to Jun. 98
Zinc..................... 1,102 tons $0.6001/lb. to $0.6001/lb. $ 192,686 Feb. 98 to May 98
</TABLE>
The Company's open hedging positions at October 31, 1997 were (numbers not
in thousands):
FUTURES SALES CONTRACTS
<TABLE>
<CAPTION>
METAL QUANTITY PRICE RANGE FAIR MARKET VALUE PERIOD
- ------------------------- --------------- --------------------------- ----------------- ---------------------
<S> <C> <C> <C> <C>
Lead..................... 5,594 tons $ 0.2716/lb. to $0.3243/lb. $ 253,391 Nov. 97 to Dec. 98
Copper................... 1,213 tons $ 0.9525/lb. to $1.0097/lb. $ 142,174 Nov. 97 to Feb. 98
Zinc..................... 2,535 tons $ 0.6001/lb. to $0.6652/lb. $ 210,744 Nov. 97 to May 98
</TABLE>
The above commitments represent less than 20% of the Company's estimated
sales for the year ending October 31, 1998.
The Company's open hedging positions at October 31, 1996 were (numbers not
in thousands):
FUTURES SALES (PURCHASE) CONTRACTS
<TABLE>
<CAPTION>
METAL QUANTITY PRICE RANGE FAIR MARKET VALUE PERIOD
- ------------------------- --------------- --------------------------- ----------------- ---------------------
<S> <C> <C> <C> <C>
Lead..................... (19,869) tons $ 0.3384/lb. to $0.3765/lb. $ 54,692 Nov. 96 to Oct. 97
Copper................... 2,811 tons $ 0.8573/lb. to $1.1290/lb. $ 687,136 Nov. 96 to Mar. 97
Zinc..................... 6,063 tons $ 0.4990/lb. to $0.5026/lb. $ 259,087 Nov. 96 to Jan. 97
</TABLE>
SOLD CALL OPTION CONTRACTS
<TABLE>
<CAPTION>
METAL QUANTITY PRICE RANGE FAIR MARKET VALUE PERIOD
- ------------------------------------------- ----------- ------------ --------------------- ---------------------
<S> <C> <C> <C> <C>
Lead....................................... 2,576 tons $ 0.3600/lb. -- Nov. 96 to Dec. 96
</TABLE>
The Company is exposed to risk from market price fluctuations to the extent
it cannot meet anticipated sales.
The Company does not obtain collateral or other security to support hedge
instruments subject to credit risk, but assesses the reliability and reputation
of its counterparties before contracts are established.
F-24
<PAGE>
THE DOE RUN RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(13) COMMITMENTS AND CONTINGENCIES (CONTINUED)
LETTERS OF CREDIT
At October 31, 1996 and 1997, the Company's lender had issued irrevocable
standby letters of credit totaling $5,342 and $6,100, respectively, in
connection with the Company's insurance and bonding activities. At October 31,
1997, the Company's lender had issued a $3,300 standby letter of credit as a
guarantee for a potential purchase price adjustment related to the acquisition
of Metaloroya, as required by the Contract.
EMPLOYMENT AGREEMENTS
The Company has employment agreements with a number of its senior executives
through October 31, 1999.
ADDITIONAL PAYMENTS RELATED TO ACQUISITIONS
The terms of an agreement with the previous owners of The Doe Run Company
(predecessor to the Company) provided that, beginning with the fiscal period
ending October 31, 1994, additional payments may be required based on a
percentage of gross margin for those periods in excess of a specified base
amount. Payments made under the agreement were $237 and $5,778 in the fiscal
years ended October 31, 1996 and 1997, respectively. In conjunction with the
retirement of the obligations due to the previous owners, the amount paid
exceeded recorded obligations by $5,108. This amount was recorded as additional
purchase price paid for the assets of the Company acquired from the previous
owners. The Company was released from further obligation under the agreement.
Pursuant to an Asset Purchase Agreement (the "Purchase Agreement")
additional consideration may be due to the former owners of Seafab if certain
earnings levels are met for the five-year period beginning November 1, 1996.
Payments made in fiscal 1997 totaled $181.
(14) ENVIRONMENTAL AND LITIGATION MATTERS
ENVIRONMENTAL
DOMESTIC OPERATIONS
Doe Run is subject to numerous federal, state and local environmental laws
and regulations governing, among other things, air emissions, waste water
discharge, solid and hazardous waste treatment, and storage, disposal and
remediation of releases of hazardous materials. In common with much of the
mining industry, Doe Run's facilities are located on sites that have been used
for heavy industrial purposes for decades and may require remediation. Doe Run
has made and intends to continue making the necessary expenditures for
environmental remediation and compliance with environmental laws and
regulations. Environmental laws and regulations may become more stringent in the
future which could increase costs of compliance.
The Company has recorded a liability of $35,527 as of October 31, 1997,
which represents management's best estimate of known obligations relating to
environmental and reclamation matters, which are discussed below.
Primary smelter slag produced by and stored at the primary smelter in
Herculaneum, Missouri is currently exempt from hazardous waste regulation under
the Resource Conservation and Recovery Act of 1976, as amended ("RCRA"). The
Company has accrued approximately $1,200 related to the Herculaneum
F-25
<PAGE>
THE DOE RUN RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(14) ENVIRONMENTAL AND LITIGATION MATTERS (CONTINUED)
smelter's operations, primarily for closure obligations. However, the EPA
recently published a proposed rule, which, if adopted, would require this slag
to be managed as a hazardous waste. Certain other waste materials, including
baghouse dust, generated at the smelter and now recycled in the smelter may also
become regulated as hazardous wastes. At this time, the Company cannot predict
the final outcome of the EPA's proposed rule. However, the EPA has indicated,
notwithstanding the full RCRA requirements, the rule will not be imposed, in
particular, that the slag will not be regulated. If the slag or other wastes at
the smelter were to be regulated as hazardous waste, the Company may be required
to take corrective action under RCRA at the smelter, as well as to adopt
stricter management practices for these wastes.
The Company is working with regulators at the Herculaneum smelter to develop
a new three-year compliance plan to meet the ambient air quality standard for
lead promulgated under the federal Clean Air Act. The plan will take effect
after fiscal 1998 to implement control measures identified in the plan. The
Company expects to make capital expenditures for additional control measures
totaling approximately $2,800 for fiscal 1998 while the plan is developed and
anticipates future cash requirements of $3,000 for the three-year plan.
Doe Run has received notice that it is a potentially responsible party
("PRP") subject to liability under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA"), at four sites in
St. Francois County, Missouri: the Big River Mine Tailings Site, the Bonne Terre
Site, the Federal site, and the National site; the Oronogo-Durenweg site in
Jasper County, Missouri; the Cherokee County site in Cherokee County, Kansas;
the Tar Creek site in Ottawa County, Oklahoma; the Block "P" site in Cascade
County, Montana; and the Missouri Electric Works site in Cape Girardeau,
Missouri. In addition, there are four sites in St. Francois County for which the
EPA has indicated it will issue notice. These sites involve historical
operations of predecessors of the Company. CERCLA provides for strict and, in
certain circumstances, joint and several liability for response costs and
natural resource damages. Doe Run signed a voluntary Administrative Order of
Consent ("AOC") in 1994 with the EPA to remediate the Big River Mine Tailings
Site. In February 1997, Doe Run signed an AOC to perform an Engineering
Evaluation/Cost Analysis on the Bonne Terre Site. In addition to remediating the
mine waste areas at these sites, the Company has signed an AOC with the EPA to
conduct a Remedial Investigation/ Feasibility Study ("RIFS") to assess potential
off-site impacts of site operations on and the need for remediation regarding
groundwater, residential soils, several creeks and a river. The RIFS is being
conducted by a third party and is approximately one-third complete, with
completion expected within one year. The Block "P" site in Montana was a
polymetallic mine with a waste facility located on U.S. Forest Service land.
Studies of the tailings site, mine and the potential impacts on surface water
have been requested by the State of Montana. The Company has a reserve as of
October 31, 1997 of approximately $17,800 for these sites, including the four
additional sites in St. Francois County.
Doe Run's recycling facility is subject to corrective action requirements
under RCRA, as a result of a storage permit for certain wastes issued in 1989.
This has required and may involve future remediation of solid waste management
units at the site. Although it is not possible to predict whether completed
actions will be approved or new actions required, the Company has reserves as of
October 31, 1997 of approximately $1,900 for future corrective actions and
$2,600 for closure costs for the permitted storage area.
The Company's domestic operating facilities have wastewater discharge
permits issued under the federal Clean Water Act, as amended. It is expected
that stricter discharge limits than previously in effect will be included in
permits now subject to renewal. As a result, there will be additional treatment
facilities
F-26
<PAGE>
THE DOE RUN RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(14) ENVIRONMENTAL AND LITIGATION MATTERS (CONTINUED)
required, with anticipated total capital expenditures of $4,000 over the next
five years to meet applicable permit requirements. There will be no appreciable
increase in operating costs.
The Company's mining and milling operations include five mine waste disposal
facilities that are subject to Missouri mine closure permit requirements. The
total expected cost of closure is $11,000. The Company has begun certain closure
requirements ahead of closure and is also accruing for the cost of ultimate
closure at a rate of approximately $300 per year. The Company's mine closure
reserves were approximately $4,800 as of October 31, 1997.
FOREIGN OPERATIONS
Doe Run Peru has negotiated a capital spending plan with the Peruvian
government to invest $107,575 during the next nine years to meet its obligations
under the Programa de Adecuacion y Manejo Ambiental (Environmental Adjustment
and Management Program) (the "PAMA") as follows:
<TABLE>
<CAPTION>
ESTIMATED
YEAR COSTS
- ---------------------------------------------------------------------------------- ----------
<S> <C>
1998.............................................................................. $ 2,700
1999.............................................................................. 3,612
2000.............................................................................. 4,963
2001.............................................................................. 3,300
2002.............................................................................. 3,000
2003.............................................................................. 3,800
2004.............................................................................. 2,775
2005.............................................................................. 38,700
2006.............................................................................. 44,725
----------
$ 107,575
----------
----------
</TABLE>
According to the Contract, the Company has the option to continue the use of
Doe Run Peru's existing zinc ferrite disposal site for three years, after which
it can take ownership of the site or create a new site. If the Company chooses
to take ownership of the site, it will be responsible for its closure costs. The
Company has accrued for management's estimate of the closure costs, or $7,200.
If the Company abandons the ferrite site, it must pay this amount to Centromin
Peru S.A.
CONSOLIDATED
The Company believes its reserves for domestic and foreign environmental and
reclamation matters are adequate, based on the information available. Depending
upon the type and extent of remediation activities required, costs in excess of
established reserves are reasonably possible. Therefore, there can be no
assurance that additional costs, both individually and in the aggregate, would
not have a material adverse effect on the results of operations, financial
condition and liquidity of the Company.
LITIGATION
The Company is a defendant in several lawsuits alleging certain damages
stemming from the operations at the Herculaneum smelter. Two of these cases are
class action lawsuits. In one case, the plaintiffs seek to have certified two
separate classes. The first class would consist of property owners in a certain
section of Herculaneum, alleging that property values have been damaged due to
the operations of the smelter. The second class alleged is comprised of children
who lived in Herculaneum during a period
F-27
<PAGE>
THE DOE RUN RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(14) ENVIRONMENTAL AND LITIGATION MATTERS (CONTINUED)
of time when they were six months to six years old, and the remedy sought is
medical monitoring for the class. The second class action similarly is seeking
certification of a class of property owners allegedly damaged by operations from
the smelter, but the purported size of the class is every home in Herculaneum,
Missouri. The other two cases are personal injury actions by fourteen
individuals who allege damages from the effects of lead poisoning due to
operations at the smelter. Punitive damages also are being sought in each case.
The Company is vigorously defending all of these claims. Preliminary
investigation and research by the Company indicates property values in
Herculaneum are consistent with those of surrounding communities and have not
been affected by the smelter. Finally, based on rules for class certification,
the Company believes class certification is not appropriate. However, because
the cases are in the early stages of discovery, the Company is unable at this
time to state with certainty the expected outcome of and the final costs of any
of these cases. Therefore, there can be no assurance that these cases would not
have a material adverse effect, both individually and in the aggregate, on the
results of operations, financial condition and liquidity of the Company.
(15) SUBSEQUENT EVENTS
On March 12, 1998, the Company completed the sale of $200,000 11.25% Senior
Notes due 2005 (the "Fixed Rate Notes") and $55,000 Floating Interest Rate
Senior Notes due 2003 (collectively, the "Notes"). The Notes are guaranteed by
certain subsidiaries of the Company (see Note 16). The Company used $125,000 of
the proceeds from the Notes to make a deposit (the "Special Term Deposit") in a
bank, which in turn loaned such amount (the "Back-to-Back Loan") to Doe Run
Mining. The Special Term Deposit and the Back-to-Back Loan have payment terms
that match the timing and amount of the payments on $125,000 of the Fixed Rate
Notes, except that additional interest of 0.50% for the first six months and
0.25% thereafter through September 11, 2004 is payable on the Back-to-Back Loan.
The Back-to-Back Loan is collateralized by the Special Term Deposit. Doe Run
Mining used the proceeds of the Back-to-Back Loan to repay the $100,000 balance
on the $225,000 term loan, plus accrued interest thereon of $1,004, repay the
$23,000 subordinated note to the Company and pay fees of $313.
The remaining $130,000 of the proceeds of the Notes, plus the $23,000
repayment of the subordinated note by Doe Run Mining, were used by the Company
to: (i) repay principal and interest on the $130,000 term loan of $128,125 and
$1,127, respectively, (ii) repay the revolving loan balance of $14,444, (iii)
pay Renco $5,000 to redeem the $2,500 preferred stock, plus accrued dividends
thereon of $188, and a transaction fee of $2,312 and (iv) pay related fees and
expenses of $6,553.
As a result of these transactions, the Company expects to recognize an
extraordinary loss of approximately $5,800, net of income taxes.
(16) GUARANTOR SUBSIDIARIES (UNAUDITED)
Financial information regarding the Guarantor Subsidiaries (Fabricated
Products, Inc. ("FPI") and Doe Run Cayman and its subsidiaries, Doe Run Mining
S.R. Ltda. ("Doe Run Mining") and Doe Run Peru) as of October 31, 1997 and
January 31, 1998, the year ended October 31, 1997 and the three months ended
January 31, 1998 is presented below for purposes of complying with the reporting
requirements of the Guarantor Subsidiaries. FPI was incorporated in August 1996,
and its operations were not material to the results of operations of the Company
for the year ended October 31, 1996. Separate financial statements and other
disclosures concerning each Guarantor Subsidiary and disclosures concerning non-
Guarantor Subsidiaries have not been presented because management has determined
that such information is not material to investors.
F-28
<PAGE>
(16) GUARANTOR SUBSIDIARIES (UNAUDITED) (CONTINUED)
CONSOLIDATING BALANCE SHEETS
OCTOBER 31, 1997
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THE COMPANY
EXCLUDING
GUARANTOR DOE RUN CAYMAN
SUBSIDIARIES FPI AND SUBSIDIARIES ELIMINATIONS THE COMPANY
------------- --------- ---------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash.................................. $ 1,579 $ -- $ 7,364 $ -- $ 8,943
Trade accounts receivable, net of
allowance for doubtful accounts..... 46,016 6,416 390 (352) 52,470
Inventories........................... 27,597 2,104 59,032 (85) 88,648
Prepaid expenses and other current
assets.............................. 1,383 1,128 2,752 -- 5,263
Due from subsidiary................... 29,878 -- -- (29,878) --
Net deferred tax assets............... 3,882 -- 69 -- 3,951
------------- --------- ---------------- ------------ -------------
Total current assets................ 110,335 9,648 69,607 (30,315) 159,275
Property, plant and equipment, net...... 105,666 2,943 97,739 -- 206,348
Other noncurrent assets, net............ 11,305 290 3,623 -- 15,218
Investment in subsidiary................ 2,941 -- -- (2,941) --
------------- --------- ---------------- ------------ -------------
Total assets........................ $ 230,247 $ 12,881 $ 170,969 $ (33,256) $ 380,841
------------- --------- ---------------- ------------ -------------
------------- --------- ---------------- ------------ -------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term
debt................................ $ 8,345 $ -- $ 4,000 $ -- $ 12,345
Accounts payable...................... 15,583 2,704 23,151 (352) 41,086
Accrued liabilities................... 18,510 383 10,000 -- 28,893
Due to parent......................... -- -- 24,743 (24,743) --
------------- --------- ---------------- ------------ -------------
Total current liabilities........... 42,438 3,087 61,894 (25,095) 82,324
Long-term debt, less current
maturities............................ 123,395 -- 99,000 -- 222,395
Net deferred tax liabilities............ 3,882 -- -- -- 3,882
Postretirement benefits................. 12,455 -- -- -- 12,455
Reclamation and environmental costs..... 24,485 -- 7,200 -- 31,685
Due to parent........................... -- 5,135 -- (5,135) --
Other noncurrent liabilities............ 10,392 2,388 1,146 -- 13,926
------------- --------- ---------------- ------------ -------------
Total liabilities................... 217,047 10,610 169,240 (30,230) 366,667
Shareholders' liability:
Preferred stock, $1,000 par value,
2,500 shares issued, authorized and
outstanding; liquidation and
redemption value of $2,668 and
$2,618 on October 31, 1996 and 1997,
respectively........................ 2,500 -- -- -- 2,500
Common stock, $.10 par value, 1,000
shares authorized, issued, and
outstanding......................... -- -- -- -- --
Common stock, $1 par value, 1,000
shares authorized, issued and
outstanding......................... -- 1 -- (1) --
Common stock, $1 par value, 2,005,000
shares authorized, issued and
outstanding......................... -- -- 2,005 (2,005) --
Additional paid in capital............ 5,000 935 -- (935) 5,000
Retained earnings..................... 5,700 1,335 (276) (85) 6,674
------------- --------- ---------------- ------------ -------------
Total shareholders' equity.......... 13,200 2,271 1,729 (3,026) 14,174
------------- --------- ---------------- ------------ -------------
Total liabilities and shareholders'
equity.............................. $ 230,247 $ 12,881 $ 170,969 $ (33,256) $ 380,841
------------- --------- ---------------- ------------ -------------
------------- --------- ---------------- ------------ -------------
</TABLE>
F-29
<PAGE>
(16) GUARANTOR SUBSIDIARIES (UNAUDITED) (CONTINUED)
CONSOLIDATING STATEMENTS OF OPERATIONS
YEAR ENDED OCTOBER 31, 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
THE COMPANY
EXCLUDING
GUARANTOR DOE RUN CAYMAN
SUBSIDIARIES FPI AND SUBSIDIARIES ELIMINATIONS THE COMPANY
------------- ----------- ---------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Net sales.............................. $ 257,243 $ 23,338 $ 2,571 $ (2,685) $ 280,467
Costs and expenses:
Cost of sales........................ 214,742 20,194 2,027 (2,612) 234,531
Depletion, depreciation and
amortization....................... 14,091 476 151 -- 14,718
Selling, general and administrative
expenses, including related party
management fees of $1,200 per
year............................... 10,005 920 34 -- 10,959
Exploration expense.................. 2,705 -- -- -- 2,705
------------- ----------- ------- ------------ -------------
Total costs and expenses......... 241,543 21,590 2,212 (2,612) 262,733
------------- ----------- ------- ------------ -------------
Income from operations........... 15,700 1,748 359 (73) 17,734
Other income (expense):
Interest expense..................... (13,038) (445) (257) -- (13,740)
Interest income...................... 21 -- -- -- 21
Other, net........................... 127 (136) (28) -- (37)
------------- ----------- ------- ------------ -------------
(12,890) (581) (285) -- (13,756)
------------- ----------- ------- ------------ -------------
Income before income taxes....... 2,810 1,167 74 (73) 3,978
Income tax expense..................... 3,977 4 350 -- 4,331
------------- ----------- ------- ------------ -------------
Income before extraordinary
item........................... (1,167) 1,163 (276) (73) (353)
(1,062) -- -- -- (1,062)
------------- ----------- ------- ------------ -------------
Net income (loss)................ $ (2,229) $ 1,163 $ (276) $ (73) $ (1,415)
</TABLE>
F-30
<PAGE>
(16) GUARANTOR SUBSIDIARIES (UNAUDITED) (CONTINUED)
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
YEAR ENDED OCTOBER 31, 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
THE COMPANY
EXCLUDING
GUARANTOR DOE RUN CAYMAN
SUBSIDIARIES FPI AND SUBSIDIARIES ELIMINATIONS THE COMPANY
------------- --------- ---------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Net cash provided by operating activities... $ 12,884 $ 741 $ 4,395 $ -- $ 18,020
Cash flows from investing activities:
Purchases of property, plant and
equipment............................... (13,258) (89) (129) -- (13,476)
Payment for acquisitions.................. (5,227) -- (123,015) -- (128,242)
Investment in subsidiary.................. (2,005) -- -- 2,005 --
------------- --- -------- ------ -------------
Net cash used in investing activities... (20,490) (89) (123,144) 2,005 (141,718)
Cash flows from financing activities:
Proceeds from (payments on) revolving
loan, net............................... (9,399) -- 3,000 -- (6,399)
Proceeds from long-term debt.............. 140,945 -- 225,000 -- 365,945
Payments on long-term debt................ (87,453) -- (125,000) -- (212,453)
Payment of deferred financing costs....... (4,938) -- (3,635) -- (8,573)
Loans from parent......................... (24,091) (652) 24,743 -- --
Extraordinary item related to retirement
of debt................................. (638) -- -- -- (638)
Cash received from issuance of stock...... -- -- 2,005 (2,005) --
Payment of dividends...................... (5,241) -- -- -- (5,241)
------------- --- -------- ------ -------------
Net cash provided by (used in) financing
activities............................ 9,185 (652) 126,113 (2,005) 132,641
------------- --- -------- ------ -------------
Net increase in cash.................... 1,579 -- 7,364 -- 8,943
Cash at beginning of period................. -- -- -- -- --
------------- --- -------- ------ -------------
Cash at end of period....................... $ 1,579 $ -- $ 7,364 $ -- $ 8,943
------------- --- -------- ------ -------------
------------- --- -------- ------ -------------
</TABLE>
F-31
<PAGE>
(16) GUARANTOR SUBSIDIARIES (UNAUDITED) (CONTINUED)
CONSOLIDATING BALANCE SHEETS
JANUARY 31, 1998
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THE COMPANY
EXCLUDING
GUARANTOR DOE RUN CAYMAN
SUBSIDIARIES FPI AND SUBSIDIARIES ELIMINATIONS THE COMPANY
--------------- --------- ----------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash...................................... $ 966 $ -- $ 14,679 $ -- $ 15,645
Trade accounts receivable, net of
allowances for doubtful accounts........ 39,378 4,894 13,227 (238) 57,261
Inventories............................... 33,084 2,254 53,329 (344) 88,323
Prepaid expenses and other current
assets.................................. 4,484 159 14,060 -- 18,703
Due from subsidiary....................... 30,212 -- -- (30,212) --
Net deferred tax assets................... 4,205 -- 886 -- 5,091
--------------- --------- -------- ------------ -------------
Total current assets.................... 112,329 7,307 96,181 (30,794) 185,023
Property, plant and equipment, net.......... 102,988 5,034 95,962 -- 203,984
Other noncurrent assets, net................ 10,998 449 3,408 14,855
Investment in subsidiary.................... 2,941 -- -- (2,941) --
--------------- --------- -------- ------------ -------------
Total assets............................ $ 229,256 $ 12,790 $ 195,551 $ (33,735) $ 403,862
--------------- --------- -------- ------------ -------------
--------------- --------- -------- ------------ -------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt...... $ 8,395 $ -- $ 4,000 -- $ 12,395
Accounts payable.......................... 10,723 2,273 31,588 (238) 44,346
Accrued liabilities....................... 14,277 177 22,695 (345) 36,804
Due to parent............................. -- -- 23,604 (23,604) --
--------------- --------- -------- ------------ -------------
Total current liabilities............... 33,395 2,450 81,887 (24,187) 93,545
Long-term debt, less current maturities..... 136,591 -- 96,000 -- 232,591
Net deferred tax liabilities................ 4,205 -- -- -- 4,205
Postretirement benefits..................... 12,512 -- -- -- 12,512
Reclamation and environmental costs......... 24,190 -- 7,200 -- 31,390
Due to parent............................... -- 6,608 -- (6,608) --
Other noncurrent liabilities................ 10,349 1,976 1,146 -- 13,471
--------------- --------- -------- ------------ -------------
Total liabilities....................... 221,242 11,034 186,233 (30,795) 387,714
Redeemable Preferred Stock of Subsidiary.... -- -- -- -- --
Shareholders' equity:
Preferred stock, $1,000 par value, 2,500
shares issued, authorized and
outstanding............................. 2,500 -- -- -- 2,500
Common stock, $.10 par value, 1,000 shares
authorized, issued, and outstanding..... -- -- -- -- --
Common stock, $1 par value, 1,000 shares
authorized, issued and outstanding...... -- 1 -- (1) --
Common stock, $1 par value, 2,005,000
shares authorized, issued and
outstanding............................. -- -- 2,005 (2,005) --
Additional paid in capital................ 5,000 935 -- (935) 5,000
Retained earnings......................... 514 820 7,313 1 8,648
--------------- --------- -------- ------------ -------------
Total shareholders' equity.............. 8,014 1,756 9,318 (2,940) 16,148
--------------- --------- -------- ------------ -------------
Total liabilities and shareholders'
equity................................ $ 229,256 $ 12,790 $ 195,551 $ (33,735) $ 403,862
--------------- --------- -------- ------------ -------------
--------------- --------- -------- ------------ -------------
</TABLE>
F-32
<PAGE>
(16) GUARANTOR SUBSIDIARIES (UNAUDITED) (CONTINUED)
CONSOLIDATING STATEMENTS OF OPERATIONS
THREE MONTHS ENDED JANUARY 31, 1998
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
THE COMPANY
EXCLUDING
GUARANTOR DOE RUN CAYMAN
SUBSIDIARIES FPI AND SUBSIDIARIES ELIMINATIONS THE COMPANY
-------------- --------- ---------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Net sales............................... $ 56,147 $ 4,082 $ 111,811 (2,954) $ 169,086
Costs and expenses:
Cost of sales........................... 51,369 3,950 90,924 (2,696) 143,547
Depletion, depreciation and
amortization.......................... 3,893 122 1,699 -- 5,714
Selling, general and administrative
expenses, including related party
management fees of $1,200 per year.... 2,411 363 4,697 -- 7,471
Exploration expenses.................... 484 -- -- -- 484
------- --------- -------- ------------ -------------
Total costs and expenses.......... 58,157 4,435 97,320 (2,696) 157,216
------- --------- -------- ------------ -------------
Income from operations............ (2,010) (353) 14,491 (258) 11,870
Other income (expense):
Interest expense........................ (3,166) (124) (2,924) 345 (5,869)
Interest income......................... 23 -- 342 365
Other, net.............................. 31 (22) 126 -- 135
------- --------- -------- ------------ -------------
(3,112) (146) (2,456) 345 (5,369)
------- --------- -------- ------------ -------------
Income before income taxes........ (5,122) (499) 12,035 87 6,501
Income tax expense...................... 65 16 4,446 -- 4,527
------- --------- -------- ------------ -------------
Net income (loss)................. $ (5,187) $ (515) $ 7,589 $ 87 $ 1,974
------- --------- -------- ------------ -------------
------- --------- -------- ------------ -------------
</TABLE>
F-33
<PAGE>
(16) GUARANTOR SUBSIDIARIES (UNAUDITED) (CONTINUED)
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED JANUARY 31, 1998
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
THE COMPANY
EXCLUDING
GUARANTOR DOE RUN CAYMAN
SUBSIDIARIES FPI AND SUBSIDIARIES ELIMINATIONS THE COMPANY
-------------- --------- ---------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Net cash provided by operating
activities............................ $ (11,188) $ (116) $ 11,454 $ -- $ 150
Cash flows from investing activities:
Purchases of property, plant and
equipment............................ (2,059) (1,357) -- -- (3,416)
Payment for acquisitions............... -- -- -- -- --
Investment in subsidiary............... -- -- -- -- --
-------------- --------- ------- ------------ -------------
Net cash used in investing
activities....................... (2,059) (1,357) -- -- (3,416)
Cash flows from financing activities:
Proceeds from (payments on) revolving
loan, net............................ 14,091 -- (3,000) -- 11,091
Proceeds from long-term debt........... -- -- -- -- --
Payments on long-term debt............. (845) -- -- -- (845)
Payment of deferred financing costs.... (278) -- -- -- (278)
Loan from parent....................... (334) 1,473 (1,139) -- --
Extraordinary item related to
retirement debt...................... -- -- -- -- --
Cash received from issuance of stock... -- -- -- -- --
Payment of dividends................... -- -- -- -- --
-------------- --------- ------- ------------ -------------
Net cash provided by (used in)
financing activities............. 12,634 1,473 (4,139) -- 9,968
-------------- --------- ------- ------------ -------------
Net increase in cash............... (613) -- 7,315 -- 6,702
Cash at beginning of period............ 1,579 -- 7,364 -- 8,943
-------------- --------- ------- ------------ -------------
Cash at end of period.................. $ 966 $ -- $ 14,679 $ -- $ 15,645
-------------- --------- ------- ------------ -------------
-------------- --------- ------- ------------ -------------
</TABLE>
F-34
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors
Empresa Minera del Centro del Peru S.A.--Centromin Peru S.A.:
We have audited the accompanying statements of assets and liabilities of La
Oroya Metallurgical Complex (La Oroya), a division of the Peruvian state-owned
corporation Empresa Minera del Centro del Peru S.A.--Centromin Peru S.A.
(Centromin), as of December 31, 1995 and 1996 and October 23, 1997 and the
related statements of revenues and expenses, changes in net assets and cash
flows for each of the years in the three-year period ended December 31, 1996 and
the period from January 1 to October 23, 1997. These financial statements are
the responsibility of Centromin's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
As explained in Note 2, the above financial statements which have been
prepared from Centromin's accounting records, remeasured into U.S. dollars and
prepared following generally accepted accounting principles in the United States
of America, are intended to reflect separately the assets, liabilities, revenues
and expenses of La Oroya, as if La Oroya had operated as a separate entity and
applying certain allocations by Centromin on the basis described in Note 4 and
therefore, they may not necessarily reflect the financial position and results
of operations of La Oroya as if it were effectively a separate legal entity for
the periods indicated above.
In our opinion, the financial statements referred to above, present fairly,
for the purpose described in the preceding paragraph, the assets and liabilities
of La Oroya as of December 31, 1995 and 1996 and October 23, 1997, and its
revenues and expenses and cash flows for each of the years in the three-year
period ended December 31, 1996 and the period from January 1 to October 23,
1997, in conformity with accounting principles generally accepted in the United
States of America.
MEDINA, ZALDIVAR Y ASOCIADOS
Countersigned by:
Marco Antonio Zaldivar
C.P.C. Register 12477
Lima, Peru
December 5, 1997
F-35
<PAGE>
EMPRESA MINERA DEL CENTRO DEL PERU S.A.--CENTROMIN PERU S.A.
LA OROYA DIVISION
STATEMENTS OF ASSETS AND LIABILITIES
(IN THOUSANDS OF U.S. DOLLARS)
<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF
---------------------- OCTOBER 23,
1995 1996 1997
---------- ---------- -----------
<S> <C> <C> <C>
<CAPTION>
ASSETS
<S> <C> <C> <C>
CURRENT ASSETS:
Cash and deposits in banks................................................. $ 62 $ 582 $ 79
Trade accounts receivable.................................................. 15,335 30,277 10,423
Inventory:
Refined metals and concentrates for sale................................. 12,333 8,930 14,115
Metal and concentrates in process........................................ 74,175 43,555 43,007
Materials, supplies and spare parts...................................... 28,488 8,303 11,226
---------- ---------- -----------
114,996 60,788 68,348
---------- ---------- -----------
Prepaid expenses........................................................... 2,524 1,591 1,922
---------- ---------- -----------
Total current assets................................................... 132,917 93,238 80,772
---------- ---------- -----------
DEFERRED TAX AND WORKERS' PROFIT SHARING..................................... -- 4,262 2,853
PROPERTY, PLANT AND EQUIPMENT, net........................................... 55,557 50,814 46,145
---------- ---------- -----------
Total assets................................................................. $ 188,474 $ 148,314 $ 129,770
---------- ---------- -----------
---------- ---------- -----------
<CAPTION>
LIABILITIES AND NET ASSETS
<S> <C> <C> <C>
CURRENT LIABILITIES:
Bank loans................................................................. $ 19,626 $ 15,068 --
Accounts payable........................................................... 17,810 9,026 $ 16,732
Remuneration and taxes payable............................................. 5,275 4,709 4,535
Advances from customers.................................................... 7,925 10,750 --
Accrued liabilities........................................................ 3,266 4,477 2,369
Severance indemnities...................................................... 21,228 2,186 1,185
Deposits of personnel's severance indemnities.............................. 3,579 1,973 --
Current portion of environmental liabilities............................... -- 730 2,530
---------- ---------- -----------
Total current liabilities.............................................. 78,709 48,919 27,351
---------- ---------- -----------
DEFERRED TAX AND WORKERS' PROFIT SHARING..................................... 2,098 -- --
ENVIRONMENTAL LIABILITIES, net of current portion............................ -- 20,820 19,020
---------- ---------- -----------
Total liabilities...................................................... 80,807 69,739 46,371
---------- ---------- -----------
NET ASSETS................................................................... 107,667 78,575 83,399
---------- ---------- -----------
Total liabilities and net assets............................................. $ 188,474 $ 148,314 $ 129,770
---------- ---------- -----------
---------- ---------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-36
<PAGE>
EMPRESA MINERA DEL CENTRO DEL PERU S.A.--CENTROMIN PERU S.A.
LA OROYA DIVISION
STATEMENTS OF REVENUES AND EXPENSES
(IN THOUSANDS OF U.S. DOLLARS)
<TABLE>
<CAPTION>
FOR THE
PERIOD
FOR THE YEARS ENDED DECEMBER 31, JANUARY 1 TO
---------------------------------- OCTOBER 23,
1994 1995 1996 1997
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
NET SALES...................................................... $ 367,057 $ 450,929 $ 456,797 $ 352,805
OPERATING COSTS AND EXPENSES:
Costs of sales............................................... 339,302 397,524 397,158 305,959
Depreciation and amortization................................ 4,448 4,729 5,353 4,730
Administrative and general................................... 4,569 4,479 5,660 5,223
Selling and marketing........................................ 5,715 5,972 6,669 4,808
Workers' profit sharing...................................... 813 2,995 1,197 2,284
Personnel reduction costs.................................... -- 2,504 3,894 1,490
---------- ---------- ---------- ------------
354,847 418,203 419,931 324,494
---------- ---------- ---------- ------------
Operating income......................................... 12,210 32,726 36,866 28,311
---------- ---------- ---------- ------------
OTHER INCOME (EXPENSES):
Interest and bank charges.................................... (6,784) (2,100) (3,332) (832)
Exchange gains, net.......................................... 3,840 2,050 1,884 269
Other, net (see Note 15)..................................... (4,242) (3,848) (25,401) (1,486)
---------- ---------- ---------- ------------
(7,186) (3,898) (26,849) (2,049)
---------- ---------- ---------- ------------
Income before provision for income tax................... 5,024 28,828 10,017 26,262
PROVISION FOR INCOME TAX....................................... 2,803 10,332 4,128 7,879
---------- ---------- ---------- ------------
Net income............................................... $ 2,221 $ 18,496 $ 5,889 $ 18,383
---------- ---------- ---------- ------------
---------- ---------- ---------- ------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-37
<PAGE>
EMPRESA MINERA DEL CENTRO DEL PERU S.A.--CENTROMIN PERU S.A.
LA OROYA DIVISION
STATEMENTS OF CHANGES IN NET ASSETS
(IN THOUSANDS OF U.S. DOLLARS)
<TABLE>
<CAPTION>
NET ASSETS
----------
<S> <C>
BALANCE AS OF JANUARY 1, 1994......................................................................... $ 123,901
Net income.......................................................................................... 2,221
Transfers to Centromin.............................................................................. (61,632)
----------
BALANCE AS OF DECEMBER 31, 1994....................................................................... 64,490
Net income.......................................................................................... 18,496
Transfers from Centromin............................................................................ 24,681
----------
BALANCE AS OF DECEMBER 31, 1995....................................................................... 107,667
Net income.......................................................................................... 5,889
Transfers to Centromin.............................................................................. (34,981)
----------
BALANCE AS OF DECEMBER 31, 1996....................................................................... 78,575
Net income.......................................................................................... 18,383
Transfers to Centromin.............................................................................. (13,559)
----------
BALANCE AS OF OCTOBER 23, 1997........................................................................ $ 83,399
----------
----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-38
<PAGE>
EMPRESA MINERA DEL CENTRO DEL PERU S.A.--CENTROMIN PERU S.A.
LA OROYA DIVISION
STATEMENTS OF CASH FLOWS
(IN THOUSANDS OF U.S. DOLLARS)
<TABLE>
<CAPTION>
FOR THE
PERIOD
FOR THE YEARS ENDED DECEMBER 31, JANUARY 1 TO
---------------------------------- OCTOBER 23,
1994 1995 1996 1997
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income................................................. $ 2,221 $ 18,496 $ 5,889 $ 18,383
Add (less):
Depreciation and amortization.......................... 4,448 4,729 5,353 4,730
Deferred provision (benefit) of income tax and workers'
profit sharing....................................... 692 1,406 (6,360) 1,409
Increase in environmental liabilities.................. -- -- 21,550 --
Other.................................................. 337 (1,281) (610) (61)
Net changes in assets and liabilities:
Decrease (increase) in trade accounts receivables...... 11,325 1,679 (14,942) 19,854
Decrease (increase) in inventory....................... 26,686 (35,035) 54,208 (7,560)
Decrease (increase) in prepaid expenses................ 423 926 933 (331)
Increase (decrease) in accounts payable................ 16,972 (8,786) (8,784) 7,706
Increase (decrease) in remuneration and taxes
payable.............................................. 386 1,210 (566) (174)
Advances from (payments to) customers, net............. 2,302 (3,749) 2,825 (10,750)
Increase (decrease) in accrued liabilities............. 2 1,004 1,211 (2,108)
Decrease in severance indemnities...................... (51) (5,324) (19,042) (1,001)
Increase (decrease) in deposits of personnel's
severance indemnities................................ 143 3,579 (1,606) (1,973)
---------- ---------- ---------- ------------
Net cash provided by (used in) operating activities...... 65,886 (21,146) 40,059 28,124
---------- ---------- ---------- ------------
FINANCING ACTIVITIES:
Repayments of bank loans, net.............................. (4,262) (3,534) (4,558) (15,068)
Transfers (to) from Centromin.............................. (61,632) 24,681 (34,981) (13,559)
---------- ---------- ---------- ------------
Net cash provided by (used in) financing activities........ (65,894) 21,147 (39,539) (28,627)
---------- ---------- ---------- ------------
NET INCREASE (DECREASE) IN CASH AND DEPOSITS IN BANKS........ (8) 1 520 (503)
CASH AND DEPOSITS IN BANKS AT BEGINNING OF THE PERIOD........ 69 61 62 582
---------- ---------- ---------- ------------
CASH AND DEPOSITS IN BANKS AT THE END OF THE PERIOD.......... $ 61 $ 62 $ 582 $ 79
---------- ---------- ---------- ------------
---------- ---------- ---------- ------------
CASH FLOWS ADDITIONAL INFORMATION
Interest paid.............................................. $ 6,163 $ 2,096 $ 3,017 $ 1,776
Income tax paid (see Note 3)............................... $ -- $ -- $ -- $ --
---------- ---------- ---------- ------------
---------- ---------- ---------- ------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-39
<PAGE>
EMPRESA MINERA DEL CENTRO DEL PERU S.A.--CENTROMIN PERU S.A.
LA OROYA DIVISION
NOTES TO THE FINANCIAL STATEMENTS
AS OF OCTOBER 23, 1997 AND
DECEMBER 31, 1996, 1995 AND 1994
(1) BUSINESS AND DISPOSITION
The metallurgical complex of La Oroya (hereinafter "La Oroya") a division of
Empresa Minera del Centro del Peru S.A.--Centromin Peru S.A. (hereinafter
"Centromin") is engaged in the smelting and refining of polymetalic concentrates
and marketing and sale of refined metals. La Oroya primarily smelts and refines
the concentrates of polymetalic ores from the mining units of Centromin, which
include copper, lead and zinc. The operations of La Orya are conducted through
the Centromin organization systems, which include administrative, legal,
operating tasks, and all other necessary functions that support its operations.
Centromin is engaged in mining activities as specified by the General Mining
Law (Supreme Decree 014-92-EM), as well as in industrial activities necessary to
sustain mining operations.
On October 23, 1997, Centromin Peru S.A. contributed certain assets and
liabilities of La Oroya to a newly formed company, Metaloroya S.A.
("Metaloroya"), in exchange for shares in Metaloroya. Concurrent with the
transfer, Centromin sold all of the shares received to Doe Run Peru S.R. Ltda.
("Doe Run Peru"), a wholly owned subsidiary of Doe Run Mining S.R. Ltda., an
indirect wholly owned subsidiary of The Doe Run Resources Corporation.
(2) BASIS OF PRESENTATION
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
The financial statements of La Oroya division have been prepared in
accordance with the accounting principles generally accepted in the United
States of America ("U.S. GAAP"), which differ in certain significant respects
from generally accepted accounting principles in Peru. In addition, these
financial statements were prepared based on Centromin's accounting records
related to the metallurgical complex of La Oroya as if La Oroya had operated as
a separate entity and applying certain allocation methodologies, as specified in
Note 4.
Unless otherwise indicated, all amounts in the financial statements and in
these notes are presented in thousands of U.S. dollars (US$).
(3) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVENTORY
Inventory is stated at the lower of cost or net realized value. The cost of
refined metals and concentrates for sale, as well as metal and concentrates for
sale, as well as metal and concentrates in process is determined under the
first-in, first-out method ("FIFO"). The cost of materials, supplies and spare
parts is determined using the average cost method.
F-40
<PAGE>
EMPRESA MINERA DEL CENTRO DEL PERU S.A.--CENTROMIN PERU S.A.
LA OROYA DIVISION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
AS OF OCTOBER 23, 1997 AND
DECEMBER 31, 1996, 1995 AND 1994
(3) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost. Depreciation is calculated
on a straight-line basis at the rates indicated in Note 8. Maintenance and minor
repairs are charged to expenses as incurred. Material improvements and renewals
are capitalized.
In accordance with the Statement of Financial Accounting Standard No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed of" ("SFAS 121"), La Oroya's management has determined that there is
no impairment of its long-lived assets.
SEVERANCE INDEMNITIES
Severance indemnities are determined according to governmental regulations
and are provided for on an accrual basis for the amount, which would be paid if
all personnel were to retire at the date of each statement of assets and
liabilities. Under Legislative Decree 650, an accrued liability was established
to recognize the liability for personnel severance indemnities earned by
employees prior to December 31, 1990. These severance indemnities, which are
adjusted for subsequent wage increases, are required to be funded over a maximum
term of ten years, beginning in June 1991. The funding of this obligation
eliminates any adjustment for subsequent wages increases. In 1996, La Oroya
fully funded this obligation. Liabilities relating to personnel severance
indemnities earned by employees after 1991 are accrued and semi-annually
deposited into workers' individual bank accounts.
REVENUE RECOGNITION
Sales are recorded when title passes to the customer, which occurs at the
time of shipment. With respect to concentrates, sales are recorded based on
estimated weights, assays and prices. All such concentrate sales are adjusted
when final weights, assays and prices are known. Adjustments to the provisional
billings are made in the period during which additional information becomes
available.
INTEREST CAPITALIZATION
Interest expense allocable to the construction of the oxygen plant of US
$4,297 was capitalized until the start-up of its operations in 1994. Capitalized
interest is expensed over the depreciable life of the asset to which it relates.
INCOME TAX AND WORKERS' PROFIT SHARING
La Oroya is included in Centromin's income tax return. According, La Oroya
has provided income tax and remitted to Centromin any tax payable, calculated as
if it were filing separate tax returns.
Under Statement of Financial Accounting Standard No. 109, "Accounting for
Income taxes" ("SFAS 109"), which designates the liability method as the
required accounting method for taxes under U.S. GAAP, La Oroya recognizes the
tax effect of certain temporary differences between the financial reporting
basis of assets and liabilities and the related tax basis.
F-41
<PAGE>
EMPRESA MINERA DEL CENTRO DEL PERU S.A.--CENTROMIN PERU S.A.
LA OROYA DIVISION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
AS OF OCTOBER 23, 1997 AND
DECEMBER 31, 1996, 1995 AND 1994
(3) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Likewise, La Oroya recognizes the effect of temporary differences between
book and tax basis of assets and liabilities related to workers' profit sharing
on a basis similar to that used for income taxes.
(4) ALLOCATION METHODOLOGIES
As described in Note 2, La Oroya's transactions are recorded in Centromin's
accounting systems. The operations of La Oroya conducted through Centromin have
been presented using assumptions and allocations which management believes are
reasonable. They include the following:
(a) Centromin's assets and liabilities not specifically identifiable to La
Oroya have not been allocated in the accompanying financial statements.
These are cash and bank accounts, credit on value-added tax and
liabilities to certain suppliers of administrative services.
(b) Sales have been allocated based on the preliminary and final billings of
the exported refined metals and concentrates identified with La Oroya.
(c) Costs of production have been allocated based on the following:
- Concentrates acquired from Centromin's mining units were transferred
at market value as if La Oroya were an independent party.
- The depreciation charge was based on the fixed assets specifically
identifiable to La Oroya.
- Other allocated costs, included power, were based on the ratio of La
Oroya's usage to total usage by Centromin (mainly time incurred and
consumption of goods and services).
(d) Expenses relating to corporate accounting, finance and administrative
services provided by Centromin have been allocated based on the ratio of
La Oroya's usage to total usage by Centromin.
(e) Selling and marketing expenses have been allocated based on usage
estimated by management.
(f) Interest and bank charges are those which are directly related to La
Oroya's bank loans and overdrafts obtained during the year.
(g) Workers' profit sharing and income tax were provided based on the actual
results as if La Oroya had been operating as a separate entity.
(5) REMEASUREMENT INTO U.S. DOLLAR
La Oroya maintains its accounting records in Peruvian Nuevos Soles. Those
financial statements have been remeasured into U.S. dollars, which is its
functional currency, for all periods presented, in accordance with SFAS 52 using
the following methodology:
(a) Non-monetary accounts have been remeasured at historical exchange rates.
F-42
<PAGE>
EMPRESA MINERA DEL CENTRO DEL PERU S.A.--CENTROMIN PERU S.A.
LA OROYA DIVISION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
AS OF OCTOBER 23, 1997 AND
DECEMBER 31, 1996, 1995 AND 1994
(5) REMEASUREMENT INTO U.S. DOLLAR (CONTINUED)
(b) Monetary accounts in Peruvian currency have been remeasured at the
following free market exchange rates for buying (assets) and selling
(liabilities) in effect at the end of the respective period, which are in
Peruvian Nuevos soles per U.S. dollar:
<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF
------------------------------- OCTOBER 23,
1994 1995 1996 1997
--------- --------- --------- -------------
<S> <C> <C> <C> <C>
Assets................................................... 2.16 2.299 2.596 2.667
Liabilities.............................................. 2.19 2.322 2.603 2.669
</TABLE>
(c) Income and expenses, other than depreciation, that have been remeasured
at the historical exchange rates that applied to the related assets, have
been remeasured at average monthly basis at average exchange rates. Cost
of sales was determined from its components once remeasured.
The net effect of foreign exchange difference for each period is reflected
in the accompanying statement of revenues and expenses.
(6) FOREIGN CURRENCY TRANSACTIONS AND EXCHANGE RISK EXPOSURE
Under current law, foreign currency transactions are made through the
financial banking system at free market exchange rates.
The assets and liabilities denominated in Peruvian Nuevos Soles are as
follows (in thousands):
<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF
-------------------- OCTOBER 23,
1995 1996 1997
--------- --------- -----------
<S> <C> <C> <C>
Assets--
Cash and deposits in banks................................ -- 184 169
Accounts receivable....................................... 4,055 1,602 3,698
--------- --------- -----------
4,055 1,786 3,867
--------- --------- -----------
Liabilities--
Trade accounts payable.................................... 7,549 6,919 6
Remuneration and taxes payable............................ 12,249 12,257 15,298
Accrued liabilities....................................... 5,721 9,504 2,200
--------- --------- -----------
25,519 28,680 17,504
--------- --------- -----------
Net position............................................ (21,464) (26,894) (13,637)
--------- --------- -----------
--------- --------- -----------
</TABLE>
The net effects of exchange differences were US$3,840, US$2,050 and US$1,884
for the 1994, 1995 and 1996 years, respectively and US$269 for the period from
January 1 to October 23, 1997.
F-43
<PAGE>
EMPRESA MINERA DEL CENTRO DEL PERU S.A.--CENTROMIN PERU S.A.
LA OROYA DIVISION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
AS OF OCTOBER 23, 1997 AND
DECEMBER 31, 1996, 1995 AND 1994
(7) MATERIALS, SUPPLIES AND SPARE PARTS
This account is comprised of the following:
<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF
-------------------- OCTOBER 23,
1995 1996 1997
--------- --------- -----------
<S> <C> <C> <C>
Materials, supplies and spare parts......................... $ 25,714 $ 8,335 $ 11,748
Supplies in transit......................................... 2,935 490 --
--------- --------- -----------
28,649 8,825 11,748
--------- --------- -----------
Less--allowance for obsolescence............................ (161) (522) (522)
$ 28,488 $ 8,303 $ 11,226
--------- --------- -----------
--------- --------- -----------
</TABLE>
In management's opinion, the balance of the allowance for obsolescence
adequately covers the related risk as of each statement of assets and
liabilities date.
(8) PROPERTY, PLANT AND EQUIPMENT AND ACCUMULATED DEPRECIATION
This account is comprised of the following:
<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF
ANNUAL RATE OF ----------------------- OCTOBER 23,
DESCRIPTION DEPRECIATION 1995 1996 1997
- --------------------------------------------------------- ---------------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Land..................................................... -- $ 97 $ 97 $ 97
Buildings and other premises............................. 3% to 10% 21,335 21,335 21,335
Machinery and equipment.................................. 6.67% to 30% 112,072 112,072 112,072
Furniture and fixtures................................... 10% to 15% 1,388 1,388 1,388
Other equipment.......................................... 10% to 20% 13,153 13,153 13,153
Construction in progress................................. -- 3,005 3,005 3,005
---------- ----------- -----------
151,050 151,050 151,050
Accumulated depreciation................................. (95,493) (100,236) (104,905)
---------- ----------- -----------
$ 55,557 $ 50,814 $ 46,145
---------- ----------- -----------
---------- ----------- -----------
</TABLE>
Fully depreciated assets amounted to US$80,684, US$80,857, and US$80,907 as
of December 31, 1995, 1996 and October 23, 1997.
There were no significant additions to property, plant and equipment during
the period presented above. The accounting records of Centromin do not identify
the minor additions to fixed assets (other than construction in progress) by
specific year and, therefore, it is not possible to determine fixed asset
additions specifically related to La Oroya in each year. Accordingly, in the
preparation of the accompanying financial statements, the fixed assets in
service at October 23, 1997 have been assumed to be in service as of each
balance sheet date and for each period presented.
F-44
<PAGE>
EMPRESA MINERA DEL CENTRO DEL PERU S.A.--CENTROMIN PERU S.A.
LA OROYA DIVISION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
AS OF OCTOBER 23, 1997 AND
DECEMBER 31, 1996, 1995 AND 1994
(9) BANK LOANS
Bank loans are short-term obligations, which were obtained from local and
foreign financial institutions for working capital purposes. As of December 31,
1995 and 1996 and as of October 23, 1997, 70 percent, 100 percent and 100
percent, respectively, of bank loans were denominated in U.S. dollars. The fair
value of these loans approximate their carrying value.
The loans bear interest at international market rates. The weighted average
interest rate on bank loans at December 31, 1995 and 1996 and October 23, 1997
was 8.1 percent, 6.5 percent and 6.7 percent, respectively.
(10) REMUNERATIONS AND TAXES PAYABLE
This account is comprised of the following:
<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF
------------------------ OCTOBER 23,
1995 1996 1997
----------- ----------- -----------
<S> <C> <C> <C>
Remunerations:
Bonus..................................................... -- -- $ 1,023
Vacations................................................. $ 1,691 $ 1,465 1,248
Vacation bonus............................................ 1,747 1,229 1,109
Payroll and other......................................... 552 544 102
----------- ----------- -----------
3,990 3,238 3,482
----------- ----------- -----------
Taxes and contributions:
Social security........................................... 694 669 275
National housing fund..................................... 339 263 150
Private pension system.................................... -- 202 161
Income tax withholdings................................... 92 211 240
Others.................................................... 160 126 227
----------- ----------- -----------
1,285 1,471 1,053
----------- ----------- -----------
Total................................................... $ 5,275 $ 4,709 $ 4,535
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
(11) ADVANCES FROM CUSTOMERS
Advances from customers located abroad are denominated in U.S. dollars.
Advances bore interest at the rate of 8.5% per annum and are offset against
receivables resulting from subsequent sales. The fair value of these advances
approximate their carrying value at each date.
F-45
<PAGE>
EMPRESA MINERA DEL CENTRO DEL PERU S.A.--CENTROMIN PERU S.A.
LA OROYA DIVISION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
AS OF OCTOBER 23, 1997 AND
DECEMBER 31, 1996, 1995 AND 1994
(12) ACCRUED LIABILITIES
This account is comprised of the following:
<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF
------------------------ OCTOBER 23,
1995 1996 1997
----------- ----------- -----------
<S> <C> <C> <C>
Contingencies (see Note 17)................................. $ 1,808 $ 1,808 $ 1,706
Interest and bank charges payable........................... $ 525 $ 855 --
Withholdings to contractors................................. 454 284 122
Personnel reduction accrual................................. -- 953 --
Other....................................................... 479 577 541
----------- ----------- -----------
$ 3,266 $ 4,477 $ 2,369
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
(13) SEVERANCE INDEMNITIES
According to current government regulations, the liability for personnel
severance indemnities earned by employees prior to December 31, 1990, as
adjusted for subsequent wage increases until such time as the liability is
funded, must be accrued and funded over a maximum term of 10 years, beginning in
June 1991. The funding of this obligation eliminates any retroactive adjustments
from subsequent wage increases. In 1996, La Oroya fully funded this obligation.
Obligations relating to personnel severance indemnities accrued subsequent to
1990 are paid semi-annually through deposits in workers' individual bank
accounts. The analysis of the account is as follows:
<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF
-------------------- OCTOBER 23,
1995 1996 1997
--------- --------- -----------
<S> <C> <C> <C>
Balance at the beginning of period......................... $ 22,540 $ 21,228 $ 2,186
Provision................................................ $ 6,040 $ 5,926 2,154
Payments and advances.................................... (5,750) (23,365) (2,960)
Exchange difference...................................... (1,602) (1,603) (195)
--------- --------- -----------
Balance at the end of period............................... $ 21,228 $ 2,186 $ 1,185
</TABLE>
In addition, as of December 31, 1995 and 1996, certain employees had elected
to deposit their indemnity payments amounting to US$3,579 and US$1973
respectively, with Centromin. In 1997, all such indemnity liabilities were
transferred to banks as directed by each employee.
(14) TAXATION AND WORKERS' PROFIT SHARING
Centromin is subject to the Peruvian tax regulations, which require that
income tax be determined based on financial statements adjusted to reflect the
changes in the wholesale price level, following the methodology prescribed by
Legislative Decree 797. The statutory income tax rate in Peru is 30% of the
taxable income. In 1992, the Peruvian law established an alternative minimum tax
of 2 percent, which is calculated based on the total assets. Beginning in 1994,
exporting corporations may deduct from the
F-46
<PAGE>
EMPRESA MINERA DEL CENTRO DEL PERU S.A.--CENTROMIN PERU S.A.
LA OROYA DIVISION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
AS OF OCTOBER 23, 1997 AND
DECEMBER 31, 1996, 1995 AND 1994
(14) TAXATION AND WORKERS' PROFIT SHARING (CONTINUED)
minimum income tax base the accounts receivable and inventories related to
export activities and the value of fixed assets acquired during the current
year, for two consecutive years. In May 1997, the minimum income tax was
abrogated and an extraordinary tax was imposed equal to 0.5% of the net assets
declared in the 1996 income tax return. This tax constitutes a credit against
the monthly income tax prepayments made from July through December 1997 and the
regularization payment for the 1997 year.
La Oroya is included in Centromin's tax return. As such it has provided
income tax, and remitted any tax due to Centromin, based upon the statutory tax
rate in effect for each period, applied as if La Oroya filed a separate income
tax return.
In May 1994, Centromin signed a Tax Stabilization Agreement with the
Peruvian government for a ten-year period beginning in 1997.
The following conditions would be guaranteed to Centromin:
- Utilization of the tax rules prevailing on April 25, 1994.
- Custom duties will be calculated at rates ranging from 15% to 25%.
- Free commercialization of its products.
- No restriction in the use of proceeds from export sales.
- Free conversion of foreign currency generated by local sales.
- No discrimination in foreign currency transactions.
In accordance with current workers' profit sharing government regulations,
La Oroya's workers have the right to receive 8 percent of La Oroya's taxable
income, of which 50 percent is distributed among all employees based on the
number of days worked by each employee and the remaining amount is distributed
in proportion to their salaries. Such profit sharing is limited to 18 times the
annual salary for each worker. Any excess is to be reserved and expended for
training of workers.
The provision for income tax and workers' profit sharing is comprised of the
following for each of the years in the period ended December 31, 1996 and for
the period from January 1 to October 23, 1997:
<TABLE>
<CAPTION>
1994 1995 1996 1997
---------- --------- --------- ---------
<S> <C> <C> <C> <C>
Current provision............................... $ 2,924 $ 11,921 $ 11,685 $ 8,754
Deferred provision (benefit).................... 692 1,406 (6,360) 1,409
---------- --------- --------- ---------
Total........................................... $ 3,616 $ 13,327 $ 5,325 $ 10,163
---------- --------- --------- ---------
---------- --------- --------- ---------
Breakdown--
Income tax...................................... $ 2,803 $ 10,332 $ 4,128 $ 7,879
Workers' profit sharing......................... 813 2,995 1,197 2,284
---------- --------- --------- ---------
$ 3,616 $ 13,327 $ 5,325 $ 10,163
---------- --------- --------- ---------
---------- --------- --------- ---------
</TABLE>
F-47
<PAGE>
EMPRESA MINERA DEL CENTRO DEL PERU S.A.--CENTROMIN PERU S.A.
LA OROYA DIVISION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
AS OF OCTOBER 23, 1997 AND
DECEMBER 31, 1996, 1995 AND 1994
(14) TAXATION AND WORKERS' PROFIT SHARING (CONTINUED)
The following are the components of deferred tax and workers' profit sharing
assets (liability) at December 31, 1995 and 1996 and October 23, 1997:
<TABLE>
<CAPTION>
1995 1996 1997
--------- --------- ---------
<S> <C> <C> <C>
Environmental costs not deducted in tax return................ $ -- $ 7,672 $ 7,672
Tax depreciation in excess of book depreciation............... (2,656) (4,104) (5,283)
Contingencies not deducted in tax return...................... 644 644 644
Other......................................................... (86) 50 (180)
--------- --------- ---------
$ (2,098) $ 4,262 $ 2,853
--------- --------- ---------
--------- --------- ---------
</TABLE>
The reconciliation of the income tax provision computed at the statutory
Peruvian income tax rate to the provision for income tax recorded on a U.S. GAAP
basis in the statements of revenues and expenses is as follows:
<TABLE>
<CAPTION>
1994 1995 1996 1997
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Income before income tax........................... $ 5,024 $ 28,828 $ 10,017 $ 26,262
Statutory tax rate................................. 30% 30% 30% 30%
--------- --------- --------- ---------
Income tax provision at statutory tax rate......... 1,507 8,648 3,005 7,879
Effects of items increasing (decreasing) the
effective tax rate:
Permanent items
Write off of unrecoverable taxes............... -- 883 -- --
Tax penalties and assessments.................. 1,266 -- 335 --
Adjustment of inventory affecting years prior to
1994........................................... -- 1,270 -- --
Adjustment of inventory affecting 1995 and
1996........................................... -- (616) 616 --
Other............................................ 30 147 172 --
--------- --------- --------- ---------
Actual provision for income tax.................... $ 2,803 $ 10,332 $ 4,128 $ 7,879
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
F-48
<PAGE>
EMPRESA MINERA DEL CENTRO DEL PERU S.A.--CENTROMIN PERU S.A.
LA OROYA DIVISION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
AS OF OCTOBER 23, 1997 AND
DECEMBER 31, 1996, 1995 AND 1994
(15) OTHER INCOME AND (EXPENSES)
This caption includes the following:
<TABLE>
<CAPTION>
FOR THE
PERIOD
FOR THE YEARS ENDED DECEMBER 31, JANUARY 1 TO
-------------------------------- OCTOBER 23,
1994 1995 1996 1997
--------- --------- ---------- ------------
<S> <C> <C> <C> <C>
Income:
Storage and other services....................................... $ 136 $ 470 $ 1,038 $ 1,226
Other............................................................ 417 434 -- 706
--------- --------- ---------- ------------
553 904 1,038 1,932
--------- --------- ---------- ------------
Expenses:
Privatization costs.............................................. -- -- (3,570) (3,200)
Environmental program.............................................. -- -- (21,550) --
Write off of unrecoverable taxes................................. -- (2,944) -- --
Contingencies.................................................... -- (1,808) -- --
Tax penalties and assessments.................................... (4,219) -- (1,116) --
Other............................................................ (576) -- (203) (218)
--------- --------- ---------- ------------
(4,795) (4,752) (26,439) (3,418)
--------- --------- ---------- ------------
Other, net................................................. $ (4,242) $ (3,848) $ (25,401) $ (1,486)
--------- --------- ---------- ------------
--------- --------- ---------- ------------
</TABLE>
The privatization costs include costs related to moving La Oroya's personnel
away from the metallurgical complex of Centromin. These costs consist mainly of
demolition and construction of apartments, colleges and parks at the new
location.
(16) PERSONNEL REDUCTION COSTS
La Oroya recognized a charge in 1995 of US$2,504 related to the first part
of its personnel reduction program. This amount was fully paid in 1995. In
January 1996, the Board of Directors approved a second personnel reduction
program which applied to an additional 600 workers. The estimated cost of
US$3,894 was recorded in expenses in 1996. An additional provision of US$1,490
was recorded in the period from January 1 to October 23, 1997, in connection
with the second personnel reduction program.
(17) COMMITMENTS AND CONTINGENCIES
ENVIRONMENTAL MATTERS
In 1995, in compliance with Supreme Decree 016-93-EM, amended by Supreme
Decree 059-93-EM, (Regulation for the Environmental Protection in the Mining and
Metallurgical Activities), Centromin filed a preliminary evaluation of its
mining units and of the smelter and refineries in La Oroya, which were approved
by the Ministry of Energy and Mining (the competent authority).
F-49
<PAGE>
EMPRESA MINERA DEL CENTRO DEL PERU S.A.--CENTROMIN PERU S.A.
LA OROYA DIVISION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
AS OF OCTOBER 23, 1997 AND
DECEMBER 31, 1996, 1995 AND 1994
(17) COMMITMENTS AND CONTINGENCIES (CONTINUED)
At the date of that report, in compliance with the provisions of such
decrees and according to the preliminary evaluation above mentioned, Centromin
prepared a Programa de Adecuacion y Manejo Ambiental (Environmental Adjustment
and Management Program) (the "PAMA") for La Oroya metallurgical complex. The
program comprises the development of engineering projects to remediate any
existing environmental problems and to comply with current environmental
regulations. This program, which was approved by the competent authority in
January 1997, establishes total future disbursements of US$21.5 million to
remediate the damages to the environment and to establish methods of compliance
with current environmental regulations. The Company recognized a charge to
operations in 1996 for the estimated cost of such remedial actions (see Note
15).
The remediation program and the investment in environmental control
equipment required to comply with current regulations is to be implemented over
a ten year period beginning in 1997. Management expects that the cost of future
investments, principally for pollution control equipment, will be capitalized in
future periods and depreciated over the periods to be benefited.
In accordance with a revised program approved by the Ministry of Energy and
Mining, the disbursements are estimated by management to be as follows:
<TABLE>
<CAPTION>
FUTURE
EXPENDITURE
REMEDIATION FOR CONTROL
COSTS EQUIPMENT TOTAL
----------- ----------- ----------
<S> <C> <C> <C>
1997....................................................................... $ 730 -- $ 730
1998....................................................................... 1,800 $ 2,700 4,500
1999....................................................................... 1,950 3,612 5,562
2000....................................................................... 4,000 4,963 8,963
2001....................................................................... 3,750 3,300 7,050
2002....................................................................... 2,050 3,800 5,850
2003....................................................................... 2,100 3,000 5,100
2004....................................................................... 2,100 2,775 4,875
2005....................................................................... 3,070 38,700 41,770
2006....................................................................... -- 44,725 44,725
----------- ----------- ----------
Total.................................................................. $ 21,550 $ 107,575 $ 129,125
----------- ----------- ----------
----------- ----------- ----------
</TABLE>
In addition, PAMA estimated the cost to eventually close the metallurgical
complex of La Oroya at US$24 million. No provision has been recorded for this
amount, since there are no plans to close the complex.
The timing and amounts listed in the above table are estimates and actual
amounts and timing of payments could vary from the estimates. Furthermore, in
accordance with the Article 9 of the rules of the General Law on Mining, annual
expenditures for environmental remediation and control cannot be less than 1
percent of total sales.
F-50
<PAGE>
EMPRESA MINERA DEL CENTRO DEL PERU S.A.--CENTROMIN PERU S.A.
LA OROYA DIVISION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
AS OF OCTOBER 23, 1997 AND
DECEMBER 31, 1996, 1995 AND 1994
(17) COMMITMENTS AND CONTINGENCIES (CONTINUED)
POTENTIAL TAX ASSESSMENTS
Centromin's income tax returns of 1993 through 1996, as well as the net
worth tax returns of 1992 and 1993, are pending review by the National
Superintendency of Tax Administration. No significant liabilities arose as a
result of the 1992 income tax return review. If tax assessments were made, any
tax, interest or surcharges would be charged to expense in the years in which
the assessment is known. In the opinion of Centromin's management there are no
matters that should result in significant additional tax assessments.
INVESTMENT PROGRAM
As discussed in Note 14, in May 1994 Centromin signed a Tax Stabilization
Agreement with the Peruvian Government for a ten-year period beginning the year
in which Centromin meets the Investment Program for La Oroya metallurgical
complex, which was then estimated at US$11.1 million. The investment program was
completed in December, 1996. In March 1997, the Mining Bureau approved the
completion of the Investment Program. Actual expenditures amounted to
approximately US$11.5 million.
CONTINGENCIES
At October 23, 1997, La Oroya metallurgical complex has legal suits
aggregating US$15.7 million related to labor matters. The financial statements
include a reserve of US$1.7 million (see note 12) estimated to cover the cost of
defending and settling such matters. In management and legal advisors' opinion,
the ultimate outcome of these suits will not result in a material adverse effect
on La Oroya's financial position and results of operations.
In addition, there is a contingency amounting to approximately US$12
million, related to demands filed by 19 local mining companies, which are
claiming the refund of value-added-tax withheld by La Oroya from 1975 to 1980.
In opinion of La Oroya's management and its legal advisors, the ultimate outcome
of these demands will be favorable to La Oroya.
SALES COMMITMENTS AND CONCENTRATION
La Oroya derives its revenue from the sale of its refined metals and
concentrates to several customers. La Oroya's three largest customers accounted
for: 11%, 6% and 6%, respectively, of net sales in the period from January 1 to
October 23, 1997. The percentages in 1994 were 13%, 11% and 10%; in 1995 were
15%, 14% and 12% and in 1996 were 11%, 7% and 6%. These customers have sales
contracts, which guarantee their supply at prices derived from international
market quotations.
(18) RELATED PARTY TRANSACTIONS
Expenses allocated from Centromin to the operations of La Oroya related
primarily to accounting and administrative support services. These expenses
amounted to US$5,223 in the period from January 1 to October 23, 1997, US$5,660
in 1996, US$4,479 in 1995 and US$4,569 in 1994.
F-51
<PAGE>
EMPRESA MINERA DEL CENTRO DEL PERU S.A.--CENTROMIN PERU S.A.
LA OROYA DIVISION
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
AS OF OCTOBER 23, 1997 AND
DECEMBER 31, 1996, 1995 AND 1994
(18) RELATED PARTY TRANSACTIONS (CONTINUED)
Purchases of concentrates of polymetalic ores from the mining units of
Centromin were:
<TABLE>
<CAPTION>
PERCENTAGE OF
VALUE OF THE TOTAL VALUE
PERIOD PURCHASES OF PURCHASE
- ------------------------------------------------------------------ ---------- -------------------
<S> <C> <C>
1994.............................................................. $ 146,673 60%
1995.............................................................. 182,218 58
1996.............................................................. 178,018 67
For the period from January 1 to October 31, 1997................. 135,644 59
</TABLE>
(19) GEOGRAPHIC DATA
The following is an analysis of net sales by geographic region:
<TABLE>
<CAPTION>
FOR THE
PERIOD
FOR THE YEARS ENDED DECEMBER 31, JANUARY 1 TO
---------------------------------- OCTOBER 23,
1994 1995 1996 1997
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
USA............................................................ $ 131,644 $ 105,837 $ 184,546 $ 94,050
Latin America.................................................. 177,627 201,631 162,620 165,866
Asia........................................................... 28,672 112,401 84,964 65,975
Europe......................................................... 29,114 31,060 24,667 26,914
---------- ---------- ---------- ------------
$ 367,057 $ 450,929 $ 456,797 $ 352,805
---------- ---------- ---------- ------------
---------- ---------- ---------- ------------
</TABLE>
(20) SUBSEQUENT EVENT
In the Extraordinary Shareholders' Meetings of Doe Run Peru and Metaloroya
held on November 3, 1997, the merger of Metaloroya into Doe Run Peru was
approved, the surviving company being Doe Run Peru. The merger will be on
December 30, 1997.
F-52
<PAGE>
GLOSSARY OF CERTAIN METALLURGY TERMS
"Anode copper" means copper blister that, in a furnace, has been blown with
air and natural gas to upgrade its purity to approximately 99.0% copper, which
is then cast into keystone shaped slabs that are shipped to an electrolytic
refinery.
"Bullion" means unrefined raw metals containing impurities.
"By-products" means the products recovered during the refining process, such
as silver, germanium and indium, which may produce gains for the smelter.
"Cathode" means the electrolytically refined form of copper removed from the
refining cells in the refining process that are sold "as is" or melted and cast
into cakes, billets, wirebar or rods.
"Concentrates" means ores that have been crushed, ground and treated in a
flotation process that separates and concentrates the minerals creating the raw
material for smelting.
"Converter" means a principal phase of the smelting process that involves
the blowing of oxygen-enriched air through molten metal, causing oxidation and
the removal of sulfur and other impurities.
"Copper blister" means the material resulting from passing copper
concentrates through a converter that is approximately 98.5% copper and takes
its name from "blisters" that form on the surface.
"Electrolytic refining" means the process of placing copper anodes
alternately with refined copper sheets in a tank through which a copper sulfate
solution and sulfuric acid are circulated and a low voltage current is
introduced that causes the copper metal to transfer from the anodes to the pure
copper sheets, producing 99.9% copper cathodes.
"Electrowinning" means the process of removing metal from solution by the
action of electric currents.
"Flotation" means the process by which minerals attach themselves to the
bubbles in an oily froth and rise to the top where they are skimmed off.
"Flux" means inert oxides of iron, calcium, silica added to the charge to be
smelted or pyrometallurgically converted to assist with the creation of a molten
slag to assist separation of the metal from the low melting molten oxides.
"Galvanizing" means the anti-corrosion process for steel components that
consists of dipping components in a molten zinc bath after chemically stripping
off impurities.
"Leaching" means the process of extracting a metal from ores via
hydrometallurgical techniques by dissolving the metal into a solution for
subsequent treatment or recovery.
"Lead/zinc bullion" means unrefined raw metals containing impurities.
"Ore" means a mineral or aggregate of minerals from which metal can be
economically mined or extracted.
"Refining" means the chemical or metallurgical steps required to purify a
metal or compound into a commercially usable product.
"Reverberatory furnace" means a furnace with a shallow hearth and a roof
which deflects the flame and radiates heat toward the hearth or the surface of
the charge.
"Residues" means impurities remaining after the metallurgical treatment of
concentrates.
"Secondary materials" means products obtained from residues resulting from
the primary smelting process or other industrial activities containing metals
which can be recycled.
G-1
<PAGE>
"Sintering" means the agglomeration and desulfurization of concentrates into
a lumpy product suitable for smelting in a blast furnace.
"Slag" means complex silicates formed mainly by silica, iron oxide and lime
that are residues collected from the blast furnace.
"Smelting" means a pyrometallurgical process of separating metal by fusion
from, those impurities with which it may be chemically combined or physically
mixed.
"Treatment charges" means the amount of money charged per ton of concentrate
by the smelter (buyer) to the miner (seller) to cover the cost (plus profit) for
processing the concentrate.
"Zinc electrolytic process" means the hydrometallurgical process consisting
of the electrolysis of a purified zinc sulfate solution (which is obtained by
dissolving zinc oxidized concentrates in sulfuric acid) and obtaining a zinc
deposit on aluminum cathodes.
"Zinc oxide" means the oxide of zinc normally produced as a fine white power
used mainly as a catalyst for the vulcanization of rubber and also used in paint
pigments and as compounds in the pharmaceutical industry.
G-2
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON, OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER
CONTAINED HEREIN, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY DOE RUN OR THE GUARANTORS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR THE SOLICITATION OF AN OFFER TO BUY, TO ANY
PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF DOE RUN OR THE GUARANTORS SINCE THE DATE HEREOF
OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE HEREOF.
--------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Available Information.......................... 3
Special Note Regarding Forward-Looking
Statements................................... 3
Enforceability of Civil Liabilities............ 3
Presentation of Certain Financial Information.. 4
Exchange Rates................................. 4
Prospectus Summary............................. 6
Risk Factors................................... 22
Use of Proceeds................................ 30
Capitalization................................. 31
Unaudited Pro Forma Consolidated Financial
Data......................................... 32
Selected Historical Consolidated Financial
Data......................................... 39
The Exchange Offer............................. 43
Management's Discussion and Analysis of
Financial Condition and Results of
Operations................................... 50
Industry....................................... 61
Business....................................... 65
Management..................................... 96
Security Ownership............................. 100
Certain Transactions........................... 101
Description of New Revolving Credit
Facilities................................... 103
Description of the Notes....................... 105
Certain U.S. Federal Income Tax
Considerations............................... 131
Plan of Distribution........................... 131
Legal Matters.................................. 132
Experts........................................ 132
Index to Consolidated Financial Statements..... F-1
Glossary of Certain Metallurgy Terms........... G-1
</TABLE>
--------------------------
UNTIL , 1998 (40 DAYS AFTER THE DATE OF THIS PROSPECTUS) ALL
DEALERS EFFECTING TRANSACTIONS IN THE EXCHANGE NOTES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
[LOGO]
OFFER TO EXCHANGE ITS
11 1/4% SENIOR NOTES
DUE 2005, SERIES B
AND
FLOATING INTEREST RATE SENIOR NOTES
DUE 2003, SERIES B,
WHICH HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933,
AS AMENDED,
FOR ANY AND ALL OF ITS OUTSTANDING
11 1/4% SENIOR NOTES
DUE 2005, SERIES A
AND
FLOATING INTEREST RATE SENIOR NOTES
DUE 2003, SERIES A,
RESPECTIVELY
---------------------
PROSPECTUS
---------------------
, 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sections 722 and 723 of the Business Corporation Law of New York (the
"NYBCL") empower The Doe Run Resources Corporation, a New York corporation ("Doe
Run"), to indemnify, subject to the limitations and standards set forth therein,
any person made or threatened to be made a party to an action or proceeding
brought or threatened by reason of the fact that such person is or was a
director or officer of Doe Run, Section 726 of the NYBCL provides that Doe Run
may purchase insurance on behalf of any such director or officer. Article V of
Doe Run's By-Laws provides, in effect, for the indemnification by Doe Run of
each director, officer, employee or agent of Doe Run to the full extent
permitted by the NYBCL.
The By-Laws of Doe Run provide, in effect, that Doe Run shall indemnify any
person made, or threatened to be made, a party to an action or proceeding,
whether civil or criminal, including an action by or in the right of Doe Run to
procure a judgment in its favor and an action by or in the right of any other
corporation of any type or kind, domestic or foreign, or any partnership, joint
venture, trust, employee benefit plan or any other enterprise which any director
or officer of Doe Run served in any capacity at the request of Doe Run, by
reason of the fact that he, his testator or intestate is or was a director or
officer of Doe Run, or served such other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise in any capacity,
against judgments, fines, amounts paid in settlement and reasonable expenses,
including attorneys' fees, actually and necessarily incurred as a result of such
action or proceeding or any appeal therein.
Subsection (a) of Section 145 of the General Corporation Law of Delaware
(the "DGCL") empowers a corporation to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or complete
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, employee or agent of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation and, with respect to any criminal action
or proceeding, had no cause to believe his conduct was unlawful.
Subsection (b) of Section 145 of the DGCL empowers a corporation to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation and except that no indemnification may be made
in respect to any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought shall
determine that despite the adjudication of liability such person is fairly and
reasonably entitled to indemnity for such expenses which the court shall deem
proper.
Section 145 of the DGCL further provides that to the extent a director,
officer, employee or agent of a corporation has been successful in the defense
of any action, suit or proceeding referred to in subsections (a) and (b) or in
the defense of any claim, issue or matter therein, he shall be indemnified
against expenses
II-1
<PAGE>
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith; that indemnification or advancement of expenses provided
for by Section 145 shall not be deemed exclusive of any other rights to which
the indemnified party may be entitled; and empowers the corporation to purchase
and maintain insurance on behalf of a director, officer, employee or agent of
the corporation against any liability asserted against him or incurred by him in
any such capacity or arising out of his status as such whether or not the
corporation would have the power to indemnify him against such liabilities under
Section 145.
The Certificate of Incorporation of Fabricated Products, Inc., a Delaware
corporation ("FPI"), provides that a director of FPI shall not be personally
liable to FPI or its stockholders for monetary damages for breach of fiduciary
duty as a director except for liability (i) for any breach of the director's
duty of loyalty to FPI or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the DGCL or (iv) for any transaction from which
the director derives an improper personal benefit.
The Bylaws of FPI provide, in effect, that FPI shall indemnify every person
who was or is a party, or is or was threatened to be made a party, to any
action, suit, or proceeding, whether civil, criminal, administrative, or
investigative, by reason of the fact that he or she is or was a director,
officer, employee, or agent of FPI, or is or was serving at the request of FPI
as a director, officer, employee, or agent of another corporation, partnership,
joint venture, trust, employee benefit plan, or other enterprise, against
expenses (including attorneys' fees), judgments, fines, and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit, or proceedings, to the fullest extent permitted by applicable law.
Such indemnifications may, in the discretion of the board of directors, include
advances of the person's expenses in advance of final disposition of such
action, suit, or proceeding, subject to the provisions of any applicable
statute. FPI is empowered to purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee, or agent of FPI, or is or
was serving at the request of FPI as a director, officer, employee, or agent of
another corporation, partnership, joint venture, trust, or other enterprise,
against any liability incurred by such person in such capacity, or arising out
of such person's capacity.
The Companies Law (1995 Revision) of the Cayman Islands does not set out any
specific restrictions on the ability of a company to indemnify officers or
directors. However, the application of basic principles and certain Commonwealth
case law, which is likely to be persuasive in the Cayman Islands, would indicate
that indemnification is generally permissible except in the event that there had
been fraud or willful default on the part of the officer or director or reckless
disregard of his duties and obligations to the company.
Article 123 of the Articles of Association of Doe Run Cayman Ltd., a Cayman
Islands company ("Doe Run Cayman"), provides, in effect, that Doe Run Cayman
shall indemnify the directors and officers of Doe Run Cayman and any trustees
acting in relation to any of the affairs of Doe Run Cayman and their heirs,
executors, administrators and personal representatives respectively from and
against all actions, proceedings, costs, charges, losses, damages and expenses
which they or any of them shall or may incur or sustain by reason of any act
done or omitted in or about the execution of their duty in their respective
offices or trusts, except such (if any) as they shall incur or sustain by or
through their own wilful neglect or default respectively.
Peruvian law does not provide for the indemnification of officers of
companies organized as Sociedades de Responsibilidad Limitada, which do not have
directors. The Constituciones de Sociedad Comercial de Responsibilidad Limitada
for Doe Run Mining S.R. Ltda. and Doe Run Peru S.R. Ltda. do not contain any
provisions regarding the indemnification of officers.
II-2
<PAGE>
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits.
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ----------- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
3.1 -- Certificate of Incorporation of The Doe Run Resources Corporation.
3.2 -- Amended and Restated By-laws of The Doe Run Resources Corporation.
3.3 -- Certificate of Incorporation of Fabricated Products, Inc.
3.4 -- Bylaws of Fabricated Products, Inc.
3.5 -- Certificate of Incorporation of Doe Run Cayman Ltd.
3.6 -- Memorandum and Articles of Association of Doe Run Cayman Ltd.
3.7 -- Constitucion de Sociedad Comercial de Responsibilidad Limitada de Doe Run Mining S.R. Ltda. (with
English translation)
3.8 -- Constitucion de Sociedad Comercial de Responsibilidad Limitada de Doe Run Peru S.R. Ltda. (with
English translation)
4.1 -- Indenture, dated as of March 12, 1998, by and among the Registrants and State Street Bank and Trust
Company, as trustee, relating to the 11 1/4% Senior Notes due 2005, Series A, Floating Interest Rate
Senior Notes due 2003, Series A, 11 1/4% Senior Notes due 2005, Series B and Floating Interest Rate
Senior Notes due 2003, Series B and the Guarantees thereof (containing, as exhibits, specimens of
the Notes and the Guarantees).
4.2 -- Purchase Agreement, dated March 6, 1998, among the Registrants, BT Alex. Brown Incorporated,
Donaldson, Lufkin and Jenrette Securities Corporation and UBS Securities LLC, relating to the
11 1/4% Senior Notes due 2005 and Floating Interest Rate Senior Notes due 2003.
4.3 -- Registration Rights Agreement, dated as of March 12, 1998, by and among the Registrants, BT Alex.
Brown Incorporated, Donaldson, Lufkin & Jenrette Securities Corporation and UBS Securities LLC,
relating to the 11 1/4% Senior Notes due 2005 and Floating Interest Rate Senior Notes due 2003.
4.4 -- Form Letter of Transmittal.
5.1 -- Opinion of Cadwalader, Wickersham & Taft.
8.1 -- Opinion of Cadwalader, Wickersham & Taft (included in Exhibit 5.1).
10.1.1 -- Employment Agreement, dated as of April 7, 1994, between The Doe Run Resources Corporation and
Jeffrey L. Zelms.
10.1.2 -- Employment Agreement, dated as of April 7, 1994, between The Doe Run Resources Corporation and
Marvin K. Kaiser.
10.1.3 -- Employment Agreement, dated as of April 7, 1994, between The Doe Run Resources Corporation and
Richard L. Amistadi.
10.1.4 -- Employment Agreement, dated as of April 7, 1994, between The Doe Run Resources Corporation and Gary
E. Boyer.
10.1.5 -- Employment Agreement, dated as of January 1, 1996, between The Doe Run Resources Corporation and
Kenneth R. Buckley.
10.2.1 -- Net Worth Appreciation Agreement, dated as of April 7, 1994, as amended, between The Doe Run
Resources Corporation and Jeffrey L. Zelms.
10.2.2 -- Net Worth Appreciation Agreement, dated as of April 7, 1994, as amended, between The Doe Run
Resources Corporation and Marvin K. Kaiser.
10.2.3 -- Net Worth Appreciation Agreement, dated as of April 7, 1994, as amended, between The Doe Run
Resources Corporation and Richard L. Amistadi.
10.2.4 -- Net Worth Appreciation Agreement, dated as of April 7, 1994, as amended, between The Doe Run
Resources Corporation and Gary E. Boyer.
10.2.5 -- Net Worth Appreciation Agreement, dated as of April 7, 1994, as amended, between The Doe Run
Resources Corporation and Kenneth R. Buckley.
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ----------- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
10.3 -- The Doe Run Resources Corporation Supplemental Employee Retirement Plan.
10.4 -- The Doe Run Company Executive Tax Services Plan.
10.5 -- Loan and Security Agreement, dated March 12, 1998, by and among The Doe Run Resources Corporation,
Fabricated Products, Inc. and Congress Financial Corporation.
10.6 -- Contrato de Transferencia de Acciones, Aumento del Capital Social y Suscripcion de Acciones de La
Empresa Metalurgica La Oroya S.A. (Contract of Stock Transfer, Capital Increase and Stock
Subscription) (with English translation).
10.7 -- Programa de Adecuacion y Manejo Ambiental (Environmental Remedy and Management Program) (with
English translation).
10.8.1 -- Convenio de Estabilidad Juridica Entre el Estado y La Empresa Metalurgica La Oroya S.A. (Legal
Stability Agreement between the State and Empresa Metalurgica La Oroya S.A.) (with English
translation).
10.8.2 -- Convenio de Estabilidad Juridica con Doe Run Mining S.R. Ltda. (Legal Stability Agreement with Doe
Run Mining S.R. Ltda.--Commission for Foreign Investments and Technologies) (with English
translation).
10.8.3 -- Convenio de Estabilidad Juridica con Doe Run Mining S.R. Ltda. (Legal Stability Agreement with Doe
Run Mining S.R. Ltda.--Ministry of Energy and Mines) (with English translation).
10.8.4 -- Convenio de Estabilidad Juridica con Doe Run Peru S.R. Ltda. (Legal Stability Agreement with Doe Run
Peru S.R. Ltda.--Minister of Energy and Mines) (with English translation).
10.8.5 -- Convenio de Estabilidad Juridica con Doe Run Peru S.R. Ltda. (Legal Stability Agreement with Doe Run
Peru S.R. Ltda.--Vice Minister of Mines) (with English translation).
10.8.6 -- Convenio de Estabilidad Juridica con Doe Run Cayman Ltd. (Legal Stability Agreement with Doe Run
Cayman Ltd.--Commission for Foreign Investments and Technologies) (with English translation).
10.8.7 -- Remite Contrato de Estabilidad Administrativa Ambiental (Environmental Stability Agreement) (with
English translation).
12 -- Statement regarding computation of ratios.
21 -- List of Subsidiaries of Registrant.
23.1 -- Consent of Cadwalader, Wickersham & Taft (included in Exhibit 5.1).
23.2 -- Consent of KPMG Peat Marwick LLP.
23.3 -- Consent of Medina, Zaldivar y Asociados S. Civ. R.L., a member firm of Andersen Worldwide SC.
23.4 -- Consent of Pincock, Allen & Holt.
24 -- Power of Attorney (included on the signature page).
25 -- Statement of Eligibility and Qualification on Form T-1 of State Street Bank and Trust Company.
</TABLE>
(b) Financial Statement Schedules.
All schedules are omitted because they are not applicable or the required
information is shown in the consolidated financial statements or the notes
thereto.
ITEM 22. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling any
Registrant pursuant to the foregoing provisions, each Registrant has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by a Registrant of expenses
incurred or paid by a director, officer or controlling person of a Registrant in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling
II-4
<PAGE>
person in connection with the securities being registered, each Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned Registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the registration statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrants hereby undertake that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of a registration statement in reliance upon Rule 430A and contained in the
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be part of the
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
The undersigned Registrants hereby undertake to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
The undersigned Registrants hereby undertake to supply by means of a
post-effective amendment all information concerning a transaction, and Doe Run
being acquired involved therein, that was not the subject of and included in the
registration statement when it became effective.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each of the
registrants has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of St. Louis,
State of Missouri, on May 8, 1998.
<TABLE>
<S> <C>
THE DOE RUN RESOURCES CORPORATION
BY: /S/ JEFFREY L. ZELMS
------------------------------------------
JEFFREY L. ZELMS
President and Chief Executive Officer
FABRICATED PRODUCTS, INC.
BY: /S/ DAVID A. CHAPUT
------------------------------------------
DAVID A. CHAPUT
President
DOE RUN CAYMAN LTD.
BY: /S/ JEFFREY L. ZELMS
------------------------------------------
JEFFREY L. ZELMS
President
DOE RUN MINING S.R. LTDA.
BY: /S/ KENNETH R. BUCKLEY
------------------------------------------
KENNETH R. BUCKLEY
General Manager
DOE RUN PERU S.R. LTDA.
BY: /S/ KENNETH R. BUCKLEY
------------------------------------------
KENNETH R. BUCKLEY
General Manager
</TABLE>
II-6
<PAGE>
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Jeffery L. Zelms and Marvin K. Kaiser and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform such and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on May 8, 1998
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------ --------------------------
<C> <S> <C>
THE DOE RUN RESOURCES CORPORATION
/s/ IRA LEON RENNERT
- ------------------------------ Chairman of the Board and
IRA LEON RENNERT Director
President and Chief
/s/ JEFFREY L. ZELMS Executive Officer
- ------------------------------ (Principal Executive
JEFFREY L. ZELMS Officer)
Vice President and Chief
/s/ MARVIN K. KAISER Financial Officer
- ------------------------------ (Principal Financial and
MARVIN K. KAISER Accounting Officer)
FABRICATED PRODUCTS, INC.
/s/ IRA LEON RENNERT
- ------------------------------ Chairman of the Board and
IRA LEON RENNERT Director
/s/ DAVID A. CHAPUT
- ------------------------------ President (Principal
DAVID A. CHAPUT Executive Officer)
Vice President and Chief
/s/ MARVIN K. KAISER Financial Officer
- ------------------------------ (Principal Financial and
MARVIN K. KAISER Accounting Officer)
DOE RUN CAYMAN LTD.
/s/ IRA LEON RENNERT
- ------------------------------ Chairman of the Board and
IRA LEON RENNERT Director
/s/ JEFFREY L. ZELMS
- ------------------------------ President (Principal
JEFFREY L. ZELMS Executive Officer)
/s/ MARVIN K. KAISER Vice President (Principal
- ------------------------------ Financial and Accounting
MARVIN K. KAISER Officer)
</TABLE>
II-7
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------ --------------------------
<C> <S> <C>
DOE RUN MINING S.R. LTDA.
/s/ KENNETH R. BUCKLEY
- ------------------------------ General Manager (Principal
KENNETH R. BUCKLEY Executive Officer)
/s/ MARVIN K. KAISER Finance Manager (Principal
- ------------------------------ Financial and Accounting
MARVIN K. KAISER Officer)
DOE RUN PERU S.R. LTDA.
/s/ KENNETH R. BUCKLEY
- ------------------------------ General Manager (Principal
KENNETH R. BUCKLEY Executive Officer)
/s/ MARVIN K. KAISER Finance Manager (Principal
- ------------------------------ Financial and Accounting
MARVIN K. KAISER Officer)
</TABLE>
II-8
<PAGE>
Exhibit 3.1
CERTIFICATE OF INCORPORATION
OF
FLUOR ACQUISITION CORPORATION
UNDER SECTION 402 OF THE BUSINESS CORPORATION LAW
------------------------
The undersigned, Deborah C. Strauss, a natural person at least
eighteen years of age, for the purpose of forming a corporation pursuant to
Section 402 of the Business Corporation Law of the State of New York does hereby
certify:
First: The name of the corporation is FLUOR ACQUISITION CORPORATION
(hereinafter called "Corporation").
Second: The purposes for which the Corporation is formed are:
(a) To acquire by purchase, subscription, or otherwise, and to hold,
sell, assign, transfer, exchange, lease, mortgage, pledge, or otherwise dispose
of, any shares of the capital stock of, or voting trust certificates for any
shares of the capital stock of, or any bonds or other securities or evidences of
indebtedness issued or created by, this Corporation or any other corporation or
association, organized under the laws of the State of New York
<PAGE>
or of any other state, territory, district, colony or dependency of the United
States of America or under the laws of any foreign country; to pay therefor in
cash or property or to issue in exchange therefor shares of the capital stock,
bonds or other obligations of this Corporation; and while the owner or holder of
any such shares of capital stock, voting trust certificates, bonds, or other
obligations, to possess and exercise in respect thereof any and all the rights,
powers and privileges of individual holders, including the right to vote on any
shares of stock so held or owned.
(b) To organize subsidiary corporations and to convey and assign all
or any part of its assets to any such subsidiary corporation or corporations in
exchange for shares of the capital stock or other securities or evidences of
indebtedness of such subsidiary corporation or corporations.
(c) To acquire from time to time, in exchange for shares of the
capital stock of this Corporation as herein fixed or as may hereafter be
increased, such property or shares of the capital stock of any other corporation
or corporations, as the Board of Directors shall deem of advantage to this
Corporation, at such valuation of the prop-
2
<PAGE>
erty or shares so acquired as in the judgment of said Board of Directors shall
be fair and just.
(d) To purchase, lease or otherwise acquire, in whole or in part,
the business, good will, rights, franchises and property of every kind, and to
acquire the whole or any part of the assets or assume the whole or any part of
the liabilities, of any person, firm, association, or corporation, and to pay
therefor in cash or in stock or bonds, or any other evidences of indebtedness of
this Corporation or otherwise; to hold on in any manner, use or dispose of the
whole or any part of the business, good will, rights, franchises or property so
acquired and to exercise all the powers necessary or incidental to the conduct
of such business.
(e) To borrow or raise moneys for any of the purposes of this
Corporation, issue bonds, debentures, notes or other obligations of any nature,
or in any manner, for moneys so borrowed, and to secure the payment thereof and
of the interest thereon by mortgage upon, or pledge or conveyance or assignment
in trust of, the whole or any part of the property of this Corporation, real or
personal, including contract rights, whether at the time owned or thereafter
acquired, and to sell or pledge such
3
<PAGE>
bonds or notes or other obligations of this Corporation for its corporate
purposes.
(f) To aid, in any manner, any corporation or association any of
whose shares of stock, bonds or other evidences of indebtedness are held by or
for this Corporation, or in which, or in the welfare of which, this Corporation
shall have any interest, and to do any acts or things designed to protect,
preserve, improve or enhance the value of any such shares of stock, bonds or
evidences of indebtedness, or the property of this Corporation.
(g) To guarantee the payment of dividends upon any shares of the
capital stock of, or the performance of any contract by, any other corporation
or association in which, or in the welfare of which, this Corporation has an
interest, and to endorse or otherwise guarantee the payment of the principal and
interest, or either, of any bonds, debentures, notes, securities, or other
evidences of indebtedness created or issued by any such other corporation or
association.
(h) To carry out all or any part of the foregoing objects as
principal, factor, agent, broker, contractor, nominee or otherwise, either alone
or in conjunction with
4
<PAGE>
any person, firm, association or other corporation and in any part of the world;
and in carrying on its business and for the purpose of attaining or furthering
any of its objects, to make and perform contracts of any kind and description,
and to do anything and everything necessary, suitable, convenient or proper for
the accomplishment of any of such purposes herein enumerated.
(i) To lend its uninvested funds from time to time to such extent,
on such terms and on such security, if any, as the Board of Directors of the
Corporation may determine.
(j) Subject to the limitations prescribed by statute and in
furtherance of its corporate business, to pay pensions, establish and carry out
pension, profit sharing, share bonus, share purchase, share option, savings,
thrift and other retirement, incentive and benefit plans, trusts and provisions
for any and all of its directors, officers and employees.
(k) To remunerate, in cash, shares of stock, bonds or other
securities of evidences of indebtedness or otherwise, any person, firm,
syndicate, association or corporation, for services rendered, directly or
indirectly, in selling, placing, or guaranteeing the selling or plac-
5
<PAGE>
ing of any shares of the capital stock, bonds, debentures, or other securities
or evidences of indebtedness, issued, owned or controlled by this Corporation,
or by any other corporation in which this Corporation is interested, or in
connection with the formation, promotion, or operation of this Corporation, or
of any other corporation in which this Corporation is interested, or in
connection with the conduct of the business or affairs or the protection of the
property and interests of this Corporation.
(l) To conduct its business in all its branches at one or more
offices in the State of New York and in any or all other states, territories,
districts, colonies and dependencies of the United States of America and in any
or all foreign countries; and to hold, possess, purchase, lease, mortgage and
convey real and personal property and to maintain offices and agencies either
within or outside the State of New York.
For the accomplishment of the aforesaid purposes, and in furtherance
thereof, the Corporation shall have and may exercise all of the powers conferred
by the Business Corporation Law upon corporations formed thereunder, subject to
any limitations contained in Article 2 of said law or in accordance with the
provisions of any other statute
6
<PAGE>
of the State of New York.
Third: The aggregate number of shares which the Corporation shall
have the authority to issue shall be One Thousand (1,000), all of which shall be
of one class, which shall be designated common stock, and shall be of the par
value of Ten Cents ($.10) per share.
Fourth: The principal office of the Corporation is to be located in
the Borough of Manhattan, City, County and State of New York. The address,
within the State of New York, to which the Secretary of State of the State of
New York shall mail a copy of process in any action or proceeding against the
Corporation, which may be served upon him, is c/o United States Corporation
Company, 70 Pine Street, New York, New York 10270.
Fifth: The duration of the Corporation is to be perpetual.
Sixth: The Secretary of State of the State of New York is designated
as the agent of the Corporation upon whom process in any action or proceeding
against it may be served within the State of New York.
IN WITNESS WHEREOF, I hereunto sign my name
7
<PAGE>
and affirm that the statements made herein are true under the penalties of
perjury this 2d day of April, 1981.
/s/ Deborah C. Strauss
-------------------------------
Deborah C. Strauss
One State Street Plaza
New York, New York 10004
8
<PAGE>
Certificate of Incorporation
of
Fluor Acquisition Corporation
Under
Section 402 of the Business Corporation Law
STATE OF NEW YORK
DEPARTMENT OF STATE
FILED APR 2 - 1981
AMT OF CHECK $105.50
FILING FEE $ 50
TAX $ 10
COPY $ 45.50
CERT. $
REFUND $
BY: /s/ [ILLEGIBLE]
Cleary, Gottlieb, Steen & Hamilton
One State Street Plaza
New York, New York 10004
(212) 344-0600
<PAGE>
CERTIFICATE OF MERGER
OF
ST. JOE MINERALS CORPORATION
INTO
FLUOR ACQUISITION CORPORATION
Under Section 904 of the
Business Corporation Law
The undersigned, being respectively, Chairman of the Board and
Secretary of St. Joe Minerals Corporation and President and Assistant Secretary
of Fluor Acquisition Corporation do hereby certify:
1. The names of the constituent corporations to the Merger are St.
Joe Minerals Corporation, which was formed under the name St. Joseph Lead
Company, and Fluor Acquisition Corporation. The name of the surviving
corporation is Fluor Acquisition Corporation; and following the Merger its
name shall be St. Joe Minerals Corporation.
2. As to each constituent corporation, the designation and number of
outstanding shares of each class and series of stock are as follows:
(a) St. Joe Minerals Corporation had outstanding as of June
17, 1981 45,514,700 shares of Common Stock, $1.00 par value per
share, all of which are entitled to vote. The number of outstanding
shares of said Common Stock is subject to change prior to the
effective date of the Merger by way of increase by reason of the
exercise of outstanding stock options.
<PAGE>
(b) Fluor Acquisition Corporation has outstanding 1,000 shares
of Common Stock, $.10 par value per share, all of which are entitled
to vote.
3. The Certificate of Incorporation of Fluor Acquisition Corporation
shall be the Certificate of Incorporation of the surviving corporation,
except that at the effective time of the Merger, Article I of such
Certificate of Incorporation shall be amended to read as follows: "The
name of the corporation is St. Joe Minerals Corporation (hereinafter
called 'Corporation')."
4. The Certificate of Incorporation of St. Joe Minerals Corporation
was filed, under the name St. Joseph Lead Company, by the Department of
State of New York on March 25, 1864. The Certificate of Incorporation of
Fluor Acquisition Corporation was filed by the Department of State of New
York on April 2, 1981.
5. The Merger was authorized on behalf of each constituent
corporation in the following manner:
(a) on behalf of St. Joe Minerals Corporation, by the
affirmative vote of the holders of more than two-thirds of the
outstanding shares of Common Stock of St. Joe Minerals Corporation
at a special meeting of shareholders of St. Joe Minerals Corporation
held on August 3, 1981, and
(b) on behalf of Fluor Acquisition Corporation, by the written
consent of the sole shareholder, Fluor Corporation.
2
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Certificate
of Merger on the 3rd day of August, 1981, and affirm the statements contained
herein as true under penalties of perjury.
ST. JOE MINERALS CORPORATION
By /s/ John C. Duncan
---------------------------------
John C. Duncan
Chairman of the Board
By /s/ Charles E. Barnett
---------------------------------
Charles E. Barnett
Secretary
FLUOR ACQUISITION CORPORATION
By /s/ R B. Humbert
---------------------------------
R B. Humbert
President
By /s/ H.E. Owens
---------------------------------
H.E. Owens
Assistant Secretary
3
<PAGE>
CERTIFICATE OF MERGER
OF
ST. JOE MINERALS CORPORATION
INTO
FLUOR ACQUISITION CORPORATION
STATE OF NEW YORK
DEPARTMENT OF STATE
FILED AUG 3 - 1981
AMT. OF CHECK $190
FILING FEE $ 60
TAX $
COUNTY FEE $
COPY $ 120
CERT $
REFUND $
SPEC HANDLE $ 10
BY: /s/ [ILLEGIBLE]
Cleary, Gottlieb, Steen & Hamilton
One State Street Plaza
New York, New York 10004
(212) 344-0600
<PAGE>
CERTIFICATE OF CHANGE
OF
ST. JOE MINERALS CORPORATION
UNDER SECTION 805-A OF THE
BUSINESS CORPORATION LAW
* * * * *
WE, THE UNDERSIGNED, Dwight A. Miller and M. Mason Pattillo being
respectively the Vice President, General Counsel and Secretary and Assistant
General Counsel and Assistant Secretary of ST. JOE MINERALS CORPORATION, hereby
certify:
1. The original name of the corporation is Fluor Acquisition
Corporation. On August 3, 1981, the name of the corporation was changed to St.
Joe Minerals Corporation.
2. The Certificate of Incorporation of said corporation was filed by
the Department of State on April 2, 1981.
3. The following was authorized by the Board of Directors on January
14, 1985:
[ILLEGIBLE] the Secretary of State shall mail a copy of process in any action
or proceeding against the corporation which may be served on him from c/o
United States Corporation Company, 70 Pine Street, New York, New York 10270
to c/o St. Joe Minerals Corporation, 7733 Forsyth Boulevard, Clayton,
Missouri 63105.
<PAGE>
IN WITNESS WHEREOF, we have signed this Certificate on the 5th day
of March, 1985, and we affirm the statements contained therein as true under
penalties of perjury.
/s/ Dwight A. Miller,
----------------------------
Dwight A. Miller
Vice President, General
Counsel and Secretary
/s/ M. Mason Patrillo
----------------------------
M. Mason Patrillo,
Assistant General Counsel
and Assistant Secretary
<PAGE>
CERTIFICATE OF CHANGE
OF
ST. JOE MINERALS CORPORATION
Under Section 805-A of the
Business Corporation Law
[ILLEGIBLE] er: Dwight A. Miller
Vice President, General
Counsel & Secretary
St. Joe Minerals Corporation
7733 Forsyth Blvd.
Clayton, MO 63105
STATE OF NEW YORK
DEPARTMENT OF STATE
FILED MAR 14 1985
AMT. OF CHECK $23
FILING FEE $ 20
TAX $
COUNTY FEE $
COPY $ 3
CERT $
REFUND $
SPEC HANDLE $
BY: /s/ [ILLEGIBLE]
<PAGE>
CERTIFICATE OF CHANGE
OF
ST. JOE MINERALS CORPORATION
* * * * * * * * *
(Under Section 805-A of the Business Corporation Law)
* * * * * * * * *
FIRST: The name of the corporation is
ST. JOE MINERALS CORPORATION
SECOND: The Certificate of Incorporation of the corporation was
filed by the Department of State on April 2, 1981. The name under which the
corporation was formed is Fluor Acquisition Corporation.
THIRD: The Certificate of Incorporation of the corporation is hereby
changed, pursuant to the authorization of the Board of Directors of the
corporation, so as to change the post office address to which the Secretary of
State shall mail a copy of any process against the corporation served upon him
and to designate a registered agent; and, to accomplish said change, the
statement in the Certificate of Incorporation relating to said post office
address is hereby stricken and the following statement is substituted in lieu
thereof:
(a) The post office address within the State of New York to which
the Secretary of State shall mail a copy of any process against the
corporation served upon him is 15 Columbus Circle, c/o The Prentice-Hall
Corporation System, Inc., New York, New York 10022-7773.
(b) The name and the address of the registered agent of the
corporation is The Prentice-Hall Corporation System, Inc., 15 Columbus
Circle, New York, New York 10023-7773. Said registered agent is to be the
agent upon which process against the corporation may be served.
FOURTH: The Certificate of Change has been authorized by the Board
of Directors.
<PAGE>
IN WITNESS WHEREOF, we have subscribed this document on the date
hereinafter set forth and do hereby affirm, under the penalties of perjury, that
the statements contained therein have been examined by us and are true and
correct.
DATED: April 30, 1991
/s/ R. L. Guyett
-----------------------------
R. L. Guyett, President
/s/ L. R. Fisher
-----------------------------
L. R. Fisher, Secretary
<PAGE>
CERTIFICATE OF STOCK
OF
ST. JOE MINERALS CORPORATION
* * * * * * * * *
Under Section 805-A of the Business Corporation Law
* * * * * * * * *
FILED
MAY 24 12:52 PM '91
STATE OF NEW YORK
DEPARTMENT OF STATE
FILED MAY 24 1991
TAX $
BY: /s/ [ILLEGIBLE]
NEW YORK
Filed on behalf of: S. Schall Watts, Sr. Legal Assistant
Fluor Corporation
3333 Michelson Drive, 330D
Irvine, California 92730
<PAGE>
CERTIFICATE OF MERGER OF
Leadco Investments, Inc.
(a Delaware corporation)
INTO
St. Joe Minerals Corporation
(a New York corporation)
(Under Section 904 of the Business Corporation Law)
It is hereby certified, upon behalf of each of the constituent corporations
herein named, as follows:
FIRST: The Board of Directors of each of the constituent corporations has
duly adopted a plan of merger setting forth the terms and conditions of the
merger of said corporations.
SECOND: The name of the domestic constituent corporation, which is to be
the surviving corporation, and which is hereinafter sometimes referred to as the
"surviving constituent corporation", is St. Joe Minerals Corporation. The name
under which the surviving constituent corporation filed its certificate of
incorporation was "Fluor Acquisition Corporation". The date upon which its
certificate of incorporation was filed by the Department of State is April 2,
1981.
THIRD: The name of the foreign constituent corporation, which is being
merged into the surviving constituent corporation, and which is hereinafter
sometimes referred to as the "merged constituent corporation", is Leadco
Investments, Inc. The jurisdiction of its incorporation is Delaware; and the
date of its incorporation therein is May 4, 1990.
The laws of the jurisdiction of incorporation of the merged
constituent corporation permit a merger of the kind certified herein.
No Application for Authority in the State of New York of the merged
constituent corporation to transact business as a foreign corporation therein
was filed by the Department of State of the State of New York.
FOURTH: As to each constituent corporation, the plan of merger sets forth
the designation and number of outstanding shares of each class and series, the
specification of the classes and series entitled to vote on the plan of merger,
and the specification of each class and series entitled to vote as a class on
the plan of merger, as follows:
St. Joe Mineral Corporation
Designation of each Number of out- Designation of class Classes and series
outstanding class and standing shares and series entitled entitled to vote
series of shares of each class to vote as a class
- --------------------- --------------- ------------------- -----------------
Common Stock 1,000 Common Stock 1,000
Leadco Investments, Inc.
Designation of each Number of out- Designation of class Classes and series
outstanding class and standing shares and series entitled entitled to vote
series of shares of each class to vote as a class
- --------------------- --------------- ------------------- -----------------
Common Stock 1,000 Common Stock 1,000
1
<PAGE>
FIFTH: The merger herein certified was authorized in respect of the
surviving constituent corporation by the unanimous written consent of the
holders of all outstanding shares of the corporation entitled to vote on the
plan of merger.
SIXTH: The merger herein certified was authorized in respect of the merged
constituent corporation by the unanimous written consent of the holders of all
outstanding shares of the corporation entitled to vote on the plan of merger and
such consent complies with the requirements of the laws of the jurisdiction of
said corporation.
SEVENTH: The effective date of the merger herein certified, insofar as the
provisions of the New York business Corporation Law govern such effective date,
shall be the 24th day of January, 1994.
IN WITNESS WHEREOF, we have subscribed this document on the date set forth
below and do hereby affirm, under the penalties of perjury, that the statements
contained therein have been examined by us and are true and correct.
Dated: January 20, 1994
FLUOR CORPORATION,
sole shareholder of
St. Joe Minerals Corporation
(Seal)
By: /s/ P.J. Trimble
------------------------------------
P.J. Trimble, Senior Vice President-
Law and Secretary
FLUOR CORPORATION,
sole shareholder of
Leadco Investments, Inc.
(Seal)
By: /s/ P.J. Trimble
------------------------------------
P.J. Trimble, Senior Vice President-
Law and Secretary
2
<PAGE>
STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
P.J. Trimble, being duly sworn, deposes and says that he is the Senior
Vice President-Law and Secretary of Fluor Corporation, the corporation which
signed the foregoing certificate of merger in the capacity of the sole
shareholder of St. Joe Minerals Corporation, that he signed the foregoing
certificate in the corporate name and affixed the corporate seal thereto by
order of the Board of Directors of said corporate shareholder, that he has read
the foregoing certificate and knows the contents thereof, and that the
statements contained therein are true to his own knowledge.
/s/ P.J. Trimble
-----------------------------------------
P.J. Trimble, Senior Vice President - Law and
Secretary of Flour Corporation
Subscribed and sworn to before me on January 20, 1994.
[SEAL]
/s/ Carol K. Walker
-----------------------------------------
Carol K. Walker, Notary Public
STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
P.J. Trimble, being duly sworn, deposes and says that he is the Senior
Vice President-Law and Secretary of Fluor Corporation, the corporation which
signed the foregoing certificate of merger in the capacity of the sole
shareholder of Leadco Investments, Inc., that he signed the foregoing
certificate in the corporate name and affixed the corporate seal thereto by
order of the Board of Directors of said corporate shareholder, that he has read
the foregoing certificate and knows the contents thereof, and that the
statements contained therein are true to his own knowledge.
/s/ P.J. Trimble
-----------------------------------------
P.J. Trimble, Senior Vice President - Law and
Secretary of Fluor Corporation
Subscribed and sworn to before me on January 20, 1994.
[SEAL]
/s/ Carol K. Walker
-----------------------------------------
Carol K. Walker, Notary Public
3
<PAGE>
FILED
Jan 21 3:49 PM '94
1-CC
STATE OF NEW YORK
DEPARTMENT OF STATE
FILED JAN 21 1994
TAX $ 0
BY: JJW
NEW YORK
CERTIFICATE OF MERGER
OF
LEADCO INVESTMENTS, INC.
into
ST. JOE MINERALS CORPORATION
S. Schall Watts, Sr.
FLUOR DANIEL, INC.
3333 MICHELSON DRIVE 330D
IRVINE, CA. 92730.
4
<PAGE>
CERTIFICATE OF MERGER
of
St. Joe Land Management Company
(a Delaware corporation)
and
St. Joe Lead Company, Inc.
(a Delaware corporation)
into
St. Joe Minerals Corporation
(a New York corporation)
(Under Section 905 of the Business Corporation Law)
It is hereby certified by the corporation named herein as the surviving
corporation as follows:
FIRST: The Board of Directors of the corporation named herein as the
surviving corporation has adopted a plan of merger setting forth the terms and
conditions of merging the corporations named herein as the subsidiary
corporations into said surviving corporation.
SECOND: The laws of the jurisdiction of incorporation of the corporations
named herein as the subsidiary corporations permit a merger of the kind
certified herein.
THIRD: The name of one of the subsidiary corporations to be merged which
was organized under the laws of the State of Delaware on February 25, 1987, is
St. Joe Land Management Company and the name under which the corporation was
formed was ERC Products Corporation. The name under which the other subsidiary
corporation to be merged which was organized under the laws of the State of
Delaware on May 13, 1977 is St. Joe Lead Company, Inc.
No application for Authority in the State of New York of either said
corporation to transact business as a foreign corporation therein was filed by
the Department of State of the State of New York.
FOURTH: The name of the surviving corporation, the certificate of
incorporation of which was filed by the Department of State on April 2, 1981, is
St. Joe Minerals Corporation. The name under which said corporation was formed
is Fluor Acquisition Corporation.
FIFTH: The designation and number of outstanding shares of each class of
each subsidiary corporation, all of which are owned by the surviving
corporation, as set forth in the plan of merger, are as follows:
St. Joe Land Management Company
Designation Number
----------- ------
Common stock 100
St. Joe Lead Company, Inc.
Designation Number
----------- ------
Common stock 100
SIXTH: The merger of each subsidiary corporation with and into the
surviving
1
<PAGE>
corporation has been authorized under the laws of the jurisdiction of
incorporation of each said subsidiary corporation.
IN WINESS WHEREOF, we have subscribed this document on the date set forth
below and do hereby affirm, under the penalties of perjury, that the statements
contained therein have been examined by us and are true and correct.
Dated: March 24, 1994
ST. JOE MINERALS CORPORATION
sole shareholder of
St. Joe Land Management Company
(Seal)
By: /s/ P.J. Trimble
----------------------------
P.J. Trimble, Vice President
ST. JOE MINERALS CORPORATION
sole shareholder of
St. Joe Lead Company, Inc.
(Seal)
By: /s/ P.J. Trimble
----------------------------
P.J. Trimble, Vice President
STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
P.J. Trimble, being duly sworn, deposes and says that he is the Vice
President of St. Joe Minerals Corporation, the corporation which signed the
foregoing certificate of merger in the capacity of the sole shareholder of St.
Joe Land Management Company and St. Joe Lead Company, Inc.; that he signed the
foregoing certificate in the corporate name and affixed the corporate seal
thereto by order of the Board of Directors of said corporate shareholder; that
he has read the foregoing certificate and knows the contents thereof; and that
the statements contained therein are true to his own knowledge.
/s/ P.J. Trimble
----------------------------
P.J. Trimble, Vice President of
St. Joe Minerals Corporation
Subscribed and sworn to before me on March 24, 1994.
[SEAL]
/s/ Carol K. Walker
----------------------------
Carol K. Walker, Notary Public
2
<PAGE>
RECEIVED
MAR 25 1:32 PM '94
1-CC
STATE OF NEW YORK
DEPARTMENT OF STATE
FILED MAR 28 1994
TAX $ -
BY: [ILLEGIBLE]
NY
CERTIFICATE OF MERGER
OF
ST. JOE LAND MANAGEMENT COMPANY
AND
ST. JOE LEAD COMPANY, INC.
INTO
ST. JOE MINERALS CORPORATION
* * * * * * * *
Under Section 905 of the Business Corporation Law
* * * * * * * *
Filed on behalf of: S. Schall Watts, Senior Legal Assistant
Fluor Daniel, Inc.
3333 Michelson Dr., Suite 330D
Irvine, CA 92730
FILED
MAR 28 12:06 PM '94
3
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
ST. JOE MINERALS CORPORATION
Under Section 905 of the Business Corporation Law
We, the undersigned, being the President and the Secretary of St. Joe
Minerals Corporation, a corporation organized and existing under the laws of the
State of New York, do hereby certify as follows:
1. The name of the Corporation is St. Joe Minerals Corporation. The
Corporation was incorporated under the name "Fluor Acquisition Corporation".
2. The Certificate of Incorporation of the Corporation was filed by The
Department of State on April 2, 1981.
3. The Certificate of Incorporation of the Corporation is hereby amended
to:
(a) change the name of the Corporation to The Doe Run
Resources Corporation;
(b) add to the purposes of the Corporation;
(c) authorize the Corporation to issue two thousand five
hundred (2500) shares of Preferred Stock, of the par value of $1,000
per share.
4. To accomplish such changes:
(a) Article First of the Certificate of Incorporation of the
Corporation is hereby amended to read in its entirety as follows:
FIRST: The name of the Corporation is THE DOE RUN
RESOURCES CORPORATION (hereinafter called 'Corporation')".
(b) Article Second of the Certificate of Incorporation of the
Corporation is hereby amended by adding thereto a new paragraph
("m"), immediately following paragraph ("l") and preceding the final
paragraph of said Article Second, said new paragraph (m) to read in
its entirety as follows:
1
<PAGE>
"(m) to engage in any lawful act or activity for which
corporations may be organized under the Business Corporation
Law of the State of New York, but not to engage in any act or
activity requiring the consent or approval of any state
official, department, board, group or other body without such
consent or approval first being obtained."
(c) Article Third of the Certificate of Incorporation of the
Corporation is hereby amended to read in its entirety as follows:
"Third: The aggregate number of shares which the
Corporation shall have authority to issue is 3500 shares; consisting
of 2500 shares of Preferred Stock, of the par value of $1,000 per
share, and 1,000 shares of Common Stock, $.10 par value.
The designation of each class and a statement of the
relative rights, preferences and limitations of the shares thereof
is a follows:
DIVISION A - PREFERRED STOCK
1. Designation. The 2500 shares of Preferred Stock shall be
designated "Preferred Stock"
2. Dividends. The holders of the outstanding shares of Preferred
Stock shall be entitled to receive, out of any assets of the Corporation
legally available therefor, dividends in cash at the rate of $80 per share
per annum, from the date of issue thereof, and no more, payable quarterly
on the first day of January, April, July and October in each year (the
three month periods ending on such dates being herein called "Dividend
Periods"), to the holders of record such Preferred Stock as at the close
of business on the 15th day of the immediately preceding month. Dividends
for the Preferred Stock shall be cumulative from the date or original
issue thereof to the date of payment. Upon payment of all such dividends,
the holders of the Preferred Stock shall not, as such, be entitled to
participate in any other dividends paid by the Corporation.
3. Redemption. The Corporation, at any time or from time to time,
may, at its option, redeem all or any part of the Preferred Stock, at the
Redemption
2
<PAGE>
Price, of $1,00 per share, plus accrued dividends on the shares so
redeemed since the last date to which the dividends shall have been paid
thereon, pursuant to notice given as provided in subparagraph 4 of this
Division A.
4. Notice of Redemption; Effect of Notice; Surrender of
Certificates. In the case of each redemption of shares of Preferred Stock
the Corporation shall give written notice thereof to each holder of such
shares to be redeemed; not less than ten nor more than thirty days prior
to the date fixed for such redemption specifying (i) such redemption date,
(ii) the aggregate number of such shares to be redeemed on such date,
(iii) the number of shares held by the holder to be so redeemed, and (iv)
the redemption price per share. Such notice shall be given by first class
mail, postage prepaid, directed to each holder of such shares of such
class at the last address of such holder appearing upon the books of the
Corporation.
In connection with any redemption of shares of any class of
Preferred Stock, the redemption payment shall be payable only upon
surrender of the certificates for the shares to be redeemed. If less than
all of the shares represented by a surrendered certificate are to be
redeemed, the Corporation will forthwith issue one or more certificates
evidencing the shares which shall not have been so redeemed.
5. Liquidation. Upon any voluntary or involuntary liquidation,
dissolution or winding up of the business and affairs of the Corporation,
the holders of the Preferred Stock then outstanding shall be entitled to
receive payment of the Liquidation Price of $1,000 per share, plus any
accrued and unpaid dividends at the rate of $80 per share per year from
the last date to which such dividends have been paid before the holders of
any other stock of the Corporation ranking junior to the Preferred Stock
in respect of payment upon such liquidation, dissolution or winding up
shall be entitled to any payment on account of such shares.
After receipt of such payment, the holders of shares of Preferred
Stock shall not be entitled to participate on account thereof in any
further distribution made to the holders of the capital stock of the
Corporation. If upon any liquidation, dissolution or winding up, the
Corporation shall have insufficient funds to permit payment to the holders
of the Preferred Stock then outstanding of the entire
3
<PAGE>
payment required by the preceding paragraph, such funds of the Corporation
as are available for such payment shall be distributed among such holders
on the basis of the number of shares of Preferred Stock held by each such
holder so that, as nearly as may be practicable, the amount each such
holder shall receive represents the same proportion of such funds as such
holder's total holdings of shares of Preferred Stock represents of the
total number of shares of Preferred Stock at the time outstanding.
6. Voting. The holders of Preferred Stock shall not have rights as
to any matter whatever.
DIVISION B - COMMON STOCK
1. Designation. The 1,000 shares of Common Stock shall be designated
"Common Stock".
2. Dividends. So long as no dividends on the Preferred Stock shall
be accrued and unpaid, the holders of Common Stock shall be entitled to
receive such dividends as may be declared thereon by the Board of
Directors of the Corporation in its discretion out of any funds or assets
of the Corporation lawfully available for the payment of such dividends.
3. Distribution of Assets. In the event of any liquidation,
dissolution or winding up of the Corporation, or any reduction of its
capital, resulting in a distribution of its assets to stockholders,
whether voluntary or involuntary, then, after there shall have been paid
or set apart for the holders of the Preferred Stock the full preferential
amounts to which they are entitled, the holders of the Common Stock shall
be entitled to receive as a class, pro rata, all of the remaining assets
of the Corporation available for distribution to its stockholders.
4. Voting Power. The holders of the Common Stock shall possess
exclusive voting power for the election of directors and for all other
purposes and each holder thereof shall be entitled to one vote for each
share thereof.
DIVISION C - GENERAL PROVISIONS
No holder of any of the shares of the stock or options, warrants or
other rights to purchase stock or
4
<PAGE>
of other securities of the Corporation, shall be entitled as of right to
purchase or subscribe for any unissued stock of any class or any
additional shares of any class to be issued by reason of any increase in
authorized capital stock of the Corporation of any class, or certificates
of indebtedness, debentures or other securities convertible into or
exchangeable for stock of the Corporation of any class, or carrying any
right to purchase stock of any class, but any such unissued stock,
additional authorized issue of any stock or securities convertible into or
exchangeable for stock or carrying any right to purchase stock, may be
issued and disposed of pursuant to resolution of the Board of Directors to
such persons, firms, corporations or associations, whether such holders or
others, and upon such terms, as may be deemed advisable by the Board of
Directors in the exercise of its sole discretion."
5. Said amendments were authorized by the unanimous written consent of all
of the members of the board of Directors of the Corporation and the unanimous
written consent of the holders of all of the shares of the Corporation entitled
to vote thereon.
IN WITNESS WHEREOF, we have executed this certificate this 31 day of
March, 1994 and affirm that the foregoing statements are true under the
penalties of perjury.
/s/ [ILLEGIBLE] ---------
---------------------------- Approved
President [ILLEGIBLE] /s/ LNF
St. Joe Minerals Corporation Law Dept.
---------
/s/ Larry N. Fisher
----------------------------
Secretary - Larry N. Fisher
St. Joe Minerals Corporation
5
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
ST. JOE MINERALS CORPORATION
Pursuant to Section 805 of the Business Corporation Law
6 cc's
STATE OF NEW YORK
DEPARTMENT OF STATE
FILED APR 04 1994
TAX $ 1250.00
BY: JAN
Filed on behalf of: S. Schall Watts
Senior Legal Assistant
Fluor Daniel, Inc.
3333 Michelson Dr., Suite 330D
Irvine, CA 92730
6
<PAGE>
Certificate of Change
of
THE DOE RUN RESOURCES CORPORATION
(Under Section 805-A of the Business Corporation Law)
FIRST: The name of the corporation (the "corporation") is THE DOE RUN
RESOURCES CORPORATION
SECOND: The certificate of incorporation of the corporation was filed by
the Department of State on 04-02-81
Under the original name of
FLUOR ACQUISITION CORPORATION
THIRD: The certificate of incorporation of the corporation is hereby
changed, so as to change the post office address to which the Secretary of State
of New York shall mail a copy of process against the corporation served upon him
and to change the address of the registered agent; and to accomplish said
changes, the statements in the certificate of incorporation relating to said
post office address and the designation of registered agent are hereby stricken
and the following statements are substituted in lieu thereof:
"The post office address within the State of New York to which the
Secretary of State of New York shall mail a copy of any process against
the corporation served upon him is c/o
THE PRENTICE-HALL CORPORATION SYSTEM, INC.
500 Central Avenue Albany, New York 12206-2290"
"The name and address of the registered agent of the corporation are THE
PRENTICE-HALL CORPORATION SYSTEM, INC. 500 Central Avenue Albany, New York
12206-2290. Said registered agent is to be the agent upon which process
against the corporation may be served."
FOURTH: A notice of the proposed changes was mailed by the undersigned to
the corporation not less than 30 days prior to the date of the delivery of this
certificate to the of Department of State and the corporation has not objected
thereto. The person signing this certificate is the agent of the corporation to
whose address the Secretary of the State of New York is required to mail copies
of process and the registered agent of the corporation.
IN WITNESS WHEREOF, we have subscribed this document on the date set forth
below and do hereby affirm, under the penalties of perjury, that the statements
contained therein have been examined by us and are true and correct.
Date: February 1, 1995
THE PRENTICE-HALL CORPORATION SYSTEM, INC.
/s/ Dennis Howarth
--------------------------------------
Dennis Howarth, Vice President
/s/ Richard L. Kushay
--------------------------------------
Richard L. Kushay, Asst. Secretary
1
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STATE OF NEW YORK
DEPARTMENT OF STATE
FILED MAR 13 1995
TAX $
BY: EJB
NEW YORK
CERTIFICATE OF CHANGE
of
THE DOE RUN RESOURCES CORPORATION
(Under Section 805-A of the Business Corporation Law)
Margaret Timmins
THE PRENTICE-HALL CORPORATION SYSTEM, INC.
375 Hudson Street, 11th Floor
New York, New York 10014-3660
2
<PAGE>
Certificate of Change
of
THE DOE RUN RESOURCES CORPORATION
(Under Section 805-A of the Business Corporation Law)
FIRST: The name of the corporation (the "corporation") is
THE DOE RUN RESOURCES CORPORATION
The name under which the corporation was formed is
FLUOR ACQUISITION CORPORATION
SECOND: The certificate of incorporation of the corporation was filed by
the Department of State on
04 02 1981
THIRD: The certificate of incorporation of the corporation is hereby
changed, so as to change the post office address to which the Secretary of State
of New York shall mail a copy of any process against the corporation served upon
said Secretary of State and to change the address of the registered agent; and
to accomplish said changes, the statements in the certificate of incorporation
relating to said post office address and the designation of registered agent are
hereby stricken and the following statements are substituted in lieu thereof:
"The post office address within the State of New York to which the
Secretary of State of New York shall mail a copy of any process against
the corporation served upon him is
c/o THE PRENTICE-HALL CORPORATION SYSTEM, INC.
80 State Street, Albany, New York 12207"
"The name and the address of the registered agent of the corporation are
THE PRENTICE-HALL CORPORATION SYSTEM, INC.
80 State Street, Albany, New York 12207 Said registered agent is to be the
agent upon which process against the corporation may be served."
FOURTH: A notice of the proposed changes was mailed by the undersigned to
the corporation not less than 30 days prior to the date of the delivery of this
certificate to the Department of State and the corporation has not objected
thereto. The person signing this certificate is the agent of the corporation to
whose address the Secretary of State of New York is required to mail copies of
process and the registered agent of the corporation.
IN WITNESS WHEREOF, we have subscribed this document on the date set forth
below and do hereby affirm, under the penalties of perjury, that the statements
contained therein have been examined by us and are true and correct.
Date: March 3, 1997
THE PRENTICE-HALL CORPORATION SYSTEM, INC.
/s/ William G. Popeo
William G. Popeo, Vice President
/s/ John H. Pelletier
John H. Pelletier, Asst. Secretary
1
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STATE OF NEW YORK
DEPARTMENT OF STATE
FILED [ILLEGIBLE]
TAX $
BY: WST
NY
CERTIFICATE OF CHANGE
of
THE DOE RUN RESOURCES CORPORATION
(Under Section 805-A of the Business Corporation Law)
Anne [ILLEGIBLE]
THE PRENTICE-HALL CORPORATION SYSTEM, INC.
375 Hudson Street, 11th Floor
New York, New York 10014
2
<PAGE>
Exhibit 3.2
AMENDED AND RESTATED BY-LAWS
OF
THE DOE RUN RESOURCES CORPORATION
(a New York corporation)
ARTICLE I
OFFICES
Section 1.01 Registered and Principal Executive Offices
The registered office in the State of New York and the principal
executive office of the Corporation shall be located in the City of New York,
County of New York.
Section 1.02 Other Offices
The Corporation may also have offices at such other places within
and without the State of New York as the Board of Directors (the "Board") may
from time to time determine or the business of the Corporation may require. (BCL
102(a)(10))
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 2.01 Annual Meeting
The annual meeting of shareholders for the purpose of electing
Directors and for the transaction of such other business as may be brought
before the meeting shall be held at the principal executive office of the
Corporation at 9:30 o'clock a.m. on the second Monday in March of each year (or
if such day is a legal holiday, then on the next business day following) or at
such other time and on such other day or at such other place within or without
the State of New York as may be fixed in writing, or by vote, by the Board. (BCL
602(a) & (b))
Section 2.02 Special Meetings
Special meetings of the shareholders shall be held at the principal
executive office of the Corporation (or at such other place within or without
the State of New York as may be fixed in the call of the meeting) and may be
called by the Board, by the Chairman of the Board, if any, by the President, or
by the holders of a majority of the outstanding shares of the Corporation
entitled to vote for the election of Directors. (BCL 602(c))
Section 2.03 Notice of Meeting
Written notice of the place, date and hour of each meeting of the
shareholders shall be given to each shareholder entitled to vote at such
meeting, or otherwise entitled by law to notice thereof, not less than 10 or
more than 50 days before the meeting. Notice of any
<PAGE>
special meeting shall also state the purposes for which the meeting is called
and shall indicate that the notice is being issued by or at the direction of the
person or persons calling the meeting. A copy of the notice of any meeting of
shareholders shall be mailed to each shareholder entitled to vote at such
meeting, directed to him at his address as it appears on the record of
shareholders unless he shall have filed with the Secretary a written request
that notices intended for him be mailed to some other address, in which case it
shall be mailed to the address designated in such request. (BCL 615)
Section 2.04 Written Consent in Lieu of Meeting
Any action required or permitted to be taken by vote of the
shareholders may be taken without a meeting if all the holders of record of
outstanding shares who would have been entitled to vote upon the action if such
meeting were held shall consent in writing to the specific corporate action
being taken and such written consent is filed in the minute book of the
Corporation. (BCL 615)
ARTICLE III
DIRECTORS
Section 3.01 Powers
The Board shall have the general control and management of the
property and business of the Corporation. (BCL 701)
Section 3.02 Number and Qualification
The number of Directors of the Corporation shall be one or as fixed
from time to time by amendment of this Section 3.02 duly adopted by the
shareholders. Each Director shall be at least 18 years of age but need not be a
resident of the State of New York or a shareholder of the Corporation. (BCL 701
& 702)
Section 3.03 Election and Term of Office
The Directors, other than the first Board, shall be elected at the
annual meeting of shareholders. Each Director (whether elected at an annual
meeting, or to fill a vacancy or newly created directorship or otherwise) shall
serve until the next annual meeting of shareholders and until his successor has
been duly elected and qualified, or until his prior resignation, death or
removal. The first Board shall hold office until the first annual meeting of
shareholders. (BCL 614(a), 701, 702 & 703)
Section 3.04 Resignation
Any Director may resign at any time by giving written notice to the
Board. Such resignation shall take effect at the time specified therein or, if
not so specified, upon receipt thereof by the Board.
2
<PAGE>
Section 3.05 Removal
Any or all of the Directors may be removed, with or without cause,
at any time, by the shareholders at a special meeting called for that purpose,
unless otherwise prescribed by law or by the Certificate of Incorporation.
Any Director may be removed for cause by action of the Board at a
special meeting called for that purpose, unless otherwise prescribed by law or
by the Certificate of Incorporation. (BCL 706)
Section 3.06 Vacancies
Newly created directorships resulting from an increase in the number
of Directors and all vacancies occurring in the Board, including vacancies
caused by removal with or without cause, shall be filled, subject to action of
the shareholders with respect to vacancies caused by removal described
hereinafter, by the affirmative vote of a majority of the remaining Directors,
though less than a quorum of the Board. If death, resignation or removal of a
Director or Directors results in there being no remaining Directors or if the
remaining Directors are unable to fill a vacancy or vacancies by majority vote,
the vacancies shall be filled by election at a special meeting of the
shareholders called for that purpose.
Notwithstanding any other provision of this Section 3.06, any
vacancy in the Board resulting from removal with or without cause by the
shareholders at a special meeting called for that purpose may be filled at such
meeting by the shareholders, provided that, in the event the shareholders do not
fill such vacancy, it shall be filled by the Board as provided in this Section
3.06. (BCL 705)
Section 3.07 Annual and Regular Meetings
An annual meeting of the Board for the election of officers and
committees and for the transaction of any other business shall be held
immediately following the annual meeting of shareholders.
Regular meetings of the Board may be held without notice at such
times and places as may be fixed by the Board. (BCL 710 & 711)
Section 3.08 Special Meetings
Special meetings of the Board shall be held whenever called at the
direction of the Chairman of the Board, if any, or the President or any three of
the Directors. Notice of the time and place of each special meeting of the Board
shall be given to each Director, at least twenty-four hours prior to the date of
such meeting, personally or by telegram, cable or telephone. (BCL 710 & 711)
3
<PAGE>
Section 3.09 Presiding Officer
At all meetings of the Board, the Chairman of the Board, if any, or,
in his absence, the President or, in his absence, a chairman chosen by the
Board, shall preside.
Section 3.10 Meeting by Conference Call
At any meeting of the Board or any committee of the Board, any one
or more of the members thereof may participate in such meeting by means of a
conference telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time. Participation
by such means shall constitute presence in person at such meeting. (BCL 708 (c))
Section 3.11 Written Consent in Lieu of Meeting
Any action required or permitted to be taken by the Board or any
committee of the Board may be taken without a meeting if a written consent to
such action is signed by all the Directors or members of such committee, as the
case may be, and such written consent is filed with the minutes of the Board of
such committee. (BCL 708 (b))
Section 3.12 Board Committees
The Board, by resolution adopted by a majority of its members, may
designate, from among its members, committees of the Board, each consisting of
three or more Directors. Each such committee shall serve at the pleasure of the
Board and each member of such committee shall hold office until the next annual
meeting of the Board or until he shall cease to be a Director, or until his
death, resignation or removal, or until the Board shall dissolve the committee.
Each such committee shall have all the authority of the Board to the extent
provided in the resolution designating it, except that no such committee shall
have the authority as to the matters enumerated in Section 712(a) of the New
York Business Corporation Law as from time to time amended and as otherwise
required by law. Any member of any such committee may be removed at any time,
with or without cause, by the vote of a majority of the entire Board at any
regular or special meeting of the Board. Vacancies in the membership of a
committee shall be filled by the Board at a regular or special meeting of the
Board by the vote of a majority of the entire Board. One or more Directors may
be designated by a majority vote of the entire Board to serve as alternate
members of any such committee who may replace any absent member or members of
any such committee. Each such committee shall keep regular minutes of its
proceedings and report the same to the Board. Any such committee may adopt any
rules or regulations as to the frequency, calling, notice, adjournment or
conduct of its meetings as are not inconsistent with law, the Certificate of
Incorporation, these By-Laws or any resolution duly adopted by the Board. (BCL
712)
Section 3.13 Other Committees
The Board may from time to time appoint other committees which shall
have such membership and such authority and duties as provided in the resolution
designating it,
4
<PAGE>
except as otherwise required by law. Any such committee may elect its own
chairman and other officers and may adopt any rules or regulations as to the
frequency, calling, notice, adjournment or conduct of its meetings as are not
inconsistent with law, the Certificate of Incorporation, these By-Laws or any
resolution duly adopted by the Board. Each such committee shall serve at the
pleasure of the Board and each member of such committee shall serve until the
next annual meeting of the Board or until he shall cease to be a committee
member, or until his death, resignation or removal, or until the Board shall
dissolve the committee.
Section 3.14 Quorum and Voting
A majority of the entire Board or of the members of any committee of
the Board shall constitute a quorum for the transaction of business at any
meeting of the Board or of any committee of the Board, respectively, unless
otherwise provided by law or the Certificate of Incorporation or these By-Laws,
but if a quorum be not present, a majority of the members present may from time
to time adjourn any such meeting until a quorum shall be present, and the
meeting may be held as adjourned without further notice. If a quorum be present
at any meeting, the vote of a majority of the Directors, or members of the
committee, as the case may be, present shall constitute the act of the Board or
committee, except as otherwise provided by law or the Certificate of
Incorporation or these By-Laws. (BCL 707, 708 & 711 (d))
Section 3.15 Compensation
For attendance at any meeting of the Board of Directors, or of any
committee, every Director, other than a salaried officer of the Corporation or
an affiliate of the Corporation, shall receive such compensation as may be fixed
by the Board. (BCL 202(a) (10), 713)
ARTICLE IV
OFFICERS
Section 4.01 Officers
The officers of the Corporation shall be a President, one or more
Vice Presidents, a Secretary and a Treasurer, all of whom shall be elected
annually by the Board at its annual meeting, and each such officer shall hold
office until the next annual meeting of the Board and until his successor has
been duly elected and qualified, or until his prior resignation, death or
removal. The Board may from time to time also elect a Chairman of the Board, an
Executive Vice President, a General Counsel and other officers, and such
officers shall serve at the pleasure of the Board. The Board shall at the annual
election of officers designate either the Chairman of the Board, if any, or the
President as chief executive officer, but shall be free to change such
designation from time to time at any regular or special meeting called for that
purpose.
5
<PAGE>
Section 4.02 Other Officers
The Board of Directors from time to time may elect or appoint (and
may remove) such other officers as it may deem advisable, each of whom shall
have such title, hold office for such period, have such power and perform such
duties as the Board of Directors from time to time may determine. (BCL 715)
Section 4.03 Vacancies
Vacancies among the officers may be filled by the Board of Directors
at any meeting of the Board. (BCL 715 & 716)
Section 4.04 Chairman of the Board
The Chairman of the Board, if any, shall preside at all meetings of
the Board of Directors and at all meetings of shareholders. He shall also have
such other powers and perform such other duties as from time to time may be
assigned to him by, and shall have supervision of such matters as from time to
time may be designated by, the Board of Directors.
Section 4.05 President
The President shall be responsible for the administration and
operations of the Corporation. In the absence or incapacity of the Chairman of
the Board, or if there is no such officer, he shall preside at meetings of the
Board of Directors and at meetings of shareholders and shall exercise all other
powers and duties of the Chairman of the Board. He shall also have such other
powers and perform such other duties as from time to time may be assigned to him
by the Board of Directors.
Section 4.06 Executive Vice President; Other Vice Presidents
The Executive Vice President, if any, shall assist the President in
the administration and operations of the Corporation. He shall also have such
other powers and perform such other duties as from time to time may be assigned
to him by the Board of Directors, the Chairman of the Board, if any, or the
President. In the absence or incapacity of the President, his powers and duties
shall be exercised by the Executive Vice President. Each other Vice President
shall have such powers and perform such duties as from time to time may be
assigned to him by the Board of Directors, the Chairman of the Board, if any,
the President or the Executive Vice President, if any.
Section 4.07 Treasurer
The Treasurer shall have the custody of all funds and securities of
the Corporation. He shall cause all funds of the Corporation to be deposited to
its credit in such bank or banks or depository as the Board of Directors may
designate. He shall cause to be entered regularly, in books of the Corporation
to be kept for the purpose, full and accurate
6
<PAGE>
account of all moneys received and paid on account of the Corporation; he shall
at all reasonable times during business hours exhibit the books and accounts to
any Director of the Corporation. He shall perform all acts incident to the
office of Treasurer and such other acts and duties as the Board of Directors,
the Chairman of the Board, if any, the President, or the Executive Vice
President, if any, may from time to time designate.
He shall give a bond for the faithful discharge of his duties in
such sums as the Board of Directors may require.
Section 4.08 Secretary
The Secretary shall keep the minutes of all meetings of the Board of
Directors, and the minutes of all meetings of the shareholders; he shall attend
to the giving and serving of all notices of the Corporation. He shall generally
perform all the duties incident to the office of the Secretary; and shall do and
perform such other acts and duties as the Board of Directors, the Chairman of
the Board, if any, the President, or the Executive Vice President, if any, may
from time to time designate.
Section 4.09 General Counsel
The General Counsel, if any, shall be the chief legal officer of the
Corporation and shall coordinate all legal matters relating to the Corporation.
He shall also have such other powers and perform such other duties as the Board
of Directors, the Chairman of the Board, if any, the President, or the Executive
Vice President, if any, may from time to time designate.
ARTICLE V
INDEMNIFICATION
Section 5.01 Actions by or in the Right of the Corporation
The Corporation shall indemnify any person, made a party to an
action by or in the right of the Corporation to procure a judgment in its favor,
by reason of the fact that he, his testator or intestate, is or was a Director
or officer of the Corporation, against the reasonable expenses, including
attorneys' fees, actually and necessarily incurred by him in connection with the
defense of such action, or in connection with an appeal therein, except in
relation to matters as to which such Director or officer is adjudged to have
breached his duty to the Corporation under Sections 715(h) or 717 of the New
York Business Corporation Law as from time to time amended. The indemnification
authorized under the foregoing sentence shall in no case include (a) amounts
paid in settling or otherwise disposing of a threatened action or a pending
action with or without court approval, or (b) expenses incurred in defending a
threatened action or a pending action which is settled or otherwise disposed of
without court approval. (BCL 722)
7
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Section 5.02 All Other Actions
The Corporation shall indemnify any person, made, or threatened to
be made, a party to an action or proceeding other than one by or in the right of
the Corporation to procure a judgment in its favor, whether civil or criminal,
including an action by or in the right of any other corporation of any type or
kind, domestic or foreign, or any partnership, joint venture, trust, employee
benefit plan or other enterprise, which any director or officer of the
Corporation served in any capacity at the request of the Corporation, by reason
of the fact that he, his testator or intestate, was a Director or officer of the
Corporation, or served such other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise in any capacity, against
judgments, fines, amounts paid in settlement and reasonable expenses, including
attorneys' fees, actually and necessarily incurred as a result of such action or
proceeding, or any appeal therein, if such Director or officer acted, in good
faith, for a purpose which he reasonably believed to be in or, in the case of
service for any other corporation or any partnership, joint venture, trust,
employee benefit plan or other enterprise, not opposed to, the best interests of
the Corporation and, in criminal actions or proceedings, in addition, had no
reasonable cause to believe that his conduct was unlawful. The termination of
any such civil or criminal action or proceeding by judgment, settlement,
conviction or upon a plea of nolo contendere, or its equivalent, shall not in
itself create a presumption that any such Director or officer did not act, in
good faith for a purpose which he reasonably believed to be in, or in the case
of service for any other corporation or any partnership, joint venture, trust,
employee benefit plan or other enterprise, not opposed to, the best interests of
the Corporation or that he had reasonable cause to believe that his conduct was
unlawful.
For the purpose of this Section 5.02, the Corporation shall be
deemed to have requested a person to serve an employee benefit plan where the
performance by such person of his duties to the Corporation also imposes duties
on, or otherwise involves services by, such person to the plan or participants
or beneficiaries of the plan; excise taxes assessed on a person with respect to
an employee benefit plan pursuant to applicable law shall be considered fines;
and action taken or omitted by a person with respect to an employee benefit plan
in the performance of such person's duties for a purpose reasonably believed by
such person to be in the interest of the participants and beneficiaries of the
plan shall be deemed to be for a purpose which is not opposed to the best
interests of the Corporation. (BCL 723)
Section 5.03 Payment of Indemnification
A person who has been wholly successful, on the merits or otherwise,
in the defense of a civil or criminal action or proceeding of the character
described in Section 5.01 or 5.02 of this Article shall be entitled to
indemnification as authorized in such sections. Except as provided in the
foregoing sentence, any indemnification under Sections 5.01 or 5.02 of this
Article unless ordered by a court under Section 725 of the New York Business
Corporation Law, as from time to time amended, shall be made by the Corporation
only if authorized in the specific case: (1) by the Board acting by a quorum
consisting of Directors who are not parties to such action or proceeding upon a
finding that the Director or officer has met the standard of conduct set forth
in Sections 5.01 or 5.02 of this Article, as the case may be, or
8
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(2) if a quorum under the foregoing clause (1) is not obtainable with due
diligence, (a) by the Board upon the opinion in writing of independent legal
counsel that indemnification is proper in the circumstances because the
applicable standard of conduct set forth in such Sections 5.01 or 5.02 of this
Article has been met by such Director or officer, or (b) by the shareholders
upon a finding that the Director or officer has met the applicable standard of
conduct set forth in Sections 5.01 or 5.02 of this Article has been met by such
Director or officer, or (b) by the shareholders upon a finding that the Director
or officer has met the applicable standard of conduct set forth in Sections 5.01
or 5.02 of this Article. Expenses incurred in defending a civil or criminal
action or proceeding may be paid by the Corporation in advance of the final
disposition of such action or proceeding if authorized under the immediately
preceding sentence of this Section 5.03 and under Section 724 of the New York
Business Corporation Law as from time to time amended. (BCL 724)
Section 5.04 Other Indemnification Provisions
The other and further provisions affecting indemnification of
Directors and officers which are set forth in Section 726 of the New York
Business Corporation Law, as from time to time amended, shall be applicable to
the foregoing sections of this Article.
ARTICLE VI
FISCAL YEAR
The fiscal year of the Corporation shall end on the 31st day of
October of each calendar year.
ARTICLE VII
EXECUTION OF INSTRUMENTS
Subject to any limitation contained in the Certificate of
Incorporation or in these By-Laws, the Chairman of the Board, if any, the
President, any Executive Vice President or any Vice President may enter into any
contract or execute and deliver any instrument in the name and on behalf of the
Corporation. The Board of Directors may authorize any other officer or agent to
enter into any contract or execute and deliver any instrument in the name and on
behalf of the Corporation. Any such authorization may be general or confined to
specific instances. (BCL 715 (g))
ARTICLE VIII
AMENDMENTS
These By-Laws may be amended and restated or repealed, and further
By-Laws may be adopted, by and only by the shareholders at any annual meeting or
special meeting called for that purpose.
9
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Exhibit 3.3
CERTIFICATE OF INCORPORATION
OF
* * * * *
1. The name of the corporation is:
FABRICATED PRODUCTS, INC.
2. The address of its registered office in the State of Delaware is Corporation
Trust Center, 1209 Orange Street, in the City of Wilmington, County of New
Castle. The name of its registered agent at such address is The Corporation
Trust Company.
3. The nature of the business or purposes to be conducted or promoted is to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of Delaware.
4. The total number of shares of stock which the corporation shall have
authority to issue is One Thousand (1,000) and the par value of each such shares
is One Dollar ($1.00) amounting to the aggregate to One Thousand Dollars
($1,000).
5. The name and mailing address of the sole incorporator is as follows:
NAME MAILING ADDRESS
---- ---------------
Dennis A. Sadlowski The Renco Group, Inc.
30 Rockefeller Plaza - 42nd Floor
New York, NY 11012
6. The corporation is to have perpetual existence.
7. In furtherance and not in limitation of the powers conferred by statute, the
board of directors is expressly authorized to make, alter or repeal the by-laws
of the corporation.
8. Elections of directors need not be by written ballot unless the by-laws of
the corporation shall so provided.
Meetings of stockholders may be held within or without the State of
Delaware, as the by-laws may provide. The books of the corporation may be kept
(subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
board of directors or in the by-laws of the corporation.
<PAGE>
-2-
9. The corporation reserves the right to amend, alter, change or repeal any
provision contained in this Certificate of Incorporation, in the manner now or
hereafter prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.
10. A director of the corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director except for liability (i) for any breach of the director's
duty of loyalty to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the director derived any improper
personal benefit.
I, THE UNDERSIGNED, being the sole incorporator hereinbefore named, for
the purpose of forming a corporation pursuant to the General Corporation Law of
the State of Delaware, do make this Certificate, hereby declaring and certifying
that this is only act and deed and the facts herein stated are true, and
accordingly have hereunto set our hands this day of August 22, 1996.
/s/ Dennis A. Sadlowski
-----------------------
Dennis A. Sadlowski
<PAGE>
Exhibit 3.4
BYLAWS
OF
FABRICATED PRODUCTS, INC.
A Delaware Corporation
ARTICLE I
Offices
1. Registered Office. The registered office of the corporation within the
State of Delaware shall be in the City of Wilmington, County of New Castle.
2. Other Offices. The corporation may have other offices either within or
outside the State of Delaware.
ARTICLE II
Stockholders
1. Annual Meeting. The annual meeting of stockholders shall be held each
year at such time and place as is designated by the board of directors. The
purpose of the meeting shall be to elect directors and transact any other proper
business.
2. Special Meetings. A special meeting of stockholders may be called at
any time by the board of directors, by the president, or upon written request by
the holders of at least 25% of the stock entitled to vote with respect to the
business to be transacted at the meeting. No business or corporate actions shall
be taken at a special meeting other than those stated in the notice of the
meeting.
3. Notice of Meetings. At least 10 days and not more than 60 days before
any meeting of stockholders, written notice stating the time and place of the
meeting, and also its purpose in the case of a special meeting, shall be
delivered personally to, or mailed with postage prepaid to the last known
address of, each stockholder of record entitled to vote at the meeting.
If a meeting is adjourned to another time or place, notice of the
adjourned meeting must be given to all the stockholders entitled to vote at the
adjourned meeting if (i) the adjournment is for more than 30 days, (ii) a new
record date is fixed for the adjourned meeting, or (iii) the time and place of
the adjourned meeting are not announced at the
<PAGE>
meeting at which the adjournment is taken. The stockholders may transact any
business at the adjourned meeting which could have been transacted at the
original meeting.
4. Waiver of Notice. A stockholder may waive notice of any or all meetings
by delivering to the corporation a written waiver signed by such person. The
stockholder may deliver the waiver before, after, or at the time when it is
stated to be effective.
The attendance of a stockholder at any meeting shall be deemed a waiver of
notice of the meeting by such person, unless the attendance is only for the
purpose of objecting that the meeting was unlawfu1ly convened and the person so
objects at the start of the meeting.
5. Quorum. A majority of the shares entitled to vote, either present in
person or represented by proxy, shall constitute a quorum for the transaction of
any business at a meeting of stockholders.
6. Voting. Each share of stock shall entitle the holder of record to one
vote. With respect to matters other than the election of directors, the vote of
a majority of the shares present in person or represented by proxy shall prevail
and be considered an act of the stockholders. A plurality of the same shall be
sufficient for the election of directors.
7. Representation by Proxy. Any stockholder may authorize another person
or persons to act for it by proxy in all matters in which the stockholder is
entitled to participate. The proxy shall be in writing, dated, and signed by the
stockholder or its authorized agent. The proxy shall be valid, unless sooner
revoked, until the expiration of the period stated in the proxy, or until 3
years after the date of the proxy if no period is stated. A proxy shall be
irrevocable if it so states, but only if and so long as it is coupled with an
interest in the stock itself or the corporation in general.
8. Action by Consent. Any action required or permitted to be taken at a
meeting of stockholders may be taken without a meeting and without prior notice
if a sufficient number of stockholders deliver to the corporation, within a
60-day period, properly executed written consents to the action. A consent shall
be properly executed if it is signed by the stockholder, bears the date of
signature, and sets forth the action taken. The number of stockholders which is
sufficient for this purpose shall be any number which represents at least the
minimum number of votes that would be required were the action to be taken at a
meeting at which all the shares entitled to vote on the matter were present and
voted. Any action taken as described in this paragraph has the same effect as
an action taken at a duly called and convened meeting of Stockholders.
9. Record Date. The record date for determining the stockholders entitled
to notice of or to vote at any meeting of stockholders shall be determined in
accordance with Article V, paragraph 5.
10. List of Stockholders. At least 10 days before any meeting of
stockholders, the secretary shall make a list of all stockholders entitled to
vote at the meeting, arranged in
2
<PAGE>
alphabetical order and showing each stockholder's address and the number of
shares registered in such person's name. The secretary shall make the 1ist
available for the inspection of any stockholder for purposes germane to the
meeting, for a period of at least 10 days prior to the meeting, during ordinary
business hours, and at a place within the city where the meeting is to be held
which is specified in the notice of the meeting. The list shall also be produced
at the meeting and made available for inspection then by any stockholder who is
present.
ARTICLE III
Board of Directors
1. General Powers. Subject to any limitations in the certificate of
incorporation, the board of directors shall manage and direct the business and
affairs of the corporation. The board of directors shall have the authority to
fix the compensation of its members.
2. Number, Election, and Term of Office. The board of directors shall
consist of one person. Directors shall be elected at the annual meeting of
stockholders for a term of one year, and shall hold office until their
successors are elected and qualify, or until their death, resignation, or
removal as provided in these bylaws.
3. Vacancies. Any vacancy in the board of directors occurring by
resignation, removal, or otherwise may be filled by the vote of a majority of
the remaining directors, though less than a quorum; or by the stockholders at
their next annual meeting or a special meeting. Each director so elected shall
hold office until his or her successor is elected and qualified.
4. Resignations. Any director may resign at any time by giving written
notice to the corporation. Resignation shall take effect immediately upon
receipt of the notice, or at such other time as is specified in the notice.
Unless required by the notice, acceptance of the resignation is not needed to
make it effective.
5. Removal of Directors. Except as may otherwise be required by statute,
any director or the entire board of directors may be removed, with or without
cause, by the holders of a majority of the outstanding stock of the corporation.
6. Annual and Other Regular Meetings. The board of directors shall meet as
soon as practicable after the annual meeting of stockholders. The board shall
also hold other regular meetings at the times and places determined from time to
time by the board. Notice of annual and other regular meetings need not be given
to the directors.
7. Special Meetings. Special meetings of the board of directors may be
called by the president or by any director. Written, oral, or any other mode of
notice of the time and place of special meetings shall be given at least 48
hours prior to any such meeting.
3
<PAGE>
8. Quorum, Voting, and Manner of Acting. A majority of the directors in
office shall constitute a quorum for the transaction of business. Except as
otherwise provided in these bylaws, the act of a majority of the directors
present shall be the action of the board of directors. The directors shall act
only as a board, and the individual directors shall have no power as such.
9. Action by Consent. Any action required or permitted to be taken by the
board of directors may be taken without a meeting if all the directors consent
to the action in writing, and the writing is filed with the minutes of the board
of directors.
10. Telephonic Meeting. Any member of the board of directors may
participate in a meeting of the board of directors by means of a conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other.
11. Committees. The board of directors may, by resolution passed by a
majority of the directors in office, designate 1 or more committees, each
committee to consist of 1 or more directors who shall serve at the pleasure of
the board.
(a) The board may designate 1 or more directors to act as alternate
members of any committee to replace any absent or disqualified member of a
committee. If a member is absent or disqualified and an alternate member
is not available, the members present at the meeting who are not
disqualified from voting may unanimously appoint (whether or not they
constitute a quorum) another member of the board of directors to act in
the place of the absent or disqualified member.
(b) The board of directors shall designate by resolution the extent
to which the powers and authority of the board may be exercised by a
committee; provided, however, that a committee shall not have the power to
(i) amend the certificate of incorporation: (ii) adopt an agreement of
merger or consolidation; (iii) recommend to the stockholders the sale,
lease, or exchange of all or substantially all the corporation's property
and assets; (iv) recommend to the stockholders a dissolution of the
corporation or a revocation of dissolution; (v) amend the bylaws or
certificate of incorporation; or (vi) declare a dividend, authorize an
issuance of stock, or adopt a certificate of ownership and merger.
(c) Paragraphs 6 through 10 of this Article III shall also apply to
committees.
4
<PAGE>
ARTICLE IV
Officers
1. Number and Qualifications. The board of directors shall appoint by
resolution the officers of the corporation, who shall consist of a president and
a secretary. Other officers, including a chairman of the board, one or more vice
presidents, and a treasurer may also be appointed by the board of directors from
time to time. Any person may hold two or more offices, and no officer except the
chairman of the board need also be a director. Each officer shall hold office
until his or her successor is duly elected and qualified, or until his or her
death, resignation, or removal. The board of directors shall have authority to
fix the compensation of all the officers of the corporation.
2. Duties. The duties of the officers shall be the duties usually imposed
upon such officials of corporations, the duties required by law, and the duties
assigned to them by the board of directors. The secretary or his or her delegate
shall record in writing all the proceedings of all meetings of stockholders,
directors, and committees of directors.
3. Assistant Officers. An officer may appoint one or more assistant
officers if so authorized by the board of directors.
4. Resignations. Any officer or assistant officer of the corporation may
resign at any time by giving written notice of resignation to the corporation.
Resignation shall take effect immediately upon receipt of the notice, or at such
other time as is specified in the notice. Unless required by the notice,
acceptance of the resignation is not needed to make it effective.
5. Removal. The board of directors may remove any officer or assistant
officer of the corporation at any time, with or without cause.
6. Vacancies. Any vacancies in office arising from death, resignation,
removal, or otherwise may be filled by the board of directors.
ARTICLE V
Capital Stock
1. Issuance or Sale by the Corporation. The capital stock of the
corporation shall not be issued or sold without authorization by the board of
directors. The board shall determine the price at which the corporation will
issue or sell its stock, the form of consideration to be paid, the manner of
payment, and the value of any consideration paid.
2. Certificates. Except as provided in paragraph 3 of this Article V,
shares of stock in the corporation shall be represented by certificates. Each
certificate shall set forth the number of shares registered in the stockholder's
name, and shall be signed in the name
5
<PAGE>
of the corporation by the chairman of the board, the president, or a vice
president, and also by the treasurer, the secretary, or an assistant secretary.
Any signature on a certificate may be a facsimile. If an officer who has signed
or whose facsimile signature has been placed upon a certificate shall cease to
hold such office before the certificate is issued, the corporation may
nonetheless issue the certificate with the same effect as if such person still
held the office at the date of issue.
3. Uncertificated Shares. The board of directors may provide by resolution
that any class or series of stock shall be uncertificated. Nonetheless, any
holder of uncertificated shares shall be entitled, upon demand, to have a
certificate specifying the information and prepared in accordance with
paragraph 2 of this Article V.
4. Transfers of Stock. Shares of stock in the corporation shall be
transferable or assignable only on the stock ledger of the corporation and only
upon presentation of proper evidence of succession, assignment, or authority to
transfer, accompanied with the certificate for the shares (if one was issued)
duly endorsed by the holder or its duly authorized attorney; provided, however,
that the corporation shall be entitled to recognize and enforce any lawful
restriction on transfer. The board of directors may appoint, or authorize any
officer to appoint, one or more transfer agents and one or more registrars.
5. Fixing the Record Date. For the purpose of determining the stockholders
entitled to:
(a) Notice of, or to vote at, any meeting of stockholders or any
adjournment of such a meeting;
(b) Express consent to corporate action in writing without a
meeting;
(c) Receive payment of any dividend or distribution, or allotment of
any rights;
(d) Exercise any rights in respect of any change, conversion, or
exchange of stock.
or for any other lawful purpose, the board of directors may fix in advance a
record date, which shall not be more than 60 days nor less than 10 days before
the date of such meeting, nor more than 60 days prior to any other action.
If the board of directors does not fix a record date with respect to any
meeting, the record date shall occur at the close of business on the day before
notice of the meeting is given, or at the close of business on the day prior to
the meeting if notice is waived. The record date applicable for any meeting
shall also apply to an adjournment of such meeting, unless the board of
directors fixes a new record date for the adjourned meeting.
6. Distribution. Subject to the provisions of statute and the certificate
of incorporation, the board of directors may declare distributions with respect
to the shares
6
<PAGE>
of stock of the corporation at any regular or special meeting, and may cause
them to be paid in cash, property, or shares of stock of the corporation.
7. Registered Stockholders. The corporation shall be entitled to recognize
the exclusive right of a person registered on its records as the owner of shares
of stock to receive dividends and to vote as such owner, and, except as
otherwise provided by the laws of Delaware, shall not be bound to recognize any
equitable or other claim to, or interest in, such share or shares of stock on
the part of any other person.
8. Lost, Destroyed, or Mutilated Certificates. The board of directors may
in its discretion authorize the issuance of one or more new stock certificates
in place of any certificate alleged to be lost, stolen, or destroyed. The board
may, however, require the holder or its representative to give the corporation a
bond sufficient to indemnify it against any claim which might be made against
the corporation on account of the alleged loss, theft, or destruction of the old
certificate or the issuance of the new certificate.
ARTICLE VI
Indemnification
1. General. The corporation shall indemnify every person who was or is a
party, or is or was threatened to be made a party, to any action, suit, or
proceeding, whether civil, criminal, administrative, or investigative, by reason
of the fact that he or she is or was a director, officer, employee, or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, employee benefit plan, or other enterprise, against expenses
(including attorneys' fees), judgments, fines, and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit, or
proceeding, to the fullest extent permitted by applicable law. Such
indemnification may, in the discretion of the board of directors, include
advances of the person's expenses in advance of final disposition of such
action, suit, or proceeding, subject to the provisions of any applicable
statute.
2. Rights Not Exclusive. The indemnification and advancement of expenses
provided by, or granted pursuant to, this Article VI shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any law, bylaw, agreement, vote of
stockholders or disinterested directors, or otherwise, both as to action in the
indemnified party's official capacity and as to action in another capacity while
holding such office.
3. Insurance. The corporation shall have the power to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee, or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise, against any
liability incurred by such person in such capacity, or arising out of
7
<PAGE>
such person's capacity, whether or not the corporation would have the power to
indemnify the person against the liability under the provisions of this Article
VI.
4. Definition of "corporation." For the purposes of this Article VI,
references to "the corporation" include any constituent corporation absorbed in
a consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its director, officers, employees,
and agents as well as the resulting or surviving corporation. As a result, any
person who is or was a director, officer, employee, or agent of such a
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise shall stand in the same
position under the provisions of this Article VI with respect to the resulting
or surviving corporation as he or she would if he or she had served the
resulting or surviving corporation in the same capacity.
5. Survival of Rights. The indemnification and advancement of expenses
provided by, or granted pursuant to, this Article VI shall continue as to a
person who has ceased to be a director, officer, employee, or agent and shall
inure to the benefit of the heirs, executors, and administrators of such a
person.
ARTICLE VII
Amendments
1. The power to adopt, amend, or repeal any provision of the bylaws is
vested in the stockholders of the corporation entitled to vote.
2. In accordance with the certificate of incorporation, the board of
directors is also empowered to adopt, amend, or repeal any provision of the
bylaws.
ARTICLE VIII
General Provisions
1. Checks, Notes, Drafts, etc. All checks, notes, drafts, or other orders
for the payment of money of the corporation shall be signed, endorsed, or
accepted in the name of the corporation by such officers or other persons as
front time to time are designated by the board of directors or an officer
authorized by the board of directors to make such designation.
2. Execution of Contracts, Deeds, etc. The board of directors may
authorize one or more officers or agents to enter into or execute and deliver,
in the name and on behalf of the corporation, any and all deeds, bonds,
mortgages, contracts, and other obligations or instruments. Such authority may
be general or confined to specific instances.
8
<PAGE>
3. Inspection of Books and Records. Any stockholder of record, upon making
written demand under oath stating the purpose of the demand, shall have the
right to inspect during normal business hours the corporation's stock ledger,
its list of stockholders and its other books and records, and to make copies of
the same, for any purpose reasonably related to such person's interest as a
stockholder.
4. Seal. The corporation may adopt a seal, which shall be in a form
approved by the board of directors.
5. Fiscal Year. The fiscal year of the corporation shall be the calendar
year, or otherwise as fixed by resolution of the board of directors.
9
<PAGE>
Exhibit 3.5
================================================================================
I, Sharon Pierson, a Notary Public in
and for the Cayman Islands, hereby
certify this document to be a true and
correct copy of the, original.
Date 9 March '98
---------------------------------
/s/ Sharon Pierson
CR-76259
Certificate of Incorporation
I, ANTHONY IAN GODDARD Assistant Registrar of Companies of the Cayman Islands DO
HEREBY CERTIFY, pursuant to the Companies Law (Revised), that all the
requirements of the said Law in respect of registration were complied with by
DOE RUN CAYMAN LTD.
an Exempted Company incorporated in the Cayman Islands with Limited Liability
with effect from the 10th Day of September One Thousand Nine Hundred
Ninety-Seven
Given under my hand and Seal at George Town in the
Island of Grand Cayman this Tenth day of September
One Thousand Nine Hundred Ninety-Seven
/s/ Anthony Ian Goddard
Assistant Registrar
of Companies, Cayman Islands, B.W.I.
[SEAL] REGISTRAR OF COMPANIES
EXEMPTED
CAYMAN ISLANDS
================================================================================
<PAGE>
Exhibit 3.6
REGISTERED AND FILED
AS NO: 76259 THIS 10TH DAY
OF SEPTEMBER 1997
A. Goddard
----------------------------
ASST. REGISTRAR OF COMPANIES
CAYMAN ISLANDS
THE COMPANIES LAW (1995 REVISION)
COMPANY LIMITED BY SHARES
MEMORANDUM OF ASSOCIATION
OF
DOE RUN CAYMAN LTD.
1. The name of the Company is Doe Run Cayman Ltd.
2. The Registered Office of the Company shall be at the offices of Maples and
Calder, Attorneys-at-Law, Ugland House, P.O. Box 309, South Church Street,
George Town, Grand Cayman, Cayman Islands, British West Indies or at such other
place as the Directors may from time to time decide.
3. The objects for which the Company is established are unrestricted and shall
include, but without limitation, the following:
(i) (a) To carry on the business of an investment company and to act as
promoters and entrepreneurs and to carry on business as financiers, capitalists,
concessionaires, merchants, brokers, traders, dealers, agents, importers and
exporters and to undertake and carry on and execute all kinds of investment,
financial, commercial, mercantile, trading and other operations.
(b) To carry on whether as principals, agents or otherwise howsoever the
business of realtors, developers, consultants, estate agents or managers,
builders, contractors, engineers, manufacturers, dealers in or vendors of all
types of property including services.
[SEAL]
REGISTRAR OF COMPANIES
EXEMPTED
CAYMAN ISLANDS
<PAGE>
-2-
(ii) To exercise and enforce all rights and powers conferred by or incidental to
the ownership of any shares, stock, obligations or other securities including
without prejudice to the generality of the foregoing all such powers of veto or
control as may be conferred by virtue of the holding by the Company of some
special proportion of the issued or nominal amount thereof, to provide
managerial and other executive, supervisory and consultant services for or in
relation to any company in which the Company is interested upon such terms as
may be thought fit.
(iii) To purchase or otherwise acquire, to sell, exchange, surrender, lease,
mortgage, charge, convert, turn to account, dispose of and deal with real and
personal property and rights of all kinds and, in particular, mortgages,
debentures, produce, concessions, options, contracts, patents, annuities,
licences, stocks, shares, bonds, policies, book debts, business concerns,
undertakings, claims, privileges and choses in action of all kinds.
(iv) To subscribe for, conditionally or unconditionally, to underwrite, issue on
commission or otherwise, take, hold, deal in and convert stocks, shares and
securities of all kinds and to enter into partnership or into any arrangement
for sharing profits, reciprocal concessions or cooperation with any person or
company and to promote and aid in promoting, to constitute, form or organise any
company, syndicate or partnership of any kind, for the purpose of acquiring and
undertaking any property and liabilities of the Company or of advancing,
directly or indirectly, the objects of the Company or for any other purpose
which the Company may think expedient.
(v) To stand surety for or to guarantee, support or secure the performance of
all or
<PAGE>
-3-
any of the obligations of any person, firm or company whether or not related or
affiliated to the Company in any manner and whether by personal covenant or by
mortgage, charge or lien upon the whole or any part of the undertaking, property
and assets of the Company, both present and future, including its uncalled
capital or by any such method and whether or not the Company shall receive
valuable consideration therefor.
(vi) To engage in or carry on any other lawful trade, business or enterprise
which may at any time appear to the Directors of the Company capable of being
conveniently carried on in conjunction with any of the aforementioned businesses
or activities or which may appear to the Directors or the Company likely to be
profitable to the Company.
In the interpretation of this Memorandum of Association in general and of this
Clause 3 in particular no object, business or power specified or mentioned shall
be limited or restricted by reference to or inference from any other object,
business or power, or the name of the Company, or by the juxtaposition of two or
more objects, businesses or powers and that, in the event of any ambiguity in
this clause or elsewhere in this Memorandum of Association, the same shall be
resolved by such interpretation and construction as will widen and enlarge and
not restrict the objects, businesses and powers of and exercisable by the
Company.
4. Except as prohibited or limited by the Companies Law (1995 Revision), the
Company shall have full power and authority to carry out any object and shall
have and be capable of from time to time and at all times exercising any and all
of the powers at any time or from time to time exercisable by a natural person
or body corporate in doing in any
<PAGE>
-4-
part of the world whether as principal, agent, contractor or otherwise whatever
may be considered by it necessary for the attainment of its objects and whatever
else may be considered by it as incidental or conducive thereto or consequential
thereon, including, but without in any way restricting the generality of the
foregoing, the power to make any alterations or amendments to this Memorandum of
Association and the Articles of Association of the Company considered necessary
or convenient in the manner set out in the Articles of Association of the
Company, and the power to do any of the following acts or things, viz:
to pay all expenses of and incidental to the promotion, formation and
incorporation of the Company; to register the Company to do business in any
other jurisdiction; to sell, lease or dispose of any property of the Company; to
draw, make, accept, endorse, discount, execute and issue promissory notes,
debentures, bills of exchange, bills of lading, warrants and other negotiable or
transferable instruments; to lend money or other assets and to act as
guarantors; to borrow or raise money on the security of the undertaking or on
all or any of the assets of the Company including uncalled capital or without
security; to invest monies of the Company in such manner as the Directors
determine; to promote other companies; to sell the undertaking of the Company
for cash or any other consideration; to distribute assets in specie to Members
of the Company; to make charitable or benevolent donations; to pay pensions or
gratuities or provide other benefits in cash or kind to Directors, officers,
employees, past or present and their families; to purchase Directors and
officers liability insurance and to carry on any trade or business and generally
to do all acts and things which, in the opinion of the
<PAGE>
-5-
Company or the Directors, may be conveniently or profitably or usefully acquired
and dealt with, carried on, executed or done by the Company in connection with
the business aforesaid PROVIDED THAT the Company shall only carry on the
businesses for which a licence is required under the laws of the Cayman Islands
when so licensed under the terms of such laws.
5. The liability of each Member is limited to the amount from time to time
unpaid on such Member's shares.
6. The share capital of the Company is US$50,000.00 divided into 50,000 shares
of a nominal or par value of US$1.00 each with power for the Company insofar as
is permitted by law, to redeem or purchase any of its shares and to increase or
reduce the said capital subject to the provisions of the Companies Law (1995
Revision) and the Articles of Association and to issue any part of its capital,
whether original, redeemed or increased with or without any preference, priority
or special privilege or subject to any postponement of rights or to any
conditions or restrictions and so that unless the conditions of issue shall
otherwise expressly declare every issue of shares whether declared to be
preference or otherwise shall be subject to the powers hereinbefore contained.
7. If the Company is registered as exempted, its operations will be carried on
subject to the provisions of Section 192 of the Companies Law (1995 Revision)
and, subject to the provisions of the Companies Law (1995 Revision) and the
Articles of Association, it shall have the power to register by way of
continuation as a body corporate limited by shares under the laws of any
jurisdiction outside the Cayman Islands and to be
<PAGE>
-6-
deregistered in the Cayman Islands.
WE the several persons whose names and addresses are subscribed are desirous of
being formed into a company in pursuance of this Memorandum of Association and
we respectively agree to take the number of shares in the capital of the Company
set opposite our respective names.
<PAGE>
-7-
DATED the 10th day of September 1997
SIGNATURE and ADDRESS NUMBER OF SHARES
OF EACH SUBSCRIBER TAKEN BY EACH
- ------------------ -------------
/s/ Sophia Dilbert
- -------------------------------
Sophia Dilbert, Attorney-at-Law One
PO Box 309,
Grand Cayman
British West Indies
/s/ Nicola Melia
- -------------------------------
Nicola Melia, Attorney-at-Law One
PO Box 309,
Grand Cayman
British West Indies
/s/ Mary [Illegible]
- -------------------------------
Witness to the above signatures
PO Box 309,
Grand Cayman
British West Indies
[SEAL]
I, Sharon Pierson, a Notary
Public in and for the Cayman
Islands, hereby certify this
document to be a true and
correct copy of the original.
Date: 9 March 1998
------------------------------
/s/ Sharon Pierson
I, ANTHONY IAN GODDARD Asst. Registrar of Companies in and for the Cayman
Islands HEREBY CERTIFY that this is a true and correct copy of the Memorandum of
Association of this Company duly incorporated on the 10th day of September 1997.
Asst A. Goddard
-------------------------
REGISTRAR OF COMPANIES
[SEAL]
REGISTRAR OF COMPANIES
EXEMPTED
CAYMAN ISLANDS
sad/346452
<PAGE>
[CAYMAN ISLANDS STAMP]
THE COMPANIES LAW (1995 REVISION)
COMPANY LIMITED BY SHARES
ARTICLES OF ASSOCIATION
OF
DOE RUN CAYMAN LTD.
REGISTERED AND FILED
AS NO: 76259 THIS 10 DAY
OF SEPTEMBER 1997
/s/ A Goddard
--------------------
ASST. REGISTRAR OF COMPANIES
CAYMAN ISLANDS
1. In these Articles Table A in the Schedule to the Statute does not apply and,
unless there be something in the subject or context inconsistent therewith,
"Articles" means these Articles as originally framed or
as from time to time altered by Special
Resolution.
"Auditors" means the persons for the time being
performing the duties of auditors of the
Company.
"Company" means the above-named Company.
"debenture" means debenture stock, mortgages, bonds and
any other such securities of the Company
whether constituting a charge on the assets
of the Company or not.
"Directors" means the directors for the time being of
the Company.
"dividend" includes bonus.
"Member" shall bear the meaning as ascribed to it in
the Statute.
"month" means calendar month.
"paid-up" means paid-up and/or credited as paid-up.
[SEAL]
<PAGE>
-2-
"registered office" means the registered office for the time
being of the Company.
"Seal" means the common seal of the Company and
includes every duplicate seal.
"Secretary" includes an Assistant Secretary and any
person appointed to perform the duties of
Secretary of the Company.
"share" includes a fraction of a share.
"Special Resolution" has the same meaning as in the Statute and
includes a resolution approved in writing as
described therein.
"Statute" means the Companies Law of the Cayman
Islands as amended and every statutory
modification or re-enactment thereof for the
time being in force.
"written" and "in writing" include all modes of representing or
reproducing words in visible form.
Words importing the singular number only include the plural number and
vice-versa.
Words importing the masculine gender only include the feminine gender.
Words importing persons only include corporations.
2. The business of the Company may be commenced as soon after incorporation as
the Directors shall see fit, notwithstanding that part only of the shares may
have been allotted.
3. The Directors may pay, out of the capital or any other monies of the Company,
all expenses incurred in or about the formation and establishment of the Company
including the expenses of registration.
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CERTIFICATES FOR SHARES
4. Certificates representing shares of the Company shall be in such form as
shall be determined by the Directors. Such certificates may be under Seal. All
certificates for shares shall be consecutively numbered or otherwise identified
and shall specify the shares to which they relate. The name and address of the
person to whom the shares represented thereby are issued, with the number of
shares and date of issue, shall be entered in the register of Members of the
Company. All certificates surrendered to the Company for transfer shall be
cancelled and no new certificate shall be issued until the former certificate
for a like number of shares shall have been surrendered and cancelled. The
Directors may authorise certificates to be issued with the seal and authorised
signature(s) affixed by some method or system of mechanical process.
5. Notwithstanding Article 4 of these Articles, if a share certificate be
defaced, lost or destroyed, it may be renewed on payment of a fee of one dollar
(US$1.00) or such less sum and on such terms (if any) as to evidence and
indemnity and the payment of the expenses incurred by the Company in
investigating evidence, as the Directors may prescribe.
ISSUE OF SHARES
6. Subject to the provisions, if any, in that behalf in the Memorandum of
Association and to any direction that may be given by the Company in general
meeting and without prejudice to any special rights previously conferred on the
holders of existing shares, the Directors may allot, issue, grant options over
or otherwise dispose of shares of the Company (including fractions of a share)
with or without preferred, deferred or other special rights or restrictions,
whether in regard to dividend, voting, return of capital or otherwise and to
such persons, at such times and on such other terms as they think proper.
7. The Company shall maintain a register of its Members and every person whose
name is entered as a Member in the register of Members shall be entitled without
payment to receive within two months after allotment or lodgement of transfer
(or within such other period as the conditions of issue shall provide) one
certificate for all his shares or several certificates each for one or more of
his shares upon payment of fifty cents (US$0.50) for every certificate after the
first or such less sum as the Directors shall from time to time determine
provided that in respect of a share or shares held jointly by several persons
the Company shall not be bound to issue more than one certificate and delivery
of a certificate for a share to one of the several joint holders shall be
sufficient delivery to all such holders.
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TRANSFER OF SHARES
8. The instrument of transfer of any share shall be in writing and shall be
executed by or on behalf of the transferor and the transferor shall be deemed to
remain the holder of a share until the name of the transferee is entered in the
register in respect thereof.
9. The Directors may in their absolute discretion decline to register any
transfer of shares without assigning any reason therefor. If the Directors
refuse to register a transfer they shall notify the transferee within two months
of such refusal.
10. The registration of transfers may be suspended at such time and for such
periods as the Directors may from time to time determine, provided always that
such registration shall not be suspended for more than forty-five days in any
year.
REDEEMABLE SHARES
11. (a) Subject to the provisions of the Statute and the Memorandum of
Association, shares may be issued on the terms that they are, or at the option
of the Company or the holder are, to be redeemed on such terms and in such
manner as the Company, before the issue of the shares, may by Special Resolution
determine.
(b) Subject to the provisions of the Statute and the Memorandum of
Association, the Company may purchase its own shares (including fractions of a
share), including any redeemable shares, provided that the manner of purchase
has first been authorised by the Company in general meeting and may make payment
therefor in any manner authorised by the Statute, including out of capital.
VARIATION OF RIGHTS OF SHARES
12. If at any time the share capital of the Company is divided into different
classes of shares, the rights attached to any class (unless otherwise provided
by the terms of issue of the shares of that class) may, whether or not the
Company is being wound-up, be varied with the consent in writing of the holders
of three-fourths of the issued shares of that class, or with the sanction of a
Special Resolution passed at a general meeting of the holders of the shares of
that class.
The provisions of these Articles relating to general meetings shall
apply to every such general meeting of the holders of one class of shares except
that the necessary quorum shall be one person holding or representing by proxy
at least one-third of the issued shares of
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the class and that any holder of shares of the class present in person or by
proxy may demand a poll.
13. The rights conferred upon the holders of the shares of any class issued with
preferred or other rights shall not, unless otherwise expressly provided by the
terms of issue of the shares of that class, be deemed to be varied by the
creation or issue of further shares ranking pari passu therewith.
COMMISSION ON SALE OF SHARES
14. The Company may in so far as the Statute from time to time permits pay a
commission to any person in consideration of his subscribing or agreeing to
subscribe whether absolutely or conditionally for any shares of the Company.
Such commissions may be satisfied by the payment of cash or the lodgement of
fully or partly paid-up shares or partly in one way and partly in the other. The
Company may also on any issue of shares pay such brokerage as may be lawful.
NON-RECOGNITION OF TRUSTS
15. No person shall be recognised by the Company as holding any share upon any
trust and the Company shall not be bound by or be compelled in any way to
recognise (even when having notice thereof) any equitable, contingent, future,
or partial interest in any share, or any interest in any fractional part of a
share, or (except only as is otherwise provided by these Articles or the
Statute) any other rights in respect of any share except an absolute right to
the entirety thereof in the registered holder.
LIEN ON SHARES
16. The Company shall have a first and paramount lien and charge on all shares
(whether fully paid-up or not) registered in the name of a Member (whether
solely or jointly with others) for all debts, liabilities or engagements to or
with the Company (whether presently payable or not) by such Member or his
estate, either alone or jointly with any other person, whether a Member or not,
but the Directors may at any time declare any share to be wholly or in part
exempt from the provisions of this Article. The registration of a transfer of
any such share shall operate as a waiver of the Company's lien (if any) thereon.
The Company's lien (if any) on a share shall extend to all dividends or other
monies payable in respect thereof.
17. The Company may sell, in such manner as the Directors think fit, any shares
on which the Company has a lien, but no sale shall be made unless a sum in
respect of which the lien exists is presently payable, nor until the expiration
of fourteen days after a notice in
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writing stating and demanding payment of such part of the amount in respect of
which the lien exists as is presently payable, has been given to the registered
holder or holders for the time being of the share, or the person, of which the
Company has notice, entitled thereto by reason of his death or bankruptcy.
18. To give effect to any such sale the Directors may authorise some person to
transfer the shares sold to the purchaser thereof. The purchaser shall be
registered as the holder of the shares comprised in any such transfer, and he
shall not be bound to see to the application of the purchase money, nor shall
his title to the shares be affected by any irregularity or invalidity in the
proceedings in reference to the sale.
19. The proceeds of such sale shall be received by the Company and applied in
payment of such part of the amount in respect of which the lien exists as is
presently payable and the residue, if any, shall (subject to a like lien for
sums not presently payable as existed upon the shares before the sale) be paid
to the person entitled to the shares at the date of the sale.
CALL ON SHARES
20. (a) The Directors may from time to time make calls upon the Members in
respect of any monies unpaid on their shares (whether on account of the nominal
value of the shares or by way of premium or otherwise) and not by the conditions
of allotment thereof made payable at fixed terms, provided that no call shall be
payable at less than one month from the date fixed for the payment of the last
preceding call, and each Member shall (subject to receiving at least fourteen
days notice specifying the time or times of payment) pay to the Company at the
time or times so specified the amount called on the shares. A call may be
revoked or postponed as the Directors may determine. A call may be made payable
by instalments.
(b) A call shall be deemed to have been made at the time when the
resolution of the Directors authorising such call was passed.
(c) The joint holders of a share shall be jointly and severally liable to
pay all calls in respect thereof.
21. If a sum called in respect of a share is not paid before or on a day
appointed for payment thereof, the persons from whom the sum is due shall pay
interest on the sum from the day appointed for payment thereof to the time of
actual payment at such rate not exceeding ten per cent per annum as the
Directors may determine, but the Directors shall be at liberty to waive payment
of such interest either wholly or in part.
22. Any sum which by the terms of issue of a share becomes payable on allotment
or at any fixed date, whether on account of the nominal value of the share or by
way of
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premium or otherwise, shall for the purposes of these Articles be deemed to be a
call duly made, notified and payable on the date on which by the terms of issue
the same becomes payable, and in the case of non-payment all the relevant
provisions of these Articles as to payment of interest forfeiture or otherwise
shall apply as if such sum had become payable by virtue of a call duly made and
notified.
23. The Directors may, on the issue of shares, differentiate between the holders
as to the amount of calls or interest to be paid and the times of payment.
24. (a) The Directors may, if they think fit, receive from any Member willing to
advance the same, all or any part of the monies uncalled and unpaid upon any
shares held by him, and upon all or any of the monies so advanced may (until the
same would but for such advances, become payable) pay interest at such rate not
exceeding (unless the Company in general meeting shall otherwise direct) seven
per cent per annum, as may be agreed upon between the Directors and the Member
paying such sum in advance.
(b) No such sum paid in advance of calls shall entitle the Member paying
such sum to any portion of a dividend declared in respect of any period prior to
the date upon which such sum would, but for such payment, become presently
payable.
FORFEITURE OF SHARES
25. (a) If a Member fails to pay any call or instalment of a call or to make any
payment required by the terms of issue on the day appointed for payment thereof,
the Directors may, at any time thereafter during such time as any part of the
call, instalment or payment remains unpaid, give notice requiring payment of so
much of the call, instalment or payment as is unpaid, together with any interest
which may have accrued and all expenses that have been incurred by the Company
by reason of such non-payment. Such notice shall name a day (not earlier than
the expiration of fourteen days from the date of giving of the notice) on or
before which the payment required by the notice is to be made, and shall state
that, in the event of non-payment at or before the time appointed the shares in
respect of which such notice was given will be liable to be forfeited.
(b) If the requirements of any such notice as aforesaid are not complied
with, any share in respect of which the notice has been given may at any time
thereafter, before the payment required by the notice has been made, be
forfeited by a resolution of the Directors to that effect. Such forfeiture shall
include all dividends declared in respect of the forfeited share and not
actually paid before the forfeiture.
(c) A forfeited share may be sold or otherwise disposed of on such terms
and in such manner as the Directors think fit and at any time before a sale or
disposition the forfeiture may be cancelled on such terms as the Directors think
fit.
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26. A person whose shares have been forfeited shall cease to be a Member in
respect of the forfeited shares, but shall, notwithstanding, remain liable to
pay to the Company all monies which, at the date of forfeiture were payable by
him to the Company in respect of the shares together with interest thereon, but
his liability shall cease if and when the Company shall have received payment in
full of all monies whenever payable in respect of the shares.
27. A certificate in writing under the hand of one Director or the Secretary of
the Company that a share in the Company has been duly forfeited on a date stated
in the declaration shall be conclusive evidence of the fact therein stated as
against all persons claiming to be entitled to the share. The Company may
receive the consideration given for the share on any sale or disposition thereof
and may execute a transfer of the share in favour of the person to whom the
share is sold or disposed of and he shall thereupon be registered as the holder
of the share and shall not be bound to see to the application of the purchase
money, if any, nor shall his title to the share be affected by any irregularity
or invalidity in the proceedings in reference to the forfeiture, sale or
disposal of the share.
28. The provisions of these Articles as to forfeiture shall apply in the case of
non-payment of any sum which, by the terms of issue of a share, becomes payable
at a fixed time, whether on account of the nominal value of the share or by way
of premium as if the same had been payable by virtue of a call duly made and
notified.
REGISTRATION OF EMPOWERING INSTRUMENTS
29. The Company shall be entitled to charge a fee not exceeding one dollar
(US$1.00) on the registration of every probate, letters of administration,
certificate of death or marriage, power of attorney, notice in lieu of
distringas, or other instrument.
TRANSMISSION OF SHARES
30. In case of the death of a Member, the survivor or survivors where the
deceased was a joint holder, and the legal personal representatives of the
deceased where he was a sole holder, shall be the only persons recognised by the
Company as having any title to his interest in the shares, but nothing herein
contained shall release the estate of any such deceased holder from any
liability in respect of any shares which had been held by him solely or jointly
with other persons.
31. (a) Any person becoming entitled to a share in consequence of the death or
bankruptcy or liquidation or dissolution of a Member (or in any other way than
by transfer) may, upon such evidence being produced as may from time to time be
required by the
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Directors and subject as hereinafter provided, elect either to be registered
himself as holder of the share or to make such transfer of the share to such
other person nominated by him as the deceased or bankrupt person could have made
and to have such person registered as the transferee thereof, but the Directors
shall, in either case, have the same right to decline or suspend registration as
they would have had in the case of a transfer of the share by that Member before
his death or bankruptcy as the case may be.
(b) If the person so becoming entitled shall elect to be registered
himself as holder he shall deliver or send to the Company a notice in writing
signed by him stating that he so elects.
32. A person becoming entitled to a share by reason of the death or bankruptcy
or liquidation or dissolution of the holder (or in any other case than by
transfer) shall be entitled to the same dividends and other advantages to which
he would be entitled if he were the registered holder of the share, except that
he shall not, before being registered as a Member in respect of the share, be
entitled in respect of it to exercise any right conferred by membership in
relation to meetings of the Company PROVIDED HOWEVER that the Directors may at
any time give notice requiring any such person to elect either to be registered
himself or to transfer the share and if the notice is not complied with within
ninety days the Directors may thereafter withhold payment of all dividends,
bonuses or other monies payable in respect of the share until the requirements
of the notice have been complied with.
AMENDMENT OF MEMORANDUM OF ASSOCIATION, CHANGE OF
LOCATION OF REGISTERED OFFICE & ALTERATION OF CAPITAL
33. (a) Subject to and in so far as permitted by the provisions of the Statute,
the Company may from time to time by ordinary resolution alter or amend its
Memorandum of Association otherwise than with respect to its name and objects
and may, without restricting the generality of the foregoing:
(i) increase the share capital by such sum to be divided into
shares of such amount or without nominal or par value as the
resolution shall prescribe and with such rights, priorities
and privileges annexed thereto, as the Company in general
meeting may determine.
(ii) consolidate and divide all or any of its share capital into
shares of larger amount than its existing shares;
(iii) by subdivision of its existing shares or any of them divide
the whole or any part of its share capital into shares of
smaller amount than is fixed by the Memorandum of Association
or into shares without nominal or par value;
<PAGE>
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(iv) cancel any shares which at the date of the passing of the
resolution have not been taken or agreed to be taken by any
person.
(b) All new shares created hereunder shall be subject to the same
provisions with reference to the payment of calls, liens, transfer,
transmission, forfeiture and otherwise as the shares in the original share
capital.
(c) Subject to the provisions of the Statute, the Company may by Special
Resolution change its name or alter its objects.
(d) Without prejudice to Article 11 hereof and subject to the provisions
of the Statute, the Company may by Special Resolution reduce its share capital
and any capital redemption reserve fund.
(e) Subject to the provisions of the Statute, the Company may by
resolution of the Directors change the location of its registered office.
CLOSING REGISTER OF MEMBERS OR FIXING RECORD DATE
34. For the purpose of determining Members entitled to notice of or to vote at
any meeting of Members or any adjournment thereof, or Members entitled to
receive payment of any dividend, or in order to make a determination of Members
for any other proper purpose, the Directors of the Company may provide that the
register of Members shall be closed for transfers for a stated period but not to
exceed in any case forty days. If the register of Members shall be so closed for
the purpose of determining Members entitled to notice of or to vote at a meeting
of Members such register shall be so closed for at least ten days immediately
preceding such meeting and the record date for such determination shall be the
date of the closure of the register of Members.
35. In lieu of or apart from closing the register of Members, the Directors may
fix in advance a date as the record date for any such determination of Members
entitled to notice of or to vote at a meeting of the Members and for the purpose
of determining the Members entitled to receive payment of any dividend the
Directors may, at or within 90 days prior to the date of declaration of such
dividend fix a subsequent date as the record date for such determination.
36. If the register of Members is not so closed and no record date is fixed for
the determination of Members entitled to notice of or to vote at a meeting of
Members or Members entitled to receive payment of a dividend, the date on which
notice of the meeting is mailed or the date on which the resolution of the
Directors declaring such dividend is adopted, as the case may be, shall be the
record date for such determination of Members.
<PAGE>
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When a determination of Members entitled to vote at any meeting of Members has
been made as provided in this section, such determination shall apply to any
adjournment thereof.
GENERAL MEETING
37. (a) Subject to paragraph (c) hereof, the Company shall within one year of
its incorporation and in each year of its existence thereafter hold a general
meeting as its annual general meeting and shall specify the meeting as such in
the notices calling it. The annual general meeting shall be held at such time
and place as the Directors shall appoint and if no other time and place is
prescribed by them, it shall be held at the registered office on the second
Wednesday in December of each year at ten o'clock in the morning.
(b) At these meetings the report of the Directors (if any) shall be
presented.
(c) If the Company is exempted as defined in the Statute it may but shall
not be obliged to hold an annual general meeting.
38. (a) The Directors may whenever they think fit, and they shall on the
requisition of Members of the Company holding at the date of the deposit of the
requisition not less than one-tenth of such of the paid-up capital of the
Company as at the date of the deposit carries the right of voting at general
meetings of the Company, proceed to convene a general meeting of the Company.
(b) The requisition must state the objects of the meeting and must be
signed by the requisitionists and deposited at the registered office of the
Company and may consist of several documents in like form each signed by one or
more requisitionists.
(c) If the Directors do not within twenty-one days from the date of the
deposit of the requisition duly proceed to convene a general meeting, the
requisitionists, or any of them representing more than one-half of the total
voting rights of all of them, may themselves convene a general meeting, but any
meeting so convened shall not be held after the expiration of three months after
the expiration of the said twenty-one days.
(d) A general meeting convened as aforesaid by requisitionists shall be
convened in the same manner as nearly as possible as that in which general
meetings are to be convened by Directors.
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NOTICE OF GENERAL MEETINGS
39. At least five days' notice shall be given of an annual general meeting or
any other general meeting. Every notice shall be exclusive of the day on which
it is given or deemed to be given and of the day for which it is given and shall
specify the place, the day and the hour of the meeting and the general nature of
the business and shall be given in manner hereinafter mentioned or in such other
manner if any as may be prescribed by the Company PROVIDED that a general
meeting of the Company shall, whether or not the notice specified in this
regulation has been given and whether or not the provisions of Article 38 have
been complied with, be deemed to have been duly convened if it is so agreed:
(a) in the case of a general meeting called as an annual general meeting
by all the Members entitled to attend and vote thereat or their
proxies; and
(b) in the case of any other general meeting by a majority in number of
the Members having a right to attend and vote at the meeting, being
a majority together holding not less than seventy-five per cent in
nominal value or in the case of shares without nominal or par value
seventy-five per cent of the shares in issue, or their proxies.
40. The accidental omission to give notice of a general meeting to, or the
non-receipt of notice of a meeting by any person entitled to receive notice
shall not invalidate the proceedings of that meeting.
PROCEEDINGS AT GENERAL MEETINGS
41. No business shall be transacted at any general meeting unless a quorum of
Members is present at the time when the meeting proceeds to business; two
Members present in person or by proxy shall be a quorum provided always that if
the Company has one Member of record the quorum shall be that one Member present
in person or by proxy.
42. A resolution (including a Special Resolution) in writing (in one or more
counterparts) signed by all Members for the time being entitled to receive
notice of and to attend and vote at general meetings (or being corporations by
their duly authorised representatives) shall be as valid and effective as if the
same had been passed at a general meeting of the Company duly convened and held.
43. If within half an hour from the time appointed for the meeting a quorum is
not present, the meeting, if convened upon the requisition of Members, shall be
dissolved and in any other case it shall stand adjourned to the same day in the
next week at the same time and
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place or to such other time or such other place as the Directors may determine
and if at the adjourned meeting a quorum is not present within half an hour from
the time appointed for the meeting the Members present shall be a quorum.
44. The Chairman, if any, of the Board of Directors shall preside as Chairman at
every general meeting of the Company, or if there is no such Chairman, or if he
shall not be present within fifteen minutes after the time appointed for the
holding of the meeting, or is unwilling to act, the Directors present shall
elect one of their number to be Chairman of the meeting.
45. If at any general meeting no Director is willing to act as Chairman or if no
Director is present within fifteen minutes after the time appointed for holding
the meeting, the Members present shall choose one of their number to be Chairman
of the meeting.
46. The Chairman may, with the consent of any general meeting duly constituted
hereunder, and shall if so directed by the meeting, adjourn the meeting from
time to time and from place to place, but no business shall be transacted at any
adjourned meeting other than the business left unfinished at the meeting from
which the adjournment took place. When a general meeting is adjourned for thirty
days or more, notice of the adjourned meeting shall be given as in the case of
an original meeting; save as aforesaid it shall not be necessary to give any
notice of an adjournment or of the business to be transacted at an adjourned
general meeting.
47. At any general meeting a resolution put to the vote of the meeting shall be
decided on a show of hands unless a poll is, before or on the declaration of the
result of the show of hands, demanded by the Chairman or any other Member
present in person or by proxy.
48. Unless a poll be so demanded a declaration by the Chairman that a resolution
has on a show of hands been carried, or carried unanimously, or by a particular
majority, or lost, and an entry to that effect in the Company's Minute Book
containing the Minutes of the proceedings of the meeting shall be conclusive
evidence of that fact without proof of the number or proportion of the votes
recorded in favour of or against such resolution.
49. The demand for a poll may be withdrawn.
50. Except as provided in Article 52, if a poll is duly demanded it shall be
taken in such manner as the Chairman directs and the result of the poll shall be
deemed to be the resolution of the general meeting at which the poll was
demanded.
51. In the case of an equality of votes, whether on a show of hands or on a
poll, the Chairman of the general meeting at which the show of hands takes place
or at which the poll is demanded, shall be entitled to a second or casting vote.
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52. A poll demanded on the election of a Chairman or on a question of
adjournment shall be taken forthwith. A poll demanded on any other question
shall be taken at such time as the Chairman of the general meeting directs and
any business other than that upon which a poll has been demanded or is
contingent thereon may be proceeded with pending the taking of the poll.
VOTES OF MEMBERS
53. Subject to any rights or restrictions for the time being attached to any
class or classes of shares, on a show of hands every Member of record present in
person or by proxy at a general meeting shall have one vote and on a poll every
Member of record present in person or by proxy shall have one vote for each
share registered in his name in the register of Members.
54. In the case of joint holders of record the vote of the senior who tenders a
vote, whether in person or by proxy, shall be accepted to the exclusion of the
votes of the other joint holders, and for this purpose seniority shall be
determined by the order in which the names stand in the register of Members.
55. A Member of unsound mind, or in respect of whom an order has been made by
any court, having jurisdiction in lunacy, may vote, whether on a show of hands
or on a poll, by his committee, receiver, curator bonis, or other person in the
nature of a committee, receiver or curator bonis appointed by that court, and
any such committee, receiver, curator bonis or other persons may vote by proxy.
56. No Member shall be entitled to vote at any general meeting unless he is
registered as a shareholder of the Company on the record date for such meeting
nor unless all calls or other sums presently payable by him in respect of shares
in the Company have been paid.
57. No objection shall be raised to the qualification of any voter except at the
general meeting or adjourned general meeting at which the vote objected to is
given or tendered and every vote not disallowed at such general meeting shall be
valid for all purposes. Any such objection made in due time shall be referred to
the Chairman of the general meeting whose decision shall be final and
conclusive.
58. On a poll or on a show of hands votes may be given either personally or by
proxy.
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PROXIES
59. The instrument appointing a proxy shall be in writing and shall be executed
under the hand of the appointor or of his attorney duly authorised in writing,
or, if the appointor is a corporation under the hand of an officer or attorney
duly authorised in that behalf. A proxy need not be a Member of the Company.
60. The instrument appointing a proxy shall be deposited at the registered
office of the Company or at such other place as is specified for that purpose in
the notice convening the meeting no later than the time for holding the meeting,
or adjourned meeting provided that the Chairman of the Meeting may at his
discretion direct that an instrument of proxy shall be deemed to have been duly
deposited upon receipt of telex, cable or telecopy confirmation from the
appointor that the instrument of proxy duly signed is in the course of
transmission to the Company.
61. The instrument appointing a proxy may be in any usual or common form and may
be expressed to be for a particular meeting or any adjournment thereof or
generally until revoked. An instrument appointing a proxy shall be deemed to
include the power to demand or join or concur in demanding a poll.
62. A vote given in accordance with the terms of an instrument of proxy shall be
valid notwithstanding the previous death or insanity of the principal or
revocation of the proxy or of the authority under which the proxy was executed,
or the transfer of the share in respect of which the proxy is given provided
that no intimation in writing of such death, insanity, revocation or transfer as
aforesaid shall have been received by the Company at the registered office
before the commencement of the general meeting, or adjourned meeting at which it
is sought to use the proxy.
63. Any corporation which is a Member of record of the Company may in accordance
with its Articles or in the absence of such provision by resolution of its
Directors or other governing body authorise such person as it thinks fit to act
as its representative at any meeting of the Company or of any class of Members
of the Company, and the person so authorised shall be entitled to exercise the
same powers on behalf of the corporation which he represents as the corporation
could exercise if it were an individual Member of record of the Company.
64. Shares of its own capital belonging to the Company or held by it in a
fiduciary capacity shall not be voted, directly or indirectly, at any meeting
and shall not be counted in determining the total number of outstanding shares
at any given time.
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DIRECTORS
65. There shall be a Board of Directors consisting of not less than one or more
than ten persons (exclusive of alternate Directors) PROVIDED HOWEVER that the
Company may from time to time by ordinary resolution increase or reduce the
limits in the number of Directors. The first Directors of the Company shall be
determined in writing by, or appointed by a resolution of, the subscribers of
the Memorandum of Association or a majority of them.
66. The remuneration to be paid to the Directors shall be such remuneration as
the Directors shall determine. Such remuneration shall be deemed to accrue from
day to day. The Directors shall also be entitled to be paid their travelling,
hotel and other expenses properly incurred by them in going to, attending and
returning from meetings of the Directors, or any committee of the Directors, or
general meetings of the Company, or otherwise in connection with the business of
the Company, or to receive a fixed allowance in respect thereof as may be
determined by the Directors from time to time, or a combination partly of one
such method and partly the other.
67. The Directors may by resolution award special remuneration to any Director
of the Company undertaking any special work or services for, or undertaking any
special mission on behalf of, the Company other than his ordinary routine work
as a Director. Any fees paid to a Director who is also counsel or solicitor to
the Company, or otherwise serves it in a professional capacity shall be in
addition to his remuneration as a Director.
68. A Director or alternate Director may hold any other office or place of
profit under the Company (other than the office of Auditor) in conjunction with
his office of Director for such period and on such terms as to remuneration and
otherwise as the Directors may determine.
69. A Director or alternate Director may act by himself or his firm in a
professional capacity for the Company and he or his firm shall be entitled to
remuneration for professional services as if he were not a Director or alternate
Director.
70. A shareholding qualification for Directors may be fixed by the Company in
general meeting, but unless and until so fixed no qualification shall be
required.
71. A Director or alternate Director of the Company may be or become a director
or other officer of or otherwise interested in any company promoted by the
Company or in which the Company may be interested as shareholder or otherwise
and no such Director or alternate Director shall be accountable to the Company
for any remuneration or other benefits received by him as a director or officer
of, or from his interest in, such other company.
<PAGE>
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72. No person shall be disqualified from the office of Director or alternate
Director or prevented by such office from contracting with the Company, either
as vendor, purchaser or otherwise, nor shall any such contract or any contract
or transaction entered into by or on behalf of the Company in which any Director
or alternate Director shall be in any way interested be or be liable to be
avoided, nor shall any Director or alternate Director so contracting or being so
interested be liable to account to the Company for any profit realised by any
such contract or transaction by reason of such Director holding office or of the
fiduciary relation thereby established. A Director (or his alternate Director in
his absence) shall be at liberty to vote in respect of any contract or
transaction in which he is so interested as aforesaid PROVIDED HOWEVER that the
nature of the interest of any Director or alternate Director in any such
contract or transaction shall be disclosed by him or the alternate Director
appointed by him at or prior to its consideration and any vote thereon.
73. A general notice that a Director or alternate Director is a shareholder of
any specified firm or company and is to be regarded as interested in any
transaction with such firm or company shall be sufficient disclosure under
Article 72 and after such general notice it shall not be necessary to give
special notice relating to any particular transaction.
ALTERNATE DIRECTORS
74. Subject to the exception contained in Article 82, a Director who expects to
be unable to attend Directors' Meetings because of absence, illness or otherwise
may appoint any person to be an alternate Director to act in his stead and such
appointee whilst he holds office as an alternate Director shall, in the event of
absence therefrom of his appointor, be entitled to attend meetings of the
Directors and to vote thereat and to do, in the place and stead of his
appointor, any other act or thing which his appointor is permitted or required
to do by virtue of his being a Director as if the alternate Director were the
appointor, other than appointment of an alternate to himself, and he shall ipso
facto vacate office if and when his appointor ceases to be a Director or removes
the appointee from office. Any appointment or removal under this Article shall
be effected by notice in writing under the hand of the Director making the same.
<PAGE>
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POWERS AND DUTIES OF DIRECTORS
75. The business of the Company shall be managed by the Directors (or a sole
Director if only one is appointed) who may pay all expenses incurred in
promoting, registering and setting up the Company, and may exercise all such
powers of the Company as are not, from time to time by the Statute, or by these
Articles, or such regulations, being not inconsistent with the aforesaid, as may
be prescribed by the Company in general meeting required to be exercised by the
Company in general meeting PROVIDED HOWEVER that no regulations made by the
Company in general meeting shall invalidate any prior act of the Directors which
would have been valid if that regulation had not been made.
76. The Directors may from time to time and at any time by powers of attorney
appoint any company, firm, person or body of persons, whether nominated directly
or indirectly by the Directors, to be the attorney or attorneys of the Company
for such purpose and with such powers, authorities and discretions (not
exceeding those vested in or exercisable by the Directors under these Articles)
and for such period and subject to such conditions as they may think fit, and
any such powers of attorney may contain such provisions for the protection and
convenience of persons dealing with any such attorneys as the Directors may
think fit and may also authorise any such attorney to delegate all or any of the
powers, authorities and discretions vested in him.
77. All cheques, promissory notes, drafts, bills of exchange and other
negotiable instruments and all receipts for monies paid to the Company shall be
signed, drawn, accepted, endorsed or otherwise executed as the case may be in
such manner as the Directors shall from time to time by resolution determine.
78. The Directors shall cause minutes to be made in books provided for the
purpose:
(a) of all appointments of officers made by the Directors;
(b) of the names of the Directors (including those represented thereat
by an alternate or by proxy) present at each meeting of the
Directors and of any committee of the Directors;
(c) of all resolutions and proceedings at all meetings of the Company
and of the Directors and of committees of Directors.
79. The Directors on behalf of the Company may pay a gratuity or pension or
allowance on retirement to any Director who has held any other salaried office
or place of profit with the Company or to his widow or dependants and may make
contributions to any fund and pay premiums for the purchase or provision of any
such gratuity, pension or allowance.
<PAGE>
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80. The Directors may exercise all the powers of the Company to borrow money and
to mortgage or charge its undertaking, property and uncalled capital or any part
thereof and to issue debentures, debenture stock and other securities whether
outright or as security for any debt, liability or obligation of the Company or
of any third party.
MANAGEMENT
81. (a) The Directors may from time to time provide for the management of the
affairs of the Company in such manner as they shall think fit and the provisions
contained in the three next following paragraphs shall be without prejudice to
the general powers conferred by this paragraph.
(b) The Directors from time to time and at any time may establish any
committees, local boards or agencies for managing any of the affairs of the
Company and may appoint any persons to be members of such committees or local
boards or any managers or agents and may fix their remuneration.
(c) The Directors from time to time and at any time may delegate to any
such committee, local board, manager or agent any of the powers, authorities and
discretions for the time being vested in the Directors and may authorise the
members for the time being of any such local board, or any of them to fill up
any vacancies therein and to act notwithstanding vacancies and any such
appointment or delegation may be made on such terms and subject to such
conditions as the Directors may think fit and the Directors may at any time
remove any person so appointed and may annul or vary any such delegation, but no
person dealing in good faith and without notice of any such annulment or
variation shall be affected thereby.
(d) Any such delegates as aforesaid may be authorised by the Directors to
subdelegate all or any of the powers, authorities, and discretions for the time
being vested in them.
MANAGING DIRECTORS
82. The Directors may, from time to time, appoint one or more of their body (but
not an alternate Director) to the office of Managing Director for such term and
at such remuneration (whether by way of salary, or commission, or participation
in profits, or partly in one way and partly in another) as they may think fit
but his appointment shall be subject to determination ipso facto if he ceases
from any cause to be a Director and no alternate Director appointed by him can
act in his stead as a Director or Managing Director.
<PAGE>
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83. The Directors may entrust to and confer upon a Managing Director any of the
powers exercisable by them upon such terms and conditions and with such
restrictions as they may think fit and either collaterally with or to the
exclusion of their own powers and may from time to time revoke, withdraw, alter
or vary all or any of such powers.
PROCEEDINGS OF DIRECTORS
84. Except as otherwise provided by these Articles, the Directors shall meet
together for the despatch of business, convening, adjourning and otherwise
regulating their meetings as they think fit. Questions arising at any meeting
shall be decided by a majority of votes of the Directors and alternate Directors
present at a meeting at which there is a quorum, the vote of an alternate
Director not being counted if his appointor be present at such meeting. In case
of an equality of votes, the Chairman shall have a second or casting vote.
85. A Director or alternate Director may, and the Secretary on the requisition
of a Director or alternate Director shall, at any time summon a meeting of the
Directors by at least two days' notice in writing to every Director and
alternate Director which notice shall set forth the general nature of the
business to be considered unless notice is waived by all the Directors (or their
alternates) either at, before or after the meeting is held and PROVIDED FURTHER
if notice is given in person, by cable, telex or telecopy the same shall be
deemed to have been given on the day it is delivered to the Directors or
transmitting organisation as the case may be. The provisions of Article 40 shall
apply mutatis mutandis with respect to notices of meetings of Directors.
86. The quorum necessary for the transaction of the business of the Directors
may be fixed by the Directors and unless so fixed shall be two, a Director and
his appointed alternate Director being considered only one person for this
purpose, PROVIDED ALWAYS that if there shall at any time be only a sole Director
the quorum shall be one. For the purposes of this Article an alternate Director
or proxy appointed by a Director shall be counted in a quorum at a meeting at
which the Director appointing him is not present.
87. The continuing Directors may act notwithstanding any vacancy in their body,
but if and so long as their number is reduced below the number fixed by or
pursuant to these Articles as the necessary quorum of Directors the continuing
Directors or Director may act for the purpose of increasing the number of
Directors to that number, or of summoning a general meeting of the Company, but
for no other purpose.
88. The Directors may elect a Chairman of their Board and determine the period
for which he is to hold office; but if no such Chairman is elected, or if at any
meeting the Chairman is not present within five minutes after the time appointed
for holding the same, the Directors present may choose one of their number to be
Chairman of the meeting.
<PAGE>
-21-
89. The Directors may delegate any of their powers to committees consisting of
such member or members of the Board of Directors (including Alternate Directors
in the absence of their appointors) as they think fit; any committee so formed
shall in the exercise of the powers so delegated conform to any regulations that
may be imposed on it by the Directors.
90. A committee may meet and adjourn as it thinks proper. Questions arising at
any meeting shall be determined by a majority of votes of the members present,
and in the case of an equality of votes the Chairman shall have a second or
casting vote.
91. All acts done by any meeting of the Directors or of a committee of Directors
(including any person acting as an alternate Director) shall, notwithstanding
that it be afterwards discovered that there was some defect in the appointment
of any Director or alternate Director, or that they or any of them were
disqualified, be as valid as if every such person had been duly appointed and
qualified to be a Director or alternate Director as the case may be.
92. Members of the Board of Directors or of any committee thereof may
participate in a meeting of the Board or of such committee by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other and participation in a
meeting pursuant to this provision shall constitute presence in person at such
meeting. A resolution in writing (in one or more counterparts), signed by all
the Directors for the time being or all the members of a committee of Directors
(an alternate Director being entitled to sign such resolution on behalf of his
appointor) shall be as valid and effectual as if it had been passed at a meeting
of the Directors or committee as the case may be duly convened and held.
93. (a) A Director may be represented at any meetings of the Board of Directors
by a proxy appointed by him in which event the presence or vote of the proxy
shall for all purposes be deemed to be that of the Director.
(b) The provisions of Articles 59-62 shall mutatis mutandis apply to the
appointment of proxies by Directors.
VACATION OF OFFICE OF DIRECTOR
94. The office of a Director shall be vacated:
(a) if he gives notice in writing to the Company that he resigns the
office of Director;
(b) if he absents himself (without being represented by proxy or an
alternate
<PAGE>
-22-
Director appointed by him) from three consecutive meetings of the
Board of Directors without special leave of absence from the
Directors, and they pass a resolution that he has by reason of such
absence vacated office;
(c) if he dies, becomes bankrupt or makes any arrangement or composition
with his creditors generally;
(d) if he is found a lunatic or becomes of unsound mind.
APPOINTMENT AND REMOVAL OF DIRECTORS
95. The Company may by ordinary resolution appoint any person to be a Director
and may in like manner remove any Director and may in like manner appoint
another person in his stead.
96. The Directors shall have power at any time and from time to time to appoint
any person to be a Director, either to fill a casual vacancy or as an addition
to the existing Directors but so that the total amount of Directors (exclusive
of alternate Directors) shall not at any time exceed the number fixed in
accordance with these Articles.
PRESUMPTION OF ASSENT
97. A Director of the Company who is present at a meeting of the Board of
Directors at which action on any Company matter is taken shall be presumed to
have assented to the action taken unless his dissent shall be entered in the
Minutes of the meeting or unless he shall file his written dissent from such
action with the person acting as the Secretary of the meeting before the
adjournment thereof or shall forward such dissent by registered mail to such
person immediately after the adjournment of the meeting. Such right to dissent
shall not apply to a Director who voted in favour of such action.
SEAL
98. (a) The Company may, if the Directors so determine, have a Seal which shall,
subject to paragraph (c) hereof, only be used by the authority of the Directors
or of a committee of the Directors authorised by the Directors in that behalf
and every instrument to which the Seal has been affixed shall be signed by one
person who shall be either a Director or the Secretary or Secretary-Treasurer or
some person appointed by the Directors for the purpose.
(b) The Company may have a duplicate Seal or Seals each of which shall be a
<PAGE>
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facsimile of the Common Seal of the Company and, if the Directors so determine,
with the addition on its face of the name of every place where it is to be used.
(c) A Director, Secretary or other officer or representative or attorney
may without further authority of the Directors affix the Seal of the Company
over his signature alone to any document of the Company required to be
authenticated by him under Seal or to be filed with the Registrar of Companies
in the Cayman Islands or elsewhere wheresoever.
OFFICERS
99. The Company may have a President, a Secretary or Secretary-Treasurer
appointed by the Directors who may also from time to time appoint such other
officers as they consider necessary, all for such terms, at such remuneration
and to perform such duties, and subject to such provisions as to
disqualification and removal as the Directors from time to time prescribe.
DIVIDENDS, DISTRIBUTIONS AND RESERVE
100. Subject to the Statute, the Directors may from time to time declare
dividends (including interim dividends) and distributions on shares of the
Company outstanding and authorise payment of the same out of the funds of the
Company lawfully available therefor.
101. The Directors may, before declaring any dividends or distributions, set
aside such sums as they think proper as a reserve or reserves which shall at the
discretion of the Directors, be applicable for any purpose of the Company and
pending such application may, at the like discretion, be employed in the
business of the Company.
102. No dividend or distribution shall be payable except out of the profits of
the Company, realised or unrealised, or out of the share premium account or as
otherwise permitted by the Statute.
103. Subject to the rights of persons, if any, entitled to shares with special
rights as to dividends or distributions, if dividends or distributions are to be
declared on a class of shares they shall be declared and paid according to the
amounts paid or credited as paid on the shares of such class outstanding on the
record date for such dividend or distribution as determined in accordance with
these Articles but no amount paid or credited as paid on a share in advance of
calls shall be treated for the purpose of this Article as paid on the share.
104. The Directors may deduct from any dividend or distribution payable to any
Member all sums of money (if any) presently payable by him to the Company on
account of calls or otherwise.
<PAGE>
-24-
105. The Directors may declare that any dividend or distribution be paid wholly
or partly by the distribution of specific assets and in particular of paid up
shares, debentures, or debenture stock of any other company or in any one or
more of such ways and where any difficulty arises in regard to such
distribution, the Directors may settle the same as they think expedient and in
particular may issue fractional certificates and fix the value for distribution
of such specific assets or any part thereof and may determine that cash payments
shall be made to any Members upon the footing of the value so fixed in order to
adjust the rights of all Members and may vest any such specific assets in
trustees as may seem expedient to the Directors.
106. Any dividend, distribution, interest or other monies payable in cash in
respect of shares may be paid by cheque or warrant sent through the post
directed to the registered address of the holder or, in the case of joint
holders, to the holder who is first named on the register of Members or to such
person and to such address as such holder or joint holders may in writing
direct. Every such cheque or warrant shall be made payable to the order of the
person to whom it is sent. Any one of two or more joint holders may give
effectual receipts for any dividends, bonuses, or other monies payable in
respect of the share held by them as joint holders.
107. No dividend or distribution shall bear interest against the Company.
CAPITALISATION
108. The Company may upon the recommendation of the Directors by ordinary
resolution authorise the Directors to capitalise any sum standing to the credit
of any of the Company's reserve accounts (including share premium account and
capital redemption reserve fund) or any sum standing to the credit of profit and
loss account or otherwise available for distribution and to appropriate such sum
to Members in the proportions in which such sum would have been divisible
amongst them had the same been a distribution of profits by way of dividend and
to apply such sum on their behalf in paying up in full unissued shares for
allotment and distribution credited as fully paid up to and amongst them in the
proportion aforesaid. In such event the Directors shall do all acts and things
required to give effect to such capitalisation, with full power to the Directors
to make such provisions as they think fit for the case of shares becoming
distributable in fractions (including provisions whereby the benefit of
fractional entitlements accrue to the Company rather than to the Members
concerned). The Directors may authorise any person to enter on behalf of all of
the Members interested into an agreement with the Company providing for such
capitalisation and matters incidental thereto and any agreement made under such
authority shall be effective and binding on all concerned.
<PAGE>
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BOOKS OF ACCOUNT
109. The Directors shall cause proper books of account to be kept with respect
to:
(a) all sums of money received and expended by the Company and the
matters in respect of which the receipt or expenditure takes place;
(b) all sales and purchases of goods by the Company;
(c) the assets and liabilities of the Company.
Proper books shall not be deemed to be kept if there are not kept such books of
account as are necessary to give a true and fair view of the state of the
Company's affairs and to explain its transactions.
110. The Directors shall from time to time determine whether and to what extent
and at what times and places and under what conditions or regulations the
accounts and books of the Company or any of them shall be open to the inspection
of Members not being Directors and no Member (not being a Director) shall have
any right of inspecting any account or book or document of the Company except as
conferred by Statute or authorised by the Directors or by the Company in general
meeting.
111. The Directors may from time to time cause to be prepared and to be laid
before the Company in general meeting profit and loss accounts, balance sheets,
group accounts (if any) and such other reports and accounts as may be required
by law.
AUDIT
112. The Company may at any annual general meeting appoint an Auditor or
Auditors of the Company who shall hold office until the next annual general
meeting and may fix his or their remuneration.
113. The Directors may before the first annual general meeting appoint an
Auditor or Auditors of the Company who shall hold office until the first annual
general meeting unless previously removed by an ordinary resolution of the
Members in general meeting in which case the Members at that meeting may appoint
Auditors. The Directors may fill any casual vacancy in the office of Auditor but
while any such vacancy continues the surviving or continuing Auditor or
Auditors, if any, may act. The remuneration of any Auditor appointed by the
Directors under this Article may be fixed by the Directors.
114. Every Auditor of the Company shall have a right of access at all times to
the
<PAGE>
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books and accounts and vouchers of the Company and shall be entitled to require
from the Directors and Officers of the Company such information and explanation
as may be necessary for the performance of the duties of the auditors.
115. Auditors shall at the next annual general meeting following their
appointment and at any other time during their term of office, upon request of
the Directors or any general meeting of the Members, make a report on the
accounts of the Company in general meeting during their tenure of office.
NOTICES
116. Notices shall be in writing and may be given by the Company to any Member
either personally or by sending it by post, cable, telex or telecopy to him or
to his address as shown in the register of Members, such notice, if mailed, to
be forwarded airmail if the address be outside the Cayman Islands.
117. (a) Where a notice is sent by post, service of the notice shall be deemed
to be effected by properly addressing, pre-paying and posting a letter
containing the notice, and to have been effected at the expiration of sixty
hours after the letter containing the same is posted as aforesaid.
(b) Where a notice is sent by cable, telex, or telecopy, service of the
notice shall be deemed to be effected by properly addressing, and sending such
notice through a transmitting organisation and to have been effected on the day
the same is sent as aforesaid.
118. A notice may be given by the Company to the joint holders of record of a
share by giving the notice to the joint holder first named on the register of
Members in respect of the share.
119. A notice may be given by the Company to the person or persons which the
Company has been advised are entitled to a share or shares in consequence of the
death or bankruptcy of a Member by sending it through the post as aforesaid in a
pre-paid letter addressed to them by name, or by the title of representatives of
the deceased, or trustee of the bankrupt, or by any like description at the
address supplied for that purpose by the persons claiming to be so entitled, or
at the option of the Company by giving the notice in any manner in which the
same might have been given if the death or bankruptcy had not occurred.
120. Notice of every general meeting shall be given in any manner hereinbefore
authorised to:
(a) every person shown as a Member in the register of Members as of the
record
<PAGE>
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date for such meeting except that in the case of joint holders the
notice shall be sufficient if given to the joint holder first named
in the register of Members; and
(b) every person upon whom the ownership of a share devolves by reason
of his being a legal personal representative or a trustee in
bankruptcy of a Member of record where the Member of record but for
his death or bankruptcy would be entitled to receive notice of the
meeting.
No other person shall be entitled to receive notices of general meetings.
WINDING UP
121. If the Company shall be wound up the liquidator may, with the sanction of a
Special Resolution of the Company and any other sanction required by the
Statute, divide amongst the Members in specie or kind the whole or any part of
the assets of the Company (whether they shall consist of property of the same
kind or not) and may for such purpose set such value as he deems fair upon any
property to be divided as aforesaid and may determine how such division shall be
carried out as between the Members or different classes of Members. The
liquidator may with the like sanction, vest the whole or any part of such assets
in trustees upon such trusts for the benefit of the contributories as the
liquidator, with the like sanction, shall think fit, but so that no Member shall
be compelled to accept any shares or other securities whereon there is any
liability.
122. If the Company shall be wound up, and the assets available for distribution
amongst the Members as such shall be insufficient to repay the whole of the
paid-up capital, such assets shall be distributed so that, as nearly as may be,
the losses shall be borne by the Members in proportion to the capital paid up,
or which ought to have been paid up, at the commencement of the winding up on
the shares held by them respectively. And if in a winding up the assets
available for distribution amongst the Members shall be more than sufficient to
repay the whole of the capital paid up at the commencement of the winding up,
the excess shall be distributed amongst the Members in proportion to the capital
paid up at the commencement of the winding up on the shares held by them
respectively. This Article is to be without prejudice to the rights of the
holders of shares issued upon special terms and conditions.
<PAGE>
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INDEMNITY
123. The Directors and officers for the time being of the Company and any
trustee for the time being acting in relation to any of the affairs of the
Company and their heirs, executors, administrators and personal representatives
respectively shall be indemnified out of the assets of the Company from and
against all actions, proceedings, costs, charges, losses, damages and expenses
which they or any of them shall or may incur or sustain by reason of any act
done or omitted in or about the execution of their duty in their respective
offices or trusts, except such (if any) as they shall incur or sustain by or
through their own wilful neglect or default respectively and no such Director,
officer or trustee shall be answerable for the acts, receipts, neglects or
defaults of any other Director, officer or trustee or for joining in any receipt
for the sake of conformity or for the solvency or honesty of any banker or other
persons with whom any monies or effects belonging to the Company may be lodged
or deposited for safe custody or for any insufficiency of any security upon
which any monies of the Company may be invested or for any other loss or damage
due to any such cause as aforesaid or which may happen in or about the execution
of his office or trust unless the same shall happen through the wilful neglect
or default of such Director, Officer or trustee.
FINANCIAL YEAR
124. Unless the Directors otherwise prescribe, the financial year of the Company
shall end on 31st December in each year and, following the year of
incorporation, shall begin on 1st January in each year.
AMENDMENTS OF ARTICLES
125. Subject to the Statute, the Company may at any time and from time to time
by Special Resolution alter or amend these Articles in whole or in part.
TRANSFER BY WAY OF CONTINUATION
126. If the Company is exempted as defined in the Statute, it shall, subject to
the provisions of the Statute and with the approval of a Special Resolution,
have the power to register by way of continuation as a body corporate under the
laws of any jurisdiction outside the Cayman Islands and to be deregistered in
the Cayman Islands.
<PAGE>
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DATED the 10th day of September 1997
/s/ Sophia Dilbert
- ---------------------------------------
Sophia Dilbert, Attorney-at-Law
P0 Box 309,
Grand Cayman
British West Indies
/s/ Nicola Melia
- ---------------------------------------
Nicola Melia, Attorney-at-Law
P0 Box 309,
Grand Cayman
British West Indies
/s/ [ILLEGIBLE]
- ---------------------------------------
Witness to the above signatures
P0 Box 309,
Grand Cayman
British West Indies
I, Sharon Pierson, a Notary Public in
and for the Cayman Islands, hereby
certify this document to be a true and
correct copy of the original
Date 9 March 1998
---------------------------------
/s/ Sharon Pierson
I, ANTHONY IAN GODDARD Asst. Registrar of Companies in and for the Cayman
Islands HEREBY CERTIFY that this is a true and correct copy of the Articles of
Association of this Company duly incorporated on the 10th day of September 1997.
Asst. /s/ A Goddard
------------------------------
REGISTRAR OF COMPANIES
[SEAL]
sad/346542
<PAGE>
Exhibit 3.7
================================================================================
Anibal Corvetto Romero
Notario - Abogado
Plaza 27 de Noviembre 250
(Av. Central) San Isidro
Tel: 442-9564 - 442-9369
Tel: 422-9564 - 422-9369 - 440-7299
Testimonio
De la Escritura de CONSTITUCION DE SOCIEDAD COMERCIAL DE RESPONSABILIDAD
LIMITADA.
------------------------------------------------------
Otorgada por "DOE RUN MINING S.R.LTDA."
------------------------------------------------------
A favor de
------------------------------------------------------
Lima 24 de SETIEMBRE de 1997
-- --------- --
Fs 19,O44 No. 2,475
---------- ---------
Ka 28,200
--------
================================================================================
<PAGE>
[LETTERHEAD OF ANIBAL CORVETTO ROMERO, NOTARIO DE LIMA]
NUMERO: DOS MIL CUATROCIENTOS SETENTA Y CINCO
NUMERO: 28200.- FOJAS: 19,044.-
CONSTITUCION DE SOCIEDAD COMERCIAL
DE RESPONSABILIDAD LIMITADA
DENOMINADA:
"DOE RUN MINING S.R.LTDA."
================================================================================
EN LA CIUDAD DE LIMA A LOS VEINTICUATRO DIAS DEL MES DE SETIEMBRE DE MIL
NOVECIENTOS NOVENTA Y SIETE, ANTE MI ANIBAL CORVETTO ROMERO, ABOGADO NOTARIO
PUBLICO DE ESTA CAPITAL.-
COMPARECEN LAS SIGUIENTES PERSONAS:
JORGE FEDERICO GUTIERREZ SISNIEGAS, DE NACIONALIDAD: PERUANA, QUIEN MANIFESTO
SER DE ESTADO CIVIL: SOLTERO, DE PROFESION: ABOGADO, DEBIDAMENTE IDENTIFICADO
CON LIBRETA ELECTORAL NUMERO: 08251168, SUFRAGANTE, Y CON LIBRETA MILITAR
NUMERO: 2457574604.-
QUIEN EN ESTE ACTO INTERVIENE POR SU PROPIO DERECHO.-
JULIO ENRIQUE GUADALUPE BASCONES, DE NACIONALIDAD: PERUANA, QUIEN MANIFESTO
SER DE ESTADO CIVIL: SOLTERO, DE PROFESION:
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ABOGADO, DEBIDAMENTE IDENTIFICAD0 CON LIBRETA ELECTORAL NUMERO: 09388911,
SUFRAGANTE, Y CON LIBRETA MILITAR NUMERO:- 2412177708.-
QUIEN EN ESTE ACTO INTERVIENE POR SU PROPIO DERECHO.-
LOS COMPARECIENTES, SON MAYORES DE EDAD, HABILES PARA CONTRATAR E INTELIGENTES
EN EL IDIOMA CASTELLANO Y A QUIENES HE IDENTIFICADO DE LO QUE DOY FE, CON
CAPACIDAD, LIBERTAD Y CONOCIMIENTO PARA OBLIGARSE, DE LO QUE TAMBIEN DOY FE; Y
ME ENTREGAN UNA MINUTA DEBIDAMENTE FIRMADA Y AUTORIZADA, PARA QUE SU CONTENIDO
SEA ELEVADO A ESCRITURA PUBLICA, LA MISMA QUE QUEDA ARCHIVADA EN SU LEGAJO
MINUTARIO RESPECTIVO Y CON EL NUMERO DE ORDEN CORRESPONDIENTE DE LO QUE TAMBIEN
DOY FE Y CUYO TENOR LITERAL ES EL SIGUIENTE:
MINUTA; SENOR NOTARIO DOCTOR ANIBAL CORVETTO ROMERO:
SIRVASE EXTENDER EN SU REGISTRO DE ESCRITURAS PUBLICAS, UNA CONSTITUCION DE
SOCIEDAD COMERCIAL DE RESPONSABILIDAD LIMITADA, QUE OTORGAN JORGE FEDERICO
GUTIERREZ SISNIEGAS, PERUANO, SOLTERO, CON LIBRETA ELECTORAL NUMERO 08251168,
CON DOMICILIO EN MANUEL GONZALEZ OLAECHEA NUMERO 349 (TRESCIENTOS CUARENTA Y
NUEVE), SAN ISIDRO; Y, CON JULIO ENRIGUE GUADALUPE BASCONES, PERUANO, SOLTERO,
IDENTIFICADO CON LIBRETA ELECTORAL NUMERO 09388911, CON DOMICILIO EN AVENIDA
RAMON RIBEYRO 421 (CUATROCIENTOS VEINTIUNO) DEPARTAMENTO 2 (DOS) SAN ANTONIO -
MIRAFLORES, DE ACUERCO A
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[LETTERHEAD OF ANIBAL CORVETTO ROMERO, NOTARIO DE LIMA]
LAS CLAUSULAS SIGUIENTES:
PRIMERA: LOS OTORGANTES HEMOS CONVENIDO EN CONSTITUIR UNA SOCIEDAD COMERCIAL DE
RESPONSABILIDAD LIMITADA, QUE SE DENOMINARA "DOE RUN MINING S.R.LTDA.", CUYO
OBJETO SERA DEDICARSE, EN GENERAL, A LAS ACTIVIDADES PROPIAS DE LA INDUSTRIA
MINERA Y METALURGICA, TALES COMO MINADO, MOLIENDA, FUNDICION, METALURGIA,
REFINACION, INDUSTRIALIZACION Y COMERCIALIZACION DE LOS PRODUCTOS OBTENIDOS, DE
ACUERDO CON LO DISPUESTO EN LA LEGISLACION VIGENTE, Y CUALQUIER OTRA ACTIVIDAD
RELACIONADA O DEPENDIENTE CON LA ACTIVIDAD MINERA O METALURGICA TALES COMO LA
INDUSTRIA DE GENERACION ELECTRICA, PUDIENDO REALIZAR TODOS LOS ACTOS Y
OPERACIONES CIVILES, INDUSTRIALES, COMERCIALES Y DE CUALQUIER OTRA INDOLE QUE
SEAN RELACIONADOS 0 CONDUCENTES A SU OBJETO SOCIAL PRINCIPAL.-
LA SOCIEDAD PODRA ADEMAS, REALIZAR TODO TIPO DE ACTIVIDADES MINERAS, COMO LAS DE
CATEO, PROSPECCION, EXPLORACION, EXPLOTACION, LABOR GENERAL, BENEFICIO,
REFINACION, COMERCIALIZACION Y TRANSPORTE MINERO.-
SEGUNDA: EL CAPITAL DE LA SOCIEDAD ES DE S/.2,000.00 (DOS MIL Y 00/100 NUEVOS
SOLES) REPRESENTADO POR 2,000 (DOS MIL PARTICIPACIONES NOMINATIVAS DE UN VALOR
DE S/.1.00 CADA UNA (UN NUEVO SOL); EL CUAL SE ENCUENTRA INTEGRAMENTE SUSCRITO Y
PAGADO.-
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JORGE FEDERICO GUTIERREZ SISNIEGAS, SUSCRIBE 1,500 (MIL QUINIENTAS)
PARTICIPACIONES Y PAGA EN EFECTIVO S/.1,500.00 (MIL QUINIENTOS Y 00/100 NUEVOS
SOLES).-
JULIO ENRIQUE GUADALUPE BASCONES, SUSCRIBE 500 (QUINIENTAS) PARTICIPACIONES Y
PAGA EN EFECTIVO S/.500.00 (QUINIENTOS Y 00/100 NUEVOS SOLES).-
TERCERA: LA SOCIEDAD SE REGIRA POR EL SIGUIENTE ESTATUTO:
ESTATUTO
DENOMINACION, OBJETO, DOMICILIO Y DURACION
ARTICULO PRIMERO
La sociedad se denominara "DOE RUN MINING S. R. L."
El objeto de la Sociedad es dedicarse, en general, a la administracion de
empresas mineras y metalurgicas. Con este fin la Sociedad podra realizar todos
los actos y operaciones civiles, industriales, comerciales y de cualquier otra
indole que sean relacionados o conexos a sus operaciones.
En cumplimiento de su objeto social, la Sociedad podra adquirir acciones o
participaciones de Sociedades dedicadas a la actividad minera y/o metalurgica,
asi como acciones o participaciones de Sociedades dedicadas al estudio y
evaluacion del desarrollo de proyectos mineros o metalurgicos.
ARTICULO SEGUNDO
La sociedad esta domiciliada en la ciudad de Lima, pudiendo establecer
sucursales, agencias o cualquier otro establecimiento en cualquier lugar del
pais o el extranjero.
La sociedad inicia sus operaciones el 23 de setiembre de 1997 y tiene una
duracion indeterminada.
TITULO SEGUNDO
CAPITAL Y PARTICIPACIONES
ARTICULO TERCERO
El capital de la sociedad es de S/. 5'237,300.00 ( CINCO MILLONES DOSCIENTOS
TREINTISIETE MIL DE NUEVOS SOLES) representado por 5'237,300 participaciones de
un valor nominal de S/. 1.00 cada una (UN NUEVO SOL) ; el cual se encuentra
integramente suscrito y pagado. Como consecuencia de aumento de capital, el
cuadro de participacionistas de la Sociedad es el siguiente :
DOE RUN MINING SRLtda, propietaria de 648,628,009 participaciones. Jacinto
Canales Arevalo, propietario de 26,940 participaciones. Floren Eddy Ramos
Aparicio, propietario de 2,351 participaciones. Alfredo A. Basualdo Ricardi,
propietario de 1307 participaciones. Basilio Melgarejo Malpartida, propietario
de 5229 participaciones. Margarita Mondragon Hernandez, propietario de 2618
participaciones. Teresa Saenz Picasso, propietario de 6540 participaciones.
Rocio Sifuentes Ayvar, propietario de 2618 participaciones. Danitza Yupari
Capcha, propietario de 2618 participaciones
Todos los antes nombrados con domicilio en, Av. General Santa Cruz N(degree)
481, Jesus Maria ; y,
Julio Enrique Guadalupe Bascones, con domicilio en Av. Ramon Ribeyro No. 421,
departamento 2, San Antonio, Miraflores, propietario de 11 participaciones.
<TABLE>
<CAPTION>
<S> <C> <C>
TOTAL 648,678,241 PARTICIPACIONES
</TABLE>
ARTICULO CUARTO
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Los socios de la Sociedad podran ser personas naturales o juridicas.
El socio que se proponga transferir su participacion o participaciones sociales
a persona extrana a la Sociedad debe comunicarlo por escrito dirigido al Gerente
General de la Sociedad, indicando el precio de venta de las participaciones. El
Gerente General la pondra en conocimiento de los otros socios en un plazo maximo
de diez (10) dias. Los socios pueden expresar su voluntad de compra, al precio
indicado, dentro de un plazo maximo de treinta dias siguientes a la
notificacion, y si son varios, se distribuiran entre todos ellos a prorrata de
sus respectivas participaciones sociales. En el caso de que ningun socio
ejercite el derecho indicado, podra adquirir la sociedad esas participaciones al
precio indicado en un plazo no mayor a treinta (30) dias contados a partir del
fin del vencimiento del plazo anterior, para ser amortizadas con la consiguiente
reduccion del capital social. Transcurrido el plazo, sin que haya hecho uso de
la preferencia, el socio quedara libre para transferir sus participaciones
sociale s en la forma y en el modo que tenga por conveniente, salvo que se
hubiese convocado a junta para decidir la adquisicion de las acciones por la
Sociedad. En este ultimo caso, si transcurrida la fecha fijada para la
celebracion de la junta esta no ha decidido la adquisicion de las
participaciones, el socio podra proceder a la transferencia.
En el caso que alguno de los socios falleciese, los demas socios tendran derecho
a adquirir, dentro de un plazo de sesenta dias calendario a partir de la
comunicacion de dicho hecho, las participaciones del socio fallecido, de acuerdo
al valor de venta de las participaciones. En caso de discrepancia , el precio
sera fijado por tres peritos, nombrados uno por cada parte y un tercero de comun
acuerdo, o si este no se logra, el tercero sera nombrado por el juez mediante
demanda de proceso sumarisimo. Si fueran varios los socios que deseasen adquirir
esas participaciones, se distribuiran entre todos a prorrata de sus respectivas
partes sociales.
TITULO TERCERO
ORGANOS DE LA SOCIEDAD
CAPITULO I
DE LA JUNTA DE SOCIOS
ARTICULO QUINTO
La Junta de Socios es el organo maximo de la Sociedad y sus deliberaciones y
decisiones son adoptadas de conformidad con la Ley y este estatuto, obligando a
todos ellos.
Los socios podran hacerse representar en las Juntas por otra persona. El poder
tendra que conferirse por escrito, y con caracter especial para cada junta,
salvo en el caso de poderes otorgados por escritura publica.
ARTICULO SEXTO
La Junta General es convocada por el Gerente General de la Sociedad cuando lo
ordena la ley, lo establece el Estatuto, el Gerente General lo considere de
interes social o lo solicite un numero de socios que represente cuando menos el
veinte por ciento del capital social.
La convocatoria se hara mediante esquela bajo cargo, facsimil, correo
electronico u otro medio que permita obtener constancia de recepcion, dirigida
al domicilio o a la direccion designada por el socio a este efecto
ARTICULO SETIMO
El quorum se computa y establece al inicio de la junta. Comprobado el mismo, el
presidente la declara instalada.
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Para la celebracion de las juntas, cuando no se trate de los asuntos mencionados
en el parrafo siguiente, se requiere en ambas convocatorias, al menos, de la
concurrencia de socios que representen el cincuenta por ciento de las
participaciones suscritas. Los acuerdos se tomaran por mayoria absoluta de las
participaciones cuyos titulares hayan asistido a la junta o se encuentren
representados en la misma.
Para la celebracion de la junta cuando se trate de la modificacion del Estatuto
Social ; prorroga de la duracion de la Sociedad ; el aumento o la reduccion del
capital ;emision de obligaciones ; acordar la enajenacion, en un solo acto, de
activos cuyo valor contable exceda el cincuenta por ciento del capital de la
sociedad ; transformacion, fusion, escision, reorganizacion o disolucion de la
sociedad, asi como resolver sobre su liquidacion y extincion ; se requiere en
ambas convocatorias, la concurrencia de socios que representen al menos las dos
terceras partes de las participaciones suscritas. Para la validez de los
acuerdos se requiere, en ambos casos, el voto favorable de socios que
representen cuando menos, la mayoria absoluta de las participaciones suscritas.
ARTICULO OCTAVO
La junta general y los acuerdos adoptados en ellas constan en un acta que
expresa un resumen de lo acontecido en la reunion. Las actas podran asentarse en
un libro especialmente abierto a dicho efecto, en hojas sueltas o en cualquier
otra forma que permita la ley.
El acta, sera redactada por el secretario dentro de los cinco dias siguientes a
la celebracion de la junta general. En ese caso se designara a no menos de dos
socios para que, conjuntamente con el presidente y el secretario, la revisen y
aprueben. El acta debe quedar aprobada dentro de los diez dias siguientes a la
celebracion de la Junta y puesta a disposicion de los accionistas concurrentes o
sus representantes, quienes podran dejar constancia de sus observaciones o
desacuerdos mediante carta notarial.
Cuando el acta se apruebe en la misma junta, debera ser firmada por el
presidente, el secretario y uno de los socios.
Excepcionalmente, cuando por cualquier circunstancia no se pudiese asentar el
acta de acuerdo a lo establecido en el primer parrafo del presente articulo, se
extendera y firmara por todos los accionistas concurrentes en un documento
especial, el que se adherira o transcribira al libro o a las hojas sueltas no
bien estos se encuentren disponibles, o en cualquier forma que permita la ley.
El documento especial sera entregado al Gerente General quien sera responsable
de cumplir con lo antes prescrito en el mas breve plazo.
CAPITULO II
DE LA ADMINISTRACION
ARTICULO NOVENO
La administracion de la Sociedad se encarga a uno o mas gerentes o funcionarios,
socios o no, quienes tendran la facultad de representar a la Sociedad en
aquellas materias que le sean encomendadas por el presente Estatuto y los
acuerdos de Junta General de Socios. Los gerentes no pueden dedicarse por cuenta
propia o ajena al mismo genero de negocios que constituye el objeto de la
Sociedad.
Las facultades que no hayan sido expresamente encomendadas al Gerente General en
el presente Estatuto, o no sean conferidas al Gerente General mediante acuerdo
de la Junta General de Socios, se mantendran como facultades exclusivas de la
Junta General.
Los gerentes y funcionarios, seran nombrados por la Junta de Socios segun sus
requerimientos o por el Gerente General que podra delegar facultades dando
cuenta posteriormente a la Junta de Socios. Para su remocion se requiere de
acuerdo adoptado por mayoria simple de las participaciones suscritas.
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La designacion de gerentes podra recaer en una persona juridica. En dicho caso,
esta debera nombrar a una persona natural que la represente a tal efecto.
ARTICULO DECIMO
El Gerente General es el ejecutor de todas las disposiciones de la Junta y tiene
la representacion juridica, comercial y administrativa de la Sociedad.
El Gerente General es el representante legal de la Sociedad, estando facultado
para representarla, sin reserva ni limitacion alguna, ante toda clase de
personas, sean publicas o privadas, juridicas o naturales, autoridades civiles,
judiciales, administrativas, municipales, politicas, de policia, de aduanas,
fiscales, de seguridad social o laborales, teniendo todas las facultades del
mandato conforme al Codigo Civil y los poderes generales y especiales de
representacion previstos en los articulos 74 y 75 del Codigo Procesal Civil,
pudiendo realizar todos los actos de disposicion de derechos sustantivos y
demandar, reconvenir, contestar demandas y reconvenciones, desistirse del
proceso y de la pretension, prestar declaracion de parte, allanarse en todo o en
partedesistirse del proceso y de la pretension, allanarse a la pretension, a la
pretension, conciliar, transigirconciliar,transigir, someter a arbitraje las
pretensiones controvertidas en el proceso, sustituir o delegar la representacion
procesal y realizar los demas actos que exprese la ley. Asimismo, en materia
laboral, podra ejercer las atribuciones prescritas en la Ley Procesal del
Trabajo (Ley 26636) y en el Decreto Supremo 004-96-TR, en el Texto Unico
Ordenado del Decreto Legislativo 728, Ley de Formacion y Promocion Laboral
(Decreto Supremo 002-97-TR), Texto Unico Ordenado del Decreto Legislativo 728,
Ley de Productividad y Competitividad Laboral (Decreto Supremo 003-97-TR) y su
Reglamento (Decreto Supremo 001-96-TR), asi como las contenidas en la Ley de
Relaciones Colectivas de Trabajo (Decreto Ley 25593), o en las normas que
pudieran complementar, reglamentar o sustituir a las enunciadas.
Las facultades de desistirse del proceso y de la pretension, allanarse a la
pretension conciliar y transigir, por montos que excedan los US$ 100,000
(DOLARES AMERICANOS CIEN MIL) o su equivalente en moneda nacional, solo podran
ser ejercidas firmando conjuntamente con uno de los Apoderados Especiales que
para efectos de este articulo y del articulo decimo segundo nombra la Junta
General. Asimismo, dichas facultades no podran ser objeto de delegacion.
ARTICULO DECIMO PRIMERO
Adicionalmente a cualquier otro poder especial que le pueda ser otorgado por
acuerdo de la Junta General de Socios, son facultades del Gerente General :
Abrir y cerrar cuentas corrientes en los bancos e instituciones crediticias ;.
Girar y endosar cheques; girar, aceptar, reaceptar, descontar, endosar,
negociar, protestar y ejecutar letras de cambio, vales y pagares y cualquier
otro titulo valor o documentos de credito ; ,Retirar depositos. Abrir y cerrar
cajas de seguridad. Otorgar cancelaciones y recibos. Negociar, celebrar,
suscribir, modificar, rescindir, resolver y dar por terminados contratos de
curso ordinario de la Sociedad, tales como los contratos de compra de
concentrados y de venta de metales, por un valor hasta de US$ 50'000,000.00
(DOLARES AMERICANOS CINCUENTA MILLONES) o su equivalente en moneda nacional o
por un plazo maximo de un ano. Contratar seguros, aprobar y autorizar endosos y
apendices, asi como cobrar indemnizaciones y denunciar siniestros. Negociar,
celebrar, suscribir, modificar, rescindir, resolver y dar por terminados
contratos de permuta, prenda, contratos preparatorios, compraventa de bienes
muebles destinados a operaciones de la Sociedad, hasta por un monto de US$
1'000,000 (DOLARES AMERICANOS UN MILLON) o su equivalente en moneda nacional ;.
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Negociar, celebrar, suscribir, modificar, rescindir, resolver y dar por
terminados contratos de arrendamiento de bienes muebles e inmuebles. hasta
por un valor de US$ 100,000.00 (DOLARES AMERICANOS CIEN MIL) o su equivalente
en moneda nacional ; Negociar, celebrar, suscribir, modificar, rescindir,
resolver y dar por terminados contratos de prestacion de servicios hasta por
US$ US$ 1'.000,000 (DOLARES AMERICANOS UN MILLON) o su equivalente en moneda
nacional ;, con excepcion de aquellos destinados a servicios de
administracion, gerenciamiento, direccion u operacion de la Sociedad.
Negociar, celebrar, suscribir, modificar, rescindir, resolver y dar por
terminados contratos de transporte para el cumplimiento del objeto de la
Sociedad hasta por US$ US$ 1'.000,000 (DOLARES AMERICANOS UN MILLON) o su
equivalente en moneda nacional ; Negociar, celebrar, suscribir, modificar,
rescindir, resolver y dar por terminados todo tipo de contratos civiles o
comerciales y en general toda clase de contratos en que la Sociedad requiera
intervenir y que no esten expresamente indicados en los numerales anteriores,
hasta por US$ 900,000 (DOLARES AMERICANOS NOVECIENTOS MIL) o su equivalente
en moneda nacional ;
ARTICULO DECIMO SEGUNDO
Sin perjuicio de lo establecido en el articulo anterior, el Gerente General de
la Sociedad, firmando conjuntamente con el Apoderado Especial, que para los
efectos del articulo decimo y del presente articulo nombra la Junta General de
Socios, podra :
Abrir y negociar cartas de credito o cartas fianza en moneda nacional o
extranjera ; Solicitar y otorgar prestamos en moneda nacional o extranjera ;
solicitar y acordar creditos en cuenta corriente, avance o sobregiros,
celebrar toda clase de operaciones de credito con o sin garantia Suscribir
contratos de prenda mercantil para garantizar cartas de credito y otras
obligaciones con las entidades bancarias y financieras ; Aprobar el
otorgamiento de garantias o la constitucion de cargas o gravamenes sobre los
bienes de la Sociedad, en moneda nacional o extranjera; Celebrar y suscribir
contratos de arrendamiento financiero, lease back, de factoring y, en
general, cualquier otro vinculado a los intereses de la Sociedad con las
entidades bancarias y financieras ; Celebrar, suscribir, modificar,
rescindir, resolver y dar por terminados contratos de arrendamiento de bienes
muebles superiores a US$ 100,000.00 (DOLARES AMERICANOS CIEN MIL), o su
equivalente en moneda nacional, y de bienes inmuebles por cualquier monto ;
Celebrar, suscribir, modificar, rescindir, resolver y dar por terminados
contratos con empresas relacionadas economicamente con la Sociedad ;
contratos con Empresas incluidas en la actividad empresarial del Estado ; y,
contratos de trabajo y otros beneficios adicionales que pudiesen acordarse
con el Gerente General, Gerente Tecnico y Gerente de Operaciones ; Celebrar,
suscribir, modificar, rescindir, resolver y dar por terminados contratos que
impliquen la adquisicion por parte de la Sociedad de acciones o
participaciones de otras Sociedades ; Celebrar, suscribir, modificar,
rescindir, resolver y dar por terminados contratos de prestacion de servicios
por sumas superiores a US$ 1'000,000.00 (DOLARES AMERICANOS UN MILLON) ;
contratos de prestacion de servicios destinados a servicios de
administracion, gerenciamiento, direccion u operacion de la Sociedad ;
Celebrar, suscribir, modificar, rescindir, resolver y dar por terminados
contratos de arrendamiento de bienes muebles e inmuebles. por sumas
superiores a US$ 100,000.00 (DOLARES AMERICANOS CIEN MIL) o su equivalente en
moneda nacional ; Celebrar, suscribir, modificar, rescindir, resolver y dar
por terminados contratos de transporte para el cumplimiento del objeto de la
Sociedad por montos superiores a US$ US$ 1'.000,000 (DOLARES AMERICANOS UN
MILLON) o su equivalente en moneda nacional ; Celebrar, suscribir, modificar,
rescindir, resolver y dar por terminados contratos de curso ordinario de la
Sociedad, tales como los contratos de compra de concentrados y de venta de
metales, por montos superiores a US$ 50'000,000.00 (DOLARES AMERICANOS
CINCUENTA MILLONES) o su equivalente en moneda nacional o por plazos
superiores a ano.
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Celebrar, suscribir, modificar, rescindir, resolver y dar por terminados todo
tipo de contratos civiles o comerciales y en general toda clase de contratos en
que la Sociedad requiera intervenir y que no esten expresamente indicados en los
numerales anteriores, por montos superiores a US$ US$ 1'.000,000 (DOLARES
AMERICANOS UN MILLON) o su equivalente en moneda nacional ;
TITULO CUARTO
AUMENTO Y REDUCCION DE CAPITAL
ARTICULO DECIMO TERCERO
En caso de aumento de capital por nuevos aportes, los socios tienen derecho
preferencial para suscribir, a prorrata de su participacion en el capital de la
sociedad, las participaciones que se creen.
No pueden ejercer este derecho los socios que se encuentren en mora en el pago
de dividendos pasivos, y sus participaciones no se computaran para establecer la
prorrata de su participacion en el derecho de preferencia.
El derecho de preferencia se ejerce en por lo menos dos ruedas. En la primera,
el socio tiene derecho a suscribir las nuevas participaciones a prorrata de su
participacion a la fecha que se establezca el acuerdo. Si quedan participaciones
sin suscribir, quienes han intervenido en la primera rueda, podran suscribir, en
segunda rueda, las participaciones restantes a prorrata de su participacion en
el capital social, considerando para ello las participaciones adquiridas en
primera rueda.
La junta general establece el procedimiento que debe seguirse para el caso que
queden participaciones sin suscribir luego de terminada la segunda rueda.
Salvo acuerdo unanime adoptado por la totalidad de socios, el plazo para el
ejercicio del derecho de preferencia en primera rueda, no sera inferior a diez
dias, contado a partir de la fecha del aviso que debera publicarse al efecto o
de una fecha posterior que al efecto se consigne en dicho aviso. El plazo para
la segunda rueda, y las siguientes, si las hubiere, se establece por la junta
general, no pudiendo en ningun caso, cada rueda ser menor a tres dias.
La sociedad esta obligada a proporcionar a los suscriptores en forma oportuna la
informacion correspondiente.
TITULO QUINTO
DE LOS ESTADOS FINANCIEROS Y APLICACION DE UTILIDADES
ARTICULO DECIMO CUARTO
Finalizado el ejercicio, el Gerente General debe formular la memoria, los
estados financieros y la propuesta de aplicacion de las utilidades en caso de
haberlas. De estos documentos debe resultar, con claridad y precision, la
situacion economica y financiera de la sociedad, el estado de sus negocios y los
resultados obtenidos en el ejercicio vencido.
Los estados financieros deberan ser puestos a disposicion de los socios con la
antelacion necesaria para ser sometidos, conforme a ley, a consideracion de la
junta obligatoria anual.
ARTICULO DECIMO QUINTO
La aplicacion de dividendos y de las primas de capital se regira por lo previsto
en la Ley General de Sociedades.
TITULO SEXTO
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DISPOSICION GENERAL
ARTICULO DECIMO SEXTO
Las diferencias que pudieran surgir entre los socios, y entre estos y la
Sociedad seran sometidas al procedimiento y al fallo de conciencia inapelable de
un tribunal constituido por tres arbitros, uno designado por cada una de las
partes en conflicto y el otro por los arbitros designados por cada una de las
partes antes mencionadas.
El arbitraje se llevara a cabo de acuerdo con los reglamentos de arbitraje
internacional del Centro de Arbitraje Nacional e Internacional de la Camara de
Comercio de Lima.
La resolucion del Tribunal Arbitral sera final e inapelable.
ARTICULO DECIMO SETIMO
La Sociedad se regira plenamente por la Ley General de Sociedades, o la norma
que la sustituya, para todo aquello no previsto en el presente estatuto.
ANIBAL CORVETTO ROMERO
NOTARIO ABOGADO
LIMA
[NOTARY SEAL]
7
<PAGE>
Mister Notary:
Kindly enter into your Register of Public Deeds the Incorporation of a
Partnership Association, given by JORGE FEDERICO GUTIERRES SISNIEGAS, peruvian,
single, identified with identity card 011251168, addressed in Manuel Gonzalez
Olaechea 349, San Isidro; and JULIO ENRIQUE GUADALUPE BASCONES, peruvian,
single, identified with identity card 09388911, addressed in Ramon Ribeyro
avenue 421, apartment 2, San Antonio - Miraflores; according to the following
provisions:
FIRST: The granters agreed to incorporate a Partnership Association, that will
be named "DOE RUN MINING S.R.Ltda.", whose corporate purpose will be, in
general, to perform, the activities inherent to the mining and metallurgic
industry, such as mining, milling, smelting, metallurgy, refining,
industrialization and commerce of the obtained products, according to what is
disposed by the legislation in force and any industries supporting or dependent
upon the mining and metallurgic industry (i.e. electrical power industry and
exploration).
The Corporation may also fulfill any kind of mining activities, as surveys,
prospecting, exploration, exploitation, general labor, benefit, refining,
commercialization and mining transportation.
Also it can perform all acts and civil, industrial, commercial operation and
others of other nature related or conducing to its main corporate purpose.
SECOND: The Partnership capital stock is of S/. 2,000.0O ( TWO THOUSAND
NUEVOS SOLES) represented by 2,000 nominative certificates with a value of S/.
1.00 each one; the capital is totally signed and paid.
- Jorge Federico Gutierrez Sisniegas., sign 1,500 certificates and pay S/.
1,500.00.
- Julio Enrique Guadalupe Bascones, sign 500 certificates and pay S/.
500.00.
THIRD: The Partnership Association will be regulated by the following bylaws:
<PAGE>
BY-LAWS
TITLE I
NAME, PURPOSE, REGISTERED OFFICE AND TERM
FIRST ARTICLE
The Company's name is "DOE RUN MINING S.R.L.".
The purpose of the Company is to engage in general to the management of mining
and metallurgical companies. For this purpose, the Company may perform every act
and carry out all kinds of civil, industrial, commercial and other works related
or conductive to its operations.
To carry out its corporate activities, the Company may acquire participations or
interest in mining and metallurgic companies as well as companies engage to the
study and evaluation of mining and metallurgic projects.
SECOND ARTICLE
The Company's registered office is located in the city of Lima, but it may
establish branches, subsidiaries or other establishments anywhere, within or
outside Peru.
The company commences its operations on August 29, 1997 and its term is
indefinite.
TITLE II
CAPITAL STOCK AND PARTICIPATIONS
THIRD ARTICLE
The capital of the Company is S/. 5'237,300.00 (FIVE MILLION TWO HUNDRED THIRTY
THOUSAND THREE HUNDRED AND 00/100 NUEVOS SOLES), divided into 5'237,300
participations of S/.1.00 (ONE NUEVO SOL) each, fully subscribed and paid-in.
FOURTH ARTICLE
The members of the Company may be either natural or artificial persons.
Any member who desires to transfer his/her/its participation(s) in the Company
to any third person(s) outside the Company shall give notice in writing of his
intention and the transfer price to the General Manager of the Company, who
shall communicate this fact to the other members within a maximum period of ten
days thereafter. The non selling members may express their desire to acquire the
offered participations at the stated transfer price, not later than thirty days
after receiving said notice from the Company ; if more than one member wishes to
acquire the offered participation(s), the offered participation(s) shall be
prorated among all the interested members, in proportion to their respective
interest in the Company. If no member exercises said right of first refusal,
then the Company may acquire the offered participation(s) at the stated transfer
price within thirty days after the expiration of the previous term ; which may
be redeemed through a consequent reduction of the corporate capital. If the
Company fails to exercise said preferred right before expiration of the
aforementioned term, then the member shall be free to transfer its
participation(s) in the Company as he may consider appropriate, except if a
meeting has been convened to consider the acquisition of the participations by
the Company. In this last case, if
<PAGE>
after the date fixed for the meeting no decision has been taken regarding the
acquisition of the offered participation(s), the member may proceed to carry out
the transfer.
In the event of death any of the members, the other members shall have the right
to acquire the participation(s) of the deceased member within sixty calendar
days of the notice communicating this fact, at their market value. In case of
disagreement on the price, the price shall be determined by three experts, one
designated by each of the parties, and the third by mutual agreement, or, if no
agreement is reached, the price shall be decided by the judge in a summary
process. If more than one member desires to acquire said participation(s), the
participation(s) shall be prorated among all the interested members in
proportion to their respective interest in the Company.
TITLE III
CORPORATE BODIES
CHAPTER I
MEETING OF MEMBERS
FIFTH ARTICLE
The Meeting of Members is the highest corporate body. Its resolutions are
adopted in accordance with the Law and with these By-laws, and they are binding
upon all the members.
The members may be represented by another person at the Meetings. The power of
representation shall be granted in writing, and for each meeting, except for a
power-of-attorney executed as a public deed.
SIXTH ARTICLE
The General Meeting of Members is convened by the General Manager of the
Company, as prescribed by the law or established in these By-laws, or at the
request of the General Manager or of members representing at least twenty
percent of the capital stock.
The notice of an Annual Mandatory General Meeting shall be published at least
ten days prior to the date of the meeting. In all other cases, the notice shall
be published at least three days in advance, except where the law prescribes a
longer period.
SEVENTH ARTICLE
The quorum is counted and determined at the beginning of the meeting, whereupon
the chairman declares the meeting installed.
To hold a meeting or an adjourned meeting for any purpose other than to discuss
the matters referred to in the following paragraph, the presence of members
representing at least fifty percent of the purchased participations shall
constitute a valid quorum, and the resolutions shall be carried by an absolute
majority of the participations present or represented at the meeting.
To hold a meeting or an adjourned meeting for the purpose of discussing the
modification of the By-laws ; an extension of the term of the Company ; the
issuance of debentures ; the disposition, in a single act, of assets having a
book value that exceeds fifty percent of the Company's purchased participations
; the transformation, merger, division, reorganization, or winding-up of the
Company, and its liquidation and extinction, the presence of members
representing at least two-thirds of the capital stock shall constitute a valid
quorum, and its resolutions shall be carried, in both cases, with the
affirmative votes of participations representing at least an absolute majority
of the purchased participations.
EIGHTH ARTICLE
9
<PAGE>
The general meeting and the resolutions adopted thereat shall be embodied in a
minute or record of proceedings. The minutes may be entered in a special book
assigned for this purpose, or on loose sheets of paper, or in any other way
authorized by the law.
The minute shall be drafted by the secretary within five days after the general
meeting. In such case, at least two members shall be designated to review and
approve the minute, together with the chairman and the secretary. The minute
shall be approved within ten days after the Meeting and distributed to the
members or their representatives present at the meeting, who may submit their
observations or objections via notarial letter.
If the minute is drafted and approved at the same meeting, it shall be signed by
the chairman, the secretary, and one member.
Exceptionally, if for any reason the minute may not be recorded as established
in the first paragraph of this article, then it shall be prepared and signed by
all the members present in a special document, and inserted or transcribed on
the book or loose sheets when these become available, or in any other way
authorized by the law. This special document shall be delivered to the General
Manager, who shall be responsible for carrying out the above procedure as soon
as possible.
CHAPTER II
THE MANAGEMENT
NINTH ARTICLE
The management of the Company is entrusted to one or more managers or officers,
whether or not members of the Company, who will have the authority to represent
the Company in such matters related to its corporate purpose as expressly stated
in the By-laws and in resolutions adopted in the General Meeting of Members. The
managers may not engage in the same or similar businesses as the Company, either
on their own account or on account of third parties.
All the authorizations not expressly given to the General Manager or officers by
the By-laws or in Resolutions adopted by the General Meeting of Members are
reserved for exercise by the General Meeting of Members.
The managers and officers shall be appointed by the Meeting of Members, as
required, or by the General Manager, who may delegate powers subject to give
account thereof to the Meeting of Members. The managers and officers may be
removed as agreed by members representing a simple majority of the purchased
participations.
The appointment of managers could be given to an artificial person. In that
event, that artificial person has to designate an individual to represent it for
that purpose.
TENTH ARTICLE
The General Manager implements all the decisions of the Meeting of Members and
acts as the legal, commercial and administrative representative of the Company.
The General Manager acts as legal representative of the Company, with power to
represent the Company, without reserve or limitation, before any public,
private, natural or artificial person, and before any civil, judiciary,
administrative, municipal, political, police, customs, fiscal, social security,
or labor authority, with all the powers of his mandate contemplated in the Civil
Code, and with the general and special powers of representation contemplated in
the Code of Civil Procedures, and with power to dispose of substantive rights,
and to sue, countersue, defend suits and countersuits, abandon process and
claims, admit claims.
10
<PAGE>
Compromise, settle and abandon process and claims, admit
claims, compromise, settle, submit claims to arbitration, substitute or delegate
his representation in the process, and perform every other act contemplated in
the law. Likewise, with regard to labor matters, the General Manager may
exercise the powers and authorities prescribed in the Law of Labor Procedures
(Law 26636) and in Supreme Decree 004-96-TR, in the Consolidated Text of
Legislative Decree 728, Labor Training and Promotion Law (Supreme Decree
002-97-TR), Consolidated Text of Legislative Decree 728 (Labor Productivity and
Competitiveness Law (Supreme Decree 003-97-TR), and its Implementing Regulations
(Supreme Decree 001-96-TR), as well as those contained in the Law on Collective
Labor Relations (Decree Law 25593), or in any statutes that may complete,
regulate, or subrogate the former.
The faculties of abandon process and claims, admit claims, compromise and settle
for amounts over US$ 100,000, could be exercised with the joint signature of the
Special Attorney stated in the Twelfth Article. Moreover, those faculties could
not be delegated.
ELEVENTH ARTICLE
In addition of any powers that may be granted by Resolution adopted by the
General Meeting of Members, the General Manager has the power to :
Open and close checking accounts with banks and financial institutions.
Draw and endorse checks ; draw, accept, reaccept, discount, endorse, negotiate,
protest, and execute drafts, bills, and promissory notes, and any other type of
securities or credit documents ; Withdraw deposits ; Open and close safe-deposit
boxes ; Issue cancellations and receipts. Negotiate, execute, sign, modify,
rescind, resolve, and terminate ordinary course of business purchase of
concentrates and sale of metal contracts having a value up to US $ 50 million
dollars or its equivalent in Peruvian currency and having a term less than one
year. Take insurance, approve and authorize endorsements and annexes, collect
compensations and report calamities. Negotiate, execute, sign, modify, rescind,
resolve, and terminate barter or pledge agreements, preparatory contracts,
contracts for the purchase/sale of personal property, assigned to the Company's
operations up to US$ 1 million or its equivalent in Peruvian currency.
Negotiate, execute, sign, modify, rescind, resolve, and terminate leases of real
or personal property up to US$ 100,000 or its equivalent in Peruvian currency.
Negotiate, execute, sign, modify, rescind, resolve and terminate service
contracts up to US$ 1 million or its equivalent in Peruvian currency, ; except
those covering services for the management, direction or operation or the
Company. Negotiate, execute, sign, modify, rescind, resolve, and terminate
transportation contracts required to accomplish the purpose of the Company, up
to US$ 1 million or its equivalent in Peruvian currency. Negotiate, execute,
sign, modify, rescind, resolve, and terminate every type of civil or commercial
contracts, and generally every kind of contract not expressly referred to in
other sections of this article required to be signed by the Company, up to US$
900 thousand or its equivalent in Peruvian currency.
TWELFTH ARTICLE
Signing with an Special Attorney appoint by the General Meeting, the General
Manager can :
Open and negotiate letters of credit or letters of guaranty, in Peruvian or
foreign currency. Apply for and give loans in Peruvian or foreign currency ;
request and obtain credits, advances or overdrafts in checking accounts, execute
every king of credit transactions, whether or not secured. Sign chattel pledge
agreements to secure letters of credit and other obligations with banking and
financing institutions ;
11
<PAGE>
Approve the granting of guarantees or liens on the
assets of the Company in Peruvian or foreign currency. Execute and sign leasing,
lease back, and factoring agreements, and generally any other agreement related
to the Company's interest, with banking or financial institutions. Sign, execute
modify, rescind, resolve, and terminate leases of personal property for amounts
over US$ 100,000 or its equivalent in Peruvian currency and, for any amount in
the case of real property . Sign, execute, modify, rescind, resolve and
terminate contracts with subsidiaries and Companies related economically with
the Company ; contracts with Companies included into the State Business
Activities ; and, employment and other specific benefit agreements between the
Company and the General Manager, Technical and Operational Manager ; Sign,
execute, modify, rescind, resolve and terminate contracts that imply the
acquisition of shares or participations of other companies ; Sign, execute,
modify, rescind, resolve and terminate service contracts for amounts over US$ 1
million ; or contracts for the management, direction or operation of the
Company. Sign, execute, modify, rescind, resolve, and terminate leases of real
or personal property over the amount of US$ 100,000 or its equivalent in
Peruvian currency. Sign, execute modify, rescind, resolve, and terminate
transportation contracts required to accomplish the purpose of the Company, over
the amount of US$ 1 million or its equivalent in Peruvian currency. Sign,
execute, modify, rescind, resolve, and terminate ordinary course of business
purchase of concentrates and sale of metal contracts having a value over the
amount of US $ 50 million dollars or its equivalent in Peruvian currency and
having a term over one year. Sign, execute, modify, rescind, resolve, and
terminate every type of civil or commercial contracts, and generally every kind
of contract not expressly referred to in other sections of this article,
required to be signed by the Company, over the amount of US$ 1 million or its
equivalent in Peruvian currency.
TITLE IV
INCREASE AND REDUCTION OF CAPITAL
THIRTEENTH ARTICLE
If the Company's capital were increased as a result of new contributions, the
members shall enjoy pre-emptive right to subscribe the new participations to be
issued, on a pro rata basis, in proportion to their respective interest in the
Company's capital.
This pre-emptive right may not be exercised by any member(s) with payments of
calls on subscribed participations in arrears. The interest of said defaulting
member(s) shall not be taken into account for the purpose of prorating this
benefit.
The pre-emptive right hereunder is exercised in at least two rounds. In the
first round, each member has the right to subscribe the new participations in
proportion to his respective interest in the Company on the date of the
agreement therefor. Any remaining participations may be subscribed in the second
round by those members who exercised their right to subscribe participations in
the first round, in proportion to their interest in the Company's capital,
including for this purpose the participations acquired in the first round.
The general meeting shall establish the procedure to be followed with respect to
any participations still not subscribed after the second round.
Except as unanimously agreed otherwise by all the members, the term allowed to
exercise said pre-emptive right in the first round shall not be less than ten
days from the date of the notice published to this effect, or any later date
indicated in such notice. The term allowed to exercise said pre-emptive right in
the second round, and in any subsequent rounds, shall be established by the
general meeting, but may not be less than three days.
The Company has the obligation to furnish the relevant information to the
subscribers on a timely basis.
12
<PAGE>
TITLE V
FINANCIAL STATEMENTS AND ALLOCATION OF PROFITS
FOURTEENTH ARTICLE
At the end of each fiscal year, the General Manager shall prepare the annual
report, the financial statements, and the proposal for allocation of the
profits, if any. These documents shall clearly and accurately establish the
economic and financial situation of the Company and its businesses, and the
results obtained in the ended fiscal year.
The financial statements shall be distributed to the members with due
anticipation, for submission to and consideration by the annual mandatory
meeting, in accordance with the law.
FIFTEENTH ARTICLE
The distribution of dividends and premiums on capital shall be governed by the
provisions of the General Companies' Act.
TITLE VI
GENERAL PROVISION
SIXTEENTH ARTICLE
Any differences that may arise between the members, or between the members and
the Company, shall be submitted to the final decision of an arbitration panel
composed of three arbitrators, one designated by each of the disputing parties,
and the third by the other two arbitrators.
The arbitration shall be held in accordance with the rules of international
arbitration of the National and International Arbitration Center under the Lima
Chamber of Trade.
The decision of the Arbitration Court shall be final and unappealable.
SEVENTEENTH ARTICLE
The Company shall be subject to the provisions of the General Companies' Act, or
any substitute law, for all that is not provided for herein."
13
<PAGE>
Exhibit 3.8
================================================================================
Anibal Corvetto Romero
Notario - Abogado
Plaza 27 de Noviembre 250
(Av. Central) San Isidro
Tel: 442-9564 - 442-9369
Tel: 422-9564 - 422-9369 - 440-7299
Testimonio
De la Escritura de CONSTITUCION DE SOCIEDAD COMERCIAL DE
RESPONSABILIDAD LIMITADA.
--------------------------------------------------
Otorgada por "DOE RUN PERU S.R.LTDA."
--------------------------------------------------
A favor de
--------------------------------------------------
Lima 08 de SETIEMBRE de 1997
-- --------- --
Fs 17,977 No. 2,332
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Ka 28,011
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================================================================================
<PAGE>
[LETTERHEAD OF ANIBAL CORVETTO ROMERO - NOTARIO DE LIMA]
NUMERO: DOS MIL TRESCIENTOS TREINTIDOS.- FOJAS: 17,977.-
KARDEX: 28011
CONSTITUCION DE SOCIEDAD COMERCIAL
DE RESPONSABILIDAD LIMITADA
DENOMINADA:
"DOE RUN PERU S.R.LTDA."
EN LA CIUDAD DE LIMA A LOS OCHO DIAS DEL MES DE SETIEMBRE DE MIL NOVENCIENTOS
NOVENTA Y SIETE, ANTE MI ANIBAL CORVETTO ROMERO, ABOGADO NOTRAIO PUBLICO DE ESTA
CAPITAL.
COMPARECEN LAS SIGUIENTES PERSONAS:
JORGE FEDERICO GUTIERREZ SISNIEGAS, DE NACIONALIDAD: PERUANA, QUIEN MANIFESTO
SER DE ESTADO CIVIL: SOLTERO, DE PROFESION: ABOGADO, DEBIDAMENTE IDENTIFICADO
CON LIBRETA ELECTORAL NUMERO: 08251168, SUFRAGANTE, Y CON LIBRETA MILITAR
NUMERO: 2457574604.
QUIEN EN ESTE ACTO INTERVIENE FOR SU PROPIO DERECHO.
JULIO ENRIQUE GUADALUPE BASCONES, DE NACIONALIDAD: PERUANA, QUIEN MANIFESTO SER
DE ESTADO CIVIL: SOLTERO, DE PROFESION: ABOGADO, DEBIDAMENTE IDENTIFICADO CON
LIBRETA ELECTORAL
<PAGE>
ESTATUTO
DENOMINACION, OBJETO, DOMICILIO Y DURACION
ARTICULO PRIMERO
La sociedad se denominara "DOE RUN PERU S. R. L."
El objeto de la Sociedad es dedicarse, en general, a las actividades propias de
la mineria y de la metalurgia, tales como minado, molienda, fundicion,
metalurgia, refinacion, industrializacion y comercializacion de los productos
obtenidos, de acuerdo con lo dispuesto en la legislacion vigente, y cualquier
otra actividad relacionada o dependiente con la actividad minera o metalurgica
tales como la industria de generacion electrica, pudiendo realizar todos los
actos y operaciones civiles, industriales, comerciales y de cualquier otra
indole que sean relacionados o conexas a sus operaciones.
La Sociedad podra ademas, realizar todo tipo de actividades mineras, como las de
cateo, prospeccion, evaluacion, exploracion, explotacion, labor general,
beneficio, refinacion, comercializacion y transporte minero.
En cumplimiento de su objeto social, la Sociedad podra adquirir acciones o
participaciones de Sociedades con objeto social similar al establecido en el
presente Estatuto.
ARTICULO SEGUNDO
La sociedad esta domiciliada en la ciudad de Lima, pudiendo establecer
sucursales, agencias o cualquier otro establecimiento en cualquier lugar del
pais o del extranjero.
La sociedad inicia sus operaciones el 29 de agosto de 1997 y tiene una duracion
indeterminada.
TITULO SEGUNDO
CAPITAL Y PARTICIPACIONES
ARTICULO TERCERO
El capital de la sociedad es de S/. 648'678,241.00 (SEISCIENTOS CUARENTA Y OCHO
MILLONES SEISCIENTOS SETENTA Y OCHO MIL DOSCIENTOS CUARENTA Y UN NUEVOS SOLES)
representado por 648,678,241 participaciones de un valor nominal de S/. 1.00
cada una (UN NUEVO SOL) ; el cual se encuentra integramente suscrito y pagado.
Como consecuencia de aumento de capital, el cuadro de participacionistas de la
Sociedad es el siguiente :
DOE RUN MINING SRLtda, propietaria de 648,628,009 participaciones. Jacinto
Canales Arevalo, propietario de 26,940 participaciones. Floren Eddy Ramos
Aparicio, propietario de 2,351 participaciones. Alfredo A. Basualdo Ricardi,
propietario de 1307 participaciones. Basilio Melgarejo Malpartida, propietario
de 5229 participaciones. Margarita Mondragon Hernandez, propietario de 2618
participaciones. Teresa Saenz Picasso, propietario de 6540 participaciones.
Rocio Sifuentes Ayvar, propietario de 2618 participaciones. Danitza Yupari
Capcha, propietario de 2618 participaciones
Todos los antes nombrados con domicilio en, Av. General Santa Cruz N(degree)
481, Jesus Maria ; y,
<PAGE>
Julio Enrique Guadalupe Bascones, con domicilio en Av. Ramon Ribeyro No. 421,
departamento 2, San Antonio, Miraflores, propietario de 11 participaciones.
TOTAL 648,678,241 PARTICIPACIONES
ARTICULO CUARTO
Los socios de la Sociedad podran ser personas naturales o juridicas.
El socio que se proponga transferir su participacion o participaciones sociales
a persona extrana a la Sociedad debe comunicarlo por escrito dirigido al Gerente
General de la Sociedad, indicando el precio de venta de las participaciones. El
Gerente General lo pondra en conocimiento de los otros socios en un plazo maximo
de diez dias. Los socios pueden expresar su voluntad de compra, al precio
indicado, dentro de un plazo maximo de treinta dias siguientes a la
notificacion, y si son varios, se distribuiran entre todos ellos a prorrata de
sus respectivas participaciones sociales. En el caso de que ningun socio
ejercite el derecho indicado, podra adquirir la sociedad esas participaciones al
precio indicado en un plazo no mayor a treinta (30) dias contados a partir del
fin del vencimiento del plazo anterior, para ser amortizadas con la consiguiente
reduccion del capital social. Transcurrido el plazo, sin que haya hecho uso de
la preferencia, el socio quedara libre para transferir sus participaciones
sociales en la forma y en el modo que tenga por conveniente, salvo que se
hubiese convocado a junta para decidir la adquisicion de las acciones por la
Sociedad. En este ultimo caso, si transcurrida la fecha fijada para la
celebracion de la junta esta no ha decidido la adquisicion de las
participaciones, el socio podra proceder a la transferencia.
En el caso que alguno de los socios falleciese, los demas socios tendran derecho
a adquirir, dentro de un plazo de sesenta dias calendario a partir de la
comunicacion de dicho hecho, las participaciones del socio fallecido, de acuerdo
al valor de venta de las participaciones. En caso de discrepancia , el precio
sera fijado por tres peritos, nombrado uno por cada parte y un tercero de comun
acuerdo, o si este no se logra, el tercero sera nombrado por el juez mediante
demanda de proceso sumarisimo. Si fueran varios los socios que deseasen adquirir
esas participaciones, se distribuiran entre todos a prorrata de sus respectivas
partes sociales.
TITULO TERCERO
ORGANOS DE LA SOCIEDAD
CAPITULO I
DE LA JUNTA DE SOCIOS
ARTICULO QUINTO
La Junta de Socios es el organo maximo de la Sociedad y sus deliberaciones y
decisiones son adoptadas de conformidad con la Ley y este estatuto, obligando a
todos ellos.
Los socios podran hacerse representar en las Juntas por otra persona. El poder
tendra que conferirse por escrito, y con caracter especial para cada junta,
salvo en el caso de poderes otorgados por escritura publica.
ARTICULO SEXTO
La Junta General es convocada por el Gerente General de la Sociedad cuando lo
ordena la ley, lo establece el Estatuto, el Gerente General lo considere de
interes social o lo solicite un numero de socios que represente cuando menos el
veinte por ciento del capital social.
2
<PAGE>
La convocatoria se hara mediante esquela bajo cargo, facsimil, correo
electronico u otro medio que permita obtener constancia de recepcion, dirigida
al domicilio o a la direccion designada por el socio a este efecto
ARTICULO SETIMO
El quorum se computa y establece al inicio de la junta. Comprobado el mismo, el
presidente la declara instalada.
Para la celebracion de las juntas, cuando no se trate de los asuntos mencionados
en el parrafo siguiente, se requiere en ambas convocatorias, al menos, de la
concurrencia de socios que representen el cincuenta por ciento del capital
social. Los acuerdos se tomaran por mayoria absoluta de las participaciones
cuyos titulares hayan asistido a la junta o se encuentren representados en la
misma.
Para la celebracion de la junta cuando se trate de la modificacion del Estatuto
Social ; prorroga de la duracion de la Sociedad ; e emision de obligaciones ;
acordar la enajenacion, en un solo acto de activos cuyo valor contable exceda el
cincuenta por ciento del capital de la sociedad ; transformacion, fusion,
escision, reorganizacion o disolucion de la sociedad, asi como resolver sobre su
liquidacion y extincion ; se requiere en ambas convocatorias, la concurrencia de
socios que representen al menos las dos terceras partes del capital social. Para
la validez de los acuerdos se requiere, en ambos casos, el voto favorable de
socios que representen cuando menos, la mayoria absoluta del capital social.
ARTICULO OCTAVO
La junta general y los acuerdos adoptados en ellas constan en un acta que
expresa un resumen de lo acontecido en la reunion. Las actas podran asentarse en
un libro especialmente abierto a dicho efecto, en hojas sueltas o en cualquier
otra forma que permita la ley.
El acta, sera redactada por el secretario dentro de los cinco dias siguientes a
la celebracion de la junta general. En ese caso se designara a no menos de dos
socios para que, conjuntamente con el presidente y el secretario, la revisen y
aprueben. El acta debe quedar aprobada dentro de los diez dias siguientes a la
celebracion de la Junta y puesta a disposicion de los accionistas concurrentes o
sus representantes, quienes podran dejar constancia de sus observaciones o
desacuerdos mediante carta notarial.
Cuando el acta se apruebe en la misma junta, debera ser firmada por el
presidente, el secretario y uno de los socios.
Excepcionalmente, cuando por cualquier circunstancia no se pudiese asentar el
acta de acuerdo a lo establecido en el primer parrafo del presente articulo, se
extendera y firmara por todos los accionistas concurrentes en un documento
especial, el que se adherira o transcribira al libro o a las hojas sueltas no
bien estos se encuentren disponibles, o en cualquier forma que permita la ley.
El documento especial sera entregado al Gerente General quien sera responsable
de cumplir con lo antes prescrito en el mas breve plazo.
CAPITULO II
DE LA ADMINISTRACION
ARTICULO NOVENO
La administracion de la Sociedad se encarga a uno o mas gerentes o funcionarios,
socios o no, quienes tendran la facultad de representar a la Sociedad en
aquellas materias que le sean encomendadas por el presente Estatuto y los
acuerdos de Junta General de Socios. Los gerentes no pueden dedicarse por cuenta
propia o ajena al mismo genero de negocios que constituye el objeto de la
Sociedad.
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Las facultades que no hayan sido expresamente encomendadas al Gerente General en
el presente Estatuto, o no sean conferidas al Gerente General mediante acuerdo
de la Junta General de Socios, se mantendran como facultades exclusivas de la
Junta General.
Los gerentes y funcionarios, seran nombrados por la Junta de Socios segun sus
requerimientos o por el Gerente General que podra delegar facultades dando
cuenta posteriormente a la Junta de Socios. Para su remocion se requiere de
acuerdo adoptado por mayoria simple del capital social.
La designacion de gerentes podra recaer en una persona juridica. En dicho caso,
esta debera nombrar a una persona natural que la represente a tal efecto, asi
como las demas gerencias que considere necesario.
ARTICULO DECIMO
El Gerente General es el ejecutor de todas las disposiciones de la Junta y tiene
la representacion juridica, comercial y administrativa de la Sociedad.
El Gerente General es el representante legal de la Sociedad, estando facultado
para representarla, sin reserva ni limitacion alguna, ante toda clase de
personas, sean publicas o privadas, juridicas o naturales, autoridades civiles,
judiciales, administrativas, municipales, politicas, de policia, de aduanas,
fiscales, de seguridad social o laborales, teniendo todas las facultades del
mandato conforme al Codigo Civil y los poderes generales y especiales de
representacion previstos en los articulos 74 y 75 del Codigo Procesal Civil,
pudiendo realizar todos los actos de disposicion de derechos sustantivos y
demandar, reconvenir, contestar demandas y reconvenciones, desistirse del
proceso y de la pretension, prestar declaracion de parte, allanarse en todo o en
partedesistirse del proceso y de la pretension, allanarse a la pretension, a la
pretension, conciliar, transigirconciliar,transigir, someter a arbitraje las
pretensiones controvertidas en el proceso, sustituir o delegar la representacion
procesal y realizar los demas actos que exprese la ley. Asimismo, en materia
laboral, podra ejercer las atribuciones prescritas en la Ley Procesal del
Trabajo (Ley 26636) y en el Decreto Supremo 004-96-TR, en el Texto Unico
Ordenado del Decreto Legislativo 728, Ley de Formacion y Promocion Laboral
(Decreto Supremo 002-97-TR), Texto Unico Ordenado del Decreto Legislativo 728,
Ley de Productividad y Competitividad Laboral (Decreto Supremo 003-97-TR) y su
Reglamento (Decreto Supremo 001-96-TR), asi como las contenidas en la Ley de
Relaciones Colectivas de Trabajo (Decreto Ley 25593), o en las normas que
pudieran complementar, reglamentar o sustituir a las enunciadas.
Las facultades de desistirse del proceso y de la pretension, allanarse a la
pretension conciliar y transigir, por montos que excedan los US$ 100,000
(DOLARES AMERICANOS CIEN MIL) o su equivalente en moneda nacional, solo podran
ser ejercidas firmando conjuntamente con el Apoderado Especial a que se refiere
el articulo decimo segundo de este Estatuto. Asimismo, dichas facultades no
podran ser objeto de delegacion.
ARTICULO DECIMO PRIMERO
Adicionalmente a cualquier otro poder especial que le pueda ser otorgado por
acuerdo de la Junta General de Socios, son facultades del Gerente General :
Abrir y cerrar cuentas corrientes en los bancos e instituciones crediticias ;.
Girar y endosar cheques; girar, aceptar, reaceptar, descontar, endosar,
negociar, protestar y ejecutar letras de cambio, vales y pagares y cualquier
otro titulo valor o documentos de credito ; ,Retirar depositos. Abrir y cerrar
cajas de seguridad. Otorgar cancelaciones y recibos. Negociar, celebrar,
suscribir, modificar, rescindir, resolver y dar por terminados contratos de
curso ordinario de la Sociedad, tales como los contratos de compra de
concentrados y de venta de metales, por
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un valor hasta de US$ 50'000,000.00 (DOLARES AMERICANOS CINCUENTA MILLONES) o su
equivalente en moneda nacional o por un plazo maximo de un ano. Contratar
seguros, aprobar y autorizar endosos y apendices, asi como cobrar
indemnizaciones y denunciar siniestros. Negociar, celebrar, suscribir,
modificar, rescindir, resolver y dar por terminados contratos de permuta,
prenda, contratos preparatorios, compraventa de bienes muebles destinados a
operaciones de la Sociedad, hasta por un monto de US$ 1'.000,000 (DOLARES
AMERICANOS UN MILLON) o su equivalente en moneda nacional ;. Negociar, celebrar,
suscribir, modificar, rescindir, resolver y dar por terminados contratos de
arrendamiento de bienes muebles e inmuebles. hasta por un valor de US$
100,000.00 (DOLARES AMERICANOS CIEN MIL) o su equivalente en moneda nacional ;
Negociar, celebrar, suscribir, modificar, rescindir, resolver y dar por
terminados contratos de prestacion de servicios hasta por US$ US$ 1'.000,000
(DOLARES AMERICANOS UN MILLON) o su equivalente en moneda nacional ;, con
excepcion de aquellos destinados a servicios de administracion, gerenciamiento,
direccion u operacion de la Sociedad. Negociar, celebrar, suscribir, modificar,
rescindir, resolver y dar por terminados contratos de transporte para el
cumplimiento del objeto de la Sociedad hasta por US$ US$ 1'.000,000 (DOLARES
AMERICANOS UN MILLON) o su equivalente en moneda nacional ; Negociar, celebrar,
suscribir, modificar, rescindir, resolver y dar por terminados todo tipo de
contratos civiles o comerciales y en general toda clase de contratos en que la
Sociedad requiera intervenir y que no esten expresamente indicados en los
numerales anteriores, hasta por US$ US$ 1'.000,000 (DOLARES AMERICANOS UN
MILLON) o su equivalente en moneda nacional ;
ARTICULO DECIMO SEGUNDO
Sin perjuicio de lo establecido en el articulo anterior, el Gerente General de
la Sociedad, firmando conjuntamente con el Apoderado Especial, que para estos
efectos nombra la Junta General de Socios, podra :
Abrir y negociar cartas de credito o cartas fianza en moneda nacional o
extranjera ; Solicitar y otorgar prestamos en moneda nacional o extranjera ;
solicitar y acordar creditos en cuenta corriente, avance o sobregiros, celebrar
toda clase de operaciones de credito con o sin garantia Suscribir contratos de
prenda mercantil para garantizar cartas de credito y otras obligaciones con las
entidades bancarias y financieras ; Aprobar el otorgamiento de garantias o la
constitucion de cargas o gravamenes sobre los bienes de la Sociedad, en moneda
nacional o extranjera; Celebrar y suscribir contratos de arrendamiento
financiero, lease back, de factoring y, en general, cualquier otro vinculado a
los intereses de la Sociedad con las entidades bancarias y financieras ;
Celebrar, suscribir, modificar, rescindir, resolver y dar por terminados
contratos de arrendamiento de bienes muebles superiores a US$ 100,000.00
(DOLARES AMERICANOS CIEN MIL), o su equivalente en moneda nacional, y de bienes
inmuebles por cualquier monto ; Celebrar, suscribir, modificar, rescindir,
resolver y dar por terminados contratos con empresas relacionadas economicamente
con la Sociedad ; contratos con Empresas incluidas en la actividad empresarial
del Estado ; y, contratos de trabajo y otros beneficios adicionales que pudiesen
acordarse con el Gerente General, Gerente Tecnico y Gerente de Operaciones ;
Celebrar, suscribir, modificar, rescindir, resolver y dar por terminados
contratos que impliquen la constitucion y/o adquisicion por parte de la Sociedad
de acciones o participaciones de otras Sociedades ; Celebrar, suscribir,
modificar, rescindir, resolver y dar por terminados contratos de prestacion de
servicios por sumas superiores a US$ 1'000,000.00 (DOLARES AMERICANOS UN MILLON)
; contratos de prestacion de servicios destinados a servicios de administracion,
gerenciamiento, direccion u operacion de la Sociedad ; Celebrar, suscribir,
modificar, rescindir, resolver y dar por terminados contratos de permuta,
prenda, contratos preparatorios, compraventa de bienes muebles destinados a
operaciones de la Sociedad, por
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sumas superiores a US$ 1'.000,000 (DOLARES AMERICANOS UN MILLON) o su
equivalente en moneda nacional ;. Celebrar, suscribir, modificar, rescindir,
resolver y dar por terminados contratos de arrendamiento de bienes muebles e
inmuebles. por sumas superiores a US$ 100,000.00 (DOLARES AMERICANOS CIEN MIL) o
su equivalente en moneda nacional ; Celebrar, suscribir, modificar, rescindir,
resolver y dar por terminados contratos de transporte para el cumplimiento del
objeto de la Sociedad por montos superiores a US$ US$ 1'.000,000 (DOLARES
AMERICANOS UN MILLON) o su equivalente en moneda nacional ; Celebrar, suscribir,
modificar, rescindir, resolver y dar por terminados contratos de curso ordinario
de la Sociedad, tales como los contratos de compra de concentrados y de venta de
metales, por montos superiores a US$ 50'000,000.00 (DOLARES AMERICANOS CINCUENTA
MILLONES) o su equivalente en moneda nacional o por plazos superiores a ano.
Celebrar, suscribir, modificar, rescindir, resolver y dar por terminados todo
tipo de contratos civiles o comerciales y en general toda clase de contratos en
que la Sociedad requiera intervenir y que no esten expresamente indicados en los
numerales anteriores, por montos superiores a US$ US$ 1'.000,000 (DOLARES
AMERICANOS UN MILLON) o su equivalente en moneda nacional ;
TITULO CUARTO
AUMENTO Y REDUCCION DE CAPITAL
ARTICULO DECIMO TERCERO
En caso de aumento de capital por nuevos aportes, los socios tienen derecho
preferencial para suscribir, a prorrata de su participacion en el capital de la
sociedad, las participaciones que se creen.
No pueden ejercer este derecho los socios que se encuentren en mora en el pago
de dividendos pasivos, y sus participaciones no se computaran para establecer la
prorrata de su participacion en el derecho de preferencia.
El derecho de preferencia se ejerce en por lo menos dos ruedas. En la primera,
el socio tiene derecho a suscribir las nuevas participaciones a prorrata de su
participacion a la fecha que se establezca el acuerdo. Si quedan participaciones
sin suscribir, quienes han intervenido en la primera rueda, podran suscribir, en
segunda rueda, las participaciones restantes a prorrata de su participacion en
el capital social, considerando para ello las participaciones adquiridas en
primera rueda.
La junta general establece el procedimiento que debe seguirse para el caso que
queden participaciones sin suscribir luego de terminada la segunda rueda.
Salvo acuerdo unanime adoptado por la totalidad de socios, el plazo para el
ejercicio del derecho de preferencia en primera rueda, no sera inferior a diez
dias, contado a partir de la fecha del aviso que debera publicarse al efecto o
de una fecha posterior que al efecto se consigne en dicho aviso. El plazo para
la segunda rueda, y las siguientes si las hubiere, se establece por la junta
general, no pudiendo en ningun caso, cada rueda ser menor a tres dias.
La sociedad esta obligada a proporcionar a los suscriptores en forma oportuna la
informacion correspondiente.
TITULO QUINTO
DE LOS ESTADOS FINANCIEROS Y APLICACION DE UTILIDADES
ARTICULO DECIMO CUARTO
Finalizado el ejercicio, el Gerente General debe formular la memoria, los
estados financieros y la propuesta de aplicacion de las utilidades en caso de
haberlas. De estos documentos debe resultar, con
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claridad y precision, la situacion economica y financiera de la sociedad, el
estado de sus negocios y los resultados obtenidos en el ejercicio vencido.
Los estados financieros deberan ser puestos a disposicion de los socios con la
antelacion necesaria para ser sometidos, conforme a ley, a consideracion de la
junta obligatoria anual.
ARTICULO DECIMO QUINTO
La aplicacion de dividendos y de las primas de capital se regira por lo previsto
en la Ley General de Sociedades.
TITULO SEXTO
DISPOSICION GENERAL
ARTICULO DECIMO SEXTO
Las diferencias que pudieran surgir entre los socios, y entre estos y la
Sociedad seran sometidas al procedimiento y al fallo de conciencia inapelable de
un tribunal constituido por tres arbitros, uno designado por cada una de las
partes en conflicto y el otro por los arbitros designados por cada una de las
partes antes mencionadas.
El arbitraje se llevara a cabo de acuerdo con los reglamentos de arbitraje
internacional del Centro de Arbitraje Nacional e Internacional de la Camara de
Comercio de Lima.
La resolucion del Tribunal Arbitral sera final e inapelable.
ARTICULO DECIMO SETIMO
La Sociedad se regira plenamente por la Ley General de Sociedades, o la norma
que la sustituya, para todo aquello no previsto en el presente estatuto.
ANIBAL CORVETTO ROMERO
NOTARIO ABOGADO
LIMA
[NOTARY SEAL]
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Mister Notary:
Kindly enter into your Register of Public Deeds the Incorporation of a
Partnership Association, given by JORGE FEDERICO GUTIERREZ SISNIEGAS, peruvian,
single, identified with identity card 011251168, addressed in Manuel Gonzalez
Olaechea 349. San Isidro; and JULIO ENRIQUE GUADALUPE BASCONES, peruvian,
single, identified with identity card 09388911, addressed in Ramon Ribeyro
avenue 421, apartment 2, San Antonio - Miraflores; according to the following
provisions:
FIRST:
The grantors agreed to incorporate a Partnership Association, that will be named
"DOE RUN PERU S.R.Ltda.," whose corporate purpose will be, in general, to
perform, the activities inherent to the mining and metallurgic industry, such as
mining, milling, smelting, metallurgy, refining, industrialization and commerce
of the obtained products, according to what is disposed by the legislation in
force and any industries supporting or dependent upon the mining and metallurgic
industry (i.e. electrical power industry and exploration).
The Corporation may also fulfill any kind of mining activities, as surveys,
prospecting, exploration, exploitation, general labor, benefit, refining,
commercialization and mining transportation.
Also it can perform all acts and civil, industrial, commercial operation and
others of other nature related or conducing to its main corporate purpose.
SECOND:
The Partnership capital stock is of S/. 5,300.00 ( FIVE THOUSAND THREE HUNDRED
NUEVOS SOLES ) represented by 5,300 nominative certificates with a value of S/.
1.00 each one; the capital is totally signed and paid.
o Jorge Federico Gutierrez Sisniegas., sign 3,500 certificates and pay
S/. 3,500.00
o Julio Enrique Guadalupe Bascones, sign 1,800 certificates and pay S/.
1,800.00
THIRD:
The Partnership Association will be regulated by the following bylaws:
<PAGE>
BY-LAWS
TITLE I
NAME, PURPOSE, REGISTERED OFFICE AND TERM
FIRST ARTICLE
The Company's name is "DOE RUN PERU S.R.L.".
The purpose of the Company is to engage in general mining and metallurgy
activities, including the extraction, grinding, smelting, casting, refining,
processing, and commercialization of minerals, in accordance with the
legislation in force, as well as in any other activity related to, or dependent
upon, mining or metallurgy, such as power generation. For this purpose, the
Company may perform every act and carry out all kinds of civil, industrial,
commercial and other works related or conductive to its operations.
The Company may also engage in all types of mining operations, such as digging,
prospection, exploration, exploitation, mining, processing, refining,
commercialization and transportation of minerals.
To carry out its corporate activities, the Company may acquire participations or
interest in Companies having a corporate object similar to the one described in
these By-laws.
SECOND ARTICLE
The Company's registered office is located in the city of Lima, but it may
establish branches, subsidiaries or other establishments anywhere, within or
outside Peru.
The company commences its operations on August 29, 1997 and its term is
indefinite.
TITLE II
CAPITAL STOCK AND PARTICIPATIONS
THIRD ARTICLE
The capital of the Company is S/. 648'678,241.00 (SIX HUNDRED FORTY EIGHT
MILLION SIX HUNDRED SEVENTY EIGHT THOUSAND TWO HUNDRED AND FORTY ONE AND 00/100
NUEVOS SOLES), divided into 648'678,241 participations of S/.1.00 (ONE NUEVO
SOL) each, fully subscribed and paid-in.
FOURTH ARTICLE
The members of the Company may be either natural or artificial persons.
Any member who desires to transfer his/her/its participation(s) in the Company
to any third person(s) outside the Company shall give notice in writing of his
intention and the transfer price to the General Manager of the Company, who
shall communicate this fact to the other members within a maximum period of ten
days thereafter. The non selling members may express their desire to acquire the
offered participations at the stated transfer price, not later than thirty days
after receiving said notice from the Company ; if more than one member wishes to
acquire the offered participation(s), the offered participation(s) shall be
prorated among all the interested members, in proportion to their respective
interest in the Company. If no member exercises said right of first refusal,
then the Company may acquire
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the offered participation(s) at the stated transfer price within thirty days
after the expiration of the previous term ; which may be redeemed through a
consequent reduction of the corporate capital. If the e Company fails to
exercise said preferred right before expiration of the aforementioned term, then
the member shall be free to transfer its participation(s) in the Company as he
may consider appropriate, except if a meeting has been convened to consider the
acquisition of the participations by the Company. In this last case, if after
the date fixed for the meeting no decision has been taken regarding the
acquisition of the offered participation(s), the member may proceed to carry out
the transfer.
In the event of death any of the members, the other members shall have the right
to acquire the participation(s) of the deceased member within sixty calendar
days of the notice communicating this fact, at their market value. In case of
disagreement on the price, the price shall be determined by three experts, one
designated by each of the parties, and the third by mutual agreement, or, if no
agreement is reached, the price shall be decided by the judge in a summary
process. If more than one member desires to acquire said participation(s), the
participation(s) shall be prorated among all the interested members in
proportion to their respective interest in the Company.
TITLE III
CORPORATE BODIES
CHAPTER I
MEETING OF MEMBERS
FIFTH ARTICLE
The Meeting of Members is the highest corporate body. Its resolutions are
adopted in accordance with the Law and with these By-laws, and they are binding
upon all the members.
The members may be represented by another person at the Meetings. The power of
representation shall be granted in writing, and for each meeting, except for a
power-of-attorney executed as a public deed.
SIXTH ARTICLE
The General Meeting of Members is convened by the General Manager of the
Company, as prescribed by the law or established in these By-laws, or at the
request of the General Manager or of members representing at least twenty
percent of the capital stock.
The notice of an Annual Mandatory General Meeting shall be published at least
ten days prior to the date of the meeting. In all other cases, the notice shall
be published at least three days in advance, except where the law prescribes a
longer period.
SEVENTH ARTICLE
The quorum is counted and determined at the beginning of the meeting, whereupon
the chairman declares the meeting installed.
To hold a meeting or an adjourned meeting for any purpose other than to discuss
the matters referred to in the following paragraph, the presence of members
representing at least fifty percent of the capital stock shall constitute a
valid quorum, and the resolutions shall be carried by an absolute majority of
the participations present or represented at the meeting.
To hold a meeting or an adjourned meeting for the purpose of discussing the
modification of the By-laws ; an extension of the term of the Company ; the
issuance of debentures ; the disposition, in a single act, of assets having a
book value that exceeds fifty percent of the Company's capital ; the
transformation, merger, division, reorganization, or winding-up of the Company,
and its liquidation and extinction, the
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presence of members representing at least two-thirds of the capital stock shall
constitute a valid quorum, and its resolutions shall be carried, in both cases,
with the affirmative votes of participations representing at least an absolute
majority of the capital stock.
EIGHTH ARTICLE
The general meeting and the resolutions adopted thereat shall be embodied in a
minute or record of proceedings. The minutes may be entered in a special book
assigned for this purpose, or on loose sheets of paper, or in any other way
authorized by the law.
The minute shall be drafted by the secretary within five days after the general
meeting. In such case, at least two members shall be designated to review and
approve the minute, together with the chairman and the secretary. The minute
shall be approved within ten days after the Meeting and distributed to the
members or their representatives present at the meeting, who may submit their
observations or objections via notarial letter.
If the minute is drafted and approved at the same meeting, it shall be signed by
the chairman, the secretary, and one member.
Exceptionally, if for any reason the minute may not be recorded as established
in the first paragraph of this article, then it shall be prepared and signed by
all the members present in a special document, and inserted or transcribed on
the book or loose sheets when these become available, or in any other way
authorized by the law. This special document shall be delivered to the General
Manager, who shall be responsible for carrying out the above procedure as soon
as possible.
CHAPTER II
THE MANAGEMENT
NINTH ARTICLE
The management of the Company is entrusted to one or more managers or officers,
whether or not members of the Company, who will have the authority to represent
the Company in such matters related to its corporate purpose as expressly stated
in the By-laws and in resolutions adopted in the General Meeting of Members. The
managers may not engage in the same or similar businesses as the Company, either
on their own account or on account of third parties.
All the authorizations not expressly given to the General Manager or officers by
the By-laws or in Resolutions adopted by the General Meeting of Members are
reserved for exercise by the General Meeting of Members.
The managers and officers shall be appointed by the Meeting of Members, as
required, or by the General Manager, who may delegate powers subject to give
account thereof to the Meeting of Members. The managers and officers may be
removed as agreed by members representing a simple majority of the capital
stock.
The appointment of managers could be given to an artificial person. In that
event, that artificial person has to designate an individual to represent it for
that purpose.
TENTH ARTICLE
The General Manager implements all the decisions of the Meeting of Members and
acts as the legal, commercial and administrative representative of the Company.
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The General Manager acts as legal representative of the Company, with power to
represent the Company, without reserve or limitation, before any public,
private, natural or artificial person, and before any civil, judiciary,
administrative, municipal, political, police, customs, fiscal, social security,
or labor authority, with all the powers of his mandate contemplated in the Civil
Code, and with the general and special powers of representation contemplated in
the Code of Civil Procedures, and with power to dispose of substantive rights,
and to sue, countersue, defend suits and countersuits, abandon process and
claims, admit claims. Compromise, settle and abandon process and claims, admit
claims, compromise, settle, submit claims to arbitration, substitute or delegate
his representation in the process, and perform every other act contemplated in
the law. Likewise, with regard to labor matters, the General Manager may
exercise the powers and authorities prescribed in the Law of Labor Procedures
(Law 26636) and in Supreme Decree 004-96-TR, in the Consolidated Text of
Legislative Decree 728, Labor Training and Promotion Law (Supreme Decree
002-97-TR), Consolidated Text of Legislative Decree 728 (Labor Productivity and
Competitiveness Law (Supreme Decree 003-97-TR), and its Implementing Regulations
(Supreme Decree 001-96-TR), as well as those contained in the Law on Collective
Labor Relations (Decree Law 25593), or in any statutes that may complete,
regulate, or subrogate the former.
The faculties of abandon process and claims, admit claims, compromise and settle
for amounts over US$ 100,000, could be exercised with the joint signature of the
Special Attorney stated in the Twelfth Article. Moreover, those faculties could
not be delegated.
ELEVENTH ARTICLE
In addition of any powers that may be granted by Resolution adopted by the
General Meeting of Members, the General Manager has the power to :
Open and close checking accounts with banks and financial institutions.
Draw and endorse checks ; draw, accept, reaccept, discount, endorse, negotiate,
protest, and execute drafts, bills, and promissory notes, and any other type of
securities or credit documents ; Withdraw deposits ; Open and close safe-deposit
boxes ; Issue cancellations and receipts. Negotiate, execute, sign, modify,
rescind, resolve, and terminate ordinary course of business purchase of
concentrates and sale of metal contracts having a value up to US $ 50 million
dollars or its equivalent in Peruvian currency and having a term less than one
year. Take insurance, approve and authorize endorsements and annexes, collect
compensations and report calamities. Negotiate, execute, sign, modify, rescind,
resolve, and terminate barter or pledge agreements, preparatory contracts,
contracts for the purchase/sale of personal property, assigned to the Company's
operations up to US$ 1 million or its equivalent in Peruvian currency.
Negotiate, execute, sign, modify, rescind, resolve, and terminate leases of real
or personal property up to US$ 100,000 or its equivalent in Peruvian currency.
Negotiate, execute, sign, modify, rescind, resolve and terminate service
contracts up to US$ 1 million or its equivalent in Peruvian currency, ; except
those covering services for the management, direction or operation or the
Company. Negotiate, execute, sign, modify, rescind, resolve, and terminate
transportation contracts required to accomplish the purpose of the Company, up
to US$ 1 million or its equivalent in Peruvian currency. Negotiate, execute,
sign, modify, rescind, resolve, and terminate every type of civil or commercial
contracts, and generally every kind of contract not expressly referred to in
other sections of this article required to be signed by the Company, up to US$ 1
million or its equivalent in Peruvian currency.
TWELFTH ARTICLE
Signing with an Special Attorney appoint by the General Meeting, the General
Manager can :
11
<PAGE>
Open and negotiate letters of credit or letters of guaranty, in Peruvian or
foreign currency. Apply for and give loans in Peruvian or foreign currency ;
request and obtain credits, advances or overdrafts in checking accounts, execute
every king of credit transactions, whether or not secured. Sign chattel pledge
agreements to secure letters of credit and other obligations with banking and
financing institutions ; Approve the granting of guarantees or liens on the
assets of the Company in Peruvian or foreign currency. Execute and sign leasing,
lease back, and factoring agreements, and generally any other agreement related
to the Company's interest, with banking or financial institutions. Sign, execute
modify, rescind, resolve, and terminate leases of personal property for amounts
over US$ 100,000 or its equivalent in Peruvian currency and, for any amount in
the case of real property . Sign, execute, modify, rescind, resolve and
terminate contracts with subsidiaries and Companies related economically with
the Company ; contracts with Companies included into the State Business
Activities ; and, employment and other specific benefit agreements between the
Company and the General Manager, Technical and Operational Manager ; Sign,
execute, modify, rescind, resolve and terminate contracts that imply the
acquisition of shares or participations of other companies ; Sign, execute,
modify, rescind, resolve and terminate service contracts for amounts over US$ 1
million ; or contracts for the management, direction or operation of the
Company. Sign, execute, modify, rescind, resolve, and terminate barter or pledge
agreements, preparatory contracts, contracts for the purchase/sale of personal
property, assigned to the Company's operations over the amount of US$ 1 million
or its equivalent in Peruvian currency. Sign, execute, modify, rescind, resolve,
and terminate leases of real or personal property over the amount of US$ 100,000
or its equivalent in Peruvian currency. Sign, execute modify, rescind, resolve,
and terminate transportation contracts required to accomplish the purpose of the
Company, over the amount of US$ 1 million or its equivalent in Peruvian
currency. Sign, execute, modify, rescind, resolve, and terminate ordinary course
of business purchase of concentrates and sale of metal contracts having a value
over the amount of US $ 50 million dollars or its equivalent in Peruvian
currency and having a term over one year. Sign, execute, modify, rescind,
resolve, and terminate every type of civil or commercial contracts, and
generally every kind of contract not expressly referred to in other sections of
this article, required to be signed by the Company, over the amount of US$ 1
million or its equivalent in Peruvian currency.
TITLE IV
INCREASE AND REDUCTION OF CAPITAL
THIRTEENTH ARTICLE
If the Company's capital were increased as a result of new contributions, the
members shall enjoy pre-emptive right to subscribe the new participations to be
issued, on a pro rata basis, in proportion to their respective interest in the
Company's capital.
This pre-emptive right may not be exercised by any member(s) with payments of
calls on subscribed participations in arrears. The interest of said defaulting
member(s) shall not be taken into account for the purpose of prorating this
benefit.
The pre-emptive right hereunder is exercised in at least two rounds. In the
first round, each member has the right to subscribe the new participations in
proportion to his respective interest in the Company on the date of the
agreement therefor. Any remaining participations may be subscribed in the second
round by those members who exercised their right to subscribe participations in
the first round, in proportion to their interest in the Company's capital,
including for this purpose the participations acquired in the first round.
12
<PAGE>
The general meeting shall establish the procedure to be followed with respect to
any participations still not subscribed after the second round.
Except as unanimously agreed otherwise by all the members, the term allowed to
exercise said pre-emptive right in the first round shall not be less than ten
days from the date of the notice published to this effect, or any later date
indicated in such notice. The term allowed to exercise said pre-emptive right in
the second round, and in any subsequent rounds, shall be established by the
general meeting, but may not be less than three days.
The Company has the obligation to furnish the relevant information to the
subscribers on a timely basis.
TITLE V
FINANCIAL STATEMENTS AND ALLOCATION OF PROFITS
FOURTEENTH ARTICLE
At the end of each fiscal year, the General Manager shall prepare the annual
report, the financial statements, and the proposal for allocation of the
profits, if any. These documents shall clearly and accurately establish the
economic and financial situation of the Company and its businesses, and the
results obtained in the ended fiscal year.
The financial statements shall be distributed to the members with due
anticipation, for submission to and consideration by the annual mandatory
meeting, in accordance with the law.
FIFTEENTH ARTICLE
The distribution of dividends and premiums on capital shall be governed by the
provisions of the General Companies' Act.
TITLE VI
GENERAL PROVISION
SIXTEENTH ARTICLE
Any differences that may arise between the members, or between the members and
the Company, shall be submitted to the final decision of an arbitration panel
composed of three arbitrators, one designated by each of the disputing parties,
and the third by the other two arbitrators.
The arbitration shall be held in accordance with the rules of international
arbitration of the National and International Arbitration Center under the Lima
Chamber of Trade.
The decision of the Arbitration Court shall be final and unappealable.
SEVENTEENTH ARTICLE
The Company shall be subject to the provisions of the General Companies' Act, or
any substitute law, for all that is not provided for herein."
13
<PAGE>
Exhibit 4.1
============================================================================
THE DOE RUN RESOURCES CORPORATION,
as Issuer
and
the GUARANTORS named herein,
as Guarantors
and
STATE STREET BANK AND TRUST COMPANY,
as Trustee
---------------------
INDENTURE
Dated as of March 12, 1998
---------------------
up to $355,000,000
11 1/4% Senior Notes due 2005, Series A
and
11 1/4% Senior Notes due 2005, Series B
and
Floating Interest Rate
Senior Notes (FIRSTS(SM*)) due 2003, Series A
and
Floating Interest Rate
Senior Notes (FIRSTS(SM*)) due 2003, Series B
============================================================================
- ----------
* FIRSTS is a service mark of BT Alex. Brown Incorporated.
<PAGE>
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
- ------- ---------
310 (a)(1).......................................... 7.10
(a)(2).......................................... 7.10
(a)(3).......................................... N.A.
(a)(4).......................................... N.A.
(a)(5).......................................... 7.10
(b)............................................. 7.08; 7.10; 10.02
(c)............................................. N.A.
311 (a)............................................. 7.11
(b)............................................. 7.11
(c)............................................. N.A.
312 (a)............................................. 2.05
(b)............................................. 10.03
(c)............................................. 10.03
313 (a)............................................. 7.06
(b)(1).......................................... N.A.
(b)(2).......................................... 7.06
(c)............................................. 7.06; 10.02
(d)............................................. 7.06
314 (a)............................................. 4.07; 4.09; 10.02
(c)(1).......................................... 10.04
(c)(2).......................................... 10.04
(c)(3).......................................... N.A.
(e)............................................. 10.05
(f)............................................. N.A
315 (a)............................................. 7.01(b)
(b)............................................. 7.05; 10.02
(c)............................................. 7.01(a)
(d)............................................. 7.01(c)
(e)............................................. 6.11
316 (a)(last sentence).............................. 2.09
(a)(1)(A)....................................... 6.05
(a)(1)(B)....................................... 6.04
(a)(2).......................................... N.A.
(b)............................................. 6.07; 9.04
317 (a)(1).......................................... 6.08
(a)(2).......................................... 6.09
(b)............................................. 2.04
318 (a)............................................. 10.01
(c)............................................. 10.01
- --------------------
N.A. means Not Applicable
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed
to be a part of this Indenture.
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE ONE DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.............................................1
SECTION 1.02. Incorporation by Reference of TIA......................24
SECTION 1.03. Rules of Construction..................................24
ARTICLE TWO THE SECURITIES
SECTION 2.01. Form and Dating........................................25
SECTION 2.02. Execution and Authentication...........................28
SECTION 2.03. Registrar and Paying Agent.............................30
SECTION 2.04. Paying Agent To Hold Assets in Trust...................31
SECTION 2.05. Securityholder Lists...................................31
SECTION 2.06. Transfer and Exchange..................................31
SECTION 2.07. Replacement Securities.................................39
SECTION 2.08. Outstanding Securities.................................40
SECTION 2.09. Treasury Securities....................................40
SECTION 2.10. Temporary Securities...................................40
SECTION 2.11. Cancellation...........................................41
SECTION 2.12. Defaulted Interest.....................................41
SECTION 2.13. CUSIP Number...........................................41
SECTION 2.14. Designation............................................42
ARTICLE THREE REDEMPTION
SECTION 3.01. Optional Redemption....................................42
SECTION 3.02. Notices to Trustee.....................................43
SECTION 3.03. Selection of Securities To Be Redeemed.................43
SECTION 3.04. Notice of Redemption...................................44
SECTION 3.05. Effect of Notice of Redemption.........................45
SECTION 3.06. Deposit of Redemption Price............................45
SECTION 3.07. Securities Redeemed in Part............................45
ARTICLE FOUR COVENANTS
SECTION 4.01. Payment of Securities..................................46
SECTION 4.02. Maintenance of Office or Agency........................46
SECTION 4.03. Limitation on Restricted Payments......................47
SECTION 4.04. Corporate Existence....................................50
SECTION 4.05. Payment of Taxes and Other Claims......................50
SECTION 4.06. Maintenance of Properties and Insurance................51
SECTION 4.07. Compliance Certificate; Notice of Default..............52
SECTION 4.08. Compliance with Laws...................................53
SECTION 4.09. SEC Reports and Other Information......................53
-i-
<PAGE>
SECTION 4.10. Waiver of Stay, Extension or Usury Laws................54
SECTION 4.11. Limitation on Transactions with Affiliates.............54
SECTION 4.12. Limitation on Indebtedness.............................55
SECTION 4.13. Limitation on Dividends and Other Payment
Restrictions Affecting Restricted Subsidiaries.......56
SECTION 4.14. Limitation on Liens....................................57
SECTION 4.15. Change of Control......................................57
SECTION 4.16. Limitation on Sale of Assets...........................59
SECTION 4.17. Limitation on Sale/Leaseback Transactions..............62
SECTION 4.18. Limitation on Preferred Stock of Restricted
Subsidiaries.........................................62
SECTION 4.19. Qualifying Investment Requirements.....................62
SECTION 4.20. Future Guarantees......................................63
SECTION 4.21. Conduct of Business....................................63
ARTICLE FIVE SUCCESSOR CORPORATION
SECTION 5.01. When Company May Merge, Etc............................63
SECTION 5.02. Successor Corporation Substituted......................66
ARTICLE SIX DEFAULT AND REMEDIES
SECTION 6.01. Events of Default......................................66
SECTION 6.02. Acceleration...........................................68
SECTION 6.03. Other Remedies.........................................69
SECTION 6.04. Waiver of Past Defaults................................70
SECTION 6.05. Control by Majority....................................70
SECTION 6.06. Limitation on Suits....................................70
SECTION 6.07. Rights of Holders To Receive Payment...................71
SECTION 6.08. Collection Suit by Trustee.............................71
SECTION 6.09. Trustee May File Proofs of Claim.......................71
SECTION 6.10. Priorities.............................................72
SECTION 6.11. Undertaking for Costs..................................73
SECTION 6.12. Ranking................................................73
ARTICLE SEVEN TRUSTEE
SECTION 7.01. Duties of Trustee......................................73
SECTION 7.02. Rights of Trustee......................................75
SECTION 7.03. Individual Rights of Trustee...........................76
SECTION 7.04. Trustee's Disclaimer...................................76
SECTION 7.05. Notice of Default......................................76
SECTION 7.06. Reports by Trustee to Holders..........................76
SECTION 7.07. Compensation and Indemnity.............................77
-ii-
<PAGE>
SECTION 7.08. Replacement of Trustee.................................78
SECTION 7.09. Successor Trustee by Merger, Etc.......................79
SECTION 7.10. Eligibility; Disqualification..........................79
SECTION 7.11. Preferential Collection of Claims Against
Company..............................................79
ARTICLE EIGHT DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Termination of Company's Obligations...................80
SECTION 8.02. Legal Defeasance and Covenant Defeasance...............81
SECTION 8.03. Application of Trust Money.............................85
SECTION 8.04. Repayment to Company...................................85
SECTION 8.05. Reinstatement..........................................86
ARTICLE NINE AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.............................86
SECTION 9.02. With Consent of Holders................................87
SECTION 9.03. Compliance with TIA....................................89
SECTION 9.04. Revocation and Effect of Consents......................89
SECTION 9.05. Notation on or Exchange of Securities..................90
SECTION 9.06. Trustee To Sign Amendments, Etc........................90
ARTICLE TEN MISCELLANEOUS
SECTION 10.01. TIA Controls...........................................90
SECTION 10.02. Notices................................................90
SECTION 10.03. Communications by Holders with Other Holders...........92
SECTION 10.04. Certificate and Opinion as to Conditions
Precedent............................................92
SECTION 10.05. Statements Required in Certificate or Opinion..........92
SECTION 10.06. Rules by Trustee, Paying Agent, Registrar..............93
SECTION 10.07. Legal Holidays.........................................93
SECTION 10.08. Governing Law..........................................93
SECTION 10.09. No Adverse Interpretation of Other Agreements..........93
SECTION 10.10. No Recourse Against Others.............................93
SECTION 10.11. Successors.............................................94
SECTION 10.12. Duplicate Originals....................................94
SECTION 10.13. Severability...........................................94
-iii-
<PAGE>
ARTICLE ELEVEN GUARANTEE OF SECURITIES
SECTION 11.01. Unconditional Guarantee................................94
SECTION 11.02. Limitations on Guarantees..............................96
SECTION 11.03. Execution and Delivery of Guarantee....................96
SECTION 11.04. Release of a Guarantor.................................97
SECTION 11.05. Waiver of Subrogation..................................98
SECTION 11.06. Immediate Payment......................................98
SECTION 11.07. No Set-Off.............................................99
SECTION 11.08. Obligations Continuing.................................99
SECTION 11.09. Obligations Reinstated.................................99
SECTION 11.10. Obligations Not Affected...............................99
SECTION 11.11. Waiver................................................100
SECTION 11.12. No Obligation To Take Action Against the Company......100
SECTION 11.13. Dealing with the Company and Others...................100
SECTION 11.14. Default and Enforcement...............................101
SECTION 11.15. Amendment, Etc........................................101
SECTION 11.16. Acknowledgment........................................101
SECTION 11.17. Costs and Expenses....................................101
SECTION 11.18. No Waiver; Cumulative Remedies........................101
SECTION 11.19. Survival of Obligations...............................102
SECTION 11.20. Guarantee in Addition to Other Obligations............102
SECTION 11.21. Severability..........................................102
SECTION 11.22. Successors and Assigns................................102
Exhibit A - Form of Series A Fixed Rate Note
Exhibit A-1 - Form of Series A Floating Rate Note
Exhibit B - Form of Series B Fixed Rate Note
Exhibit B-1 - Form of Series B Floating Rate Note
Exhibit C - Form of Legend for Book-Entry Securities
Exhibit D - Form of Transferee Letter of Representation
Exhibit E - Form of certification to be given by the holders of
beneficial interest in a temporary Regulation S global
security to Euroclear or Cedel
Exhibit F - Form of certification to be given by Euroclear operator
or Cedel Bank, Societe Anonyme
Exhibit G - Form of certification to be given by transferee of
beneficial interest in a temporary Regulation S global
security
Exhibit H - Form of certification for transfer or exchange of
restricted global security to temporary Regulation S global
security
Exhibit I - Form of certification for transfer or exchange of
restricted global security to permanent Regulation S global
security
-iv-
<PAGE>
Exhibit J - Form of certification for transfer or exchange of
temporary Regulation S global security or permanent Regulation
S global security to restricted global security
Exhibit K-1 - Form of certification for transfer or exchange of
non-global restricted security to restricted global security
Exhibit K-2 - Form of certification for transfer or exchange of
non-global restricted security to permanent Regulation S
global security or temporary Regulation S global security
Exhibit L-1 - Form of certification for transfer or exchange of
non-global permanent Regulation S security to restricted
global security
Exhibit L-2 - Form of certification for transfer or exchange of
non-global permanent Regulation S security to permanent
Regulation S global security
Exhibit M - Form of Guarantee
Note: This Table of Contents shall not, for any purpose, be deemed to
be part of this Indenture.
-v-
<PAGE>
INDENTURE, dated as of March 12, 1998, by and among THE DOE RUN
RESOURCES CORPORATION, a New York corporation (the "Company"), as issuer,
FABRICATED PRODUCTS, INC., a Delaware corporation, as guarantor, DOE RUN CAYMAN
LTD., a Cayman Islands company, as guarantor, DOE RUN MINING S.R. LTDA., a
Peruvian company, as guarantor, and DOE RUN PERU S.R. LTDA., a Peruvian company,
as guarantor, and STATE STREET BANK AND TRUST COMPANY, as Trustee (the
"Trustee").
Each party hereto agrees as follows for the benefit of the other
parties and for the equal and ratable benefit of (i) the Holders of the
Company's 11 1/4% Senior Notes due 2005, Series A, and Senior Notes due 2005,
Series B, without distinction as to Series and (ii) the Holders of the
Company's Floating Interest Rate Senior Notes (FIRSTS)(SM) due 2003, Series
A, and Floating Interest Rate Senior Notes (FIRSTS)(SM) due 2003, Series B,
without distinction as to Series:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acquired Indebtedness" means Indebtedness of a person or any of its
Subsidiaries existing at the time such person becomes a Subsidiary (Restricted
Subsidiary, in the case of the Company) or assumed in connection with the
acquisition of assets from such person, including, without limitation,
Indebtedness incurred by such person in connection with, or in anticipation or
contemplation of, such person becoming a Subsidiary (Restricted Subsidiary, in
the case of the Company) or such acquisition.
"Acquisition" means the acquisition on October 23, 1997 by Doe Run
Peru of Metaloroya pursuant to the Subscription Agreement.
"Affiliate" of any specified person means any other person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control" when used with respect to any person means the power to direct the
management and policies of such person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"affiliated," "controlling" and "controlled" have meanings correlative of the
foregoing. For purposes of Section 4.11, the term "Affiliate" shall include any
person who, as a result of any transaction described therein, would become an
Affiliate.
<PAGE>
-2-
"Affiliate Transaction" has the meaning provided in Section 4.11(a).
"Agent" means any Registrar or Paying Agent.
"Agent Member" means any member of, or participant in, the
Depository.
"Applicable Procedures" has the meaning provided in Section 2.06(g).
"Asset Acquisition" means (i) an Investment by the Company or any
Restricted Subsidiary in any other person pursuant to which such person shall
become a Restricted Subsidiary or a Subsidiary of a Restricted Subsidiary or
shall be merged with the Company or any Restricted Subsidiary or (ii) the
acquisition by the Company or any Restricted Subsidiary of the assets of any
person which constitute all or substantially all of the assets of such person or
any division or line of business of such person.
"Asset Sale" means any direct or indirect sale, issuance,
conveyance, transfer, lease, assignment or other transfer for value by the
Company or any of the Restricted Subsidiaries (including, without limitation,
any Sale/leaseback) to any person, in one transaction or a series of related
transactions, of (i) any Capital Stock of any Restricted Subsidiary; (ii) all or
substantially all of the properties and assets of any division or line of
business of the Company or any Restricted Subsidiary; or (iii) any other
properties or assets of the Company or any Restricted Subsidiary other than in
the ordinary course of business. For the purposes of this definition, the term
"Asset Sale" shall not include (i) any sale, issuance, conveyance, transfer,
lease or other disposition of properties or assets that is consummated in
accordance with the provisions of Article Five and (ii) the sale of inventory in
the ordinary course of business.
"Asset Sale Offer" has the meaning provided in Section 4.16(a)(ii).
"Asset Sale Offer Payment Date" means, with respect to any Available
Amount from an Asset Sale, the earlier of (x) the 180th day following receipt of
such Available Amount or (y) such earlier date on which an Asset Sale Offer
shall expire.
"Available Amount" has the meaning provided in Section 4.16(a)(ii).
<PAGE>
-3-
"Bankruptcy Law" means Title 11 of the U.S. Code or any similar
Federal, state or foreign law for the relief of debtors.
"Board of Directors" means, with respect to any person, the Board of
Directors of such person or any committee of the Board of Directors of such
person duly authorized, with respect to any particular matter, to exercise the
power of the Board of Directors of such person.
"Board Resolution" means with respect to any person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such person
to have been duly adopted by the Board of Directors of such person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Book-Entry Security" means a Security represented by a Global
Security and registered in the name of the nominee of the Depository.
"Business Day" means any day that is not a Legal Holiday.
"Capital Expenditures" shall mean payments for any assets, or
improvements, replacements, substitutions or additions thereto, that have a
useful life of more than one year and which, in accordance with GAAP
consistently applied, are required to be capitalized (as opposed to expensed in
the period in which the payment occurred).
"Capital Lease," as applied to any person, means any lease of (or
any agreement conveying the right to use) any property (whether real, personal
or mixed) by such person as lessee which, in conformity with GAAP, is required
to be accounted for as a capital lease on the balance sheet of such person.
"Capital Stock" means, with respect to any person, any and all
shares, interests, participation or other equivalents (however designated) of
such person's capital stock, whether outstanding at the Issue Date or issued
after the Issue Date, and any and all rights, warrants or options exchangeable
for or convertible into such capital stock (but excluding any debt security that
is exchangeable for or convertible into such capital stock).
"Capitalized Lease Obligation" means, as to any person, the
obligations of such person under a Capital Lease and, for purposes of this
Indenture, the amount of such obligations
<PAGE>
-4-
at any date shall be the capitalized amount of such obligations at such date,
determined in accordance with GAAP.
"Cash Equivalents" means (i) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or issued by
any agency thereof and backed by the full faith and credit of the United States,
in each case maturing within two years from the date of acquisition thereof;
(ii) marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within two years from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc. ("S&P"), or Moody's Investors Service, Inc.
("Moody's"); (iii) commercial paper maturing no more than two years from the
date of creation thereof and, at the time of acquisition, having a rating of at
least A-1 from S&P or at least P-1 from Moody's; (iv) certificates of deposit or
bankers' acceptances maturing within two years from the date of acquisition
thereof issued by any commercial bank organized under the laws of the United
States of America or any state thereof or the District of Columbia or any U.S.
branch of a foreign bank having at the date of acquisition thereof combined
capital and surplus of not less than $500,000,000; (v) repurchase obligations
with a term of not more than seven days for underlying securities of the types
described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (iv) above; and (vi) investments in money
market funds which invest substantially all their assets in securities of the
types described in clauses (i) through (v) above. Notwithstanding the foregoing,
for the purposes of clause (i) of the definition of "Permitted Investments," 20%
of the Cash Equivalents may include securities having a rating of at least BBB
by S&P and Baa by Moody's.
"CEDEL" means Cedel Bank, Societe Anonyme (or any successor
securities clearing agency).
"Centromin" shall mean Empresa Minera del Centro del Peru S.A.
"Change of Control" means the occurrence of one or more of the
following events: (i) any direct or indirect sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all or
substantially all of the assets of the Company, DRA or Renco to any person or
group of related persons for purposes of Section 13(d) of the Exchange Act (a
"Group") (other than a Permitted Holder or a Group controlled by a Permitted
Holder), together with any Af-
<PAGE>
-5-
filiates thereof (whether or not otherwise in compliance with the provisions of
this Indenture); (ii) the approval by the holders of Capital Stock of the
Company, DRA or Renco, as the case may be, of any plan or proposal for the
liquidation or dissolution of the Company, DRA or Renco, as the case may be
(whether or not otherwise in compliance with the provisions of this Indenture);
(iii) the acquisition in one or more transactions of "beneficial ownership"
(within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act, except that
a person shall be deemed to have "beneficial ownership" of all securities that
such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time) by any person, entity or Group
(other than a Permitted Holder or a Group controlled by any Permitted Holder) of
any Capital Stock of the Company, DRA or Renco such that, as a result of such
acquisition, such person, entity or Group either (A) beneficially owns (within
the meaning of Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, more than 50% of the Company's, DRA's or Renco's then outstanding
voting securities entitled to vote on a regular basis in an election for a
majority of the Board of Directors of the Company, DRA or Renco or (B) otherwise
has the ability to elect, directly or indirectly, a majority of the members of
the Company's, DRA's or Renco's Board of Directors; or (iv) the shareholders of
Renco as of the Issue Date and the Permitted Holders shall cease to own at least
50% of the equity of Renco owned by such shareholders on the Issue Date.
Notwithstanding anything to the contrary herein, a merger of DRA with and into
the Company or Renco shall not constitute a "Change of Control" hereunder.
"Change of Control Date" has the meaning provided in Section
4.15(a).
"Change of Control Offer" has the meaning provided in Section
4.15(a).
"Change of Control Payment Date" has the meaning provided in Section
4.15(b)(2).
"Company" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means such
successor.
"Company Order" means a written order or request signed in the name
of the Company by its President or a Vice President, and by its Treasurer, an
Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to
the Trustee.
<PAGE>
-6-
"Consolidated EBITDA" means, with respect to any person, for any
period, the sum (without duplication) of (i) Consolidated Net Income, (ii) to
the extent Consolidated Net Income has been reduced thereby, all income taxes of
such person and its Subsidiaries (Restricted Subsidiaries, in the case of the
Company) paid or accrued in accordance with GAAP for such period (other than
income taxes attributable to extraordinary, unusual or non-recurring gains or
losses), Consolidated Interest Expense (net of any interest income),
amortization expense (including amortization of deferred financing costs) and
depletion and depreciation expense and (iii) other non-cash items (other than
non-cash interest) reducing Consolidated Net Income (including, without
limitation, any non-cash charges in respect of post-employment benefits for
health care, life insurance and long-term disability benefits required in
accordance with GAAP) less other non-cash items increasing Consolidated Net
Income, all as determined on a consolidated basis for such person and its
Subsidiaries (Restricted Subsidiaries, in the case of the Company) in accordance
with GAAP.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to
any person, the ratio of Consolidated EBITDA of such person during the four full
fiscal quarters (the "Four Quarter Period") ending on or prior to the date of
the transaction giving rise to the need to calculate the Consolidated Fixed
Charge Coverage Ratio (the "Transaction Date") to Consolidated Fixed Charges of
such person for the Four Quarter Period. For purposes of this definition, if the
Transaction Date occurs prior to the date on which four full fiscal quarters
have elapsed subsequent to the Issue Date and financial statements with respect
thereto are available, "Consolidated EBITDA" and "Consolidated Fixed Charges"
shall be calculated, in the case of the Company, after giving effect on a pro
forma basis to the issuance of the Securities and the application of the net
proceeds therefrom including the redemption of the Company's outstanding
preferred stock on the Issue Date as if the Securities were issued on the first
day of the Four Quarter Period. In addition to and without limitation of the
foregoing, for purposes of this definition, "Consolidated EBITDA" and
"Consolidated Fixed Charges" shall be calculated after giving effect on a pro
forma basis for the period of such calculation to (i) the incurrence of any
Indebtedness (and the application of the net proceeds therefrom) of such person
or any of its Subsidiaries (Restricted Subsidiaries, in the case of the Company)
giving rise to the need to make such calculation and any incurrence of other
Indebtedness at any time on or after the first day of the Four Quarter Period
and on or prior to the Transaction Date (the "Reference Period"), as if such
incurrence occurred on the first day of the Reference Period and (ii) any Asset
Sales or Asset Acquisitions (including, without
<PAGE>
-7-
limitation, any Asset Acquisition giving rise to the need to make such
calculation as a result of such person or one of its Subsidiaries (Restricted
Subsidiaries, in the case of the Company)(including any person who becomes a
Subsidiary (Restricted Subsidiary, in the case of the Company) as a result of
the Asset Acquisition) incurring, assuming or otherwise being liable for
Acquired Indebtedness) occurring during the Reference Period, as if such Asset
Sale or Asset Acquisition (including the incurrence, assumption or liability for
any such Indebtedness or Acquired Indebtedness) occurred on the first day of the
Reference Period. If such person or any of its Subsidiaries (Restricted
Subsidiaries, in the case of the Company) directly or indirectly guarantees
Indebtedness of a third person, the preceding sentence shall give effect to the
incurrence of such guaranteed Indebtedness as if such person or any Subsidiary
(Restricted Subsidiary, in the case of the Company) of such person had directly
incurred or otherwise assumed such guaranteed Indebtedness. Furthermore, in
calculating "Consolidated Fixed Charges" for purposes of determining the
denominator (but not the numerator) of this "Consolidated Fixed Charge Coverage
Ratio," (1) interest on Indebtedness determined on a fluctuating basis as of the
Transaction Date and which will continue to be so determined thereafter shall be
deemed to have accrued at a fixed rate per annum equal to the rate of interest
on such Indebtedness in effect on the Transaction Date, and (2) notwithstanding
clause (1) above, interest on Indebtedness determined on a fluctuating basis, to
the extent such interest is covered by agreements relating to Interest Rate
Protection Obligations, shall be deemed to accrue at the rate per annum
resulting after giving effect to the operation of such agreements.
"Consolidated Fixed Charges" means, with respect to any person for
any period, the sum of, without duplication, the amounts for such period, taken
as a single accounting period, of (i) Consolidated Interest Expense of such
person (net of any interest income) less non-cash amortization of deferred
financing costs and (ii) the product of (x) the amount of all dividends
declared, paid or accrued on Preferred Stock of such person during such period
times (y) a fraction, the numerator of which is one and the denominator of which
is one minus the then current effective consolidated Federal, state, local and
foreign tax rate (expressed as a decimal number between 1 and 0) of such person
during such period (as reflected in the audited consolidated financial
statements of such person for the most recently completed fiscal year).
"Consolidated Interest Expense" means, with respect to any person
for any period, without duplication, the sum of (i) the interest expense of such
person and its Subsidiaries
<PAGE>
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(Restricted Subsidiaries, in the case of the Company) for such period as
determined on a consolidated basis in accordance with GAAP consistently applied,
including, without limitation, (a) any amortization of debt discount, (b) the
net cost under Interest Rate Protection Obligations (including any amortization
of discounts), (c) the interest portion of any deferred payment obligation and
(d) all accrued interest, and (ii) the interest component of Capitalized Lease
Obligations paid, accrued and/or scheduled to be paid or accrued by such person
and its Subsidiaries (Restricted Subsidiaries, in the case of the Company)
during such period as determined on a consolidated basis in accordance with GAAP
consistently applied.
"Consolidated Net Income" means, with respect to any person for any
period, the net income (or loss) of such person and its Subsidiaries (Restricted
Subsidiaries, in the case of the Company), on a consolidated basis for such
period determined in accordance with GAAP; provided that (i) the net income of
any person in which such person or any Subsidiary (Restricted Subsidiary, in the
case of the Company) of such person has an ownership interest with a third party
(other than a person that meets the definition of a Wholly-Owned Subsidiary
(Wholly-Owned Restricted Subsidiary, in the case of the Company)) shall be
included only to the extent of the amount that has actually been received by
such person or its Wholly-Owned Subsidiaries (Wholly-Owned Restricted
Subsidiaries, in the case of the Company) in the form of dividends or other
distributions during such period (subject to, in the case of any dividend or
distribution received by a Wholly-Owned Subsidiary (Wholly-Owned Restricted
Subsidiary, in the case of the Company) of such person, the restrictions set
forth in clause (ii) below) and (ii) the net income of any Subsidiary
(Restricted Subsidiary, in the case of the Company) of such person that is
subject to any restriction or limitation on the payment of dividends or the
making of other distributions shall be excluded to the extent of such
restriction or limitation; provided, further that there shall be excluded (a)
the net income (or loss) of any person (acquired in a pooling of interests
transaction) accrued prior to the date it becomes a Subsidiary (Restricted
Subsidiary, in the case of the Company) of such person or is merged into or
consolidated with such person or any Subsidiary (Restricted Subsidiary, in the
case of the Company) of such person, (b) any gain (or loss) (and related tax
effects) resulting from an Asset Sale by such person or any of its Subsidiaries
(Restricted Subsidiaries, in the case of the Company) (c) any extraordinary,
unusual or nonrecurring gains or losses (and related tax effects) in accordance
with GAAP and (d) any compensation-related expenses arising as a result of the
application of the net proceeds from the issuance of the Securities. For
purposes of Section 4.03, the amortization of deferred fi-
<PAGE>
-9-
nancing costs relating to the issuance of the Securities shall be excluded from
this definition of "Consolidated Net Income."
"Consolidated Net Worth" means, with respect to any person at any
date, the sum of (i) the consolidated shareholders' equity of such person less
the amount of such shareholders' equity attributable to Disqualified Capital
Stock of such person and its Subsidiaries (Restricted Subsidiaries, in the case
of the Company), as determined on a consolidated basis in accordance with GAAP
consistently applied and (ii) the amount of any Preferred Stock of such person
not included in the shareholders' equity of such person in accordance with GAAP,
which Preferred Stock does not constitute Disqualified Capital Stock.
"Covenant Defeasance" has the meaning provided in Section 8.02(c).
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means any event that is, or after notice or passage of
time or both would be, an Event of Default.
"Depository" means, with respect to the Securities issued in the
form of one or more Book-Entry Securities, The Depository Trust Company or
another person designated as Depository by the Company, which must be a clearing
agency registered under the Exchange Act.
"Depository Securities Certification" has the meaning provided in
Section 2.01.
"Disqualified Capital Stock" means any class of Capital Stock which,
by its terms (or by the terms of any security into which it is convertible or
for which it is exchangeable), or upon the happening of any event (other than a
Change of Control), matures or is mandatorily redeemable, pursuant to a sinking
fund obligation or otherwise, or is redeemable at the option of the holder
thereof, in whole or in part, on or prior to the Maturity Date.
"Doe Run Cayman" means Doe Run Cayman Ltd., a Cayman Islands
company.
"Doe Run Mining" means Doe Run Mining S.R. Ltda., a Peruvian
company.
<PAGE>
-10-
"Doe Run Peru" means Doe Run Peru S.R. Ltda., a Peruvian company.
"DRA" means DR Acquisition Corp., a Missouri corporation.
"DR Exploration" means Doe Run Exploration SA (Proprietary) Limited,
a South African corporation.
"Equity Offering" means an offering of Qualified Capital Stock of
the Company (other than to any Subsidiary of the Company).
"Euroclear" means the Euroclear Clearance System (or any successor
securities clearing agency).
"Event of Default" has the meaning provided in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Offer" means the registration by the Company under the
Securities Act of all the Series B Notes pursuant to a registration statement
under which the Company offers each Holder of Series A Notes the opportunity to
exchange all Series A Notes held by such Holder for Series B Notes in an
aggregate principal amount equal to the aggregate principal amount of Series A
Notes held by such Holder, all in accordance with the terms and conditions of
the Registration Rights Agreement.
"Fair Market Value" means, with respect to any asset, the price
which could be negotiated in an arm's-length free market transaction, for cash,
between a willing seller and a willing buyer, neither of whom is under undue
pressure or compulsion to complete the transaction. Fair Market Value of any
asset of the Company or the Restricted Subsidiaries shall be determined by the
Board of Directors of the Company acting in good faith and shall be evidenced by
a Board Resolution thereof delivered to the Trustee; provided that with respect
to any Asset Sale which involves in excess of $5 million, the Fair Market Value
of any such asset or assets shall be determined by an Independent Financial
Advisor.
"Fixed Rate Notes" means Series A Fixed Rate Notes and Series B
Fixed Rate Notes.
"Floating Rate Notes" means Series A Floating Rate Notes and Series
B Floating Rate Notes.
<PAGE>
-11-
"FPI" means Fabricated Products, Inc., a Delaware corporation.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States, which are in effect as of the
Issue Date.
"Global Security" means a Security evidencing all or a part of the
Securities to be issued as Book-Entry Securities, issued to the Depository in
accordance with Section 2.02 and bearing the legend or legends prescribed in
Exhibit C to this Indenture.
"guarantee" means, as applied to any obligation, (a) a guarantee
(other than by endorsement of negotiable instruments for collection in the
ordinary course of business), direct or indirect, in any manner, of any part or
all of such obligation and (b) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, the
payment of amounts drawn down by letters of credit.
"Guarantees" means the guarantee of the Securities by the
Guarantors.
"Guarantor" means each of FPI, Doe Run Cayman, Doe Run Mining, Doe
Run Peru and any Restricted Subsidiary that in the future executes a
supplemental indenture pursuant to Section 4.20 of this Indenture or otherwise
in which any such Restricted Subsidiary agrees to be bound by the terms of this
Indenture; provided that any person constituting a Guarantor as described above
shall cease to constitute a Guarantor when its respective Guarantee is released
in accordance with the terms of this Indenture.
"Hedging Agreement" shall mean any agreement with respect to (i) the
hedging of price risk associated with the purchase or sale of lead, copper,
zinc, gold and silver under which the Company is a party or beneficiary and (ii)
the hedging of currency risks in connection with funding payroll expenses, so
long as any such agreement has been entered into in the ordinary course of
business consistent with past price risk
<PAGE>
-12-
or currency management practices of the Company and the Restricted Subsidiaries
and not for purposes of speculation.
"Holder" or "Securityholder" means the person in whose name a
Security is registered on the Registrar's books.
"Indebtedness" means with respect to any person, without
duplication, (i) all obligations of such person for borrowed money, (ii) all
obligations of such person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all Capitalized Lease Obligations (but not
obligations under Operating Leases) of such person, (iv) all obligations of such
person issued or assumed as the deferred purchase price of property or services,
all conditional sale obligations and all obligations under any title retention
agreement (but excluding trade accounts payable, accrued expenses and deferred
taxes arising in the ordinary course of business), (v) all obligations of such
person for the reimbursement of any obligor on any letter of credit, banker's
acceptance or similar credit transaction entered into in the ordinary course of
business, (vi) all obligations of any other person of the type referred to in
clauses (i) through (v) which are secured by any Lien on any property or asset
of such first person and the amount of such obligation shall be the lesser of
the value of such property or asset or the amount of the obligation so secured,
(vii) all guarantees of Indebtedness by such person, (viii) Disqualified Capital
Stock valued at the greater of its voluntary or involuntary maximum fixed
repurchase price plus accrued and unpaid dividends, (ix) all obligations under
interest rate agreements or hedging agreements of such person and (x) any
amendment, supplement, modification, deferral, renewal, extension or refunding
of any liability of the types referred to in clauses (i) through (ix) above. For
purposes hereof, the "maximum fixed repurchase price" of any Disqualified
Capital Stock which does not have a fixed repurchase price shall be calculated
in accordance with the terms of such Disqualified Capital Stock as if such
Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Indenture, and if such price
is based upon, or measured by, the Fair Market Value of such Disqualified
Capital Stock, such Fair Market Value to be determined in good faith by the
Board of Directors of the person issuing such Disqualified Capital Stock.
Notwithstanding anything to the contrary contained herein, any obligation of the
Company or any Restricted Subsidiary in the form of an earn-out arrangement
undertaken in connection with any acquisition of property or assets by the
Company or such Restricted Subsidiary, which obligation shall be based upon
increases in metal prices above price levels existing on the date of such
acquisition, shall not constitute Indebtedness under this Indenture.
<PAGE>
-13-
"Indenture" means this Indenture, as amended or supplemented from
time to time in accordance with the terms hereof.
"Independent Financial Advisor" means an accounting, appraisal or
investment banking firm of nationally recognized standing that is, in the
reasonable and good faith judgment of the Board of Directors of the Company,
qualified to perform the task for which such firm has been engaged and
disinterested and independent with respect to the Company and its Affiliates.
"Initial Purchasers" means BT Alex. Brown Incorporated, Donaldson,
Lufkin & Jenrette Securities Corporation and UBS Securities LLC.
"Interest Payment Date" means the stated maturity of an installment
of interest on the Securities.
"Interest Rate Protection Obligations" means the obligations of any
person, pursuant to any arrangement with any other person, whereby, directly or
indirectly, such person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such other
person calculated by applying a fixed or a floating rate of interest on the same
notional amount and shall include, without limitation, interest rate swaps,
caps, floors, collars and similar agreements.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter.
"Investment" means, with respect to any person, any direct or
indirect advance, loan, guarantee or other extension of credit or capital
contribution to (by means of any transfer of cash or other property to others or
any payment for property or services for the account or use of others or
otherwise), or any purchase or acquisition by such person of any Capital Stock,
bonds, notes, debentures or other securities or evidences of Indebtedness issued
by, any other person. Investments shall exclude extensions of trade credit on
commercially reasonable terms in accordance with normal trade practices. For the
purposes of Section 4.03, the amount of any Investment (other than an Investment
covered by clause (z) of Section 4.03) shall be the original cost of such
Investment plus the cost of all additional Investments by the Company or any of
the Restricted Subsidiaries, without any adjustments for increases or decreases
in value, or write-ups, write-downs or write-offs with respect to such
Investment, reduced by the pay-
<PAGE>
-14-
ment of dividends or distributions in connection with such Investment or any
other amounts received in respect of such Investment.
"Issue Date" means the date on which the Securities offered hereby
are originally issued under this Indenture.
"legal defeasance" has the meaning provided in Section 8.02(b).
"Legal Holiday" has the meaning provided in Section 10.07.
"Lien" means (x) any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind including, without limitation, any
conditional sale or other title retention agreement, any lease in the nature
thereof, any option or other agreement to sell and any filing of or agreement to
file a financing statement as debtor under the Uniform Commercial Code or any
similar statute and (y) any agreement to enter into any of the foregoing.
"Maturity Date" means (i) with respect to the Floating Rate Notes,
March 15, 2003 and (ii) with respect to the Fixed Rate Notes, March 15, 2005.
"Metaloroya" means Empresa Metalurgica La Oroya S.A., a Peruvian
company, prior to the merger of such entity with and into Doe Run Peru.
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds thereof in the form of cash or Cash Equivalents including payments in
respect of deferred payment obligations when received in the form of cash or
Cash Equivalents (except to the extent that such obligations are financed or
sold with recourse to the Company or any Restricted Subsidiary) net of (i)
brokerage commissions and other fees and expenses (including fees and expenses
of legal counsel and investment bankers) related to such Asset Sale, (ii)
provisions for all taxes payable as a direct result of such Asset Sale and (iii)
appropriate amounts to be provided by the Company or any Restricted Subsidiary,
as the case may be, as a reserve required in accordance with GAAP consistently
applied against any liabilities associated with such Asset Sale and retained by
the Company or any Restricted Subsidiary, as the case may be, after such Asset
Sale, including, without limitation, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and liabilities under
any indemnification obligations associated with such Asset Sale, all as
reflected in an Officers' Certificate delivered to the Trustee.
<PAGE>
-15-
"Obligations" means any principal, interest, penalties, fees and
other liabilities payable under the documentation governing any Indebtedness.
"Offering Memorandum" means the Offering Memorandum dated March 6,
1998, pursuant to which the Series A Notes were issued.
"Officer" means, with respect to any person, the Chairman of the
Board, the Chief Executive Officer, the President, any Vice President, the Chief
Financial Officer, the Controller, the Treasurer, or the Secretary of such
person.
"Officers' Certificate" means, with respect to any person, a
certificate signed by two Officers or by an Officer and either an Assistant
Treasurer or an Assistant Secretary of such person and otherwise complying with
the requirements of Sections 10.04 and 10.05.
"Operating Lease" means, as applied to any person, any lease
(including, without limitation, leases that may be terminated by the lessee at
any time) of any property (whether real, personal or mixed) that is not a
Capital Lease other than any such lease under which that person is the lessor.
"Opinion of Counsel" means a written opinion from legal counsel who
is acceptable to the Trustee complying with the requirements of Sections 10.04
and 10.05. Unless otherwise required by the TIA, the legal counsel may be an
employee of or counsel to the Company.
"Owner Securities Certification" has the meaning provided in Section
2.01.
"Paying Agent" has the meaning provided in Section 2.03.
"Permanent Regulation S Global Security" has the meaning provided in
Section 2.01.
"Permitted Holders" means Ira Leon Rennert and his Affiliates,
estate, heirs and legatees, and the legal representatives of any of the
foregoing, including, without limitation, the trustee of any trust of which one
or more of the foregoing are the sole beneficiaries.
"Permitted Indebtedness" means (i) any Indebtedness of the Company
and the Restricted Subsidiaries under (A) the U.S. Revolving Credit Facility in
an aggregate amount not to exceed $100.0 million in aggregate principal amount
at any time
<PAGE>
-16-
outstanding and (B) the Peruvian Revolving Credit Facility in an aggregate
principal amount not to exceed $60.0 million in aggregate principal amount at
any time outstanding, in each case plus any interest, fees and expenses from
time to time owed thereunder, (ii) the Securities issued in the Offering in an
aggregate principal amount not to exceed $255.0 million and the related
Guarantees, (iii) any other Indebtedness of the Company and the Restricted
Subsidiaries outstanding on the Issue Date, (iv) purchase money Indebtedness and
any Indebtedness incurred for Capitalized Lease Obligations (A) of the Company
and the Restricted Subsidiaries (other than Doe Run Cayman and its Subsidiaries)
not to exceed $5.0 million in the aggregate at any time outstanding and (B) of
Doe Run Cayman and its Subsidiaries not to exceed $20.0 million in the aggregate
at any time outstanding, (v) Interest Rate Protection Obligations to the extent
the notional principal amount of such Interest Rate Protection Obligations does
not exceed the principal amount of the Indebtedness to which such Interest Rate
Protection Obligations relate, and Hedging Agreements, in each case entered into
in the ordinary course of business, (vi) additional Indebtedness of the Company
and the Restricted Subsidiaries not to exceed $25.0 million in the aggregate at
any time outstanding, (vii) Indebtedness owed by the Company or any of the
Wholly-Owned Restricted Subsidiaries to the Company or any Wholly-Owned
Restricted Subsidiary; provided that this clause (vii) shall also include
Indebtedness indirectly between or among the Company and/or one or more of the
Wholly-Owned Restricted Subsidiaries through one or more financial
intermediaries, (viii) any renewals, extensions, substitutions, refundings,
refinancings or replacements of any Indebtedness described in the preceding
clauses (i), (ii) and (iii) above and this clause (viii), so long as such
renewal, extension, substitution, refunding, refinancing or replacement does not
result in an increase in the aggregate principal amount of the outstanding
Indebtedness represented thereby (except if such Indebtedness refinances
Indebtedness under the Revolving Credit Facilities or any other agreement
providing for subsequent borrowings, does not result in an increase in the
commitment available under the Revolving Credit Facilities or such other
agreement) and (ix) any guarantees of the foregoing.
"Permitted Investment" means (i) cash and Cash Equivalents, (ii) any
Investment by the Company or any of the Restricted Subsidiaries in the Company
or any Wholly-Owned Restricted Subsidiary; provided that this clause (ii) shall
also include indirect Investments by the Company and the Wholly-Owned Restricted
Subsidiaries in the Company or one or more of the Wholly-Owned Restricted
Subsidiaries through one or more financial intermediaries, (iii) Related
Business Investments by the Company or any of the Restricted Subsidiaries in
joint ven-
<PAGE>
-17-
tures, partnerships or persons (including Unrestricted Subsidiaries) that are
not Wholly-Owned Restricted Subsidiaries in an amount not to exceed $25.0
million in the aggregate at any one time outstanding; (iv) Investments by the
Company or any Restricted Subsidiary in another person, if as a result of such
Investment (a) such other person becomes a Wholly-Owned Restricted Subsidiary or
(b) such other person is merged or consolidated with or into, or transfers or
conveys all or substantially all of its assets to, the Company or a Wholly-Owned
Restricted Subsidiary, (v) Investments received in connection with the
bankruptcy or reorganization of suppliers and customers and in settlement of
delinquent obligations of, and other disputes with, customers and suppliers, in
each case arising in the ordinary course of business, (vi) the non-cash proceeds
of any Asset Sale, (vii) Investments under or pursuant to Interest Rate
Protection Obligations or Hedging Agreements, in each case in the ordinary
course of business, (viii) loans and advances to employees of the Company and
the Restricted Subsidiaries made in the ordinary course of business and (ix)
Investments represented by the Qualifying Investments Promissory Notes.
"Permitted Liens" means (i) pledges or deposits by such person under
worker's compensation laws, unemployment insurance laws or similar legislation,
or good faith deposits in connection with bids, tenders, contracts (other than
for the payment of Indebtedness) or leases to which such person is a party, or
deposits to secure public statutory obligations of such person or deposits to
secure surety or appeal bonds to which such person is a party, or deposits as
security for contested taxes or import duties or for the payment of rent, (ii)
Liens imposed by law, such as landlords', carriers', warehousemen's and
mechanics' Liens or bankers' Liens incurred in the ordinary course of business
for sums which are not yet due or are being contested in good faith and for
which adequate provision has been made, (iii) Liens for taxes not yet subject to
penalties for non-payment or which are being contested in good faith and by
appropriate proceedings, if adequate reserve, as may be required by GAAP, shall
have been made therefor, (iv) Liens in favor of issuers of surety bonds or
appeal bonds issued pursuant to the request of and for the account of such
person in the ordinary course of its business, (v) Liens to support trade
letters of credit issued in the ordinary course of business, (vi) survey
exceptions, encumbrances, easements or reservations of, or rights of others for,
rights of way, sewers, electric lines, telegraph and telephone lines and other
similar purposes, or zoning or other restrictions on the use of real property,
(vii) Liens securing Indebtedness permitted under clause (iv) of the definition
of Permitted Indebtedness; provided that the Fair Market Value of the asset at
the time of the incurrence of the Indebtedness subject to the Lien shall
<PAGE>
-18-
not exceed the principal amount of the Indebtedness secured, (viii) Liens with
respect to Acquired Indebtedness permitted to be incurred in accordance with
Section 4.12; provided that such Liens secured such Acquired Indebtedness at the
time of the incurrence of such Acquired Indebtedness by the Company or any of
the Restricted Subsidiaries and were not incurred in connection with, or in
anticipation of, the incurrence of such Acquired Indebtedness by the Company or
any of the Restricted Subsidiaries; provided, further, that such Liens do not
extend to or cover any property or assets of the Company or any of the
Restricted Subsidiaries other than the property or assets that secured the
Acquired Indebtedness prior to the time such Indebtedness became Acquired
Indebtedness of the Company or any of the Restricted Subsidiaries and are no
more favorable to the lienholders than those securing the Acquired Indebtedness
prior to the incurrence of such Acquired Indebtedness by the Company or any of
the Restricted Subsidiaries, (ix) Liens arising from judgments, decrees or
attachments in circumstances not constituting an Event of Default, (x) Liens on
assets or property (including any real property upon which such assets or
property are or will be located) securing Indebtedness incurred to purchase or
construct such assets or property, which Indebtedness is permitted to be
incurred under this Indenture, (xi) Liens securing Indebtedness which is
incurred to refinance or replace Indebtedness which has been secured by a Lien
permitted under this Indenture and is permitted to be refinanced or replaced
under this Indenture, provided that such Liens do not extend to or cover any
property or assets of the Company or any of the Restricted Subsidiaries not
securing the Indebtedness so refinanced or replaced, and (xii) Liens securing
reimbursement obligations under letters of credit but only in or upon the goods
the purchase of which was financed by such letters of credit.
"person" means any individual, corporation, partnership, joint
venture, trust, estate, unincorporated organization or government or any agency
or political subdivision thereof or any similar entities.
"Peruvian Revolving Credit Facility" means one or more working
capital facilities or other working capital financings or programs entered into
by Doe Run Peru and its Subsidiaries from time to time, as the same may be
amended, restated, supplemented or otherwise modified from time to time, and
includes any agreement renewing, refinancing or replacement all or any portion
of the Indebtedness under such agreement.
"Plan of Liquidation" means, with respect to any person, a plan that
provides for, contemplates or the effectuation of which is preceded or
accompanied by (whether or not substantially contemporaneously, in phases or
otherwise) (i) the sale,
<PAGE>
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lease, conveyance or other disposition of all or substantially all of the assets
of such person otherwise than as an entirety or substantially as an entirety and
(ii) the distribution of all or substantially all of the proceeds of such sale,
lease, conveyance or other disposition and all or substantially all of the
remaining assets of such person to holders of Capital Stock of such person.
"Preferred Stock" means, with respect to any person, any and all
shares, interests, participation or other equivalents (however designated) of
such person's preferred or preference stock, whether outstanding on the Issue
Date or issued thereafter, and including, without limitation, all classes and
series of preferred or preference stock of such person.
"principal" of any Indebtedness (including the Securities) means the
principal of such Indebtedness plus the premium, if any, on such Indebtedness.
"pro forma" means, with respect to any calculation made or required
to be made pursuant to the terms of this Indenture, a calculation in accordance
with Article 11 of Regulation S-X under the Exchange Act.
"Qualified Capital Stock" means, with respect to any person, any
Capital Stock of such person that is not Disqualified Capital Stock or
convertible into or exchangeable or exercisable for Disqualified Capital Stock.
"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"Qualifying Auditors" shall mean the firm of independent auditors of
acknowledged international prestige elected annually by Centromin in accordance
with Section 4.2 of the Subscription Agreement.
"Qualifying Investment" shall mean investments that meet the
qualifications of Section 4.5 of the Subscription Agreement, as determined in
good faith by the Qualifying Auditors.
"Qualifying Investments Promissory Notes" shall have the meaning
given to such term in Section 4.19.
"Record Date" means the Record Dates specified in the Securities;
provided that if any such date is a Legal Holiday, the Record Date shall be the
first day immediately preceding such specified day that is not a Legal Holiday.
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"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to this Indenture
and the Securities.
"Redemption Price," when used with respect to any Security to be
redeemed, means the price fixed for such redemption pursuant to this Indenture
and the Securities.
"Registrar" has the meaning provided in Section 2.03.
"Registration Rights Agreement" means the Registration Rights
Agreement by and between the Company, the Guarantors and the Initial Purchasers,
dated as of March 12, 1998, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the terms thereof.
"Regulation S" means Regulation S under the Securities Act (or any
successor provision), as it may be amended from time to time.
"Related Business Investment" means any Investment, Capital
Expenditure or other expenditure by the Company or any Restricted Subsidiary
which is related to the business of the Company and the Restricted Subsidiaries
as it is conducted on the Issue Date or any business which is the same, similar
or reasonably related to such business.
"Renco" means The Renco Group, Inc., a New York corporation, which
is the ultimate parent of the Company, or any successor thereto.
"Restricted Global Security" has the meaning provided in Section
2.01.
"Restricted Payment" has the meaning provided in Section 4.03.
"Restricted Period" has the meaning provided in Section 2.01.
"Restricted Security" has the meaning provided in Rule 144(a)(3)
under the Securities Act.
"Restricted Subsidiary" means any Subsidiary of the Company which at
the time of determination is not an Unrestricted Subsidiary. The Board of
Directors of the Company may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary only if, immediately after giving effect to such
designation, the Company and the Guarantors could incur at least $1.00 of
additional Indebtedness (other than Permitted Indebt-
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edness) pursuant to Section 4.12, on a pro forma basis taking into account such
designation.
"Revolving Credit Facilities" means the U.S. Revolving Credit
Facility and the Peruvian Revolving Credit Facility.
"Sale/leaseback" means any lease, whether an Operating Lease or a
Capital Lease, whereby the Company or any of the Restricted Subsidiaries,
directly or indirectly, becomes or remains liable as lessee or as guarantor or
other surety, of any property (whether real or personal or mixed) whether now
owned or hereafter acquired, (i) that the Company or the Restricted
Subsidiaries, as the case may be, has sold or transferred or is to sell or
transfer to any other person (other than the Company or any Restricted
Subsidiary), or (ii) that the Company or any of the Restricted Subsidiaries, as
the case may be, intends to use for substantially the same purpose as any other
property that has been or is to be sold or transferred by the Company or any
such Restricted Subsidiary to any person (other than the Company or any
Restricted Subsidiary) in connection with such lease.
"SEC" means the Securities and Exchange Commission.
"Securities" means the Series A Notes, and the Series B Notes and
any other notes issued after the Issue Date in accordance with clause (iii) of
the fourth paragraph of Section 2.02.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations of the SEC promulgated thereunder.
"Series A Fixed Rate Notes" means the Company's 11 1/4% Senior Notes
due 2005, Series A, as amended or supplemented from time to time in accordance
with the terms hereof, that are issued pursuant to this Indenture.
"Series A Floating Rate Notes" means the Company's Floating
Interest Rate Senior Notes (FIRSTS)(SM) due 2003, Series A, as amended or
supplemented from time to time in accordance with the terms hereof, that are
issued pursuant to this Indenture.
"Series A Notes" means the Series A Fixed Rate Notes and the Series
A Floating Rate Notes due 2005.
"Series B Fixed Rate Notes" means the Company's 11 1/4% Senior Notes
due 2005, Series B, as amended or supple-
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mented from time to time in accordance with the terms hereof, that are issued
pursuant to this Indenture.
"Series B Floating Rate Notes" means the Company's Floating Interest
Rate Senior Notes (FIRSTS)(SM*) due 2003, Series B, as amended or supplemented
from time to time in accordance with the terms hereof, that are issued pursuant
to this Indenture.
"Series B Notes" means the Series B Fixed Rate Notes and the Series
B Floating Rate Notes.
"Significant Subsidiary" means any Restricted Subsidiary that
satisfies the criteria for a "significant subsidiary" set forth in Rule 1.02(w)
of Regulation S-X under the Exchange Act.
"Subsidiary" of any person means (i) any corporation of which the
outstanding capital stock having at least a majority of the votes entitled to be
cast in the election of directors under ordinary circumstances shall at the time
be owned, directly or indirectly, by such person or (ii) any other person of
which at least a majority of the voting interest under ordinary circumstances is
at the time owned, directly or indirectly, by such person. For purposes of this
definition, any directors' qualifying shares or investments by foreign nationals
mandated by applicable law shall be disregarded in determining the ownership of
a Subsidiary.
"Subscription Agreement" means the Contrato de Transferencia de
Acciones, Aumento de Capital Social y Subscripcion de Acciones de la Empresa
Metalurgica La Oroya S.A., dated as of October 23, 1997, between Doe Run Peru
and Centromin.
"Temporary Regulation S Global Security" has the meaning provided in
Section 2.01.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb), as amended, as in effect on the date of the execution of this
Indenture until such time as this Indenture is qualified under the TIA, and
thereafter as in effect on the date on which this Indenture is qualified under
the TIA.
"Transferee Certificate" means the Transferee Letter of
Representation attached as Exhibit D to this Indenture.
"Transferee Securities Certification" has the meaning provided in
Section 2.06(g).
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"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"Trust Officer" means any officer of the Trustee assigned by the
Trustee to administer its corporate trust matters.
"U.S. Government Obligations" has the meaning provided in Section
8.01(b).
"U.S. Legal Tender" means such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company
which at the time of determination is an Unrestricted Subsidiary (as designated
by the Board of Directors of the Company, as provided below) and (ii) any
Subsidiary of an Unrestricted Subsidiary. The Board of Directors of the Company
may designate any Subsidiary of the Company (including any newly acquired or
newly formed Subsidiary) to be an Unrestricted Subsidiary, unless such
Subsidiary owns any Capital Stock of, or owns or holds any Lien on any property
of, any Restricted Subsidiary of the Company which is not a Subsidiary of the
Subsidiary to be so designated; provided that (a) the Company certifies that
such designation complies with Section 4.03 and (b) each Subsidiary to be so
designated and each of its Subsidiaries has not at the time of designation, and
does not thereafter, create, incur, issue, assume, guarantee or otherwise become
directly or indirectly liable with respect to any Indebtedness pursuant to which
the lender has recourse to any of the assets of the Company or any of the
Restricted Subsidiaries. The Board of Directors of the Company may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary only if, immediately after
giving effect to such designation, the Company and the Guarantors could incur at
least $1.00 of additional Indebtedness (other than Permitted Indebtedness)
pursuant to Section 4.12, on a pro forma basis taking into account such
designation.
"U.S. Revolving Credit Facility" means the Loan and Security
Agreement dated as of the Issue Date, among the Company, FPI Congress Financial
Corporation, as Lender, as the same may be amended, restated, supplemented or
otherwise modified from time to time, and includes any agreement renewing,
refinancing or replacement of all or any portion of the Indebtedness under such
agreement.
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"Wholly-Owned Restricted Subsidiary" means any Restricted Subsidiary
which is a Wholly-Owned Subsidiary of the Company.
"Wholly-Owned Subsidiary" means any Subsidiary of such person to the
extent all of the Capital Stock or other ownership interests in such Subsidiary
(other than (x) directors' qualifying shares, (y) with respect to Doe Run Peru,
any shares purchased by employees of Doe Run Peru or Centromin in connection
with the Acquisition, which retained amount shall not exceed 1% of the total
interests in Doe Run Peru, and (z) an immaterial interest owned by other persons
solely to comply with applicable law) is owned directly or indirectly by such
person or a Wholly-Owned Subsidiary of such person.
SECTION 1.02. Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in, and made a part of, this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Holder or a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on this Indenture securities means the Company or any
other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them therein.
SECTION 1.03. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
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(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the
plural include the singular;
(5) provisions apply to successive events and transactions; and
(6) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision.
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating.
The Securities and the Trustee's certificate of authentication with
respect thereto shall be substantially in the form of Exhibit A, Exhibit A-1,
Exhibit B or Exhibit B-1 hereto, as the case may be. The Securities may have
notations, legends or endorsements required by law, stock exchange rule or
usage. The Company and the Trustee shall approve the form of the Securities and
any notation, legend or endorsement on them. Each Security shall be dated the
date of its authentication, shall bear interest from the applicable date and
shall be payable on the Interest Payment Dates and the Maturity Date. Each
Security shall have an executed Guarantee from each of the Guarantors endorsed
thereon substantially in the form of Exhibit M hereto.
The terms and provisions contained in the Securities shall
constitute, and are hereby expressly made, a part of this Indenture and, to the
extent applicable, the Company, the Guarantors and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
Securities offered and sold in their initial distribution in
reliance on Regulation S may be initially issued in the form of temporary Global
Securities in fully registered form without interest coupons, substantially in
the form of Exhibit A or Exhibit A-1, as applicable, with such applicable
legends as are provided for in Exhibit A, Exhibit A-1 or Exhibit C. Such
temporary Global Securities may be registered in the name of the Depository or
its nominee and deposited with the Trustee, as custodian for the Depository,
duly executed by
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the Company and authenticated by the Trustee as hereinafter provided (and the
Guarantors shall execute the Guarantees thereon), for credit by the Depository
to the respective accounts of the beneficial owners of the Securities
represented thereby (or such other accounts as they may direct), provided that
upon such deposit all such Securities shall be credited to or through accounts
maintained at the Depository by or on behalf of Euroclear or CEDEL. Until such
time as the Restricted Period (as defined below) shall have expired, such
temporary Global Securities, together with their Successor Securities which are
Global Securities other than the Restricted Global Security, shall be referred
to herein as a "Temporary Regulation S Global Security." After such time as the
Restricted Period shall have expired and the certifications referred to below in
the next succeeding paragraph shall have been provided, interests in such
Temporary Regulation S Global Securities shall be exchanged for interests in
like Global Securities, referred to herein collectively as the "Permanent
Regulation S Global Security," substantially in the form of Security set forth
in Exhibit A or Exhibit A-1, as applicable, with such applicable legends as are
provided for in Exhibit A, Exhibit A-1 or Exhibit C. Such Permanent Regulation S
Global Securities shall be registered in the name of the Depository or its
nominee and deposited with the Trustee, as custodian for the Depository, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided, for credit to the respective accounts of the beneficial owners of the
Securities represented thereby (or such other accounts as they may direct). The
aggregate principal amount of the Temporary Regulation S Global Security or the
Permanent Regulation S Global Security may be increased or decreased from time
to time by adjustments made on the records of the Trustee, as custodian for the
Depository, as hereinafter provided. As used herein, the term "Restricted
Period" means the period of 40 days commencing on the day after the latest of
(a) the day on which the Securities are first offered to persons other than
distributors (as defined in Regulation S) in reliance on Regulation S and (b)
the date of this Indenture.
Interests in a Temporary Regulation S Global Security may be
exchanged for interests in a Permanent Regulation S Global Security only after
(a) the expiration of the Restricted Period, (b) delivery by a beneficial owner
of an interest therein to Euroclear or CEDEL of a written certification (an
"Owner Securities Certification") substantially in the form of Annex E hereto,
and (c) upon delivery by Euroclear or CEDEL to the Trustee of a written
certification (a "Depository Securities Certification") substantially in the
form attached hereto as Exhibit F. Upon satisfaction of such conditions, the
Trustee will exchange the portion of the Temporary Regulation S
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Global Security covered by such certification for interests in a Permanent
Regulation S Global Security. The delivery by such Holder of a beneficial
interest in such Temporary Regulation S Global Security of such certification
shall constitute an irrevocable instruction by such holder to Euroclear or
CEDEL, as the case may be, to exchange such Holder's beneficial interest in the
Temporary Regulation S Global Security for a beneficial interest in the
Permanent Regulation S Global Security upon the expiration of the Restricted
Period in accordance with the next succeeding paragraph.
Upon:
(i) the expiration of the Restricted Period;
(ii) receipt by Euroclear or CEDEL, as the case may be, of Owner
Securities Certifications described in the preceding paragraph;
(iii) receipt by the Depository of:
(1) written instructions given in accordance with the
Applicable Procedures from an Agent Member directing the Depository
to credit or cause to be credited to a specified Agent Member's
account a beneficial interest in a Permanent Regulation S Global
Security in a principal amount equal to that of the beneficial
interest in a corresponding Temporary Regulation S Global Security
for which the necessary certifications have been delivered; and
(2) a written order given in accordance with the Applicable
Procedures containing information regarding the account of the Agent
Member, and the Euroclear or CEDEL account for which such Agent
Member's account is held, to be credited with, and the account of
the Agent Member to be debited for, such beneficial interest; and
(iv) receipt by the Trustee of notification from the Depository of
the transactions described in (iii) above and from Euroclear or CEDEL, as
the case may be, of Depository Securities Certifications,
the Trustee, as Registrar, shall instruct the Depository to reduce the principal
amount of such Temporary Regulation S Global Security and to increase the
principal amount of such Permanent Regulation S Global Security, by the
principal amount of the beneficial interest in such Temporary Regulation S
Global Security to be so transferred, and to credit or cause to be cred-
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ited to the account of the person specified in such instructions a beneficial
interest in such Permanent Regulation S Global Security having a principal
amount equal to the amount by which the principal amount of such Temporary
Regulation S Global Security was reduced upon such transfer.
Securities offered and sold in their initial distribution in
reliance on Rule 144A under the Securities Act and other than in reliance on
Rule 144A under the Securities Act or Regulation S shall be issued in the form
of one or more Global Securities (collectively, and, together with their
Successor Securities, the "Restricted Global Security") in fully registered form
without interest coupons, substantially in the form of Security set forth in
Exhibit A or Exhibit A-1, as applicable, with such applicable legends as are
provided for in Exhibit A, Exhibit A-1 or Exhibit C, except as otherwise
permitted herein. Such Restricted Global Security shall be registered in the
name of the Depository or its nominee and deposited with the Trustee, as
custodian for the Depository, duly executed by the Company and authenticated by
the Trustee as hereinafter provided, for credit by the Depository to the
respective accounts of beneficial owners of the Securities represented thereby
(or such other accounts as they may direct). The aggregate principal amount of
the Restricted Global Security may be increased or decreased from time to time
by adjustments made on the records of the Trustee, as custodian for the
Depository, in connection with a corresponding decrease or increase in the
aggregate principal amount of the Temporary Regulation S Global Security or the
Permanent Regulation S Global Security, as hereinafter provided.
SECTION 2.02. Execution and Authentication.
Two Officers, or an Officer and an Assistant Secretary, shall sign,
or one Officer shall sign and one Officer or an Assistant Secretary for the
Company and each Guarantor (each of whom shall, in each case, have been duly
authorized by all requisite corporate actions) shall attest to, the Securities
for the Company and the Guarantees for the Guarantors by manual or facsimile
signature.
If an Officer whose signature is on a Security or a Guarantee was an
Officer at the time of such execution but no longer holds that office at the
time the Trustee authenticates the Security, the Security shall nevertheless be
valid.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclu-
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sive evidence that the Security has been authenticated under this Indenture.
The Trustee shall authenticate (i) Series A Fixed Rate Notes for
original issue in the aggregate principal amount not to exceed $200,000,000,
(ii) Series A Floating Rate Notes for original issue in the aggregate principal
amount not to exceed $55,000,000 and (iii) one or more series of Fixed Rate
Notes and one or more series of Floating Rate Notes for original issue after the
Issue Date (such Notes to be substantially in the form of Exhibits A or A-1, as
the case may be, or Exhibits B or B-1, as the case may be) in an aggregate
principal amount not to exceed $100,000,000 (and if in the form of Exhibit A or
A-1, as the case may be, the same principal amount of Securities in exchange
therefor upon consummation of a registered exchange offer) in each case, upon
written orders of the Company in the form of an Officers' Certificate. In each
case, the Officers' Certificate shall specify the amount of Securities to be
authenticated and the date on which the Securities are to be authenticated and
the aggregate principal amount of Securities outstanding on the date of
authentication whether the Securities are to be Series A Notes, Series B Notes
or Securities issued under clause (iii) of the preceding sentence and shall
further specify the amount of such Securities to be issued as a Global Security
or in certificated form. The aggregate principal amount of Securities
outstanding at any time may not exceed $355,000,000, except as provided in
Section 2.07. Upon the written order of the Company in the form of an Officers'
Certificate, the Trustee shall authenticate Securities in substitution of
Securities originally issued to reflect any name change of the Company.
Series B Notes may be issued only in exchange for a like principal
amount of Series A Notes pursuant to an Exchange Offer.
The principal and interest on Book-Entry Securities shall be payable
to the Depository or its nominee, as the case may be, as the sole registered
owner and the sole holder of the Book-Entry Securities represented thereby. The
principal and interest on Securities in certificated form shall be payable at
the office of the Paying Agent.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate Securities. Unless otherwise provided
in the appointment, an authenticating agent may authenticate Securities whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticat-
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ing agent has the same rights as an Agent to deal with the Company and
Affiliates of the Company.
The Securities shall be issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof.
If the Securities are to be issued in the form of one or more Global
Securities, then the Company shall execute and the Trustee shall authenticate
and deliver one or more Global Securities that shall represent and shall be in
minimum denominations of $1,000.
SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency in the Borough of
Manhattan, The City of New York, where (a) Securities may be presented or
surrendered for registration of transfer or for exchange ("Registrar"), (b)
Securities may be presented or surrendered for payment ("Paying Agent") and (c)
notices and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The Company may also from time to time designate one or
more other offices or agencies where the Securities may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in the Borough of Manhattan, The City of New York, for such purposes. Neither
the Company nor any Affiliate of the Company shall act as Paying Agent. The
Registrar shall keep a register of the Securities and of their transfer and
exchange. The Company, upon notice to the Trustee, may have one or more
co-Registrars and one or more additional paying agents reasonably acceptable to
the Trustee. The term "Paying Agent" includes any additional paying agent. The
Company initially appoints the Trustee as Registrar and Paying Agent until such
time as the Trustee has resigned or a successor has been appointed. The initial
office of the Company and the Trustee for purposes of this Section 2.03 shall be
State Street Bank and Trust Company, N.A., 61 Broadway, 15th Floor, NY, NY
10006.
The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture, which agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall notify
the Trustee, in advance, of the name and address of any such Agent. If the
Company fails to maintain a Registrar or Paying Agent, the Trustee shall act as
such.
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SECTION 2.04. Paying Agent To Hold Assets in Trust.
The Company shall require each Paying Agent other than the Trustee
to agree in writing that each Paying Agent shall hold in trust for the benefit
of the Holders or the Trustee all assets held by the Paying Agent for the
payment of principal of, or interest on, the Securities (whether such assets
have been distributed to it by the Company or any other obligor on the
Securities), and shall notify the Trustee of any Default by the Company (or any
other obligor on the Securities) in making any such payment. The Company at any
time may require a Paying Agent to distribute all assets held by it to the
Trustee and account for any assets disbursed and the Trustee may at any time
during the continuance of any payment Default, upon written request to a Paying
Agent, require such Paying Agent to distribute all assets held by it to the
Trustee and to account for any assets distributed. Upon distribution to the
Trustee of all assets that shall have been delivered by the Company to the
Paying Agent, the Paying Agent shall have no further liability for such assets.
SECTION 2.05. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the Holders. If the Trustee is not the Registrar, the Company shall furnish to
the Trustee before each Record Date and at such other times as the Trustee may
request in writing a list as of such date and in such form as the Trustee may
reasonably require of the names and addresses of the Holders, which list may be
conclusively relied upon by the Trustee.
SECTION 2.06. Transfer and Exchange.
(a) Beneficial interests in a Global Security may, subject to the
restrictions on the transferability of the Securities and upon delivery of a
certificate in the form of Exhibit D, be exchanged for certificated Securities
upon request but only upon at least 20 days' prior written notice given to the
Trustee by or on behalf of the Depository (in accordance with the Depository's
customary procedures) and will bear the applicable legends set forth in Exhibit
A or Exhibit A-1, as applicable.
(b) If any Global Security is to be exchanged for other Securities
or cancelled in whole, it shall be surrendered by or on behalf of the Depository
or its nominee to the Trustee, as Registrar, for exchange or cancellation as
provided in this Article II. If any Global Security is to be exchanged for
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other Securities or cancelled in part, or if another Security is to be exchanged
in whole or in part for a beneficial interest in any Global Security, such
Global Security shall be so surrendered for exchange or cancellation as provided
in this Article II or, if the Trustee is acting as custodian for the Depository
or its nominee (or is party to a similar arrangement) with respect to such
Global Security, the principal amount thereof shall be reduced or increased by
an amount equal to the portion thereof to be so exchanged or cancelled, or the
principal amount of such other Security to be so exchanged for a beneficial
interest therein, as the case may be, in each case by means of an appropriate
adjustment made on the records of the Trustee, whereupon the Trustee, in
accordance with the Applicable Procedures, shall instruct the Depository or its
authorized representatives to make a corresponding adjustment to its records
(including by crediting or debiting any Agent Member's account as necessary to
reflect any transfer or exchange of a beneficial interest). Upon any such
surrender or adjustment of a Global Security, the Trustee shall, subject to this
Article II, authenticate and deliver any Securities (and the Guarantors shall
execute the Guarantees thereon) issuable in exchange for such Global Security
(or any portion thereof) to or upon the order of, and registered in such names
as may be directed by, the Depository or its authorized representative and each
of the Guarantors shall execute a Guarantee thereon at the Trustee's request.
Upon the request of the Trustee in connection with the occurrence of any of the
events specified in the preceding paragraph or in paragraph (r) below, the
Company shall promptly make available to the Trustee a reasonable supply of
Securities that are not in the form of Global Securities. The Trustee shall be
entitled to rely upon any order, direction or request of the Depository or its
authorized representative which is given or made pursuant to this Article II if
such order, direction or request is given or made in accordance with the
Applicable Procedures, as certified to the Trustee by the Depository.
(c) Subject to the provisions in the legends required by this
Indenture, the registered Holder may grant proxies and otherwise authorize any
Person, including Agent Members and Persons who may hold interests in Agent
Members, to take any action that such Holder is entitled to take under this
Indenture.
(d) Neither Agent Members nor any other Person on whose behalf Agent
Members may act shall have any rights under this Indenture with respect to any
Global Security held on their behalf by the Depository or under the Global
Security, and the Depository may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute
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owner of such Global Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or any agent of
the Company or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by the Depository or impair, as between
the Depository and its Agent Members, the operation of customary practices
governing the exercise of the rights of a Holder of any Security. With respect
to any Global Security deposited with the Trustee as custodian for the
Depository for credit to their respective accounts (or to such other accounts as
they may direct) at Euroclear or CEDEL, the provisions of the "Operating
Procedures of the Euroclear System" and the "Terms and Conditions Governing Use
of Euroclear", and the "Management Regulations" and "Instructions to
Participants" of CEDEL, respectively, shall be applicable to such Global
Security, as certifies to the Trustee by Euroclear or CEDEL, as applicable.
(e) Upon presentation for transfer or exchange of any Security at
the office of the Trustee, as Registrar, located in The City of New York,
accompanied by a written instrument of transfer or exchange in the form approved
by the Company (it being understood that, until notice to the contrary is given
to holders of Securities, the Company shall be deemed to have approved the form
of instrument of transfer or exchange, if any, printed on any Security),
executed by the registered Holder, in person or by such Holder's attorney
thereunto duly authorized in writing, and upon compliance with this Section
2.06, such Security shall be transferred upon the Register, and a new Security
shall be authenticated and issued in the name of the transferee and the
Guarantors shall execute Guarantees thereon. Notwithstanding any provision to
the contrary herein or in the Securities, transfers of a Global Security, in
whole or in part, and transfers of interests therein of the kind described in
this Section 2.06, shall only be made in accordance with this Section 2.06.
Transfers and exchanges subject to this Section 2.06 shall also be subject to
the other provisions of this Indenture that are not inconsistent with this
Section 2.06.
(f) General. A Global Security may not be transferred, in whole or
in part, to any Person other than the Depository or a nominee thereof, and no
such transfer to any such other Person may be registered; provided, however,
that this clause (f) shall not prohibit any transfer of a Security that is
issued in exchange for a Global Security but is not itself a Global Security. No
transfer of a Security to any Person shall be effective under this Indenture or
the Securities unless and until such Security has been registered in the name of
such Person. Nothing in this clause (f) shall prohibit or render ineffective any
transfer of a beneficial interest in a Global
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Security effected in accordance with the other provisions of this Section 2.06.
(g) Temporary Regulation S Global Security. If the holder of a
beneficial interest in a Temporary Regulation S Global Security wishes at any
time to transfer such interest to a Person who wishes to take delivery thereof
in the form of a beneficial interest in such Temporary Regulation S Global
Security, such transfer may be effected, subject to the rules and procedures of
the Depository, Euroclear and CEDEL, in each case to the extent applicable and
as in effect from time to time (the "Applicable Procedures"), only in accordance
with this clause (g). Upon delivery (i) by a beneficial owner of an interest in
a Temporary Regulation S Global Security to Euroclear or CEDEL, as the case may
be, of an Owner Securities Certification, (ii) by the transferee of such
beneficial interest in the Temporary Regulation S Global Security to Euroclear
or CEDEL, as the case may be, of a written certification (a "Transferee
Securities Certification") substantially in the form of Exhibit G hereto and
(iii) by Euroclear or CEDEL, as the case may be, to the Trustee, as Registrar,
of a Depository Securities Certification, the Trustee may direct either
Euroclear or CEDEL, as the case may be, to reflect on its records the transfer
of a beneficial interest in the Temporary Regulation S Global Security from the
beneficial owner providing the Owner Securities Certification to the Person
providing the Transferee Securities Certification.
(h) Restricted Global Security to Temporary Regulation S Global
Security. If the holder of a beneficial interest in the Restricted Global
Security wishes at any time to transfer such interest to a Person who wishes to
take delivery thereof in the form of a beneficial interest in the Temporary
Regulation S Global Security, such transfer may be effected, subject to the
Applicable Procedures, only in accordance with the provisions of this clause (h)
and clause (n) below. Upon receipt by the Trustee, as Registrar, of (A) written
instructions given by or on behalf of the Depository in accordance with the
Applicable Procedures directing the Trustee to credit or cause to be credited to
a specified Agent Member's account a beneficial interest in the Temporary
Regulation S Global Security in a specified principal amount and to cause to be
debited from another specified Agent Member's account a beneficial interest in
the Restricted Global Security in an equal principal amount and (B) a
certificate in substantially the form set forth in Exhibit H signed by or on
behalf of the holder of such beneficial interest in the Restricted Global
Security, the Trustee, as Security Registrar, shall, subject to clause (n)
below, reduce the principal amount of the Restricted Global Security, and
increase the principal amount of the Temporary
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Regulation S Global Security by such specified principal amount.
(i) Restricted Global Security to Permanent Regulation S Global
Security. If the holder of a beneficial interest in the Restricted Global
Security wishes at any time to transfer such interest to a Person who wishes to
take delivery thereof in the form of a beneficial interest in the Permanent
Regulation S Global Security, such transfer may be effected, subject to the
Applicable Procedures, only in accordance with this clause (i). Upon receipt by
the Trustee, as Security Registrar, of (A) written instructions given by or on
behalf of the Depository in accordance with the Applicable Procedures directing
the Trustee to credit or cause to be credited to a specified Agent Member's
account a beneficial interest in the Permanent Regulation S Global Security in a
specified principal amount and to cause to be debited from another specified
Agent Member's account a beneficial interest in the Restricted Global Security
in an equal principal amount and (B) a certificate in substantially the form set
forth in Exhibit I signed by or on behalf of the holder of such beneficial
interest in the Restricted Global Security, the Trustee, as Registrar, shall
reduce the principal amount of a Restricted Global Security, and increase the
principal amount of the Permanent Regulation S Global Security by such specified
principal amount.
(j) Temporary Regulation S Global Security or Permanent Regulation S
Global Security to Restricted Global Security. If the holder of a beneficial
interest in the Temporary Regulation S Global Security or the Permanent
Regulation S Global Security at any time, wishes to transfer such interest to a
Person who wishes to take delivery thereof in the form of a beneficial interest
in the Restricted Global Security, such transfer may be effected, subject to the
Applicable Procedures, only in accordance with this clause (j) and clause (n)
below; provided that with respect to any transfer of a beneficial interest in a
Temporary Regulation S Global Security, the transferor and Euroclear or CEDEL,
as the case may be, must have previously delivered an Owner Securities
Certification and a Depository Securities Certification respectively, with
respect to such beneficial interest. Upon receipt by the Trustee, as Registrar,
of (A) written instructions given by or on behalf of the Depository in
accordance with the Applicable Procedures directing the Trustee to credit or
cause to be credited to a specified Agent Member's account a beneficial interest
in the Restricted Global Security in a specified principal amount and to cause
to be debited from another specified Agent Member's account a beneficial
interest in the Temporary Regulation S Global Security or the Permanent
Regulation S Global Security, as the case may be, in an equal principal amount
and (B) a cer-
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tificate in substantially the form set forth in Exhibit J signed by or on behalf
of the holder of such beneficial interest in the Temporary Regulation S Global
Security or the Permanent Regulation S Global Security, as the case may be, the
Trustee, as Security Registrar, shall, subject to clause (n) below, reduce the
principal amount of such Temporary Regulation S Global Security or Permanent
Regulation S Global Security, as the case may be, and increase the principal
amount of the Restricted Global Security by such specified principal amount.
(k) Non-Global Restricted Security to Global Security. If the holder
of a Restricted Security (other than a Global Security) wishes at any time to
transfer all or any portion of such Security to a Person who wishes to take
delivery thereof in the form of a beneficial interest in the Restricted Global
Security, the Temporary Regulation S Global Security or the Permanent Regulation
S Global Security, such transfer may be effected, subject to the Applicable
Procedures, only in accordance with this clause (k) and clause (n) below. Upon
receipt by the Trustee, as Registrar, of (A) such Security and written
instructions given by or on behalf of such Holder as provided in this Section
2.06 directing the Trustee to credit or cause to be credited to a specified
Agent Member's account a beneficial interest in the Restricted Global Security,
the Temporary Regulation S Global Security or the Permanent Regulation S Global
Security, as the case may be, in a specified principal amount equal to the
principal amount of the Restricted Security (or portion thereof) to be so
transferred, and (B) an appropriately completed certificate substantially in the
form set forth in Exhibit K-1 hereto, if the specified account is to be credited
with a beneficial interest in the Restricted Global Security, or Exhibit K-2
hereto, if the specified account is to be credited with a beneficial interest in
the Temporary Regulation S Global Security or the Permanent Regulation S Global
Security, signed by or on behalf of such Holder, then the Trustee, as Registrar,
shall, subject to clause (n) below, cancel such Restricted Security (and issue a
new Security in respect of any untransferred portion thereof) as provided in
this Section 2.06 and increase the principal amount of the Restricted Global
Security, Temporary Regulation S Global Security or Permanent Regulation S
Global Security, as the case may be, by the specified principal amount.
(l) Non-Global Permanent Regulation S Security to Restricted
Global Security or Permanent Regulation S Global Security. If the Holder of a
Permanent Regulation S Security (other than a Global Security) wishes at any
time to transfer all or any portion of such Security to a Person who wishes to
take delivery thereof in the form of a beneficial interest in the Restricted
Global Security or the Permanent Regulation S
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Global Security, as the case may be, such transfer may be effected only in
accordance with this clause (l) and subject to the Applicable Procedures. Upon
receipt by the Trustee, as Registrar, of (A) such Security and instructions
given by or on behalf of such Holder as provided in this Section 2.06 directing
the Trustee to credit or cause to be credited to a specified Agent Member's
account a beneficial interest in the Restricted Global Security or the Permanent
Regulation S Global Security, as the case may be, in a principal amount equal to
the principal amount of the Security (or portion thereof) to be so transferred,
and (B)(i) with respect to a transfer which is to be delivered in the form of a
beneficial interest in the Restricted Global Security, a certificate in
substantially the form set forth in Exhibit L-1, signed by or on behalf of such
Holder, and (ii) with respect to a transfer which is to be delivered in the form
of a beneficial interest in the Permanent Regulation S Global Security, a
certificate in substantially the form set forth in Exhibit L-2, signed by or on
behalf of such Holder, then the Trustee, as Registrar, shall, subject to Clause
(9) below, cancel such Security (and issue a new Security in respect of any
untransferred portion thereof) as provided in this Section 2.06 and increase the
principal amount of the Restricted Global Security, or the Permanent Regulation
S Global Security, as the case may be, by the specified principal.
(m) Other Exchanges. Securities that are not Global Securities may
be exchanged (on transfer or otherwise) for Securities that are not Global
Securities or for beneficial interests in a Global Security (if any is then
outstanding) only in accordance with such procedures, which shall be
substantially consistent with the provisions of clauses (f) through (l) above
(including the certification requirements intended to insure that transfers of
beneficial interests in a Global Security comply with Rule 144A under the
Securities Act, Rule 144 under the Securities Act or Regulation S, as the case
may be) and any Applicable Procedures, as may be from time to time adopted by
the Company and the Trustee.
(n) Interests in Temporary Regulation S Global Security To Be Held
Through Euroclear or CEDEL. Until the later of the expiration of the Restricted
Period and the provision of the Owner Securities Certification and the
Depository Securities Certification, beneficial interests in any Temporary
Regulation S Global Security may be held only in or through accounts maintained
at the Depository by Euroclear or CEDEL (or by Agent Members acting for the
account thereof).
(o) When Securities in certificated form are presented to the
Registrar or a co-Registrar with a request to
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register the transfer of such Securities or to exchange such Securities for an
equal principal amount of Securities of other authorized denominations, the
Registrar or co-Registrar shall register the transfer or make the exchange as
requested if its requirements for such transaction are met; provided, however,
that the Securities surrendered for transfer or exchange shall be duly endorsed
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Registrar or co-Registrar, duly executed by the Holder thereof
or his attorney duly authorized in writing. To permit registrations of transfers
and exchanges, the Company shall execute and the Trustee shall authenticate
Securities (and the Guarantors shall execute the Guarantors thereon) at the
Registrar's or co-Registrar's request. No service charge shall be made for any
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer taxes or similar
governmental charge payable upon exchanges or transfers pursuant to Sections
2.02, 2.10, 3.07, 4.15, 4.16 or 9.05). The Registrar or co-Registrar shall not
be required to register the transfer of or exchange of any Security (i) during a
period beginning at the opening of business 15 days before the mailing of a
notice of redemption of Securities and ending at the close of business on the
day of such mailing and (ii) selected for redemption in whole or in part
pursuant to Article Three, except the unredeemed portion of any Security being
redeemed in part.
(p) If a Series A Note is a Restricted Security in certificated
form, then as provided in this Indenture and subject to the limitations herein
set forth, the Holder, provided it is a Qualified Institutional Buyer, may
exchange such Security for a Book-Entry Security by instructing the Trustee (by
completing the Transferee Certificate in the form of Exhibit D hereto) to
arrange for such Series A Note to be represented by a beneficial interest in a
Global Security in accordance with the customary procedures of the Depository.
(q) Upon any exchange provided for in Section 2.06(a), the Company
shall execute and the Trustee shall authenticate and deliver to the person
specified by the Depository a new Series A Note or Series A Notes registered in
such names and in such authorized denominations as the Depository, pursuant to
the instructions of the beneficial owner of the Securities requesting the
exchange, shall instruct the Trustee. Thereupon, the beneficial ownership of
such Global Security shown on the records maintained by the Depository or its
nominee shall be reduced by the amounts so exchanged and an appropriate
endorsement shall be made by or on behalf of the Trustee on the Global Security.
Any such exchange shall be effected
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through the Depository in accordance with the procedures of the Depository
therefor.
(r) Notwithstanding the foregoing, no Global Security shall be
registered for transfer or exchange, or authenticated and delivered, whether
pursuant to this Section, Section 2.07, 2.10 or 3.07 or otherwise, in the name
of a person other than the Depository for such Global Security or its nominee
until (i) the Depository notifies the Company that it is unwilling or unable to
continue as Depository for such Global Security or if at any time the Depository
ceases to be a clearing agency registered under the Exchange Act, and a
successor depository is not appointed by the Company within 30 days, (ii) the
Company executes and delivers to the Trustee a Company order that all such
Global Securities shall be exchangeable or (iii) there shall have occurred and
be continuing an Event of Default. Upon the occurrence in respect of any Global
Security representing the Series A Notes of any one or more of the conditions
specified in clause (i), (ii) or (iii) of the preceding sentence, such Global
Security may be registered for transfer or exchange for Series A Notes
registered in the names of, authenticated and delivered to such persons as the
Trustee or the Depository, as the case may be, shall direct.
(s) Except as provided above, any Security authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of,
any Global Security, whether pursuant to this Section, Section 2.07, 2.10 or
3.07 or otherwise, shall also be a Global Security and bear the legend specified
in Exhibit C.
SECTION 2.07. Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if the
Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, the Company shall issue and the Trustee shall authenticate a
replacement Security (and the Guarantors shall execute the Guarantees thereon)
if the Trustee's requirements are met. If required by the Trustee or the
Company, such Holder must provide an indemnity bond or other indemnity,
sufficient in the judgment of the Company, the Guarantors and the Trustee, to
protect the Company, the Guarantors, the Trustee or any Agent from any loss
which any of them may suffer if a Security is replaced. The Company may charge
such Holder for its reasonable out-of-pocket expenses in replacing a Security,
including reasonable fees and expenses of counsel. Every replacement Security
shall constitute an additional obligation of the Company and the Guarantors.
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SECTION 2.08. Outstanding Securities.
Securities outstanding at any time are all the Securities that have
been authenticated by the Trustee except those cancelled by it, those delivered
to it for cancellation and those described in this Section as not outstanding. A
Security does not cease to be outstanding because the Company or any of its
Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.07 (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser. A mutilated Security ceases to be outstanding
upon surrender of such Security and replacement thereof pursuant to Section
2.07.
If on a Redemption Date or the Maturity Date the Paying Agent holds
U.S. Legal Tender or U.S. Government Obligations sufficient to pay all of the
principal and interest due on the Securities payable on that date, then on and
after that date such Securities cease to be outstanding and interest on them
ceases to accrue; provided, however, that to the extent the Trustee is enjoined
from making payments to the Holders, interest will continue to accrue until such
time as the Trustee is not so enjoined.
SECTION 2.09. Treasury Securities.
In determining whether the Holders of the required principal amount
of Securities have concurred in any direction, waiver or consent, Securities
owned by the Company or an Affiliate of the Company shall be disregarded, except
that, for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Securities that the
Trustee knows are so owned shall be disregarded.
SECTION 2.10. Temporary Securities.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities (and the
Guarantors shall execute the guarantees thereon) upon receipt of a written order
of the Company in the form of an Officers' Certificate. The Officers'
Certificate shall specify the amount of temporary Securities to be authenticated
and the date on which the temporary Securities are to be authenticated.
Temporary Securities shall be substantially in the form of definitive Securities
but may have variations that the Company considers appropriate for temporary
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Securities. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate and the Guarantors shall execute Guarantees on, upon
receipt of a written order of the Company pursuant to Section 2.02, definitive
Securities in exchange for temporary Securities.
SECTION 2.11. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for transfer, exchange or payment. The
Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent,
and no one else, shall cancel and, at the written direction of the Company,
shall dispose of all Securities surrendered for transfer, exchange, payment or
cancellation. Subject to Section 2.07, the Company may not issue new Securities
to replace Securities that it has paid or delivered to the Trustee for
cancellation. If the Company shall acquire any of the Securities, such
acquisition shall not operate as a redemption or satisfaction of the
Indebtedness represented by such Securities unless and until the same are
surrendered to the Trustee for cancellation pursuant to this Section 2.11.
SECTION 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the Securities,
it shall, unless the Trustee fixes another record date pursuant to Section 6.10,
pay the defaulted interest, plus (to the extent lawful) any interest payable on
the defaulted interest to the persons who are Holders on a subsequent special
record date, which date shall be the fifteenth day next preceding the date fixed
by the Company for the payment of defaulted interest or the next succeeding
Business Day if such date is not a Business Day. At least 15 days before the
subsequent special record date, the Company shall mail to each Holder, with a
copy to the Trustee, a notice that states the subsequent special record date,
the payment date and the amount of defaulted interest, and interest payable on
such defaulted interest, if any, to be paid.
SECTION 2.13. CUSIP Number.
The Company in issuing the Securities may use a CUSIP number or
numbers, and if so, the Trustee shall use the CUSIP number or numbers in notices
of redemption or exchange as a convenience to Holders; provided that any such
notice may state that no representation is made as to the correctness or
accuracy of the CUSIP number or numbers printed in the notice or on
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the Securities, and that reliance may be placed only on the other identification
numbers printed on the Securities.
SECTION 2.14. Designation.
The Indebtedness evidenced by the Securities and the Guarantees is
hereby irrevocably designated as "senior indebtedness" or such other term
denoting seniority (i) for all purposes of the provisions defining subordination
contained in agreements that provide that the Indebtedness of the Company issued
pursuant to such agreements is subordinate to Indebtedness designated as senior
indebtedness and (ii) for the purposes of any future Indebtedness of the Company
which the Company expressly makes subordinate to any senior indebtedness or such
other term denoting seniority. In connection with the issuance of any such
future subordinated Indebtedness, the Company shall take all necessary steps to
effectuate the foregoing.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Optional Redemption.
(a) The Fixed Rate Notes will be subject to redemption, in whole
or in part, at the option of the Company, at any time on or after March 15,
2002, at the redemption prices (expressed as percentages of principal amount)
set forth below plus accrued interest to the redemption date, if redeemed during
the 12 month period beginning on March 15 of the years indicated below:
Year Percentage
2002...................................... 105.625%
2003...................................... 102.813%
2004 and thereafter....................... 100.000%
(b) The Floating Rate Notes will be subject to redemption, in
whole at any time or in part from time to time, at the option of the Company, at
the redemption prices (expressed as percentages of principal amount) set forth
below plus accrued interest to the redemption date, if redeemed during the
twelve month period beginning on March 15 of the years indicated below:
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Year Percentage
1998...................................... 104.000%
1999...................................... 103.000%
2000...................................... 102.000%
2001...................................... 101.000%
2002 and thereafter....................... 100.000%
(c) In addition, at any time prior to March 15, 2001, the Company
may redeem up to 35% of the sum of (x) the aggregate principal amount of the
Fixed Rate Notes issued in the Offering plus (y) any additional Fixed Rate Notes
issued after the Issue Date pursuant to this Indenture, with the proceeds of one
or more Equity Offerings at a redemption price (expressed as a percentage of
principal amount) of 111.25% plus accrued interest to the redemption date;
PROVIDED that at least 65% of the sum of (x) the aggregate principal amount of
Fixed Rate Notes issued in the Offering plus (y) any additional Fixed Rate Notes
issued after the Issue Date pursuant to this Indenture remains outstanding
immediately after any such redemption. In order to effect the foregoing
redemption with the proceeds of any Equity Offering, the Company shall make such
redemption not more than 120 days after the consummation of any such Equity
Offering.
SECTION 3.02. Notices to Trustee.
If the Company elects to redeem Securities pursuant to this
Indenture and the Securities, it shall notify the Trustee and the Paying Agent
in writing of the Redemption Date and the principal amount of the Securities to
be redeemed and whether it wants the Trustee to give notice of redemption to the
Holders (at the Company's expense) at least 30 days (unless a shorter notice
shall be satisfactory to the Trustee) but not more than 60 days before the
Redemption Date. Any such notice may be cancelled at any time prior to notice of
such redemption being mailed to any Holder and shall thereby be void and of no
effect.
SECTION 3.03. Selection of Securities To Be Redeemed.
If less than all of the Securities are to be redeemed at any time,
the Trustee shall select the Securities to be redeemed in compliance with the
requirements of the principal national securities exchange, if any, on which the
Securities being redeemed are listed or, if the Securities are not listed on a
national securities exchange, on a PRO RATA basis, by lot or by such other
method as the Trustee shall deem fair and appropriate.
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The Trustee shall make the selection from the Securities outstanding
and not previously called for redemption and shall promptly notify the Company
in writing of the Securities selected for redemption and, in the case of any
Security selected for partial redemption, the principal amount thereof to be
redeemed. Securities in denominations of $1,000 or less may be redeemed only in
whole. The Trustee may select for redemption portions (equal to $1,000 or any
integral multiple thereof) of the principal of Securities that have
denominations larger than $1,000. If a redemption is to be made with the
proceeds of an Equity Offering pursuant to Section 3.01(c), selection of the
Fixed Rate Notes for redemption shall be made by the Trustee only on a PRO RATA
basis unless such method is otherwise prohibited. Provisions of this Indenture
that apply to Securities called for redemption also apply to portions of
Securities called for redemption.
SECTION 3.04. Notice of Redemption.
Except as otherwise provided in Section 3.01, at least 30 days but
not more than 60 days before a Redemption Date the Company shall mail a notice
of redemption by first class mail to each Holder whose Securities are to be
redeemed, with a copy to the Trustee. At the Company's request, the Trustee
shall give the notice of redemption in the Company's name and at the Company's
expense. Each notice for redemption shall identify the Securities to be redeemed
and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(5) that, unless the Company defaults in making the redemption
payment, interest on Securities called for redemption ceases to accrue on
and after the Redemption Date, and the only remaining right of the Holders
of such Securities is to receive payment of the Redemption Price upon
surrender to the Paying Agent of the Securities redeemed;
(6) if any Security is being redeemed in part, the portion of the
principal amount of such Security to be redeemed and that, after the
Redemption Date, and upon surrender of such Security, a new Security or
Securities in
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the aggregate principal amount equal to the unredeemed portion thereof
will be issued;
(7) if fewer than all the Securities are to be redeemed, the
identification of the particular Securities (or portion thereof) to be
redeemed, as well as the aggregate principal amount of Securities to be
redeemed and the aggregate principal amount of Securities to be
outstanding after such partial redemption; and
(8) the CUSIP number, if any, relating to such Securities.
SECTION 3.05. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.04,
Securities called for redemption become due and payable on the Redemption Date
and at the Redemption Price. Upon surrender to the Trustee or Paying Agent, such
Securities called for redemption shall be paid at the Redemption Price plus
accrued interest to the Redemption Date, but interest installments whose
maturity is on or prior to such Redemption Date will be payable on the relevant
Interest Payment Dates to the Holders of record at the close of business on the
relevant Record Dates referred to in the Securities.
SECTION 3.06. Deposit of Redemption Price.
On or before the Redemption Date, the Company shall deposit with the
Paying Agent U.S. Legal Tender sufficient and timely to pay the Redemption Price
of all Securities to be redeemed on that date (other than Securities or portions
thereof called for redemption on that date which have been delivered by the
Company to the Trustee for cancellation). The Paying Agent shall promptly return
to the Company any U.S. Legal Tender so deposited which is not required for that
purpose upon the written request of the Company, except with respect to monies
owed as obligations to the Trustee pursuant to Article Seven.
If the Company complies with the preceding paragraph, then, unless
the Company defaults in the payment of such Redemption Price, interest on the
Securities to be redeemed will cease to accrue on and after the applicable
Redemption Date, whether or not such Securities are presented for payment.
SECTION 3.07. Securities Redeemed in Part.
Upon surrender of a Security that is to be redeemed in part, the
Trustee shall authenticate for the Holder a new
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Security or Securities equal in principal amount to the unredeemed portion of
the Security surrendered.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities.
The Company shall pay the principal of and interest on the
Securities on the dates and in the manner provided in the Securities. An
installment of principal of or interest on the Securities shall be considered
paid on the date it is due if the Trustee or Paying Agent holds on that date
U.S. Legal Tender designated for and sufficient and timely to pay the
installment. Interest on the Fixed Rate Notes will be computed on the basis of a
360-day year comprised of twelve 30-day months and interest on the Floating Rate
Notes will be computed as set forth in Exhibit A-1 or Exhibit B-1, as
applicable.
The Company shall pay interest on overdue principal and (to the
extent permitted by law) on overdue installments of interest at a rate equal to
13.25% PER ANNUM.
SECTION 4.02. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, The City of
New York, the office or agency required under Section 2.03. The Company shall
give prior notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the address of the Trustee set forth in Section 10.02.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
PROVIDED, HOWEVER, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York, for such purposes. The Company will
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.
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The Company hereby initially designates the office of State Street
Bank and Trust Company, Goodwin Square, 225 Asylum, 23rd Floor, Hartford, CT
06103, as such office of the Company in accordance with this Section 4.02.
SECTION 4.03. Limitation on Restricted Payments.
The Company will not, and will not permit any of the Restricted
Subsidiaries to, directly or indirectly, after the Issue Date (a) declare or pay
any dividend or make any distribution on the Company's Capital Stock or make any
payment to holders of such Capital Stock (other than dividends or distributions
payable in Qualified Capital Stock of the Company), (b) purchase, redeem or
otherwise acquire or retire for value any Capital Stock of the Company or any
warrants, rights or options to purchase or acquire shares of any class of such
Capital Stock, (c) purchase, redeem, prepay, defease or otherwise acquire or
retire for value, prior to any scheduled maturity, scheduled repayment or
scheduled sinking fund payment, Indebtedness of the Company or any of the
Guarantors that is expressly subordinate in right of payment to the Securities
or the Guarantee of such Guarantor, as the case may be, or (d) make any
Investment (excluding any Permitted Investment) (each of the foregoing actions
set forth in clauses (a), (b), (c) and (d) being referred to as a "Restricted
Payment"), if at the time of such Restricted Payment or immediately after giving
effect thereto,(i) a Default or an Event of Default shall have occurred and be
continuing or (ii) Restricted Payments made subsequent to the Issue Date (the
amount expended for such purposes, if other than in cash, shall be the Fair
Market Value of such property proposed to be transferred by the Company or such
Restricted Subsidiary, as the case may be, pursuant to such Restricted Payment)
shall exceed the sum of:
(w) 50% of the cumulative Consolidated Net Income (or if cumulative
Consolidated Net Income shall be a loss, minus 100% of such loss) of the
Company earned subsequent to the Issue Date and prior to the date the
Restricted Payment occurs (treating such period as a single accounting
period);
(x) 100% of the aggregate net proceeds, including the Fair Market
Value of Property other than cash, received by the Company from any person
(other than a Subsidiary of the Company) from the issuance and sale
subsequent to the Issue Date of Qualified Capital Stock of the Company
(excluding (A) Qualified Capital Stock paid as a dividend on any Capital
Stock or as interest on any Indebtedness, (B) any net proceeds from
issuances and sales financed directly or indirectly using funds borrowed
from
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the Company or any Subsidiary of the Company, until and to the extent such
borrowing is repaid and (C) any net proceeds from any Equity Offering
which are used to redeem Fixed Rate Notes pursuant to, and in accordance
with, the provisions under Section 3.01(c).
(y) 100% of the aggregate net proceeds, including the Fair Market
Value of property other than cash, received by the Company from any person
(other than a Subsidiary of the Company) from the issuance and sale of
Disqualified Capital Stock and/or Indebtedness, in each case that has been
converted into or exchanged for Qualified Capital Stock of the Company
after the Issue Date; and
(z) without duplication, the sum of (1) the aggregate amount
returned in cash on or with respect to Investments (other than Permitted
Investments) made subsequent to the Issue Date whether through interest
payments, principal payments, dividends or other distributions or
payments, (2) the net cash proceeds received by the Company or any
Restricted Subsidiary from the disposition of all or any portion of such
Investments (other than to a Subsidiary of the Company) and (3) upon
redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary,
the Fair Market Value of such Subsidiary; PROVIDED, HOWEVER, that the sum
of clauses (1), (2) and (3) above shall not exceed the aggregate amount of
all such Investments made subsequent to the Issue Date.
The foregoing provisions shall not prohibit:
(1) the payment of any dividend within 60 days after the date of its
declaration if the dividend would have been permitted on the date of
declaration;
(2) the acquisition of Capital Stock of the Company or Indebtedness
of the Company or any Guarantor either (i) solely in exchange for shares
of Qualified Capital Stock of the Company or (ii) through the application
of net proceeds of a substantially concurrent sale for cash (other than to
a Subsidiary of the Company) of shares of Qualified Capital Stock of the
Company.
(3) the acquisition of Indebtedness of the Company or any Guarantor
that is expressly subordinate in right of payment to the Securities or
such Guarantor's Guarantee, as the case may be, either (i) solely in
exchange for Indebtedness of the Company or such Guarantor which is
expressly subordinate in right of payment to the Securities or such
Guarantor's Guarantee, as the case may be, at
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least to the extent that the Indebtedness being acquired is subordinated
to the Securities or such Guarantor's Guarantee, as the case may be, and
has no scheduled principal prepayment dates prior to the scheduled final
maturity date of the Indebtedness being exchanged or (ii) through the
application of net proceeds of a substantially concurrent sale for cash
(other than to a Subsidiary of the Company) of Indebtedness of the Company
or such Guarantor which is expressly subordinate in right of payment to
the Securities or such Guarantor's Guarantee, as the case may be, at least
to the extent that the Indebtedness being acquired is subordinated to the
Securities or such Guarantor's Guarantee, as the case may be, and has no
scheduled principal prepayment dates prior to the scheduled final maturity
date of the Indebtedness being refinanced;
(4) the making of payments by the Company or any of the Restricted
Subsidiaries to DRA or Renco (A) no earlier than ten days prior to the
date on which Renco is required to make its payments to the Internal
Revenue Service or the applicable state taxing authority, as the case may
be, pursuant to a tax sharing agreement (which tax sharing agreement
provides that the payments thereunder shall not exceed the amount the
Company and its Subsidiaries would have been required to pay for taxes on
a stand-alone basis, except that the Company and its Subsidiaries will not
have the benefit of any of its tax loss carryforwards unless such tax
losses were a result of timing differences between the Company's and its
Subsidiaries' accounting for tax and financial reporting purposes, and
which tax sharing agreement also provides that transactions between the
Company, DRA and Renco and Renco's other Subsidiaries are accounted for on
a cash basis and not on an accrual basis) and (B) to reimburse DRA or
Renco for out of pocket insurance payments made by DRA or Renco on behalf
of the Company and its Subsidiaries;
(5) the payment by the Company or any of the Restricted Subsidiaries
of a management fee to Renco in an amount not to exceed $200,000 in any
month;
(6) the repurchase from Renco of the Company's outstanding 2,500
shares of preferred stock, par value $1,000 per share, including the
payment of accrued and unpaid dividends thereon, in an aggregate amount of
approximately $2.8 million; and
(7) the payment of a transaction fee to Renco in an amount of
approximately $2.2 million;
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PROVIDED that in the case of clauses (2), (3) and (5), no Default or Event of
Default shall have occurred and be continuing at the time of such payment or as
a result thereof.
In determining the aggregate amount of Restricted Payments
permissible under clause (ii) of the first paragraph of this section, amounts
expended, incurred or outstanding pursuant to clauses (1) and (2) (but not
pursuant to clauses (3), (4), (5), (6) or (7)) of the second paragraph of this
section shall be included as Restricted Payments; PROVIDED that any proceeds
received from the issuance of Qualified Capital Stock pursuant to clause (2) of
the second paragraph of this section shall be included in calculating the amount
referred to in clause (x) or clause (y), as the case may be, of the first
paragraph of this Section 4.03.
SECTION 4.04. Corporate Existence.
Except as otherwise permitted by Article Five, each of the Company
and the Guarantors shall do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence and the corporate or
other existence of each of its Subsidiaries in accordance with the respective
organizational documents of each such Subsidiary and the rights (charter and
statutory) and franchises of each of the Company and the Guarantors and each
such Subsidiary; PROVIDED, HOWEVER, that each of the Company and the Guarantors
shall not be required to preserve, with respect to itself, any right or
franchise, and with respect to any of its Subsidiaries any such existence, right
or franchise, if the Board of Directors of each of the Company and the
Guarantors shall determine that the preservation thereof is no longer desirable
in the conduct of the business of each of the Company and the Guarantors and
will not be adverse in any material respect to the Holders.
SECTION 4.05. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (i) all taxes, assessments
and governmental charges (including withholding taxes and any penalties,
interest and additions to taxes) levied or imposed upon it or any of its
Subsidiaries or properties of it or any of its Subsidiaries and (ii) all lawful
claims for labor, materials and supplies that, if unpaid, might by law become a
Lien upon the property of it or any of its Subsidiaries; PROVIDED, HOWEVER, that
the Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim if either (a) the amount,
applicability or validity thereof is being contested in
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good faith by appropriate proceedings and an adequate reserve has been
established therefor to the extent required by GAAP or (b) the failure to make
such payment or effect such discharge (together with all other such failures)
would not have a material adverse effect on the financial condition or results
of operations of the Company and its Subsidiaries, taken as a whole.
SECTION 4.06. Maintenance of Properties and Insurance.
(a) Each of the Company and the Guarantors shall cause all
properties used or useful in the conduct of its business or the business of any
of its Subsidiaries to be maintained and kept in good condition, repair and
working order and supplied with all necessary equipment and shall cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in its judgment may be necessary, so that the business carried
on in connection therewith may be properly and advantageously conducted at all
times unless the failure to so maintain such properties (together with all other
such failures) would not have a material adverse effect on the financial
condition or results of operations of the Company and the Guarantors and their
Subsidiaries taken as a whole; PROVIDED, HOWEVER, that nothing in this Section
4.06 shall prevent the Company and the Guarantors or any of their Subsidiaries
from discontinuing the operation or maintenance of any of such properties, or
disposing of any of them, if such discontinuance or disposal is either (i) in
the ordinary course of business, (ii) in the good faith judgment of the Board of
Directors of the Company or the Guarantors or the Subsidiary concerned, or of
the senior officers of the Company or the Guarantors or such Subsidiary, as the
case may be, desirable in the conduct of the business of the Company or the
Guarantors or such Subsidiary, as the case may be, or (iii) is otherwise
permitted by this Indenture.
(b) Each of the Company and the Guarantors shall provide or cause to
be provided, for itself and each of its Subsidiaries, insurance (including
appropriate self-insurance) against loss or damage of the kinds that, in the
reasonable, good faith opinion of each of the Company and the Guarantors are
adequate and appropriate for the conduct of the business of the Company and the
Guarantors and such Subsidiaries in a prudent manner, with reputable insurers or
with the government of the United States of America or an agency or
instrumentality thereof, in such amounts, with such deductibles, and by such
methods as shall be customary, in the reasonable, good faith opinion of each of
the Company and the Guarantors, for companies similarly situated in the
industry, unless the failure to provide such insurance (together with all other
such failures)
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would not have a material adverse effect on the financial condition or results
of operations of each of the Company and the Guarantors and its Subsidiaries,
taken as a whole.
SECTION 4.07. Compliance Certificate; Notice of Default.
(a) The Company shall deliver to the Trustee, within 60 days after
the end of the Company's fiscal quarters and within 90 days after the end of the
Company's fiscal year, an Officers' Certificate stating that a review of its
activities and the activities of its Subsidiaries during the preceding fiscal
period has been made under the supervision of the signing Officers with a view
to determining whether it has kept, observed, performed and fulfilled its
obligations under this Indenture and further stating, as to each such Officer
signing such certificate, that to the best of his knowledge, the Company during
such preceding fiscal period has kept, observed, performed and fulfilled each
and every such covenant and no Default or Event of Default occurred during such
period and at the date of such certificate there is no Default or Event of
Default that has occurred and is continuing or, if such signers do know of such
Default or Event of Default, the certificate shall describe the Default or Event
of Default and its status with particularity. The Officers' Certificate shall
also include all calculations necessary to show covenant compliance. The
Officers' Certificate shall also notify the Trustee should the Company elect to
change the manner in which it fixes its fiscal year end.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the Company shall
deliver to the Trustee within 90 days after the end of each fiscal year a
written statement by its independent certified public accountants stating (A)
that its audit examination has included a review of the terms of this Indenture
and the Securities as they relate to accounting matters, and (B) whether, in
connection with its audit examination, any Default or Event of Default has come
to its attention and if such a Default or Event of Default has come to its
attention, specifying the nature and period of existence thereof.
(c) The Company will deliver to the Trustee as soon as possible, and
in any event within 10 days after the Company becomes aware or should reasonably
have become aware of the occurrence of any Default or Event of Default, an
Officers' Certificate specifying such Default or Event of Default and what
action the Company is taking or proposes to take with respect thereto.
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SECTION 4.08. Compliance with Laws.
Each of the Company and the Guarantors shall comply, and shall cause
each of its Subsidiaries to comply, with all applicable statutes, rules,
regulations, orders and restrictions of the United States of America, Peru and
the Cayman Islands, all states and municipalities thereof, and of any
governmental department, commission, board, regulatory authority, bureau, agency
and instrumentality of the foregoing, in respect of the conduct of their
respective businesses and the ownership of their respective properties, except
such as are being contested in good faith and by appropriate proceedings and
except for such noncompliances as would not in the aggregate have a material
adverse effect on the financial condition or results of operations of each of
the Company and the Guarantors and its Subsidiaries taken as a whole.
SECTION 4.09. SEC Reports and Other Information.
(a) At all times when the Company is required or permitted
voluntarily to file with the SEC pursuant to Section 13 or 15(d) of the Exchange
Act or this Indenture is qualified under the TIA, the Company (at its own
expense) shall file with the SEC and shall file with the Trustee and mail or
cause the Trustee to mail to the Holders at their addresses set forth in the
register of Securities within 15 days after it files them with the SEC copies of
the annual reports, quarterly reports and the information, documents, and other
reports (or copies of such portions of any of the foregoing as the SEC may by
rules and regulations prescribe) to be filed pursuant to Section 13 or 15(d) of
the Exchange Act. If the Company is not subject to the requirements of such
Section 13 or 15(d) of the Exchange Act and not permitted to voluntarily file
and this Indenture has not been qualified under the TIA, the Company (at its own
expense) shall file with the Trustee and mail or cause the Trustee to mail to
the Holders at their addresses set forth in the register of Securities, within
15 days after it would have been required to file such information with the SEC,
all information and financial statements, including any notes thereto and with
respect to annual reports, quarterly reports, an auditors' report by an
accounting firm of established national reputation, and a "Management's
Discussion and Analysis of Financial Condition and Results of Operations," both
comparable to the disclosure that each of the Company would have been required
to include in such annual reports, quarterly reports, information, documents or
other reports, as if the Company was subject to the requirements of such Section
13 or 15(d) of the Exchange Act, in each case in the form that would have been
required by the SEC. Upon qualification of this Indenture under
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the TIA, the Company shall also comply with the provisions of TIA ss. 314(a).
(b) At any time when the Company is not subject to Section 13 or
15(d) of the Exchange Act, upon the request of a Holder of a Series A Note, the
Company will promptly furnish or cause to be furnished such information as is
specified pursuant to Rule 144A(d)(4) under the Securities Act (or any successor
provision thereto) to such Holder or to a prospective purchaser of such Series A
Note designated by such Holder, as the case may be, in order to permit
compliance by such Holder with Rule 144A under the Securities Act.
SECTION 4.10. Waiver of Stay, Extension or Usury Laws.
Each of the Company and the Guarantors covenants (to the extent that
it may lawfully do so) that it will not at any time insist upon, plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law that would prohibit or forgive the
each of Company and the Guarantors from paying all or any portion of the
principal of or interest on the Securities as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) each of the Company and the Guarantors hereby expressly waives
all benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
SECTION 4.11. Limitation on Transactions with Affiliates.
(a) The Company will not, and will not permit any of the Restricted
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction (including, without limitation, the purchase, sale, lease or
exchange of any property or the rendering of any service) with or for the
benefit of an Affiliate of the Company or any Restricted Subsidiary (other than
transactions between the Company and a Wholly-Owned Restricted Subsidiary or
between Wholly-Owned Restricted Subsidiaries) (an "Affiliate Transaction"),
other than (x) Affiliate Transactions permitted under (b) below and (y)
Affiliate Transactions (including lease transactions) on terms that are no less
favorable to the Company or the relevant Restricted Subsidiary in the aggregate
than those that might reasonably have been obtained in a comparable transaction
by the Company or such Restricted Subsidiary on an arm's-length basis (as
determined in good faith by the Board of Directors of
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the Company, as evidenced by a Board Resolution) from a person that is not an
Affiliate; PROVIDED that except as otherwise provided under (b) below, neither
the Company nor any of the Restricted Subsidiaries shall enter into an Affiliate
Transaction or series of related Affiliate Transactions involving or having a
value of more than $5.0 million unless the Company or such Restricted
Subsidiary, as the case may be, has received an opinion from an Independent
Financial Advisor, with a copy thereof to the Trustee, to the effect that the
financial terms of such Affiliate Transaction are fair and reasonable to the
Company or such Restricted Subsidiary, as the case may be, and such terms are no
less favorable to the Company or such Restricted Subsidiary, as the case may be,
than those that could be obtained in a comparable transaction on an arm's-length
basis with a person that is not an Affiliate.
(b) The foregoing provisions shall not apply to (i) any Restricted
Payment that is made in compliance with Section 4.03, (ii) payments by the
Company or any of the Restricted Subsidiaries to Renco or DRA of the amounts set
forth in clauses (4), (5), (6) and (7) of the second paragraph of Section 4.03
and (iii) reasonable and customary regular fees to directors of the Company and
the Restricted Subsidiaries who are not employees of the Company and the
Restricted Subsidiaries.
SECTION 4.12. Limitation on Indebtedness.
(a) The Company will not, and will not cause or permit any of the
Restricted Subsidiaries to, directly or indirectly, create, incur, assume,
guarantee, become liable, contingently or otherwise, with respect to, or
otherwise become responsible for the payment of (collectively "incur") any
Indebtedness (including Acquired Indebtedness) other than Permitted
Indebtedness; PROVIDED that the Company and the Guarantors may incur
Indebtedness (including Acquired Indebtedness) if: (A) no Default or Event of
Default shall have occurred and be continuing at the time of the proposed
incurrence thereof or shall occur as a result of such proposed incurrence, and
(B) after giving effect to such proposed incurrence, the Consolidated Fixed
Charge Coverage Ratio of the Company is at least equal to 2.25 to 1.0.
Notwithstanding the foregoing, a Restricted Subsidiary that is not a Guarantor
may incur Acquired Indebtedness to the extent such Indebtedness could have been
incurred by the Company and the Guarantors pursuant to the proviso in the
immediately preceding sentence.
(b) The Company and the Guarantors shall not, directly or
indirectly, in any event incur any Indebtedness which by its terms (or by the
terms of any agreement governing such
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Indebtedness) is subordinated to any other Indebtedness of the Company or such
Guarantor unless such Indebtedness is also by its terms (or by the terms of any
agreement governing such Indebtedness) made expressly subordinated to the
Securities or the Guarantee of such Guarantor, as the case may be, to the same
extent and in the same manner as such Indebtedness is subordinated to such other
Indebtedness of the Company or such Guarantor.
SECTION 4.13. Limitation on Dividends and Other Payment
Restrictions Affecting Restricted Subsidiaries.
The Company will not, and will not permit any of the Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to: (a) pay dividends or make any other distributions on
its Capital Stock, or any other interest or participation in, or measured by,
its profits, owned by the Company or by any Restricted Subsidiary, or pay any
Indebtedness owed to the Company or any Restricted Subsidiary; (b) make loans or
advances to the Company or any Restricted Subsidiary; or (c) transfer any of its
properties or assets to the Company or to any Restricted Subsidiary, except, in
each case, for such encumbrances or restrictions existing under or by reason of:
(i) applicable law; (ii) this Indenture; (iii) customary non-assignment
provisions of any lease governing a leasehold interest of the Company or any
Restricted Subsidiary; (iv) any instrument governing Indebtedness of a person
acquired by the Company or any Restricted Subsidiary at the time of such
acquisition, which encumbrance or restriction is not applicable to any person,
or the properties or assets of any person, other than the person or its
Subsidiaries so acquired; (v) any written agreement existing on the Issue Date
or amendments or modifications thereto, PROVIDED that no such agreement shall be
modified or amended in such a manner as to make the encumbrance or restriction
more restrictive than as in effect on the Issue Date; (vi) Indebtedness existing
and as in effect on the Issue Date, including, without limitation, the U.S.
Revolving Credit Facility or any refinancing, refunding, replacement or
extensions thereof, PROVIDED that any such encumbrance or restriction contained
in any refinancing, refunding, replacement or extension of the U.S. Revolving
Credit Facility shall be no more restrictive than such encumbrance or
restriction contained in the U.S. Revolving Credit Facility as in effect on the
Issue Date; (vii) Indebtedness under the Peruvian Revolving Credit Facility or
any refinancings, refundings, replacements or extensions thereof, PROVIDED that
such restrictions do not prohibit payments pursuant to the intercompany
agreements between
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the Company and the Restricted Subsidiaries as in effect on the Issue Date or
pursuant to any replacements thereof or pursuant to any comparable agreements
thereto, in each case providing for the same or similar payments; and (viii)
Indebtedness incurred in accordance with this Indenture, PROVIDED that such
encumbrance or restriction shall be no more restrictive than any encumbrance or
restriction contained in the Revolving Credit Facilities.
SECTION 4.14. Limitation on Liens.
The Company will not, and will not permit any of the Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Liens upon any properties or assets of the Company (including, without
limitation, any Capital Stock of a Restricted Subsidiary) or any of the
Restricted Subsidiaries whether owned on the Issue Date or acquired after the
Issue Date, or on any income or profits therefrom, or assign or otherwise convey
any right to receive income or profits thereon other than (i) Liens existing on
the Issue Date to the extent and in the manner such Liens are in effect on the
Issue Date, (ii) Liens on the non-fixed assets of the Company and the Restricted
Subsidiaries securing Indebtedness under the Revolving Credit Facilities and
(iii) Permitted Liens.
SECTION 4.15. Change of Control.
(a) Upon the occurrence of a Change of Control, the Company shall be
obligated to make an offer to purchase all outstanding Securities pursuant to
the offer described in paragraph (b), below (the "Change of Control Offer"), at
a purchase price equal to 101% of the principal amount thereof plus accrued
interest, if any, to the date of purchase. Within 10 days after the date upon
which the Change of Control occurred (the "Change of Control Date") requiring
the Company to make a Change of Control Offer pursuant to this Section 4.15, the
Company shall so notify the Trustee.
(b) The notice to the Holders shall contain all instructions and
materials necessary to enable such Holders to tender Securities pursuant to the
Change of Control Offer. Within 30 days following any Change of Control Date,
the Company shall send, by first class mail, a notice to each Holder, with
copies to the Trustee, which notice shall govern the terms of the Change of
Control Offer. Such notice shall state:
(1) that the Change of Control Offer is being made pursuant to this
Section 4.15 and that all Securities tendered will be accepted for
payment;
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(2) the purchase price (including the amount of accrued interest)
and the purchase date (which shall be no earlier than 45 days nor later
than 60 days following the Change of Control Date, other than as may be
required by law) (the "Change of Control Payment Date");
(3) that any Security not tendered will continue to accrue interest;
(4) that, unless the Company defaults in making payment therefor,
any Security accepted for payment pursuant to the Change of Control Offer
shall cease to accrue interest after the Change of Control Payment Date;
(5) that Holders electing to have a Security purchased pursuant to a
Change of Control Offer will be required to surrender the Security, with
the form entitled "Option of Holder to Elect Purchase" on the last page of
the Security completed, to the Paying Agent at the address specified in
the notice prior to the close of business on the Business Day prior to the
Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than two Business Days prior to the
Change of Control Payment Date, a telegram, telex, facsimile transmission
or letter setting forth the name of the Holder, the principal amount of
the Securities the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Security purchased;
(7) that Holders whose Securities are purchased only in part will be
issued new Securities in a principal amount equal to the unpurchased
portion of the Securities surrendered; and
(8) the circumstances and relevant facts regarding such Change of
Control.
On or before the Change of Control Payment Date, the Company shall
(i) accept for payment Securities or portions thereof tendered pursuant to the
Change of Control Offer, (ii) deposit with the Paying Agent U.S. Legal Tender
sufficient to pay the purchase price of all Securities so tendered and (iii)
deliver to the Trustee Securities so accepted together with an Officers'
Certificate stating the Securities or portions thereof being purchased by the
Company. The Paying Agent shall promptly mail to the Holders of Securities so
accepted payment in an amount equal to the purchase price, and the Trus-
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tee shall promptly authenticate and mail to such Holders new Securities equal in
principal amount to any unpurchased portion of the Securities surrendered. Any
Securities not so accepted shall be promptly mailed by the Company to the Holder
thereof. The Company will publicly announce the results of the Change of Control
Offer on or as soon as practicable after the Change of Control Payment Date. The
Company shall comply, to the extent applicable, with the requirements of Section
14(e) of the Exchange Act and any other securities laws or regulations in
connection with the repurchase of securities pursuant to a Change of Control
Offer. The Change of Control Offer shall remain open for at least 20 Business
Days and until the close of business on the Change of Control Payment Date. For
purposes of this Section 4.15, the Trustee shall act as the Paying Agent.
SECTION 4.16. Limitation on Sale of Assets.
(a) The Company will not, and will not permit any of the Restricted
Subsidiaries to, consummate any Asset Sale, unless (i) such Asset Sale is for at
least Fair Market Value, (ii) at least 80% of the consideration therefrom
received by the Company or such Restricted Subsidiary is in the form of cash or
Cash Equivalents and (iii) the Company or such Restricted Subsidiary shall apply
the Net Cash Proceeds of such Asset Sale within 270 days of receipt thereof, as
follows:
(i) first, to repay (and, in the case of any revolving credit
facility, effect a permanent reduction in the commitment thereunder) any
Indebtedness secured by the assets involved in such Asset Sale or
otherwise required to be repaid with the proceeds thereof; and
(ii) second, with respect to any Net Cash Proceeds remaining after
application pursuant to the preceding paragraph (A) (the "Available
Amount"), the Company shall make an offer to purchase (the "Asset Sale
Offer") from all Holders of Securities, up to a maximum principal amount
(expressed as a multiple of $1,000) of Securities equal to the Available
Amount at a purchase price equal to 100% of the principal amount thereof
plus accrued and unpaid interest thereon, if any, to the date of purchase;
PROVIDED, HOWEVER, that the Company will not be required to apply pursuant
to this paragraph (B) Net Cash Proceeds received from any Asset Sale if,
and only to the extent that, such Net Cash Proceeds are applied to a
Related Business Investment within 270 days of such Asset Sale; PROVIDED,
FURTHER, that if at any time any non-cash consideration received by the
Company or any such Restricted Subsidiary, as the case may be, in
connection with any Asset Sale is converted into or sold or otherwise
disposed
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of for cash, then such conversion or disposition shall be deemed to
constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall
be applied in accordance with this Section 4.16; and PROVIDED, FURTHER,
that the Company may defer the Asset Sale Offer until there is an
aggregate unutilized Available Amount equal to or in excess of $5 million
resulting from one or more Asset Sales (at which time, the entire
unutilized Available Amount, and not just the amount in excess of $5
million, shall be applied as required pursuant to this paragraph). To the
extent the Asset Sale Offer is not fully subscribed to by Holders of the
Securities, the Company and the Restricted Subsidiaries may retain such
unutilized portion of the Available Amount and use it for any purpose not
prohibited by this Indenture.
In the event of the transfer of substantially all (but not all) of
the property and assets of the Company and the Restricted Subsidiaries as an
entirety to a person in a transaction permitted under Article Five hereof, the
successor corporation shall be deemed to have sold the properties and assets of
the Company and the Restricted Subsidiaries not so transferred for purposes of
this Section 4.16, and shall comply with the provisions of this covenant with
respect to such deemed sale as if it were an Asset Sale. In addition, the Fair
Market Value of such properties and assets of the Company or the Restricted
Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for
purposes of this Section 4.16.
The notice of an Asset Sale Offer shall be sent, by first class
mail, by the Company (or caused to be mailed by the Company) with a copy to the
Trustee to all Holders of Securities not less than 30 days nor more than 60 days
before the Asset Sale Payment Date at their last registered addresses. The Asset
Sale Offer shall remain open from the time of mailing until three days before
the Asset Sale Offer Payment Date. The notice to the Holders shall contain all
instructions and materials necessary to enable such Holders to tender Securities
pursuant to the Asset Sale Offer. Such notice shall state:
(1) that the Asset Sale Offer is being made pursuant to Section
4.16;
(2) the purchase price (including an amount of accrued interest) and
the Asset Sale Offer Payment Date;
(3) that any Security not tendered will continue to accrue interest;
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(4) that unless the Company defaults in making payment therefor, any
Security accepted for payment pursuant to the Asset Sale Offer shall cease
to accrue interest after the Asset Sale Offer Payment Date;
(5) that Holders electing to have a Security purchased pursuant to
an Asset Sale Offer will be required to surrender the Security, with the
form entitled "Option of Holder to Elect Purchase" on the last page of the
Security completed, to the Paying Agent at the address specified in the
notice prior to the close of business on the Business Day prior to the
Asset Sale Offer Payment Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, no later than two Business Days prior to the Asset
Sale Offer Payment Date, a telegram, telex, facsimile transmission or
letter stating fully the name of the Holder, the principal amount of the
Securities the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Security purchased;
(7) that if Securities in a principal amount in excess of the
principal amount of the Securities to be acquired pursuant to the Asset
Sale Offer are tendered and not withdrawn pursuant to the Asset Sale
Offer, the Company shall purchase Securities on a PRO RATA basis (with
such adjustment as may be deemed appropriate by the Company so that only
Securities in denominations of $1,000 or integral multiples of $1,000
shall be so acquired); and
(8) that Holders whose Securities are purchased only in part will be
issued new Securities in a principal amount equal to the unpurchased
portion of the Securities surrendered.
On or before an Asset Sale Offer Payment Date, the Company shall (i)
accept for payment Securities or portions thereof tendered pursuant to the Asset
Sale Offer (on a PRO RATA basis if required pursuant to paragraph (7) above),
(ii) deposit with the Paying Agent U.S. Legal Tender sufficient to pay the
purchase price of all Securities or portions thereof so tendered and (iii)
deliver to the Trustee Securities so accepted together with an Officers'
Certificate identifying the Securities or portions thereof accepted for payment
by the Company. The Paying Agent shall promptly mail or deliver to Holders of
Securities so accepted payment in an amount equal to the purchase price, and the
Trustee shall promptly authenticate and mail or deliver to such Holders new
Securities equal in principal amount to any unpurchased portion of the
Securities surren-
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dered. Any Securities not so accepted shall be promptly mailed or delivered by
the Company to the Holder thereof. The Company will publicly announce the
results of the Asset Sale Offer as promptly as practicable following the Asset
Sale Offer Payment Date. The Company shall comply, to the extent applicable,
with the requirements of Section 14(e) of the Exchange Act and any other
securities laws or regulations in connection with the repurchase of Securities
pursuant to an Asset Sale Offer.
SECTION 4.17. Limitation on Sale/Leaseback Transactions.
The Company will not, and will not permit any of the Restricted
Subsidiaries to, enter into any Sale/leaseback. Notwithstanding the foregoing,
the Company and the Restricted Subsidiaries may enter into a Sale/leaseback if
(i) after giving pro forma effect to any such Sale/leaseback, the Company and
the Restricted Subsidiaries shall be in compliance with Section 4.12, (ii) the
sale price in such Sale/leaseback is at least equal to the Fair Market Value of
such property and (iii) the Company or such Restricted Subsidiary shall apply
the Net Cash Proceeds of the sale as provided pursuant to Section 4.16, to the
extent required by such provision.
SECTION 4.18. Limitation on Preferred Stock of Restricted
Subsidiaries.
The Company will not permit any Restricted Subsidiary to issue any
Preferred Stock (except to the Company or a Wholly-Owned Restricted Subsidiary),
nor will the Company permit any person (other than the Company or a Wholly-Owned
Restricted Subsidiary) to hold any Preferred Stock of a Restricted Subsidiary.
SECTION 4.19. Qualifying Investment Requirements.
At least semi-annually commencing April 30, 1998 until $120 million
has been expended by Doe Run Peru in the manner required by Section 4.5 of the
Subscription Agreement, (i) Doe Run Peru shall make Investments in Doe Run
Mining, which Investments, including any interest payable thereon, shall be
represented by promissory notes (the "Qualifying Investments Promissory Notes"),
in an amount equal to Doe Run Peru's expected Qualifying Investments for the
following six months and (ii) Doe Run Mining shall use the proceeds of each such
Qualifying Investment to prepay in part the promissory note issued by Doe Run
Mining to Metaloroya on October 23, 1997, the date of consummation of the
Acquisition; PROVIDED, FURTHER, that pending utilization of such proceeds for
Qualifying Investments, Doe Run Peru may repay outstanding loans under the
Peruvian Revolving Credit Facility.
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SECTION 4.20. Future Guarantees.
If the Company or any of the Restricted Subsidiaries transfers or
causes to be transferred, in one transaction or a series of related
transactions, any property to any Restricted Subsidiary that is not a Guarantor,
or if the Company or any of the Restricted Subsidiaries shall organize, acquire
or otherwise invest in another Restricted Subsidiary having total assets with a
book value in excess of $1 million, then such transferee or acquired or other
Restricted Subsidiary shall (i) execute and deliver to the Trustee a
supplemental indenture in form reasonably satisfactory to the Trustee pursuant
to which such Restricted Subsidiary shall unconditionally guarantee all of the
Company's obligations under the Securities and this Indenture on the terms set
forth in this Indenture and (ii) deliver to the Trustee an Opinion of Counsel
that such supplemental indenture has been duly authorized, executed and
delivered by such Restricted Subsidiary and constitutes a legal, valid, binding
and enforceable obligation of such Restricted Subsidiary. Thereafter, such
Restricted Subsidiary shall be a Guarantor for all purposes of this Indenture.
Notwithstanding the foregoing, the following Restricted Subsidiaries shall not
be required to become Guarantors under this Indenture: (i) DR Exploration; (ii)
any Restricted Subsidiary formed or acquired in connection with Related Business
Investments made by the Company or any of the Restricted Subsidiaries pursuant
to clause (iii) of the definition of "Permitted Investment" and (iii) any
Restricted Subsidiary which is not permitted by law to become a Guarantor under
this Indenture.
SECTION 4.21. Conduct of Business.
The Company and the Restricted Subsidiaries will not engage in any
businesses which are not the same, similar or reasonably related to the
businesses in which the Company and the Restricted Subsidiaries are engaged on
the Issue Date.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. When Company May Merge, Etc.
(a) The Company will not, in a single transaction or series of
related transactions, (i) consolidate or merge with or into, or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
assets to any person or (ii) adopt a Plan of Liquidation unless:
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(1) either (a) the Company shall be the surviving or continuing
corporation, or (b) the person (if other than the Company) formed by such
consolidation or the person into which the Company is merged or the person
which acquires by sale, assignment, transfer, lease, conveyance or
otherwise all or substantially all of the assets of the Company or in the
case of a Plan of Liquidation, the person to which the assets of the
Company have been transferred (i) shall be a corporation organized and
validly existing under the laws of the United States or any State thereof
or the District of Columbia and (ii) shall expressly assume, by
supplemental indenture (in form and substance satisfactory to the Trustee)
executed and delivered to the Trustee, the due and punctual payment of the
principal of, and premium, if any, and interest on, all of the Securities,
and the performance of every covenant of this Indenture, the Securities
and the Registration Rights Agreement on the part of the Company to be
performed or observed;
(2) immediately after giving effect to such transaction and the
assumption contemplated by clause (1)(b)(ii) above (including giving
effect to any Indebtedness and Acquired Indebtedness incurred or
anticipated to be incurred in connection with or in respect of such
transaction), the Company (in the case of clause (a) of the foregoing
clause (1))or such person (in the case of clause (1)(b) thereof) (a) shall
have a Consolidated Net Worth (immediately after the transaction but prior
to any purchase accounting adjustments relating to such transaction) equal
to or greater than the Consolidated Net Worth of the Company immediately
prior to such transaction and shall be able to incur (assuming a market
rate of interest with respect thereto) at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) as if it were the Company
under paragraph (a) of Section 4.12 of this Indenture;
(3) immediately before and after giving effect to such transaction
and the assumption contemplated by clause (1)(b)(ii) above (including
giving effect to any Indebtedness and Acquired Indebtedness incurred or
anticipated to be incurred in connection with or in respect of the
transaction), no Default or Event of Default shall have occurred and be
continuing;
(4) the Company or such person shall have delivered to the Trustee
(A) an Officers' Certificate and an Opinion of Counsel (which counsel
shall not be in-house counsel of the Company), each stating that such
consolidation, merger, conveyance, transfer, lease or Plan of Liquidation
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and if a supplemental indenture is required in connection with such
transaction, such supplemental indenture comply with this provision of
this Indenture and that all conditions precedent in this Indenture
relating to such transaction have been satisfied and (B) a certificate
from the Company's independent certified public accountants stating that
the Company has made the calculations required by clause (2) above in
accordance with the terms of this Indenture; and
(5) neither the Company nor any Restricted Subsidiary nor such
person, as the case may be, would thereupon become obligated with respect
to any Indebtedness (including Acquired Indebtedness) nor any of its
property or assets subject to any Lien, unless the Company or such
Restricted Subsidiary or such person, as the case may be, could incur such
Indebtedness (including Acquired Indebtedness) or create such Lien under
this Indenture (giving effect to such person being bound by all the terms
of this Indenture).
(b) For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties or assets of one or
more Restricted Subsidiaries, the Capital Stock of which constitutes all or
substantially all of the properties and assets of the Company, shall be deemed
to be the transfer of all or substantially all of the properties and assets of
the Company.
Each Guarantor (other than any Guarantor whose Guarantee is to be
released in accordance with the terms of the Guarantee and this Indenture in
connection with any transaction complying with the provisions of Section 4.16)
will not, and the Company will not cause or permit any Guarantor to, consolidate
with or merge with or into or sell, assign, transfer, lease, convey or otherwise
dispose of all or substantially all of its assets to any person (other than a
merger of the Company with any Guarantor or a merger of Guarantors) unless (i)
the entity formed by or surviving any such consolidation or merger (if other
than the Guarantor) or to which such sale, lease, conveyance or other
disposition shall have been made is a corporation organized and validly existing
under the laws of the United States or any state thereof or the District of
Columbia or an entity organized and validly existing under the laws of the
foreign jurisdiction in which such Guarantor is organized; (ii) such entity
assumes by supplemental indenture all of the obligations of such Guarantor under
such Guarantee; and (iii) immediately after giving effect to such transaction,
no
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Default or Event of Default shall have occurred and be continuing.
Notwithstanding the foregoing, (i) the merger of the Company with an
Affiliate incorporated solely for the purpose of incorporating the Company in
another jurisdiction shall be permitted and (ii) the merger of the Company and
any Restricted Subsidiary shall be permitted.
SECTION 5.02. Successor Corporation Substituted.
Upon any consolidation, merger, conveyance, lease or transfer in
accordance with Section 5.01, the successor person formed by such consolidation
or into which the Company or any Guarantor, as the case may be, is merged or to
which such conveyance, lease or transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company or such
Guarantor, as the case may be, under this Indenture with the same effect as if
such successor person had been named as the Company or such Guarantor, as the
case may be, herein and thereafter (except in the case of a sale, assignment,
transfer, lease, conveyance or other disposition) the predecessor corporation
will be relieved of all further obligations and covenants under this Indenture
and the Securities, in the case of the Company, or its Guarantee, in the case of
any Guarantor.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
An "Event of Default" occurs if:
(1) the Company defaults in the payment of interest on any
Securities when the same becomes due and payable and the Default continues
for a period of 30 days;
(2) the Company defaults in the payment of the stated principal
amount of any Securities when the same becomes due and payable at
maturity, upon acceleration or redemption pursuant to an offer to purchase
required hereunder or otherwise;
(3) the Company or any of the Guarantors fails to comply in all
material respects with any of their other agreements contained in the
Securities or this Indenture
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(including, without limitation, under Sections 4.15, 4.16 and 5.01) and
the Default continues for the period and after the notice specified below;
(4) there shall be any default or defaults in the payment of
principal or interest under one or more agreements, instruments,
mortgages, bonds, debentures or other evidences of Indebtedness under
which the Company or any Restricted Subsidiary then has outstanding
Indebtedness in excess of $7.5 million, individually or in the aggregate;
(5) there shall be any default or defaults under one or more
agreements, instruments, mortgages, bonds, debentures or other evidences
of Indebtedness under which the Company or any Restricted Subsidiary then
has outstanding Indebtedness in excess of $7.5 million, individually or in
the aggregate, and such default or defaults have resulted in the
acceleration of the maturity of such Indebtedness;
(6) the Company or any Restricted Subsidiary fails to perform (after
giving effect to any applicable grace periods) any term, covenant,
condition or provision of one or more agreements, instruments, mortgages,
bonds, debentures or other evidences of Indebtedness under which the
Company or any Restricted Subsidiary then has outstanding Indebtedness in
excess of $7.5 million, individually or in the aggregate, and such failure
to perform results in the commencement of judicial proceedings to
foreclose upon any assets of the Company or any such Restricted Subsidiary
securing such Indebtedness or the holders of such Indebtedness shall have
exercised any right under applicable law or applicable security documents
to take ownership of any such assets in lieu of foreclosure;
(7) one or more judgments, orders or decrees for the payment of
money which either individually or in the aggregate at any one time exceed
$7.5 million shall be rendered against the Company or any Restricted
Subsidiary by a court of competent jurisdiction and shall remain
undischarged and unbonded for a period (during which execution shall not
be effectively stayed) of 60 consecutive days after such judgment becomes
final and nonappealable;
(8) the Company or any Significant Subsidiary (1) admits in writing
its inability to pay its debts generally as they become due, (2) commences
a voluntary case or proceeding under any Bankruptcy Law with respect to
itself, (3) consents to the entry of a judgment, decree or order for
relief against it in an involuntary case or proceeding under any
Bankruptcy Law, (4) consents to the ap-
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pointment of a Custodian of it or for substantially all of its property,
(5) consents to or acquiesces in the institution of a bankruptcy or an
insolvency proceeding against it, (6) makes a general assignment for the
benefit of its creditors or (7) takes any corporate action to authorize or
effect any of the foregoing;
(9) a court of competent jurisdiction enters a judgment, decree or
order for relief in respect of the Company or any Significant Subsidiary
in an involuntary case or proceeding under any Bankruptcy Law which shall
(1) approve as properly filed a petition seeking reorganization,
arrangement, adjustment or composition in respect of the Company or any
Significant Subsidiary, (2) appoint a Custodian of the Company or any
Significant Subsidiary or for substantially all of its property or (3)
order the winding-up or liquidation of its affairs, and such judgment,
decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or
(10) any of the Guarantees of any Significant Subsidiary ceases to
be in full force and effect or any of such Guarantees is declared to be
null and void and unenforceable or any of such Guarantees is found to be
invalid, or any such Guarantor denies its liability under its Guarantee
(other than by reason of release of a Guarantor in accordance with the
terms of this Indenture).
A Default under clause (3) above (other than in the case of any
Default under Sections 4.15, 4.16 and 5.01, which Defaults shall be Events of
Default without the notice and without the passage of time specified in this
paragraph) is not an Event of Default until the Trustee notifies the Company, or
the Holders of at least 25% in principal amount of the outstanding Securities
notify the Company and the Trustee, of the Default, and the Company does not
cure the Default within 30 days after receipt of the notice. The notice must
specify the Default, demand that it be remedied and state that the notice is a
"Notice of Default." Such notice shall be given by the Trustee if so requested
by the Holders of at least 25% in principal amount of the Securities then
outstanding.
SECTION 6.02. Acceleration.
If an Event of Default (other than an Event of Default specified in
Section 6.01(8) or 6.01(9)) occurs and is continuing, then and in every such
case the Trustee may, by notice to the Company, or the Holders of at least 25%
in aggregate principal amount of the Securities then outstanding may, by written
notice to the Company and the Trustee, and the Trus-
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tee shall, upon the request of such Holders, declare the aggregate unpaid
principal of and premium, if any, on all of the Securities outstanding, together
with accrued but unpaid interest thereon to the date of payment, to be due and
payable and, upon any such declaration, the same shall become and be due and
payable; PROVIDED, HOWEVER, that the Trustee shall be under no obligation to
follow any request of any of the Holders unless such Holders shall have offered
to the Trustee, after request by the Trustee, reasonable security or indemnity
against the costs, expenses and liabilities which may be incurred by it in
compliance with such request, order or direction. If an Event of Default
specified in Section 6.01(8) or 6.01(9) occurs, all unpaid principal, premium,
if any, and accrued interest on the Securities then outstanding shall IPSO FACTO
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Securityholder. Upon payment of such principal
amount and interest, all of the Company's obligations under the Securities and
this Indenture, other than obligations under Section 7.07, shall terminate. The
Holders of a majority in principal amount of the Securities then outstanding by
notice to the Trustee may rescind an acceleration and its consequences if (i)
all existing Events of Default, other than the non-payment of the principal and
interest on the Securities which have become due solely by such declaration of
acceleration, have been cured or waived, (ii) to the extent the payment of such
interest is lawful, interest on overdue installments of interest and overdue
principal, which has become due otherwise than by such declaration of
acceleration, has been paid, and (iii) the rescission would not conflict with
any judgment or decree of a court of competent jurisdiction. No such rescission
shall affect any subsequent default or impair any right consequent thereto. In
the event that a declaration of acceleration under either Section 6.01(4) or
6.01(5) above has occurred and is continuing, such declaration of acceleration
shall be automatically annulled if the Indebtedness that is the subject of such
Event of Default has been discharged or paid or the holders of such Indebtedness
shall have rescinded their declaration of acceleration in respect of such
Indebtedness within 60 days thereafter and no other Event of Default has
occurred during such 60-day period which has not been cured or waived.
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
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The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Securityholder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
SECTION 6.04. Waiver of Past Defaults.
Subject to Sections 6.07 and 9.02, the Holders of a majority in
principal amount of the outstanding Securities by notice to the Trustee may
waive an existing Default or Event of Default and its consequences, except a
Default in the payment of principal of, premium, if any, or interest on any
Security as specified in clauses (1) and (2) of Section 6.01 or in respect of
any provision hereof which cannot be modified or amended without the consent of
the Holder so affected pursuant to Section 9.02. When a Default or Event of
Default is so waived, it shall be deemed cured and cease to exist.
SECTION 6.05. Control by Majority.
The Holders of a majority in principal amount of the outstanding
Securities may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on it including, without limitation, any remedies provided for in
Section 6.03. Subject to Section 7.01, however, the Trustee may refuse to follow
any direction that conflicts with any law or this Indenture, that the Trustee
determines may be unduly prejudicial to the rights of another Securityholder, or
that may involve the Trustee in personal liability; PROVIDED that the Trustee
may take any other action deemed proper by the Trustee which is not inconsistent
with such direction.
SECTION 6.06. Limitation on Suits.
A Securityholder may not pursue any remedy with respect to this
Indenture or the Securities unless:
(1) the Holder gives to the Trustee notice of a continuing
Event of Default;
(2) Holders of at least 25% in principal amount of the outstanding
Securities make a written request to the Trustee to pursue the remedy;
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(3) such Holders offer to the Trustee reasonable indemnity against
any loss, liability or expense to be incurred in compliance with such
request;
(4) the Trustee does not comply with the request within 30 days
after receipt of the request and the offer of satisfactory indemnity; and
(5) during such 30-day period the Holders of a majority in principal
amount of the outstanding Securities do not give the Trustee a direction
which, in the opinion of the Trustee, is inconsistent with the request.
A Securityholder may not use this Indenture to prejudice the rights
of another Securityholder or to obtain a preference or priority over such other
Securityholder.
SECTION 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of principal of and interest on a Security, on or
after the respective due dates expressed in such Security, or to bring suit for
the enforcement of any such payment on or after such respective dates, shall not
be impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default in payment of principal or interest specified
in clause (1) or (2) of Section 6.01 occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company, the Guarantors or any other obligor on the Securities for the whole
amount of principal and accrued interest remaining unpaid, together with
interest on overdue principal and, to the extent that payment of such interest
is lawful, interest on overdue installments of interest, in each case at the
rate per annum borne by the Securities and such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses, taxes,
disbursements and advances of the Trustee, its agents and counsel) and the
Securi-
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tyholders allowed in any judicial proceedings relating to the Company, the
Guarantors or any other obligor upon the Securities, any of their respective
creditors or any of their respective property and shall be entitled and
empowered to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same, and any Custodian in
any such judicial proceedings is hereby authorized by each Securityholder to
make such payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Securityholders, to pay
to the Trustee any amount due to it for the reasonable compensation, expenses,
taxes, disbursements and advances of the Trustee, its agent and counsel, and any
other amounts due the Trustee under Section 7.07. Nothing herein contained shall
be deemed to authorize the Trustee to authorize or consent to or accept or adopt
on behalf of any Securityholder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Securityholder in any such proceeding.
SECTION 6.10. Priorities.
If the Trustee collects any money pursuant to this Article Six, it
shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Holders for interest accrued on the Securities,
ratably, without preference or priority of any kind, according to
the amounts due and payable on the Securities for interest;
Third: to Holders for principal amounts owing under the Securities
and other amounts owing to the Holders with respect to the Securities,
ratably, without preference or priority of any kind, according to the
amounts due and payable on the Securities for principal and other amounts
owing to the Holders with respect to the Securities; and
Fourth: to the Company or any other obligor on the
Securities, as their interests may appear, or as a court of
competent jurisdiction may direct.
The Trustee, upon prior notice to the Company, may fix a record date
and payment date for any payment to Securityholders pursuant to this Section
6.10.
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SECTION 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07, or a suit by a Holder or Holders of more than 10% in
principal amount of the outstanding Securities.
SECTION 6.12. Ranking.
Every Holder, by accepting a Security, shall be deemed to agree that
the indebtedness of Doe Run Peru evidenced by its Guarantee will be
contractually subordinated to the indebtedness under the Peruvian Revolving
Credit Facility. The Trustee is authorized to take any and all actions and
execute any necessary documentation, whether on the Issue Note or at any time
thereafter, to effectuate the foregoing subordination. In addition, except as
described in the preceding sentence, the indebtedness of Doe Run Mining and Doe
Run Peru evidenced by their Guarantee will rank senior in right of payment to
all future unsecured indebtedness of Doe Run Mining and Doe Run Peru,
respectively, subject to statutorily preferred exceptions and statutorily
mandated priorities based on the date of issuance with respect to payment of
obligations under applicable Peruvian law.
ARTICLE SEVEN
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this
Indenture and covenants and agrees to perform the same, as herein expressed.
SECTION 7.01. Duties of Trustee.
(a) If a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in its exercise
thereof as a pru-
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dent person would exercise or use under the circumstances in the conduct of his
own affairs.
(b) Except during the continuance of a Default or an Event of
Default:
(1) The Trustee need perform only those duties as are specifically
set forth in this Indenture and no covenants or obligations shall be
implied in this Indenture that are adverse to the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section 7.01.
(2) The Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Sections 6.02 or 6.05.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(e) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), (c) and (d) of this Section 7.01.
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(f) The Trustee shall not be liable for interest on any money or
assets received by it except as the Trustee may agree with the Company. Assets
held in trust by the Trustee need not be segregated from other assets except to
the extent required by law.
SECTION 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may rely and shall be fully protected in acting or
refraining from acting upon any document believed by it to be genuine and
to have been signed or presented by the proper person. The Trustee need
not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may consult
with counsel and may require an Officers' Certificate or an Opinion of
Counsel, which shall conform to Sections 10.04 and 10.05. The Trustee
shall not be liable for any action it takes or omits to take in good faith
in reliance on such certificate or opinion.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Trustee shall not be liable for any action that it takes or
omits to take in good faith which it believes to be authorized or within
its rights or powers.
(e) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled, upon reasonable
notice to the Company, to examine the books, records, and premises of the
Company, personally or by agent or attorney.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this
Indenture, unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses
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and liabilities which may be incurred by it in compliance with such
request, order or direction.
SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company, any
Subsidiary of the Company or their respective Affiliates with the same rights it
would have if it were not Trustee. Any Agent may do the same with like rights.
However, the Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy
of this Indenture or the Securities, it shall not be accountable for the
Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement in the Securities other than the Trustee's
certificate of authentication.
SECTION 7.05. Notice of Default.
If a Default or an Event of Default occurs and is continuing and if
it is known to the Trustee, the Trustee shall mail to each Securityholder, as
their names and addresses appear on the Securityholder list described in Section
2.05, notice of the uncured Default or Event of Default within 90 days after the
Trustee obtains actual knowledge that such Default or Event of Default has
occurred. Except in the case of a Default or an Event of Default in payment of
principal of, or interest on, any Security, and a Default that resulted from the
failure to comply with Sections 4.15, 4.16 or 5.01, the Trustee may withhold the
notice if and so long as its board of directors, the executive committee of its
board of directors or a committee of its directors and/or Trust Officers in good
faith determines that withholding the notice is in the interest of the
Securityholders.
SECTION 7.06. Reports by Trustee to Holders.
This Section 7.06 shall not be operative as a part of this Indenture
until this Indenture is qualified under the TIA, and, until such qualification,
this Indenture shall be construed as if this Section 7.06 were not contained
herein.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, the Trustee shall, to the extent that any of the
events described in TIA ss. 313(a) occurred within the previous twelve months,
but not otherwise,
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mail to each Securityholder a brief report dated as of such May 15 that complies
with TIA ss. 313(a). The Trustee also shall comply with TIA ss.ss. 313(b) and
313(c).
A copy of each report at the time of its mailing to Securityholders
shall be mailed to the Company and filed with the SEC and each stock exchange,
if any, on which the Securities are listed.
The Company shall notify the Trustee if the Securities become listed
on any securities exchange.
SECTION 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services as the Company and the Trustee may agree. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all tax obligations imposed on the Trustee related to this Indenture
and all reasonable out-of-pocket expenses incurred or made by it. Such expenses
shall include the reasonable fees and expenses of the Trustee's agents and
counsel.
The Company shall indemnify the Trustee and its agents for, and hold
them harmless against, any loss, liability or expense incurred by them except
for such actions to the extent caused by any negligence or bad faith on their
part, arising out of or in connection with the administration of this trust
including the reasonable costs and expenses of defending themselves against any
claim or liability in connection with the exercise or performance of any of
their rights, powers or duties hereunder. The Trustee shall notify the Company
promptly of any claim asserted against the Trustee for which it may seek
indemnity, but the Trustee's failure to so notify the Company shall not affect
the Company's obligations hereunder. The Company shall defend the claim and the
Trustee shall cooperate in the defense. The Trustee may have separate counsel
and the Company shall pay the reasonable fees and expenses of such counsel;
provided that the Company will not be required to pay such fees and expenses if
it assumes the Trustee's defense and there is no conflict of interest between
the Company and the Trustee in connection with such defense as reasonably
determined by the Trustee. The Company need not pay for any settlement made
without its written consent. The Company need not reimburse any expense or
indemnify against any loss or liability to the extent incurred by the Trustee
through its negligence, bad faith or willful misconduct.
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To secure the Company's payment obligations in this Section 7.07,
the Trustee shall have a lien prior to the Securities on all assets or money
held or collected by the Trustee, in its capacity as Trustee, except assets or
money held in trust to pay principal of or interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(8) or (9) occurs, such expenses and the
compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 7.08. Replacement of Trustee.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the outstanding Securities may remove the
Trustee by so notifying the Company and the Trustee and may appoint a successor
trustee with the Company's consent. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee
or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall notify each Holder of such
event and shall promptly appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a majority in principal amount of
the Securities may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided in Section 7.07, the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Securityholder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the re-
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tiring Trustee, the Company or the Holders of at least 10% in principal amount
of the outstanding Securities may petition any court of competent jurisdiction
for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirement of TIA ss.ss. 310(a)(1) and 310(a)(5). The Trustee (or in the case
of a corporation included in a bank holding company system, the related bank
holding company) shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition. In addition, if the Trustee is a corporation included in a bank
holding company system, the Trustee, independently of such bank holding company,
shall meet the capital requirements of TIA ss. 310(a)(2). The Trustee shall
comply with TIA ss. 310(b); PROVIDED, HOWEVER, that there shall be excluded from
the operation of TIA ss. 310(b)(1) any indenture or indentures under which other
securities, or certificates of interest or participation in other securities, of
the Company or the Guarantors are outstanding, if the requirements for such
exclusion set forth in TIA ss. 310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
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ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Termination of Company's Obligations.
The Company and the Guarantors may terminate their obligations under
the Securities and the Guarantees and this Indenture, except those obligations
referred to in the penultimate paragraph of this Section 8.01, if all Securities
previously authenticated and delivered (other than destroyed, lost or stolen
Securities which have been replaced or paid and Securities for whose payment
money has heretofore been deposited in trust or segregated and held in trust by
the Company and thereafter repaid to the Company or discharged from such trust)
have been delivered to the Trustee for cancellation and the Company has paid all
sums payable by it hereunder, or if:
(a) pursuant to Article Three, the Company shall have given notice
to the Trustee and mailed a notice of redemption to each Holder of the
redemption of all of the Securities under arrangements satisfactory to the
Trustee for the giving of such notice;
(b) the Company shall have irrevocably deposited or caused to be
deposited with the Trustee or a trustee satisfactory to the Trustee, under
the terms of an irrevocable trust agreement in form and substance
satisfactory to the Trustee, as trust funds in trust solely for the
benefit of the Holders for that purpose, money or direct non-callable
obligations of, or non-callable obligations guaranteed by, the United
States of America for the payment of which guarantee or obligation the
full faith and credit of the United States is pledged ("U.S. Government
Obligations") maturing as to principal and interest in such amounts and at
such times as are sufficient without consideration of any reinvestment of
such interest, to pay principal of, premium, if any, and interest on such
outstanding Securities to redemption as certified to the Trustee by a
nationally recognized firm of independent public accountants designated by
the Company; PROVIDED that the Trustee shall have been irrevocably
instructed to apply such money or the proceeds of such U.S. Government
Obligations to the payment of said principal, premium, if any, and
interest with respect to the Securities; and
(c) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent providing for the
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termination of the Company's obligation under the Securities, the
Guarantees and this Indenture have been complied with.
Notwithstanding the foregoing paragraph, the Company's obligations
in Sections 2.05, 2.06, 2.07, 2.08, 4.01, 4.02, 7.07, 7.08, 8.04 and 8.05 shall
survive until the Securities are no longer outstanding. After the Securities are
no longer outstanding, the Company's obligations in Sections 7.07, 8.04 and 8.05
shall survive.
After such delivery or irrevocable deposit the Trustee upon request
shall acknowledge in writing the discharge of the Company's obligations under
the Securities, the Guarantees and this Indenture except for those surviving
obligations specified above.
SECTION 8.02. Legal Defeasance and Covenant Defeasance.
(a) The Company may, at its option by Board Resolution, at any time,
with respect to the Securities, elect to have either paragraph (b) or paragraph
(c) below be applied to the outstanding Securities upon compliance with the
conditions set forth in paragraph (d).
(b) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (b), the Company shall be deemed to have been
released and discharged from its obligations with respect to the outstanding
Securities and the Guarantees on the date the conditions set forth below are
satisfied (hereinafter, "legal defeasance"). For this purpose, such legal
defeasance means that the Company shall be deemed to have paid and discharged
the entire indebtedness represented by the outstanding Securities, which shall
thereafter be deemed to be "outstanding" only for the purposes of paragraph (e)
below and the other Sections of and matters under this Indenture referred to in
(i) and (ii) below, and to have satisfied all its other obligations under such
Securities and Guarantees and this Indenture insofar as such Securities and
Guarantees are concerned (and the Trustee, at the expense of the Company, shall
execute proper instruments acknowledging the same), except for the following
which shall survive until otherwise terminated or discharged hereunder: (i) the
rights of Holders of outstanding Securities to receive solely from the trust
fund described in paragraph (d) below and as more fully set forth in such
paragraph, payments in respect of the principal of and interest on such
Securities and Guarantees when such payments are due, (ii) the Company's
obligations with respect to such Securities and Guarantees under Sections 2.05,
2.06, 2.07, 2.08, 4.02, 7.07, 7.08, 8.04 and 8.05, (iii) the rights, powers,
trusts,
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duties and immunities of the Trustee hereunder and (iv) this Section 8.02.
Subject to compliance with this Section 8.02, the Company may exercise its
option under this paragraph (b) notwithstanding the prior exercise of its option
under paragraph (c) below with respect to the Securities.
(c) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (c), the Company shall be released and discharged
from its obligations under any covenant contained in Article Five and in
Sections 4.03, 4.07, 4.09 and 4.11 through 4.21 with respect to the outstanding
Securities on and after the date the conditions set forth below are satisfied
(hereinafter, "covenant defeasance"), and the Securities shall thereafter be
deemed to be not "outstanding" for the purpose of any direction, waiver, consent
or declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder. For this purpose, such covenant defeasance
means that, with respect to the outstanding Securities, the Company may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or by reason of
any reference in any such covenant to any other provision herein or in any other
document and such omission to comply shall not constitute a Default or an Event
of Default under Section 6.01, but, except as specified above, the remainder of
this Indenture and such Securities shall be unaffected thereby.
(d) The following shall be the conditions to application of either
paragraph (b) or paragraph (c) above to the outstanding Securities:
(i) the Company shall irrevocably have deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Securities, (A)
money in an amount, or (B) U.S. Government Obligations which through the
scheduled payment of principal of and interest in respect thereof in
accordance with their terms will provide, not later than one day before
the due date of any payment, money in an amount, or (C) a combination
thereof, sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge and which shall be
applied by the Trustee (or other qualifying trustee) to pay and discharge
principal of, premium, if any, and interest on the out-
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standing Securities on the Maturity Date of such principal or installment
of principal or interest in accordance with the terms of this Indenture
and of such Securities; PROVIDED, HOWEVER, that the Trustee (or other
qualifying trustee) shall have received an irrevocable written order from
the Company instructing the Trustee (or other qualifying trustee) to apply
such money or the proceeds of such U.S. Government Obligations to said
payments with respect to the Securities;
(ii) no Default or Event of Default or event which with notice or
lapse of time or both would become a Default or an Event of Default with
respect to the Securities shall have occurred and be continuing on the
date of such deposit or, insofar as Sections 6.01(8) and (9) are
concerned, at any time during the period ending on the 91st day after the
date of such deposit (it being understood that this condition shall not be
deemed satisfied until the expiration of such period);
(iii) such legal defeasance or covenant defeasance shall not result in
a breach or violation of, or constitute a Default or Event of Default
under, this Indenture or any other agreement or instrument to which the
Company is a party or by which it is bound;
(iv) in the case of an election under paragraph (b) above, the
Company shall have delivered to the Trustee an Opinion of Counsel stating
that (x) the Company has received from, or there has been published by,
the Internal Revenue Service a ruling or (y) since the date of this
Indenture, there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such opinion
shall confirm that, the Holders of the outstanding Securities will not
recognize income, gain or loss for Federal income tax purposes as a result
of such legal defeasance and will be subject to Federal income tax on the
same amounts, in the same manner and at the same times as would have been
the case if such legal defeasance had not occurred;
(v) in the case of an election under paragraph (c) above, the
Company shall have delivered to the Trustee an Opinion of Counsel to the
effect that the Holders of the outstanding Securities will not recognize
income, gain or loss for Federal income tax purposes as a result of such
covenant defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the
case if such covenant defeasance had not occurred;
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(vi) in the case of an election under either paragraph (b) or (c)
above, an Opinion of Counsel to the effect that, assuming no intervening
bankruptcy of the Company between the date of deposit and the 91st day
following the date of deposit and that no Holder is an insider of the
Company, (x) the trust funds will not be subject to any rights of any
other holders of Indebtedness of the Company, and (y) after the 91st day
following the deposit, the trust funds will not be subject to the effect
of any applicable Bankruptcy Law; PROVIDED, HOWEVER, that if a court were
to rule under any such law in any case or proceeding that the trust funds
remained property of the Company, no opinion needs to be given as to the
effect of such laws on the trust funds except the following: (A) assuming
such trust funds remained in the Trustee's possession prior to such court
ruling to the extent not paid to Holders of Securities, the Trustee will
hold, for the benefit of the Holders of Securities, a valid and
enforceable security interest in such trust funds that is not avoidable in
bankruptcy or otherwise, subject only to principles of equitable
subordination, (B) the Holders of Securities will be entitled to receive
adequate protection of their interests in such trust funds if such trust
funds are used, and (C) no property, rights in property or other interests
granted to the Trustee or the Holders of Securities in exchange for or
with respect to any of such funds will be subject to any prior rights of
any other Person, subject only to prior Liens granted under Section 364 of
Title 11 of the U.S. Bankruptcy Code (or any section of any other
Bankruptcy Law having the same effect), but still subject to the foregoing
clause (B); and
(vii) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that (A) all
conditions precedent provided for relating to either the legal defeasance
under paragraph (b) above or the covenant defeasance under paragraph (c)
above, as the case may be, have been complied with and (B) if any other
Indebtedness of the Company shall then be outstanding, such legal
defeasance or covenant defeasance will not violate the provisions of the
agreements or instruments evidencing such Indebtedness.
Notwithstanding the foregoing, the Opinion of Counsel and a ruling
from the Internal Revenue Service required by clause (iv) above of this Section
8.02 need not be delivered if all Securities not theretofore delivered to the
Trustee for cancellation (i) have become due and payable, (ii) will become due
and payable on the Maturity Date within one year or (iii) are to be called for
redemption within one year under arrange-
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ments satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the Company.
(e) All money and U.S. Government Obligations (including the
proceeds thereof) deposited with the Trustee (or other qualifying trustee,
collectively for purposes of this paragraph (e), the "Trustee") pursuant to
paragraph (d) above in respect of the outstanding Securities shall be held in
trust and applied by the Trustee, in accordance with the provisions of such
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (other than the Company or any of its Affiliates) as the Trustee
may determine, to the Holders of such Securities of all sums due and to become
due thereon in respect of principal and interest, but such money need not be
segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to paragraph (d) above or the principal and interest received
in respect thereof other than any such tax, fee or other charge which by law is
for the account of the Holders of the outstanding Securities.
Anything in this Section 8.02 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request,
in writing, by the Company any money or U.S. Government Obligations held by it
as provided in paragraph (d) above which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, are in excess of the amount
thereof which would then be required to be deposited to effect an equivalent
legal defeasance or covenant defeasance.
SECTION 8.03. Application of Trust Money.
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Sections 8.01 and 8.02, and shall apply the
deposited money and the money from U.S. Government Obligations in accordance
with this Indenture to the payment of principal of, premium, if any, and
interest on the Securities.
SECTION 8.04. Repayment to Company.
Subject to Sections 7.07, 8.01 and 8.02, the Trustee shall promptly
pay to the Company, upon receipt by the Trustee
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of an Officers' Certificate, any excess money, determined in accordance with
Sections 8.02(d)(i) and (e), held by it at any time. The Trustee and the Paying
Agent shall pay to the Company upon receipt by the Trustee or the Paying Agent,
as the case may be, of an Officers' Certificate, any money held by it for the
payment of principal or interest that remains unclaimed for two years; PROVIDED,
HOWEVER, that the Trustee and the Paying Agent before being required to make any
payment may, but need not, at the expense of the Company, cause to be published
once in a newspaper of general circulation in The City of New York or mail to
each Holder entitled to such money notice that such money remains unclaimed and
that after a date specified therein, which shall be at least 30 days from the
date of such publication or mailing, any unclaimed balance of such money then
remaining will be repaid to the Company. After payment to the Company,
Securityholders entitled to money must look solely to the Company for payment as
general creditors unless an applicable abandoned property law designates another
Person, and all liability of the Trustee or Paying Agent with respect to such
money shall thereupon cease.
SECTION 8.05. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with this Indenture by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then
and only then the Company's obligations under this Indenture and the Securities
shall be revived and reinstated as though no deposit had been made pursuant to
this Indenture until such time as the Trustee is permitted to apply all such
money or U.S. Government Obligations in accordance with this Indenture;
PROVIDED, HOWEVER, that if the Company has made any payment of interest on or
principal of any Securities because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money or U.S. Government Obligations held by the
Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.
From time to time, the Company and the Guarantors when authorized by
Board Resolutions, and the Trustee, to-
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gether, may amend or supplement this Indenture or the Securities without notice
to or consent of any Securityholder:
(1) to cure any ambiguity, defect or inconsistency; provided that
such amendment or supplement does not adversely affect the rights of any
Holder;
(2) to comply with Article Five;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(4) to make any other change that does not materially adversely
affect the rights of any Securityholders hereunder, including, without
limitation, adding Restricted Subsidiaries as additional Guarantors; or
(5) to comply with any requirements of the SEC in connection with
the qualification of this Indenture under the TIA;
PROVIDED that the Company has delivered to the Trustee an Opinion of Counsel and
an Officers' Certificate, each stating that such amendment or supplement
complies with the provisions of this Section 9.01.
SECTION 9.02. With Consent of Holders.
Subject to Section 6.07, the Company and the Guarantors, when
authorized by Board Resolutions, and the Trustee, together, with the written
consent of the Holder or Holders of at least a majority in aggregate principal
amount of the outstanding Securities, may amend or supplement this Indenture or
the Securities, without notice to any other Securityholders. Subject to Section
6.07, the Holder or Holders of a majority in aggregate principal amount of the
outstanding Securities may waive compliance by the Company with any provision of
this Indenture or the Securities without notice to any other Securityholder.
However, without the consent of each Securityholder, no amendment, supplement or
waiver, including a waiver pursuant to Section 6.04, may:
(1) reduce the principal amount of Securities whose Holders must
consent to an amendment, supplement or waiver of any provision of this
Indenture or the Securities;
(2) reduce the rate of, or extend the time for payment of, interest,
including defaulted interest, on any Security;
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(3) reduce the principal amount of any Security or any premium
thereon;
(4) change the Maturity Date of any Security, or alter the
redemption provisions or the repurchase provisions in this Indenture or
the Securities in a manner adverse to any Holder;
(5) waive a default in the payment of the principal of, interest on,
or redemption payment or repurchase payment required hereunder with
respect to, any Security, including without limitation, a failure to make
payment when required upon a Change of Control or after an Asset Sale;
(6) make any changes in any provisions relating to waivers of
defaults, the ability of the Holders to enforce their rights under this
Indenture, the Securities or this Section 9.02;
(7) make the principal of, or the interest on any Security payable
in money other than as provided for in this Indenture and the Securities
as in effect on the date hereof;
(8) affect the ranking of the Securities or the Guarantees in a
manner adverse to the Holders;
(9) after the Company's obligation to purchase the Securities arises
thereunder, amend, change or modify in any material respect any obligation
of the Company to make and consummate a Change of Control Offer in the
event of a Change of Control or make and consummate an Asset Sale Offer in
the event of an Asset Sale or waive any default in the performance thereof
or modify any of the provisions or definitions with respect to such
offers; or
(10) release the Guarantee of any Significant Subsidiary.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any
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way impair or affect the validity of any such supplemental indenture.
SECTION 9.03. Compliance with TIA.
From the date on which this Indenture is qualified under the TIA,
every amendment, waiver or supplement of this Indenture or the Securities shall
comply with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security, even if notation of the consent is not
made on any Security. However, any such Holder or subsequent Holder may revoke
the consent as to his Security or portion of his Security by notice to the
Trustee or the Company received before the date on which the Trustee receives an
Officers' Certificate certifying that the Holders of the requisite principal
amount of Securities have consented (and not theretofore revoked such consent)
to the amendment, supplement or waiver. Notwithstanding the above, nothing in
this paragraph shall impair the right of any Securityholder under ss. 316(b) of
the TIA.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then notwithstanding the last
sentence of the immediately preceding paragraph, those persons who were Holders
at such record date (or their duly designated proxies), and only those persons,
shall be entitled to revoke any consent previously given, whether or not such
persons continue to be Holders after such record date. No such consent shall be
valid or effective for more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Securityholder, unless it makes a change described in any of clauses
(1) through (10) of Section 9.02, in which case, the amendment, supplement or
waiver shall bind only each Holder of a Security who has consented to it and
every subsequent Holder of a Security or portion of a Security that evidences
the same debt as the consenting Holder's Security.
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SECTION 9.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation on the Security about
the changed terms and return it to the Holder. Alternatively, if the Company or
the Trustee so determines, the Company in exchange for the Security shall issue
and the Trustee shall authenticate a new Security (and the Guarantors shall
execute the Guarantees thereon) that reflects the changed terms. Failure to make
the appropriate notation or issue a new Security shall not affect the validity
and effect of such amendment, supplement or waiver.
SECTION 9.06. Trustee To Sign Amendments, Etc.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article Nine; PROVIDED that the Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel and an Officers' Certificate
each stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article Nine is authorized or permitted by this
Indenture.
ARTICLE TEN
MISCELLANEOUS
SECTION 10.01. TIA Controls.
If any provision of this Indenture limits, qualifies, or conflicts
with another provision which is required to be included in this Indenture by the
TIA, the required provision shall control.
SECTION 10.02. Notices.
Any notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficiently given if made by hand delivery,
by telex, by telecopier or registered or certified mail, postage prepaid, return
receipt requested, or overnight courier addressed as follows:
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if to the Company or any Guarantor:
The Doe Run Resources Corporation
1801 Park 270 Drive
St. Louis, Missouri 63146
Attention: Marvin K. Kaiser
with a copy to:
Cadwalader, Wickersham & Taft
100 Maiden Lane
New York, New York 10038
Attention: Michael C. Ryan, Esq.,
c/o Managing Attorneys' Office
if to the Trustee:
State Street Bank and Trust Company
Goodwin Square
225 Asylum, 23rd Floor
Hartford, CT 06103
Attention: Corporate Trust Administration
Each of the Company, the Guarantors and the Trustee by written
notice to each other such person may designate additional or different addresses
for notices to such person. Any notice or communication to the Company, the
Guarantors or the Trustee shall be deemed to have been given or made as of the
date so delivered, if personally delivered; when answered back, if telexed; when
receipt is acknowledged, if faxed; and five (5) calendar days after mailing, if
sent by registered or certified mail, postage prepaid (except that a notice of
change of address shall not be deemed to have been given until actually received
by the addressee).
Any notice or communication mailed to a Securityholder, including
any notice delivered in connection with TIA ss. 310(b), TIA ss. 313(c), TIA ss.
314(a) and TIA ss. 315(b), shall be mailed to him by first class mail or other
equivalent means at his address as it appears on the registration books of the
Registrar and shall be sufficiently given to him if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communi-
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cation is mailed in the manner provided above, it is duly given, whether or not
the addressee receives it.
SECTION 10.03. Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA ss. 312(b) with
other Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Guarantors, the Trustee, the Registrar and any
other person shall have the protection of TIA ss. 312(c).
SECTION 10.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company or the Guarantors to
the Trustee to take any action under this Indenture, the Company shall furnish
to the Trustee:
(1) an Officers' Certificate, in form and substance satisfactory to
the Trustee, stating that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 10.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
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(4) a statement as to whether or not, in the opinion of each such
person, such condition or covenant has been complied with.
SECTION 10.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules in accordance with the
Trustee's customary practices for action by or at a meeting of Securityholders.
The Paying Agent or Registrar may make reasonable rules for its functions.
SECTION 10.07. Legal Holidays.
A "Legal Holiday" used with respect to a particular place of payment
is a Saturday, a Sunday or a day on which banking institutions in New York, New
York or at such place of payment are not required to be open. If a payment date
is a Legal Holiday at such place, payment may be made at such place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.
SECTION 10.08. Governing Law.
THIS INDENTURE, THE SECURITIES AND THE GUARANTEES SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS
APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICT OF LAWS. Each of the parties hereto agrees to
submit to the jurisdiction of the courts of the State of New York in any action
or proceeding arising out of or relating to this Indenture.
SECTION 10.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of the Company, the Guarantors, or any of their Subsidiaries.
Any such indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 10.10. No Recourse Against Others.
A director, officer, employee, stockholder or Affiliate, as such, of
the Company or the Guarantors shall not have any liability for any obligations
of the Company or the Guarantors under the Securities or this Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. Each Securityholder by accepting a Security waives and releases all
such liability. Such waiver and re-
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lease are part of the consideration for the issuance of the Securities.
SECTION 10.11. Successors.
All agreements of the Company and the Guarantors in this Indenture
and the Securities shall bind its successors. All agreements of the Trustee in
this Indenture shall bind its successor.
SECTION 10.12. Duplicate Originals.
All parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together shall represent the
same agreement.
SECTION 10.13. Severability.
In case any provision in this Indenture or in the Securities shall
be invalid, illegal or unenforceable, in any respect for any reason, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
ARTICLE ELEVEN
GUARANTEE OF SECURITIES
SECTION 11.01. Unconditional Guarantee.
Subject to the provisions of this Article Eleven, each of the
Guarantors hereby, jointly and severally, unconditionally and irrevocably
guarantees, on a senior basis, except as described in Section 6.12, (such
guarantee to be referred to herein as a "Guarantee") to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee and its successors
and assigns, irrespective of the validity and enforceability of this Indenture,
the Securities or the obligations of the Company or any other Guarantors to the
Holders or the Trustee hereunder or thereunder, that: (a) the principal of,
premium, if any, and interest on the Securities shall be duly and punctually
paid in full when due, whether at maturity, upon redemption at the option of
Holders pursuant to the provisions of the Securities relating thereto, by
acceleration or otherwise, and interest on the overdue principal and (to the
extent permitted by law) interest, if any, on the Securities and all other
obligations of the Company or the Guarantors to the Holders or the Trustee
hereunder or thereunder (including amounts due the
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Trustee under Section 7.07 hereof) and all other obligations shall be promptly
paid in full or performed, all in accordance with the terms hereof and thereof;
and (b) in case of any extension of time of payment or renewal of any Securities
or any of such other obligations, the same shall be promptly paid in full when
due or performed in accordance with the terms of the extension or renewal,
whether at maturity, by acceleration or otherwise. Failing payment when due of
any amount so guaranteed, or failing performance of any other obligation of the
Company to the Holders under this Indenture or under the Securities, for
whatever reason, each Guarantor shall be obligated to pay, or to perform or
cause the performance of, the same immediately. An Event of Default under this
Indenture or the Securities shall constitute an event of default under this
Guarantee, and shall entitle the Holders of Securities to accelerate the
obligations of the Guarantors hereunder in the same manner and to the same
extent as the obligations of the Company.
Each of the Guarantors hereby agrees that its obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Securities or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Securities with
respect to any provisions hereof or thereof, any release of any other Guarantor,
the recovery of any judgment against the Company, any action to enforce the
same, whether or not a Guarantee is affixed to any particular Security, or any
other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a Guarantor. Each of the Guarantors hereby waives the
benefit of diligence, presentment, demand of payment, filing of claims with a
court in the event of insolvency or bankruptcy of the Company, any right to
require a proceeding first against the Company, protest, notice and all demands
whatsoever and covenants that its Guarantee shall not be discharged except by
complete performance of the obligations contained in the Securities, this
Indenture and this Guarantee. This Guarantee is a guarantee of payment and not
of collection. If any Holder or the Trustee is required by any court or
otherwise to return to the Company or to any Guarantor, or any custodian,
trustee, liquidator or other similar official acting in relation to the Company
or such Guarantor, any amount paid by the Company or such Guarantor to the
Trustee or such Holder, this Guarantee, to the extent theretofore discharged,
shall be reinstated in full force and effect. Each Guarantor further agrees
that, as between it, on the one hand, and the Holders of Securities and the
Trustee, on the other hand, (a) subject to this Article Eleven, the maturity of
the obligations guaranteed hereby may be accelerated as provided in Article Six
hereof for the purposes of this Guarantee, notwithstanding any stay, in-
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junction or other prohibition preventing such acceleration in respect of the
obligations guaranteed hereby, and (b) in the event of any acceleration of such
obligations as provided in Article Six hereof, such obligations (whether or not
due and payable) shall forthwith become due and payable by the Guarantors for
the purpose of this Guarantee.
No stockholder, officer, director, employee or incorporator, past,
present or future, or any Guarantor, as such, shall have any personal liability
under this Guarantee by reason of his, her or its status as such stockholder,
officer, director, employee or incorporator.
Each Guarantor that makes a payment or distribution under its
Guarantee shall be entitled to a contribution from each other Guarantor in an
amount pro rata based on the net assets of each Guarantor, determined in
accordance with GAAP.
SECTION 11.02. Limitations on Guarantees.
The obligations of each Guarantor under its Guarantee are limited to
the maximum amount which, after giving effect to all other contingent and fixed
liabilities of such Guarantor and after giving effect to any collections from or
payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under its Guarantee or pursuant to its
contribution obligations under this Indenture, will result in the obligations of
such Guarantor under the Guarantee not constituting a fraudulent conveyance or
fraudulent transfer under any laws of the United States, any state of the United
States, the District of Columbia, the Republic of Peru or the Cayman Islands or
any political subdivisions or territories therein or any other jurisdiction
under which a Guarantor is organized.
SECTION 11.03. Execution and Delivery of Guarantee.
To further evidence the Guarantee set forth in Section 11.01, each
Guarantor hereby agrees that a notation of such Guarantee, substantially in the
form of Exhibit M herein, shall be endorsed on each Security authenticated and
delivered by the Trustee. Such Guarantee shall be executed on behalf of each
Guarantor by either manual or facsimile signature of two Officers of each
Guarantor, each of whom, in each case, shall have been duly authorized to so
execute by all requisite corporate action. The validity and enforceability of
any Guarantee shall not be affected by the fact that it is not affixed to any
particular Security.
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Each of the Guarantors hereby agrees that its Guarantee set forth in
Section 11.01 shall remain in full force and effect notwithstanding any failure
to endorse on each Security a notation of such Guarantee.
If an Officer of a Guarantor whose signature is on this Indenture or
a Guarantee no longer holds that office at the time the Trustee authenticates
the Security on which such Guarantee is endorsed or at any time thereafter, such
Guarantor's Guarantee of such Security shall be valid nevertheless.
The delivery of any Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of any Guarantee
set forth in this Indenture on behalf of each Guarantor.
SECTION 11.04. Release of a Guarantor.
(a) If no Default exists or would exist under this Indenture, upon
the sale or disposition of all of the Capital Stock of a Guarantor by the
Company, in a transaction constituting an Asset Sale the Net Cash Proceeds of
which are applied in accordance with Section 4.16, or upon the consolidation or
merger of a Guarantor with or into any Person in compliance with Article Five
(in each case, other than to the Company or an Affiliate of the Company), or if
any Guarantor is dissolved or liquidated in accordance with this Indenture, such
Guarantor's Guarantee shall be released, and such Guarantor and each Subsidiary
of such Guarantor that is also a Guarantor shall be deemed released from all
obligations under this Article Eleven without any further action required on the
part of the Trustee or any Holder. Any Guarantor not so released or the entity
surviving such Guarantor, as applicable, shall remain or be liable under its
Guarantee as provided in this Article Eleven.
(b) The Trustee shall deliver an appropriate instrument evidencing
the release of a Guarantor upon receipt of a request by the Company or such
Guarantor accompanied by an Officers' Certificate and an Opinion of Counsel
certifying as to the compliance with this Section 11.04, provided the legal
counsel delivering such Opinion of Counsel may rely as to matters of fact on one
or more Officers Certificates of the Company.
The Trustee shall execute any documents reasonably requested by the
Company or a Guarantor in order to evidence the release of such Guarantor from
its obligations under its Guarantee endorsed on the Securities and under this
Article Eleven.
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Except as set forth in Articles Four and Five and this Section
11.04, nothing contained in this Indenture or in any of the Securities shall
prevent any consolidation or merger of a Guarantor with or into the Company or
another Guarantor or shall prevent any sale or conveyance of the property of a
Guarantor as an entirety or substantially as an entirety to the Company or
another Guarantor.
SECTION 11.05. Waiver of Subrogation.
Until this Indenture is discharged and all of the Securities are
discharged and paid in full, each Guarantor hereby irrevocably waives and agrees
not to exercise any claim or other rights which it may now or hereafter acquire
against the Company that arise from the existence, payment, performance or
enforcement of the Company's obligations under the Securities or this Indenture
and such Guarantor's obligations under this Guarantee and this Indenture, in any
such instance including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution, indemnification, and any right to
participate in any claim or remedy of the Holders against the Company, whether
or not such claim, remedy or right arises in equity, or under contract, statute
or common law, including, without limitation, the right to take or receive from
the Company, directly or indirectly, in cash or other property or by set-off or
in any other manner, payment or security on account of such claim or other
rights. If any amount shall be paid to any Guarantor in violation of the
preceding sentence and any amounts owing to the Trustee or the Holders of
Securities under the Securities, this Indenture, or any other document or
instrument delivered under or in connection with such agreements or instruments,
shall not have been paid in full, such amount shall have been deemed to have
been paid to such Guarantor for the benefit of, and held in trust for the
benefit of, the Trustee or the Holders and shall forthwith be paid to the
Trustee for the benefit of itself or such Holders to be credited and applied to
the obligations in favor of the Trustee or the Holders, as the case may be,
whether matured or unmatured, in accordance with the terms of this Indenture.
Each Guarantor acknowledges that it will receive direct and indirect benefits
from the financing arrangements contemplated by this Indenture and that the
waiver set forth in this Section 11.05 is knowingly made in contemplation of
such benefits.
SECTION 11.06. Immediate Payment.
Each Guarantor agrees to make immediate payment to the Trustee on
behalf of the Holders of all Obligations owing or payable to the respective
Holders upon receipt of a demand
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for payment therefor by the Trustee to such Guarantor in writing.
SECTION 11.07. No Set-Off.
Each payment to be made by a Guarantor hereunder in respect of the
Obligations shall be payable in the currency or currencies in which such
Obligations are denominated, and shall be made without set-off, counterclaim,
reduction or diminution of any kind or nature.
SECTION 11.08. Obligations Continuing.
The obligations of each Guarantor hereunder shall be continuing and
shall remain in full force and effect until all the obligations have been paid
and satisfied in full. Each Guarantor agrees with the Trustee that it will from
time to time deliver to the Trustee suitable acknowledgments of this continued
liability hereunder.
SECTION 11.09. Obligations Reinstated.
The obligations of each Guarantor hereunder shall continue to be
effective or shall be reinstated, as the case may be, if at any time any payment
which would otherwise have reduced the obligations of any Guarantor hereunder
(whether such payment shall have been made by or on behalf of the Company or by
or on behalf of a Guarantor) is rescinded or reclaimed from any of the Holders
upon the insolvency, bankruptcy, liquidation or reorganization of the Company or
any Guarantor or otherwise, all as though such payment had not been made. If
demand for, or acceleration of the time for, payment by the Company is stayed
upon the insolvency, bankruptcy, liquidation or reorganization of the Company,
all such Indebtedness otherwise subject to demand for payment or acceleration
shall nonetheless be payable by each Guarantor as provided herein.
SECTION 11.10. Obligations Not Affected.
The obligations of each Guarantor hereunder shall not be affected,
impaired or diminished in any way by any act, omission, matter or thing
whatsoever, occurring before, upon or after any demand for payment hereunder
(and whether or not known or consented to by any Guarantor or any of the
Holders) which, but for this provision, might constitute a whole or partial
defense to a claim against any Guarantor hereunder or might operate to release
or otherwise exonerate any Guarantor from any of its obligations hereunder or
otherwise affect such
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obligations, whether occasioned by default of any of the Holders or otherwise.
SECTION 11.11. Waiver.
Without in any way limiting the provisions of Section 11.01 hereof,
each Guarantor hereby waives notice or proof of reliance by the Holders upon the
obligations of any Guarantor hereunder, and diligence, presentment, demand for
payment on the Company, protest or notice of dishonor of any of the Obligations,
or other notice or formalities to the Company of any kind whatsoever.
SECTION 11.12. No Obligation To Take Action Against the Company.
Neither the Trustee nor any other Person shall have any obligation
to enforce or exhaust any rights or remedies or to take any other steps under
any security for the Obligations or against the Company or any other Person or
any property of the Company or any other Person before the Trustee is entitled
to demand payment and performance by any or all Guarantors of their liabilities
and obligations under their Guarantees or under this Indenture.
SECTION 11.13. Dealing with the Company and Others.
The Holders, without releasing, discharging, limiting or otherwise
affecting in whole or in part the obligations and liabilities of any Guarantor
hereunder and without the consent of or notice to any Guarantor, may
(a) grant time, renewals, extensions, compromises, concessions,
waivers, releases, discharges and other indulgences to the Company or any
other Person;
(b) take or abstain from taking security or collateral from the
Company or from perfecting security or collateral of the Company;
(c) release, discharge, compromise, realize, enforce or otherwise
deal with or do any act or thing in respect of (with or without
consideration) any and all collateral, mortgages or other security given
by the Company or any third party with respect to the obligations or
matters contemplated by this Indenture or the Securities;
(d) accept compromises or arrangements from the Company;
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(e) apply all monies at any time received from the Company or from
any security upon such part of the Obligations as the Holders may see fit
or change any such application in whole or in part from time to time as
the Holders may see fit; and
(f) otherwise deal with, or waive or modify their right to deal
with, the Company and all other Persons and any security as the Holders or
the Trustee may see fit.
SECTION 11.14. Default and Enforcement.
If any Guarantor fails to pay in accordance with Section 11.06
hereof, the Trustee may proceed in its name as trustee hereunder in the
enforcement of the Guarantee of any such Guarantor and such Guarantor's
obligations thereunder and hereunder by any remedy provided by law, whether by
legal proceedings or otherwise, and to recover from such Guarantor the
obligations.
SECTION 11.15. Amendment, Etc.
No amendment, modification or waiver of any provision of this
Indenture relating to any Guarantor or consent to any departure by any Guarantor
or any other Person from any such provision will in any event be effective
unless it is signed by such Guarantor and the Trustee.
SECTION 11.16. Acknowledgment.
Each Guarantor hereby acknowledges communication of the terms of
this Indenture and the Securities and consents to and approves of the same.
SECTION 11.17. Costs and Expenses.
Each Guarantor shall pay on demand by the Trustee any and all costs,
fees and expenses (including, without limitation, legal fees on a solicitor and
client basis) incurred by the Trustee, its agents, advisors and counsel or any
of the Holders in enforcing any of their rights under any Guarantee.
SECTION 11.18. No Waiver; Cumulative Remedies.
No failure to exercise and no delay in exercising, on the part of
the Trustee or the Holders, any right, remedy, power or privilege hereunder or
under this Indenture or the Securities, shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege
hereunder or under this Indenture or the Securities pre-
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clude any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges in the
Guarantee and under this Indenture, the Securities and any other document or
instrument between a Guarantor and/or the Company and the Trustee are cumulative
and not exclusive of any rights, remedies, powers and privilege provided by law.
SECTION 11.19. Survival of Obligations.
Without prejudice to the survival of any of the other obligations of
each Guarantor hereunder, the obligations of each Guarantor under Section 11.01
and shall be enforceable against such Guarantor without regard to and without
giving effect to any right of offset or counterclaim available to or which may
be asserted by the Company or any Guarantor.
SECTION 11.20. Guarantee in Addition to Other Obligations.
The obligations of each Guarantor under its Guarantee and this
Indenture are in addition to and not in substitution for any other obligations
to the Trustee or to any of the Holders in relation to this Indenture or the
Securities (including the Purchase Agreement and the Registration Rights
Agreement).
SECTION 11.21. Severability.
Any provision of this Article Eleven which is prohibited or
unenforceable in any jurisdiction shall not invalidate the remaining provisions
and any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction
unless its removal would substantially defeat the basic intent, spirit and
purpose of this Indenture and this Article Eleven.
SECTION 11.22. Successors and Assigns.
Each Guarantee shall be binding upon and inure to the benefit of
each Guarantor and the Trustee and the other Holders and their respective
successors and permitted assigns, except that no Guarantor may assign any of its
obligations hereunder or thereunder.
[Remainder of Page Intentionally Left Blank]
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the date first written above.
THE DOE RUN RESOURCES CORPORATION,
as Issuer
By: /s/ Marvin K. Kaiser
-------------------------------
Name: Marvin K. Kaiser
Title: Vice President and CFO
FABRICATED PRODUCTS, INC.,
as Guarantor
By: /s/ David Chaput
-------------------------------
Name: David Chaput
Title: President
DOE RUN MINING S.R. LTDA.,
as Guarantor
By: /s/ Marvin K. Kaiser
-------------------------------
Name: Marvin K. Kaiser
Title: Finance Manager
DOE RUN PERU S.R. LTDA,
as Guarantor
By: /s/ Marvin K. Kaiser
-------------------------------
Name: Marvin K. Kaiser
Title: Finance Manager
DOE RUN CAYMAN LTD.,
as Guarantor
By: /s/ Marvin K. Kaiser
-------------------------------
Name: Marvin K. Kaiser
Title: Vice President
<PAGE>
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By: /s/ Robert L. Reynolds
-------------------------------
Name: Robert L. Reynolds
Title: Vice President
<PAGE>
EXHIBIT A
[FORM OF SERIES A FIXED RATE NOTE]
[If a restricted security, then insert -- THIS SECURITY HAS NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR
THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B)
IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (2) AGREES
THAT IT WILL NOT PRIOR TO THE DATE THAT IS TWO YEARS AFTER THE ORIGINAL ISSUANCE
OF THIS SECURITY RESELL, OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE
ISSUER THEREOF OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) INSIDE THE UNITED STATES TO AN "ACCREDITED INVESTOR" (AS DEFINED IN
RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) (AN "ACCREDITED
INVESTOR") THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS
BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUST FOR
THIS SECURITY), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION
FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE),
OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION
WITH ANY TRANSFER OF THIS SECURITY WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE
OF THIS SECURITY, IF THE PROPOSED TRANSFEREE IS AN ACCREDITED INVESTOR, THE
HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN TO THEM
BY REGULATION S UNDER THE SECURITIES ACT.
[If a Temporary Regulation S Global Security, then insert -- THIS SECURITY IS A
TEMPORARY REGULATION S GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
REFERRED TO HEREINAFTER.
A-1
<PAGE>
EXCEPT IN THE CIRCUMSTANCES DESCRIBED IN SECTION 2.06 OF THE INDENTURE,
INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY MAY NOT BE OFFERED OR
SOLD TO A U.S. PERSON OR FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON PRIOR TO
THE EXPIRATION OF THE RESTRICTED PERIOD (AS DEFINED IN THE INDENTURE), AND NO
TRANSFER OR EXCHANGE OF AN INTEREST IN THIS TEMPORARY REGULATION S GLOBAL
SECURITY MAY BE MADE FOR AN INTEREST IN A RESTRICTED GLOBAL SECURITY OR IN A
PERMANENT REGULATION S GLOBAL SECURITY UNTIL AFTER THE LATER OF THE DATE OF
EXPIRATION OF THE RESTRICTED PERIOD AND THE DATE ON WHICH THE OWNER SECURITIES
CERTIFICATION AND THE DEPOSITORY SECURITIES CERTIFICATION RELATING TO SUCH
INTEREST HAVE BEEN PROVIDED IN ACCORDANCE WITH THE TERMS OF THE INDENTURE, TO
THE EFFECT THAT THE BENEFICIAL OWNER OR OWNERS OF SUCH INTEREST ARE NOT U.S.
PERSONS.]
[If a Permanent Regulation S Security, then insert -- THE SECURITIES
EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933 (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, OR DELIVERED IN
THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON,
UNLESS THE SECURITIES ARE REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS THEREOF IS AVAILABLE.]
A-2
<PAGE>
THE DOE RUN RESOURCES CORPORATION
11 1/4% Senior Note
due 2005, Series A
CUSIP No.
No. $
The Doe Run Resources Corporation, a New York corporation (the
"Company," which term includes any successor entity), for value received
promises to pay to or registered assigns, the principal sum
of Dollars, on March 15, 2005.
Interest Payment Dates: March 15 and September 15
Record Dates: March 1 and September 1
Reference is made to the further provisions of this Security
contained herein, which will for all purposes have the same effect as if set
forth at this place.
A-3
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officers.
Dated: March 12, 1998
THE DOE RUN RESOURCES CORPORATION
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
A-4
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Series A Fixed Rate Notes described in the
within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
-------------------------------------
Authorized Signatory
A-5
<PAGE>
THE DOE RUN RESOURCES CORPORATION
11 1/4% Senior Note
due 2005, Series A
1. Interest.
THE DOE RUN RESOURCES CORPORATION, a New York corporation (the
"Company"), promises to pay cash interest on the principal amount of this
Security at the rate per annum shown above. The Company will pay interest
semi-annually in arrears on March 15 and September 15 of each year (the
"Interest Payment Date"), commencing September 15, 1998. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal and interest on
overdue installments of interest, to the extent lawful, at a rate equal to
13.25% per annum.
2. Method of Payment.
The Company shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date even if the
Securities are cancelled on registration of transfer or registration of exchange
after such Record Date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company shall pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts ("U.S. Legal Tender"). However, the Company
may pay principal and interest by wire transfer of Federal funds, or interest by
its check payable in such U.S. Legal Tender. The Company may deliver any such
interest payment to the Paying Agent or to a Holder at the Holder's registered
address. Notwithstanding the foregoing, the Company shall pay or cause to be
paid all amounts payable with respect to Restricted Securities or non-DTC
eligible Securities by wire transfer of Federal funds to the account of the
Holders of such Securities. If this Security is a Global Security, all payments
in respect of this Security will be made to the Depository or its nominee in
immediately available funds in accordance with customary procedures established
from time to time by the Depository.
3. Paying Agent and Registrar.
Initially, STATE STREET BANK AND TRUST COMPANY (the "Trustee"), will
act as Paying Agent and Registrar. The Com-
A-6
<PAGE>
pany may change any Paying Agent or Registrar without notice to the Holders.
4. Indenture.
The Company issued the Securities under an Indenture, dated as of
March 12, 1998 (the "Indenture"), by and among the Company, the Guarantors and
the Trustee. This Security is one of a duly authorized issue of Securities of
the Company designated as its 11 1/4% Senior Notes due 2005, Series A (the
"Series A Fixed Rate Notes"), limited (except as otherwise provided in the
Indenture) in aggregate principal amount to $200,000,000. The Securities include
the Fixed Rate Notes (as defined in the Indenture) and the Floating Rate Notes
(as defined in the Indenture). The Fixed Rate Notes and the Floating Rate Notes
are treated as a single class of securities under the Indenture unless otherwise
specified in the Indenture. Capitalized terms herein are used as defined in the
Indenture unless otherwise defined herein. The terms of the Securities include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939 (15 U.S. Code ss.ss. 77aaa-77bbbb) (the
"TIA"), as in effect on the date of the Indenture until such time as the
Indenture is qualified under the TIA, and thereafter as in effect on the date on
which the Indenture is qualified under the TIA. Notwithstanding anything to the
contrary herein, the Securities are subject to all such terms, and Holders of
Securities are referred to the Indenture and said Act for a statement of them.
The Securities are general obligations of the Company limited in aggregate
principal amount to $355,000,000.
5. Registration Rights.
Pursuant to the Registration Rights Agreement by and between the
Company, the Guarantors and the initial purchasers of the Series A Fixed Rate
Notes, the Company and the Guarantors will be obligated to consummate an
exchange offer pursuant to which the Holder of this Security shall have the
right to exchange this Security for 11 1/4% Senior Notes due 2005, Series B, of
the Company (the "Series B Fixed Rate Notes"), which have been registered under
the Securities Act, in like principal amount and having identical terms as the
Series A Fixed Rate Notes. The Holders of Series A Fixed Rate Notes shall be
entitled to receive certain additional interest payments in the event such
exchange offer is not consummated and upon certain other conditions, all
pursuant to and in accordance with the terms of the Registration Rights
Agreement. The Series A Fixed Rate Notes and the Series B Fixed Rate Notes are
together referred to herein as the "Fixed Rate Notes."
A-7
<PAGE>
6. Optional Redemption.
The Fixed Rate Notes will be subject to redemption, in whole or in
part, at the option of the Company, at any time on or after March 15, 2002, at
the redemption prices (expressed as percentages of principal amount) set forth
below plus accrued interest to the redemption date, if redeemed during the
12-month period beginning on March 15 of the years indicated below:
Year Percentage
2002............................................ 105.625%
2003............................................ 102.813%
2004 and thereafter............................. 100.000%
In addition, at any time prior to March 15, 2001, the Company may
redeem up to 35% of (x) the aggregate principal amount of the Fixed Rate Notes
issued in the Offering plus (y) any additional Fixed Rate Notes issued after the
Issue Date pursuant to the Indenture, with the proceeds of one or more Equity
Offerings at a redemption price (expressed as a percentage of principal amount)
of 111.25% plus accrued interest to the redemption date; provided that at least
65% of the sum of (x) the aggregate principal amount of Fixed Rate Notes issued
in the Offering plus (y) any additional Fixed Rate Notes issued after the Issue
Date pursuant to the Indenture remains outstanding immediately after any such
redemption. In order to effect the foregoing redemption with the proceeds of any
Equity Offering, the Company shall make such redemption not more than 120 days
after the consummation of any such Equity Offering. "Equity Offering" means an
offering of Qualified Capital Stock of the Company (other than any Subsidiary of
the Company).
7. Notice of Redemption.
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each Holder of Securities to be
redeemed at such Holder's registered address. Securities in denominations larger
than $1,000 may be redeemed in part.
Except as set forth in the Indenture, from and after any Redemption
Date, if monies for the redemption of the Securities called for redemption shall
have been deposited with the Paying Agent for redemption on such Redemption
Date, then, unless the Company defaults in the payment of such Redemption Price,
the Securities called for redemption will cease to bear interest and the only
right of the Holders of such Securities will be to receive payment of the
Redemption Price.
A-8
<PAGE>
8. Change of Control Offer.
Upon the occurrence of a Change of Control, upon the satisfaction of
the conditions set forth in the Indenture, the Company shall be required to
offer to purchase all of the then outstanding Securities pursuant to a Change of
Control Offer at a purchase price equal to 101% of the principal amount thereof
plus accrued interest, if any, to the date of purchase. Holders of Securities
which are the subject of such an offer to repurchase shall receive an offer to
repurchase and may elect to have such Securities repurchased in accordance with
the provisions of the Indenture pursuant to and in accordance with the terms of
the Indenture.
9. Limitation on Disposition of Assets.
Under certain circumstances, the Company is required to apply the
net proceeds from Asset Sales to repurchase Securities at a price equal to 100%
of the aggregate principal amount thereof, plus accrued interest to the date of
purchase.
10. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof selected for redemption. No service
charge shall be made for any registration of transfer or exchange or redemption
of Securities, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
11. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the owner of
it for all purposes.
With respect to Global Securities, the Depository may grant proxies
and otherwise authorize Holders of Book-Entry Securities to give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action which a Holder of a Security is entitled to give or take under the
Indenture.
A-9
<PAGE>
12. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee and the Paying Agent will pay the money back to the
Company at its request. After that, all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
13. Discharge Prior to Redemption or Maturity.
The Company's obligations pursuant to the Indenture will be
discharged, except for obligations pursuant to certain sections thereof, subject
to the terms of the Indenture, upon the payment of all the Securities or upon
the irrevocable deposit with the Trustee of money or U.S. Government Obligations
sufficient to pay when due principal of, and premium, if any, and interest on
the Securities to maturity or redemption, as the case may be.
14. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Securities may
be amended or supplemented with the written consent of the Holders of at least a
majority in aggregate principal amount of the Securities then outstanding, and
any existing Default or Event of Default or compliance with any provision may be
waived with the consent of the Holders of a majority in aggregate principal
amount of the Securities then outstanding. Without notice to or consent of any
Holder, the parties thereto may amend, waive or supplement the Indenture or the
Securities to, among other things, cure any ambiguity, defect or inconsistency,
provide for uncertificated Securities in addition to or in place of certificated
Securities, comply with Article Five of the Indenture or comply with any
requirements of the SEC in connection with the qualification of the Indenture
under the TIA, or make any other change that does not adversely affect the
rights of any Holder of a Security.
15. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of the
Company and its Restricted Subsidiaries to, among other things, incur additional
Indebtedness or Liens, make payments in respect of its Capital Stock and merge
or consolidate with any other person and sell, lease, transfer or otherwise
dispose of substantially all of certain of its properties or assets. The
limitations are subject to a number of important qualifications and exceptions.
The Company must annually report to the Trustee on compliance with such
limitations.
A-10
<PAGE>
16. Successors.
When a successor assumes all the obligations of its predecessor
under the Securities and the Indenture, the predecessor will be released from
those obligations.
17. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable in the manner,
at the time and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture or the Securities except as provided in the
Indenture. The Trustee is not obligated to enforce the Indenture or the
Securities unless it has received indemnity satisfactory to it. The Indenture
permits, subject to certain limitations therein provided, Holders of a majority
in aggregate principal amount of the Securities then outstanding to direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of Securities notice of any continuing Default or Event of Default
(except a Default in payment of principal or interest) if it determines that
withholding notice is in their interest.
18. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company, the Guarantors, their Subsidiaries or their respective
Affiliates as if it were not the Trustee.
19. No Recourse Against Others.
No stockholder, director, officer, employee or incorporator, as
such, of the Company or the Guarantors shall have any liability for any
obligation of the Company or the Guarantors under the Securities or the
Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Holder of a Security by accepting a Security
waives and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Securities.
20. Authentication.
This Security shall not be valid until the Trustee or authenticating
agent manually signs the certificate of authentication on this Security.
A-11
<PAGE>
21. Governing Law.
The Laws of the State of New York shall govern this Security and the
Indenture.
22. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
23. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company will cause CUSIP numbers to be
printed on the Securities immediately prior to the qualification of the
Indenture under the TIA as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
24. Guarantees.
This Security will be entitled to the benefits of certain Guarantees
made for the benefit of the Holders. Reference is hereby made to the Indenture
for a statement of the respective rights, limitations of rights, duties and
obligations thereunder of the Guarantors, the Trustee and the Holders.
25. Indenture.
Each Holder, by accepting a Security, agrees to be bound by all of
the terms and provisions of the Indenture, as the same may be amended from time
to time.
The Company will furnish to any Holder of a Security upon written
request and without charge a copy of the Indenture. Requests may be made to: THE
DOE RUN RESOURCES CORPORATION, 1801 Park 270 Drive, St. Louis, Missouri 63146,
Attn.: Chief Financial Officer.
26. Certain Information Obligations.
At any time when the Company is not subject to Section 13 or 15(d)
of the Securities Exchange Act of 1934, upon the request of a Holder of a Series
A Fixed Rate Note, the Company will promptly furnish or cause to be furnished
such information as is specified pursuant to Rule 144A(d)(4) under the
A-12
<PAGE>
Securities Act (or any successor provision thereto) to such Holder or to a
prospective purchaser of such Series A Fixed Rate Security designated by such
Holder, as the case may be, in order to permit compliance by such Holder with
Rule 144A under the Securities Act.
[The form of reverse of a Temporary Regulation S Global Security
shall be as set forth below --
Until this Temporary Regulation S Global Security is exchanged for a
Permanent Regulation S Global Security, the Holder hereof shall not be entitled
to receive payments of interest hereon; until so exchanged in full, this
Temporary Regulation S Global Security shall in all other respects be entitled
to the same benefits as other Securities under the Indenture.
This Temporary Regulation S Global Security is exchangeable in whole
or in part for one or more Permanent Regulation S Global Securities or
Restricted Global Securities only (i) on or after the expiration of the
Restricted Period and (ii) upon presentation of certificates (accompanied by an
Opinion of Counsel, if applicable) required by Article II of the Indenture. Upon
exchange of this Temporary Regulation S Global Security for one or more
Permanent Regulation S Global Securities or Restricted Global Securities, the
Trustee shall cancel this Temporary Regulation S Global Security.
This Temporary Regulation S Global Security shall not become valid
or obligatory until the certificate of authentication hereon shall have been
duly manually signed by the Trustee in accordance with the Indenture. This
Temporary Regulation S Global Security shall be governed by and construed in
accordance with the laws of the State of New York.
A-13
<PAGE>
SCHEDULE OF EXCHANGES FOR GLOBAL SECURITIES
The following exchanges of a part of this Temporary Regulation S
Global Security for other Global Securities have been made:
Amount of Amount of Principal
decrease in increase in Amount of this
Principal Principal Global Security Signature of
Amount of this Amount of following such authorized
Date of Global this Global decrease (or officer of
Exchange Security Security increase) Trustee
---------- -------------- ----------- --------------- -------------
A-14
<PAGE>
[FORM OF ASSIGNMENT]
I or we assign this Security to
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code of assignee)
Please insert Social Security or other
identifying number of assignee
_________________________________________
and irrevocably appoint _______________________ agent to transfer this Security
on the books of the Company. The agent may substitute another to act for him.
Dated: Signed:
-------------------- ----------------------------------------------
________________________________________________________________________________
(Sign exactly as your name appears on
the front of this Security)
Signature Guarantee:
------------------------------------------------------------
A-15
<PAGE>
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.15 or Section 4.16 of the Indenture, check the appropriate
box:
Section 4.15 [ ]
Section 4.16 [ ]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.15 or Section 4.16 of the Indenture, state the
amount:
$
Date: Signature:
--------------- ----------------------------------
(Sign exactly as your
name appears on the front
of this Security)
Signature Guarantee:
------------------------------------------------------------
A-16
<PAGE>
EXHIBIT A-1
[FORM OF SERIES A FLOATING RATE NOTE]
[If a restricted security, then insert -- THIS SECURITY HAS NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR
THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B)
IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (2) AGREES
THAT IT WILL NOT PRIOR TO THE DATE THAT IS TWO YEARS AFTER THE ORIGINAL ISSUANCE
OF THIS SECURITY RESELL, OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE
ISSUER THEREOF OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) INSIDE THE UNITED STATES TO AN "ACCREDITED INVESTOR" (AS DEFINED IN
RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) (AN "ACCREDITED
INVESTOR") THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS
BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUST FOR
THIS SECURITY), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION
FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE),
OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION
WITH ANY TRANSFER OF THIS SECURITY WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE
OF THIS SECURITY, IF THE PROPOSED TRANSFEREE IS AN ACCREDITED INVESTOR, THE
HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN TO THEM
BY REGULATION S UNDER THE SECURITIES ACT.
[If a Temporary Regulation S Global Security, then insert -- THIS SECURITY IS A
TEMPORARY REGULATION S GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
REFERRED TO HEREINAFTER.
A-1-1
<PAGE>
EXCEPT IN THE CIRCUMSTANCES DESCRIBED IN SECTION 2.06 OF THE INDENTURE,
INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY MAY NOT BE OFFERED OR
SOLD TO A U.S. PERSON OR FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON PRIOR TO
THE EXPIRATION OF THE RESTRICTED PERIOD (AS DEFINED IN THE INDENTURE), AND NO
TRANSFER OR EXCHANGE OF AN INTEREST IN THIS TEMPORARY REGULATION S GLOBAL
SECURITY MAY BE MADE FOR AN INTEREST IN A RESTRICTED GLOBAL SECURITY OR IN A
PERMANENT REGULATION S GLOBAL SECURITY UNTIL AFTER THE LATER OF THE DATE OF
EXPIRATION OF THE RESTRICTED PERIOD AND THE DATE ON WHICH THE OWNER SECURITIES
CERTIFICATION AND THE DEPOSITORY SECURITIES CERTIFICATION RELATING TO SUCH
INTEREST HAVE BEEN PROVIDED IN ACCORDANCE WITH THE TERMS OF THE INDENTURE, TO
THE EFFECT THAT THE BENEFICIAL OWNER OR OWNERS OF SUCH INTEREST ARE NOT U.S.
PERSONS.]
[If a Permanent Regulation S Security, then insert -- THE SECURITIES
EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933 (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, OR DELIVERED IN
THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON,
UNLESS THE SECURITIES ARE REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS THEREOF IS AVAILABLE.]
A-1-2
<PAGE>
THE DOE RUN RESOURCES CORPORATION
Floating Interest Rate Senior Notes (FIRSTS(SM)*)
due 2003, Series A
CUSIP No.
No. $
The Doe Run Resources Corporation, a New York corporation (the
"Company," which term includes any successor entity), for value received
promises to pay to or registered assigns, the principal sum
of Dollars, on March 15, 2003.
Interest Payment Dates: March 15 and September 15
Record Dates: March 1 and September 1
Reference is made to the further provisions of this Security
contained herein, which will for all purposes have the same effect as if set
forth at this place.
- --------------------------------------
* FIRSTS is a service mark of BT ALex. Brown Incorporated.
A-1-3
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officers.
Dated: March 12, 1998
THE DOE RUN RESOURCES CORPORATION
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
A-1-4
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Floating Interest Rate Senior Notes (FIRSTS(SM))
due 2003, Series A described in the within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
------------------------------
Authorized Signatory
A-1-5
<PAGE>
THE DOE RUN RESOURCES CORPORATION
Floating Interest Rate Senior Notes
(FIRSTS(SM)) due 2003, Series A
1. Interest.
THE DOE RUN RESOURCES CORPORATION, a New York corporation (the
"Company"), promises to pay interest on the principal amount of this Security at
the rate per annum, reset semi-annually, equal to LIBOR (as defined below) plus
6.29%, as determined by the calculation agent (the "Calculation Agent").
Interest on this Security will accrue from the most recent date on which
interest has been paid or, if no interest has been paid, from March 12, 1998.
The Company will pay interest semi-annually on each March 15 and September 15
(each, an "Interest Payment Date"), commencing September 15, 1998, for the
period commencing on and including the immediately preceding Interest Payment
Date and ending on and including the day next preceding the Interest Payment
Date (an "Interest Period"), with the exception that the first Interest Period
shall commence on and include March 12, 1998 and end on and include September
14, 1998, and at stated maturity.
The Company shall pay interest on overdue principal and interest on
overdue installments of interest, to the extent lawful, at a rate equal to
13.25% per annum.
"LIBOR", with respect to an Interest Period, shall be the rate
(expressed as a percentage per annum) for deposits in United States dollars for
a six-month period beginning on the second London Banking Day (as defined) after
the Determination Date (as defined) that appears on Telerate Page 3750 (as
defined) as of 11:00 a.m., London time, on the Determination Date. If Telerate
Page 3750 does not include such a rate or is unavailable on a Determination
Date, LIBOR for the Interest Period shall be the arithmetic mean of the rates
(expressed as a percentage per annum) for deposits in a Representative Amount
(as defined) in U.S. dollars for a six-month period beginning on the second
London Banking Day after the Determination Date that appears on Reuters Screen
LIBO Page (as defined) as of 11:00 a.m., London time, on the Determination Date.
If Reuters Screen LIBO Page does not include two or more rates or is unavailable
on a Determination Date, the Calculation Agent will request the principal London
office of each of four major banks in the London interbank market, as selected
by the Calculation Agent, to provide such bank's offered quotation (expressed as
a percentage per annum), as of approximately 11:00 a.m., London time, on such
Determination Date, to prime banks in the London interbank market for deposits
in a Representative Amount in U.S. dollars for a six-month period beginning on
the second
A-1-6
<PAGE>
London Banking Day after the Determination Date. If at least two such offered
quotations are so provided, LIBOR for the Interest Period will be the arithmetic
mean of such quotations. If fewer than two such quotations are so provided, the
Calculation Agent will request each of three major banks in New York City, as
selected by the Calculation Agent, to provide such bank's rate (expressed as a
percentage per annum), as of approximately 11:00 a.m., New York City time, on
such Determination Date, for loans in a Representative Amount in U.S. dollars to
leading European banks for a six-month period beginning on the second London
Banking Day after the Determination Date. If at least two such rates are so
provided, LIBOR for the Interest Period will be the arithmetic mean of such
rates. If fewer than two such rates are so provided, then LIBOR for the Interest
Period will be LIBOR in effect with respect to the immediately preceding
Interest Period.
"Determination Date," with respect to an Interest Period, will be
the second London Banking Day preceding the first day of the Interest Period.
"London Banking Day" is any day in which dealings in U.S. dollars
are transacted or, with respect to any future date, are expected to be
transacted in the London interbank market.
"Representative Amount" means a principal amount of not less than
U.S. $1,000,000 for a single transaction in the relevant market at the relevant
time.
"Telerate Page 3750" means the display designated as "Page 3750" on
the Dow Jones Telerate Service (or such other page as may replace Page 3750 on
that service).
"Reuters Screen LIBO Page" means the display designated as page
"LIBO" on The Reuters Monitor Money Rates Service (or such other page as may
replace the LIBO page on that service).
The amount of interest for each day that this Security is
outstanding (the "Daily Interest Amount") will be calculated by dividing the
interest rate in effect for such day by 360 and multiplying the result by the
principal amount of this Security. The amount of interest to be paid on this
Security for each Interest Period will be calculated by adding the Daily
Interest Amounts for each day in the Interest Period.
All percentages resulting from any of the above calculations will be
rounded, if necessary, to the nearest one hundred-thousandth of a percentage
point, with five one-millionths of a percentage point rounded upwards (e.g.,
9.876545% (or .09876545) being rounded to 9.87655% (or
A-1-7
<PAGE>
.0987655)) and all dollar amounts used in or resulting from such calculations
will be rounded to the nearest cent (with one-half cent being rounded upwards).
The interest rate on this Security will in no event be higher than
the maximum rate permitted by New York law as the same may be modified by U.S.
law of general application. Under current New York law, the maximum rate of
interest is 25% per annum on a simple interest basis. This limit may not apply
to Securities in which $2,500,000 or more has been invested.
The Calculation Agent will, upon the request of the holder of any
Floating Rate Note, provide the interest rate then in effect with respect to
this Security. All calculations made by the Calculation Agent in the absence of
manifest error shall be conclusive for all purposes and binding on the Company
and the Holders of this Security.
2. Method of Payment.
The Company shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date even if the
Securities are cancelled on registration of transfer or registration of exchange
after such Record Date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company shall pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts ("U.S. Legal Tender"). However, the Company
may pay principal and interest by wire transfer of Federal funds, or interest by
its check payable in such U.S. Legal Tender. The Company may deliver any such
interest payment to the Paying Agent or to a Holder at the Holder's registered
address. Notwithstanding the foregoing, the Company shall pay or cause to be
paid all amounts payable with respect to Restricted Securities or non-DTC
eligible Securities by wire transfer of Federal funds to the account of the
Holders of such Securities. If this Security is a Global Security, all payments
in respect of this Security will be made to the Depository or its nominee in
immediately available funds in accordance with customary procedures established
from time to time by the Depository.
3. Paying Agent and Registrar.
Initially, STATE STREET BANK AND TRUST COMPANY (the "Trustee"), will
act as Paying Agent and Registrar. The Company may change any Paying Agent or
Registrar without notice to the Holders.
A-1-8
<PAGE>
4. Indenture.
The Company issued the Securities under an Indenture, dated as of
March 12, 1998 (the "Indenture"), by and among the Company, the Guarantors and
the Trustee. This Security is one of a duly authorized issue of Securities of
the Company designated as its Floating Interest Rate Senior Notes (FIRSTS(SM))
due 2003, Series A (the "Series A Floating Rate Notes"), limited (except as
otherwise provided in the Indenture) in aggregate principal amount to
$55,000,000. The Securities include the Floating Rate Notes (as defined in the
Indenture) and the Fixed Rate Notes (as defined in the Indenture). The Floating
Rate Notes and the Fixed Rate Notes are treated as a single class of securities
under the Indenture unless otherwise specified in the Indenture. Capitalized
terms herein are used as defined in the Indenture unless otherwise defined
herein. The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S. Code ss.ss. 77aaa-77bbbb) (the "TIA"), as in effect on the date of the
Indenture until such time as the Indenture is qualified under the TIA, and
thereafter as in effect on the date on which the Indenture is qualified under
the TIA. Notwithstanding anything to the contrary herein, the Securities are
subject to all such terms, and Holders of Securities are referred to the
Indenture and said Act for a statement of them. The Securities are general
obligations of the Company limited in aggregate principal amount to
$355,000,000.
5. Registration Rights.
Pursuant to the Registration Rights Agreement by and between the
Company, the Guarantors and the initial purchasers of the Series A Floating Rate
Notes, the Company and the Guarantors will be obligated to consummate an
exchange offer pursuant to which the Holder of this Security shall have the
right to exchange this Security for Floating Interest Rate Senior Notes
(FIRSTS(SM)) due 2003, Series B, of the Company (the "Series B Floating Rate
Notes"), which have been registered under the Securities Act, in like principal
amount and having identical terms as the Series A Floating Rate Notes. The
Holders of Series A Floating Rate Notes shall be entitled to receive certain
additional interest payments in the event such exchange offer is not consummated
and upon certain other conditions, all pursuant to and in accordance with the
terms of the Registration Rights Agreement. The Series A Floating Rate Notes and
the Series B Floating Rate Notes are together referred to herein as the
"Floating Rate Notes."
6. Optional Redemption.
The Floating Rate Notes will be subject to redemption, in whole at
any time or in part from time to time, at the
A-1-9
<PAGE>
option of the Company, at the redemption prices (expressed as percentages of
principal amount) set forth below plus accrued interest to the redemption date,
if redeemed during the twelve month period beginning on March 15 of the years
indicated below:
Year Percentage
1998............................................ 104.000%
1999............................................ 103.000%
2000............................................ 102.000%
2001............................................ 101.000%
2002 and thereafter............................. 100.000%
7. Notice of Redemption.
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each Holder of Securities to be
redeemed at such Holder's registered address. Securities in denominations larger
than $1,000 may be redeemed in part.
Except as set forth in the Indenture, from and after any Redemption
Date, if monies for the redemption of the Securities called for redemption shall
have been deposited with the Paying Agent for redemption on such Redemption
Date, then, unless the Company defaults in the payment of such Redemption Price,
the Securities called for redemption will cease to bear interest and the only
right of the Holders of such Securities will be to receive payment of the
Redemption Price.
8. Change of Control Offer.
Upon the occurrence of a Change of Control, upon the satisfaction of
the conditions set forth in the Indenture, the Company shall be required to
offer to purchase all of the then outstanding Securities pursuant to a Change of
Control Offer at a purchase price equal to 101% of the principal amount thereof
plus accrued interest, if any, to the date of purchase. Holders of Securities
which are the subject of such an offer to repurchase shall receive an offer to
repurchase and may elect to have such Securities repurchased in accordance with
the provisions of the Indenture pursuant to and in accordance with the terms of
the Indenture.
9. Limitation on Disposition of Assets.
Under certain circumstances, the Company is required to apply the
net proceeds from Asset Sales to repurchase Securities at a price equal to 100%
of the aggregate principal amount thereof, plus accrued interest to the date of
purchase.
A-1-10
<PAGE>
10. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof selected for redemption. No service
charge shall be made for any registration of transfer or exchange or redemption
of Securities, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
11. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the owner of
it for all purposes.
With respect to Global Securities, the Depository may grant proxies
and otherwise authorize Holders of Book-Entry Securities to give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action which a Holder of a Security is entitled to give or take under the
Indenture.
12. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee and the Paying Agent will pay the money back to the
Company at its request. After that, all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
13. Discharge Prior to Redemption or Maturity.
The Company's obligations pursuant to the Indenture will be
discharged, except for obligations pursuant to certain sections thereof, subject
to the terms of the Indenture, upon the payment of all the Securities or upon
the irrevocable deposit with the Trustee of money or U.S. Government Obligations
sufficient to pay when due principal of, and premium, if any, and interest on
the Securities to maturity or redemption, as the case may be.
14. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Securities may
be amended or supplemented with the written con-
A-1-11
<PAGE>
sent of the Holders of at least a majority in aggregate principal amount of the
Securities then outstanding, and any existing Default or Event of Default or
compliance with any provision may be waived with the consent of the Holders of a
majority in aggregate principal amount of the Securities then outstanding.
Without notice to or consent of any Holder, the parties thereto may amend, waive
or supplement the Indenture or the Securities to, among other things, cure any
ambiguity, defect or inconsistency, provide for uncertificated Securities in
addition to or in place of certificated Securities, comply with Article Five of
the Indenture or comply with any requirements of the SEC in connection with the
qualification of the Indenture under the TIA, or make any other change that does
not adversely affect the rights of any Holder of a Security.
15. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of the
Company and its Restricted Subsidiaries to, among other things, incur additional
Indebtedness or Liens, make payments in respect of its Capital Stock and merge
or consolidate with any other person and sell, lease, transfer or otherwise
dispose of substantially all of certain of its properties or assets. The
limitations are subject to a number of important qualifications and exceptions.
The Company must annually report to the Trustee on compliance with such
limitations.
16. Successors.
When a successor assumes all the obligations of its predecessor
under the Securities and the Indenture, the predecessor will be released from
those obligations.
17. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable in the manner,
at the time and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture or the Securities except as provided in the
Indenture. The Trustee is not obligated to enforce the Indenture or the
Securities unless it has received indemnity satisfactory to it. The Indenture
permits, subject to certain limitations therein provided, Holders of a majority
in aggregate principal amount of the Securities then outstanding to direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of Securities notice of any continuing Default or Event of Default
(except a Default in payment of principal or interest) if it determines that
withholding notice is in their interest.
A-1-12
<PAGE>
18. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company, the Guarantors, their Subsidiaries or their respective
Affiliates as if it were not the Trustee.
19. No Recourse Against Others.
No stockholder, director, officer, employee or incorporator, as
such, of the Company or the Guarantors shall have any liability for any
obligation of the Company or the Guarantors under the Securities or the
Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Holder of a Security by accepting a Security
waives and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Securities.
20. Authentication.
This Security shall not be valid until the Trustee or authenticating
agent manually signs the certificate of authentication on this Security.
21. Governing Law.
The Laws of the State of New York shall govern this Security and the
Indenture.
22. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
23. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company will cause CUSIP numbers to be
printed on the Securities immediately prior to the qualification of the
Indenture under the TIA as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
A-1-13
<PAGE>
24. Guarantees.
This Security will be entitled to the benefits of certain Guarantees
made for the benefit of the Holders. Reference is hereby made to the Indenture
for a statement of the respective rights, limitations of rights, duties and
obligations thereunder of the Guarantors, the Trustee and the Holders.
25. Indenture.
Each Holder, by accepting a Security, agrees to be bound by all of
the terms and provisions of the Indenture, as the same may be amended from time
to time.
The Company will furnish to any Holder of a Security upon written
request and without charge a copy of the Indenture. Requests may be made to: THE
DOE RUN RESOURCES CORPORATION, 1801 Park 270 Drive, St. Louis, Missouri 63146,
Attn.: Chief Financial Officer.
26. Certain Information Obligations.
At any time when the Company is not subject to Section 13 or 15(d)
of the Securities Exchange Act of 1934, upon the request of a Holder of a Series
A Floating Rate Note, the Company will promptly furnish or cause to be furnished
such information as is specified pursuant to Rule 144A(d)(4) under the
Securities Act (or any successor provision thereto) to such Holder or to a
prospective purchaser of such Series A Floating Rate Security designated by such
Holder, as the case may be, in order to permit compliance by such Holder with
Rule 144A under the Securities Act.
[The form of reverse of a Temporary Regulation S Global Security
shall be as set forth below --
Until this Temporary Regulation S Global Security is exchanged for a
Permanent Regulation S Global Security, the Holder hereof shall not be entitled
to receive payments of interest hereon; until so exchanged in full, this
Temporary Regulation S Global Security shall in all other respects be entitled
to the same benefits as other Securities under the Indenture.
This Temporary Regulation S Global Security is exchangeable in whole
or in part for one or more Permanent Regulation S Global Securities or
Restricted Global Securities only (i) on or after the expiration of the
Restricted Period and (ii) upon presentation of certificates (accompanied by an
Opinion of Counsel, if applicable) required by Article II of the Indenture. Upon
exchange of this Temporary Regulation S Global Security for one or more
Permanent Regulation S Global Securi-
A-1-14
<PAGE>
ties or Restricted Global Securities, the Trustee shall cancel this Temporary
Regulation S Global Security.
This Temporary Regulation S Global Security shall not become valid
or obligatory until the certificate of authentication hereon shall have been
duly manually signed by the Trustee in accordance with the Indenture. This
Temporary Regulation S Global Security shall be governed by and construed in
accordance with the laws of the State of New York.
A-1-15
<PAGE>
SCHEDULE OF EXCHANGES FOR GLOBAL SECURITIES
The following exchanges of a part of this Temporary Regulation S
Global Security for other Global Securities have been made:
Amount of Amount of Principal
decrease in increase in Amount of this
Principal Principal Global Security Signature of
Amount of this Amount of following such authorized
Date of Global this Global decrease (or officer of
Exchange Security Security increase) Trustee
- --------------- -------------- ------------ --------------- -------------
A-1-16
<PAGE>
[FORM OF ASSIGNMENT]
I or we assign this Security to
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code of assignee)
Please insert Social Security or other
identifying number of assignee
__________________________________________
and irrevocably appoint _______________________ agent to transfer this Security
on the books of the Company. The agent may substitute another to act for him.
Dated: Signed:
-------------------- ----------------------------------------------
________________________________________________________________________________
(Sign exactly as your name appears on
the front of this Security)
Signature Guarantee:
------------------------------------------------------------
A-1-17
<PAGE>
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.15 or Section 4.16 of the Indenture, check the appropriate
box:
Section 4.15 [ ]
Section 4.16 [ ]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.15 or Section 4.16 of the Indenture, state the
amount:
$
Date: Signature:
--------------- ----------------------------------
(Sign exactly as your
name appears on the front
of this Security)
Signature Guarantee:
------------------------------------------------------------
A-1-18
<PAGE>
EXHIBIT B
[FORM OF SERIES B FIXED RATE NOTE]
THE DOE RUN RESOURCES CORPORATION
11 1/4% Senior Note
due 2005, Series B
CUSIP No.
No. $
THE DOE RUN RESOURCES CORPORATION, a New York corporation (the
"Company," which term includes any successor entity), for value received
promises to pay to or registered assigns, the principal sum of
Dollars, on March 15, 2005.
Interest Payment Dates: March 15 and September 15
Record Dates: March 1 and September 1
Reference is made to the further provisions of this Security
contained herein, which will for all purposes have the same effect as if set
forth at this place.
IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officers.
Dated:
THE DOE RUN RESOURCES CORPORATION
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
B-1
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Series B Fixed Rate Notes described in the
within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
-------------------------------------
Authorized Signatory
B-2
<PAGE>
THE DOE RUN RESOURCES CORPORATION
11 1/4% Senior Note
due 2005, Series B
1. Interest.
THE DOE RUN RESOURCES CORPORATION, a New York corporation (the
"Company"), promises to pay cash interest on the principal amount of this
Security at the rate per annum shown above. The Company will pay interest
semi-annually in arrears on March 15 and September 15 of each year (the
"Interest Payment Date"), commencing September 15, 1998. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal and interest on
overdue installments of interest, to the extent lawful, at a rate equal to
13.25% per annum.
2. Method of Payment.
The Company shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date even if the
Securities are cancelled on registration of transfer or registration of exchange
after such Record Date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company shall pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts ("U.S. Legal Tender"). However, the Company
may pay principal and interest by wire transfer of Federal funds, or interest by
its check payable in such U.S. Legal Tender. The Company may deliver any such
interest payment to the Paying Agent or to a Holder at the Holder's registered
address.
3. Paying Agent and Registrar.
Initially, STATE STREET BANK AND TRUST COMPANY (the "Trustee") will
act as Paying Agent and Registrar. The Company may change any Paying Agent or
Registrar without notice to the Holders.
4. Indenture.
The Company issued the Securities under an Indenture, dated as of
March 12, 1998 (the "Indenture"), by and among the Company, the Guarantors and
the Trustee. This Security is one of a duly authorized issue of Securities of
the Company desig-
B-3
<PAGE>
nated as its 11 1/4% Senior Notes due 2005, Series B (the "Series B Fixed Rate
Notes"), limited (except as otherwise provided in the Indenture) in aggregate
principal amount to $200,000,000. The Securities include the Fixed Rate Notes
(as defined in the Indenture) and the Floating Rate Notes (as defined in the
Indenture). The Fixed Rate Notes and the Floating Rate Notes are treated as a
single class of securities under the Indenture unless otherwise specified in the
Indenture. Capitalized terms herein are used as defined in the Indenture unless
otherwise defined herein. The terms of the Securities include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S. Code ss.ss. 77aaa-77bbbb) (the "TIA"), as in
effect on the date of the Indenture until such time as the Indenture is
qualified under the TIA, and thereafter as in effect on the date on which the
Indenture is qualified under the TIA. Notwithstanding anything to the contrary
herein, the Securities are subject to all such terms, and Holders of Securities
are referred to the Indenture and said Act for a statement of them. The
Securities are general obligations of the Company limited in aggregate principal
amount to $355,000,000.
5. Exchange Offer.
The Series B Fixed Rate Notes were issued pursuant to an exchange
offer pursuant to which 11 1/4% Senior Notes due 2005, Series A, of the Company
(the "Series A Fixed Rate Notes"), in like principal amount and having
substantially identical terms as the Series B Fixed Rate Notes, were exchanged
for the Series B Fixed Rate Notes. The Series A Fixed Rate Notes and the Series
B Fixed Rate Notes are together referred to herein as the "Securities."
6. Optional Redemption.
The Fixed Rate Notes will be subject to redemption, in whole or in
part, at the option of the Company, at any time on or after March 15, 2002, at
the redemption prices (expressed as percentages of principal amount) set forth
below plus accrued interest to the redemption date, if redeemed during the
12-month period beginning on March 15 of the years indicated below:
Year Percentage
2002............................................ 105.625%
2003............................................ 102.813%
2004 and thereafter............................. 100.000%
In addition, at any time prior to March 15, 2001, the Company may
redeem up to 35% of (x) the aggregate principal amount of the Fixed Rate Notes
issued in the Offering plus
B-4
<PAGE>
(y) any additional Fixed Rate Notes issued after the Issue Date pursuant to the
Indenture, with the proceeds of one or more Equity Offerings at a redemption
price (expressed as a percentage of principal amount) of 111.25% plus accrued
interest to the redemption date; provided that at least 65% of the sum of (x)
the aggregate principal amount of Fixed Rate Notes issued in the Offering plus
(y) any additional Fixed Rate Notes issued after the Issue Date pursuant to the
Indenture remains outstanding immediately after any such redemption. In order to
effect the foregoing redemption with the proceeds of any Equity Offering, the
Company shall make such redemption not more than 120 days after the consummation
of any such Equity Offering. "Equity Offering" means an offering of Qualified
Capital Stock of the Company (other than any Subsidiary of the Company).
7. Notice of Redemption.
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each Holder of Securities to be
redeemed at such Holder's registered address. Securities in denominations larger
than $1,000 may be redeemed in part.
Except as set forth in the Indenture, from and after any Redemption
Date, if monies for the redemption of the Securities called for redemption shall
have been deposited with the Paying Agent for redemption on such Redemption
Date, then, unless the Company defaults in the payment of such Redemption Price,
the Securities called for redemption will cease to bear interest and the only
right of the Holders of such Securities will be to receive payment of the
Redemption Price.
8. Change of Control Offer.
Upon the occurrence of a Change of Control, upon the satisfaction of
the conditions set forth in the Indenture, the Company shall be required to
offer to purchase all of the then outstanding Securities pursuant to a Change of
Control Offer at a purchase price equal to 101% of the principal amount thereof
plus accrued interest, if any, to the date of purchase. Holders of Securities
which are the subject of such an offer to repurchase shall receive an offer to
repurchase and may elect to have such Securities repurchased in accordance with
the provisions of the Indenture pursuant to and in accordance with the terms of
the Indenture.
9. Limitation on Disposition of Assets.
Under certain circumstances, the Company is required to apply the
net proceeds from Asset Sales to repurchase Securities at a price equal to 100%
of the aggregate principal amount thereof, plus accrued interest to the date of
purchase.
B-5
<PAGE>
10. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof selected for redemption. No service
charge shall be made for any registration of transfer or exchange or redemption
of Securities, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
11. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the owner of
it for all purposes.
With respect to Global Securities, the Depository may grant proxies
and otherwise authorize Holders of Book-Entry Securities to give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action which a Holder of a Security is entitled to give or take under the
Indenture.
12. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee and the Paying Agent will pay the money back to the
Company at its request. After that, all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
13. Discharge Prior to Redemption or Maturity.
The Company's obligations pursuant to the Indenture will be
discharged, except for obligations pursuant to certain sections thereof, subject
to the terms of the Indenture, upon the payment of all the Securities or upon
the irrevocable deposit with the Trustee of money or U.S. Government Obligations
sufficient to pay when due principal of, and premium, if any, and interest on
the Securities to maturity or redemption, as the case may be.
14. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Securities may
be amended or supplemented with the written con-
B-6
<PAGE>
sent of the Holders of at least a majority in aggregate principal amount of the
Securities then outstanding, and any existing Default or Event of Default or
compliance with any provision may be waived with the consent of the Holders of a
majority in aggregate principal amount of the Securities then outstanding.
Without notice to or consent of any Holder, the parties thereto may amend, waive
or supplement the Indenture or the Securities to, among other things, cure any
ambiguity, defect or inconsistency, provide for uncertificated Securities in
addition to or in place of certificated Securities, comply with Article Five of
the Indenture or comply with any requirements of the SEC in connection with the
qualification of the Indenture under the TIA, or make any other change that does
not adversely affect the rights of any Holder of a Security.
15. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of the
Company and its Restricted Subsidiaries to, among other things, incur additional
Indebtedness or Liens, make payments in respect of its Capital Stock and merge
or consolidate with any other person and sell, lease, transfer or otherwise
dispose of substantially all of certain of its properties or assets. The
limitations are subject to a number of important qualifications and exceptions.
The Company must annually report to the Trustee on compliance with such
limitations.
16. Successors.
When a successor assumes all the obligations of its predecessor
under the Securities and the Indenture, the predecessor will be released from
those obligations.
17. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable in the manner,
at the time and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture or the Securities except as provided in the
Indenture. The Trustee is not obligated to enforce the Indenture or the
Securities unless it has received indemnity satisfactory to it. The Indenture
permits, subject to certain limitations therein provided, Holders of a majority
in aggregate principal amount of the Securities then outstanding to direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of Securities notice of any continuing Default or Event of Default
(except a Default in payment of principal or interest) if it determines that
withholding notice is in their interest.
B-7
<PAGE>
18. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company, the Guarantors, their Subsidiaries or their respective
Affiliates as if it were not the Trustee.
19. No Recourse Against Others.
No stockholder, director, officer, employee or incorporator, as
such, of the Company or the Guarantors shall have any liability for any
obligation of the Company or the Guarantors under the Securities or the
Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Holder of a Security by accepting a Security
waives and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Securities.
20. Authentication.
This Security shall not be valid until the Trustee or authenticating
agent manually signs the certificate of authentication on this Security.
21. Governing Law.
The Laws of the State of New York shall govern this Security and the
Indenture.
22. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
23. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company will cause CUSIP numbers to be
printed on the Securities immediately prior to the qualification of the
Indenture under the TIA as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
B-8
<PAGE>
24. Guarantees.
This Security will be entitled to the benefits of certain Guarantees
made for the benefit of the Holders. Reference is hereby made to the Indenture
for a statement of the respective rights, limitations of rights, duties and
obligations thereunder of the Guarantors, the Trustee and the Holders.
25. Indenture.
Each Holder, by accepting a Security, agrees to be bound by all of
the terms and provisions of the Indenture, as the same may be amended from time
to time.
The Company will furnish to any Holder of a Security upon written
request and without charge a copy of the Indenture. Requests may be made to: THE
DOE RUN RESOURCES CORPORATION, 1801 Park 270 Drive, St. Louis, Missouri 63146,
Attn.: Chief Financial Officer.
B-9
<PAGE>
[FORM OF ASSIGNMENT]
I or we assign this Security to
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code of assignee)
Please insert Social Security or other
identifying number of assignee
__________________________________________
and irrevocably appoint _______________________ agent to transfer this Security
on the books of the Company. The agent may substitute another to act for him.
Dated: Signed:
-------------------- ----------------------------------------------
________________________________________________________________________________
(Sign exactly as your name appears on
the front of this Security)
Signature Guarantee:
------------------------------------------------------------
B-10
<PAGE>
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.15 or Section 4.16 of the Indenture, check the appropriate
box:
Section 4.15 [ ]
Section 4.16 [ ]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.15 or Section 4.16 of the Indenture, state the
amount:
$
Date: Signature:
--------------- ----------------------------------
(Sign exactly as your
name appears on the front
of this Security)
Signature Guarantee:
------------------------------------------------------------
B-11
<PAGE>
EXHIBIT B-1
[FORM OF SERIES B FLOATING RATE NOTE]
THE DOE RUN RESOURCES CORPORATION
Floating Interest Rate Senior Notes (FIRSTS(SM)*)
due 2003, Series B
CUSIP No.
No. $
THE DOE RUN RESOURCES CORPORATION, a New York corporation (the
"Company," which term includes any successor entity), for value received
promises to pay to or registered assigns, the principal
sum of Dollars, on March 15, 2003.
Interest Payment Dates: March 15 and September 15
Record Dates: March 1 and September 1
Reference is made to the further provisions of this Security
contained herein, which will for all purposes have the same effect as if set
forth at this place.
IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officers.
Dated:
THE DOE RUN RESOURCES CORPORATION
By:
-------------------------------
Name:
Title:
By:
-------------------------------
Name:
Title:
- -----------------------------------
* FIRSTS is a service mark of BT Alex. Brown Incorporated.
B-1-1
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Floating Interest Rate Senior Notes (FIRSTS(SM))
due 2003, Series B described in the within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
--------------------------------
Authorized Signatory
B-1-2
<PAGE>
THE DOE RUN RESOURCES CORPORATION
Floating Interest Rate Senior Note (FIRSTS(SM))
due 2003, Series B
1. Interest.
THE DOE RUN RESOURCES CORPORATION, a New York corporation (the
"Company"), promises to pay interest on the principal amount of this Security at
the rate per annum, reset semi-annually, equal to LIBOR (as defined below) plus
6.29%, as determined by the calculation agent (the "Calculation Agent").
Interest on this Security will accrue from the most recent date on which
interest has been paid or, if no interest has been paid, from March 12, 1998.
The Company will pay interest semi-annually on each March 15 and September 15
(each, an "Interest Payment Date"), commencing September 15, 1998, for the
period commencing on and including the immediately preceding Interest Payment
Date and ending on and including the day next preceding the Interest Payment
Date (an "Interest Period"), with the exception that the first Interest Period
shall commence on and include March 12, 1998 and end on and include September
14, 1998, and at stated maturity.
The Company shall pay interest on overdue principal and interest on
overdue installments of interest, to the extent lawful, at a rate equal to
13.25% per annum.
"LIBOR", with respect to an Interest Period, shall be the rate
(expressed as a percentage per annum) for deposits in United States dollars for
a six-month period beginning on the second London Banking Day (as defined) after
the Determination Date (as defined) that appears on Telerate Page 3750 (as
defined) as of 11:00 a.m., London time, on the Determination Date. If Telerate
Page 3750 does not include such a rate or is unavailable on a Determination
Date, LIBOR for the Interest Period shall be the arithmetic mean of the rates
(expressed as a percentage per annum) for deposits in a Representative Amount
(as defined) in U.S. dollars for a six-month period beginning on the second
London Banking Day after the Determination Date that appears on Reuters Screen
LIBO Page (as defined) as of 11:00 a.m., London time, on the Determination Date.
If Reuters Screen LIBO Page does not include two or more rates or is unavailable
on a Determination Date, the Calculation Agent will request the principal London
office of each of four major banks in the London interbank market, as selected
by the Calculation Agent, to provide such bank's offered quotation (expressed as
a percentage per annum), as of approximately 11:00 a.m., London time, on such
Determination Date, to prime banks in the London interbank market for deposits
in a Representative Amount in U.S. dollars for a six-month period beginning on
the second
B-1-3
<PAGE>
London Banking Day after the Determination Date. If at least two such offered
quotations are so provided, LIBOR for the Interest Period will be the arithmetic
mean of such quotations. If fewer than two such quotations are so provided, the
Calculation Agent will request each of three major banks in New York City, as
selected by the Calculation Agent, to provide such bank's rate (expressed as a
percentage per annum), as of approximately 11:00 a.m., New York City time, on
such Determination Date, for loans in a Representative Amount in U.S. dollars to
leading European banks for a six-month period beginning on the second London
Banking Day after the Determination Date. If at least two such rates are so
provided, LIBOR for the Interest Period will be the arithmetic mean of such
rates. If fewer than two such rates are so provided, then LIBOR for the Interest
Period will be LIBOR in effect with respect to the immediately preceding
Interest Period.
"Determination Date," with respect to an Interest Period, will be
the second London Banking Day preceding the first day of the Interest Period.
"London Banking Day" is any day in which dealings in U.S. dollars
are transacted or, with respect to any future date, are expected to be
transacted in the London interbank market.
"Representative Amount" means a principal amount of not less than
U.S. $1,000,000 for a single transaction in the relevant market at the relevant
time.
"Telerate Page 3750" means the display designated as "Page 3750" on
the Dow Jones Telerate Service (or such other page as may replace Page 3750 on
that service).
"Reuters Screen LIBO Page" means the display designated as page
"LIBO" on The Reuters Monitor Money Rates Service (or such other page as may
replace the LIBO page on that service).
The amount of interest for each day that this Security is
outstanding (the "Daily Interest Amount") will be calculated by dividing the
interest rate in effect for such day by 360 and multiplying the result by the
principal amount of this Security. The amount of interest to be paid on this
Security for each Interest Period will be calculated by adding the Daily
Interest Amounts for each day in the Interest Period.
All percentages resulting from any of the above calculations will be
rounded, if necessary, to the nearest one hundred-thousandth of a percentage
point, with five one-millionths of a percentage point rounded upwards (e.g.,
9.876545% (or .09876545) being rounded to 9.87655% (or
B-1-4
<PAGE>
.0987655)) and all dollar amounts used in or resulting from such calculations
will be rounded to the nearest cent (with one-half cent being rounded upwards).
The interest rate on this Security will in no event be higher than
the maximum rate permitted by New York law as the same may be modified by U.S.
law of general application. Under current New York law, the maximum rate of
interest is 25% per annum on a simple interest basis. This limit may not apply
to Securities in which $2,500,000 or more has been invested.
The Calculation Agent will, upon the request of the holder of any
Floating Rate Note, provide the interest rate then in effect with respect to
this Security. All calculations made by the Calculation Agent in the absence of
manifest error shall be conclusive for all purposes and binding on the Company
and the Holders of this Security.
2. Method of Payment.
The Company shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date even if the
Securities are cancelled on registration of transfer or registration of exchange
after such Record Date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company shall pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts ("U.S. Legal Tender"). However, the Company
may pay principal and interest by wire transfer of Federal funds, or interest by
its check payable in such U.S. Legal Tender. The Company may deliver any such
interest payment to the Paying Agent or to a Holder at the Holder's registered
address.
3. Paying Agent and Registrar.
Initially, STATE STREET BANK AND TRUST COMPANY (the "Trustee") will
act as Paying Agent and Registrar. The Company may change any Paying Agent or
Registrar without notice to the Holders.
4. Indenture.
The Company issued the Securities under an Indenture, dated as of
March 12, 1998 (the "Indenture"), by and among the Company, the Guarantors and
the Trustee. This Security is one of a duly authorized issue of Securities of
the Company designated as its Floating Interest Rate Senior Notes (FIRSTS(SM))
due 2003, Series B (the "Series B Floating Rate Notes"), limited (except as
otherwise provided in the Indenture) in aggregate
B-1-5
<PAGE>
principal amount to $55,000,000. The Securities include the Floating Rate Notes
(as defined in the Indenture) and the Fixed Rate Notes (as defined in the
Indenture). The Fixed Rate Notes and the Floating Rate Notes are treated as a
single class of securities under the Indenture unless otherwise specified in the
Indenture. Capitalized terms herein are used as defined in the Indenture unless
otherwise defined herein. The terms of the Securities include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S. Code ss.ss. 77aaa-77bbbb) (the "TIA"), as in
effect on the date of the Indenture until such time as the Indenture is
qualified under the TIA, and thereafter as in effect on the date on which the
Indenture is qualified under the TIA. Notwithstanding anything to the contrary
herein, the Securities are subject to all such terms, and Holders of Securities
are referred to the Indenture and said Act for a statement of them. The
Securities are general obligations of the Company limited in aggregate principal
amount to $355,000,000.
5. Exchange Offer.
The Series B Floating Rate Notes were issued pursuant to an exchange
offer pursuant to which Floating Interest Rate Senior Notes (FIRSTS(SM)) due
2003, Series A, of the Company (the "Series A Notes"), in like principal amount
and having substantially identical terms as the Series B Floating Rate Notes,
were exchanged for the Series B Floating Rate Notes. The Series A Floating Rate
Notes and the Series B Floating Notes are together referred to herein as the
"Securities."
6. Optional Redemption.
The Floating Rate Notes will be subject to redemption, in whole at
any time or in part from time to time, at the option of the Company, at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued interest to the redemption date, if redeemed during the twelve
month period beginning on March 15 of the years indicated below:
Year Percentage
1998............................................ 104.000%
1999............................................ 103.000%
2000............................................ 102.000%
2001............................................ 101.000%
2002 and thereafter............................. 100.000%
7. Notice of Redemption.
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each
B-1-6
<PAGE>
Holder of Securities to be redeemed at such Holder's registered address.
Securities in denominations larger than $1,000 may be redeemed in part.
Except as set forth in the Indenture, from and after any Redemption
Date, if monies for the redemption of the Securities called for redemption shall
have been deposited with the Paying Agent for redemption on such Redemption
Date, then, unless the Company defaults in the payment of such Redemption Price,
the Securities called for redemption will cease to bear interest and the only
right of the Holders of such Securities will be to receive payment of the
Redemption Price.
8. Change of Control Offer.
Upon the occurrence of a Change of Control, upon the satisfaction of
the conditions set forth in the Indenture, the Company shall be required to
offer to purchase all of the then outstanding Securities pursuant to a Change of
Control Offer at a purchase price equal to 101% of the principal amount thereof
plus accrued interest, if any, to the date of purchase. Holders of Securities
which are the subject of such an offer to repurchase shall receive an offer to
repurchase and may elect to have such Securities repurchased in accordance with
the provisions of the Indenture pursuant to and in accordance with the terms of
the Indenture.
9. Limitation on Disposition of Assets.
Under certain circumstances, the Company is required to apply the
net proceeds from Asset Sales to repurchase Securities at a price equal to 100%
of the aggregate principal amount thereof, plus accrued interest to the date of
purchase.
10. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof selected for redemption. No service
charge shall be made for any registration of transfer or exchange or redemption
of Securities, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
B-1-7
<PAGE>
11. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the owner of
it for all purposes.
With respect to Global Securities, the Depository may grant proxies
and otherwise authorize Holders of Book-Entry Securities to give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action which a Holder of a Security is entitled to give or take under the
Indenture.
12. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee and the Paying Agent will pay the money back to the
Company at its request. After that, all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
13. Discharge Prior to Redemption or Maturity.
The Company's obligations pursuant to the Indenture will be
discharged, except for obligations pursuant to certain sections thereof, subject
to the terms of the Indenture, upon the payment of all the Securities or upon
the irrevocable deposit with the Trustee of money or U.S. Government Obligations
sufficient to pay when due principal of, and premium, if any, and interest on
the Securities to maturity or redemption, as the case may be.
14. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Securities may
be amended or supplemented with the written consent of the Holders of at least a
majority in aggregate principal amount of the Securities then outstanding, and
any existing Default or Event of Default or compliance with any provision may be
waived with the consent of the Holders of a majority in aggregate principal
amount of the Securities then outstanding. Without notice to or consent of any
Holder, the parties thereto may amend, waive or supplement the Indenture or the
Securities to, among other things, cure any ambiguity, defect or inconsistency,
provide for uncertificated Securities in addition to or in place of certificated
Securities, comply with Article Five of the Indenture or comply with any
requirements of the SEC in connection with the qualification of the Indenture
under the TIA, or make any other change that does not adversely affect the
rights of any Holder of a Security.
B-1-8
<PAGE>
15. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of the
Company and its Restricted Subsidiaries to, among other things, incur additional
Indebtedness or Liens, make payments in respect of its Capital Stock and merge
or consolidate with any other person and sell, lease, transfer or otherwise
dispose of substantially all of certain of its properties or assets. The
limitations are subject to a number of important qualifications and exceptions.
The Company must annually report to the Trustee on compliance with such
limitations.
16. Successors.
When a successor assumes all the obligations of its predecessor
under the Securities and the Indenture, the predecessor will be released from
those obligations.
17. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable in the manner,
at the time and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture or the Securities except as provided in the
Indenture. The Trustee is not obligated to enforce the Indenture or the
Securities unless it has received indemnity satisfactory to it. The Indenture
permits, subject to certain limitations therein provided, Holders of a majority
in aggregate principal amount of the Securities then outstanding to direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of Securities notice of any continuing Default or Event of Default
(except a Default in payment of principal or interest) if it determines that
withholding notice is in their interest.
18. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company, the Guarantors, their Subsidiaries or their respective
Affiliates as if it were not the Trustee.
19. No Recourse Against Others.
No stockholder, director, officer, employee or incorporator, as
such, of the Company or the Guarantors shall have any liability for any
obligation of the Company or the Guarantors under the Securities or the
Indenture or for any claim
B-1-9
<PAGE>
based on, in respect of or by reason of, such obligations or their creation.
Each Holder of a Security by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Securities.
20. Authentication.
This Security shall not be valid until the Trustee or authenticating
agent manually signs the certificate of authentication on this Security.
21. Governing Law.
The Laws of the State of New York shall govern this Security and the
Indenture.
22. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).
23. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company will cause CUSIP numbers to be
printed on the Securities immediately prior to the qualification of the
Indenture under the TIA as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
24. Guarantees.
This Security will be entitled to the benefits of certain Guarantees
made for the benefit of the Holders. Reference is hereby made to the Indenture
for a statement of the respective rights, limitations of rights, duties and
obligations thereunder of the Guarantors, the Trustee and the Holders.
25. Indenture.
Each Holder, by accepting a Security, agrees to be bound by all of
the terms and provisions of the Indenture, as the same may be amended from time
to time.
B-1-10
<PAGE>
The Company will furnish to any Holder of a Security upon written
request and without charge a copy of the Indenture. Requests may be made to: THE
DOE RUN RESOURCES CORPORATION, 1801 Park 270 Drive, St. Louis, Missouri 63146,
Attn.: Chief Financial Officer.
B-1-11
<PAGE>
[FORM OF ASSIGNMENT]
I or we assign this Security to
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code of assignee)
Please insert Social Security or other
identifying number of assignee
_________________________________________
and irrevocably appoint _______________________ agent to transfer this Security
on the books of the Company. The agent may substitute another to act for him.
Dated: Signed:
-------------------- ----------------------------------------------
________________________________________________________________________________
(Sign exactly as your name appears on
the front of this Security)
Signature Guarantee:
------------------------------------------------------------
B-1-12
<PAGE>
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.15 or Section 4.16 of the Indenture, check the appropriate
box:
Section 4.15 [ ]
Section 4.16 [ ]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.15 or Section 4.16 of the Indenture, state the
amount:
$
Date: Signature:
--------------- -----------------------------------
(Sign exactly as your
name appears on the front
of this Security)
Signature Guarantee:
------------------------------------------------------------
B-1-13
<PAGE>
EXHIBIT C
FORM OF LEGEND FOR BOOK-ENTRY SECURITIES
Any Global Security authenticated and delivered hereunder shall bear
a legend (which would be in addition to any other legends required in the case
of a Restricted Security) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS
SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY
(OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A
NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE
DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE,
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
C-1
<PAGE>
EXHIBIT D
Transferee Letter of Representation
The Doe Run Resources Corporation
1801 Park 270 Drive
St. Louis, Missouri 63146
Attn.: [ ]
Dear Sirs:
In connection with our proposed purchase of $200,000,000 aggregate
principal amount of the 11 1/4% Senior Notes due 2005, Series A and 11 1/4%
Senior Notes due 2005, Series B and $55,000,000 aggregate principal amount of
Floating Interest Rate Senior Notes (FIRSTS(SM)*)due 2003, Series A and Floating
Interest Rate Senior Notes (FIRSTS(SM)*) due 2003, Series B (collectively, the
"Securities") of The Doe Run Resources Corporation, a New York corporation (the
"Company"), we confirm that:
1. We understand that the Securities have not been registered under
the Securities Act of 1933, as amended (the "Securities Act"), and, unless so
registered, may not be sold except as permitted in the following sentence. We
agree on our own behalf and on behalf of any investor account for which we are
purchasing Securities to offer, sell or otherwise transfer such Securities prior
to the date which is three years after the later of the date of original issue
and the last date on which the Company or any affiliate of the Company was the
owner of such Securities (or any predecessor thereto) (the "Resale Restriction
Termination Date") only (a) to the Company, (b) pursuant to a registration
statement which has been declared effective under the Securities Act, (c) so
long as the Securities are eligible for resale pursuant to Rule 144A under the
Securities Act, to a person we reasonably believe is a qualified institutional
buyer under Rule 144A (a "QIB") that purchases for its own account or for the
account of a QIB and to whom notice is given that the transfer is being made in
reliance on Rule 144A, (d) pursuant to offers and sales that occur outside the
United States within the meaning of Regulation S under the Securities Act, (e)
to an institutional "accredited investor" within the meaning of subparagraph
(a)(1), (2), (3) or (7) of Rule 501 under the Securities Act that is purchasing
- -----------------------------------
* FIRSTS is a service mark of BT Alex. Brown Incorporated.
D-1
<PAGE>
for his own account or for the account of such an institutional "accredited
investor," in each case in a minimum principal amount of Securities of $500,000,
(f) in an offshore transaction pursuant to Regulation S of the Securities Act or
(g) pursuant to any other available exemption from the registration requirements
of the Securities Act, subject in each of the foregoing cases to any requirement
of law that the disposition of our property or the property of such investor
account or accounts be at all times within our or their control and to
compliance with any applicable state securities laws. The foregoing restrictions
on resale will not apply subsequent to the Resale Restriction Termination Date.
If any resale or other transfer of the Securities is proposed to be made
pursuant to clause (e) above prior to the Resale Restriction Termination Date,
the transferor shall deliver a letter from the transferee substantially in the
form of this letter to the Trustee, which shall provide, among other things,
that the transferee is an institutional "accredited investor" within the meaning
of subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the Securities Act and
that it is acquiring such Securities for investment purposes and not for
distribution in violation of the Securities Act. Each purchaser acknowledges
that the Company and the Trustee reserve the right prior to any offer, sale or
other transfer prior to the Resale Restriction Termination Date of the
Securities pursuant to clause (c), (d) or (f) above to require the delivery of
an opinion of counsel, certifications and/or other information satisfactory to
the Company and the Trustee.
2. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) purchasing
for our own account or for the account of such an institutional "accredited
investor," and we are acquiring the Securities for investment purposes and not
with a view to, or for offer or sale in connection with, any distribution in
violation of the Securities Act and we have such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of our investment in the Securities, and we and any accounts for which we
are acting are each able to bear the economic risk of our or its investment.
3. We are acquiring at least $500,000 principal amount of the
Securities and we are acquiring the Securities purchased by us for our own
account or for one or more accounts as to each of which we exercise sole
investment discretion.
4. You are entitled to rely upon this letter and you are irrevocably
authorized to produce this letter or a copy
D-2
<PAGE>
hereof to any interested party in any administrative or legal proceeding or
official inquiry with respect to the matters covered hereby.
Very truly yours,
----------------------------------------
(Name of Purchaser)
By:
-----------------------------------
Date:
-----------------------------------
D-3
<PAGE>
Upon transfer the Securities would be registered in the name of the
new beneficial owner as follows:
Name:
-----------------------------------
Address:
-------------------------------
Taxpayer ID Number:
--------------------
D-4
<PAGE>
EXHIBIT E
[FORM OF CERTIFICATION TO BE GIVEN BY HOLDERS OF
BENEFICIAL INTEREST IN A TEMPORARY
REGULATION S GLOBAL SECURITY
TO EUROCLEAR OR CEDEL]
OWNER SECURITIES CERTIFICATION
THE DOE RUN RESOURCES CORPORATION
11 1/4% Senior Notes due 2005]
[Floating Interest Rate Senior Notes (FIRSTS(SM)*)
due 2003]**
CUSIP No.______
Reference is hereby made to the Indenture, dated as of March 12,
1998 (the "Indenture"), by and among The Doe Run Resources Corporation, a New
York corporation, as issuer, the Guarantors named therein, and State Street Bank
and Trust Company, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
This is to certify that, as of the date hereof, $___________ of the
above-captioned Securities (the "Securities") are beneficially owned by non-U.S.
person(s). As used in this paragraph, the term "U.S. person" has the meaning
given to it by Regulation S under the Securities Act of 1933, as amended.
We undertake to advise you promptly by tested telex on or prior to
the date on which you intend to submit your certification relating to the
Securities held by you for our account in accordance with your operating
procedures if any applicable statement herein is not correct on such date, and
in the absence of any such notification it may be assumed that this
certification applies as of such date.
- -----------------------------------
* FIRSTS is a service mark of BT Alex. Brown Incorporated.
** As applicable.
E-1
<PAGE>
We understand that this certificate is required in connection with
certain securities laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate to any interested party in such
E-2
<PAGE>
proceedings. This certificate and the statements contained herein are made for
your benefit and the benefit of the Company and the Initial Purchasers.
Dated: __________, ____
By:
-------------------------------------
As, or as agent for, the beneficial
owner(s) of the Securities to which this
certificate relates.
E-3
<PAGE>
EXHIBIT F
[FORM OF CERTIFICATION TO BE GIVEN
BY THE EUROCLEAR OPERATOR OR
CEDEL BANK, SOCIETE ANONYME]
DEPOSITORY SECURITIES CERTIFICATION
THE DOE RUN RESOURCES CORPORATION
[11 1/4% Senior Notes due 2005]
[Floating Interest Rate Senior Notes (FIRSTS(SM)*)
due 2003]**
CUSIP No. ________
Reference is hereby made to the Indenture, dated as of March 12, 1998 (the
"Indenture"), by and among The Doe Run Resources Corporation., a New York
corporation, as issuer, the Guarantors named therein, and State Street Bank and
Trust Company, as trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
This is to certify that, with respect to U.S.$__________ principal amount of the
above-captioned Securities (the "Securities"), except as set forth below, we
have received in writing, by tested telex or by electronic transmission, from
member organizations appearing in our records as persons being entitled to a
portion of the principal amount of the Securities (our "Member Organizations"),
certifications with respect to such portion, substantially to the effect set
forth in the Indenture.***
We further certify (i) that we are not making available herewith for exchange
(or, if relevant, exercise of any rights or collection of any interest) any
portion of the Temporary Regulation S Global Security (as defined in the
Indenture) excepted in such certifications and (ii) that as of the date hereof
we have not received any notification from any of our Member Or-
- -----------------------------------
* FIRSTS is a service mark of BT Alex. Brown Incorporated.
** As applicable.
*** Unless Morgan Guaranty Trust Company of New York, London Branch is
otherwise informed by the Agent, the long form certificate set out in the
Operating Procedures will be deemed to meet the requirements of this
sentence.
F-1
<PAGE>
ganizations to the effect that the statements made by such Member Organizations
with respect to any portion of the part submitted herewith for exchange (or, if
relevant, exercise of any rights or collection of any interest) are no longer
true and cannot be relied upon as of the date hereof.
F-2
<PAGE>
We understand that this certification is required in connection with certain
securities laws of the United States. In connection therewith, if administrative
or legal proceedings are commenced or threatened in connection with which this
certification is or would be relevant, we irrevocably authorize you to produce
this certification to any interested party in such proceedings. This certificate
and the statements contained herein are made for your benefit and the benefit of
the Company and the Initial Purchasers.
Dated: ___________, ____
Yours faithfully,
MORGAN GUARANTY TRUST COMPANY OF NEW
YORK, as operator of the Euroclear System
or
[CEDEL BANK, SOCIETE ANONYME]
By:
----------------------------------
F-3
<PAGE>
EXHIBIT G
[FORM OF CERTIFICATION TO BE GIVEN BY
TRANSFEREE OF BENEFICIAL INTEREST IN A
TEMPORARY REGULATION S GLOBAL SECURITY]
TRANSFEREE SECURITIES CERTIFICATION
THE DOE RUN RESOURCES CORPORATION.
[11 1/4% Senior Notes due 2005]
[Floating Interest Rate Senior Notes (FIRSTS(SM)*)
due 2003]**
CUSIP No._________
Reference is hereby made to the Indenture, dated as of March 12, 1998 (the
"Indenture"), by and among The Doe Run Resources Corporation., a New York
corporation, as issuer, the Guarantors named therein, and State Street Bank and
Trust Company, as trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
For purposes of acquiring a beneficial interest in the Temporary Regulation S
Global Security, the undersigned certifies that it is not a U.S. Person as
defined by Regulation S under the Securities Act of 1933, as amended.
We undertake to advise you promptly by tested telex on or prior to the date on
which you intend to submit your certification relating to the Securities held by
you in which we intend to acquire a beneficial interest in accordance with your
operating procedures if any applicable statement herein is not correct on such
date, and in the absence of any such notification it may be assumed that this
certification applies as of such date.
We understand that this certificate is required in connection with certain
securities laws of the United States. In connection therewith, if administrative
or legal proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate to any interested party in such proceeding. This certificate
and the statements contained herein are
- -----------------------------------
* FIRSTS is a service mark of BT Alex. Brown Incorporated.
** As applicable.
G-1
<PAGE>
made for your benefit and the benefit of the Company and the Initial Purchasers.
Dated: _____________, ____
By:
----------------------------------------
As, or as agent for, the beneficial
acquiror of the Securities to which this
certificate relates.
G-2
<PAGE>
EXHIBIT H
FORM OF CERTIFICATION FOR TRANSFER OR
EXCHANGE OF RESTRICTED GLOBAL SECURITY
TO TEMPORARY REGULATION S GLOBAL SECURITY
State Street Bank and Trust Company
as Trustee
Goodwin Square
225 Asylum, 23rd Floor
Hartford, CT 06103
Attention: Corporate Trust Administration
Re: The Doe Run Resources Corporation
[11 1/4% Senior Notes due 2005]
[Floating Interest Rate
Senior Notes (FIRSTS(SM)*)
due 2003, ]**(the "Securities")
Reference is hereby made to the Indenture, dated as of March 12,
1998 (the "Indenture"), by and among The Doe Run Resources Corporation, a New
York corporation, as issuer, the Guarantors named therein and State Street Bank
and Trust Company, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
This letter relates to U.S. $_____________ aggregate principal
amount of Securities which are held in the form of the Restricted Global
Security (CUSIP No. ) with the Depository in the name of [insert name of
transferor] (the "Transferor"). The Transferor has requested a transfer of such
beneficial interest in the Securities to a Person who will take delivery thereof
in the form of an equal aggregate principal amount of Securities evidenced by
the Temporary Regulation S Global Security (CUSIP No.______) to be held with the
Depository in the name of [Euroclear] [Cedel Bank, societe anonyme].
In connection with such request and in respect of such Securities,
the Transferor does hereby certify that such transfer has been effected in
accordance with the transfer restrictions set forth in the Securities and
pursuant to and in accordance with Regulation S under the Securities Act of
1933,
- -----------------------------------
* FIRSTS is a service mark of BT Alex. Brown Incorporated.
** As applicable.
H-1
<PAGE>
as amended (the "Securities Act"), and accordingly the Transferor does hereby
certify that:
(1) the offer of the Securities was not made to a person in the
United States;
[(2) at the time the buy order was originated, the transferee was
outside the United States or the Transferor and any person acting on its
behalf reasonably believed that the transferee was outside the United
States;]
[(2) the transaction was executed in, on or through the facilities
of a designated offshore securities market and neither the Transferor nor
any person acting on our behalf knows that the transaction was
pre-arranged with a buyer in the United States;]*
(3) no directed selling efforts have been made in contravention of
the requirements of Rule 903 (b) or 904(b) of Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) upon completion of the transaction, the beneficial interest
being transferred as described above is to be held with the Depository in
the name of [Euroclear] [Cedel Bank, societe anonyme].
We understand that this certificate is required in connection with
certain securities laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate to any interested party in such proceeding. This
certificate and the statements contained herein are made for your benefit and
the benefit of the Company and the Initial Purchasers.
[Insert Name of Transferor]
By:
---------------------------------------
Name:
Title:
- ------------------------------------
* Insert one of these two provisions, which come from the definition of
"offshore transaction" in Regulation S.
H-2
<PAGE>
Dated:
-------------------------------
cc: The Doe Run Resources Corporation
H-3
<PAGE>
EXHIBIT I
FORM OF CERTIFICATION FOR TRANSFER OR EXCHANGE OF
RESTRICTED GLOBAL SECURITY TO
PERMANENT REGULATION S GLOBAL SECURITY
State Street Bank and Trust Company,
as Trustee
Goodwin Square
225 Asylum, 23rd Floor
Hartford, CT 06103
Attention: Corporate Trust Administration
Re: The Doe Run Resources Corporation
[11 1/4% Senior Notes due 2005]
[Floating Interest Rate
Senior Notes (FIRSTS(SM)*)
due 2003]** (the "Securities")
Reference is hereby made to the Indenture, dated as of March 12,
1998 (the "Indenture"), by and among The Doe Run Resources Corporation, a New
York corporation, as issuer, the Guarantors named therein and State Street Bank
and Trust Company, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
This letter relates to U.S.$____________ aggregate principal amount
of Securities which are held in the form of the Restricted Global Security
(CUSIP No._______ ) with the Depository in the name of [insert name of
transferor] (the "Transferor"). The Transferor has requested a transfer of such
beneficial interest in the Securities to a Person who will take delivery thereof
in the form of an equal aggregate principal amount of Securities evidenced by
the Permanent Regulation S Global Security (CUSIP No. ______ ).
In connection with such request, and in respect of such Securities,
the Transferor does hereby certify that such transfer has been effected in
accordance with the transfer restrictions set forth in the Securities and,
- -----------------------------------
* FIRSTS is a service mark of BT Alex. Brown Incorporated.
** As applicable.
I-1
<PAGE>
(1) with respect to transfers made in reliance on Regulation S under
the Securities Act of 1933, as amended (the "Securities Act"), the Transferor
does hereby certify that:
(A) the offer of the Securities was not made to a person in the
United States;
[(B) (at the time the buy order was originated, the transferee was
outside the United States or the Transferor and any person acting on its
behalf reasonably believed that the transferee was outside the United
States;]
[(C) the transaction was executed in, on or through the facilities
of a designated offshore securities market and neither the Transferor nor
any person acting on our behalf knows that the transaction was
pre-arranged with a buyer in the United States;]*
(D) no directed selling efforts have been made in contravention of
the requirements of Rule 903(b) or 904(b) of Regulation S, as applicable;
and
(E) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(2) with respect to transfers made in reliance on Rule 144 under the
Securities Act, the Transferor does hereby certify that the Securities are being
transferred in a transaction permitted by Rule 144 under the Securities Act.
We understand that this certificate is required in connection with
certain securities laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate to any interested party in such proceeding. This
certificate and the statements contained herein are made for your benefit and
the benefit of the Company and the Initial Purchasers.
[Insert Name of Transferor]
- ------------------------------------
* Insert one of these two provisions, which come from the definition of
"offshore transactions" in Regulation S.
I-2
<PAGE>
By:
---------------------------------------
Name:
Title:
Dated:
----------------------------
cc: The Doe Run Resources Corporation.
I-3
<PAGE>
EXHIBIT J
FORM OF CERTIFICATION FOR TRANSFER OR EXCHANGE OF
TEMPORARY REGULATION S GLOBAL SECURITY
OR PERMANENT REGULATION S GLOBAL SECURITY TO
RESTRICTED GLOBAL SECURITY
State Street Bank and Trust Company,
as Trustee
Goodwin Square
225 Asylum, 23rd Floor
Hartford, CT 06103
Attention: Corporate Trust Administration
Re: The Doe Run Resources Corporation
[11 1/4% Senior Notes due 2005]
[Floating Interest Rate
Senior Notes (FIRSTS(SM)*)
due 2003,]** (the "Securities")
Reference is hereby made to the Indenture, dated as of March 12,
1998 (the "Indenture"), by and among The Doe Run Resources Corporation, a New
York corporation, as issuer, the Guarantors named therein and State Street Bank
and Trust Company, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
This letter relates to U.S.$__________ principal amount of
Securities which are evidenced by an aggregate [Temporary Regulation S Global
Security (CUSIP No.__________] [Permanent Regulation S Global Security (CUSIP
No._________ ] and held with the Depository through [Euroclear] [Cedel] (Common
Code __________ ) in the name of [insert name of transferor] (the "Transferor").
The Transferor has requested a transfer of such beneficial interest in
Securities to a person that will take delivery thereof in the form of an equal
principal amount of Securities evidenced by a Restricted Global Security of the
same series and of like tenor as the Securities (CUSIP No. ______________ ).
In connection with such request and in respect of such Securities,
the Transferor does hereby certify that such
- -----------------------------------
* FIRSTS is a service mark of BT Alex. Brown Incorporated.
** As applicable.
J-1
<PAGE>
transfer is being effected pursuant to and in accordance with Rule 144A under
the Securities Act and, accordingly, the Transferor does hereby further certify
that the Securities are being transferred to a person that the Transferor
reasonably believes is purchasing the Securities for its own account, or for one
or more accounts with respect to which such person exercises sole investment
discretion, and such person and each such account is a "qualified institutional
buyer" within the meaning of Rule 144A, in each case in a transaction meeting
the requirements of Rule 144A and in accordance with any applicable securities
laws of any state of the United States.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company and the Initial Purchaser.
[Insert Name of Transferor]
By:
-----------------------------------
Name:
Title:
Dated:
------------------------------
cc: The Doe Run Resources Corporation
J-2
<PAGE>
EXHIBIT K-1
FORM OF CERTIFICATION FOR TRANSFER
OR EXCHANGE OF NON-GLOBAL RESTRICTED SECURITY TO
RESTRICTED GLOBAL SECURITY
State Street Bank and Trust Company
as Trustee
Goodwin Square
225 Asylum, 23rd Floor
Hartford, CT 06103
Attention: Corporate Trust Administration
Re: The Doe Run Resources Corporation
[11 1/4% Senior Notes due 2005]
[Floating Interest Rate
Senior Notes (FIRSTS(SM)*)
due 2003]** (the "Securities")
Reference is hereby made to the Indenture, dated as of March 12,
1998 (the "Indenture"), by and among The Doe Run Resources Corporation, a New
York corporation, as issuer, the Guarantors named therein and State Street Bank
and Trust Company, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
This letter relates to $____________ principal amount of Restricted
Securities held in definitive form (CUSIP No.___________) by [insert name of
transferor] (the "Transferor"). The Transferor has requested an exchange or
transfer of such Securities.
In connection with such request and in respect of such Securities,
the Transferor does hereby certify that (i) such Securities are owned by the
Transferor and are being exchanged without transfer or (ii) such transfer has
been effected pursuant to and in accordance with Rule 144A or Rule 144 under the
United States Securities Act of 1933, as amended (the "Securities Act") and
accordingly the Transferor does hereby further certify that:
- -----------------------------------
* FIRSTS is a service mark of BT Alex. Brown Incorporated.
** As applicable.
K-1-1
<PAGE>
(1) if the transfer has been effected pursuant to Rule 144A:
(A) the Securities are being transferred to a person that the
Transferor reasonably believes is purchasing the Securities for its
own account, or for one or more accounts with respect to which such
Person exercises sole investment discretion;
(B) such Person and each such account is a "qualified
institutional buyer" within the meaning of Rule 144A; and
(C) the Securities have been transferred in a transaction
meeting the requirements of Rule 144A and in accordance with any
applicable securities laws of any state of the United States; or
(2) if the transfer has been effected pursuant to Rule 144:
(A) more than two years has elapsed since the date of the
closing of the initial placement of the Securities pursuant to the
Purchase Agreement; and
i (B) the Securities have been transferred in a transaction
permitted by Rule 144 and made in accordance with any applicable
securities laws of any state of the United States.
We understand that this certificate is required in connection with
certain securities laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate to any interested party in such proceeding. This
certificate and the statements contained herein are made for your benefit and
the benefit of the Company and the Initial Purchasers.
Dated: _____________, ____
[Insert Name of Transferor]
By:
--------------------------------------
Name:
Title:
cc: The Doe Run Resources Corporation.
K-1-2
<PAGE>
EXHIBIT K-2
FORM OF CERTIFICATION FOR TRANSFER
OR EXCHANGE OF NON-GLOBAL RESTRICTED SECURITY TO
PERMANENT REGULATION S GLOBAL SECURITY
OR TEMPORARY REGULATION S GLOBAL SECURITY
State Street Bank and Trust Company,
as Trustee
Goodwin Square
225 Asylum, 23rd Floor
Hartford, CT 06103
Attention: Corporate Trust Administration
Re: The Doe Run Resources Corporation
[11 1/4% Senior Notes due 2005]
[Floating Interest Rate Senior
Notes (FIRSTS(SM)*)
due 2003,]** (the "Securities")
Reference is hereby made to the Indenture, dated as of March 12,
1998 (the "Indenture"), by and among The Doe Run Resources Corporation, a New
York corporation, as issuer, the Guarantors named therein and State Street Bank
and Trust Company, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
This letter relates to $_________ principal amount of Restricted
Securities held in definitive form (CUSIP No._______ ) by [insert name of
transferor] (the "Transferor"). The Transferor has requested an exchange or
transfer of such Securities.
In connection with such request and in respect of such Securities,
the Transferor does hereby certify that (i) such Securities are owned by the
Transferor and are being exchanged without transfer or (ii) such transfer has
been effected pursuant to and in accordance with (a) Rule 903 or Rule 904 under
the Securities Act of 1933, as amended (the "Act"), or (b) Rule 144 under the
Act, and accordingly the Transferor does hereby further certify that:
- -----------------------------------
* FIRSTS is a service mark of BT Alex. Brown Incorporated.
** As applicable.
K-2-1
<PAGE>
(1) if the transfer has been effected pursuant to Rule 903 or Rule
904:
(A) the offer of the Securities was not made to a person in the
United States;
(B) either;
(i) at the time the buy order was originated, the transferee
was outside the United States or the Transferor and any person
acting on its behalf reasonably believed that the transferee was
outside the United States, or
(ii) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither
the Transferor nor any person acting on its behalf knows that the
transaction was pre-arranged with a buyer in the United States;
(C) no directed selling efforts have been made in contravention of
the requirements of Rule 903(b) or 904(b) of Regulation S, as applicable;
(D) the transaction is not part of a plan or scheme to evade the
registration requirements of the Act; and
(E) if such transfer is to occur during the Restricted Period, upon
completion of the transaction, the beneficial interest being transferred
as described above was held with the Depository through [Euroclear]
[CEDEL]; or
(2) if the transfer has been effected pursuant to Rule 144:
(A) more than two years has elapsed since the date of the closing of
the initial placement of the Securities pursuant to the Purchase
Agreement; and
(B) the Securities have been transferred in a transaction permitted
by Rule 144 and made in accordance with any applicable securities laws of
any state of the United States.
We understand that this certificate is required in connection with
certain securities laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate to any interested party in such
K-2-2
<PAGE>
proceeding. This certificate and the statements contained herein are made for
your benefit and the benefit of the Company and the Initial Purchasers.
Dated: ____________, ____
[Insert Name of Transferor]
By:
--------------------------------------
Name:
Title:
cc: The Doe Run Resources Corporation
K-2-3
<PAGE>
EXHIBIT L-1
FORM OF CERTIFICATION FOR TRANSFER
OR EXCHANGE OF NON-GLOBAL PERMANENT REGULATION S
SECURITY TO RESTRICTED GLOBAL SECURITY
State Street Bank and Trust Company,
as Trustee
Goodwin Square
225 Asylum, 23rd Floor
Hartford, CT 06103
Attention: Corporate Trust Administration
Re: The Doe Run Resources Corporation
[11 1/4% Senior Notes due 2005]
[Floating Interest Rate
Senior Notes (FIRSTS(SM)*)
due 2003]** (the "Securities")
Reference is hereby made to the Indenture, dated as of March 12,
1998 (the "Indenture"), by and among The Doe Run Resources Corporation, a New
York corporation, as issuer, and State Street Bank and Trust Company, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
This letter relates to $ _______ principal amount of Restricted
Securities held in definitive form (CUSIP No._____ ) by [insert name of
transferor] (the "Transferor"). The Transferor has requested an exchange or
transfer of such Securities.
In connection with such request and in respect of such Securities,
the Transferor does hereby certify that (i) such Securities are owned by the
Transferor and are being exchanged without transfer or (ii) such transfer has
been effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended, and accordingly the Transferor does
hereby further certify that the Securities are being transferred to a person
that the Transferor reasonably believes is purchasing the Securities for its own
- -----------------------------------
* FIRSTS is a service mark of BT Alex. Brown Incorporated.
** As applicable.
L-1-1
<PAGE>
account, or for one or more accounts with respect to which such Person exercises
sole investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A, in each case in
a transaction meeting the requirements of Rule 144A and in accordance with any
applicable securities laws of any state of the United States.
We understand that this certificate is required in connection with
certain securities laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate to any interested party in such proceeding. This
certificate and the statements contained herein are made for your benefit and
the benefit of the Company and the Initial Purchasers.
Dated: _______________, ____
[Insert Name of Transferor]
By:
---------------------------------------
Name:
Title:
cc: The Doe Run Resources Corporation
L-1-2
<PAGE>
EXHIBIT L-2
FORM OF CERTIFICATION FOR TRANSFER
OR EXCHANGE OF NON-GLOBAL PERMANENT REGULATION S
SECURITY TO PERMANENT REGULATION S GLOBAL SECURITY
State Street Bank and Trust Company,
as Trustee
Goodwin Square
225 Asylum, 23rd Floor
Hartford, CT 06103
Attention: Corporate Trust Administration
Re: The Doe Run Resources Corporation
[11 1/4% Senior Notes due 2005]
[Floating Interest Rate
Senior Notes (FIRSTS(SM)*)
due 2003]** (the "Securities")
Reference is hereby made to the Indenture, dated as of March 12,
1998 (the "Indenture"), by and among The Doe Run Resources Corporation, a New
York corporation, as issuer, the Guarantors named therein and State Street Bank
and Trust Company, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
This letter relates to $______________ principal amount of
Restricted Securities held in definitive form (CUSIP No. ) by __________ [insert
name of transferor] (the "Transferor"). The Transferor has requested an exchange
or transfer of such Securities.
In connection with such request and in respect of such Securities,
the Transferor does hereby certify that (i) such Securities are owned by the
Transferor and are being exchanged without transfer or (ii) such transfer has
been effected pursuant to and in accordance with (a) Rule 903 or Rule
- -----------------------------------
* FIRSTS is a service mark of BT Alex. Brown Incorporated.
** As applicable.
L-2-1
<PAGE>
904 under the Securities Act of 1933, as amended (the "Act"), or (b) Rule 144
under the Act, and accordingly the Transferor does hereby further certify that:
(1) if the transfer has been effected pursuant to Rule 903 or Rule
904:
(A) the offer of the Securities was not made to a person in
the United States;
(B) either;
(i) at the time the buy order was originated, the
transferee was outside the United States or the Transferor and
any person acting on its behalf reasonably believed that the
transferee was outside the United States, or
(ii) the transaction was executed in, on or through the
facilities of a designated offshore securities market and
neither the Transferor nor any person acting on its behalf
knows that the transaction was pre-arranged with a buyer in
the United States;
(C) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or 904 (b) of
Regulation S, as applicable;
(D) the transaction is not part of a plan or scheme to evade
the registration requirements of the Act; and
(E) if such transfer is to occur during the Restricted Period,
upon completion of the transaction, the beneficial interest being
transferred as described above was held with the Depository through
[Euroclear] [CEDEL]; or
(2) if the transfer has been effected pursuant to Rule 144:
(A) more than two years has elapsed since the date of the
closing of the initial placement of the Securities pursuant to the
Purchase Agreement; and
(B) the Securities have been transferred in a transaction
permitted by Rule 144 and made in accordance with any applicable
securities laws of any state of the United States.
L-2-2
<PAGE>
We understand that this certificate is required in connection with
certain securities laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate to any interested party in such proceeding. This
certificate and the statements contained
L-2-3
<PAGE>
herein are made for your benefit and the benefit of the Company and the Initial
Purchasers.
Dated: ______________, ____
[Insert Name of Transferor]
By:
---------------------------------------
Name:
Title:
cc: The Doe Run Resources Corporation
L-2-4
<PAGE>
EXHIBIT M
GUARANTEE
For value received, the undersigned hereby unconditionally
guarantees, as principal obligor and not only as a surety, to the Holder of this
Security the cash payments in United States dollars of principal of, premium, if
any, and interest on this Security in the amounts and at the times when due and
interest on the overdue principal, premium, if any, and interest, if any, of
this Security, if lawful, and the payment or performance of all other
obligations of the Company under the Indenture (as defined below) or the
Securities, to the Holder of this Security and the Trustee, all in accordance
with and subject to the terms and limitations of this Security, Article Eleven
of the Indenture and this Guarantee. This Guarantee will become effective in
accordance with Article Eleven of the Indenture and its terms shall be evidenced
therein. The validity and enforceability of any Guarantee shall not be affected
by the fact that it is not affixed to any particular Security. Capitalized terms
used but not defined herein shall have the meanings ascribed to them in the
Indenture dated as of March 12, 1998, by and among The Doe Run Resources
Corporation, a New York corporation, as issuer, the Guarantors named therein and
State Street Bank and Trust Company, as trustee, as amended or supplemented (the
"Indenture").
The obligations of the undersigned to the Holders of Securities and
to the Trustee pursuant to this Guarantee and the Indenture are expressly set
forth in Article Eleven of the Indenture and reference is hereby made to the
Indenture for the precise terms of the Guarantee and all of the other provisions
of the Indenture to which this Guarantee relates.
THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF
CONFLICTS OF LAW. Each Guarantor hereby agrees to submit to the jurisdiction of
any federal or state court in the Borough of Manhattan of the City of New York
for purposes of any legal suit, action or proceeding against it arising out of
or related to this Indenture, the Securities and the Guarantees (a "Related
Proceeding"). The Company hereby consents to the jurisdiction of each such court
for the purposes of any Related Proceeding, and irrevocably waives, to the
fullest extent it may effectively do so, any objection to the laying of venue of
any Related Proceeding in any such court and the defense of an inconvenient
forum to the maintenance of any Related Proceedings in any such court.
This Guarantee is subject to release upon the terms set forth in the
Indenture.
M-1
<PAGE>
IN WITNESS WHEREOF, each Guarantor has caused its Guarantee to be
duly executed.
Date:____________________
FABRICATED PRODUCTS, INC.,
as Guarantor
By:
---------------------------------------
Name:
Title:
DOE RUN CAYMAN LTD.,
as Guarantor
By:
---------------------------------------
Name:
Title:
DOE RUN MINING S.R. LTDA.,
as Guarantor
By:
---------------------------------------
Name:
Title:
DOE RUN PERU S.R. LTDA.,
as Guarantor
By:
---------------------------------------
Name:
Title:
M-2
<PAGE>
DOE RUN PERU MINING S. R. Ltda.
[STAMP]
NOTARIA
SAN ISIDRO
27 de Nov. 250
ANIBAL CORVETTO R.
[STAMP]
- -----------------------------
ANIBAL CORVETTO ROMERO
NOTARIO DE LIMA
Plaza 27 de Noviembre No. 250
(Av. Central) San Isidrio
Telf. 4429368 - 4229584
fax: 421-8778
- -----------------------------
En Lima a los siete dias del mes de Octubre de mil novecientos noventisiete yo,
ANIBAL CORVETTO ROMERO ABOGADO NOTARIO DE LIMA, en aplicacion de los articulos
113 al 116 del DL No. 26002, legalizo la aperture del presente Libro denominado:
ACTAS corespondiente a DOE RUN PERU MINING S.R.LTDA el mismo que [ILLEGIBLE] de
100 folios simples y que queda registrado bajo el N3902-97 en mi Registro
Cronologico de Legalizacion de Apertura de Libros y Hojas Sueltas lo que doy
fe.
[STAMP]
/s/ [ILLEGIBLE]
[STAMP] ----------------------
ANIBAL CORVETTO ROMERO
----------------------
ANIBAL CORVETTO ROMERO Certifica que por error involuntario se indico en la
certificacion que antelede que la denominacion social de la persona juridica
a quien pertenece el presente libro era la de "DOE RUN MINING S.R.LTDA"
Cuando en Realidad es ta de "DOE RUN MINING S.R.LTDA" Segun escritura del 24
de setiembre de 1997. Por ante mi mismo, quedando registrada esta
ratificacion bajo el No.3916-97 en mi Registro Cronologico de Legalizacion de
Apertura de Libros y Hojas Sueltas, de todo lo que doy fe. Lima 09 de octubre
de 1997.
[STAMP]
/s/ [ILLEGIBLE]
[STAMP] ----------------------
ANIBAL CORVETTO ROMERO
----------------------
<PAGE>
Exhibit 4.2
$255,000,000
The Doe Run Resources Corporation
$200,000,000 11 1/4% Senior Notes due 2005
$55,000,000 Floating Interest Rate Senior Notes due 2003
PURCHASE AGREEMENT
March 6, 1998
BT ALEX. BROWN INCORPORATED
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
UBS SECURITIES LLC
c/o BT ALEX. BROWN INCORPORATED
Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Ladies and Gentlemen:
The Doe Run Resources Corporation, a New York corporation (the
"Company"), hereby confirms its agreement with BT Alex. Brown Incorporated
("BTAB"), Donaldson, Lufkin & Jenrette Securities Corporation and UBS Securities
LLC (the "Initial Purchasers"), as set forth below.
1. The Securities. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the Initial Purchasers
$200,000,000 aggregate principal amount of its 11 1/4% Senior Notes due 2005,
Series A (the "Fixed Rate Notes") and $55,000,000 aggregate principal of its
Floating Interest Rate Senior Notes due 2003 (the "Floating Rate Notes" and
together with the Fixed Rate Notes, the "Notes"). The Notes will be guaranteed
(collectively, the "Guarantees" and, together with the Notes, the "Securities")
by Fabricated Products, Inc., a Delaware corporation ("Fabricated Products"),
Doe Run Cayman Ltd., a Cayman Islands company ("Doe Run Cayman"), Doe Run Mining
S.R. Ltda., a Peruvian company ("Doe Run Mining") and Doe Run Peru S.R. Ltda., a
Peruvian company ("Doe Run Peru") (collectively, the "Guarantors" and, together
with the Company, the "Issuers"). The Notes are to be issued under an indenture
(the "Indenture") to be dated as of
<PAGE>
-2-
March 12, 1998 by and among the Company, the Guarantors, and State Street Bank
and Trust Company as Trustee (the "Trustee").
The Notes will be offered and sold to the Initial Purchasers without
being registered under the Securities Act of 1933, as amended (the "Act"), in
reliance on exemptions therefrom.
In connection with the sale of the Notes, the Issuers have prepared
a preliminary offering memorandum dated February 13, 1998 (the "Preliminary
Memorandum"), and a final offering memorandum dated March 6, 1998 (the "Final
Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein
being referred to as a "Memorandum") setting forth or including a description of
the terms of the Securities, the terms of the offering of the Securities, a
description of the Company and the Guarantors and any material developments
relating to the Company and the Guarantors occurring after the date of the most
recent historical financial statements included therein.
The Initial Purchasers and their direct and indirect transferees of
the Notes will be entitled to the benefits of the Registration Rights Agreement
to be dated as of the Closing Date, (the "Registration Rights Agreement"),
pursuant to which the Issuers have agreed, among other things, to file a
registration statement (the "Registration Statement") with the Securities and
Exchange Commission (the "Commission") registering the Notes or the Exchange
Notes (as defined in the Registration Rights Agreement) under the Act.
2. Representations and Warranties. Each of the Issuers represent and
warrant to and agree with each of the Initial Purchasers that:
(a) Neither the Preliminary Memorandum as of the date thereof nor
the Final Memorandum nor any amendment or supplement thereto as of the date
thereof and at all times subsequent thereto up to the Closing Date (as defined
in Section 3 below) contained or contains any untrue statement of a material
fact or omitted or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties set forth
in this Section 2(a) do not apply to statements or omissions made in reliance
upon and in conformity with information relating to any of the Initial
Purchasers furnished to the Company in writing by the Initial Purchasers
expressly for use in the Preliminary Memoran-
<PAGE>
-3-
dum, the Final Memorandum or any amendment or supplement thereto.
(b) As of the Closing Date, the Company will have the authorized,
issued and outstanding capitalization set forth in the Final Memorandum; all of
the subsidiaries of the Company are listed in Schedule 2 attached hereto (each,
a "Subsidiary" and collectively, the "Subsidiaries"); all of the outstanding
shares of capital stock or equity interests, as the case may be, of the Company
and the Subsidiaries have been, and as of the Closing Date will be, duly
authorized and validly issued, are fully paid and nonassessable and were not
issued in violation of any preemptive or similar rights; all of the outstanding
shares of capital stock or equity interests, as the case may be, of the Company
and of each of the Subsidiaries will be free and clear of all liens,
encumbrances, equities and claims or restrictions on transferability (other than
those imposed by the Act and the securities or "Blue Sky" laws of certain
jurisdictions) or voting; except as set forth in the Final Memorandum, there are
no (i) options, warrants or other rights to purchase, (ii) agreements or other
obligations to issue or (iii) other rights to convert any obligation into, or
exchange any securities for, shares of capital stock of or ownership interests
in the Company or any of the Subsidiaries outstanding. Except for the
Subsidiaries or as disclosed in the Final Memorandum, the Company and the
Subsidiaries do not own, directly or indirectly, any shares of capital stock or
any other equity or long-term debt securities or have any equity interest in any
firm, partnership, joint venture or other entity.
(c) Each of the Company and the Subsidiaries is duly organized,
validly existing and in good standing under the laws of its respective
jurisdiction of organization and has all requisite power and authority to own
its properties and conduct its business as now conducted and as described in the
Final Memorandum; each of the Company and the Subsidiaries is duly qualified to
do business as a foreign entity in good standing in all other jurisdictions
where the ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so qualified would
not, individually or in the aggregate, have a material adverse effect on the
general affairs, management, business, condition (financial or otherwise),
prospects or results of operations of the Company and the Subsidiaries, taken as
a whole (any such event, a "Material Adverse Effect").
(d) The Company has all requisite corporate power and authority to
execute, deliver and perform each of its obli-
<PAGE>
-4-
gations under the Notes, the Exchange Notes and the Private Exchange Notes (as
defined in the Registration Rights Agreement). The Notes, when issued, will be
in the form contemplated by the Indenture. The Notes, the Exchange Notes and the
Private Exchange Notes have each been duly and validly authorized by the Company
and, when executed by the Company and authenticated by the Trustee in accordance
with the provisions of the Indenture and, in the case of the Notes, when
delivered to and paid for by the Initial Purchasers in accordance with the terms
of this Agreement, will constitute valid and legally binding obligations of the
Company, entitled to the benefits of the Indenture, and enforceable against the
Company in accordance with their terms, except that the enforcement thereof may
be subject to (i) bankruptcy, insolvency, restructuring, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally, (ii) general principles of equity and the
discretion of the court before which any proceeding therefor may be brought and
(iii) any limitation on a waiver of rights under any usury laws.
(e) Each of the Issuers has all requisite corporate power and
authority to execute, deliver and perform its obligations under the Indenture.
The Indenture meets the requirements for qualification under the Trust Indenture
Act of 1939, as amended (the "TIA"). The Indenture has been duly and validly
authorized by each of the Issuers and, when executed and delivered by each of
the Issuers (assuming the due authorization, execution and delivery by the
Trustee), will constitute a valid and legally binding agreement of each of the
Issuers, enforceable against each of the Issuers in accordance with its terms,
except that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, restructuring, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights generally, (ii) general
principles of equity and the discretion of the court before which any proceeding
therefor may be brought and (iii) any limitation on a waiver of rights under any
usury laws.
(f) Each of the Issuers has all requisite corporate power and
authority to execute, deliver and perform its obligations under the Registration
Rights Agreement. The Registration Rights Agreement has been duly and validly
authorized by each of the Issuers and, when executed and delivered by each of
the Issuers, will constitute a valid and legally binding agreement of each of
the Issuers enforceable against each of the Issuers in accordance with its
terms, except that (A) the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereaf-
<PAGE>
-5-
ter in effect relating to creditors' rights generally, and (ii) general
principles of equity and the discretion of the court before which any proceeding
therefor may be brought and (B) any rights to indemnity or contribution
thereunder may be limited by federal, state or foreign securities laws and
public policy considerations.
(g) Each of the Guarantors has all requisite corporate power and
authority to execute, deliver and perform its obligations under the Guarantees.
The Guarantees have been duly and validly authorized for issuance to the Initial
Purchasers by the Guarantors and, when the Notes are duly and validly
authorized, executed, issued and authenticated in accordance with the terms of
the Indenture and delivered against payment therefor in accordance with the
terms hereof, will be the legally valid and binding obligations of each of the
Guarantors, enforceable against each of the Guarantors in accordance with their
terms and entitled to the benefits of the Indenture, except that the enforcement
thereof may be subject to (i) bankruptcy, insolvency, restructuring,
reorganization, moratorium or other similar laws now or hereinafter in effect
relating to creditors' rights generally, (ii) general principles of equity
regardless of the discretion of the court before which any proceeding therefor
may be brought and (iii) any limitation on a waiver of rights under any usury
laws.
(h) Each of the Issuers has all requisite corporate power and
authority to execute, deliver and perform its obligations under this Agreement.
This Agreement has been duly and validly authorized by each of the Issuers, and
when executed and delivered by each of the Issuers, will constitute a valid and
legally binding agreement of each of the Issuers enforceable against each of the
Issuers in accordance with its terms, except that (A) the enforcement thereof
may be subject to (i) bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereinafter in effect relating to creditors' rights
generally, and (ii) general principles of equity and the discretion of the court
before which any proceeding therefor may be brought and (B) any rights to
indemnity or contribution thereunder may be limited by federal, state or foreign
securities laws and public policy considerations.
(i) Each of the Company and Doe Run Mining has all requisite
corporate power and authority to execute, deliver and perform its obligations
under the Contract for a Loan in Foreign Currency to be dated as of March 12,
1998 entered into by and between Banco de Credito Overseas Limited, a
corporation established and existing pursuant to the laws of the Common-
<PAGE>
-6-
wealth of the Bahamas (the "Bank"), and Doe Run Mining (the "Peruvian Loan
Agreement") and the Special Term Deposit Contract to be dated as of March 12,
1998 entered into by and between the Bank and the Company (the "Deposit
Agreement" and, together with the Peruvian Loan Agreement, the "Loan
Agreement"). The Loan Agreement has been duly and validly authorized by each of
the Company and Doe Run Mining and, when executed and delivered by each of the
Company and Doe Run Mining, will constitute a valid and legally binding
agreement of each of the Company and Doe Run Mining enforceable against each of
the Company and Doe Run Mining in accordance with its terms, except that the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally, (ii) general principles of equity and
the discretion of the court before which any proceeding therefor may be brought
and (iii) any limitation on a waiver of rights under any usury laws.
(j) No consent, approval, license, validation of, filing, recording
or registration with, or exemption by, authorization or order of any court or of
any foreign or domestic governmental agency or body, or third party is required
for the issuance and sale by the Issuers of the Securities to the Initial
Purchasers or the consummation by each of the Issuers of the other transactions
contemplated hereby, except such as have been obtained and such as may be
required under state securities or "Blue Sky" laws in connection with the
purchase and resale of the Notes by the Initial Purchasers. None of the Company
or the Subsidiaries is (i) in violation of any provision of the charter,
"Estatuto" or bylaws (or similar organizational documents), (ii) in breach or
violation of any statute, judgment, decree, order, rule or regulation applicable
to any of them or any of their respective properties or assets, except for any
such breach or violation which would not, individually or in the aggregate, have
a Material Adverse Effect, or (iii) in breach of or default under (nor has any
event occurred which, with notice or passage of time or both, would constitute a
default under) or in violation of any of the terms or provisions of any
indenture, mortgage, deed of trust, loan agreement, note, lease, license,
franchise agreement, permit, certificate, contract or other agreement or
instrument to which any of them is a party or to which any of them or their
respective properties or assets is subject (collectively, "Contracts"), except
for any such breach, default, violation or event which would not, individually
or in the aggregate, have a Material Adverse Effect.
<PAGE>
-7-
(k) The execution, delivery and performance by each of the Issuers
of this Agreement, the Loan Agreement, the Indenture, the Registration Rights
Agreement and the Guarantees and the consummation by each of the Issuers of the
transactions contemplated hereby and thereby (including, without limitation, the
issuance and sale of the Securities to the Initial Purchasers) will not conflict
with or constitute or result in a breach of or a default under (or an event
which with notice or passage of time or both would constitute a default under)
or violation of any of (i) the terms or provisions of any Contract, except for
any such conflict, breach, violation, default or event which would not,
individually or in the aggregate, have a Material Adverse Effect, (ii) the
provisions of the charter, "Estatuto" or bylaws (or similar organizational
documents) of the Company or any of the Subsidiaries, or (iii) (assuming
compliance with all applicable state securities or "Blue Sky" laws and assuming
the accuracy of the representations and warranties of the Initial Purchasers in
Section 8 hereof) any statute, judgment, decree, order, rule or regulation
applicable to the Company or any of the Subsidiaries or any of their respective
properties or assets, except for any such conflict, breach or violation which
would not, individually or in the aggregate, have a Material Adverse Effect.
(l) The audited consolidated financial statements of the Company and
the Subsidiaries included in the Final Memorandum present fairly in all material
respects the financial position, results of operations and cash flows of the
Company and the Subsidiaries at the dates and for the periods to which they
relate and have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis, except as otherwise stated therein.
The summary and selected financial and statistical data in the Final Memorandum
present fairly in all material respects the information shown therein and have
been prepared and compiled on a basis consistent with the audited financial
statements included therein, except as otherwise stated therein. KPMG Peat
Marwick LLP and Medina, Zaldivar y Asociados S. Civ. R.L., a member firm of
Andersen Worldwide SC, (the "Independent Accountants") are independent public
accounting firms within the meaning of the Act and the rules and regulations
promulgated thereunder.
(m) The pro forma financial statements (including the notes thereto)
and the other pro forma financial information included in the Final Memorandum
(i) comply as to form in all material respects with the applicable requirements
of Regulation S-X promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), (ii) have been prepared
<PAGE>
-8-
in accordance with the Commission's rules and guidelines with respect to pro
forma financial statements, and (iii) have been properly computed on the bases
described therein; the assumptions used in the preparation of the pro forma
financial data and other pro forma financial information included in the Final
Memorandum are reasonable and the adjustments used therein are appropriate to
give effect to the transactions or circumstances referred to therein.
(n) Except as described in the Final Memorandum, there is not
pending or, to the knowledge of the Issuers, threatened any action, suit,
proceeding, inquiry or investigation to which the Company or any of the
Subsidiaries is a party, or to which the property or assets of the Company or
any of the Subsidiaries are subject, before or brought by any court, arbitrator
or governmental agency or body which, if determined adversely to the Company or
any of the Subsidiaries, would, individually or in the aggregate, have a
Material Adverse Effect or which seeks to restrain, enjoin, prevent the
consummation of or otherwise challenge the issuance or sale of the Notes to be
sold hereunder or the consummation of the other transactions described in the
Final Memorandum.
(o) Each of the Company and the Subsidiaries possesses all licenses,
permits, certificates, consents, orders, approvals and other authorizations
from, and has made all declarations and filings with, all federal, state, local
and other foreign and domestic governmental authorities, all self-regulatory
organizations and all courts and other tribunals, presently required or
necessary to own or lease, as the case may be, and to operate its respective
properties and to carry on its respective businesses as now or proposed to be
conducted as set forth in the Final Memorandum ("Permits"), except where the
failure to obtain such Permits would not, individually or in the aggregate, have
a Material Adverse Effect; each of the Company and the Subsidiaries has
fulfilled and performed all of its obligations with respect to such Permits, and
no event has occurred which allows, or after notice or lapse of time would
allow, revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such Permit; and none of the
Company or the Subsidiaries has received any notice of any proceeding relating
to revocation or modification of any such Permit, except as described in the
Final Memorandum or except where such revocation or modification would not,
individually or in the aggregate, have a Material Adverse Effect.
<PAGE>
-9-
(p) Since the date of the most recent financial statements appearing
in the Final Memorandum, except as described therein, (i) none of the Company or
the Subsidiaries has incurred any liabilities or obligations, direct or
contingent, or entered into or agreed to enter into any transactions or
contracts (written or oral) not in the ordinary course of business which
liabilities, obligations, transactions or contracts would, individually or in
the aggregate, be material to the general affairs, management, business,
condition (financial or otherwise), prospects or results of operations of the
Company and its Subsidiaries, taken as a whole, (ii) none of the Company or the
Subsidiaries has purchased any of its outstanding equity interests, nor
declared, paid or otherwise made any dividend or distribution of any kind on its
equity interests (other than with respect to any of such Subsidiaries, the
purchase of, or dividend or distribution on, equity interests owned by the
Company) and (iii) there shall not have been any material change in the equity
interests or long-term indebtedness of the Company or the Subsidiaries.
(q) Each of the Company and the Subsidiaries has filed all necessary
federal, state and foreign income and franchise tax returns, except where the
failure to so file such returns would not, individually or in the aggregate,
have a Material Adverse Effect, and has paid all taxes shown as due thereon; and
other than tax deficiencies which the Company or any Subsidiary is contesting in
good faith and for which the Company or such Subsidiary has provided adequate
reserves, there is no tax deficiency that has been asserted against the Company
or any of the Subsidiaries that would have, individually or in the aggregate, a
Material Adverse Effect.
(r) The statistical and market-related data included in the Final
Memorandum are based on or derived from sources which the Issuers believe to be
reliable and accurate.
(s) None of the Issuers or any agent acting on their behalf has
taken or will take any action that might cause this Agreement or the sale of the
Notes to violate Regulation G, T, U or X of the Board of Governors of the
Federal Reserve System, in each case as in effect, or as the same may hereafter
be in effect, on the Closing Date.
(t) Each of the Company and the Subsidiaries has good and marketable
title to all real property and good title to all personal property described in
the Final Memorandum as being owned by it and good and marketable title to a
leasehold estate in the real and personal property described in the Final
Memorandum as being leased by it free and clear of all liens, charges,
encumbrances or restrictions, except as described in the Final
<PAGE>
-10-
Memorandum or to the extent the failure to have such title or the existence of
such liens, charges, encumbrances or restrictions would not, individually or in
the aggregate, have a Material Adverse Effect. All leases, contracts and
agreements to which the Company or any of the Subsidiaries is a party or by
which any of them is bound are valid and enforceable against the Company or such
Subsidiary, and are valid and enforceable against the other party or parties
thereto and are in full force and effect with only such exceptions as would not,
individually or in the aggregate, have a Material Adverse Effect. The Company
and the Subsidiaries own or possess adequate licenses or other rights to use all
patents, trademarks, service marks, trade names, copyrights and know-how
necessary to conduct the businesses now or proposed to be operated by them as
described in the Final Memorandum, and none of the Company or the Subsidiaries
has received any notice of infringement of or conflict with (or knows of any
such infringement of or conflict with) asserted rights of others with respect to
any patents, trademarks, service marks, trade names, copyrights or know-how
which, if such assertion of infringement or conflict were sustained, would have
a Material Adverse Effect.
(u) There are no legal or foreign or domestic governmental
proceedings involving or affecting the Company or any Subsidiary or any of their
respective properties or assets which would be required to be described in a
prospectus pursuant to the Act that are not described in the Final Memorandum,
nor are there any material contracts or other documents which would be required
to be described in a prospectus pursuant to the Act that are not described in
the Final Memorandum.
(v) Except as would not, individually or in the aggregate, have a
Material Adverse Effect, or as described in the Final Memorandum (A) each of the
Company and the Subsidiaries is in compliance with and not subject to liability
under applicable Environmental Laws (as defined below), (B) each of the Company
and the Subsidiaries has made all filings and provided all notices required
under any applicable Environmental Law, and has and is in compliance with all
Permits required under any applicable Environmental Laws, and each of them is in
full force and effect, (C) there is no civil, criminal or administrative action,
suit, demand, claim, hearing, notice of violation, investigation, proceeding,
notice or demand letter or request for information pending or, to the knowledge
of the Issuers, threatened against the Company or any of the Subsidiaries under
any Environmental Law, (D) no lien, charge, encumbrance
<PAGE>
-11-
or restriction has been recorded under any Environmental Law with respect to any
assets, facility or property owned, operated, leased or controlled by the
Company or any of the Subsidiaries, (E) none of the Company or the Subsidiaries
has received notice that it has been identified as a potentially responsible
party under the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended ("CERCLA") or any comparable state law, (F) no property
or facility of the Company or any of the Subsidiaries is (i) listed or proposed
for listing on the National Priorities List under CERCLA or is (ii) listed in
the Comprehensive Environmental Response, Compensation, Liability Information
System List promulgated pursuant to CERCLA, or on any comparable list maintained
by any state or local governmental authority.
For purposes of this Agreement, "Environmental Laws" means the
common law and all applicable foreign, federal, state and local laws or
regulations, codes, orders, decrees, judgments or injunctions issued,
promulgated, approved or entered thereunder, relating to pollution or protection
of public or employee health and safety or the environment, including, without
limitation, laws relating to (i) emissions, discharges, releases or threatened
releases of hazardous materials into the environment (including, without
limitation, ambient air, surface water, ground water, land surface or subsurface
strata), (ii) the manufacture, processing, distribution, use, generation,
treatment, storage, disposal, transport or handling of hazardous materials,
(iii) underground and above ground storage tanks and related piping, and
emissions, discharges, releases or threatened releases therefrom and (iv)
including, without limitation, Programa de Adecuacion y Manejo Ambiental, dated
as of October 16, 1997 between Empresa Metalurgica La Oroya S.A., a Peruvian
corporation, and Ministry of Energy and Mines ("PAMA").
(w) There is no strike, labor dispute, slowdown or work stoppage
with the employees of the Company or any of the Subsidiaries which is pending
or, to the knowledge of the Issuers, threatened.
(x) Each of the Company and the Subsidiaries carries insurance in
such amounts and covering such risks as is adequate for the conduct of its
business and the value of its properties.
(y) None of the Company or the Subsidiaries has any liability for
any prohibited transaction or funding deficiency or any complete or partial
withdrawal liability with respect to
<PAGE>
-12-
any pension, profit sharing or other plan which is subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), to which the
Company or any of the Subsidiaries makes or ever has made a contribution and in
which any employee of the Company or of any Subsidiary is or has ever been a
participant. With respect to such plans, the Company and each Subsidiary is in
compliance in all material respects with all applicable provisions of ERISA.
(z) Each of the Company and the Subsidiaries (i) makes and keeps
accurate books and records and (ii) maintains internal accounting controls which
provide reasonable assurance that (A) transactions are executed in accordance
with management's authorization, (B) transactions are recorded as necessary to
permit preparation of its financial statements and to maintain accountability
for its assets, (C) access to its assets is permitted only in accordance with
management's authorization and (D) the reported accountability for its assets is
compared with existing assets at reasonable intervals.
(aa) None of the Issuers is, or will be, an "investment company" or
"promoter" or "principal underwriter" for an "investment company," as such terms
are defined in the Investment Company Act of 1940, as amended, and the rules and
regulations thereunder.
(bb) The Notes, the Guarantees, the Loan Agreement, the Indenture
and the Registration Rights Agreement will conform in all material respects to
the descriptions thereof in the Final Memorandum.
(cc) No holder of securities of the Issuers will be entitled to have
such securities registered under the registration statements required to be
filed by the Company pursuant to the Registration Rights Agreement other than as
expressly permitted thereby.
(dd) Immediately after the consummation of the transactions
contemplated by this Agreement, the fair value and present fair saleable value
of the assets of each of the Company and the Guarantors (each on a consolidated
basis) will exceed the sum of its stated liabilities and identified contingent
liabilities; none of the Company or the Guarantors (each on a consolidated
basis) is, nor will any of the Company or the Guarantors (each on a consolidated
basis) be, after giving effect to the execution, delivery and performance of
this Agreement, and the consummation of the transactions contemplated hereby,
(a) left with unreasonably small capital with which to
<PAGE>
-13-
carry on its business as it is proposed to be conducted, (b) unable to pay its
debts (contingent or otherwise) as they mature or (c) otherwise insolvent.
(ee) None of the Issuers or any of their respective Affiliates (as
defined in Rule 501(b) of Regulation D under the Act) has directly, or through
any agent, (i) sold, offered for sale, solicited offers to buy or otherwise
negotiated in respect of, any "security" (as defined in the Act) of the same
class as the Notes within the six month period immediately prior to the date
hereof or (ii) engaged in any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Act) in
connection with the offering of the Notes or in any manner involving a public
offering within the meaning of Section 4(2) of the Act. Assuming the accuracy of
the representations and warranties of the Initial Purchasers in Section 8
hereof, it is not necessary in connection with the offer, sale and delivery of
the Securities to the Initial Purchasers in the manner contemplated by this
Agreement to register any of the Securities under the Act or to qualify the
Indenture under the TIA.
(ff) No securities of the Issuers are of the same class (within the
meaning of Rule 144A under the Act ("Rule 144A")) as the Securities and listed
on a national securities exchange registered under Section 6 of the Exchange
Act, or quoted in a U.S. automated inter-dealer quotation system.
(gg) None of the Issuers has taken, nor will any of them take,
directly or indirectly, any action designed to, or that might be reasonably
expected to, cause or result in stabilization or manipulation of the price of
the Notes.
(hh) None of the Issuers, any of their respective Affiliates or any
person acting on its or their behalf (other than the Initial Purchasers) has
engaged in any directed selling efforts (as that term is defined in Regulation S
under the Act ("Regulation S")) with respect to the Securities; the Issuers and
their respective Affiliates and any person acting on its or their behalf (other
than the Initial Purchasers) have complied with the offering restrictions
requirement of Regulation S.
(ii) None of the Issuers or any of its or their properties or assets
has any sovereign immunity or any other immunity from the jurisdiction of any
court or from any legal process (whether through service or notice, attachment
prior to
<PAGE>
-14-
judgment, attachment in and of judgment, execution or otherwise) under the laws
of Peru or the Cayman Islands.
(jj) Under current Peruvian law and Cayman Islands law and
regulations, there is no tax, duty, levy, impost, deduction, charge or
withholding (including, without limitation, any registration or transfer tax,
stamp duty (except stamp duty payable in the Cayman Islands on original
documents executed in or brought into the jurisdiction) or similar levy) imposed
or, to the knowledge of the Issuers, pending or proposed, by Peru or the Cayman
Islands or any political subdivision thereof or taxing authority therein or any
federation or organization or similar entity of which Peru or the Cayman Islands
is a member either (i) on or by virtue of the Issuers' execution, delivery,
performance or enforcement of this Agreement, the Notes, the Exchange Notes, the
Guarantees, the Indenture or any other document to be furnished hereunder or
thereunder, or (ii) on any payment to be made pursuant to this Agreement, the
Loan Agreement, the Indenture, the Guarantees or on payment to any holder of the
Notes. Under current and, to the knowledge of the Issuers, proposed or pending,
Peruvian and Cayman Islands law and regulations, interest payments by the
Company on the Notes and the Exchange Notes are not and will not be subject to
any Peruvian or Cayman Islands withholding or other tax except the 1%
withholding tax applicable to payments of interest on the loan pursuant to the
Loan Agreement.
Any certificate signed by any officer of any of the Issuers and
delivered to any Initial Purchaser or to counsel for the Initial Purchasers
shall be deemed a joint and several representation and warranty by each of the
Issuers to each Initial Purchaser as to the matters covered thereby.
3. Purchase, Sale and Delivery of the Notes. On the basis of the
representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Issuers agree to issue
and sell to the Initial Purchasers, and the Initial Purchasers, acting severally
and not jointly, agree to purchase the Notes (and the Guarantees) in the
respective amounts set forth on Schedule 1 hereto from the Company at 97.5% of
their principal amount. One or more certificates in definitive form for the
Notes that the Initial Purchasers have agreed to purchase hereunder, and in such
denomination or denominations and registered in such name or names as the
Initial Purchasers request upon notice to the Company at least 36 hours prior to
the Closing Date, shall be delivered by or on behalf of the Issuers to the
Initial Purchasers, against payment by or on behalf of the Initial Pur-
<PAGE>
-15-
chasers of the purchase price therefor by wire transfer (same day funds) to such
account or accounts as the Company shall specify prior to the Closing Date, or
by such means as the parties hereto shall agree prior to the Closing Date. Such
delivery of and payment for the Notes shall be made at the offices of Cahill
Gordon & Reindel, 80 Pine Street, New York, New York at 10:00 A.M., New York
time, on March 12, 1998, or at such other place, time or date as the Initial
Purchasers, on the one hand, and the Issuers, on the other hand, may agree upon,
such time and date of delivery against payment being herein referred to as the
"Closing Date." The Company will make such certificate or certificates for the
Notes available for checking and packaging by the Initial Purchasers at the
offices of BT Alex. Brown Incorporated in New York, New York, or at such other
place as BT Alex. Brown Incorporated may designate, at least 24 hours prior to
the Closing Date.
4. Offering by the Initial Purchasers. The Initial Purchasers
propose to make an offering of the Notes at the price and upon the terms set
forth in the Final Memorandum, as soon as practicable after this Agreement is
entered into and as in the judgment of the Initial Purchasers is advisable.
5. Covenants of the Issuers. Each of the Issuers covenants and
agrees with each of the Initial Purchasers that:
(a) Each of the Issuers will not amend or supplement the Final
Memorandum or any amendment or supplement thereto of which the Initial
Purchasers shall not previously have been advised and furnished a copy for a
reasonable period of time prior to the proposed amendment or supplement and as
to which the Initial Purchasers shall not have given their consent. Each of the
Issuers will promptly, upon the reasonable request of the Initial Purchasers or
counsel for the Initial Purchasers, make any amendments or supplements to the
Preliminary Memorandum or the Final Memorandum that may be necessary in
connection with the resale of the Notes by the Initial Purchasers.
(b) Each of the Issuers will cooperate with the Initial Purchasers
in arranging for the qualification of the Securities for offering and sale under
the securities or "Blue Sky" laws of which jurisdictions as the Initial
Purchasers may designate and will continue such qualifications in effect for as
long as may be necessary to complete the resale of the Securities; provided,
however, that in connection therewith, each of the Issuers shall not be required
to qualify as a foreign corporation or to execute a general consent to service
of process
<PAGE>
-16-
in any jurisdiction or subject itself to taxation in excess of a nominal dollar
amount in any such jurisdiction where it is not then so subject.
(c) If, at any time prior to the completion of the distribution by
the Initial Purchasers of the Notes or the Private Exchange Notes, any event
occurs or information becomes known as a result of which the Final Memorandum as
then amended or supplemented would include any untrue statement of a material
fact, or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, or
if for any other reason it is necessary at any time to amend or supplement the
Final Memorandum to comply with applicable law, the Issuers will promptly notify
the Initial Purchasers thereof and will prepare, at the expense of the Issuers,
an amendment or supplement to the Final Memorandum that corrects such statement
or omission or effects such compliance.
(d) The Company will, without charge, provide to the Initial
Purchasers and to counsel for the Initial Purchasers as many copies of the
Preliminary Memorandum and the Final Memorandum or any amendment or supplement
thereto as the Initial Purchasers may reasonably request.
(e) The Issuers will apply the net proceeds from the sale of the
Notes as set forth under "Use of Proceeds" in the Final Memorandum.
(f) For so long as any of the Notes remain outstanding, the Issuers
will furnish to the Initial Purchasers copies of all reports and other
communications (financial or otherwise) furnished by the Issuers to the Trustee
or to the holders of the Notes and, as soon as available, copies of any reports
or financial statements furnished to or filed by the Issuers with the Commission
or any national securities exchange on which any class of securities of the
Issuers may be listed.
(g) Prior to the Closing Date, each of the Issuers will furnish to
the Initial Purchasers, as soon as they have been prepared, a copy of any
unaudited interim financial statements, if any, of each of the Issuers, as
applicable, for any period subsequent to the period covered by the most recent
financial statements appearing in the Final Memorandum.
(h) None of the Issuers or any of their Affiliates will sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of any
"security" (as defined in the Act)
<PAGE>
-17-
which could be integrated with the sale of the Notes in a manner which would
require the registration under the Act of the Notes.
(i) Each of the Issuers will not, and will not permit any of their
Affiliates to, engage in any form of general solicitation or general advertising
(as those terms are used in Regulation D under the Act) in connection with the
offering of the Notes or in any manner involving a public offering within the
meaning of Section 4(2) of the Act.
(j) For so long as any of the Notes remain outstanding, the Company
will make available at its expense, upon request, to any holder of such Notes
and any prospective purchasers thereof the information specified in Rule
144A(d)(4) under the Act, unless the Company is then subject, or voluntarily
filing reports pursuant, to Section 13 or 15(d) of the Exchange Act.
(k) The Company will use its reasonable efforts to (i) permit the
Notes to be designated PORTAL securities in accordance with the rules and
regulations adopted by the NASD relating to trading in the PORTAL Market and
(ii) permit the Notes to be eligible for clearance and settlement through The
Depository Trust Company.
(l) In connection with Notes offered and sold in an off shore
transaction (as defined in Regulation S), the Company will not register any
transfer of such Notes not made in accordance with the provisions of Regulation
S and will not, except in accordance with the provisions of Regulation S, if
applicable, issue any such Notes in the form of definitive securities.
6. Expenses. The Issuers agree to pay all costs and expenses
incident to the performance of its obligations under this Agreement, whether or
not the transactions contemplated herein are consummated or this Agreement is
terminated pursuant to Section 11 hereof, including all costs and expenses
incident to (i) the printing, word processing or other production of documents
with respect to the transactions contemplated hereby, including any costs of
printing the Preliminary Memorandum and the Final Memorandum and any amendment
or supplement thereto, and any "Blue Sky" memoranda, (ii) all arrangements
relating to the delivery to
<PAGE>
-18-
the Initial Purchasers of copies of the foregoing documents, (iii) the fees and
disbursements of United States, Peruvian and Cayman Islands counsel, the
accountants and any other experts or advisors retained by the Issuers, (iv)
preparation (including printing), issuance and delivery to the Initial
Purchasers of the Notes, (v) the qualification of the Notes under state
securities and "Blue Sky" laws, including filing fees and fees and disbursements
of counsel for the Initial Purchasers relating thereto, (vi) its expenses in
connection with any meetings with prospective investors in the Notes, (vii) fees
and expenses of the Trustee including fees and expenses of its counsel, (viii)
all expenses and listing fees incurred in connection with the application for
quotation of the Notes on the PORTAL Market, (ix) 50% of any private jet rental
costs incurred while conducting any road show presentations and (x) any fees
charged by investment rating agencies for the rating of the Notes. If the sale
of the Notes provided for herein is not consummated because any condition to the
obligations of the Initial Purchasers set forth in Section 7 hereof is not
satisfied, because this Agreement is terminated (except pursuant to clauses
(ii), (iv), (v), (vii) or (viii) of Section 11(a) of this Agreement) or because
of any failure, refusal or inability on the part of the Issuers to perform all
obligations and satisfy all conditions on their part to be performed or
satisfied hereunder (other than solely by reason of a default by the Initial
Purchasers of their obligations hereunder after all conditions hereunder have
been satisfied in accordance herewith), the Issuers agree to promptly reimburse
the Initial Purchasers upon demand for all out-of-pocket expenses (including all
reasonable fees, disbursements and charges of Cahill Gordon & Reindel, United
States counsel for the Initial Purchasers, and Estudio Bellido Saco-Vertiz
Taboada, Peruvian counsel for the Initial Purchasers) that shall have been
incurred by the Initial Purchasers in connection with the proposed purchase and
sale of the Notes.
7. Conditions of the Initial Purchasers' Obligations. The obligation
of the Initial Purchasers to purchase and pay for the Notes shall, in their sole
discretion, be subject to the satisfaction or waiver of the following conditions
on or prior to the Closing Date:
(a) On the Closing Date, the Initial Purchasers shall have received
the opinion, dated as of the Closing Date and addressed to the Initial
Purchasers and Cadwalader, Wickersham & Taft, of Estudio Ferrero Abogados,
Special Peruvian counsel for the Issuers, in form and substance satisfactory to
counsel for the Initial Purchasers to the effect that:
(i) Each of Doe Run Mining and Doe Run Peru is duly organized,
validly existing and in good standing under the laws of Peru and has all
requisite power and authority to own its properties and to conduct its
business as de-
<PAGE>
-19-
scribed in the Final Memorandum. Each of Doe Run Mining and Doe Run Peru
is duly qualified to do business as a foreign entity in good standing in
all other jurisdictions where the ownership or leasing of its properties
or the conduct of its business requires such qualification, except where
the failure to be so qualified would not, individually or in the
aggregate, have a Material Adverse Effect.
(ii) Each of Doe Run Mining and Doe Run Peru has all requisite power
and authority to execute, deliver and perform its obligations under this
Agreement, the Indenture, the Registration Rights Agreement, the Loan
Agreement and the Guarantees and to consummate the transactions
contemplated hereby and thereby; this Agreement, the Indenture, the
Registration Rights Agreement, the Loan Agreement and the Guarantees and
the consummation by each of Doe Run Mining and Doe Run Peru of the
transactions contemplated hereby and thereby have been duly and validly
authorized by each of Doe Run Mining and Doe Run Peru. This Agreement, the
Indenture, the Registration Rights Agreement, the Loan Agreement and the
Guarantees have been duly executed and delivered by each of Doe Run Mining
and Doe Run Peru.
(iii) No legal or governmental proceedings are pending or, to the
knowledge of such counsel, threatened to which any of Doe Run Mining or
Doe Run Peru is a party or to which the property or assets of Doe Run
Mining or Doe Run Peru is subject which, if determined adversely to Doe
Run Mining or Doe Run Peru, would result, individually or in the
aggregate, in a Material Adverse Effect, or which seeks to restrain,
enjoin, prevent the consummation of or otherwise challenge the issuance or
sale of the Notes to be sold hereunder or the consummation of the other
transactions described in the Final Memorandum under the caption "Use of
Proceeds."
(iv) None of Doe Run Mining or Doe Run Peru is (i) in violation of
any provision of the charter, "Estatuto" or bylaws (or similar
organizational documents), (ii) to the knowledge of such counsel, in
breach or violation of any statute, judgment, decree, order, rule or
regulation applicable to any of them or any of their respective properties
or assets, except for any such breach or violation which would not,
individually or in the aggregate, have a Material Adverse Effect, or (iii)
in breach or default under (nor has any event occurred which, with notice
or pas-
<PAGE>
-20-
sage of time or both, would constitute a default under) or in violation of
any of the terms or provisions of any Contract known to such counsel,
except for any such breach, default, violation or event which would not,
individually or in the aggregate, have a Material Adverse Effect.
(v) The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby (including,
without limitation, the issuance and sale of the Notes to the Initial
Purchasers) will not conflict with or constitute or result in a breach or
a default under (or an event which with notice or passage of time or both
would constitute a default under) or violation of any of (i) the terms or
provisions of any Contract known to such counsel, except for any such
conflict, breach, violation, default or event which would not,
individually or in the aggregate, have a Material Adverse Effect, (ii) the
provisions of the Charter, "Estatutos" or bylaws (or similar
organizational document) of Doe Run Mining or Doe Run Peru, or (iii) any
statute, judgment, decree, order, rule or regulation known to such counsel
to be applicable to Doe Run Mining or Doe Run Peru or any of their
respective properties or assets, except for any such conflict, breach or
violation which would not, individually or in the aggregate, have a
Material Adverse Effect.
(vi) Doe Run Mining and Doe Run Peru have obtained all Permits
necessary to conduct the businesses now or proposed to be conducted by
them as described in the Final Memorandum, the lack of which would,
individually or in the aggregate, have a Material Adverse Effect; each of
Doe Run Mining and Doe Run Peru has fulfilled and performed all of its
obligations with respect to such Permits and no event has occurred which
allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the
rights of the holder of any such Permit.
(vii) To such counsel's knowledge, Doe Run Mining and Doe Run Peru
own or possess adequate licenses or other rights to use all patents,
trademarks, service marks, trade names, copyrights and know-how necessary
to conduct the businesses now or proposed to be operated by them as
described in the Final Memorandum, and to such counsel's knowledge, none
of Doe Run Mining or Doe Run Peru has received any notice of infringement
of or conflict with asserted rights of others with respect to any patents,
trademarks, service marks, trade names, copyrights or
<PAGE>
-21-
know-how which, if such assertion of infringement or conflict were
sustained, would have a Material Adverse Effect.
(viii) To the knowledge of such counsel, there are no legal or
governmental proceedings involving or affecting Doe Run Mining and Doe Run
Peru or any of their respective properties or assets.
(ix) None of Doe Run Mining, Doe Run Peru or any of its or their
properties or assets has any sovereign immunity or any other immunity from
the jurisdiction of any court or from any legal process (whether through
service or notice, attachment prior to judgment, attachment in and of
judgment, execution or otherwise) under the laws of Peru.
(x) The choice of law provisions in the Indenture, this Agreement,
the Loan Agreement and the Registration Rights Agreement will be
recognized in the courts of Peru; under the laws of Peru, the submission
of Doe Run Mining and Doe Run Peru in such agreements to the jurisdiction
of any New York Court (as defined in Section 14 hereto) is legal, valid
and binding; and any judgment against Doe Run Mining and Doe Run Peru
obtained in a New York Court arising out of or in relation to the
obligations of Doe Run Mining or Doe Run Peru under such agreements would
be recognized and enforced by the courts of Peru.
(xi) Under current Peruvian law and regulations there is no tax,
duty, levy, impost, deduction, charge or withholding (including, without
limitation, any registration or transfer tax, stamp duty or similar levy)
imposed or, as such counsel is aware pending or proposed, by Peru or any
political subdivision thereof or taxing authority therein or any
federation or organization or similar entity of which Peru is a member
either (i) on or by virtue of Doe Run Mining's or Doe Run Peru's
execution, delivery, performance or enforcement of this Agreement, the
Loan Agreement, the Guarantees, the Indenture or any other document to be
furnished hereunder or thereunder, or (ii) on any payment to be made
pursuant to this Agreement, the Indenture, the Loan Agreement, the
Guarantees of Doe Run Mining and Doe Run Peru or on payment to any holder
of the Notes except the 1% withholding tax applicable to payments of
interest on the loan pursuant to the Peruvian Loan Agreement. Under
current and, as such counsel is aware, proposed or pending, Peruvian law
and regulations,
<PAGE>
-22-
interest payments by the Company on the Notes and the Exchange Notes are
not and will not be subject to any Peruvian withholding or other tax.
(xii) The statements made in the Final Memorandum under the headings
"Industry," "Business," "Enforceability of Civil Liabilities," and "The
Republic of Peru" insofar as such statements purport to summarize certain
provisions of Peruvian law, are fair summaries and accurate in all
material respects.
(xiii) Such other opinions as the Initial Purchasers or their
counsel may reasonably request.
At the time the foregoing opinion is delivered, Estudio Ferrero
Abogados shall additionally state that it has participated in conferences with
officers and other representatives of Doe Run Mining and Doe Run Peru,
representatives of the independent public accountants for Doe Run Mining and Doe
Run Peru, representatives of the Initial Purchasers and counsel for the Initial
Purchasers, at which conferences the contents of the Final Memorandum and
related matters were discussed, and, although it has not independently verified
and is not passing upon and assumes no responsibility for the accuracy,
completeness or fairness of the statements contained in the Final Memorandum, no
facts have come to its attention which lead it to believe that the Final
Memorandum, on the date thereof or at the Closing Date, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements contained therein, in light
of the circumstances under which they were made, not misleading (it being
understood that such firm need express no opinion with respect to the financial
statements and related notes thereto and the other financial, statistical and
accounting data included in the Final Memorandum). The opinions of Estudio
Ferrero Abogados described in this Section shall be rendered to the Initial
Purchasers at the request of the Company and shall so state therein.
References to the Final Memorandum in this subsection (a) shall
include any amendment or supplement thereto prepared in accordance with the
provisions of this Agreement at the Closing Date.
(b) On the Closing Date, the Initial Purchasers shall have received
the opinion, dated as of the Closing Date and addressed to the Initial
Purchasers and Cadwalader, Wickersham & Taft, of Maples and Calder, Special
Cayman Islands coun-
<PAGE>
-23-
sel for the Company, in form and substance satisfactory to counsel for the
Initial Purchasers which as to matters other than under Cayman Islands law, may
rely on or be supplemented by an opinion from another law firm reasonably
satisfactory to the Initial Purchasers, to the effect that:
(i) Doe Run Cayman is duly incorporated, validly existing and in
good standing under the laws of the Cayman Islands and has all requisite
corporate power and authority to own its properties and to conduct its
business as described in the Final Memorandum.
(ii) Doe Run Cayman has all requisite corporate power and authority
to execute, deliver and perform its obligations under this Agreement, the
Indenture, the Registration Rights Agreement and the Guarantee to which it
is a party and to consummate the transactions contemplated hereby and
thereby; this Agreement, the Indenture, the Registration Rights Agreement
and the Guarantee to which it is a party and the consummation by Doe Run
Cayman of the transactions contemplated hereby and thereby have been duly
and validly authorized by Doe Run Cayman. This Agreement, the Indenture,
the Registration Rights Agreement and the Guarantee to which it is a party
have been duly executed by Doe Run Cayman.
(iii) No legal proceedings are pending to which Doe Run Cayman is a
party in the Cayman Islands.
(iv) The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby (including,
without limitation, the issuance and sale of the Notes to the Initial
Purchasers) will not conflict with or constitute or result in a breach or
a default under (or an event which with notice or passage of time or both
would constitute a default under) or violation of any of (i) the
provisions of the memorandum and articles of association of Doe Run
Cayman, or (ii) any statute, judgment, decree, order, rule or regulation
known to such counsel to be applicable to Doe Run Cayman or any of its
properties or assets in the Cayman Islands currently in force.
(v) No authorizations, consents or approvals are required from, and
no notice to or filing or registration with, any governmental authorities
or agencies or other official bodies in the Cayman Islands in connection
with the execution or delivery of this Agreement, the Inden-
<PAGE>
-24-
ture, the Registration Rights Agreement and the Guarantee or the
performance by Doe Run Cayman of its obligations thereunder.
(vi) Neither Doe Run Cayman nor any of its properties or assets has
any sovereign immunity or any other immunity from the jurisdiction of any
court or from any legal process (whether through service or notice,
attachment, execution or otherwise) under the laws of the Cayman Islands.
(vii) The choice of law provisions in the Indenture, this Agreement
and the Registration Rights Agreement will be recognized in the courts of
the Cayman Islands, assuming evidence of such law is pleaded; under the
laws of the Cayman Islands, the submission of Doe Run Cayman in such
agreements to the jurisdiction of any New York Court (as defined in
Section 14 hereto) is legal, valid and binding assuming this to be the
case under the laws of the relevant jurisdiction; and any judgment against
Doe Run Cayman obtained in a New York Court arising out of or in relation
to the obligations of Doe Run Cayman under such agreements would be
recognized and enforced by the courts of the Cayman Islands, provided such
judgment is final for a liquidated sum not in respect of taxes or a fine
or penalty and which was not obtained in a manner and is not of a kind the
enforcement of which is contrary to the public policy of the Cayman
Islands.
(viii) Under current Cayman Islands law and regulations there is no
tax, duty, levy, impost, deduction, charge or withholding (including,
without limitation, any registration or transfer tax, stamp duty (except
stamp duty payable in the Cayman Islands on original documents executed in
or brought into the jurisdiction) or similar levy) imposed by the Cayman
Islands or any political subdivision thereof or taxing authority therein
or any federation or organization or similar entity of which the Cayman
Islands is a member either (i) on or by virtue of Doe Run Cayman's
execution, delivery, performance or enforcement of this Agreement, the
Guarantees, the Indenture, or any other document to be furnished hereunder
or thereunder, or (ii) on any payment to be made pursuant to this
Agreement, the Indenture, or on payment to any holder of the Notes. Under
current Cayman Islands law and regulations, interest payments by the
Company on the Notes and the Exchange Notes are not and will not be
subject to any Cayman Islands withholding or other tax.
<PAGE>
-25-
(ix) The statements made in the Final Memorandum under the heading
"Enforceability of Civil Liabilities" insofar as such statements purport
to summarize certain provisions of Cayman Islands law, are fair summaries
and accurate in all material respects.
(x) Such other opinions as the Initial Purchasers or their counsel
may reasonably request.
References to the Final Memorandum in this subsection (b) shall
include any amendment or supplement thereto prepared in accordance with the
provisions of this Agreement at the Closing Date.
(c) On the Closing Date, the Initial Purchasers shall have received
the opinion, dated as of the Closing Date and addressed to the Initial
Purchasers, of Cadwalader, Wickersham & Taft, special New York counsel for the
Company, in form and substance satisfactory to counsel for the Initial
Purchasers which as to matters other than under New York law, rely on the
Estudio Ferrero Abogados opinion delivered under Section 7(a) hereof, and the
Maples and Calder opinion delivered under Section 7(b) hereof to the effect
that:
(i) Each of the Company and Fabricated Products is organized and
validly existing as a corporation in good standing under the laws of its
respective jurisdiction of incorporation, has all requisite power and
authority to own, lease and operate its properties and to conduct its
business as it is currently being conducted and as described in the Final
Memorandum, and is duly qualified and in good standing as a foreign
corporation, authorized to do business in each jurisdiction in which the
ownership, leasing and operating of its property and the conduct of its
business requires such qualification, except where the failure to be so
qualified would not have a Material Adverse Effect;
(ii) Each of the Company and Fabricated Products has all requisite
corporate power and authority to execute, deliver and perform each of its
obligations under the Indenture, the Notes, the Exchange Notes and the
Private Exchange Notes; the Indenture meets the requirements for
qualification under the TIA; the Indenture has been duly and validly
authorized by the Company and Fabricated Products and, when duly executed
and delivered by the Company and Fabricated Products (assuming the due
authorization, execution and delivery thereof by Doe Run Cayman, Doe Run
<PAGE>
-26-
Mining, Doe Run Peru and the Trustee), will constitute the valid and
legally binding agreement of the Company and the Guarantors, enforceable
against the Company and the Guarantors in accordance with its terms,
except that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, (ii) general
principles of equity and the discretion of the court before which any
proceeding therefor may be brought and (iii) any limitation on a waiver of
rights under any usury laws.
(iii) The Notes are in the form contemplated by the Indenture. The
Notes have each been duly and validly authorized by the Company and, when
duly executed and delivered by the Company and paid for by the Initial
Purchasers in accordance with its terms of this Agreement (assuming the
due authorization, execution and delivery of the Indenture by the Trustee
and due authentication and delivery of the Notes by the Trustee in
accordance with the Indenture), will constitute the valid and legally
binding obligations of the Company, entitled to the benefits of the
Indenture, and enforceable against the Company in accordance with its
terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally, (ii)
general principles of equity and the discretion of the court before which
any proceeding therefor may be brought and (iii) any limitation on a
waiver of rights under any usury laws.
(iv) The Exchange Notes and the Private Exchange Notes have been
duly and validly authorized by the Company, and when the Exchange Notes
and the Private Exchange Notes have been duly executed and delivered, if
ever, by the Company in accordance with the terms of the Registration
Rights Agreement and the Indenture (assuming the due authorization,
execution and delivery of the Indenture by the Trustee and due
authentication and delivery of the Exchange Notes and the Private Exchange
Notes by the Trustee in accordance with the Indenture), will constitute
the valid and legally binding obligations of the Company, entitled to the
benefits of the Indenture, and enforceable against the Company in
accordance with their terms, except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to
<PAGE>
-27-
creditors' rights generally, (ii) general principles of equity and the
discretion of the court before which any proceeding therefor may be
brought and (iii) any limitation on a waiver of rights under any usury
laws.
(v) Each of the Company and Fabricated Products has all requisite
corporate power and authority to execute, deliver and perform its
obligations under the Registration Rights Agreement; the Registration
Rights Agreement has been duly and validly authorized by each of the
Company and Fabricated Products and, when duly executed and delivered by
the Company and Fabricated Products (assuming due authorization, execution
and delivery thereof by each of the Initial Purchasers, Doe Run Cayman,
Doe Run Mining and Doe Run Peru), will constitute the valid and legally
binding agreement of the Company and the Guarantors enforceable against
the Company and the Guarantors in accordance with its terms, except that
(A) the enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and (ii) general principles
of equity and the discretion of the court before which any proceeding
therefor may be brought and (B) any rights to indemnity or contribution
thereunder may be limited by federal and state securities laws and public
policy considerations.
(vi) Fabricated Products has all requisite corporate power and
authority to execute, deliver and perform its obligations under the
Guarantee; the Guarantee has been duly and validly authorized by
Fabricated Products and, when duly executed and delivered by Fabricated
Products (assuming the due authorization, execution and delivery of the
Guarantees by each of the other Guarantors), the Guarantees will
constitute the valid and legally binding agreement of the Guarantors,
enforceable against the Guarantors in accordance with their terms, except
that (A) the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity and the discretion of the court before which
any proceeding therefor may be brought and (B) any rights to indemnity or
contribution thereunder may be limited by federal, state or foreign
securities laws and public policy considerations.
(vii) The Company has all requisite corporate power and authority to
execute, deliver and perform its obliga-
<PAGE>
-28-
tions under the Loan Agreement and to consummate the transactions
contemplated thereby; the Loan Agreement and the consummation by the
Company of the transactions contemplated thereby have been duly and
validly authorized by the Company. The Loan Agreement has been duly
executed and delivered by the Company and (assuming the due authorization,
execution and delivery of the Loan Agreement by each of the Bank and Doe
Run Mining), will constitute the valid and legally binding agreement of
the Company and Doe Run Mining, enforceable against the Company and Doe
Run Mining in accordance with its terms, except that (A) the enforcement
thereof may be subject to (i) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) general principles of equity and the
discretion of the court before which any proceeding therefor may be
brought and (B) any rights to indemnity or contribution thereunder may be
limited by federal, state or foreign securities laws and public policy
considerations.
(viii) Each of the Company and Fabricated Products has all requisite
corporate power and authority to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions
contemplated hereby; this Agreement and the consummation by each of the
Company and Fabricated Products of the transactions contemplated hereby
have been duly and validly authorized by each of the Company and
Fabricated Products. This Agreement has been duly executed and delivered
by each of the Company and Fabricated Products.
(ix) The Indenture, the Notes and the Registration Rights Agreement
conform in all material respects to the descriptions thereof contained in
the Final Memorandum.
(x) None of the Issuers is, or immediately after the sale of the
Notes to be sold hereunder and the application of the proceeds from such
sale (as described in the Final Memorandum under the caption "Use of
Proceeds) will be, an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended.
(xi) Neither the consummation of the transactions contemplated by
this Agreement nor the sale, issuance, execution or delivery of the Notes
or the Exchange Notes will violate Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System.
<PAGE>
-29-
(xii) No consent, approval, authorization or order of, or filing or
registration with, or other action by, any governmental agency or body of
the United States or the State of New York is necessary to be obtained or
made by the Issuers (1) for the due execution, delivery and performance by
the Issuers of the Indenture or (2) for the issuance, sale or delivery of
the Notes to the Initial Purchasers or the validity or enforceability of
the Notes.
(xiii) No registration under the Act of the Securities is required
in connection with the sale of the Securities to the Initial Purchasers as
contemplated by this Agreement and the Final Memorandum or in connection
with the initial resale of the Securities by the Initial Purchasers in
accordance with Section 8 of this Agreement, and prior to the commencement
of the Exchange Offer (as defined in the Registration Rights Agreement) or
the effectiveness of the Shelf Registration Statement (as defined in the
Registration Rights Agreement) and the Indenture is not required to be
qualified under the TIA, in each case assuming the accuracy of the Initial
Purchasers' representations in Section 8 hereof and those of the Issuers
contained in this Agreement regarding the absence of a general
solicitation or directed selling efforts in connection with the sale of
such Notes to the Initial Purchasers and the initial resale thereof and
the due performance by the Initial Purchasers of the agreements set forth
in Section 8 hereof.
(xiv) The statements made in the Final Memorandum under the headings
"Description of the Notes," "Certain U.S. Federal Tax Considerations for
Non-U.S. Holders of the Notes," "Transfer Restrictions," "Exchange Offer;
Registration Rights," and "Private Placement," insofar as such statements
purport to summarize certain provisions of the Notes, the Indenture and
this Agreement and federal laws of the United States referred to
thereunder, are fair summaries and accurate in all material respects.
(xv) Such counsel does not know of any pending or threatened action,
suit or proceeding before any U.S. court or governmental agency, authority
or body or any arbitrator to which the Company or any of its subsidiaries
is a party or to which any of the properties of the Company or any of its
subsidiaries is subject other than proceedings fairly and accurately
described in all material respects in the Final Memorandum and proceedings
which such counsel believes are not likely to have a Material
<PAGE>
-30-
Adverse Effect or a material adverse effect on the power or ability of the
Company to perform its obligations under the Notes, the Indenture or this
Agreement.
In addition to the matters set forth above, such opinion shall also
include a statement to the effect that no facts have come to the attention to
such counsel which cause them to believe that the Final Memorandum (except for
the financial statements and all other financial data contained therein, as to
which such counsel need not express any belief), or any amendment or supplement
thereto, as of the respective dates thereof and as of the Closing Date,
contained or contains an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading. With
respect to such statement, such counsel may state that their belief is based
upon the procedures set forth therein, but is without independent check or
verification.
(d) On the Closing Date, the Initial Purchasers shall have received
the opinion, in form and substance satisfactory to the Initial Purchasers, dated
as of the Closing Date and addressed to the Initial Purchasers, of Cahill Gordon
& Reindel, counsel for the Initial Purchasers, with respect to certain legal
matters relating to this Agreement and such other related matters as the Initial
Purchasers may reasonably require. In rendering such opinion, Cahill Gordon &
Reindel shall have received and may rely upon such certificates and other
documents and information as it may reasonably request to pass upon such
matters.
(e) On the Closing Date, the Initial Purchasers shall have received
the opinion, dated as of the Closing Date and addressed to the Initial
Purchasers, of Estudio Bellido Saco-Vertiz Taboada, Peruvian counsel for the
Initial Purchasers, with respect to certain legal matters relating to this
Agreement and such other related matters as the Initial Purchasers may
reasonably require, to the effect that:
(i) Each of Doe Run Mining and Doe Run Peru is duly consituted,
incorporated, validly existing and in good standing under the laws of Peru
and has all requisite corporate power and authority to own its properties
and to conduct its business as described in the Final Memorandum. Under
their respective by-laws ("Estatutos") each of Doe Run Mining and Doe Run
Peru are qualified to do business inside or outside Peru.
<PAGE>
-31-
(ii) Each of Doe Run Mining and Doe Run Peru has all requisite
corporate power and authority to execute, deliver and perform its
obligations under this Agreement, the Indenture, the Loan Agreement, the
Registration Rights Agreement and the Guarantees and to consummate the
transactions contemplated hereby and thereby. The validity, legality and
enforceability of this Agreement in respect of Doe Run Peru and Doe Run
Mining, is subject and conditioned to its ratification by the Partner's
Meeting ("Junta de Socios") of Doe Run Peru and Doe Run Mining
respectively, where it should also be ratified the authority and powers of
the individuals who have signed this Agreement to execute and sign such
Agreement on behalf and in representation of Doe Run Peru and Doe Run
Mining. The legal effects in respect of third parties of the Indenture,
the Registration Rights Agreement and the Guarantee is subject and
conditioned to the recording at the proper Peruvian Pacific Registry (the
"Registro de Personas Juridicas de Lima") of the Partners Meetings Minutes
("Actas de Juntas de Socios") of Doe Run Peru and Doe Run Mining, held on
March 7, 1998 and March 7, 1998, respectively. This Agreement, the
Indenture, the Loan Agreement, the Registration Rights Agreement and the
Guarantees have been duly executed and delivered by each of Doe Run Mining
and Doe Run Peru.
(iii) To the knowledge of such counsel, no legal or governmental
proceedings are pending or threatened to which any of Doe Run Mining or
Doe Run Peru is a party or to which the property or assets of Doe Run
Mining or Doe Run Peru is subject which, if determined adversely to Doe
Run Mining or Doe Run Peru, would result, individually or in the
aggregate, in a Material Adverse Effect, or which seeks to restrain,
enjoin, prevent the consummation of or otherwise challenge the issuance or
sale of the Notes to be sold hereunder or the consummation of the other
transactions described in the Final Memorandum under the caption "Use of
Proceeds."
(iv) To the knowledge of such counsel, none of Doe Run Mining or Doe
Run Peru is (i) in violation of any provision of the charter, "Estatuto"
or bylaws (or similar organizational documents), (ii) in breach or
violation of any statute, judgment, decree, order, rule or regulation
applicable to any of them or any of their respective properties or assets,
except for any such breach or violation which would not, individually or
in the aggregate, have a Material Adverse Effect, or (iii) in breach or
default un-
<PAGE>
-32-
der (nor has any event occurred which, with notice or passage of time or
both, would constitute a default under) or in violation of any of the
terms or provisions of any Contract known to such counsel, except for any
such breach, default, violation or event which would not, individually or
in the aggregate, have a Material Adverse Effect.
(v) To the knowledge of such counsel, the execution, delivery and
performance of this Agreement and the Loan Agreement, and the consummation
of the transactions contemplated hereby and thereby (including, without
limitation, the issuance and sale of the Notes to the Initial Purchasers)
will not conflict with or constitute or result in a breach or a default
under (or an event which with notice or passage of time or both would
constitute a default under) or violation of any of (i) the terms or
provisions of any Contract known to such counsel, except for any such
conflict, breach, violation, default or event which would not,
individually or in the aggregate, have a Material Adverse Effect, (ii)
provision of the Charter, "Estatutos", "Pacto Social",or bylaws (or
similar organizational document) of Doe Run Mining or Doe Run Peru, or
(iii) any statute, judgment, decree, order, rule or regulation known to
such counsel to be applicable to Doe Run Mining or Doe Run Peru or any of
their respective properties or assets, except for any such conflict,
breach or violation which would not, individually or in the aggregate,
have a Material Adverse Effect.
(vi) Doe Run Mining and Doe Run Peru have obtained all Permits
necessary to conduct the businesses now or proposed to be conducted by
them as described in the Final Memorandum, the lack of which would,
individually or in the aggregate, have a Material Adverse Effect.
(vii) To the knowledge of such counsel, Doe Run Mining and Doe Run
Peru own or possess adequate licenses or other rights to use all patents,
trademarks, service marks, trade names, copyrights and know-how necessary
to conduct the businesses now or proposed to be operated by them as
described in the Final Memorandum, and none of Doe Run Mining and Doe Run
Peru has received any notice of infringement of or conflict with asserted
rights of others with respect to any patents, trademarks, service marks,
trade names, copyrights or know-how which, if such assertion of
infringement or conflict were sustained, would have a Material Adverse
Effect.
<PAGE>
-33-
(viii) To the knowledge of such counsel, there are no legal or
governmental proceedings involving or affecting Doe Run Mining and Doe Run
Peru or any of their respective properties or assets.
(ix) Neither Doe Run Mining nor Doe Run Peru nor any of its or their
properties or assets has any sovereign immunity or any other immunity from
the jurisdiction of any court or from any legal process (whether through
service or notice, attachment prior to judgment, attachment in and of
judgment, execution or otherwise) under the laws of Peru.
(x) The choice of law provisions in the Indenture, Section 14 of
this Agreement, the Loan Agreement and the Registration Rights Agreement
will be recognized in the courts of Peru, under the laws of Peru, the
submission of Doe Run Mining and Doe Run Peru in such agreements to the
jurisdiction of any New York Court (as defined in Section 14 hereto) is
legal, valid and binding. Any final and conclusive judgment for a fixed
and definite sum obtained against Doe Run Mining or Doe Run Peru, in a New
York Court arising out or in relation to the obligation of Doe Run Mining
or Doe Run Peru under such agreements, will, upon request, be deemed valid
and enforceable in the Republic of Peru, provided that (i) there is in
effect a treaty between the country where said foreign court sits and the
Republic of Peru regarding the recognition and enforcement of foreign
judgments or, in the absence of such a treaty, as is presently the case,
(ii) the following requirements are met: (a) the judgment does not resolve
matters under the exclusive jurisdiction of Peruvian courts; (b) such
court had jurisdiction under its own conflicts of law rules and under
general principles of international procedural jurisdiction; (c) the
defendant was served in accordance with the laws of the place where the
procedure took place, was granted a reasonable opportunity to appear
before such foreign court, and was guaranteed due process rights; (d) the
judgment has the status of res judicata in the jurisdiction of the court
rendering such judgment; (e) there is no pending litigation in Peru
between the same parties for the same dispute, which shall have been
initiated before the commencement of the proceeding that concluded with
the foreign judgment; (f) the judgment is not incompatible with another
previously rendered judgment which fulfills the requirements of
recognition and enforceability established by Peruvian law; (g) the
judgment is not contrary to public order or good mor-
<PAGE>
-34-
als, and (h) it is not proven that such foreign court denies enforcement
of Peruvian judgments or engages in a review of the merits or substance
thereof.
(xi) Under current Peruvian law and regulations there is no tax,
duty, levy, impost, deduction, charge or withholding (including, without
limitation, any registration or transfer tax, stamp duty or similar levy)
imposed or, as such counsel is aware pending or proposed, by Peru or any
political subdivision thereof or taxing authority therein or any
federation or organization or similar entity of which Peru is a member
either (i) on or by virtue of Doe Run Mining's or Doe Run Peru's
execution, delivery, performance or enforcement of this Agreement, the
Loan Agreement, the Guarantees, the Indenture or any other document to be
furnished hereunder or thereunder, or (ii) on any payment to be made
pursuant to this Agreement, the Indenture, the Loan Agreement, the
Guarantees of Doe Run Mining and Doe Run Peru or on payment to any holder
of the Notes. Under current and, as such counsel is aware, proposed or
pending, Peruvian law and regulations, interest payments on the Notes and
the Exchange Notes are not and will not be subject to any Peruvian
withholding or other tax except the 1% withholding income tax applicable
to payments of interest on the loan pursuant to the Peruvian Loan
Agreement.
(xii) The statements made in the Final Memorandum under the headings
"Business," "Enforceability of Civil Liabilities," and "The Republic of
Peru" insofar as such statements purport to summarize certain provisions
of Peruvian law, are fair summaries and accurate in all material respects.
(xiii) Such other opinions as the Initial Purchasers or their
counsel may reasonably request.
References to the Final Memorandum in this subsection (e) shall
include any amendment or supplement thereto prepared in accordance with the
provisions of this Agreement at the Closing Date.
(f) The Initial Purchasers shall have received from the Independent
Accountants comfort letters dated the date hereof and the Closing Date, in form
and substance satisfactory to counsel for the Initial Purchasers.
<PAGE>
-35-
(g) The representations and warranties of each of the Issuers
contained in this Agreement shall be true and correct on and as of the date
hereof and on and as of the Closing Date as if made on and as of the Closing
Date; the statements of the Issuers' officers made pursuant to any certificate
delivered in accordance with the provisions hereof shall be true and correct on
and as of the date made and on and as of the Closing Date; each of the Issuers
shall have performed all covenants and agreements and satisfied all conditions
on their part to be performed or satisfied hereunder at or prior to the Closing
Date; and, except as described in the Final Memorandum (exclusive of any
amendment or supplement thereto after the date hereof), subsequent to the date
of the most recent financial statements in such Final Memorandum, there shall
have been no event or development, and no information shall have become known,
that, individually or in the aggregate, has or would be reasonably likely to
have a Material Adverse Effect.
(h) The sale of the Notes hereunder shall not be enjoined
(temporarily or permanently) on the Closing Date.
(i) Subsequent to the date of the most recent financial statements
in the Final Memorandum (exclusive of any amendment or supplement thereto after
the date hereof), none of the Company or any of the Subsidiaries shall have
sustained any loss or interference with respect to its business or properties
from fire, flood, hurricane, accident or other calamity, whether or not covered
by insurance, or from any strike, labor dispute, slow down or work stoppage or
from any legal or governmental proceeding, order or decree, which loss or
interference, individually or in the aggregate, has or would be reasonably
likely to have a Material Adverse Effect.
(j) The Initial Purchasers shall have received a certificate of each
of the Issuers, dated the Closing Date, signed on behalf of the Issuers by its
Chairman of the Board, Chief Executive Officer, President, any Vice President or
any General Manager and the Chief Financial Officer or Finance Manager, to the
effect that:
(i) The representations and warranties of each of the Issuers
contained in this Agreement are true and correct on and as of the date
hereof and on and as of the Closing Date, and each of the Issuers has
performed all covenants and agreements and satisfied all conditions on its
part to be performed or satisfied hereunder at or prior to the Closing
Date;
<PAGE>
-36-
(ii) At the Closing Date, since the date hereof or since the date of
the most recent financial statements in the Final Memorandum (exclusive of
any amendment or supplement thereto after the date hereof), no event or
development has occurred, and no information has become known, that,
individually or in the aggregate, has or would be reasonably likely to
have a Material Adverse Effect; and
(iii) The sale of the Notes hereunder has not been enjoined
(temporarily or permanently).
(k) On the Closing Date, the Initial Purchasers shall have received
the Registration Rights Agreement executed by each of the Issuers and such
agreement shall be in full force and effect.
On or before the Closing Date, the Initial Purchasers and counsel
for the Initial Purchasers shall have received such further documents, opinions,
certificates, letters and schedules or instruments relating to the business,
corporate, legal and financial affairs of the Company and the Subsidiaries as
they shall have heretofore reasonably requested from the Company.
All such documents, opinions, certificates, letters, schedules or
instruments delivered pursuant to this Agreement will comply with the provisions
hereof only if they are reasonably satisfactory in all material respects to the
Initial Purchasers and counsel for the Initial Purchasers. The Company shall
furnish to the Initial Purchasers such conformed copies of such documents,
opinions, certificates, letters, schedules and instruments in such quantities as
the Initial Purchasers shall reasonably request.
8. Offering of Notes; Restrictions on Transfer. (a) Each of the
Initial Purchasers represents and warrants (as to itself only) that it is a
qualified institutional buyer (as defined in Rule 144A) (a "QIB"). Each of the
Initial Purchasers agrees with the Company (as to itself only) that (i) it has
not and will not solicit offers for, or offer or sell, the Notes by any form of
general solicitation or general advertising (as those terms are used in
Regulation D under the Act) or in any manner involving a public offering within
the meaning of Section 4(2) of the Act; and (ii) it has and will solicit offers
for the Notes only from, and will offer the Notes only to (A) in the case of
offers inside the United States, persons whom the Initial Purchasers reasonably
believe to be QIBs or, if any such person is buying for one or more
institutional ac-
<PAGE>
-37-
counts for which such person is acting as fiduciary or agent, only when such
person has represented to the Initial Purchasers that each such account is a
QIB, to whom notice has been given that such sale or delivery is being made in
reliance on Rule 144A, and, in each case, in transactions under Rule 144A and
(B) in the case of offers outside the United States, to persons other than U.S.
persons ("foreign purchasers," which term shall include dealers or other
professional fiduciaries in the United States acting on a discretionary basis
for foreign beneficial owners (other than an estate or trust)); provided,
however, that, in the case of this clause (B), in purchasing such Notes such
persons are deemed to have represented and agreed as provided under the caption
"Transfer Restrictions" contained in the Final Memorandum (or, if the Final
Memorandum is not in existence, in the most recent Memorandum).
(b) Each of the Initial Purchasers represents and warrants (as to
itself only) with respect to offers and sales outside the United States that (i)
it has and will comply with all applicable laws and regulations in each
jurisdiction in which it acquires, offers, sells or delivers Notes or has in its
possession or distributes any Memorandum or any such other material, in all
cases at its own expense; (ii) the Notes have not been and will not be offered
or sold within the United States or to, or for the account or benefit of, U.S.
persons except in accordance with Regulation S or pursuant to an exemption from
the registration requirements of the Act; (iii) it has offered the Notes and
will offer and sell the Notes (A) as part of its distribution at any time and
(B) otherwise until 40 days after the later of the commencement of the offering
and the Closing Date, only in accordance with Rule 903 of Regulation S and,
accordingly, neither it nor any persons acting on its behalf have engaged or
will engage in any directed selling efforts (within the meaning of Regulation S)
with respect to the Notes, and any such persons have complied and will comply
with the offering restrictions requirement of Regulation S; and (iv) it agrees
that, at or prior to confirmation of sales of the Notes, it will have sent to
each distributor, dealer or person receiving a selling concession, fee or other
remuneration that purchases Notes from it during the restricted period a
confirmation or notice to substantially the following effect:
"The Securities covered hereby have not been registered under the United
States Securities Act of 1933 (the "Securities Act") and may not be
offered and sold within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of the distribution of the Securities
at any time or
<PAGE>
-38-
(ii) otherwise until 40 days after the later of the commencement of the
offering and the closing date of the offering, except in either case in
accordance with Regulation S (or Rule 144A if available) under the
Securities Act. Terms used above have the meaning given to them in
Regulation S."
Terms used in this Section 8 and not defined in this Agreement have
the meanings given to them in Regulation S.
9. Indemnification and Contribution. (a) Each of the Issuers,
jointly and severally, agrees to indemnify and hold harmless the Initial
Purchasers, and each person, if any, who controls any Initial Purchaser within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, against
any losses, claims, damages or liabilities to which any Initial Purchaser or
such controlling person may become subject under the Act, the Exchange Act or
otherwise, insofar as any such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of any material
fact contained in any Memorandum or any amendment or supplement thereto;
or
(ii) the omission or alleged omission to state, in any Memorandum or
any amendment or supplement thereto, a material fact required to be stated
therein or necessary to make the statements therein not misleading,
and will reimburse, as incurred, the Initial Purchasers and each such
controlling person for any legal or other expenses incurred by the Initial
Purchasers or such controlling person in connection with investigating,
defending against or appearing as a third-party witness in connection with any
such loss, claim, damage, liability or action; provided, however, the Issuers
will not be liable in any such case to the extent that any such loss, claim,
damage, or liability arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in any Memorandum
or any amendment or supplement thereto in reliance upon and in conformity with
written information concerning the Initial Purchasers furnished to the Issuers
by the Initial Purchasers specifically for use therein; provided, further,
however, that the Issuers will not be required to provide the indemnity
hereunder if such untrue statement or alleged untrue statement or omission or
alleged omission was contained or made in any Memorandum and corrected in a
subsequent Memorandum and any such loss, claim,
<PAGE>
-39-
damage or liability suffered or incurred by an indemnified party resulted from
any action, claim or suit by any purchaser of the Notes from such indemnified
party and such indemnified party failed to deliver or provide a copy of such
subsequent Memorandum to such person with or prior to the confirmation of the
sale of such Notes to such person; provided that the Issuers will be required to
provide the indemnity hereunder if any Issuer fails to comply with Section 5(d)
of this Agreement with respect to such subsequent Memorandum. This indemnity
agreement will be in addition to any liability that the Issuers may otherwise
have to the indemnified parties. The Issuers shall not be liable under this
Section 9 for any settlement of any claim or action effected without its prior
written consent, which shall not be unreasonably withheld.
(b) The Initial Purchasers agree to indemnify and hold harmless the
Issuers, their directors, their officers and each person, if any, who controls
any of the Issuers within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act against any losses, claims, damages or liabilities to which the
Company or any such director, officer or controlling person may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon (i) any untrue statement or alleged untrue statement of any material fact
contained in any Memorandum or any amendment or supplement thereto or any
Application, or (ii) the omission or the alleged omission to state therein a
material fact required to be stated in any Memorandum or any amendment or
supplement thereto or any Application, or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
concerning such Initial Purchaser, furnished to the Issuers by the Initial
Purchasers specifically for use therein; and subject to the limitation set forth
immediately preceding this clause, will reimburse, as incurred, any legal or
other expenses incurred by the Issuers or any such director, officer or
controlling person in connection with investigating or defending against or
appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action in respect thereof. This indemnity agreement will be
in addition to any liability that the Initial Purchasers may otherwise have to
the indemnified parties. The Initial Purchasers shall not be liable under this
Section 9 for any settlement of any claim or action effected without their
consent, which shall not be unreasonably withheld. The Company shall not,
without the prior written consent
<PAGE>
-40-
of the Initial Purchasers, effect any settlement or compromise of any pending or
threatened proceeding in respect of which any Initial Purchaser is or could have
been a party, or indemnity could have been sought hereunder by any Initial
Purchaser, unless such settlement (A) includes an unconditional written release
of the Initial Purchasers, in form and substance reasonably satisfactory to the
Initial Purchasers, from all liability on claims that are the subject matter of
such proceeding and (B) does not include any statement as to an admission of
fault, culpability or failure to act by or on behalf of any Initial Purchaser.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action for which such indemnified
party is entitled to indemnification under this Section 9, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 9, notify the indemnifying party of the commencement
thereof in writing; but the omission to so notify the indemnifying party (i)
will not relieve it from any liability under paragraph (a) or (b) above unless
and to the extent such failure results in the forfeiture by the indemnifying
party of substantial rights and defenses and (ii) will not, in any event,
relieve the indemnifying party from any obligations to any indemnified party
other than the indemnification obligation provided in paragraphs (a) and (b)
above. In case any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party; provided, however, that if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (ii) the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified party shall
have been advised by counsel that there may be one or more legal defenses
available to it and/or other indemnified parties that are different from or
additional to those available to the indemnifying party, or (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after receipt by the indemnifying party of notice of the institution of
such action, then, in each such case, the indemnifying party shall not have the
right to direct the defense of such action on behalf of such indemnified party
or parties and such indemnified party or parties shall have the
<PAGE>
-41-
right to select separate counsel to defend such action on behalf of such
indemnified party or parties. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and approval
by such indemnified party of counsel appointed to defend such action, the
indemnifying party will not be liable to such indemnified party under this
Section 9 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof, unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the immediately preceding
sentence (it being understood, however, that in connection with such action the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (in addition to local counsel) in any one action or separate
but substantially similar actions in the same jurisdiction arising out of the
same general allegations or circumstances, designated by the Initial Purchasers
in the case of paragraph (a) of this Section 9 or the Issuers in the case of
paragraph (b) of this Section 9, representing the indemnified parties under such
paragraph (a) or paragraph (b), as the case may be, who are parties to such
action or actions) or (ii) the indemnifying party has authorized in writing the
employment of counsel for the indemnified party at the expense of the
indemnifying party. After such notice from the indemnifying party to such
indemnified party, the indemnifying party will not be liable for the costs and
expenses of any settlement of such action effected by such indemnified party
without the prior written consent of the indemnifying party (which consent shall
not be unreasonably withheld), unless such indemnified party waived in writing
its rights under this Section 9, in which case the indemnified party may effect
such a settlement without such consent.
(d) In circumstances in which the indemnity agreement provided for
in the preceding paragraphs of this Section 9 is unavailable to, or insufficient
to hold harmless, an indemnified party in respect of any losses, claims, damages
or liabilities (or actions in respect thereof), each indemnifying party, in
order to provide for just and equitable contribution, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect (i) the relative benefits received by
the indemnifying party or
<PAGE>
-42-
parties on the one hand and the indemnified party on the other from the offering
of the Notes or (ii) if the allocation provided by the foregoing clause (i) is
not permitted by applicable law, not only such relative benefits but also the
relative fault of the indemnifying party or parties on the one hand and the
indemnified party on the other in connection with the statements or omissions or
alleged statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof). The relative benefits received by
the Issuers on the one hand and any Initial Purchaser on the other shall be
deemed to be in the same proportion as the total proceeds from the offering (net
of discounts and commissions but before deducting expenses) received by the
Company bear to the total discounts and commissions received by such Initial
Purchaser. The relative fault of the parties shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Issuers on the one hand, or such Initial
Purchaser on the other, the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission or
alleged statement or omission, and any other equitable considerations
appropriate in the circumstances. The Issuers and the Initial Purchasers agree
that it would not be equitable if the amount of such contribution were
determined by pro rata or per capita allocation or by any other method of
allocation that does not take into account the equitable considerations referred
to in the first sentence of this paragraph (d). Notwithstanding any other
provision of this paragraph (d), no Initial Purchaser shall be obligated to make
contributions hereunder that in the aggregate exceed the total discounts,
commissions and other compensation received by such Initial Purchaser under this
Agreement, less the aggregate amount of any damages that such Initial Purchaser
has otherwise been required to pay by reason of the untrue or alleged untrue
statements or the omissions or alleged omissions to state a material fact, and
no person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this paragraph (d),
each person, if any, who controls an Initial Purchaser within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act shall have the same
rights to contribution as the Initial Purchasers, and each director of the
Issuers, each officer of the Issuers and each person, if any, who controls the
Issuers within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, shall have the same rights to contribution as the Issuers.
10. Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Issuers, their
officers and the Initial Pur-
<PAGE>
-43-
chasers set forth in this Agreement or made by or on behalf of them pursuant to
this Agreement shall remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Issuers, any of its officers or
directors, the Initial Purchasers or any controlling person referred to in
Section 9 hereof and (ii) delivery of and payment for the Notes. The respective
agreements, covenants, indemnities and other statements set forth in Sections 6,
9 and 15 hereof shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement.
11. Termination. (a) This Agreement may be terminated in the sole
discretion of the Initial Purchasers by notice to the Issuers given prior to the
Closing Date in the event that the Issuers shall have failed, refused or been
unable to perform all obligations and satisfy all conditions on its part to be
performed or satisfied hereunder at or prior thereto or, if at or prior to the
Closing Date:
(i) any of the Company or the Subsidiaries shall have sustained any
loss or interference with respect to its businesses or properties from
fire, flood, hurricane, accident or other calamity, whether or not covered
by insurance, or from any strike, labor dispute, slow down or work
stoppage or any legal or governmental proceeding, which loss or
interference, in the sole judgment of the Initial Purchasers, has had or
has a Material Adverse Effect, or there shall have been, in the sole
judgment of the Initial Purchasers, any event or development that,
individually or in the aggregate, has or could be reasonably likely to
have a Material Adverse Effect (including without limitation a change in
control of the Company or the Subsidiaries), except in each case as
described in the Final Memorandum (exclusive of any amendment or
supplement thereto);
(ii) trading in securities of any of the Issuers or in securities
generally on the New York Stock Exchange, American Stock Exchange or the
Nasdaq National Market shall have been suspended or minimum or maximum
prices shall have been established on any such exchange or market;
(iii) there shall have occurred any change, or any development
involving a prospective change, in the condition, financial or otherwise,
or in the earnings, business or operations, of the Company and the
Subsidiaries, taken as a whole, from that set forth in the Final
Memorandum
<PAGE>
-44-
(without regard to any amendment thereto after the date hereof) that is
material and adverse and that makes it, in the Initial Purchasers'
judgment, impracticable to market the Notes on the terms and in the manner
contemplated in the Final Memorandum (without regard to any amendment
thereto after the date hereof).
(iv) a banking moratorium shall have been declared by New York or
United States authorities or the Peruvian authorities in Peru;
(v) there shall have been (A) an outbreak or escalation of
hostilities between the United States or Peru and any foreign power, or
(B) an outbreak or escalation of any other insurrection or armed conflict
involving the United States or Peru or any other national or international
calamity or emergency, or (C) any material change in the financial markets
of the United States or Peru which, in the case of (A), (B) or (C) above
and in the sole judgment of the Initial Purchasers, makes it impracticable
or inadvisable to proceed with the offering or the delivery of the Notes
as contemplated by the Final Memorandum; or
(vi) any securities of any of the Issuers shall have been downgraded
or placed on any "watch list" for possible downgrading by any nationally
recognized statistical rating organization.
(vii) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs that has
a material adverse effect on the financial markets in the United States or
Peru, and would, in the sole judgment of the Initial Purchasers, make it
impracticable or inadvisable to market the Notes; or
(viii) the enactment, publication, decree, or other promulgation of
any federal or state statute, regulation, rule, order of any court or
other governmental authority which, in the judgment of the Initial
Purchasers, would have a Material Adverse Effect.
(b) Termination of this Agreement pursuant to this Section 11 shall
be without liability of any party to any other party except as provided in
Section 10 hereof.
12. Information Supplied by the Initial Purchasers. The statements
set forth in the last paragraph on the front
<PAGE>
-45-
cover page in the third paragraph under the heading "Private Placement" in the
Final Memorandum (to the extent such statements relate to the Initial
Purchasers) constitute the only information furnished by the Initial Purchasers
to the Issuers for the purposes of Sections 2(a) and 9 hereof.
13. Notices. All communications hereunder shall be in writing and,
if sent to the Initial Purchasers, shall be mailed or delivered to (i) BT Alex.
Brown Incorporated, 130 Liberty Street, New York, New York 10006, Attention:
Corporate Finance Department; if sent to the Issuers, shall be mailed or
delivered to the Issuers c/o The Doe Run Resources Corporation, 1801 Park 270
Drive, St. Louis, Missouri 63146, Attention: Chief Executive Officer; with a
copy to Cadwalader, Wickersham & Taft, 100 Maiden Lane, New York, N.Y. 10038,
Attention: Michael C. Ryan, Esq.
All such notices and communications shall be deemed to have been
duly given: when delivered by hand, if personally delivered; three business days
after being deposited in the mail, postage prepaid, if mailed; and one business
day after being timely delivered to a next-day air courier.
14. Consent to Jurisdiction. Each of the parties hereto irrevocably
agrees that any legal dispute, action or proceeding arising out of or based upon
this Agreement or the transactions contemplated hereby by the Initial
Purchasers, directors, officers, employees or agents of the Initial Purchasers
or by each person, if any, who controls the Initial Purchasers, may be
instituted in any New York State or U.S. Federal court sitting in the Borough of
Manhattan, New York City, New York, U.S.A. (each a "New York Court" and
collectively, the "New York Courts"), and irrevocably waives, to the extent
permitted by applicable law, any objection which it may now or hereafter have to
the laying of venue to any such proceeding and irrevocably submits to the
non-exclusive jurisdiction of such courts in any such suit, action or
proceeding.
15. Waiver of Jury Trial; Waiver of Immunity. (a) Each of the
parties to this Agreement hereby irrevocably waives all right to a trial by jury
in any action, proceeding or counterclaim (whether based upon contract, tort or
otherwise) arising out of or relating to this Agreement or the transactions
contemplated hereby.
(b) To the extent that the Issuers or any of their revenues, assets
or properties shall be entitled, with respect to any proceeding at any time
brought against the Issuers or any
<PAGE>
-46-
of their revenues, assets or properties or with respect to any suit, action or
proceeding at any time brought for the purpose of enforcing or executing any
judgment in any jurisdiction in which any specified court or other court is
located, to any immunity from suit, from the jurisdiction of any such court,
from attachment prior to judgment, from attachment in aid of execution of
judgment, from execution of a judgment or from any other legal or judicial
process or remedy, and to the extent of such immunity, the Issuers irrevocably
agree not to claim and irrevocably waive such immunity to the fullest extent
permitted by the laws of such jurisdiction (including, without limitation, the
Foreign Sovereign Immunities Act of 1976 of the United States).
16. Payments. All payments hereunder shall be made without defense,
setoff or counterclaim of any kind and shall be made freely available in U.S.
dollars in New York without any deduction on account of taxes. If any amount is
required to be withheld on account of taxes, then the Company shall pay to the
Initial Purchasers such additional amounts as shall be required to be paid so
that the net amount received by the Initial Purchasers, after all such
deductions or withholdings, shall not be less than the Initial Purchasers would
have received had no such deductions or withholdings been made or required and
shall promptly deliver to the Initial Purchasers all relevant tax receipts.
17. Currency Indemnity. The obligation of the Company in respect of
any sum due to the Initial Purchasers shall, notwithstanding any judgment in a
currency other than United States dollars, not be discharged until the first
business day following receipt by the Initial Purchasers of any sum adjudged to
be so due in such other currency, on which (and only to the extent that) the
Initial Purchasers may in accordance with normal banking procedures purchase
United States dollars with such other currency; if the United States dollars so
purchased are less than the sum originally due to the Initial Purchasers
hereunder, the Company agrees, as a separate obligation and notwithstanding any
such judgment, to indemnify the Initial Purchasers against such loss. If the
United States dollars so purchased are greater than the sum originally due to
the Initial Purchasers hereunder, the Initial Purchasers agree to pay to the
Company an amount equal the excess of the dollars so purchased over the sum
originally due to the Initial Purchasers hereunder.
18. Successors. This Agreement shall inure to the benefit of and be
binding upon the Initial Purchasers, the Company and their respective successors
and legal representatives, and nothing expressed or mentioned in this Agreement
is in-
<PAGE>
-47-
tended or shall be construed to give any other person any legal or equitable
right, remedy or claim under or in respect of this Agreement, or any provisions
herein contained; this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person except that (i) the indemnities of the
Issuers contained in Section 9 of this Agreement shall also be for the benefit
of any person or persons who control the Initial Purchasers within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act and (ii) the
indemnities of the Initial Purchasers contained in Section 9 of this Agreement
shall also be for the benefit of the directors of the Issuers, their officers
and any person or persons who control the Issuers within the meaning of Section
15 of the Act or Section 20 of the Exchange Act. No purchaser of Notes from the
Initial Purchasers will be deemed a successor because of such purchase.
19. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT GIVING EFFECT TO ANY
PROVISIONS THEREOF RELATING TO CONFLICTS OF LAW.
20. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
<PAGE>
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among the Issuers and
the Initial Purchasers.
Very truly yours,
THE DOE RUN RESOURCES
CORPORATION, as Issuer
By: /s/ Marvin K. Kaiser
-----------------------------
Name: Marvin K. Kaiser
Title: VP & CFO
FABRICATED PRODUCTS, INC.,
as Guarantor
By: /s/ Marvin K. Kaiser
-----------------------------
Name: Marvin K. Kaiser
Title: VP & CFO
DOE RUN CAYMAN LTD.,
as Guarantor
By: /s/ Marvin K. Kaiser
-----------------------------
Name: Marvin K. Kaiser
Title: VP & CFO
DOE RUN MINING S.R. LTDA.,
as Guarantor
By:
-----------------------------
Name:
Title:
DOE RUN PERU S.R. LTDA.,
as Guarantor
By:
-----------------------------
Name:
Title:
<PAGE>
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among the Issuers and
the Initial Purchasers.
Very truly yours,
THE DOE RUN RESOURCES
CORPORATION, as Issuer
By:
-----------------------------
Name:
Title:
FABRICATED PRODUCTS, INC.,
as Guarantor
By:
-----------------------------
Name:
Title:
DOE RUN CAYMAN LTD.,
as Guarantor
By:
-----------------------------
Name:
Title:
DOE RUN MINING S.R. LTDA.,
as Guarantor
By: /s/ Kenneth R. Buckley
-----------------------------
Name: Kenneth R. Buckley
Title: General Manager
DOE RUN PERU S.R. LTDA.,
as Guarantor
By: /s/ Kenneth R. Buckley
-----------------------------
Name: Kenneth R. Buckley
Title: President and General Manager
<PAGE>
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
BT ALEX. BROWN INCORPORATED
By: /s/ Dalton G. Dwyer
--------------------------
Name: Dalton Dwyer
Title: Managing Director
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By:
--------------------------
Name:
Title:
UBS SECURITIES LLC
By:
--------------------------
Name:
Title:
UBS SECURITIES LLC
By:
--------------------------
Name:
Title:
<PAGE>
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
BT ALEX. BROWN INCORPORATED
By:
--------------------------
Name:
Title:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ Craig Packer
--------------------------
Name: Craig Packer
Title: Senior Vice President
UBS SECURITIES LLC
By:
--------------------------
Name:
Title:
UBS SECURITIES LLC
By:
--------------------------
Name:
Title:
<PAGE>
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
BT ALEX. BROWN INCORPORATED
By:
--------------------------
Name:
Title:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By:
--------------------------
Name:
Title:
UBS SECURITIES LLC
By: /s/ Nicholas Daifotis
--------------------------
Name: Nicholas Daifotis
Title: Managing Director
UBS SECURITIES LLC
By: /s/ Jean Smith
--------------------------
Name: Jean Smith
Title: Managing Director
<PAGE>
SCHEDULE 1
Principal
Amount of
Initial Purchaser Notes
- ----------------- ---------
BT Alex. Brown Incorporated................... $
Donaldson, Lufkin & Jenrette Securities
Corporation................................
UBS Securities LLC............................
------------
Total............................... $255,000,000
<PAGE>
SCHEDULE 2
Subsidiaries of the Company
Jurisdiction of
Name Organization
- ---- ------------
Fabricated Products, Inc. Delaware
Doe Run Cayman Ltd. Cayman Islands
Doe Run Mining S.R. Ltda. Peru
Doe Run Peru S.R. Ltda. Peru
DR Exploration (Proprietary) Limited South Africa
<PAGE>
Exhibit 4.3
================================================================================
REGISTRATION RIGHTS AGREEMENT
Dated as of March 12, 1998
By and Among
THE DOE RUN RESOURCES CORPORATION,
FABRICATED PRODUCTS, INC., DOE RUN
MINING S.R. LTDA., DOE RUN PERU S.R. LTDA.,
and
BT ALEX. BROWN INCORPORATED, DONALDSON, LUFKIN
& JENRETTE SECURITIES CORPORATION, AND
UBS SECURITIES LLC,
as Initial Purchasers
$200,000,000 11 1/4% Senior Notes due 2005
$55,000,000 Floating Interest Rate
Senior Notes due 2003
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TABLE OF CONTENTS
Page
----
1. Definitions.............................................................1
2. Exchange Offer..........................................................5
3. Shelf Registration.....................................................10
4. Additional Interest....................................................12
5. Registration Procedures................................................14
6. Registration Expenses..................................................26
7. Indemnification........................................................27
8. Rules 144 and 144A.....................................................32
9. Underwritten Registrations.............................................32
10. Miscellaneous.........................................................33
(a) No Inconsistent Agreements....................................33
(b) Adjustments Affecting Registrable Notes.......................33
(c) Amendments and Waivers........................................33
(d) Notices.......................................................34
(e) Successors and Assigns........................................35
(f) Counterparts..................................................35
(g) Headings......................................................36
(h) Governing Law.................................................36
(i) Severability..................................................36
(j) Securities Held by the Company, Guarantors
or Their Affiliates..........................................36
(k) Third Party Beneficiaries.....................................36
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REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is dated as of
March 12, 1998, by and among The Doe Run Resources Corporation, a New York
corporation (the "Company"), and Fabricated Products, Inc., a Delaware
corporation, Doe Run Cayman, Ltd., a Cayman Islands company, Doe Run Mining S.R.
Ltda., a Peruvian company and Doe Run Peru S.R. Ltda., a Peruvian company (each
individually, a "Guarantor" and collectively, the "Guarantors") and BT Alex.
Brown Incorporated, Donaldson, Lufkin & Jenrette Securities Corporation, and UBS
Securities LLC (each individually, an "Initial Purchaser" and collectively, the
"Initial Purchasers").
This Agreement is entered into in connection with the Purchase
Agreement, dated as of March 6, 1998, by and among the Company, the Guarantors
and the Initial Purchasers (the "Purchase Agreement"), which provides for the
sale by the Company to the Initial Purchasers of $200,000,000 aggregate
principal amount of its 11 1/4% Senior Notes due 2005 and $55,000,000 aggregate
principal amount of its Floating Interest Rate Senior Notes due 2003
(collectively, the "Notes") and the Guarantors' guarantees thereof. In order to
induce the Initial Purchasers to enter into the Purchase Agreement, the Company
and the Guarantors have agreed to provide the registration rights set forth in
this Agreement for the benefit of the Initial Purchasers and any subsequent
holder or holders of the Notes. The execution and delivery of this Agreement is
a condition to the Initial Purchasers' obligation to purchase the Notes under
the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the
following meanings:
Additional Interest: See Section 4(a) hereof.
Advice: See the last paragraph of Section 5 hereof.
Agreement: See the introductory paragraphs hereto.
Applicable Period: See Section 2(b) hereof.
Company: See the introductory paragraphs hereto.
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Effectiveness Date: With respect to (i) the Exchange Offer
Registration Statement, the 150th day after the Issue Date, (ii) the Initial
Shelf Registration Statement, the 150th day after delivery of the Shelf Notice
and (iii) all other Shelf Registration Statements, the 60th day after the filing
date thereof.
Effectiveness Period: See Section 3(a) hereof.
Event Date: See Section 4(b) hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
Exchange Notes: See Section 2(a) hereof.
Exchange Offer: See Section 2(a) hereof.
Exchange Offer Registration Statement: See Section 2(a)
hereof.
Filing Date: (A) If no Registration Statement has been filed by the
Company and the Guarantors pursuant to this Agreement, the 60th day after the
Issue Date; and (B) in any other case (which may be applicable notwithstanding
the consummation of the Exchange Offer), the 60th day after the delivery of a
Shelf Notice.
Guarantors: See the introductory paragraphs hereto.
Holder: Any holder of a Registrable Note or Registrable Notes.
Indemnified Person: See Section 7(c) hereof.
Indemnifying Person: See Section 7(c) hereof.
Indenture: The Indenture, dated as of March 12, 1998, by and among
the Company, the Guarantors and State Street Bank and Trust Company, as trustee,
pursuant to which the Notes are being issued, as the same may be amended or
supplemented from time to time in accordance with the terms thereof.
Initial Purchasers: See the introductory paragraphs hereto.
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Initial Shelf Registration: See Section 3(a) hereof.
Inspectors: See Section 5(o) hereof.
Issue Date: March 12, 1998, the date of original issuance of the
Notes.
NASD: See Section 5(s) hereof.
Notes: See the introductory paragraphs hereto.
Participant: See Section 7(a) hereof.
Participating Broker-Dealer: See Section 2(b) hereof.
Person: An individual, trustee, corporation, partnership, joint
stock company, trust, unincorporated association, union, business association,
firm or other legal entity.
Private Exchange: See Section 2(b) hereof.
Private Exchange Notes: See Section 2(b) hereof.
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, any prospectus subject to completion and a
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
under the Securities Act and any term sheet filed pursuant to Rule 434 under the
Securities Act), as amended or supplemented by any prospectus supplement, and
all other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
Purchase Agreement: See the introductory paragraphs hereof.
Records: See Section 5(n) hereof.
Registrable Notes: Each Note upon its original issuance and at all
times subsequent thereto, each Exchange Note as to which Section 2(c)(iv) hereof
is applicable upon original issuance and at all times subsequent thereto and
each Private Exchange Note upon original issuance thereof and at all times
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subsequent thereto, until (i) a Registration Statement (other than, with respect
to any Exchange Note as to which Section 2(c)(iv) hereof is applicable, the
Exchange Offer Registration Statement) covering such Note, Exchange Note or
Private Exchange Note has been declared effective by the SEC and such Note,
Exchange Note or such Private Exchange Note, as the case may be, has been
disposed of in accordance with such effective Registration Statement, (ii) such
Note has been, or could have been, exchanged pursuant to the Exchange Offer for
an Exchange Note or Exchange Notes that may be resold without restriction under
federal securities laws, (iii) such Note, Exchange Note or Private Exchange
Note, as the case may be, ceases to be outstanding for purposes of the Indenture
or (iv) such Note, Exchange Note or Private Exchange Note, as the case may be,
may be resold without restriction pursuant to Rule 144 under the Securities Act.
Registration Statement: Any registration statement of the Company
and the Guarantors that covers any of the Notes, the Exchange Notes or the
Private Exchange Notes filed with the SEC under the Securities Act, including
the Prospectus, amendments and supplements to such registration statement,
including post-effective amendments, all exhibits, and all material incorporated
by reference or deemed to be incorporated by reference in such registration
statement.
Rule 144: Rule 144 promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than Rule
144A) or regulation hereafter adopted by the SEC providing for offers and sales
of securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of the Company or the Guarantors of
such securities being free of the registration and prospectus delivery
requirements of the Securities Act.
Rule 144A: Rule 144A promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than Rule 144)
or regulation hereafter adopted by the SEC.
Rule 415: Rule 415 promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
SEC: The Securities and Exchange Commission.
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Securities Act: The Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
Shelf Notice: See Section 2(b) hereof.
Shelf Registration: See Section 3(b) hereof.
Shelf Registration Statement: Any Registration Statement relating to
a Shelf Registration.
Subsequent Shelf Registration: See Section 3(b) hereof.
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The trustee under the Indenture.
Underwritten registration or underwritten offering: A registration
in which securities of the Company and the Guarantors are sold to an underwriter
for reoffering to the public.
2. Exchange Offer
(a) To the extent not prohibited by applicable law or applicable
interpretation of the staff of the Division of Corporation Finance of the SEC,
the Company and the Guarantors shall file with the SEC, no later than the Filing
Date, a Registration Statement (the "Exchange Offer Registration Statement") on
an appropriate registration form with respect to a registered offer (the
"Exchange Offer") to exchange any and all of the Registrable Notes for a like
aggregate principal amount of notes (the "Exchange Notes") of the Company,
guaranteed by the Guarantors, that are identical in all material respects to the
Notes except that the Exchange Notes shall contain no restrictive legend
thereon. The Exchange Offer shall comply with all applicable tender offer rules
and regulations under the Exchange Act and other applicable laws. The Company
and the Guarantors shall use their reasonable efforts to (x) cause the Exchange
Offer Registration Statement to be declared effective under the Securities Act
on or before the Effectiveness Date; (y) keep the Exchange Offer open for at
least 20 business days (or longer if required by applicable law) after the date
that notice of the Exchange Offer is mailed to Holders; and (z) consummate the
Exchange Offer on or prior to the 180th day after the Issue Date. If, after the
Exchange Offer Registra-
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<PAGE>
tion Statement is initially declared effective by the SEC, the Exchange Offer or
the issuance of the Exchange Notes thereunder is interfered with by any stop
order, injunction or other order or requirement of the SEC or any other
governmental agency or court, the Exchange Offer Registration Statement shall be
deemed not to have become effective for purposes of this Agreement.
Each Holder that participates in the Exchange Offer will be required
to represent that any Exchange Notes to be received by it will be acquired in
the ordinary course of its business, that at the time of the consummation of the
Exchange Offer such Holder will have no arrangement or understanding with any
Person to participate in the distribution of the Exchange Notes in violation of
the provisions of the Securities Act, and that such Holder is not an affiliate
of the Company or the Guarantors within the meaning of the Securities Act.
Upon consummation of the Exchange Offer in accordance with this
Section 2, the provisions of this Agreement shall continue to apply, solely with
respect to Registrable Notes that are Private Exchange Notes, Exchange Notes as
to which Section 2(c)(iv) is applicable and Exchange Notes held by Participating
Broker-Dealers, and the Company and the Guarantors shall have no further
obligation to register Registrable Notes (other than Private Exchange Notes and
other than in respect of any Exchange Notes as to which clause 2(c)(iv) hereof
applies) pursuant to Section 3 hereof. No securities other than the Exchange
Notes shall be included in the Exchange Offer Registration Statement.
(b) The Company and the Guarantors shall include within the
Prospectus contained in the Exchange Offer Registration Statement a section
entitled "Plan of Distribution," reasonably acceptable to the Holders, which
shall contain a summary statement of the positions taken or policies made by the
staff of the SEC with respect to the potential "underwriter" status of any
broker-dealer that is the beneficial owner (as defined in Rule 13d-3 under the
Exchange Act) of Exchange Notes received by such broker-dealer in the Exchange
Offer (a "Participating Broker-Dealer"), whether such positions or policies have
been publicly disseminated by the staff of the SEC or such positions or policies
represent the prevailing views of the staff of the SEC. Such "Plan of
Distribution" section shall also expressly permit, to the extent permitted by
applicable policies and regulations of the SEC, the use of the Pro-
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<PAGE>
spectus by all Persons subject to the prospectus delivery requirements of the
Securities Act, including, to the extent permitted by applicable policies and
regulations of the SEC, all Participating Broker-Dealers, and include a
statement describing the means by which Participating Broker-Dealers may resell
the Exchange Notes in compliance with the Securities Act.
The Company and Guarantors shall use their reasonable efforts to
keep the Exchange Offer Registration Statement effective and to amend and
supplement the Prospectus contained therein in order to permit such Prospectus
to be lawfully delivered by all Persons subject to the prospectus delivery
requirements of the Securities Act for such period of time as is necessary to
comply with applicable law in connection with any resale of the Exchange Notes
covered thereby; provided, however, that such period shall not exceed 180 days
after such Exchange Offer Registration Statement is declared effective (or such
longer period if extended pursuant to the last paragraph of Section 5 hereof)
(the "Applicable Period").
If, prior to consummation of the Exchange Offer, the Initial
Purchasers hold any Notes acquired by it that have, or that are reasonably
likely to be determined to have, the status of an unsold allotment in an initial
distribution, or any Holder is not entitled to participate in the Exchange
Offer, the Company and the Guarantors upon the request of any such Holder shall
simultaneously with the delivery of the Exchange Notes in the Exchange Offer,
issue and deliver to any such Holder, in exchange (the "Private Exchange") for
such Notes held by any such Holder, a like principal amount of notes (the
"Private Exchange Notes") of the Company, guaranteed by the Guarantors, that are
identical in all material respects to the Exchange Notes (except that they may
bear a customary legend with respect to restrictions on transfer). The Private
Exchange Notes shall be issued pursuant to the same indenture as the Exchange
Notes and bear the same CUSIP number as the Exchange Notes.
Interest on the Exchange Notes and the Private Exchange Notes will
accrue from (A) the later of (i) the last interest payment date on which
interest was paid on the Notes surrendered in exchange therefor or (ii) if the
Notes are surrendered for exchange on a date subsequent to the record date for
an interest payment date to occur on or after the date of such exchange and as
to which interest will be paid, the date
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of such interest payment or (B) if no interest has been paid on the Notes, from
the date of the original issuance of the Notes.
In connection with the Exchange Offer, the Company and the
Guarantors shall:
(1) mail, or cause to be mailed, to each Holder entitled to
participate in the Exchange Offer a copy of the Prospectus forming part of
the Exchange Offer Registration Statement, together with an appropriate
letter of transmittal and related documents;
(2) keep the Exchange Offer open for not less than 20 business days
after the date that notice of the Exchange Offer is mailed to Holders (or
longer if required by applicable law);
(3) utilize the services of a depositary for the Exchange Offer with
an address in the Borough of Manhattan, The City of New York;
(4) permit Holders to withdraw tendered Notes at any time prior to
the close of business, New York time, on the last business day on which
the Exchange Offer shall remain open; provided, however, that withdrawal
rights may be terminated upon any extension of the Exchange Offer; and
(5) otherwise comply in all material respects with all applicable
laws, rules and regulations.
As soon as practicable after the close of the Exchange Offer and the
Private Exchange, if any, the Company and the Guarantors shall:
(1) accept for exchange all Registrable Notes validly tendered and
not validly withdrawn pursuant to the Exchange Offer and the Private
Exchange, if any;
(2) deliver to the Trustee for cancellation all Registrable Notes so
accepted for exchange; and
(3) cause the Trustee to authenticate and deliver promptly to each
Holder of Registrable Notes, Exchange Notes or Private Exchange Notes, as
the case may be, equal in principal amount to the Registrable Notes of
such Holder so accepted for exchange.
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The Exchange Offer and the Private Exchange shall not be subject to
any conditions, other than that (i) the Exchange Offer or Private Exchange, as
the case may be, does not violate applicable law or any applicable
interpretation of the staff of the SEC, (ii) no action or proceeding shall have
been instituted or threatened in any court or by any governmental agency which
might materially impair the ability of the Company and the Guarantors to proceed
with the Exchange Offer or the Private Exchange, and no material adverse
development shall have occurred in any existing action or proceeding with
respect to the Company and the Guarantors and (iii) all governmental approvals
shall have been obtained, which approvals the Company and the Guarantors deem
necessary for the consummation of the Exchange Offer or Private Exchange.
The Exchange Notes and the Private Exchange Notes shall be issued
under (i) the Indenture or (ii) an indenture identical in all material respects
to the Indenture and which, in either case, has been qualified under the TIA or
is exempt from such qualification and shall provide that the Exchange Notes
shall not be subject to the transfer restrictions set forth in the Indenture.
The Indenture or such indenture shall provide that the Exchange Notes, the
Private Exchange Notes and the Notes shall vote and consent together on all
matters as one class and that none of the Exchange Notes, the Private Exchange
Notes or the Notes will have the right to vote or consent as a separate class on
any matter.
(c) If, (i) because of any change in law or in currently prevailing
interpretations of the staff of the SEC, the Company and the Guarantors are not
permitted to effect the Exchange Offer, (ii) the Exchange Offer is not
consummated within 180 days of the Issue Date, (iii) the Initial Purchasers or
any holder of Private Exchange Notes so requests in writing to the Company and
the Guarantors at any time after the consummation of the Exchange Offer, or (iv)
in the case of any Holder that participates in the Exchange Offer, such Holder
does not receive Exchange Notes on the date of the exchange that may be sold
without restriction under federal securities laws (other than due solely to the
status of such Holder as an affiliate of any of the Company or the Guarantors
within the meaning of the Securities Act) and so notifies the Company and the
Guarantors within 30 days after such Holder first becomes aware of such
restrictions, in the case of each of clauses (i) to and including (iv) of this
sentence, then the Company and the Guarantors shall promptly deliver to the
Holders and the Trustee written
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notice thereof (the "Shelf Notice") and shall file a Shelf Registration pursuant
to Section 3 hereof.
3. Shelf Registration
If at any time a Shelf Notice is delivered as contemplated by
Section 2(c) hereof, then:
(a) Shelf Registration. The Company and the Guarantors shall file
with the SEC a Registration Statement for an offering to be made on a continuous
basis pursuant to Rule 415 covering all of the Registrable Notes not permitted
to be exchanged in the Exchange Offer in accordance with the terms of this
Agreement, Private Exchange Notes and Exchange Notes as to which Section
2(c)(iv) is applicable (the "Initial Shelf Registration"). The Company and the
Guarantors shall use their reasonable efforts to file with the SEC the Initial
Shelf Registration on or before the applicable Filing Date. The Initial Shelf
Registration shall be on Form S-1 or another appropriate form permitting
registration of such Registrable Notes for resale by Holders in the reasonable
manner or manners designated by them (including, without limitation, one or more
underwritten offerings). The Company and the Guarantors shall not permit any
securities other than the Registrable Notes to be included in the Initial Shelf
Registration or any Subsequent Shelf Registration (as defined below).
The Company and the Guarantors shall use their reasonable efforts to
cause the Initial Shelf Registration to be declared effective under the
Securities Act on or prior to the Effectiveness Date and to keep the Initial
Shelf Registration continuously effective under the Securities Act until the
date which is two years from the Issue Date, subject to extension pursuant to
the last paragraph of Section 5 hereof (the "Effectiveness Period"), or such
shorter period ending when all Registrable Notes covered by the Shelf
Registration have been sold in the manner set forth and as contemplated in the
Initial Shelf Registration or, if applicable, a Subsequent Shelf Registration;
provided, however, that the Effectiveness Period in respect of the Initial Shelf
Registration shall be extended to the extent required to permit dealers to
comply with the applicable prospectus delivery requirements of Rule 174 under
the Securities Act and as otherwise provided herein and shall be subject to
reduction to the extent that the applicable provisions of Rule 144(k) are
amended or revised to reduce the two
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year holding period set forth therein or any similar rule providing for a
shorter holding period.
No holder of Registrable Notes may include any of its Registrable
Notes in any Shelf Registration Statement pursuant to this Agreement unless and
until such holder furnishes to the Company and the Guarantors in writing, within
15 business days after receipt of a request therefor, such information as the
Company and the Guarantors may reasonably request for use in connection with any
Shelf Registration Statement or Prospectus or preliminary prospectus included
therein. No holder of Registrable Notes shall be entitled to Additional Interest
pursuant to Section 4 hereof unless and until such holder shall have provided
all such reasonably requested information. Each holder of Registrable Notes as
to which any Shelf Registration Statement is being effected agrees to furnish
promptly to the Company and the Guarantors all information required to be
disclosed in order to make information previously furnished to the Company and
the Guarantors by such Holder not a material misstatement or omission.
(b) Subsequent Shelf Registrations. If the Initial Shelf
Registration or any Subsequent Shelf Registration ceases to be effective for any
reason at any time during the Effectiveness Period (other than because of the
sale of all of the securities registered thereunder), the Company and the
Guarantors shall use their reasonable efforts to obtain the prompt withdrawal of
any order suspending the effectiveness thereof, and in any event shall within 30
days of such cessation of effectiveness amend the Initial Shelf Registration in
a manner to obtain the withdrawal of the order suspending the effectiveness
thereof, or file an additional Shelf Registration Statement pursuant to Rule 415
covering all of the Registrable Notes covered by and not sold under the Initial
Shelf Registration or an earlier Subsequent Shelf Registration (each, a
"Subsequent Shelf Registration"). If a Subsequent Shelf Registration is filed,
the Company and the Guarantors shall use their reasonable efforts to cause the
Subsequent Shelf Registration to be declared effective under the Securities Act
as soon as practicable after such filing and to keep such subsequent Shelf
Registration continuously effective for a period equal to the number of days in
the Effectiveness Period (subject to reduction as provided herein) less the
aggregate number of days during which the Initial Shelf Registration or any
Subsequent Shelf Registration was previously continuously effective. As used
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herein the term "Shelf Registration" means the Initial Shelf Registration and
any Subsequent Shelf Registration.
(c) Supplements and Amendments. The Company and the Guarantors shall
promptly supplement and amend any Shelf Registration if required by the rules,
regulations or instructions applicable to the registration form used for such
Shelf Registration, if required by the Securities Act, or if reasonably
requested by the Holders of a majority in aggregate principal amount of the
Registrable Notes covered by such Registration Statement or by any underwriter
of such Registrable Notes.
(d) Withdrawal of Stop Orders. If the Shelf Registration ceases to
be effective for any reason at any time during the Effectiveness Period (other
than because of the sale of all of the securities registered thereunder), the
Company and the Guarantors shall use their reasonable efforts to obtain the
prompt withdrawal of any order suspending the effectiveness thereof.
4. Additional Interest
(a) The Company, the Guarantors and the Initial Purchasers agree
that the Holders will suffer damages if the Company and the Guarantors fail to
fulfill their obligations under Section 2 or Section 3 hereof and that it would
not be feasible to ascertain the extent of such damages with precision.
Accordingly, the Company and the Guarantors agree to pay, as liquidated damages,
additional interest on the Notes ("Additional Interest") under the circumstances
and to the extent set forth below (each of which shall be given independent
effect):
(i) if (A) neither the Exchange Offer Registration Statement nor the
Initial Shelf Registration has been filed on or prior to the Filing Date
applicable thereto (i.e., 60 days after the Issue Date or delivery of the
Shelf Notice, as applicable) or (B) notwith-standing that the Company and
the Guarantors have consummated or will consummate the Exchange Offer, the
Company and the Guarantors are required to file a Shelf Registration and
such Shelf Registration is not filed on or prior to the Filing Date
applicable thereto, then, commencing on the day after any such Filing
Date, Additional Interest shall accrue on the principal amount of the
Notes at a rate of 0.50% per annum for the first 90 days immediately
following such applicable Filing Date, and such Additional Interest rate
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shall increase by an additional 0.50% per annum at the beginning of each
subsequent 90-day period; or
(ii) if (A) neither the Exchange Offer Registration Statement nor
the Initial Shelf Registration is declared effective by the SEC on or
prior to the Effectiveness Date applicable thereto (i.e., 150 days after
the Issue Date or delivery of the Shelf Notice, as applicable) or (B)
notwithstanding that the Company and the Guarantors have consummated or
will consummate the Exchange Offer, the Company and the Guarantors are
required to file a Shelf Registration and such Shelf Registration is not
declared effective by the SEC on or prior to the Effectiveness Date
applicable to such Shelf Registration, then, commencing on the day after
such Effectiveness Date, Additional Interest shall accrue on the principal
amount of the Notes at a rate of 0.50% per annum for the first 90 days
immediately following the day after such Effectiveness Date, and such
Additional Interest rate shall increase by an additional 0.50% per annum
at the beginning of each subsequent 90-day period;
(iii) if (A) the Company and the Guarantors have not exchanged
Exchange Notes for all Notes validly tendered in accordance with the terms
of the Exchange Offer on or prior to the 195th day after the Issue Date or
(B) if applicable, a Shelf Registration has been declared effective and
such Shelf Registration ceases to be effective at any time during the
Effectiveness Period, then Additional Interest shall accrue on the
principal amount of the Notes at a rate of 0.50% per annum for the first
90 days commencing on the (x) 196th day after the Issue Date, in the case
of (A) above, or (y) the day such Shelf Registration ceases to be
effective in the case of (B) above, and such Additional Interest rate
shall increase by an additional 0.50% per annum at the beginning of each
such subsequent 90-day period;
provided, however, that the Additional Interest rate on the Notes may not exceed
at any one time in the aggregate 1.0% per annum; provided, further, however,
that (1) upon the filing of the applicable Exchange Offer Registration Statement
or the applicable Shelf Registration as required hereunder (in the case of
clause (i) above of this Section 4), (2) upon the effectiveness of the Exchange
Offer Registration Statement or the applicable Shelf Registration Statement as
required hereunder (in
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the case of clause (ii) of this Section 4), or (3) upon the exchange of the
Exchange Notes for all Notes tendered (in the case of clause (iii)(A) of this
Section 4), or upon the effectiveness of the applicable Shelf Registration
Statement which had ceased to remain effective (in the case of (iii)(B) of this
Section 4), Additional Interest on the Notes in respect of which such events
relate as a result of such clause (or the relevant subclause thereof), as the
case may be, shall cease to accrue.
(b) The Company and the Guarantors shall notify the Trustee within
one business day after each and every date on which an event occurs in respect
of which Additional Interest is required to be paid (an "Event Date"). Any
amounts of Additional Interest due pursuant to (a)(i), (a)(ii) or (a)(iii) of
this Section 4 will be payable in cash semi-annually on each March 15 and
September 15 (to the holders of record on the March 1 and September 1
immediately preceding such dates), commencing with the first such date occurring
after any such Additional Interest commences to accrue. The amount of Additional
Interest will be determined by multiplying the applicable Additional Interest
rate by the principal amount of the Registrable Notes, multiplied by a fraction,
the numerator of which is the number of days such Additional Interest rate was
applicable during such period (determined on the basis of a 360-day year
composed of twelve 30-day months and, in the case of a partial month, the actual
number of days elapsed), and the denominator of which is 360.
5. Registration Procedures
In connection with the filing of any Registration Statement pursuant
to Sections 2 or 3 hereof, the Company and the Guarantors shall effect such
registrations to permit the sale of the securities covered thereby in accordance
with the intended method or methods of disposition thereof, and pursuant thereto
and in connection with any Registration Statement filed by the Company and the
Guarantors hereunder the Company and Guarantors shall:
(a) Prepare and file with the SEC prior to the applicable Filing
Date, a Registration Statement or Registration Statements as prescribed by
Sections 2 or 3 hereof, and use its reasonable efforts to cause each such
Registration Statement to become effective and remain effective as
provided herein; provided, however, that, if
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(1) such filing is pursuant to Section 3 hereof or (2) a Prospectus
contained in the Exchange Offer Registration Statement filed pursuant to
Section 2 hereof is required to be delivered under the Securities Act by
any Participating Broker-Dealer who seeks to sell Exchange Notes during
the Applicable Period relating thereto, before filing any Registration
Statement or Prospectus or any amendments or supplements thereto, the
Company and the Guarantors shall furnish to and afford the Holders of the
Registrable Notes covered by such Registration Statement or BT Alex. Brown
Incorporated (the "Representative") on behalf of such Participating
Broker-Dealer, as the case may be, their or its counsel and the managing
underwriters, if any, a reasonable opportunity to review copies of all
such documents (including copies of any documents to be incorporated by
reference therein and all exhibits thereto) proposed to be filed (in each
case at least five business days prior to such filing, or such later date
as is reasonable under the circumstances). The Company and the Guarantors
shall not file any Registration Statement or Prospectus or any amendments
or supplements thereto if the Holders of a majority in aggregate principal
amount of the Registrable Notes covered by such Registration Statement,
their counsel, or the managing underwriters, if any, shall reasonably
object.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Shelf Registration Statement or Exchange Offer
Registration Statement, as the case may be, as may be necessary to keep
such Registration Statement continuously effective for the Effectiveness
Period or the Applicable Period or until consummation of the Exchange
Offer, as the case may be; cause the related Prospectus to be supplemented
by any Prospectus supplement required by applicable law, and as so
supplemented to be filed pursuant to Rule 424 (or any similar provisions
then in force) promulgated under the Securities Act; and comply with the
provisions of the Securities Act and the Exchange Act applicable to it
with respect to the disposition of all securities covered by such
Registration Statement as so amended or in such Prospectus as so
supplemented and with respect to the subsequent resale of any securities
being sold by a Participating Broker-Dealer covered by any such
Prospectus. The Company and the Guarantors shall be deemed not to have
used their reasonable efforts to keep a Registration Statement effective
during the Effective Pe-
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<PAGE>
riod or the Applicable Period, as the case may be, relating thereto if the
Company and the Guarantors voluntarily take any action that would result
in selling Holders of the Registrable Notes covered thereby or
Participating Broker-Dealers seeking to sell Exchange Notes not being able
to sell such Registrable Notes or such Exchange Notes during that period
unless (i) such action is required by applicable law or (ii) the Company
and the Guarantors comply with this Agreement, including without
limitation, the provisions of Section 5(k) or the last paragraph of this
Section 5.
(c) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Offer Registration
Statement filed pursuant to Section 2 hereof is required to be delivered
under the Securities Act by any Participating Broker-Dealer who seeks to
sell Exchange Notes during the Applicable Period relating thereto from
whom the Company and the Guarantors have received written notice that it
will be a Participating Broker-Dealer in the Exchange Offer, notify the
selling Holders of Registrable Notes, or the Representative on behalf of
such Participating Broker-Dealer, as the case may be, their or its counsel
and the managing underwriters, if any, promptly (but in any event within
two business days), and confirm such notice in writing, (i) when a
Prospectus or any Prospectus supplement or post-effective amendment has
been filed, and, with respect to a Registration Statement or any
post-effective amendment, when the same has become effective under the
Securities Act (including in such notice a written statement that any
Holder may, upon request, obtain, at the sole expense of the Company and
the Guarantors, one conformed copy of such Registration Statement or
post-effective amendment including financial statements and schedules,
documents incorporated or deemed to be incorporated by reference therein
and exhibits), (ii) of the issuance by the SEC of any stop order
suspending the effectiveness of a Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus or the
initiation of any proceedings for that purpose, (iii) if at any time when
a prospectus is required by the Securities Act to be delivered in
connection with sales of the Registrable Notes or resales of Exchange
Notes by Participating Broker-Dealers the representations and warranties
of the Company and the Guarantors contained in any agreement (including
any underwriting
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<PAGE>
agreement) contemplated by Section 5(m) hereof cease to be true and
correct in all material respects, (iv) of the receipt by the Company and
the Guarantors of any notification with respect to the suspension of the
qualification or exemption from qualification of a Registration Statement
or any of the Registrable Notes or the Exchange Notes to be sold by any
Participating Broker-Dealer for offer or sale in any jurisdiction, or the
initiation or threatening of any proceeding for such purpose, (v) of the
happening of any event, the existence of any condition or any information
becoming known that makes any statement made in such Registration
Statement or related Prospectus or any document incorporated or deemed to
be incorporated therein by reference untrue in any material respect or
that requires the making of any changes in or amendments or supplements to
such Registration Statement, Prospectus or documents so that, in the case
of the Registration Statement, it will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and
that in the case of the Prospectus, it will not contain any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading, and (vi)
of any of the Company's and the Guarantors' determination that a
post-effective amendment to a Registration Statement would be appropriate.
(d) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Offer Registration
Statement filed pursuant to Section 2 hereof is required to be delivered
under the Securities Act by any Participating Broker-Dealer who seeks to
sell Exchange Notes during the Applicable Period, use its reasonable
efforts to prevent the issuance of any order suspending the effectiveness
of a Registration Statement or of any order preventing or suspending the
use of a Prospectus or suspending the qualification (or exemption from
qualification) of any of the Registrable Notes or the Exchange Notes to be
sold by any Participating Broker-Dealer, for sale in any jurisdiction,
and, if any such order is issued, to use its reasonable efforts to obtain
the withdrawal of any such order at the earliest possible date.
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<PAGE>
(e) If a Shelf Registration is filed pursuant to Section 3 and if
requested by the managing underwriter or underwriters (if any), the
Holders of a majority in aggregate principal amount of the Registrable
Notes being sold in connection with an underwritten offering or any
Participating Broker-Dealer, (i) promptly as practicable incorporate in a
prospectus supplement or post-effective amendment such information as the
managing underwriter or underwriters (if any), such Holders, any
Participating Broker-Dealer or counsel for any of them reasonably request
to be included therein, (ii) make all required filings of such prospectus
supplement or such post-effective amendment as soon as practicable after
the Company and the Guarantors have received notification of the matters
to be incorporated in such prospectus supplement or post-effective
amendment, and (iii) supplement or make amendments to such Registration
Statement.
(f) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Offer Registration
Statement filed pursuant to Section 2 hereof is required to be delivered
under the Securities Act by any Participating Broker-Dealer who seeks to
sell Exchange Notes during the Applicable Period, furnish to each selling
Holder of Registrable Notes and the Representative on behalf of such
Participating Broker-Dealer and to counsel and each managing underwriter,
if any, at the sole expense of the Company and the Guarantors, one
conformed copy of the Registration Statement or Registration Statements
and each post-effective amendment thereto, including financial statements
and schedules, and, if requested, all documents incorporated or deemed to
be incorporated therein by reference and all exhibits.
(g) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Offer Registration
Statement filed pursuant to Section 2 hereof is required to be delivered
under the Securities Act by any Participating Broker-Dealer who seeks to
sell Exchange Notes during the Applicable Period, deliver to each selling
Holder of Registrable Notes, or each such Participating Broker-Dealer, as
the case may be, their respective counsel, and the underwriters, if any,
at the sole expense of the Company and the Guarantors, as many copies of
the Prospectus or Prospectuses (including each form of preliminary
prospectus) and each amendment or sup-
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<PAGE>
plement thereto and any documents incorporated by reference therein as
such Persons may reasonably request; and, subject to the last paragraph of
this Section 5, the Company and the Guarantors hereby consent to the use
of such Prospectus and each amendment or supplement thereto by each of the
selling Holders of Registrable Notes or each such Participating
Broker-Dealer, as the case may be, and the underwriters or agents, if any,
and dealers (if any), in connection with the offering and sale of the
Registrable Notes covered by, or the sale by Participating Broker-Dealers
of the Exchange Notes pursuant to, such Prospectus and any amendment or
supplement thereto.
(h) Prior to any public offering of Registrable Notes or any
delivery of a Prospectus contained in the Exchange Offer Registration
Statement by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, to use its reasonable efforts to
register or qualify, and to cooperate with the selling Holders of
Registrable Notes or the Representative on behalf of such Participating
Broker-Dealer, as the case may be, the managing underwriter or
underwriters, if any, and their respective counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Notes for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States
as any selling Holder, Participating Broker-Dealer, or the managing
underwriter or underwriters reasonably request in writing; provided,
however, that where Exchange Notes held by Participating Broker-Dealers or
Registrable Notes are offered other than through an underwritten offering,
the Company and the Guarantors agree to cause its counsel to perform Blue
Sky investigations and file registrations and qualifications required to
be filed pursuant to this Section 5(h); keep each such registration or
qualification (or exemption therefrom) effective during the period such
Registration Statement is required to be kept effective and do any and all
other acts or things reasonably necessary or advisable to enable the
disposition in such jurisdictions of the Exchange Notes held by
Participating Broker-Dealers or the Registrable Notes covered by the
applicable Registration Statement; provided, however, that the Company and
the Guarantors shall not be required to (A) qualify generally to do
business in any jurisdiction where it is not then so qualified, (B) take
any action that would subject it to
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<PAGE>
general service of process in any such jurisdiction where it is not then
so subject or (C) subject itself to taxation in excess of a nominal dollar
amount in any such jurisdiction where it is not then so subject.
(i) If a Shelf Registration is filed pursuant to Section 3 hereof,
cooperate with the selling Holders of Registrable Notes and the managing
underwriter or underwriters, if any, to facilitate the timely preparation
and delivery of certificates representing Registrable Notes to be sold,
which certificates shall not bear any restrictive legends and shall be in
a form eligible for deposit with The Depository Trust Company; and enable
such Registrable Notes to be in such denominations and registered in such
names as the managing underwriter or underwriters, if any, or Holders may
reasonably request.
(j) Use its reasonable efforts to cause the Registrable Notes
covered by the Registration Statement to be registered with or approved by
such other governmental agencies or authorities as may be reasonably
necessary to enable the seller or sellers thereof or the underwriter or
underwriters, if any, to consummate the disposition of such Registrable
Notes, except as may be required solely as a consequence of the nature of
such selling Holder's business, in which case the Company and the
Guarantors will cooperate in all reasonable respects with the filing of
such Registration Statement and the granting of such approvals.
(k) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Offer Registration
Statement filed pursuant to Section 2 hereof is required to be delivered
under the Securities Act by any Participating Broker-Dealer who seeks to
sell Exchange Notes during the Applicable Period, upon the occurrence of
any event contemplated by paragraph 5(c)(v) or 5(c)(vi) hereof, as
promptly as practicable prepare and (subject to Section 5(a) hereof) file
with the SEC, at the sole expense of the Company and the Guarantors, a
supplement or post-effective amendment to the Registration Statement or a
supplement to the related Prospectus or any document incorporated or
deemed to be incorporated therein by reference, or file any other required
document so that, as thereafter delivered to the purchasers of the
Registrable Notes being sold thereunder or to the purchasers of
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<PAGE>
the Exchange Notes to whom such Prospectus will be delivered by a
Participating Broker-Dealer, any such Prospectus will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
(l) Prior to the effective date of the first Registration Statement
relating to the Registrable Notes, (i) provide the Trustee with
certificates for the Registrable Notes or Exchange Notes, as the case may
be, in a form eligible for deposit with The Depository Trust Company and
(ii) provide a CUSIP number for the Registrable Notes or Exchange Notes,
as the case may be.
(m) In connection with any underwritten offering of Registrable
Notes pursuant to a Shelf Registration, enter into an underwriting
agreement as is customary in underwritten offerings of debt securities
similar to the Notes in form and substance reasonably satisfactory to the
Company and the Guarantors and take all such other actions as are
reasonably requested by the managing underwriter or underwriters in order
to expedite or facilitate the registration or the disposition of such
Registrable Notes and, in such connection, (i) make such representations
and warranties to, and covenants with, the underwriters with respect to
the business of the Company, the Guarantors and their subsidiaries and the
Registration Statement, Prospectus and documents, if any, incorporated or
deemed to be incorporated by reference therein, in each case, as are
customarily made by issuers to underwriters in underwritten offerings of
debt securities similar to the Notes, and confirm the same in writing if
and when requested in form and substance reasonably satisfactory to the
Company and the Guarantors; (ii) obtain the written opinions of counsel to
the Company and the Guarantors and written updates thereof in form, scope
and substance reasonably satisfactory to the managing underwriter or
underwriters, addressed to the underwriters covering the matters
customarily covered in opinions reasonably requested in underwritten
offerings and such other matters as may be reasonably requested by the
managing underwriter or underwriters; (iii) use its reasonable efforts to
obtain "cold comfort" letters and updates thereof in form, scope and
substance reasonably satisfactory to the managing underwriter or
un-
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<PAGE>
derwriters from the independent certified public accountants of the
Company and the Guarantors (and, if necessary, any other independent
certified public accountants of any subsidiary of the Company, the
Guarantors or of any business acquired by the Company or the Guarantors
for which financial statements and financial data are, or are required to
be, included or incorporated by reference in the Registration Statement),
addressed to the underwriter, such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort" letters
in connection with underwritten offerings of debt securities similar to
the Notes and such other matters as reasonably requested by the managing
underwriter or underwriters as permitted by the Statement on Auditing
Standards No. 72; and (iv) if an underwriting agreement is entered into,
the same shall contain indemnification provisions and procedures no less
favorable to the sellers and underwriters, if any, than those set forth in
Section 7 hereof (or such other provisions and procedures acceptable to
Holders of a majority in aggregate principal amount of Registrable Notes
covered by such Registration Statement and the managing underwriter or
underwriters or agents, if any). The above shall be done at each closing
under such underwriting agreement, or as and to the extent required
thereunder.
(n) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Offer Registration
Statement filed pursuant to Section 2 hereof is required to be delivered
under the Securities Act by any Participating Broker-Dealer who seeks to
sell Exchange Notes during the Applicable Period, make available for
inspection by any selling Holder of such Registrable Notes being sold, or
each such Participating Broker-Dealer, as the case may be, any underwriter
participating in any such disposition of Registrable Notes, if any, and
any attorney, accountant or other agent retained by any such selling
Holder or each such Participating Broker-Dealer, as the case may be, or
underwriter (collectively, the "Inspectors"), at the offices where
normally kept, during reasonable business hours, all financial and other
records, pertinent corporate documents and instruments of the Company, the
Guarantors and their subsidiaries (collectively, the "Records") as shall
be reasonably necessary to enable them to exercise any applicable due
diligence responsibilities, and cause the offi-
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<PAGE>
cers, directors and employees of the Company, the Guarantors and their
subsidiaries to supply all information reasonably requested by any such
Inspector in connection with such Registration Statement and Prospectus.
Each Inspector shall agree in writing that it will keep the Records
confidential and that it will not disclose any of the Records unless (i)
the disclosure of such Records is necessary to avoid or correct a
misstatement or omission in such Registration Statement or Prospectus,
(ii) the release of such Records is ordered pursuant to a subpoena or
other order from a court of competent jurisdiction, or (iii) the
information in such Records has been made generally available to the
public. Each selling Holder of such Registrable Notes and each such
Participating Broker-Dealer will be required to agree that information
obtained by it as a result of such inspections shall be deemed
confidential and shall not be used by it as the basis for any market
transactions in the securities of the Company and the Guarantors unless
and until such information is made generally available to the public. Each
selling Holder of such Registrable Notes and each such Participating
Broker-Dealer will be required to further agree that it will, upon
learning that disclosure of such Records is sought in a court of competent
jurisdiction, give notice to the Company and the Guarantors and allow the
Company and the Guarantors to undertake appropriate action to prevent
disclosure of the Records deemed confidential at the Company's and the
Guarantors' expense.
(o) Provide an indenture trustee for the Registrable Notes or the
Exchange Notes, as the case may be, and cause the Indenture or the trust
indenture provided for in Section 2(a) hereof, as the case may be, to be
qualified under the TIA not later than the effective date of the first
Registration Statement relating to the Registrable Notes; and in
connection therewith, cooperate with the trustee under any such indenture
and the Holders of the Registrable Notes, to effect such changes to such
indenture as may be required for such indenture to be so qualified in
accordance with the terms of the TIA; and execute, and use its best
efforts to cause such trustee to execute, all documents as may be required
to effect such changes, and all other forms and documents required to be
filed with the SEC to enable such indenture to be so qualified in a timely
manner.
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<PAGE>
(p) Comply with all applicable rules and regulations of the SEC and
make generally available to their respective securityholders earnings
statements satisfying the provisions of Section 11(a) of the Securities
Act and Rule 158 thereunder (or any similar rule promulgated under the
Securities Act) no later than 45 days after the end of any 12-month period
(or 90 days after the end of any 12-month period if such period is a
fiscal year) (i) commencing at the end of any fiscal quarter in which
Registrable Notes are sold to underwriters in a firm commitment or best
efforts underwritten offering and (ii) if not sold to underwriters in such
an offering, commencing on the first day of the first fiscal quarter of
the Company and the Guarantors after the effective date of a Registration
Statement, which statements shall cover said 12-month periods.
(q) If the Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Registrable Notes by Holders to the
Company and the Guarantors (or to such other Person as directed by the
Company and the Guarantors) in exchange for the Exchange Notes or the
Private Exchange Notes, as the case may be, the Company and the Guarantors
shall mark, or cause to be marked, on such Registrable Notes that such
Registrable Notes are being cancelled in exchange for the Exchange Notes
or the Private Exchange Notes, as the case may be; in no event shall such
Registrable Notes be marked as paid or otherwise satisfied.
(r) Use its reasonable efforts to cause the Registrable Notes
covered by a Registration Statement to be rated with the appropriate
rating agencies, if so requested by the managing underwriter or
underwriters, if any.
(s) Cooperate with the managing underwriter, if any, participating
in the disposition of Registrable Notes and its counsel in connection with
any filings required to be made with the National Association of
Securities Dealers, Inc. (the "NASD").
(t) Use its reasonable efforts to take all other steps reasonably
necessary to effect the registration of the Exchange Notes and/or
Registrable Notes covered by a Registration Statement contemplated hereby.
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<PAGE>
The Company and the Guarantors may require each seller of
Registrable Notes as to which any registration is being effected to furnish to
the Company and the Guarantors such information regarding such seller and the
distribution of such Registrable Notes as the Company and the Guarantors may,
from time to time, reasonably request. The Company and the Guarantors may
exclude from such registration the Registrable Notes of any seller so long as
such seller fails to furnish such information within a reasonable time after
receiving such request. Each seller as to which any Shelf Registration is being
effected agrees to furnish promptly to the Company and the Guarantors all
information required to be disclosed in order to make the information previously
furnished to the Company and the Guarantors by such seller not to contain a
material misstatement or omission.
Each Holder of Registrable Notes and each Participating
Broker-Dealer agrees by its acquisition of such Registrable Notes or Exchange
Notes to be sold by such Participating Broker-Dealer, as the case may be, that,
upon actual receipt of any notice from the Company and the Guarantors of the
happening of any event of the kind described in Section 5(c)(ii), 5(c)(iv),
5(c)(v), or 5(c)(vi) hereof, such Holder will forthwith discontinue disposition
of such Registrable Notes covered by such Registration Statement or Prospectus
or Exchange Notes to be sold by such Holder or Participating Broker-Dealer, as
the case may be, and the dissemination of the applicable Prospectus until such
Holder's or Participating Broker-Dealer's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 5(k) hereof, or until
it is advised in writing (the "Advice") by the Company and the Guarantors that
the use of the applicable Prospectus may be resumed. In the event that the
Company and the Guarantors shall give any such notice, each of the Effectiveness
Period and the Applicable Period shall be extended by the number of days during
such periods from and including the date of the giving of such notice to and
including the date when each seller of Registrable Notes covered by such
Registration Statement or Exchange Notes to be sold by such Participating
Broker-Dealer, as the case may be, shall have received (x) the copies of the
supplemented or amended Prospectus contemplated by Section 5(k) hereof or (y)
the Advice.
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<PAGE>
6. Registration Expenses
All fees and expenses incident to the performance of or compliance
with this Agreement by the Company and the Guarantors shall be borne by the
Company and the Guarantors whether or not the Exchange Offer Registration
Statement or any Shelf Registration Statement is filed or becomes effective or
the Exchange Offer is consummated, including, without limitation, (i) all
registration and filing fees (including, without limitation, (A) fees with
respect to filings required to be made with the NASD in connection with an
underwritten offering and (B) fees and expenses of compliance with state
securities or Blue Sky laws (including, without limitation, reasonable fees and
disbursements of counsel in connection with Blue Sky qualifications of the
Registrable Notes or Exchange Notes and determination of the eligibility of the
Registrable Notes or Exchange Notes for investment under the laws of such
jurisdictions (x) where the holders of Registrable Notes are located, in the
case of the Exchange Notes, or (y) as provided in Section 5(h) hereof, in the
case of Registrable Notes or Exchange Notes to be sold by a Participating
Broker-Dealer during the Applicable Period)), (ii) printing expenses, including,
without limitation, expenses of printing certificates for Registrable Notes or
Exchange Notes in a form eligible for deposit with The Depository Trust Company
and of printing prospectuses if the printing of prospectuses is requested by the
managing underwriter or underwriters, if any, by the Holders of a majority in
aggregate principal amount of the Registrable Notes included in any Registration
Statement or in respect of Exchange Notes to be sold by any Participating
Broker-Dealer during the Applicable Period, as the case may be, (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel for the
Company and the Guarantors and, in the case of a Shelf Registration, reasonable
fees and disbursements of one special counsel for all of the sellers of
Registrable Notes (exclusive of any counsel retained pursuant to Section 7
hereof), (v) fees and disbursements of all independent certified public
accountants referred to in Section 5(m)(iii) hereof (including, without
limitation, the expenses of any special audit and "cold comfort" letters
required by or incident to such performance), (vi) Securities Act liability
insurance, if the Company and the Guarantors desire such insurance, (vii) fees
and expenses of all other Persons retained by the Company and the Guarantors,
(viii) internal expenses of the Company and the Guarantors (including, without
limitation, all salaries and expenses of officers and employees of the Company
and the Guarantors per-
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<PAGE>
forming legal or accounting duties), (ix) the expense of any annual audit, (x)
the fees and expenses incurred in connection with the listing of the securities
to be registered on any securities exchange, and the obtaining of a rating of
the securities, in each case, if applicable, and (xi) the expenses relating to
printing, word processing and distributing all Registration Statements,
underwriting agreements, indentures and any other documents necessary in order
to comply with this Agreement.
7. Indemnification
(a) The Company and the Guarantors, jointly and severally, agree to
indemnify and hold harmless each Holder of Registrable Notes and each
Participating Broker-Dealer selling Exchange Notes during the Applicable Period,
the officers, directors, employees and agents of each such Person, and each
Person, if any, who controls any such Person within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act (each, a
"Participant"), from and against any and all losses, claims, damages, judgments,
liabilities and expenses (including, without limitation, the reasonable legal
fees and other expenses actually incurred in connection with any suit, action or
proceeding or any claim asserted) caused by, arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement (or any amendment thereto) or Prospectus (as amended or
supplemented if the Company and the Guarantors shall have furnished any
amendments or supplements thereto) or any preliminary prospectus, or caused by,
arising out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the case of the Prospectus in the light of the circumstances under
which they were made, not misleading, except insofar as such losses, claims,
damages or liabilities are caused by, arise out of or are based upon any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with information relating to any Participant furnished to
the Company or the Guarantors in writing by such Participant expressly for use
therein; provided, however, that the Company and the Guarantors will not be
liable if such untrue statement or omission or alleged untrue statement or
omission was contained or made in any preliminary prospectus and corrected in
the final Prospectus or any amendment or supplement thereto and any such loss,
liability, claim, or damage or expense suffered or incurred by the
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<PAGE>
Participants resulted from any action, claim or suit by any Person who purchased
Registrable Notes or Exchange Notes which are the subject thereof from such
Participant and such Participant failed to deliver or provide a copy of the
final Prospectus (as amended or supplemented) to such Person with or prior to
the confirmation of the sale of such Registrable Notes or Exchange Notes sold to
such Person if required by applicable law, unless such failure to deliver or
provide a copy of the final Prospectus (as amended or supplemented) was a result
of noncompliance by the Company and the Guarantors with Section 5 of this
Agreement.
(b) Each Participant agrees, severally and not jointly, to indemnify
and hold harmless the Company, the Guarantors, their respective directors, their
respective officers who sign the Registration Statement and each Person who
controls the Company or the Guarantors within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company and the Guarantors to each Participant, but
only with reference to information relating to such Participant furnished to the
Company or the Guarantors in writing by such Participant expressly for use in
any Registration Statement or Prospectus, any amendment or supplement thereto,
or any preliminary prospectus. The liability of any Participant under this
paragraph shall in no event exceed the proceeds received by such Participant
from sales of Registrable Notes or Exchange Notes giving rise to such
obligations.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any Person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such Person (the "Indemnified Person") shall promptly
notify the Persons against whom such indemnity may be sought (the "Indemnifying
Persons") in writing, and the Indemnifying Persons shall be entitled to, and
upon request of the Indemnified Person shall, retain counsel reasonably
satisfactory to the Indemnified Person to represent the Indemnified Person and
any others the Indemnifying Persons may reasonably designate in such proceeding
and shall pay the reasonable fees and expenses actually incurred by such counsel
related to such proceeding; provided, however, that the failure to so notify the
Indemnifying Persons shall not relieve any of them of any obligation or
liability which any of them may have hereunder or otherwise except to the extent
it is materially prejudiced by
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<PAGE>
such failure. In any such proceeding, any Indemnified Person shall have the
right to retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such Indemnified Person unless (i) the Indemnifying Persons
and the Indemnified Person shall have mutually agreed to the contrary, (ii) the
Indemnifying Persons shall have failed within a reasonable period of time to
retain counsel reasonably satisfactory to the Indemnified Person or (iii) the
named parties in any such proceeding (including any impleaded parties) include
both any Indemnifying Person and the Indemnified Person or any affiliate thereof
and representation of both parties by the same counsel would be inappropriate
due to actual or potential conflicting interests between them. It is understood
that, unless there exists a conflict among Indemnified Persons, the Indemnifying
Persons shall not, in connection with such proceeding or separate but
substantially similar related proceeding in the same jurisdiction arising out of
the same general allegations, be liable for the fees and expenses of more than
one separate firm (in addition to any local counsel) for all Indemnified
Persons, and that all such fees and expenses shall be reimbursed promptly as
they are incurred. Any such separate firm for the Participants and such control
Persons of Participants shall be designated in writing by Participants who sold
a majority in interest of Registrable Notes and Exchange Notes sold by all such
Participants and shall be reasonably acceptable to the Company and any such
separate firm for the Company or the Guarantors, their respective directors,
their respective officers and such control Persons of the Company and the
Guarantors shall be designated in writing by the Company and the Guarantors and
shall be reasonably acceptable to the Holders. The Indemnifying Persons shall
not be liable for any settlement of any proceeding effected without its prior
written consent (which consent shall not be unreasonably withheld or delayed),
but if settled with such consent or if there be a final non-appealable judgment
for the plaintiff for which the Indemnified Person is entitled to
indemnification pursuant to this Agreement, each of the Indemnifying Persons
agrees to indemnify and hold harmless each Indemnified Person from and against
any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an Indemnified Person shall have
requested an Indemnifying Person to reimburse the Indemnified Person for
reasonable fees and expenses actually incurred by counsel as contemplated by the
third sentence of this paragraph, the Indemnifying Person agrees that it shall
be liable for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered
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<PAGE>
into more than 30 days after receipt by such Indemnifying Person of the
aforesaid request and (ii) such Indemnifying Person shall not have reimbursed
the Indemnified Person in accordance with such request prior to the date of such
settlement; provided, however, that the Indemnifying Person shall not be liable
for any settlement effected without its consent pursuant to this sentence if the
Indemnifying Person is contesting, in good faith, the request for reimbursement.
No Indemnifying Person shall, without the prior written consent of the
Indemnified Persons (which consent shall not be unreasonably withheld or
delayed), effect any settlement or compromise of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party, or indemnity could have been sought hereunder by such Indemnified Person,
unless such settlement (A) includes an unconditional written release of such
Indemnified Person, in form and substance reasonably satisfactory to such
Indemnified Person, from all liability on claims that are the subject matter of
such proceeding and (B) does not include any statement as to an admission of
fault, culpability or failure to act by or on behalf of such Indemnified Person.
(d) If the indemnification provided for in clauses (a) and (b) of
this Section 7 is for any reason unavailable to, or insufficient to hold
harmless, an Indemnified Person in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Person under such
paragraphs, in lieu of indemnifying such Indemnified Person thereunder and in
order to provide for just and equitable contribution, shall contribute to the
amount paid or payable by such Indemnified Person as a result of such losses,
claims, damages or liabilities in such proportion as is appropriate to reflect
(i) the relative benefits received by the Indemnifying Person or Persons on the
one hand and the Indemnified Person or Persons on the other from the offering of
the Notes or (ii) if the allocation provided by the foregoing clause (i) is not
permitted by applicable law, not only such relative benefits but also the
relative fault of the Indemnifying Person or Persons on the one hand and the
Indemnified Person or Persons on the other in connection with the misstatements
or omissions or alleged misstatements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof) as well as any
other relevant equitable considerations. The relative fault of the parties shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a
-30-
<PAGE>
material fact relates to information supplied by the Company and the Guarantors
on the one hand or such Participant or such other Indemnified Person, as the
case may be, on the other, the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such misstatement or omission,
and any other equitable considerations appropriate in the circumstances.
(e) The parties agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
(even if the Participants were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an Indemnified Person as a result of the losses, claims,
damages, judgments, liabilities and expenses referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any reasonable legal or other expenses actually incurred by such
Indemnified Person in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 7, in no event shall a
Participant be required to contribute any amount in excess of the amount by
which proceeds received by such Participant from sales of Registrable Notes or
Exchange Notes, as the case may be, exceeds the amount of any damages that such
Participant has otherwise been required to pay or has paid by reason of such
untrue or alleged untrue statement or omission or alleged omission. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
(f) Any losses, claims, damages, liabilities or expenses for which
an Indemnified Person is entitled to indemnification or contribution under this
Section 7 shall be paid by the Indemnifying Person to the Indemnified Person as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the Company and the Guarantors set forth in
this Agreement shall remain operative and in full force and effect, regardless
of (i) any investigation made by or on behalf of any Holder or any person who
controls a Holder, the Company or the Guarantors and their respective directors,
officers, employees or agents or any per-
-31-
<PAGE>
son controlling the Company or the Guarantors, and (ii) any termination of this
Agreement.
(g) The indemnity and contribution agreements contained in this
Section 7 will be in addition to any liability which the Indemnifying Persons
may otherwise have to the Indemnified Persons referred to above.
8. Rules 144 and 144A
The Company and the Guarantors covenant and agree that, so long as
Registrable Notes remain outstanding, it will file the reports required to be
filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the SEC thereunder in a timely manner in accordance with
the requirements of the Securities Act and the Exchange Act and, if at any time
the Company and the Guarantors are not permitted to file such reports, the
Company and the Guarantors will, upon the request of any Holder or beneficial
owner of Registrable Notes, make publicly available annual reports and such
information, documents and other reports of the type specified in Sections 13
and 15(d) of the Exchange Act. The Company and the Guarantors further covenant
for so long as any Registrable Notes remain outstanding, to make available to
any Holder or beneficial owner of Registrable Notes in connection with any sale
thereof and any prospective purchaser of such Registrable Notes from such Holder
or beneficial owner the information required by Rule 144A(d)(4) under the
Securities Act in order to permit resales of such Registrable Notes pursuant to
Rule 144A.
9. Underwritten Registrations
If any of the Registrable Notes covered by any Shelf Registration
are to be sold in an underwritten offering, the investment banker or investment
bankers and manager or managers that will manage the offering will be selected
by the Company and the Guarantors and shall be reasonably acceptable to the
Holders of a majority in aggregate principal amount of such Registrable Notes
included in such offering.
No Holder of Registrable Notes may participate in any underwritten
registration hereunder unless such Holder (a) agrees to sell such Holder's
Registrable Notes on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and
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<PAGE>
(b) completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.
10. Miscellaneous
(a) No Inconsistent Agreements. As of the date hereof, the Company
and the Guarantors will not enter into any agreement with respect to any of its
securities that is inconsistent with the rights granted to the Holders of
Registrable Notes in this Agreement or otherwise conflicts with the provisions
hereof. The rights granted to the Holders hereunder do not in any way conflict
with and are not inconsistent with the rights granted to the holders of any of
the Company's and the Guarantors' other issued and outstanding securities. As of
the date hereof, the Company and the Guarantors have not entered and the Company
and Guarantors will not enter into any agreement with respect to any of its
securities which will grant to any Person piggy-back registration rights with
respect to any Registration Statement required to be filed by the Company and
the Guarantors pursuant to this Agreement.
(b) Adjustments Affecting Registrable Notes. The Company and the
Guarantors shall not, directly or indirectly, take any action with respect to
the Registrable Notes as a class that would adversely affect the ability of the
Holders of Registrable Notes to include such Registrable Notes in a registration
undertaken pursuant to this Agreement.
(c) Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, otherwise than with the prior written
consent of (I) the Company and the Guarantors and (II)(A) the Holders of not
less than a majority in aggregate principal amount of the then outstanding
Registrable Notes and (B) in circumstances that would adversely affect the
Participating Broker-Dealers, the Participating Broker-Dealers holding not less
than a majority in aggregate principal amount of the Exchange Notes held by all
Participating Broker-Dealers; provided, however, that Section 7 and this Section
10(c) may not be amended, modified or supplemented without the prior written
consent of each Holder and each Participating Broker-Dealer (including any
person who was a Holder or Participating Broker-Dealer of Registrable Notes or
Exchange Notes, as the case may be, disposed of pursuant to any Registration
Statement) affected by any such
-33-
<PAGE>
amendment, modification or supplement. Notwithstanding the foregoing, a waiver
or consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders of Registrable Notes whose
securities are being sold pursuant to a Registration Statement and that does not
directly or indirectly affect, impair, limit or compromise the rights of other
Holders of Registrable Notes may be given by Holders of at least a majority in
aggregate principal amount of the Registrable Notes being sold pursuant to such
Registration Statement.
(d) Notices. All notices and other communications (including,
without limitation, any notices or other communications to the Trustee) provided
for or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, next-day air courier or facsimile:
(i) if to a Holder of the Registrable Notes or any Participating
Broker-Dealer, at the most current address of such Holder or Participating
Broker-Dealer, as the case may be, set forth on the records of the
registrar under the Indenture, with a copy in like manner to the Initial
Purchasers as follows:
BT Alex. Brown Incorporated
One Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Facsimile No: (212) 250-7200
Attention: Corporate Finance
with a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Facsimile No: (212) 269-5420
Attention: William M. Hartnett, Esq.
(ii) if to the Initial Purchasers, at the address specified in
Section 10(d)(i);
(iii) if to the Company and the Guarantors, at the address as
follows:
-34-
<PAGE>
c/o The Doe Run Resources Corporation
1801 Park 270 Drive, Suite 300
St. Louis, Missouri 63146
Facsimile No.: (314) 453-7178
Attention: Chief Financial Officer
with a copy to:
The Renco Group, Inc.
30 Rockefeller Plaza, Suite 4225
New York, New York 10112-4296
Facsimile No.: (212) 541-6197
Attention: Dennis A. Sadlowski, Esq.
with a copy to:
Cadwalader, Wickersham & Taft
100 Maiden Lane
New York, New York 10038
Facsimile No.: (212) 504-6666
Attention: Michael C. Ryan, Esq.
All such notices and communications shall be deemed to have been
duly given: when delivered by hand, if personally delivered; three business days
after being deposited in the mail, postage prepaid, if mailed; one business day
after being timely delivered to a next-day air courier; and upon receiving
confirmation of receipt by the addressee, if sent by facsimile.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address and in the manner specified in the Indenture.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
hereto, the Holders and the Participating Broker-Dealers, provided that nothing
herein shall be deemed to permit any assignment, transfer or other disposition
of Registrable Notes in violation of the terms of the Purchase Agreement or the
Indenture.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be
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<PAGE>
deemed to be an original and all of which taken together shall constitute one
and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS
MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.
(i) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
(j) Securities Held by the Company, Guarantors or their Affiliates.
Whenever the consent or approval of Holders of a specified percentage of
Registrable Notes is required hereunder, Registrable Notes held by the Company
or the Guarantors or any of their affiliates (as such term is defined in Rule
405 under the Securities Act) shall not be counted in determining whether such
consent or approval was given by the Holders of such required percentage.
(k) Third Party Beneficiaries. Holders of Registrable Notes and
Participating Broker-Dealers are intended third party beneficiaries of this
Agreement, and this Agreement may be enforced by such Persons.
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
THE DOE RUN RESOURCES CORPORATION,
By: /s/ Marvin K. Kaiser
-------------------------------
Name: Marvin K. Kaiser
Title: President and CFO
FABRICATED PRODUCTS, INC.,
as a Guarantor
By: David Chaput
-------------------------------
Name: David Chaput
Title: President
DOE RUN CAYMAN LTD.,
as a Guarantor
By: /s/ Marvin K. Kaiser
-------------------------------
Name: Marvin K. Kaiser
Title: Vice President
DOE RUN MINING S.R. LTDA.,
as a Guarantor
By: /s/ Marvin K. Kaiser
-------------------------------
Name: Marvin K. Kaiser
Title: Vice President
DOE RUN PERU S.R. LTDA.,
as a Guarantor
By: /s/ Marvin K. Kaiser
-------------------------------
Name: Marvin K. Kaiser
Title: Vice President
<PAGE>
BT ALEX. BROWN INCORPORATED,
as Initial Purchaser
By: /s/ Dalton Dwyer
-------------------------------
Name: Dalton Dwyer
Title: Managing Director
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION,
as Initial Purchaser
By: /s/
-------------------------------
Name:
Title:
UBS SECURITIES LLC,
as Initial Purchaser
By: /s/
-------------------------------
Name:
Title:
By: /s/
-------------------------------
Name:
Title:
<PAGE>
BT ALEX. BROWN INCORPORATED,
as Initial Purchaser
By: /s/
-------------------------------
Name:
Title:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION,
as Initial Purchaser
By: /s/ Craig Packer
-------------------------------
Name: Craig Packer
Title: Senior Vice President
UBS SECURITIES LLC,
as Initial Purchaser
By: /s/
-------------------------------
Name:
Title:
By: /s/
-------------------------------
Name:
Title:
<PAGE>
BT ALEX. BROWN INCORPORATED,
as Initial Purchaser
By: /s/
-------------------------------
Name:
Title:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION,
as Initial Purchaser
By: /s/
-------------------------------
Name:
Title:
UBS SECURITIES LLC,
as Initial Purchaser
By: /s/ Nicholas Daifotis
-------------------------------
Name: Nicholas Daifotis
Title: Managing Director
By: /s/ Philip Benedict
-------------------------------
Name: Philip Benedict
Title: Director
<PAGE>
EXHIBIT 4.4
Letter of Transmittal
To Tender for Exchange
11 1/4% Senior Notes due 2005, Series A
and
Floating Interest Rate Senior Notes due 2003, Series A
of
THE DOE RUN RESOURCES CORPORATION
Pursuant to
Prospectus dated __________, 1998
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME ON _________,
1998, UNLESS EXTENDED. TENDERS OF 11 1/4% SENIOR NOTES DUE 2005, SERIES A AND
FLOATING INTEREST RATE SENIOR NOTES DUE 2003, SERIES A MAY ONLY BE WITHDRAWN
UNDER THE CIRCUMSTANCES DESCRIBED IN THE PROSPECTUS AND HEREIN.
- --------------------------------------------------------------------------------
The Exchange Agent for the Exchange Offer is:
State Street Bank and Trust Company
Facsimile Transmission:
(860) 244-1881
Confirm by Telephone:
(860) 244-1846
By Mail: By Hand/Overnight Delivery:
State Street Bank and Trust Company State Street Bank and Trust Company
Two International Place, 4th Floor 61 Broadway, 15th Floor
Boston, Massachusetts 02110 New York, New York 10006
Attention: Clarie Young--Corporate Trust Attention: Corporate Trust Department
Department
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF OLD NOTES TENDERED
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Name(s) and Address(es) of Holder(s) Old Notes Tendered
(Please fill in, if blank, exactly as name(s) appear(s) (Attach additional schedule, if necessary)
on Old Notes)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
(1) (2) (3)
----------------------------------------------------------
Certificate Number(s) Total Principal Amount
of Old Notes Tendered
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
Total
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
The undersigned acknowledges receipt of the Prospectus, dated __________,
1998 (the "Prospectus"), of The Doe Run Resources Corporation, a New York
corporation (the "Company"), relating to the offer (the "Exchange Offer") of the
Company, upon the terms and subject to the conditions set forth in the
Prospectus and herein and the instructions hereto, to exchange $1,000 principal
amount of its 11 1/4% Senior Notes due 2005, Series B and Floating Interest Rate
Senior Notes due 2003, Series B (collectively, the "Exchange Notes") for each
$1,000 principal amount of the outstanding 11 1/4% Senior Notes due 2005, Series
A and Floating Interest Rate Senior Notes due 2003, Series A (collectively, the
"Old Notes"), respectively, of which $200.0 million and $55.0 million aggregate
principal amount is outstanding, respectively. The minimum permitted tender is
$1,000 principal amount of Old Notes, and all other tenders must be in integral
multiples of $1,000.
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION BY
FACSIMILE, OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
The Exchange Offer will expire at 5:00 p.m., New York City time, on
_________, 1998 (the "Expiration Date"), unless extended.
HOLDERS WHO WISH TO BE ELIGIBLE TO RECEIVE EXCHANGE NOTES PURSUANT TO THE
EXCHANGE OFFER MUST VALIDLY TENDER THEIR OLD NOTES TO THE EXCHANGE AGENT ON OR
PRIOR TO THE EXPIRATION DATE.
This Letter of Transmittal should be used only to exchange the Old Notes,
pursuant to the Exchange Offer as set forth in the Prospectus.
This Letter of Transmittal is to be used (a) if Old Notes are to be
physically delivered to the Exchange Agent or (b) if delivery of Old Notes is to
be made by book-entry transfer to the account maintained by the Exchange Agent
at The Depository Trust Company ("DTC" or the "Book-Entry Transfer Facility")
pursuant to the procedures set forth in the Prospectus under the caption "The
Exchange Offer--Procedures for Tendering." Delivery of documents to the
Book-Entry Transfer Facility does not constitute deliver to the Exchange Agent.
Holders whose Old Notes are not available or who cannot deliver their Old
Notes and all other documents required hereby to the Exchange Agent on or prior
to the Expiration Date nevertheless may tender their Old Notes in accordance
with the guaranteed delivery procedures set forth in the Prospectus under the
caption "The Exchange Offer--Guaranteed Delivery Procedures." See Instruction 1.
THE EXCHANGE OFFER IS NOT BEING MADE TO (NOR WILL THE SURRENDER OF OLD
NOTES FOR EXCHANGE BE ACCEPTED FROM OR ON BEHALF OF) HOLDERS IN ANY JURISDICTION
IN WHICH THE MAKING OR ACCEPTANCE OF THE EXCHANGE OFFER WOULD NOT BE IN
COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION.
All capitalized terms used herein and not defined herein shall have the
meanings ascribed to them in the Prospectus.
Holders who wish to exchange their Old Notes must complete the box below
entitled "Method of Delivery," complete columns (1) through (3) in the box on
the cover entitled "Description of Old Notes Tendered" and sign in the
appropriate box(es) below.
2
<PAGE>
METHOD OF DELIVERY
- --------------------------------------------------------------------------------
/ / CHECK HERE IF CERTIFICATES FOR TENDERED OLD NOTES ARE ENCLOSED HEREWITH.
/ / CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE
BOOK-ENTRY TRANSFER FACILITY SPECIFIED ABOVE AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:
----------------------------------------
Name of Book-Entry Transfer Facility:
/ / The Depository Trust Company
Account Number: Transaction Code Number:
------------------ ----------------
- --------------------------------------------------------------------------------
/ / CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE
THE FOLLOWING (See Instructions 1 and 4):
Name(s) of Registered Holder(s):
---------------------------------------
Window Ticket Number (if any):
-----------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
--------------------
Name of Eligible Institution which Guaranteed Delivery:
----------------
If delivered by the Book-Entry Transfer Facility, check box of Book-Entry
Transfer Facility:
/ / The Depository Trust Company
Account Number: Transaction Code Number:
------------------ ----------------
- --------------------------------------------------------------------------------
/ / CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE TEN ADDITIONAL
COPIES OF THE PROSPECTUS AND COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name:
------------------------------------------------------------------
Address:
---------------------------------------------------------------
- --------------------------------------------------------------------------------
3
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Company the principal amount of Old Notes
indicated in the box on the cover entitled "Description of Old Notes Tendered."
Subject to, and effective upon, the acceptance for exchange of the Old Notes
tendered hereby, the undersigned hereby irrevocably sells, assigns and transfers
to or upon the order of the Company all right, title and interest in and to such
Old Notes, and hereby irrevocably constitutes and appoints the Exchange Agent
the true and lawful agent and attorney-in-fact of the undersigned (with full
knowledge that said Exchange Agent also acts as the agent of the Company and as
Trustee under the indenture governing the Old Notes and the Exchange Notes) with
respect to such Old Notes, with full power of substitution (such power of
attorney being deemed to be an irrevocable power coupled with an interest) to
(a) deliver certificates representing such Old Notes, and to deliver all
accompanying evidences of transfer and authenticity to or upon the order of the
Company upon receipt by the Exchange Agent, as the undersigned's agent, of the
Exchange Notes to which the undersigned is entitled upon the acceptance by the
Company of such Old Notes for exchange pursuant to the Exchange Offer, (b)
receive all benefits and otherwise to exercise all rights of beneficial
ownership of such Old Notes, all in accordance with the terms of the Exchange
Offer, and (c) present such Old Notes for transfer on the register for such Old
Notes.
The undersigned acknowledges that prior to this Exchange Offer, there has
been no public market for the Old Notes or the Exchange Notes. If a market for
the Exchange Notes should develop, the Exchange Notes could trade at a discount
from their principal amount. The undersigned is aware that the Company does not
intend to list the Exchange Notes on a national securities exchange and that
there can be no assurance that an active market for the Exchange Notes will
develop.
The undersigned also acknowledges that this Exchange Offer is being made in
reliance on an interpretation by the staff of the Securities and Exchange
Commission (the "Commission") that the Exchange Notes issued pursuant to the
Exchange Offer in exchange for the Old Notes may be offered for resale, resold
and otherwise transferred by any person receiving such Exchange Notes whether or
not such person is the holder thereof, (other than any such holder or other
person which is (i) a broker-dealer that receives Exchange Notes for its own
account in exchange for Old Notes, where such Old Notes were acquired by such
broker-dealer as a result of market-making or other trading activities, or (ii)
an "affiliate" of the Company within the meaning of Rule 405 under the
Securities Act of 1933, as amended (the "Securities Act")) without compliance
with the registration and prospectus delivery provisions of the Securities Act,
provided that such Exchange Notes are acquired in the ordinary course of
business of such holder or other person, such holder or other person is not
engaged in or intending to engage in a distribution of the Exchange Notes, and
such holder or other person has no arrangement with any person to participate in
the distribution of such Exchange Notes. See Morgan Stanley & Co. Incorporated,
SEC No-Action Letter (available June 5, 1991) and Exxon Capital Holdings
Corporation, SEC No-Action Letter (available May 13, 1988).
If the undersigned is not a broker-dealer, the undersigned represents that
it is not engaged in, and does not intend to engage in, a distribution of
Exchange Notes. If the undersigned is a broker-dealer that will receive Exchange
Notes, it represents that the Old Notes to be exchanged for Exchange Notes were
acquired as a result of market-making activities or other trading activities and
it acknowledges that it will deliver a prospectus in connection with any resale
of such Exchange Notes; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
The Exchange Offer is not being made to, nor will tenders be accepted from
or on behalf of, holders of the Old Notes in any jurisdiction in which the
making of the Offer or acceptance thereof would not be in compliance with the
laws of such jurisdiction or would otherwise not be in compliance with any
provision of any applicable security law.
The undersigned represents that (a) the Exchange Notes acquired pursuant to
the Exchange Offer are being obtained in the ordinary course of business of the
undersigned or other person receiving such Exchange Notes, (b) neither the
undersigned nor any such other person is engaged in or intends to engage in a
distribution of such
4
<PAGE>
Exchange Notes, (c) neither the undersigned nor any such other person has any
arrangement or understanding with any person to participate in a distribution of
the Exchange Notes and (d) neither the undersigned nor any such other person is
an "affiliate" as defined under Rule 405 of the Securities Act, of the Company,
its subsidiaries or The Renco Group, Inc., the parent corporation of the
Company, or if such holder is such an affiliate, that such holder will comply
with the registration and the prospectus delivery requirements of the Securities
Act in connection with the disposition of any Exchange Notes to the extent
applicable.
The undersigned understands and acknowledges that the Company reserves the
right in its sole discretion to purchase or make offers for any Old Notes that
remain outstanding subsequent to the Expiration Date or, as set forth in the
Prospectus under the caption "Conditions of the Exchange Offer," to terminate
the Exchange Offer and, to the extent permitted by applicable law, purchase Old
Notes in the open market, in privately negotiated transactions or otherwise. The
terms of any such purchases or offers will differ from the terms of the Exchange
Offer.
The undersigned hereby represents and warrants that the undersigned accepts
the terms and conditions of the Exchange Offer, has full power and authority to
tender, exchange, assign and transfer the Old Notes tendered hereby, and that
when the same are accepted for exchange by the Company, the Company will acquire
good and unencumbered title thereto, free and clear of all liens, restrictions,
charges and encumbrances and not subject to any adverse claim or right. The
undersigned will, upon request, execute and deliver any additional documents
deemed by the Exchange Agent or the Company to be necessary or desirable to
complete the sale, assignment and transfer of the Old Notes tendered hereby.
The undersigned agrees that all authority conferred or agreed to be
conferred by this Letter of Transmittal and every obligation of the undersigned
hereunder shall be binding upon the successors, assigns, heirs, executors,
administrators, trustees in bankruptcy and legal representatives of the
undersigned and shall not be affected by, and shall survive, the death or
incapacity of the undersigned. The undersigned also agrees that, except as
stated in the Prospectus, the Old Notes tendered hereby cannot be withdrawn.
The undersigned understands that tenders of the Old Notes pursuant to any
one of the procedures described in the Prospectus under the caption "The
Exchange Offer--Procedures for Tendering" and in the instructions hereto will
constitute a binding agreement between the undersigned and the Company in
accordance with the terms and subject to the conditions of the Exchange Offer.
The undersigned understands that by tendering Old Notes pursuant to one of
the procedures described in the Prospectus and the instructions hereto, the
tendering holder will be deemed to have waived the right to receive any payment
in respect of interest on the Old Notes accrued up to the date of issuance of
the Exchange Notes.
The undersigned recognizes that, under certain circumstances set forth in
the Prospectus, the Company may not be required to accept for exchange any of
the Old Notes tendered. Old Notes not accepted for exchange or withdrawn will be
returned to the undersigned at the address set forth below unless otherwise
indicated under "Special Delivery Instructions" below.
Unless otherwise indicated herein under the box entitled "Special Issuance
Instructions" below, Exchange Notes, and Old Notes not validly tendered or
accepted for exchange, will be issued in the name of the undersigned. Similarly,
unless otherwise indicated under the box entitled "Special Delivery
Instructions" below, Exchange Notes, and Old Notes not validly tendered or
accepted for exchange, will be delivered to the undersigned at the address shown
below the signature of the undersigned. The undersigned recognizes that the
Company has no obligation pursuant to the "Special Issuance Instructions" to
transfer any Old Notes from the name of the registered holder thereof if the
Company does not accept for exchange any of the principal amount of such Old
Notes so tendered.
All questions as to the validity, form, eligibility (including time of
receipt), and withdrawal of the tendered Old Notes will be determined by the
Company in its sole discretion, which determination will be final and binding.
The Company reserves the absolute right to reject any and all Old Notes not
properly tendered or any Old Notes the Company's acceptance of which would, in
the opinion of counsel for the Company, be unlawful. The Company also reserves
the right to waive any irregularities or conditions of tender as to particular
Old Notes. The Company's interpretation of the terms and conditions of the
Exchange Offer (including the instructions in this Letter of Transmittal) will
be final and binding on all parties. Unless waived, any defects or
irregularities in
5
<PAGE>
connection with tenders of Old Notes must be cured within such time as the
Company shall determine. Neither the Company, the Exchange Agent nor any other
person shall be under any duty to give notification of defects or irregularities
with respect to tenders of Old Notes, nor shall any of them incur any liability
for failure to give such notification. Tenders of Old Notes will not be deemed
to have been made until such irregularities have been cured or waived. Any Old
Notes received by the Exchange Agent that are not properly tendered and as to
which the defects or irregularities have not been cured or waived will be
returned without cost to such holder by the Exchange Agent to the tendering
holders of Old Notes, unless otherwise provided in this Letter of Transmittal,
as soon as practicable following the Expiration Date.
6
<PAGE>
THE UNDERSIGNED, BY COMPLETING THE BOX ON THE COVER ENTITLED "DESCRIPTION
OF OLD NOTES TENDERED" AND SIGNING THIS LETTER OF TRANSMITTAL, WILL BE DEEMED TO
HAVE TENDERED THE OLD NOTES AND MADE CERTAIN REPRESENTATIONS (INCLUDING AS TO
FINANCIAL STATUS) DESCRIBED IN THE PROSPECTUS AND HEREIN.
- --------------------------------------------------------------------------------
SIGN HERE
(To Be Completed by All Tendering Holders)
X
--------------------------------------------------------------------------
X
--------------------------------------------------------------------------
(Signature(s) of Holder(s) or Authorized Signatory)
Must be signed by the registered holder(s) of Old Notes exactly as their
name(s) appear(s) on certificate(s) for the Old Notes or by person(s)
authorized to become registered holder(s) by endorsements and documents
transmitted with this Letter of Transmittal. If signature is by a trustee,
executor, administrator, guardian, attorney-in-fact, officer of a
corporation, agent or other person acting in a fiduciary or representative
capacity, please provide the following information. See Instruction 3.
Name(s):
---------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please Print)
Capacity (full title):
-------------------------------------------------------
Address:
---------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Including Zip Code)
Area Code and Telephone No.:
-------------------------------------------------
SIGNATURE GUARANTEE
(See Instruction 3)
- --------------------------------------------------------------------------------
(Name of Eligible Institution Guaranteeing Signature(s))
- --------------------------------------------------------------------------------
(Address, including Zip Code, and Telephone No., including area code, of Firm)
- --------------------------------------------------------------------------------
(Authorized Signature)
- --------------------------------------------------------------------------------
(Printed Name)
- --------------------------------------------------------------------------------
(Title)
Date: , 1998
-----------------------------
- --------------------------------------------------------------------------------
7
<PAGE>
- --------------------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS
(See Instructions 3, 4 and 6)
To be completed ONLY if certificates for Old
Notes in a principal amount not exchanged and/or
certificates for Exchange Notes are to be issued
in the name of someone other than the
undersigned, or if Old Notes are to be returned
by credit to an account maintained by the
Book-Entry Transfer Facility.
Issue (check appropriate box)
/ / Exchange Notes to:
/ / Old Notes to:
Name:
------------------------------------------------
(Please Print)
Address:
------------------------------------------------
------------------------------------------------
Zip Code
- ---------------------------------------------------------
Taxpayer Identification Number
(You must also complete
Substitute Form W-9 below.)
Credit unaccepted Old Notes tendered by book-entry
transfer to:
/ / The Depository Trust Company
account set forth below
- --------------------------------------------------------
(DTC account number)
- --------------------------------------------------------
SPECIAL DELIVER INSTRUCTIONS
(See Instructions 3, 4 and 6)
To be completed ONLY if certificates for Old
Notes in a principal amount not exchanged and/or
certificates for Exchange Notes are to be sent
to someone other than the undersigned at an
address other than that shown above.
Deliver (check appropriate box)
/ / Exchange Notes to:
/ / Old Notes to:
Name:
-------------------------------------------
(Please Print)
Address:
-------------------------------------------
-------------------------------------------
Zip Code
- --------------------------------------------------------
Taxpayer Identification Number
(You must also complete
Substitute Form W-9 below.)
- --------------------------------------------------------
8
<PAGE>
INSTRUCTIONS
Forming Part of the Terms and Conditions of the
Offer and the Solicitation
1. Delivery of this Letter of Transmittal and Certificates; Guaranteed
Delivery Procedures. To be effectively tendered pursuant to the Exchange Offer,
the Old Notes, together with a properly completed Letter of Transmittal (or
facsimile thereof), duly executed by the registered holder thereof, and any
other documents required by this Letter of Transmittal, must be received by the
Exchange Agent at one of its addresses set forth on the front page of this
Letter of Transmittal. If the beneficial owner of any Old Notes is not the
registered holder, then such person may validly tender his or her Old Notes only
by obtaining and submitting to the Exchange Agent a properly completed Letter of
Transmittal from the registered holder. Old Notes should be delivered only to
the Exchange Agent and not to the Company or to any other person.
The method of delivery of Old Notes and all other required documents to the
Exchange Agent is at the election and risk of the holder, but if such delivery
is by mail, it is suggested that the holder use properly insured, registered or
certified mail with return receipt requested. Instead of delivery by mail, it is
recommended that Old Notes be delivered by hand or by courier.
If certificates for Old Notes are sent by mail, it is suggested that the
mailing be made sufficiently in advance of the Expiration Date to permit
delivery to the Exchange Agent prior to 5:00 p.m., New York City time, on the
Expiration Date.
If a holder desires to tender Old Notes and such holder's Old Notes are not
immediately available or time will not permit such holder's Letter of
Transmittal, Old Notes or other required documents to reach the Exchange Agent
on or before the Expiration Date, such holder's tender may be effected if:
(a) such tender is made by or through an Eligible Institution (as
defined);
(b) on or prior to the Expiration Date, the Exchange Agent has received
a properly completed and duly executed Notice of Guaranteed Delivery (by
facsimile transmission, mail or hand delivery) from such Eligible
Institution setting forth the name and address of the holder of such Old
Notes, the certificate numbers of such Old Notes (if available) and the
principal amount of Old Notes tendered and stating that the tender is being
made thereby and guaranteeing that, within three business days after the
Expiration Date, a duly executed Letter of Transmittal, or facsimile
thereof, together with the Old Notes, and any other documents required by
this Letter of Transmittal and the instructions hereto, will be deposited
by such Eligible Institution with the Exchange Agent; and
(c) this Letter of Transmittal (or facsimile thereof), a Notice of
Guaranteed Delivery and Old Notes, in proper form for transfer, and all
other required documents are received by the Exchange Agent within three
business days after the date of such telegram, facsimile transmission or
letter.
2. Withdrawal of Tenders. Tendered Old Notes may be withdrawn at any time
prior to 5:00 p.m., New York City time, on the Expiration Date, unless
previously accepted for exchange.
To be effective, a written or facsimile transmission notice of withdrawal
must (a) be received by the Exchange Agent at one of its addresses set forth on
the first page of this Letter of Transmittal prior to 5:00 p.m., New York City
time, on the Expiration Date, unless previously accepted for exchange, (b)
specify the name of the person who tendered the Old Notes, (c) contain the
description of the Old Notes to be withdrawn, the certificate numbers shown on
the particular certificates evidencing such Old Notes and the aggregate
principal amount represented by such Old Notes and (d) be signed by the holder
of such Old Notes in the same manner as the original signature appears on this
Letter of Transmittal (including any required signature guarantees) or be
accompanied by evidence sufficient to have the Trustee with respect to the Old
Notes register the transfer of such Old Notes into the name of the holder
withdrawing the tender. The signature(s) on the notice of withdrawal must be
guaranteed by an Eligible Institution unless such Old Notes have been tendered
(a) by a registered holder of Old Notes who has not completed either the box
entitled "Special Issuance Instructions" or the box entitled "Special Delivery
Instructions" on this Letter of Transmittal or (b) for the account of an
Eligible Institution. All questions as to the validity, form and eligibility
(including time of receipt) of such withdrawal notices shall be determined by
the
9
<PAGE>
Company, whose determination shall be final and binding on all parties. If
the Old Notes to be withdrawn have been delivered or otherwise identified to the
Exchange Agent, a signed notice of withdrawal is effective immediately upon
receipt by the Exchange Agent of a written or facsimile transmission notice of
withdrawal even if physical release is not yet effected. In addition, such
notice must specify, in the case of Old Notes tendered by delivery of
certificates for such Old Notes, the name of the registered holder (if different
from that of the tendering holder) to be credited with the withdrawn Old Notes.
Withdrawals may not be rescinded, and any Old Notes withdrawn will thereafter be
deemed not validly tendered for purposes of the Exchange Offer. However,
properly withdrawn Old Notes may be retendered by following one of the
procedures described under "The Exchange Offer--Procedures for Tendering" in the
Prospectus at any time on or prior to the applicable Expiration Date.
3. Signatures on this Letter of Transmittal, Bond Powers and Endorsements;
Guarantee of Signatures. If this letter of Transmittal is signed by the
registered holder(s) of the Old Notes tendered hereby, the signature must
correspond exactly with the name(s) as written on the face of the certificates
without any change whatsoever.
If any Old Notes tendered hereby are owned of record by two or more joint
owners, all such owners must sign this Letter of Transmittal.
If any Old Notes tendered hereby are registered in different names on
several certificates, it will be necessary to complete, sign and submit as many
separate copies of this Letter of Transmittal as there are different
registrations of certificates.
When this Letter of Transmittal is signed by the registered holder or
holders specified herein and tendered hereby, no endorsements of certificates or
separate bond powers are required unless Exchange Notes are to be issued, or
certificates for any untendered principal amount of Old Notes are to be
reissued, to a person other than the registered holder.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of any certificate(s) specified herein such certificates(s)
must be endorsed or accompanied by appropriate bond powers, in either case
signed exactly as the name(s) of the registered holder(s) appear(s) on the
certificate(s).
If this Letter of Transmittal or a Notice of Guaranteed Delivery or any
certificates or bond powers are signed by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity, such persons should so indicate when
signing, and unless waived by the Company, proper evidence satisfactory to the
Company of their authority so to act must be submitted.
Except as described below, signatures on this Letter of Transmittal or a
notice of withdrawal, as the case may be, must be guaranteed by an Eligible
Institution. Signatures on this Letter of Transmittal or a notice of withdrawal,
as the case may be, need not be guaranteed if the Old Notes tendered pursuant
hereto are tendered (a) by a registered holder of Old Notes who has not
completed either the box entitled "Special Issuance Instructions" or the box
entitled "Special Delivery Instructions" on this Letter of Transmittal or (b)
for the account of an Eligible Institution. In the event that signatures on this
Letter of Transmittal or a notice of withdrawal, as the case may be, are
required to be guaranteed, such guarantee must be by a firm which is a member of
a registered national securities exchange or a member of the National
Association of Securities Delivers, Inc. or by a commercial bank or trust
company having an office or correspondent in the Untied States (each as
"Eligible Institutions").
Endorsements on certificates for Old Notes or signatures on bond powers
required by this Instruction 3 must be guaranteed by an Eligible Institution.
4. Special Issuance and Delivery Instructions. Tendering holders should
indicate in the applicable box the name and address to which certificates for
Exchange Notes and/or substitute certificates evidencing Old Notes for the
principal amounts not exchanged are to be issued or sent, if different from the
name and address of the person signing this Letter of Transmittal. In the case
of issuance in a different name, the employer identification or social security
number of the person named must also be indicated. If no such instructions are
given, any Old Notes not exchanged will be returned to the name and address of
the person signing this Letter of Transmittal.
10
<PAGE>
5. Tax Identification Number and Backup Withholding. Federal income tax law
of the United States requires that a holder of Old Notes whose Old Notes are
accepted for exchange provide the Company with his correct taxpayer
identification number, which, in the case of a holder who is an individual, is
his or her social security number, or otherwise establish an exemption from
backup withholding. If the Company is not provided with the correct taxpayer
identification number, the exchanging holder of Old Notes may be subject to a
$50 penalty imposed by the Internal Revenue Service (the "IRS"). In addition,
interest on the Exchange Notes acquired pursuant to the Exchange Offer may be
subject to backup withholding in an amount equal to 31% of any interest payment.
If withholding occurs and results in an overpayment of taxes, a refund may be
obtained.
To prevent backup withholding, each exchange holder of Old Notes subject to
backup withholding must provide his correct taxpayer identification number by
completing the Substitute Form W-9 provided in this Letter of Transmittal,
certifying that the taxpayer identification number provided is correct (or that
the exchanging holder of Old Notes is awaiting a taxpayer identification number)
and that either (a) the exchanging holder has not yet notified by the IRS that
such holder is subject to backup withholding as a result of failure to report
all interest or dividends or (b) the IRS has notified the exchanging holder that
such holder is no longer subject to backup withholding.
Certain exchanging holders of Old Notes (including, among others, all
corporations and certain foreign individuals) are not subject to these backup
withholding requirements. A foreign individual and other exempt holders (i.e.
corporations) should certify, in accordance with the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9," to such
exempt status on the Substitute Form W-9 provided in this Letter of Transmittal.
6. Transfer Taxes. Holders tendering pursuant to the Exchange Offer will
not be obligated to pay brokerage commissions or fees or to pay transfer taxes
with respect to their exchange under the Exchange Offer unless the box entitled
"Special Issuance Instructions" in this Letter of Transmittal has been
completed, or unless the Exchange Notes are to be issued to any person other
than the holder of the Old Notes tendered for exchange. The Company will pay all
other charges or expenses in connection with the Exchange Offer. If holders
tender Old Notes for exchange and the Exchange Offer is not consummated,
certificates representing the Old Notes will be returned to the holders at the
Company's expense.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the certificate(s) specified in this Letter
of Transmittal.
7. Inadequate Space. If the space provided herein is inadequate, the
aggregate principal amount of the Old Notes being tendered and the certificate
numbers (if available) should be listed on a separate schedule attached hereto
and separately signed by all parties required to sign this Letter of
Transmittal.
8. Partial Tenders. Tenders of Old Notes will be accepted only in integral
multiples of $1,000. If tenders are to be made with respect to less than the
entire principal amount of any Old Notes, fill in the principal amount of Old
Notes which are tendered in column (3) in the box on the cover entitled
"Description of Old Notes Tendered." In the case of partial tenders, new
certificates representing the Old Notes in fully registered form for the
remainder of the principal amount of the Old Notes will be sent to the person(s)
signing this Letter of Transmittal, unless otherwise indicated in the
appropriate place on this Letter of Transmittal, as promptly as practicable
after the expiration or termination of the Exchange Offer.
9. Mutilated, Lost, Stolen or Destroyed Old Notes. Any holder whose Old
Notes have been mutilated, lost, stolen or destroyed should contact the Exchange
Agent at the address indicated above for further instructions.
10. Request for Assistance or Additional Copies. Requests for assistance or
additional copies of the Prospectus or this Letter of Transmittal may be
obtained from the Exchange Agent at its telephone number set forth on the cover.
11
<PAGE>
PAYER'S NAME: STATE STREET BANK AND TRUST COMPANY
- ------------------------ -------------------------- --------------------------
SUBSTITUTE Part I--PLEASE PROVIDE
Form W-9 YOUR TIN IN THE BOX AT --------------------------
Department of the RIGHT AND CERTIFY BY Social Security Number
Treasury Internal SIGNING AND DATING BELOW.
Revenue Service Payer's OR
Request for Taxpayer ------------------------
Identification Employer Identification
Number (TIN) Number
- -------------------------------------------------------------------------------
CERTIFICATION--UNDER PENALTIES OF PERJURY, I CERTIFY THAT:
(1) The number shown on this form is my correct Taxpayer Identification Number
(or I am waiting for a number to be issued to me) and
(2) I am not subject to backup withholding either because: (a) I am exempt from
backup withholding; or (b) I have not been notified by the Internal Revenue
Service (the "IRS") that I am subject to backup withholding as a result of
failure to report all interest or dividends, or (c) the IRS has notified me
that I am no longer subject to backup withholding.
- -------------------------------------- --------------------------------------
Part II--Awaiting TIN / / Part III--Exempt / /
- -------------------------------------- --------------------------------------
Certification Instructions--You must cross out item (2) above if you have
been notified by the IRS that you are subject to backup withholding because
of under-reporting interest or dividends on your tax return. However, if
after being notified by the IRS that you were subject to backup withholding
you received another notification from the IRS stating that you are no
longer subject to backup withholding, do not cross out item (2). If you are
exempt from backup withholding, check the box in Part III.
Signature Date
--------------------------------- --------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Payer's Request for Taxpayer Identification Number (TIN)
Please fill out your name and address below:
- --------------------------------------------------------------------------------
Name
- --------------------------------------------------------------------------------
Address (Number and street)
- --------------------------------------------------------------------------------
City, State and Zip Code
- --------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER
AND THE SOLICITATION. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER OF SUBSTITUTE FORM W-9
FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF
YOU CHECKED THE BOX IN PART II OF SUBSTITUTE FORM W-9.
- --------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (b)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number to the payor by the time of
payment, 31% of all reportable payments made to me will be withheld until I
provide a number and that, if I do not provide my taxpayer identification number
within 60 days, such retained amounts shall be remitted to the IRS as backup
withholding.
Signature Date
--------------------------------- ---------------------
- --------------------------------------------------------------------------------
12
<PAGE>
EXHIBIT 5.1
[Letterhead of Cadwalader, Wickersham & Taft]
May 8, 1998
The Doe Run Resources Corporation
Fabricated Products, Inc.
Doe Run Cayman Ltd.
Doe Run Mining S.R. Ltda.
Doe Run Peru S.R. Ltda.
c/o The Doe Run Resources Corporation
1801 Park 270 Drive
St. Louis, MO 63146
Re: Registration Statement on Form S-4 related to 11 1/4% Senior Notes due
2005, Series B and Floating Interest Rate Senior Notes due 2003, Series B
Gentlemen:
We have acted as special counsel for The Doe Run Resources Corporation, a New
York corporation ("Doe Run"), Fabricated Products, Inc., a Delaware corporation
("FPI"), Doe Run Cayman Ltd., a Cayman Islands company ("Doe Run Cayman"), Doe
Run Mining S.R. Ltda., a Peruvian company ("Doe Run Mining"), and Doe Run Peru
S.R. Ltda., a Peruvian company ("Doe Run Peru"), (collectively, the "Issuers")
in connection with the preparation of the Issuers' Registration Statement on
Form S-4 pursuant to the Securities Act of 1933, as amended (the "Securities
Act"), being filed with the Securities and Exchange Commission (the
"Commission") on the date hereof and to which this opinion letter is an exhibit.
The Registration Statement relates to Doe Run's offer to exchange its 11 1/4%
Senior Notes due 2005, Series B and Floating Interest Rate Senior Notes due
2003, Series B (collectively, the "Exchange Notes") for any and all of its
outstanding 11 1/4% Senior Notes due 2005, Series A and Floating Interest Rate
Senior Notes due 2003, Series A (collectively, the "Old Notes"), respectively.
The Old Notes were issued, and the Exchange Notes are to be issued, under an
indenture, dated as of March 12, 1998 (the "Indenture"), by and among Doe Run,
as issuer, and FPI, Doe Run Cayman, Doe Run Mining and Doe Run Peru, as
guarantors (collectively, in such capacity, the "Guarantors"), and State Street
Bank and Trust Company, as trustee.
In rendering the opinions expressed below, we have examined and relied upon,
among other things, (a) the Registration Statement, including the Prospectus
constituting a part thereof, (b) the Indenture filed as an exhibit to the
Registration Statement and (c) originals or copies, certified or otherwise
identified to our satisfaction, of such certificates, corporate, public or other
records, and other documents as we have deemed appropriate for the purpose of
rendering this opinion letter. In connection with such examination, we have
assumed the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the
<PAGE>
The Doe Run Resources Corporation
Fabricated Products, Inc.
Doe Run Cayman,Ltd.
Doe Run Mining S.R. Ltda.
Doe Run Peru S.R. Ltda.
c/o The Doe Run Resources Corporation
May 8, 1998
Page 2
conformity to original documents and instruments of all documents and
instruments submitted to us as copies or specimens, and the authenticity of the
originals of such documents and instruments submitted to us as copies or
specimens. We have also made such investigations of law as we have deemed
appropriate. In addition, we have assumed that the Exchange Notes and the
guarantees of the Guarantors (the "Guarantees") will be executed and delivered
in substantially the form in which they are filed as exhibits to the
Registration Statement.
Based upon the foregoing and subject to the qualifications set forth herein, we
are of the opinion that:
1. The Exchange Notes and the Guarantees will be legally and validly issued
and binding obligations of Doe Run and the Guarantors, as the case may be,
(except to the extent enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
other similar laws affecting the enforcement of creditors' rights generally
and by the effect of general principles of equity, regardless of whether
enforceability is considered in a proceeding in equity or at law), when the
Registration Statement, as finally amended, shall have become effective
under the Securities Act and the Indenture shall have been qualified under
the Trust Indenture Act of 1939, as amended, (b) [the Issuers' respective
board of directors or partners, as the case may be, have duly adopted final
resolutions authorizing the issuance of the Notes and the Guarantees, as
the case may be, as contemplated by the Registration Statement and the
Indenture and (c)] the Exchange Notes shall have been duly executed,
authenticated and delivered, and the Guarantees shall have been duly
executed and delivered, as contemplated in the Registration Statement.
2. The statements made in the Prospectus constituting a part of the
Registration Statement under the caption "Certain U.S. Federal Income Tax
Considerations," insofar as such statements purport to summarize certain
federal income tax laws of the United States of America, constitute a fair
summary of the principal federal income tax consequences of an investment
in the Exchange Notes.
We hereby consent to the filing of this opinion letter as an exhibit to the
Registration Statement and to the reference to this Firm in the Prospectus
constituting a part of the Registration Statement under the caption "Legal
Matters," without admitting that
<PAGE>
The Doe Run Resources Corporation
Fabricated Products, Inc.
Doe Run Cayman,Ltd.
Doe Run Mining S.R. Ltda.
Doe Run Peru S.R. Ltda.
c/o The Doe Run Resources Corporation
May 8, 1998
Page 3
we are "experts" within the meaning of the Securities Act or the rules and
regulations of the Commission issued thereunder with respect to any part of the
Registration Statement, including this exhibit.
Very truly yours,
/s/ Cadwalader, Wickersham & Taft
<PAGE>
Exhibit 10.1.1
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 7th day of April, 1994, between THE
DOE RUN RESOURCES CORPORATION, a New York corporation, doing business in
Missouri under the trade name "The Doe Run Company" (herein called the
"Company"), with its principal office at 1801 Park 270 Drive, St. Louis,
Missouri 63146 and Jeffrey L. Zelms ("Employee").
W I T N E S S E T H:
WHEREAS, Employee has for some years been employed by the
Company or a predeessor, and Company desires to continue to employ the Employee
and Employee desires to continue to be employed by the Company, all on the terms
hereof;
In consideration of the mutual covenants herein contained, it
is hereby agreed as follows:
1. Term and Duties.
Commencing on the date of this Agreement and continuing until
October 31, 1999, unless sooner terminated or extended as herein provided (the
"Employment Term"), the Company shall continue to employ the Employee as its
President and Chief Executive Officer. During the Employment Term the Employee
shall continue to devote all of his business time and his best efforts to the
business of the Company, and its subsidiaries, as may be necessary to perform
his duties hereunder, in accordance with the policies, procedures, business
plans and budgets from time to time established by the Board of
<PAGE>
Directors, and the Chairman of the Board and the President and shall not have
any other business affiliations. Employee hereby accepts continued employment
hereunder.
2. Compensation.
In full compensation for the services to be rendered by the
Employee to the Company and its subsidiaries hereunder, during the Employment
Term, the Company will pay to the Employee, and the Employee shall accept:
(a) a basic annual salary of $210,000 for each employment year of
the Employment Term payable in installments not less frequently than monthly,
and increased as the Board of Directors may, from time to time, determine in
its discretion; plus
(b) for each fiscal year (November 1 to October 31) of the Company
ending during the employment of the Employee, a year end bonus of not less than
$50,000 nor more than $100,000 as may be determined by the Company in its sole
discretion, provided that the Employee is in the employ of the Company at the
close of such year and the Company shall not have incurred a net loss before
taxes for such fiscal year determined in accordance with generally accepted
accounting principles followed by the Company in preparing its audited balance
sheet as of the date of this Agreement but before giving effect to this clause
(b), and to like provisions in any other employment agreement to which
the Company is a party. The bonus for each fiscal year shall, if due, be paid as
promptly as practicable after the independent accountants for the Company shall
have determined, and reported in writing, as to whether the Company had a net
loss within the meaning of this clause (b) for such year; plus
2
<PAGE>
(c) such additional amounts, if any, as the Board of Directors of the
Company may determine from time to time in its discretion.
3. Place of Employment.
The Employee's regular place of employment during the Employment Term shall
be at the principal executive office of the Company in the St. Louis, Missouri
metropolitan area. The Employee may not be required to relocate without his
consent.
4. Travel; Expenses.
The Employee shall engage in such travel as may reasonably be required in
connection with the performance of his duties, in accordance with prior
practice.
All reasonable travel and other expenses incurred by the Employee (in
accordance with the policies of the Company established from time to time) in
carrying out his duties hereunder will be reimbursed by the Company on
presentation to it of expense accounts and appropriate documentation in
accordance with the customary procedures of the Company for reimbursement of
executive expenses. The Employee shall be entitled to a travel expense advance
in the discretion of the Company when anticipated travel warrants such advance.
5. Early Termination of Employment Term on Disability or Death.
(a) If during the Employment Term, the Employee fails because of illness
or other incapacity (including incapacity because of substance abuse) to render
to the Company the services required of him hereunder for a period of two months
(during which
3
<PAGE>
the Company shall continue the Employee's compensation at the rates herein
provided), the Company may, in its discretion, give one month notice of
termination of the Employment Term (during which the Employee's compensation
shall likewise be continued), and if the Employee shall not resume full
performance of his duties within such one month period, the Employment Term
shall terminate at the expiration thereof, provided that any such termination
shall not affect the right of the Employee (or his estate) to continue to
receive benefits under any disability insurance plan covering the Employee which
is in effect at the date of termination, and further provided that if any such
termination shall be during a fiscal year and the Company shall not have a net
loss before income taxes determined as provided in paragraph 2(b) for such
fiscal year, the Employee shall be entitled to a pro-rata portion of the minimum
bonus for such year based on the number of full months worked by him in such
year.
(a) The Employment Term shall end upon the death of the Employee,
provided that (i) if the Employee shall die during a fiscal year, and the
Company shall not have a net loss, determined as provided in paragraph 2(b),
for such fiscal year, the Employee shall be entitled to a pro-rata portion of
the minimum bonus for such year, based on the number of full months worked by
him during such year.
6. Vacation.
During the Employment Term, the Employee shall be entitled to vacation
periods not exceeding weeks in each year, to be taken at such time or times as
shall be mutually convenient to the Company and the Employee (but not more.than
two weeks consecutively). Unused vacation shall not accumulate from year to
year.
4
<PAGE>
7. Confidentiality; Competition.
(a) For the purposes hereof, all confidential information about the
business and affairs of the Company (including, without limitation, business
plans, financial and marketing information and information about its secrets
and machinery, designs, plans, patterns and specifications, formulae,
processes, inventions and discoveries, and names of suppliers and customers
and nature of dealings with them) constitute "Company Confidential
Information." For some years, the Employee has been a senior officer of the
Company or a predecessor. He acknowledges that he has in the past had, and
will continue to have, access to and knowledge of Company Confidential
Information, and that improper use or revelation of same by the Employee
during or after the termination of his employment by the Company could cause
serious injury to the business of the Company. Accordingly, the Employee
agrees that he will forever keep secret and inviolate all Company
Confidential Information which shall have come or shall hereafter come into
his possession, and that he will not use the same for his own private
benefit, or directly or indirectly for the benefit of others, and that he
will not disclose such Company Confidential Information to any other person.
(b) Dring the Employment Term, the Employee will not (whether as an
officer, director, partner, proprietor, investor, associate, employee,
consultant, adviser, public relations or advertising representative or
otherwise), directly or indirectly, be engaged in any aspect of the business
of lead mining, milling, recycling or sale within the continental United
States (which the parties acknowledge is the Company's trading area). For
purposes of the preceding sentence, the Employee shall be deemed to be
engaged in any business which any person for whom he shall perform services
is engaged. Nothing herein contained
5
<PAGE>
shall be deemed to prohibit the Employee from owning, as a passive
investment, a security of any issuer which is not a supplier, vendor;
customer or competitor of the Company.
(c) Within the terms of this Agreement, it is intended to limit
disclosure and competition by the Employee to the maximum extent permitted by
law. If it shall be finally determined by any court of competent jurisdiction
ruling on this Agreement that the scope or duration of any limitation
contained in this paragraph 7 is too extensive to be legally enforceable,
then the parties hereby agree that the scope and duration (not greater than
that provided for herein) of such limitation shall be the maximum scope and
duration which shall be legally enforceable and the Employee hereby consents
to the enforcement of such limitation as so modified.
(d) The Employee acknowledges that any violation by him of the
provisions of this paragraph 7 could cause serious and irreparable damages to
the Company. He further acknowledges that it might hot be possible to measure
such-damages in money. Accordingly, the Employee further acknowledges that,
in the event of a breach or threatened breach by him of the provisions of
this paragraph 7, the Company may seek in addition to any other rights or
remedies, including money damages, an injunction or restraining order,
restraining the Employee from doing or continuing to do or perform any acts
constituting such breach or threatened breach.
8. Employee's Inventions.
The Employee agrees to assign and transfer to the Company, its successors
and assigns, his entire right, title and interest in and to any or all
inventions, designs, discoveries and improvements which he may make, either
solely or jointly with others,
6
<PAGE>
during the Employment Term hereunder and for a period of one (1) year
thereafter, which relate in any way to the business or products of the
Company, together with all rights to letters patent which may be granted
thereon. Immediately upon making any inventions, designs, discoveries or
improvements, the Employee shall notify the Company and, without further
compensation, shall execute and deliver to the Company such documents as may
be necessary to prepare or prosecute applications for patents upon such
inventions, designs, discoveries and improvements, and shall assign and
transfer to the Company his entire right, title and interest therein. The
Company shall pay all expenses involved in carrying out the provisions of
this paragraph 8.
9. Benefits.
The Company agrees to provide to the Employee during the Employment Term
the medical, hospitalization, disability insurance benefits and other
benefits as it provides to its other senior officers.
10. Employee's Representation.
Employee hereby represents to the Company that he has full right and
power to enter into this Agreement and carry out his duties hereunder, and
that same will not constitute a breach of or default under any employment,
confidentiality, non-competition or other agreement by which he may be bound.
7
<PAGE>
11. Default by Employee.
If the Employee shall:
(i) commit an act of dishonesty against the Company or fraud upon the
Company; or
(ii) breach his obligations under-this Agreement and fail to cure such
breach within five (5) days after written notice thereof; or
(iii) be convicted of a crime involving moral turpitude; or
(iv) fail or neglect diligently to perform his duties hereunder and
continue in his failure after written notice;
then, and in any such case, the Company may terminate the employment of the
Employee hereunder and, in the event of any such termination, the Employee
shall no longer have any right to any and all benefits (including future
salary payments) which would otherwise have accrued after such termination.
12. Automatic Renewal.
This Agreement shall automatically renew and be extended from year to
year upon the expiration of the Employment Term (as extended if extended)
unless terminated by either party by written notice given to the other at
least three months prior to its terminationn date. If any such notice shall
be given, this Agreement shall terminate on the the next succeeding October
31.
13. Successors.
The rights, benefits, duties and obligations under this Agreement shall
inure to and be binding upon the Company, its successors and assigns and upon
the Employee and his legal representatives, legatees and heirs. It is
specifically understood, however, that this
8
<PAGE>
Agreement may not be transferred or assigned by the Employee. The Company may
assign any of its rights and obligations hereunder to any subsidiary or
affiliate of the Company, or, by written instruction to a successor or
surviving corporation resulting from a merger, consolidation, sale of assets
or stock, or other corporate reorganization, on condition that the assignee
shall assume all of the Company's obligations hereunder (but nevertheless the
Company shall remain liable hereunder) and it is agreed that such successor
or surviving corporation shall continue to be obligated to perform the
provisions of this Agreement.
14. Notices.
Notices hereunder shall be in writing and shall be sent by telegraph or
by certified or registered mail, telecopy, or recognized overnight delivery
service (such as Federal Express) prepaid as follows:
To Employee: To Company:
Jeffrey L. Zelms The Doe Run Company
c/o The Renco Group, Inc.
45 Rockefeller Center
New York, New York 10111
Attention: Ira Leon Rennert
Chairman
After October 1, 1994:
30 Rockefeller Plaza
42nd floor
New York, NY
with copies to:
9
<PAGE>
The Doe Run Resources
Corporation
1801 Park 270 Drive
St. Louis, Missouri 63146
Attention: President
and
Baer Marks & Upham
805 Third Avenue
New York, New York 10022
Attention: Justin W. D"Atri, Esq.
and shall be deemed to have been given when telecopied to the addressee or
three days after placed in the mail or the second business day following
delivery to a recognized overnight delivery service (such as Federal Express)
or a telegraph company, prepaid and properly addressed. Notices to the
Employee may also be delivered to him personally. Notices of change of
address shall be given as provided above, but shall be effective only when
actually received.
15. Waivers.
The failure of either party to insist upon the strict performance of any
of the terms, conditions, and provisions of this Agreement shall not be
construed as a waiver or relinquishment of future compliance therewith, and
said terms, conditions, and provisions shall remain in full force and effect.
No waiver of any term or condition of this Agreement on the part of the
Company, shall be effective for any purposes whatsoever unless such waiver is
in writing and signed by the Company.
10
<PAGE>
16. Entire Agreement; Governing Law.
There are no oral or written understandings concerning the Employee's
employment outside of this Agreement and the separate Net Worth Appreciation
Agreement between the Company and .the Employee. This Agreement may not be
modified except by a writing signed by the parties hereto. This Agreement
supersedes any and all prior employment agreements or understandings. This
Agreement is made under, and shall be construed in accordance with, the laws
of the State of Missouri, applicable to agreements to be performed wholly
within that state.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
THE DOE RUN RESOURCES CORPORATION
Attest: doing business as THE DOE RUN COMPANY
/s/ Nicole Ferrick
- ---------------------- By: /s/ Ira Leon Rennert
------------------------------------
Witness:
/s/ Laura L. Shaw /s/ Jeffrey L. Zelms
- ---------------------- ------------------------------------
Jeffrey L. Zelms, Employee
11
<PAGE>
Exhibit 10.1.2
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 7th day of April, 1994, between THE DOE RUN
RESOURCES CORPORATION, a New York corporation, doing business in Missouri under
the trade name "The Doe Run Company" (herein called the "Company"), with its
principal office at 1801 Park 270 Drive, St. Louis, Missouri 63146 and Marvin K.
Kaiser ("Employee").
W I T N E S S E T H:
WHEREAS, Employee has for some years been employed by the Company or a
predeessor, and Company desires to continue to employ the Employee and Employee
desires to continue to be employed by the Company, all on the terms hereof; In
consideration of the mutual covenants herein contained, it is hereby agreed as
follows:
1. Term and Duties.
Commencing on the date of this Agreement and continuing until October 31,
1999, unless sooner terminated or extended as herein provided (the "Employment
Term"), the Company shall continue to employ the Employee as its Vice President
and Chief Financial Officer. During the Employment Term the Employee shall
continue to devote all of his business time and his best efforts to the business
of the Company, and its subsidiaries, as may be necessary to perform his duties
hereunder, in accordance with the policies, procedures, business plans and
budgets from time to time established by the Board of
<PAGE>
Directors, and the Chairman of the Board and the President and shall not have
any other business affiliations. Employee hereby accepts continued employment
hereunder.
2. Compensation.
In full compensation for the services to be rendered by the Employee to the
Company and its subsidiaries hereunder, during the Employment Term, the Company
will pay to the Employee, and the Employee shall accept:
(a) a basic annual salary of $150,000 for each employment year of the
Employment Term payable in installments not less frequently than monthly, and
increased as the Board of Directors may, from time to time, determine in its
discretion; plus
(b) for each fiscal year (November 1 to October 31) of the Company
ending during the employment of the Employee, a year end bonus of not less than
$30,000 nor more than $60,000 as may be determined by the Company in its sole
discretion, provided that the Employee is in the employ of the Company at the
close of such year and the Company shall not have incurred a net loss before
taxes for such fiscal year determined in accordance with generally accepted
accounting principles followed by the Company in preparing its audited balance
sheet as of the date of this Agreement but before giving effect to this clause
(b), and to like provisions in any other employment agreement to which the
Company is a party. The bonus for each fiscal year shall, if due, be paid as
promptly as practicable after the independent accountants for the Company shall
have determined, and reported in writing, as to whether the Company had a net
loss within the meaning of this clause (b) for such year; plus
2
<PAGE>
(c) such additional amounts, if any, as the Board of Directors of the
Company may determine from time to time in its discretion.
3. Place of Employment.
The Employee's regular place of employment during the Employment Term shall
be at the principal executive office of the Company in the St. Louis, Missouri
metropolitan area. The Employee may not be required to relocate without his
consent.
4. Travel; Expenses.
The Employee shall engage in such travel as may reasonably be required in
connection with the performance of his duties, in accordance with prior
practice.
All reasonable travel and other expenses incurred by the Employee (in
accordance with the policies of the Company established from time to time) in
carrying out his duties hereunder will be reimbursed by the Company on
presentation to it of expense accounts and appropriate documentation in
accordance with the customary procedures of the Company for reimbursement of
executive expenses. The Employee shall be entitled to a travel expense advance
in the discretion of the Company when anticipated travel warrants such advance.
5. Early Termination of Employment Term on Disability or Death.
(a) If during the Employment Term, the Employee fails because of illness
or other incapacity (including incapacity because of substance abuse) to render
to the Company the services required of him hereunder for a period of two months
(during which
3
<PAGE>
the Company shall continue the Employee's compensation at the rates herein
provided), the Company may, in its discretion, give one month notice of
termination of the Employment Term (during which the Employee's compensation
shall likewise be continued), and if the Employee shall not resume full
performance of his duties within such one month period, the Employment Term
shall terminate at the expiration thereof, provided that any such termination
shall not affect the right of the Employee (or his estate) to continue to
receive benefits under any disability insurance plan covering the Employee which
is in effect at the date of termination, and further provided that if any such
termination shall be during a fiscal year and the Company shall not have a net
loss before income taxes determined as provided in paragraph 2(b) for such
fiscal year, the Employee shall be entitled to a pro-rata portion of the minimum
bonus for such year based on the number of full months worked by him in such
year.
(b) The Employment Term shall end upon the death of the Employee,
provided that (i) if the Employee shall die during a fiscal year, and the
Company shall not have a net loss, determined as provided in paragraph 2(b), for
such fiscal year, the Employee shall be entitled to a pro-rata portion of the
minimum bonus for such year, based on the number of full months worked by him
during such year.
6. Vacation.
During the Employment Term, the Employee shall be entitled to vacation
periods not exceeding weeks in each year, to be taken at such time or
times as shall be mutually convenient to the Company and the Employee (but
not more.than two weeks consecutively). Unused vacation shall not accumulate
from year to year.
4
<PAGE>
7. Confidentiality; Competition.
(a) For the purposes hereof, all confidential information about the
business and affairs of the Company (including, without limitation, business
plans, financial and marketing information and information about its secrets and
machinery, designs, plans, patterns and specifications, formulae, processes,
inventions and discoveries, and names of suppliers and customers and nature of
dealings with them) constitute "Company Confidential Information." For some
years, the Employee has been a senior officer of the Company or a predecessor.
He acknowledges that he has in the past had, and will continue to have, access
to and knowledge of Company Confidential Information, and that improper use or
revelation of same by the Employee during or after the termination of his
employment by the Company could cause serious injury to the business of the
Company. Accordingly, the Employee agrees that he will forever keep secret and
inviolate all Company Confidential Information which shall have come or shall
hereafter come into his possession, and that he will not use the same for his
own private benefit, or directly or indirectly for the benefit of others, and
that he will not disclose such Company Confidential Information to any other
person.
(b) During the Employment Term, the Employee will not (whether as an
officer, director, partner, proprietor, investor, associate, employee,
consultant, adviser, public relations or advertising representative or
otherwise), directly or indirectly, be engaged in any aspect of the business of
lead mining, milling, recycling or sale within the continental United States
(which the parties acknowledge is the Company's trading area). For purposes of
the preceding sentence, the Employee shall be deemed to be engaged in any
business which any person for whom he shall perform services is engaged. Nothing
herein contained
5
<PAGE>
shall be deemed to prohibit the Employee from owning, as a passive investment, a
security of any issuer which is not a supplier, vendor; customer or competitor
of the Company.
(c) Within the terms of this Agreement, it is intended to limit
disclosure and competition by the Employee to the maximum extent permitted by
law. If it shall be finally determined by any court of competent jurisdiction
ruling on this Agreement that the scope or duration of any limitation contained
in this paragraph 7 is too extensive to be legally enforceable, then the parties
hereby agree that the scope and duration (not greater than that provided for
herein) of such limitation shall be the maximum scope and duration which shall
be legally enforceable and the Employee hereby consents to the enforcement of
such limitation as so modified.
(d) The Employee acknowledges that any violation by him of the
provisions of this paragraph 7 could cause serious and irreparable damages to
the Company. He further acknowledges that it might hot be possible to measure
such-damages in money. Accordingly, the Employee further acknowledges that, in
the event of a breach or threatened breach by him of the provisions of this
paragraph 7, the Company may seek in addition to any other rights or remedies,
including money damages, an injunction or restraining order, restraining the
Employee from doing or continuing to do or perform any acts constituting such
breach or threatened breach.
8. Employee's Inventions.
The Employee agrees to assign and transfer to the Company, its successors
and assigns, his entire right, title and interest in and to any or all
inventions, designs, discoveries and improvements which he may make, either
solely or jointly with others,
6
<PAGE>
during the Employment Term hereunder and for a period of one (1) year
thereafter, which relate in any way to the business or products of the Company,
together with all rights to letters patent which may be granted thereon.
Immediately upon making any inventions, designs, discoveries or improvements,
the Employee shall notify the Company and, without further compensation, shall
execute and deliver to the Company such documents as may be necessary to prepare
or prosecute applications for patents upon such inventions, designs, discoveries
and improvements, and shall assign and transfer to the Company his entire right,
title and interest therein. The Company shall pay all expenses involved in
carrying out the provisions of this paragraph 8.
9. Benefits.
The Company agrees to provide to the Employee during the Employment Term the
medical, hospitalization, disability insurance benefits and other benefits as it
provides to its other senior officers.
10. Employee's Representation.
Employee hereby represents to the Company that he has full right and power
to enter into this Agreement and carry out his duties hereunder, and that same
will not constitute a breach of or default under any employment,
confidentiality, non-competition or other agreement by which he may be bound.
7
<PAGE>
11. Default by Employee.
If the Employee shall:
(i) commit an act of dishonesty against the Company or fraud upon the
Company; or
(ii) breach his obligations under-this Agreement and fail to cure such
breach within five (5) days after written notice thereof; or
(iii) be convicted of a crime involving moral turpitude; or
(iv) fail or neglect diligently to perform his duties hereunder and
continue in his failure after written notice;
then, and in any such case, the Company may terminate the employment of the
Employee hereunder and, in the event of any such termination, the Employee shall
no longer have any right to any and all benefits (including future salary
payments) which would otherwise have accrued after such termination.
12. Automatic Renewal.
This Agreement shall automatically renew and be extended from year to year
upon the expiration of the Employment Term (as extended if extended) unless
terminated by either party by written notice given to the other at least three
months prior to its terminationn date. If any such notice shall be given, this
Agreement shall terminate on the the next succeeding October 31.
13. Successors.
The rights, benefits, duties and obligations under this Agreement shall
inure to and be binding upon the Company, its successors and assigns and upon
the Employee and his legal representatives, legatees and heirs. It is
specifically understood, however, that this
8
<PAGE>
Agreement may not be transferred or assigned by the Employee. The Company may
assign any of its rights and obligations hereunder to any subsidiary or
affiliate of the Company, or, by written instruction to a successor or surviving
corporation resulting from a merger, consolidation, sale of assets or stock, or
other corporate reorganization, on condition that the assignee shall assume all
of the Company's obligations hereunder (but nevertheless the Company shall
remain liable hereunder) and it is agreed that such successor or surviving
corporation shall continue to be obligated to perform the provisions of this
Agreement.
14. Notices.
Notices hereunder shall be in writing and shall be sent by telegraph or by
certified or registered mail, telecopy, or recognized overnight delivery service
(such as Federal Express) prepaid as follows:
To Employee: To Company:
Marvin K. Kaiser The Doe Run Company
c/o The Renco Group, Inc.
45 Rockefeller Center
New York, New York 10111
Attention: Ira Leon Rennert
Chairman
After October 1, 1994:
30 Rockefeller Plaza
42nd floor
New York, NY
with copies to:
9
<PAGE>
The Doe Run Resources
Corporation
1801 Park 270 Drive
St. Louis, Missouri 63146
Attention: President
and
Baer Marks & Upham
805 Third Avenue
New York, New York 10022
Attention: Justin W. D"Atri, Esq.
and shall be deemed to have been given when telecopied to the addressee or three
days after placed in the mail or the second business day following delivery to a
recognized overnight delivery service (such as Federal Express) or a telegraph
company, prepaid and properly addressed. Notices to the Employee may also be
delivered to him personally. Notices of change of address shall be given as
provided above, but shall be effective only when actually received.
15. Waivers.
The failure of either party to insist upon the strict performance of any of
the terms, conditions, and provisions of this Agreement shall not be construed
as a waiver or relinquishment of future compliance therewith, and said terms,
conditions, and provisions shall remain in full force and effect. No waiver of
any term or condition of this Agreement on the part of the Company, shall be
effective for any purposes whatsoever unless such waiver is in writing and
signed by the Company.
10
<PAGE>
16. Entire Agreement; Governing Law.
There are no oral or written understandings concerning the Employee's
employment outside of this Agreement and the separate Net Worth Appreciation
Agreement between the Company and .the Employee. This Agreement may not be
modified except by a writing signed by the parties hereto. This Agreement
supersedes any and all prior employment agreements or understandings. This
Agreement is made under, and shall be construed in accordance with, the laws of
the State of Missouri, applicable to agreements to be performed wholly within
that state.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
THE DOE RUN RESOURCES CORPORATION
Attest: doing business as THE DOE RUN COMPANY
/s/ Nicole Ferrick
- ----------------------------- By: /s/ Ira Leon Rennert
----------------------------------
Witness:
/s/ Laura L. Shaw /s/ Marvin K. Kaiser
- ----------------------------- -------------------------------------
Marvin K. Kaiser, Employee
11
<PAGE>
Exhibit 10.1.3
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 7th day of April, 1994, between THE DOE RUN
RESOURCES CORPORATION, a New York corporation, doing business in Missouri under
the trade name "The Doe Run Company" (herein called the "Company"), with its
principal office at 1801 Park 270 Drive, St. Louis, Missouri 63146 and Richard
L. Amistadi ("Employee").
W I T N E S S E T H:
WHEREAS, Employee has for some years been employed by the Company or a
predeessor, and Company desires to continue to employ the Employee and Employee
desires to continue to be employed by the Company, all on the terms hereof;
In consideration of the mutual covenants herein contained, it is hereby
agreed as follows:
1. Term and Duties.
Commencing on the date of this Agreement and continuing until October 31,
1999, unless sooner terminated or extended as herein provided (the "Employment
Term"), the Company shall continue to employ the Employee as its Vice President
Sales and Marketing. During the Employment Term the Employee shall continue to
devote all of his business time and his best efforts to the business of the
Company, and its subsidiaries, as may be necessary to perform his duties
hereunder, in accordance with the policies, procedures, business plans and
budgets from time to time established by the Board of
<PAGE>
Directors, and the Chairman of the Board and the President and shall not have
any other business affiliations. Employee hereby accepts continued employment
hereunder.
2. Compensation.
In full compensation for the services to be rendered by the Employee to the
Company and its subsidiaries hereunder, during the Employment Term, the Company
will pay to the Employee, and the Employee shall accept:
(a) a basic annual salary of $160,032 for each employment year of the
Employment Term payable in installments not less frequently than monthly, and
increased as the Board of Directors may, from time to time, determine in its
discretion; plus
(b) for each fiscal year (November 1 to October 31) of the Company
ending during the employment of the Employee, a year end bonus of not less than
$30,000 nor more than $60,000 as may be determined by the Company in its sole
discretion, provided that the Employee is in the employ of the Company at the
close of such year and the Company shall not have incurred a net loss before
taxes for such fiscal year determined in accordance with generally accepted
accounting principles followed by the Company in preparing its audited balance
sheet as of the date of this Agreement but before giving effect to this clause
(b), and to like provisions in any other employment agreement to which the
Company is a party. The bonus for each fiscal year shall, if due, be paid as
promptly as practicable after the independent accountants for the Company shall
have determined, and reported in writing, as to whether the Company had a net
loss within the meaning of this clause (b) for such year; plus
2
<PAGE>
(c) such additional amounts, if any, as the Board of Directors of the
Company may determine from time to time in its discretion.
3. Place of Employment.
The Employee's regular place of employment during the Employment Term shall
be at the principal executive office of the Company in the St. Louis, Missouri
metropolitan area. The Employee may not be required to relocate without his
consent.
4. Travel; Expenses.
The Employee shall engage in such travel as may reasonably be required in
connection with the performance of his duties, in accordance with prior
practice.
All reasonable travel and other expenses incurred by the Employee (in
accordance with the policies of the Company established from time to time) in
carrying out his duties hereunder will be reimbursed by the Company on
presentation to it of expense accounts and appropriate documentation in
accordance with the customary procedures of the Company for reimbursement of
executive expenses. The Employee shall be entitled to a travel expense advance
in the discretion of the Company when anticipated travel warrants such advance.
5. Early Termination of Employment Term on Disability or Death.
(a) If during the Employment Term, the Employee fails because of illness
or other incapacity (including incapacity because of substance abuse) to render
to the Company the services required of him hereunder for a period of two months
(during which
3
<PAGE>
the Company shall continue the Employee's compensation at the rates herein
provided), the Company may, in its discretion, give one month notice of
termination of the Employment Term (during which the Employee's compensation
shall likewise be continued), and if the Employee shall not resume full
performance of his duties within such one month period, the Employment Term
shall terminate at the expiration thereof, provided that any such termination
shall not affect the right of the Employee (or his estate) to continue to
receive benefits under any disability insurance plan covering the Employee which
is in effect at the date of termination, and further provided that if any such
termination shall be during a fiscal year and the Company shall not have a net
loss before income taxes determined as provided in paragraph 2(b) for such
fiscal year, the Employee shall be entitled to a pro-rata portion of the minimum
bonus for such year based on the number of full months worked by him in such
year.
(b) The Employment Term shall end upon the death of the Employee,
provided that (i) if the Employee shall die during a fiscal year, and the
Company shall not have a net loss, determined as provided in paragraph 2(b), for
such fiscal year, the Employee shall be entitled to a pro-rata portion of the
minimum bonus for such year, based on the number of full months worked by him
during such year.
6. Vacation.
During the Employment Term, the Employee shall be entitled to vacation
periods not exceeding weeks in each year, to be taken at such time or times as
shall be mutually convenient to the Company and the Employee (but not more.than
two weeks consecutively). Unused vacation shall not accumulate from year to
year.
4
<PAGE>
7. Confidentiality; Competition.
(a) For the purposes hereof, all confidential information about the
business and affairs of the Company (including, without limitation, business
plans, financial and marketing information and information about its secrets and
machinery, designs, plans, patterns and specifications, formulae, processes,
inventions and discoveries, and names of suppliers and customers and nature of
dealings with them) constitute "Company Confidential Information." For some
years, the Employee has been a senior officer of the Company or a predecessor.
He acknowledges that he has in the past had, and will continue to have, access
to and knowledge of Company Confidential Information, and that improper use or
revelation of same by the Employee during or after the termination of his
employment by the Company could cause serious injury to the business of the
Company. Accordingly, the Employee agrees that he will forever keep secret and
inviolate all Company Confidential Information which shall have come or shall
hereafter come into his possession, and that he will not use the same for his
own private benefit, or directly or indirectly for the benefit of others, and
that he will not disclose such Company Confidential Information to any other
person.
(b) During the Employment Term, the Employee will not (whether as an
officer, director, partner, proprietor, investor, associate, employee,
consultant, adviser, public relations or advertising representative or
otherwise), directly or indirectly, be engaged in any aspect of the business of
lead mining, milling, recycling or sale within the continental United States
(which the parties acknowledge is the Company's trading area). For purposes of
the preceding sentence, the Employee shall be deemed to be engaged in any
business which any person for whom he shall perform services is engaged. Nothing
herein contained
5
<PAGE>
shall be deemed to prohibit the Employee from owning, as a passive investment, a
security of any issuer which is not a supplier, vendor; customer or competitor
of the Company.
(c) Within the terms of this Agreement, it is intended to limit
disclosure and competition by the Employee to the maximum extent permitted by
law. If it shall be finally determined by any court of competent jurisdiction
ruling on this Agreement that the scope or duration of any limitation contained
in this paragraph 7 is too extensive to be legally enforceable, then the parties
hereby agree that the scope and duration (not greater than that provided for
herein) of such limitation shall be the maximum scope and duration which shall
be legally enforceable and the Employee hereby consents to the enforcement of
such limitation as so modified.
(d) The Employee acknowledges that any violation by him of the
provisions of this paragraph 7 could cause serious and irreparable damages to
the Company. He further acknowledges that it might hot be possible to measure
such-damages in money. Accordingly, the Employee further acknowledges that, in
the event of a breach or threatened breach by him of the provisions of this
paragraph 7, the Company may seek in addition to any other rights or remedies,
including money damages, an injunction or restraining order, restraining the
Employee from doing or continuing to do or perform any acts constituting such
breach or threatened breach.
8. Employee's Inventions.
The Employee agrees to assign and transfer to the Company, its successors
and assigns, his entire right, title and interest in and to any or all
inventions, designs, discoveries and improvements which he may make, either
solely or jointly with others,
6
<PAGE>
during the Employment Term hereunder and for a period of one (1) year
thereafter, which relate in any way to the business or products of the Company,
together with all rights to letters patent which may be granted thereon.
Immediately upon making any inventions, designs, discoveries or improvements,
the Employee shall notify the Company and, without further compensation, shall
execute and deliver to the Company such documents as may be necessary to prepare
or prosecute applications for patents upon such inventions, designs, discoveries
and improvements, and shall assign and transfer to the Company his entire right,
title and interest therein. The Company shall pay all expenses involved in
carrying out the provisions of this paragraph 8.
9. Benefits.
The Company agrees to provide to the Employee during the Employment Term the
medical, hospitalization, disability insurance benefits and other benefits as it
provides to its other senior officers.
10. Employee's Representation.
Employee hereby represents to the Company that he has full right and power
to enter into this Agreement and carry out his duties hereunder, and that same
will not constitute a breach of or default under any employment,
confidentiality, non-competition or other agreement by which he may be bound.
7
<PAGE>
11. Default by Employee.
If the Employee shall:
(i) commit an act of dishonesty against the Company or fraud upon the
Company; or
(ii) breach his obligations under-this Agreement and fail to cure such
breach within five (5) days after written notice thereof; or
(iii) be convicted of a crime involving moral turpitude; or
(iv) fail or neglect diligently to perform his duties hereunder and
continue in his failure after written notice;
then, and in any such case, the Company may terminate the employment of the
Employee hereunder and, in the event of any such termination, the Employee shall
no longer have any right to any and all benefits (including future salary
payments) which would otherwise have accrued after such termination.
12. Automatic Renewal.
This Agreement shall automatically renew and be extended from year to year
upon the expiration of the Employment Term (as extended if extended) unless
terminated by either party by written notice given to the other at least three
months prior to its terminationn date. If any such notice shall be given, this
Agreement shall terminate on the the next succeeding October 31.
13. Successors.
The rights, benefits, duties and obligations under this Agreement shall
inure to and be binding upon the Company, its successors and assigns and upon
the Employee and his legal representatives, legatees and heirs. It is
specifically understood, however, that this
8
<PAGE>
Agreement may not be transferred or assigned by the Employee. The Company may
assign any of its rights and obligations hereunder to any subsidiary or
affiliate of the Company, or, by written instruction to a successor or surviving
corporation resulting from a merger, consolidation, sale of assets or stock, or
other corporate reorganization, on condition that the assignee shall assume all
of the Company's obligations hereunder (but nevertheless the Company shall
remain liable hereunder) and it is agreed that such successor or surviving
corporation shall continue to be obligated to perform the provisions of this
Agreement.
14. Notices.
Notices hereunder shall be in writing and shall be sent by telegraph or by
certified or registered mail, telecopy, or recognized overnight delivery service
(such as Federal Express) prepaid as follows:
To Employee: To Company:
Richard L. Amistadi The Doe Run Company
c/o The Renco Group, Inc.
45 Rockefeller Center
New York, New York 10111
Attention: Ira Leon Rennert
Chairman
After October 1, 1994:
30 Rockefeller Plaza
42nd floor
New York, NY
with copies to:
9
<PAGE>
The Doe Run Resources
Corporation
1801 Park 270 Drive
St. Louis, Missouri 63146
Attention: President
and
Baer Marks & Upham
805 Third Avenue
New York, New York 10022
Attention: Justin W. D"Atri, Esq.
and shall be deemed to have been given when telecopied to the addressee or three
days after placed in the mail or the second business day following delivery to a
recognized overnight delivery service (such as Federal Express) or a telegraph
company, prepaid and properly addressed. Notices to the Employee may also be
delivered to him personally. Notices of change of address shall be given as
provided above, but shall be effective only when actually received.
15. Waivers.
The failure of either party to insist upon the strict performance of any of
the terms, conditions, and provisions of this Agreement shall not be construed
as a waiver or relinquishment of future compliance therewith, and said terms,
conditions, and provisions shall remain in full force and effect. No waiver of
any term or condition of this Agreement on the part of the Company, shall be
effective for any purposes whatsoever unless such waiver is in writing and
signed by the Company.
10
<PAGE>
16. Entire Agreement; Governing Law.
There are no oral or written understandings concerning the Employee's
employment outside of this Agreement and the separate Net Worth Appreciation
Agreement between the Company and .the Employee. This Agreement may not be
modified except by a writing signed by the parties hereto. This Agreement
supersedes any and all prior employment agreements or understandings. This
Agreement is made under, and shall be construed in accordance with, the laws of
the State of Missouri, applicable to agreements to be performed wholly within
that state.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
THE DOE RUN RESOURCES CORPORATION
Attest: doing business as THE DOE RUN COMPANY
/s/ Nicole Ferrick By: /s/ Ira Leon Rennert
- ----------------------- -----------------------------------
Witness:
/s/ Ron Figuero /s/ Richard L. Amistadi
- ----------------------- -----------------------------------
Richard L. Amistadi, Employee
11
<PAGE>
Exhibit 10.1.4
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 7th day of April, 1994, between THE DOE RUN
RESOURCES CORPORATION, a New York corporation, doing business in Missouri under
the trade name "The Doe Run Company" (herein called the "Company"), with its
principal office at 1801 Park 270 Drive, St. Louis, Missouri 63146 and Gary E.
Boyer ("Employee").
W I T N E S S E T H:
WHEREAS, Employee has for some years been employed by the Company or a
predeessor, and Company desires to continue to employ the Employee and Employee
desires to continue to be employed by the Company, all on the terms hereof;
In consideration of the mutual covenants herein contained, it is hereby
agreed as follows:
1. Term and Duties.
Commencing on the date of this Agreement and continuing until October 31,
1999, unless sooner terminated or extended as herein provided (the "Employment
Term"), the Company shall continue to employ the Employee as its Vice President
and General Manager- Mining/Milling. During the Employment Term the Employee
shall continue to devote all of his business time and his best efforts to the
business of the Company, and its subsidiaries, as may be necessary to perform
his duties hereunder, in accordance with the policies, procedures, business
plans and budgets from time to time established by the Board of
<PAGE>
Directors, and the Chairman of the Board and the President and shall not have
any other business affiliations. Employee hereby accepts continued employment
hereunder.
2. Compensation.
In full compensation for the services to be rendered by the Employee to the
Company and its subsidiaries hereunder, during the Employment Term, the Company
will pay to the Employee, and the Employee shall accept:
(a) a basic annual salary of $132,540 for each employment year of the
Employment Term payable in installments not less frequently than monthly, and
increased as the Board of Directors may, from time to time, determine in its
discretion; plus
(b) for each fiscal year (November 1 to October 31) of the Company
ending during the employment of the Employee, a year end bonus of not less than
$30,000 nor more than $60,000 as may be determined by the Company in its sole
discretion, provided that the Employee is in the employ of the Company at the
close of such year and the Company shall not have incurred a net loss before
taxes for such fiscal year determined in accordance with generally accepted
accounting principles followed by the Company in preparing its audited balance
sheet as of the date of this Agreement but before giving effect to this clause
(b), and to like provisions in any other employment agreement to which the
Company is a party. The bonus for each fiscal year shall, if due, be paid as
promptly as practicable after the independent accountants for the Company shall
have determined, and reported in writing, as to whether the Company had a net
loss within the meaning of this clause (b) for such year; plus
2
<PAGE>
(c) such additional amounts, if any, as the Board of Directors of the
Company may determine from time to time in its discretion.
3. Place of Employment.
The Employee's regular place of employment during the Employment Term shall
be at the Mining Division operations of the Company in Viburnum, Missouri. The
Employee may not be required to relocate without his consent.
4. Travel; Expenses.
The Employee shall engage in such travel as may reasonably be required in
connection with the performance of his duties, in accordance with prior
practice.
All reasonable travel and other expenses incurred by the Employee (in
accordance with the policies of the Company established from time to time) in
carrying out his duties hereunder will be reimbursed by the Company on
presentation to it of expense accounts and appropriate documentation in
accordance with the customary procedures of the Company for reimbursement of
executive expenses. The Employee shall be entitled to a travel expense advance
in the discretion of the Company when anticipated travel warrants such advance.
5. Early Termination of Employment Term on Disability or Death.
(a) If during the Employment Term, the Employee fails because of illness
or other incapacity (including incapacity because of substance abuse) to render
to the Company the services required of him hereunder for a period of two months
(during which
3
<PAGE>
the Company shall continue the Employee's compensation at the rates herein
provided), the Company may, in its discretion, give one month notice of
termination of the Employment Term (during which the Employee's compensation
shall likewise be continued), and if the Employee shall not resume full
performance of his duties within such one month period, the Employment Term
shall terminate at the expiration thereof, provided that any such termination
shall not affect the right of the Employee (or his estate) to continue to
receive benefits under any disability insurance plan covering the Employee which
is in effect at the date of termination, and further provided that if any such
termination shall be during a fiscal year and the Company shall not have a net
loss before income taxes determined as provided in paragraph 2(b) for such
fiscal year, the Employee shall be entitled to a pro-rata portion of the minimum
bonus for such year based on the number of full months worked by him in such
year.
(b) The Employment Term shall end upon the death of the Employee,
provided that (i) if the Employee shall die during a fiscal year, and the
Company shall not have a net loss, determined as provided in paragraph 2(b), for
such fiscal year, the Employee shall be entitled to a pro-rata portion of the
minimum bonus for such year, based on the number of full months worked by him
during such year.
6. Vacation.
During the Employment Term, the Employee shall be entitled to vacation
periods not exceeding weeks in each year, to be taken at such time or times as
shall be mutually convenient to the Company and the Employee (but not more.than
two weeks consecutively). Unused vacation shall not accumulate from year to
year.
4
<PAGE>
7. Confidentiality; Competition.
(a) For the purposes hereof, all confidential information about the
business and affairs of the Company (including, without limitation, business
plans, financial and marketing information and information about its secrets and
machinery, designs, plans, patterns and specifications, formulae, processes,
inventions and discoveries, and names of suppliers and customers and nature of
dealings with them) constitute "Company Confidential Information." For some
years, the Employee has been a senior officer of the Company or a predecessor.
He acknowledges that he has in the past had, and will continue to have, access
to and knowledge of Company Confidential Information, and that improper use or
revelation of same by the Employee during or after the termination of his
employment by the Company could cause serious injury to the business of the
Company. Accordingly, the Employee agrees that he will forever keep secret and
inviolate all Company Confidential Information which shall have come or shall
hereafter come into his possession, and that he will not use the same for his
own private benefit, or directly or indirectly for the benefit of others, and
that he will not disclose such Company Confidential Information to any other
person.
(b) During the Employment Term, the Employee will not (whether as an
officer, director, partner, proprietor, investor, associate, employee,
consultant, adviser, public relations or advertising representative or
otherwise), directly or indirectly, be engaged in any aspect of the business of
lead mining, milling, recycling or sale within the continental United States
(which the parties acknowledge is the Company's trading area). For purposes of
the preceding sentence, the Employee shall be deemed to be engaged in any
business which any person for whom he shall perform services is engaged. Nothing
herein contained
5
<PAGE>
shall be deemed to prohibit the Employee from owning, as a passive investment, a
security of any issuer which is not a supplier, vendor; customer or competitor
of the Company.
(c) Within the terms of this Agreement, it is intended to limit
disclosure and competition by the Employee to the maximum extent permitted by
law. If it shall be finally determined by any court of competent jurisdiction
ruling on this Agreement that the scope or duration of any limitation contained
in this paragraph 7 is too extensive to be legally enforceable, then the parties
hereby agree that the scope and duration (not greater than that provided for
herein) of such limitation shall be the maximum scope and duration which shall
be legally enforceable and the Employee hereby consents to the enforcement of
such limitation as so modified.
(d) The Employee acknowledges that any violation by him of the
provisions of this paragraph 7 could cause serious and irreparable damages to
the Company. He further acknowledges that it might hot be possible to measure
such-damages in money. Accordingly, the Employee further acknowledges that, in
the event of a breach or threatened breach by him of the provisions of this
paragraph 7, the Company may seek in addition to any other rights or remedies,
including money damages, an injunction or restraining order, restraining the
Employee from doing or continuing to do or perform any acts constituting such
breach or threatened breach.
8. Employee's Inventions.
The Employee agrees to assign and transfer to the Company, its successors
and assigns, his entire right, title and interest in and to any or all
inventions, designs, discoveries and improvements which he may make, either
solely or jointly with others,
6
<PAGE>
during the Employment Term hereunder and for a period of one (1) year
thereafter, which relate in any way to the business or products of the Company,
together with all rights to letters patent which may be granted thereon.
Immediately upon making any inventions, designs, discoveries or improvements,
the Employee shall notify the Company and, without further compensation, shall
execute and deliver to the Company such documents as may be necessary to prepare
or prosecute applications for patents upon such inventions, designs, discoveries
and improvements, and shall assign and transfer to the Company his entire right,
title and interest therein. The Company shall pay all expenses involved in
carrying out the provisions of this paragraph 8.
9. Benefits.
The Company agrees to provide to the Employee during the Employment Term the
medical, hospitalization, disability insurance benefits and other benefits as it
provides to its other senior officers.
10. Employee's Representation.
Employee hereby represents to the Company that he has full right and power
to enter into this Agreement and carry out his duties hereunder, and that same
will not constitute a breach of or default under any employment,
confidentiality, non-competition or other agreement by which he may be bound.
7
<PAGE>
11. Default by Employee.
If the Employee shall:
(i) commit an act of dishonesty against the Company or fraud upon the
Company; or
(ii) breach his obligations under-this Agreement and fail to cure such
breach within five (5) days after written notice thereof; or
(iii) be convicted of a crime involving moral turpitude; or
(iv) fail or neglect diligently to perform his duties hereunder and
continue in his failure after written notice;
then, and in any such case, the Company may terminate the employment of the
Employee hereunder and, in the event of any such termination, the Employee shall
no longer have any right to any and all benefits (including future salary
payments) which would otherwise have accrued after such termination.
12. Automatic Renewal.
This Agreement shall automatically renew and be extended from year to year
upon the expiration of the Employment Term (as extended if extended) unless
terminated by either party by written notice given to the other at least three
months prior to its terminationn date. If any such notice shall be given, this
Agreement shall terminate on the the next succeeding October 31.
13. Successors.
The rights, benefits, duties and obligations under this Agreement shall
inure to and be binding upon the Company, its successors and assigns and upon
the Employee and his legal representatives, legatees and heirs. It is
specifically understood, however, that this
8
<PAGE>
Agreement may not be transferred or assigned by the Employee. The Company may
assign any of its rights and obligations hereunder to any subsidiary or
affiliate of the Company, or, by written instruction to a successor or surviving
corporation resulting from a merger, consolidation, sale of assets or stock, or
other corporate reorganization, on condition that the assignee shall assume all
of the Company's obligations hereunder (but nevertheless the Company shall
remain liable hereunder) and it is agreed that such successor or surviving
corporation shall continue to be obligated to perform the provisions of this
Agreement.
14. Notices.
Notices hereunder shall be in writing and shall be sent by telegraph or by
certified or registered mail, telecopy, or recognized overnight delivery service
(such as Federal Express) prepaid as follows:
To Employee: To Company:
Gary E. Boyer The Doe Run Company
c/o The Renco Group, Inc.
45 Rockefeller Center
New York, New York 10111
Attention: Ira Leon Rennert
Chairman
After October 1,
1994:
30 Rockefeller Plaza
42nd floor
New York, NY
with copies to:
9
<PAGE>
The Doe Run Resources
Corporation
1801 Park 270 Drive
St. Louis, Missouri 63146
Attention: President
and
Baer Marks & Upham
805 Third Avenue
New York, New York 10022
Attention: Justin W. D"Atri, Esq.
and shall be deemed to have been given when telecopied to the addressee or three
days after placed in the mail or the second business day following delivery to a
recognized overnight delivery service (such as Federal Express) or a telegraph
company, prepaid and properly addressed. Notices to the Employee may also be
delivered to him personally. Notices of change of address shall be given as
provided above, but shall be effective only when actually received.
15. Waivers.
The failure of either party to insist upon the strict performance of any of
the terms, conditions, and provisions of this Agreement shall not be construed
as a waiver or relinquishment of future compliance therewith, and said terms,
conditions, and provisions shall remain in full force and effect. No waiver of
any term or condition of this Agreement on the part of the Company, shall be
effective for any purposes whatsoever unless such waiver is in writing and
signed by the Company.
10
<PAGE>
16. Entire Agreement; Governing Law.
There are no oral or written understandings concerning the Employee's
employment outside of this Agreement and the separate Net Worth Appreciation
Agreement between the Company and .the Employee. This Agreement may not be
modified except by a writing signed by the parties hereto. This Agreement
supersedes any and all prior employment agreements or understandings. This
Agreement is made under, and shall be construed in accordance with, the laws of
the State of Missouri, applicable to agreements to be performed wholly within
that state.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
THE DOE RUN RESOURCES CORPORATION
Attest: doing business as THE DOE RUN COMPANY
/s/ Nicole Ferrick By: /s/ Ira Leon Rennert
- ------------------------- ------------------------------------
Witness:
/s/ Kimberley Midgett /s/ Gary E. Boyer
- ------------------------- ------------------------------------
Gary E. Boyer, Employee
11
<PAGE>
Exhibit 10.1.5
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 1st day of January, 1996, between THE DOE RUN
RESOURCES CORPORATION, a New York corporation, doing business in Missouri under
the trade name "The Doe Run Company" (herein called the "Company"), with its
principal office at 1801 Park 270 Drive, St. Louis, Missouri 63146 and Kenneth
R. Buckley ("Employee").
W I T N E S S E T H:
WHEREAS, Employee has for some years been employed by the Company or a
predeessor, and Company desires to continue to employ the Employee and Employee
desires to continue to be employed by the Company, all on the terms hereof;
In consideration of the mutual covenants herein contained, it is hereby
agreed as follows:
1. Term and Duties.
Commencing on the date of this Agreement and continuing until December 31,
2000, unless sooner terminated or extended as herein provided (the "Employment
Term"), the Company shall continue to employ the Employee as Vice President
Smelting. During the Employment Term the Employee shall continue to devote all
of his business time and his best efforts to the business of the Company, and
its subsidiaries, as may be necessary to perform his duties hereunder, in
accordance with the policies, procedures, business plans and budgets from time
to time established by the Board of Directors, and the Chairman of the Board and
the President and
<PAGE>
shall not have any other business affiliations. Employee hereby accepts
continued employment hereunder.
As of January 1, 1996, this agreement replaces the prior agreement dated
April 7, 1994 between the parties and such prior agreement shall be and is
null and void.
2. Compensation.
In full compensation for the services to be rendered by the Employee to the
Company and its subsidiaries hereunder, during the Employment Term, the Company
will pay to the Employee, and the Employee shall accept:
(a) a basic annual salary of $120,000 for each employment year of the
Employment Term payable in installments not less frequently than monthly, and
increased as the Board of Directors may, from time to time, determine in its
discretion; plus
(b) for each fiscal year (November 1 to October 31) of the Company
ending during the employment of the Employee, a year end bonus of not less than
$30,000 nor more than $60,000 as may be determined by the Company in its sole
discretion, provided that the Employee is in the employ of the Company at the
close of such year and the Company shall not have incurred a net loss before
taxes for such fiscal year determined in accordance with generally accepted
accounting principles followed by the Company in preparing its audited balance
sheet as of the date of this Agreement but before giving effect to this clause
(b), and to like provisions in any other employment agreement to which the
Company is a party. The bonus for each fiscal year shall, if due, be paid as
promptly as practicable after the independent accountants for the Company shall
have determined, and reported in writing, as to whether the Company had a net
loss within the meaning of this clause (b) for such year; plus
2
<PAGE>
(c) such additional amounts, if any, as the Board of Directors of the
Company may determine from time to time in its discretion.
3. Place of Employment.
The Employee's regular place of employment during the Employment Term shall
be at the Buick Recylcing Division of the Company in Boss, Missouri. The
Employee may not be required to relocate without his consent.
4. Travel; Expenses.
The Employee shall engage in such travel as may reasonably be required in
connection with the performance of his duties, in accordance with prior
practice.
All reasonable travel and other expenses incurred by the Employee (in
accordance with the policies of the Company established from time to time) in
carrying out his duties hereunder will be reimbursed by the Company on
presentation to it of expense accounts and appropriate documentation in
accordance with the customary procedures of the Company for reimbursement of
executive expenses. The Employee shall be entitled to a travel expense advance
in the discretion of the Company when anticipated travel warrants such advance.
5. Early Termination of Employment Term on Disability or Death.
(a) If during the Employment Term, the Employee fails because of illness
or other incapacity (including incapacity because of substance abuse) to render
to the Company the services required of him hereunder for a period of two months
(during which
3
<PAGE>
the Company shall continue the Employee's compensation at the rates herein
provided), the Company may, in its discretion, give one month notice of
termination of the Employment Term (during which the Employee's compensation
shall likewise be continued), and if the Employee shall not resume full
performance of his duties within such one month period, the Employment Term
shall terminate at the expiration thereof, provided that any such termination
shall not affect the right of the Employee (or his estate) to continue to
receive benefits under any disability insurance plan covering the Employee which
is in effect at the date of termination, and further provided that if any such
termination shall be during a fiscal year and the Company shall not have a net
loss before income taxes determined as provided in paragraph 2(b) for such
fiscal year, the Employee shall be entitled to a pro-rata portion of the minimum
bonus for such year based on the number of full months worked by him in such
year.
(b) The Employment Term shall end upon the death of the Employee,
provided that (i) if the Employee shall die during a fiscal year, and the
Company shall not have a net loss, determined as provided in paragraph 2(b), for
such fiscal year, the Employee shall be entitled to a pro-rata portion of the
minimum bonus for such year, based on the number of full months worked by him
during such year.
6. Vacation.
During the Employment Term, the Employee shall be entitled to vacation
periods in accordance with previously agreed-to vacation entitlement or with
the *Vacation Policy for St. Louis Office Employees on April 7, 1994, to be
taken at such time or times as shall be mutually convenient to the Company
and the Employee (but not more than two weeks consecutively except as may be
specifically approved by the President.
Unused vacation shall not accumulate from year to year.
*1-4 years service = 2 weeks vacation
5-11 years service = 3 weeks vacation
12-19 years service = 4 weeks vacation
20-29 years service = 5 weeks vacation
30 or more years of service = 6 weeks vacation
4
<PAGE>
7. Confidentiality; Competition.
(a) For the purposes hereof, all confidential information about the
business and affairs of the Company (including, without limitation, business
plans, financial and marketing information and information about its secrets and
machinery, designs, plans, patterns and specifications, formulae, processes,
inventions and discoveries, and names of suppliers and customers and nature of
dealings with them) constitute "Company Confidential Information." For some
years, the Employee has been a senior officer of the Company or a predecessor.
He acknowledges that he has in the past had, and will continue to have, access
to and knowledge of Company Confidential Information, and that improper use or
revelation of same by the Employee during or after the termination of his
employment by the Company could cause serious injury to the business of the
Company. Accordingly, the Employee agrees that he will forever keep secret and
inviolate all Company Confidential Information which shall have come or shall
hereafter come into his possession, and that he will not use the same for his
own private benefit, or directly or indirectly for the benefit of others, and
that he will not disclose such Company Confidential Information to any other
person.
(b) During the Employment Term, the Employee will not (whether as an
officer, director, partner, proprietor, investor, associate, employee,
consultant, adviser, public relations or advertising representative or
otherwise), directly or indirectly, be engaged in any aspect of the business of
lead mining, milling, recycling or sale within the continental United States
(which the parties acknowledge is the Company's trading area). For purposes of
the preceding sentence, the Employee shall be deemed to be engaged in any
business which any person for whom he shall perform services is engaged. Nothing
herein contained
5
<PAGE>
shall be deemed to prohibit the Employee from owning, as a passive investment, a
security of any issuer which is not a supplier, vendor; customer or competitor
of the Company.
(c) Within the terms of this Agreement, it is intended to limit
disclosure and competition by the Employee to the maximum extent permitted by
law. If it shall be finally determined by any court of competent jurisdiction
ruling on this Agreement that the scope or duration of any limitation contained
in this paragraph 7 is too extensive to be legally enforceable, then the parties
hereby agree that the scope and duration (not greater than that provided for
herein) of such limitation shall be the maximum scope and duration which shall
be legally enforceable and the Employee hereby consents to the enforcement of
such limitation as so modified.
(d) The Employee acknowledges that any violation by him of the
provisions of this paragraph 7 could cause serious and irreparable damages to
the Company. He further acknowledges that it might hot be possible to measure
such-damages in money. Accordingly, the Employee further acknowledges that, in
the event of a breach or threatened breach by him of the provisions of this
paragraph 7, the Company may seek in addition to any other rights or remedies,
including money damages, an injunction or restraining order, restraining the
Employee from doing or continuing to do or perform any acts constituting such
breach or threatened breach.
8. Employee's Inventions.
The Employee agrees to assign and transfer to the Company, its successors
and assigns, his entire right, title and interest in and to any or all
inventions, designs, discoveries and improvements which he may make, either
solely or jointly with others,
6
<PAGE>
during the Employment Term hereunder and for a period of one (1) year
thereafter, which relate in any way to the business or products of the Company,
together with all rights to letters patent which may be granted thereon.
Immediately upon making any inventions, designs, discoveries or improvements,
the Employee shall notify the Company and, without further compensation, shall
execute and deliver to the Company such documents as may be necessary to prepare
or prosecute applications for patents upon such inventions, designs, discoveries
and improvements, and shall assign and transfer to the Company his entire right,
title and interest therein. The Company shall pay all expenses involved in
carrying out the provisions of this paragraph 8.
9. Benefits.
The Company agrees to provide to the Employee during the Employment Term
the retirement plan, 401(k) Savings Plan, medical, hospitalization, dental,
life and AD&D, disability, travel accident insurance benefits as well as the
executive auto allowance program as it provides to its other senior officers.
10. Employee's Representation.
Employee hereby represents to the Company that he has full right and power
to enter into this Agreement and carry out his duties hereunder, and that same
will not constitute a breach of or default under any employment,
confidentiality, non-competition or other agreement by which he may be bound.
7
<PAGE>
11. Default by Employee.
If the Employee shall:
(i) commit an act of dishonesty against the Company or fraud upon the
Company; or
(ii) breach his obligations under-this Agreement and fail to cure such
breach within five (5) days after written notice thereof; or
(iii) be convicted of a crime involving moral turpitude; or
(iv) fail or neglect diligently to perform his duties hereunder and
continue in his failure after written notice;
then, and in any such case, the Company may terminate the employment of the
Employee hereunder and, in the event of any such termination, the Employee shall
no longer have any right to any and all benefits (including future salary
payments) which would otherwise have accrued after such termination.
12. Automatic Renewal.
This Agreement shall automatically renew and be extended from year to year
upon the expiration of the Employment Term (as extended if extended) unless
terminated by either party by written notice given to the other at least three
months prior to its terminationn date. If any such notice shall be given, this
Agreement shall terminate on the the next succeeding October 31.
13. Successors.
The rights, benefits, duties and obligations under this Agreement shall
inure to and be binding upon the Company, its successors and assigns and upon
the Employee and his legal representatives, legatees and heirs. It is
specifically understood, however, that this
8
<PAGE>
Agreement may not be transferred or assigned by the Employee. The Company may
assign any of its rights and obligations hereunder to any subsidiary or
affiliate of the Company, or, by written instruction to a successor or surviving
corporation resulting from a merger, consolidation, sale of assets or stock, or
other corporate reorganization, on condition that the assignee shall assume all
of the Company's obligations hereunder (but nevertheless the Company shall
remain liable hereunder) and it is agreed that such successor or surviving
corporation shall continue to be obligated to perform the provisions of this
Agreement.
14. Notices.
Notices hereunder shall be in writing and shall be sent by telegraph or by
certified or registered mail, telecopy, or recognized overnight delivery service
(such as Federal Express) prepaid as follows:
To Employee: To Company:
Kenneth R. Buckley The Doe Run Company
c/o The Renco Group, Inc.
30 Rockefeller Plaza
42nd floor
New York, NY
with copies to:
9
<PAGE>
The Doe Run Resources
Corporation
1801 Park 270 Drive
St. Louis, Missouri 63146
Attention: President
and
Baer Marks & Upham
805 Third Avenue
New York, New York 10022
Attention: Justin W. D"Atri, Esq.
and shall be deemed to have been given when telecopied to the addressee or three
days after placed in the mail or the second business day following delivery to a
recognized overnight delivery service (such as Federal Express) or a telegraph
company, prepaid and properly addressed. Notices to the Employee may also be
delivered to him personally. Notices of change of address shall be given as
provided above, but shall be effective only when actually received.
15. Waivers.
The failure of either party to insist upon the strict performance of any of
the terms, conditions, and provisions of this Agreement shall not be construed
as a waiver or relinquishment of future compliance therewith, and said terms,
conditions, and provisions shall remain in full force and effect. No waiver of
any term or condition of this Agreement on the part of the Company, shall be
effective for any purposes whatsoever unless such waiver is in writing and
signed by the Company.
10
<PAGE>
16. Entire Agreement; Governing Law.
There are no oral or written understandings concerning the Employee's
employment outside of this Agreement and the separate Net Worth Appreciation
Agreement between the Company and .the Employee. This Agreement may not be
modified except by a writing signed by the parties hereto. This Agreement
supersedes any and all prior employment agreements or understandings. This
Agreement is made under, and shall be construed in accordance with, the laws of
the State of Missouri, applicable to agreements to be performed wholly within
that state.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
THE DOE RUN RESOURCES CORPORATION
Attest: doing business as THE DOE RUN COMPANY
/s/ Laura L. Shaw By: /s/ Jeffrey Zelms
- ----------------------- -----------------------------------
Witness:
/s/ James Stark /s/ Kenneth Buckley
- ----------------------- -----------------------------------
Kenneth R. Buckley, Employee
11
<PAGE>
Exhibit 10.2.1
DR ACQUISITION CORP.
C/O THE DOE RUN RESOURCES CORPORATION
1801 PARK 270 DRIVE
ST. LOUIS, MISSOURI 63146
As of April 7, 1994
Mr. J. L. Zelms
c/o The Doe Run Resources Corporation
1801 Park 270 Drive
St. Louis, Missouri 63146
Re: Net Worth Appreciation Agreement
--------------------------------
Dear Mr. Zelms:
This will confirm the understanding of this corporation, (the "Company")
with you, effective upon acquisition by this corporation of the capital stock of
The Doe Run Resources Corporation ("Doe Run"), with respect to your Net Worth
Appreciation benefit, intended to constitute additional incentive compensation
to you as an employee of Doe Run.
1. Vesting. On March 31, 1997, provided that you have been continuously
in the employ of Doe Run from the date hereof through that date, you shall
receive a net worth appreciation credit of 3% and on March 31 in each of the
years 1998 and 1999 you shall receive an additional net worth appreciation
credit of
<PAGE>
-2-
1%, provided that you have been continuously in the employ of Doe Run from the
date hereof to the applicable March 31, for a maximum credit, if you remain in
the employ of Doe Run continuously through March 31, 1999, of 5%. You shall not
receive any credit unless you remain in the employ of Doe Run from the date
hereof continually until March 31, 1997, and thereafter you shall not receive
credit for any partial year, provided that (a) if your employment terminates due
to death or permanent disability preventing you from performing your usual
employment functions and duties ("disability") on or after March 31, 1995 and
prior to March 31, 1997, you shall receive a credit of 1% if such termination is
prior to March 31, 1996 and 2% if such termination is on or after March 31, 1996
and prior to March 31, 1997, and (b) if your employment terminates after March
31, 1997 and before March 31, 1999, due to death or disability, you shall
receive a credit of 1% for the partial year in which the termination takes place
(in addition to all credits previously accrued).
<PAGE>
-3-
2. Net Worth Appreciation Benefit. Upon the termination of your
employment by Doe Run, other than for cause, you shall be entitled to a net
worth appreciation payment ("Payment") equal to the product of (a) the total
percentage credited to you under paragraph 1 (a maximum of 5%) multiplied by (b)
the "net worth increment." The "net worth increment" is the amount, if any, by
which the consolidated net worth of this Company and its subsidiaries, as at
the end of its fiscal quarter immediately preceding the date of your
termination, exceeds its consolidated net worth as of the date hereof, provided,
however, that any increase in net worth resulting from a capital contribution to
the Company or Doe Run or the sale of stock of the Company or Doe Run shall be
disregarded in calculating "net worth increment". The determination of the
independent public accountants for the Company as to the net worth increment,
made in accordance with generally accepted accounting principles, consistently
applied, shall be conclusive on each of us. If there is no "net worth
increment", no amount shall be payable. If your employment is terminated for
legal cause, you shall not be entitled to receive any payment.
<PAGE>
-4-
3. Payment. The Payment shall be payable to you (or your designee or
estate) in 40 equal quarterly installments, without interest, commencing three
(3) months after the termination of your employment, and at 3 month intervals
thereafter.
4. Dividends; Sale of Substantially All of the Company's Stock or Assets.
(a) If and in the event either Doe Run or the Company shall pay
either a dividend or management fee or any other form of distribution in
excess of $1,200,000 annually to The Renco Group, Inc. ("Renco") or any
affiliate, other than a subsidiary of the Company, (this distribution shall
include any transfer of assets from the Company or Doe Run to Renco or any
other subsidiary company of Renco in any form whether as cash or other form
of value which shall have the effect of reducing the net worth of the
Company) while you shall be employed by Doe Run, then you shall be entitled
to receive, as additional compensation, an amount equal to 5% of such cash
dividend or distribution. This provision shall not
<PAGE>
-5-
apply to intercompany payments among the Company and its own wholly-owned
subsidiaries or among two wholly-owned subsidiaries of the Company, or to
reimbursement to Renco for a proportionate part of costs, such as audit
charges and insurance premiums, paid by Renco on behalf of itself and all
of its subsidiaries including the Company and Doe Run;
(b) If, while you shall be employed by Doe Run (and whether before or
after March 31, 1997), all or substantially all the stock or assets of the
Company or of Doe Run shall be sold to a person who is not an affiliate of
Ira Leon Rennert, or if The Renco Group, Inc. sells a controlling interest
in the Company, then, upon the closing of such sale, your full 5% net worth
appreciation credit shall be deemed to be vested, and you shall be entitled
to receive as payment in full of your participation, your pro rata share
(5%) of the "net proceeds" of the sale, in kind, on the same terms and
conditions as the Company or its shareholder is being paid. "Net
proceeds", for purposes hereof, shall mean the amount if any, by which the
proceeds
<PAGE>
-6-
of the sale after deducting all expenses of the sale, all applicable
federal, state and local taxes, and all liabilities retained by the seller
exceeds the consolidated net worth of the Company on the date hereof.
Except for such payment, neither you nor this Company nor Doe Run have any
further rights or liabilities hereunder.
5. Condition Precedent. The Company's obligation to make the Payment to
you shall be conditioned on your faithful adherence to your employment
arrangements with Doe Run and on your refraining from engaging directly or
indirectly in any activity competitive with the business of the Company or Doe
Run during the period over which such payments are to be made to you. If you
do engage in any such competitive activities, then we shall no longer be
obligated to make any payments to you hereunder.
6. Notice. Any notices to be sent pursuant hereto shall be sent by hand,
certified or registered mail or overnight service to you, at the address
indicated above and to the Company, c/o
<PAGE>
-7-
The Renco Group, Inc. at 45 Rockefeller Plaza (36th Floor), New York, New
York 10111 (after October 1, 1994: 30 Rockefeller Plaza, New York, New York -
42nd floor), to the attention of Ira Leon Rennert, or to any other address which
any of us may designate by notice in writing.
Please confirm that the foregoing correctly sets forth our full agreement
with respect to your net worth appreciation benefit by signing and returning the
enclosed copy of this letter.
Very truly yours,
DR ACQUISITION CORP.
/s/ Ira Leon Rennert
--------------------------------
Ira Leon Rennert
Chairman of the Board
Accepted and Agreed to:
/s/ Jeffrey Zelms
- ------------------------------
J. L. Zelms
<PAGE>
FIRST AMENDMENT TO THE NET WORTH APPRECIATION AGREEMENT
MARCH 12, 1998
******************************************************************************
This will confirm our agreement with you to amend your Net Worth
Appreciation Agreement as follows:
1) DR Acquisition Corp. hereby assigns the Net Worth Appreciation
Agreement to The Doe Run Resources Corporation ("Doe Run") and
Doe Run accepts such assignment.
2) The definition of net worth increment will be changed to a)
substitute Doe Run for the Company and b) exclude from
consolidated net worth all preferred stock.
The economic effect of such changes is that the redemption of the
preferred stock of Doe Run will not reduce net worth increment.
3) Paragraph 4(a) of the Agreement is amended by substituting
$2,400,000 for $1,200,000.
Please acknowledge the foregoing by signing below.
Very truly yours,
DR Acquisition Corp.
The Doe Run Resources Corporation
/s/ Ira Leon Rennert
-----------------------------
Ira Leon Rennert
Chairman of the Board
Accepted and agreed to:
/s/ Jeffrey L. Zelms
- ------------------------------
Jeffrey L. Zelms
<PAGE>
Exhibit 10.2.2
DR ACQUISITION CORP.
c/o THE DOE RUN RESOURCES CORPORATION
1801 Park 270 Drive
St. Louis, Missouri 63146
As of April 7, 1994
Mr. M. K. Kaiser
c/o The Doe Run Resources Corporation
1801 Park 270 Drive
St. Louis, Missouri 63146
Re: Net Worth Appreciation Agreement
--------------------------------
Dear Mr. Kaiser:
This will confirm the understanding of this corporation, (the "Company")
with you, effective upon acquisition by this corporation of the capital stock of
The Doe Run Resources Corporation ("Doe Run"), with respect to your Net Worth
Appreciation benefit, intended to constitute additional incentive compensation
to you as an employee of Doe Run.
1. VESTING. On March 31, 1997, provided that you have been continuously
in the employ of Doe Run from the date hereof through that date, you shall
receive a net worth appreciation credit of 3/5ths of 1% and on March 31 in each
of the years 1998 and 1999 you shall receive an additional net worth
appreciation
<PAGE>
-2-
credit of 1/5th of 1%, provided that you have been continuously in the employ of
Doe Run from the date hereof to the applicable March 31, for a maximum credit,
if you remain in the employ of Doe Run continuously through March 31, 1999, of
1.5%. You shall not receive any credit unless you remain in the employ of Doe
Run from the date hereof continually until March 31, 1997, and thereafter you
shall not receive credit for any partial year, provided that (a) if your
employment terminates due to death or permanent disability preventing you from
performing your usual employment functions and duties ("disability") on or after
March 31, 1995 and prior to March 31, 1997, you shall receive a credit of 1/5th
of 1% if such termination is prior to March 31, 1996 and 2/5ths of 1% if such
termination is on or after March 31, 1996 and prior to March 31, 1997, and (b)
if your employment terminates after March 31, 1997 and before March 31, 1999,
due to death or disability, you shall receive a credit of 3/10th of 1% for the
partial year in which the termination takes place (in addition to all credits
previously accrued).
<PAGE>
-3-
2. NET WORTH APPRECIATION BENEFIT. Upon the termination of your
employment by Doe Run, other than for cause, you shall be entitled to a net
worth appreciation payment ("Payment") equal to the product of (a) the total
percentage credited to you under paragraph 1 (a maximum of 1%) multiplied by (b)
the "net worth increment." The "net worth increment" is the amount, if any, by
which the consolidated net worth of this Company and its subsidiaries, as at
the end of its fiscal quarter immediately preceding the date of your
termination, exceeds its consolidated net worth as of the date hereof, provided,
however, that any increase in net worth resulting from a capital contribution to
the Company or Doe Run or the sale of stock of the Company or Doe Run shall be
disregarded in calculating "net worth increment". The determination of the
independent public accountants for the Company as to the net worth increment,
made in accordance with generally accepted accounting principles, consistently
applied, shall be conclusive on each of us. If there is no "net worth
increment", no amount shall be payable. If your employment is terminated for
legal cause, you shall not be entitled to receive any payment.
<PAGE>
-4-
3. PAYMENT. The Payment shall be payable to you (or your designee or
estate) in 40 equal quarterly installments, without interest, commencing three
(3) months after the termination of your employment, and at 3 month intervals
thereafter.
4. DIVIDENDS; SALE OF SUBSTANTIALLY ALL OF THE COMPANY'S STOCK OR ASSETS.
(a) If and in the event either Doe Run or the Company shall pay
either a dividend or management fee or any other form of distribution in
excess of $1,200,000 annually to The Renco Group, Inc. ("Renco") or any
affiliate, other than a subsidiary of the Company, (this distribution shall
include any transfer of assets from the Company or Doe Run to Renco or any
other subsidiary company of Renco in any form whether as cash or other form
of value which shall have the effect of reducing the net worth of the
Company) while you shall be employed by Doe Run, then you shall be entitled
to receive, as additional compensation, an amount equal to 1% of such cash
dividend or distribution. This provision shall not
<PAGE>
-5-
apply to intercompany payments among the Company and its own wholly-owned
subsidiaries or among two wholly-owned subsidiaries of the Company, or to
reimbursement to Renco for a proportionate part of costs, such as audit
charges and insurance premiums, paid by Renco on behalf of itself and all
of its subsidiaries including the Company and Doe Run;
(b) If, while you shall be employed by Doe Run (and whether before or
after March 31, 1997), all or substantially all the stock or assets of the
Company or of Doe Run shall be sold to a person who is not an affiliate of
Ira Leon Rennert, or if The Renco Group, Inc. sells a controlling interest
in the Company, then, upon the closing of such sale, your full 1% net worth
appreciation credit shall be deemed to be vested, and you shall be entitled
to receive as payment in full of your participation, your pro rata share
(1%) of the "net proceeds" of the sale, in kind, on the same terms and
conditions as the Company or its shareholder is being paid. "Net
proceeds", for purposes hereof, shall mean the amount if any, by which the
proceeds
<PAGE>
-6-
of the sale after deducting all expenses of the sale, all applicable
federal, state and local taxes, and all liabilities retained by the seller
exceeds the consolidated net worth of the Company on the date hereof.
Except for such payment, neither you nor this Company nor Doe Run have any
further rights or liabilities hereunder.
5. CONDITION PRECEDENT. The Company's obligation to make the Payment to
you shall be conditioned on your faithful adherence to your employment
arrangements with Doe Run and on your refraining from engaging directly or
indirectly in any activity competitive with the business of the Company or Doe
Run during the period over which such payments are to be made to you. If you
do engage in any such competitive activities, then we shall no longer be
obligated to make any payments to you hereunder.
6. NOTICE. Any notices to be sent pursuant hereto shall be sent by hand,
certified or registered mail or overnight service to you, at the address
indicated above and to the Company, c/o
<PAGE>
-7-
The Renco Group, Inc. at 45 Rockefeller Plaza (36th Floor), New York, New
York 10111 (after October 1, 1994: 30 Rockefeller Plaza, New York, New York -
42nd floor), to the attention of Ira Leon Rennert, or to any other address which
any of us may designate by notice in writing.
Please confirm that the foregoing correctly sets forth our full agreement
with respect to your net worth appreciation benefit by signing and returning the
enclosed copy of this letter.
Very truly yours,
DR ACQUISITION CORP.
/s/ Ira Leon Rennert
----------------------------
Ira Leon Rennert
Chairman of the Board
Accepted and Agreed to:
/s/ M. K. Kaiser
- --------------------------
M. K. Kaiser
<PAGE>
FIRST AMENDMENT TO THE NET WORTH APPRECIATION AGREEMENT
MARCH 12, 1998
******************************************************************************
This will confirm our agreement with you to amend your Net Worth
Appreciation Agreement as follows:
1) DR Acquisition Corp. hereby assigns the Net Worth Appreciation
Agreement to The Doe Run Resources Corporation ("Doe Run") and
Doe Run accepts such assignment.
2) The definition of net worth increment will be changed to a)
substitute Doe Run for the Company and b) exclude from
consolidated net worth all preferred stock.
The economic effect of such changes is that the redemption of the
preferred stock of Doe Run will not reduce net worth increment.
3) Paragraph 4(a) of the Agreement is amended by substituting
$2,400,000 for $1,200,000.
Please acknowledge the foregoing by signing below.
Very truly yours,
DR Acquisition Corp.
The Doe Run Resources Corporation
/s/ Ira Leon Rennert
----------------------------
Ira Leon Rennert
Chairman of the Board
Accepted and agreed to:
/s/ Marvin K. Kaiser
- ---------------------------
Marvin K. Kaiser
<PAGE>
Exhibit 10.2.3
DR ACQUISITION CORP.
c/o THE DOE RUN RESOURCES CORPORATION
1801 Park 270 Drive
St. Louis, Missouri 63146
As of April 7, 1994
Mr. R. L. Amistadi
c/o The Doe Run Resources Corporation
1801 Park 270 Drive
St. Louis, Missouri 63146
Re: Net Worth Appreciation Agreement
--------------------------------
Dear Mr. Amistadi:
This will confirm the understanding of this corporation, (the "Company")
with you, effective upon acquisition by this corporation of the capital stock of
The Doe Run Resources Corporation ("Doe Run"), with respect to your Net Worth
Appreciation benefit, intended to constitute additional incentive compensation
to you as an employee of Doe Run.
1. VESTING. On March 31, 1997, provided that you have been continuously
in the employ of Doe Run from the date hereof through that date, you shall
receive a net worth appreciation credit of 9/10ths of 1% and on March 31 in each
of the years 1998 and 1999 you shall receive an additional net worth
appreciation
<PAGE>
-2-
credit of 3/10th of 1%, provided that you have been continuously in the employ
of Doe Run from the date hereof to the applicable March 31, for a maximum
credit, if you remain in the employ of Doe Run continuously through March 31,
1999, of 1.5%. You shall not receive any credit unless you remain in the employ
of Doe Run from the date hereof continually until March 31, 1997, and thereafter
you shall not receive credit for any partial year, provided that (a) if your
employment terminates due to death or permanent disability preventing you from
performing your usual employment functions and duties ("disability") on or after
March 31, 1995 and prior to March 31, 1997, you shall receive a credit of 3/10th
of 1% if such termination is prior to March 31, 1996 and 6/10ths of 1% if such
termination is on or after March 31, 1996 and prior to March 31, 1997, and (b)
if your employment terminates after March 31, 1997 and before March 31, 1999,
due to death or disability, you shall receive a credit of 3/10th of 1% for the
partial year in which the termination takes place (in addition to all credits
previously accrued).
<PAGE>
-3-
2. NET WORTH APPRECIATION BENEFIT. Upon the termination of your
employment by Doe Run, other than for cause, you shall be entitled to a net
worth appreciation payment ("Payment") equal to the product of (a) the total
percentage credited to you under paragraph 1 (a maximum of 1.5%) multiplied by
(b) the "net worth increment." The "net worth increment" is the amount, if any,
by which the consolidated net worth of this Company and its subsidiaries, as at
the end of its fiscal quarter immediately preceding the date of your
termination, exceeds its consolidated net worth as of the date hereof, provided,
however, that any increase in net worth resulting from a capital contribution to
the Company or Doe Run or the sale of stock of the Company or Doe Run shall be
disregarded in calculating "net worth increment". The determination of the
independent public accountants for the Company as to the net worth increment,
made in accordance with generally accepted accounting principles, consistently
applied, shall be conclusive on each of us. If there is no "net worth
increment", no amount shall be payable. If your employment is terminated for
legal cause, you shall not be entitled to receive any payment.
<PAGE>
-4-
3. PAYMENT. The Payment shall be payable to you (or your designee or
estate) in 40 equal quarterly installments, without interest, commencing three
(3) months after the termination of your employment, and at 3 month intervals
thereafter.
4. DIVIDENDS; SALE OF SUBSTANTIALLY ALL OF THE COMPANY'S STOCK OR ASSETS.
(a) If and in the event either Doe Run or the Company shall pay
either a dividend or management fee or any other form of distribution in
excess of $1,200,000 annually to The Renco Group, Inc. ("Renco") or any
affiliate, other than a subsidiary of the Company, (this distribution shall
include any transfer of assets from the Company or Doe Run to Renco or any
other subsidiary company of Renco in any form whether as cash or other form
of value which shall have the effect of reducing the net worth of the
Company) while you shall be employed by Doe Run, then you shall be entitled
to receive, as additional compensation, an amount equal to 1.5% of such
cash dividend or distribution. This provision shall not
<PAGE>
-5-
apply to intercompany payments among the Company and its own wholly-owned
subsidiaries or among two wholly-owned subsidiaries of the Company, or to
reimbursement to Renco for a proportionate part of costs, such as audit
charges and insurance premiums, paid by Renco on behalf of itself and all
of its subsidiaries including the Company and Doe Run;
(b) If, while you shall be employed by Doe Run (and whether before or
after March 31, 1997), all or substantially all the stock or assets of the
Company or of Doe Run shall be sold to a person who is not an affiliate of
Ira Leon Rennert, or if The Renco Group, Inc. sells a controlling interest
in the Company, then, upon the closing of such sale, your full 1.5% net
worth appreciation credit shall be deemed to be vested, and you shall be
entitled to receive as payment in full of your participation, your pro rata
share (1.5%) of the "net proceeds" of the sale, in kind, on the same terms
and conditions as the Company or its shareholder is being paid. "Net
proceeds", for purposes hereof, shall mean the amount if any, by which the
proceeds
<PAGE>
-6-
of the sale after deducting all expenses of the sale, all applicable
federal, state and local taxes, and all liabilities retained by the seller
exceeds the consolidated net worth of the Company on the date hereof.
Except for such payment, neither you nor this Company nor Doe Run have any
further rights or liabilities hereunder.
5. CONDITION PRECEDENT. The Company's obligation to make the Payment to
you shall be conditioned on your faithful adherence to your employment
arrangements with Doe Run and on your refraining from engaging directly or
indirectly in any activity competitive with the business of the Company or Doe
Run during the period over which such payments are to be made to you. If you
do engage in any such competitive activities, then we shall no longer be
obligated to make any payments to you hereunder.
6. NOTICE. Any notices to be sent pursuant hereto shall be sent by hand,
certified or registered mail or overnight service to you, at the address
indicated above and to the Company, c/o
<PAGE>
-7-
The Renco Group, Inc. at 45 Rockefeller Plaza (36th Floor), New York, New
York 10111 (after October 1, 1994: 30 Rockefeller Plaza, New York, New York -
42nd floor), to the attention of Ira Leon Rennert, or to any other address which
any of us may designate by notice in writing.
Please confirm that the foregoing correctly sets forth our full agreement
with respect to your net worth appreciation benefit by signing and returning the
enclosed copy of this letter.
Very truly yours,
DR ACQUISITION CORP.
/s/ Ira Leon Rennert
-------------------------------
Ira Leon Rennert
Chairman of the Board
Accepted and Agreed to:
/s/ R. L. Amistadi
- ---------------------------
R. L. Amistadi
<PAGE>
FIRST AMENDMENT TO THE NET WORTH APPRECIATION AGREEMENT
MARCH 12, 1998
******************************************************************************
This will confirm our agreement with you to amend your Net Worth
Appreciation Agreement as follows:
1) DR Acquisition Corp. hereby assigns the Net Worth Appreciation
Agreement to The Doe Run Resources Corporation ("Doe Run") and
Doe Run accepts such assignment.
2) The definition of net worth increment will be changed to a)
substitute Doe Run for the Company and b) exclude from
consolidated net worth all preferred stock.
The economic effect of such changes is that the redemption of the preferred
stock of Doe Run will not reduce net worth increment.
3) Paragraph 4(a) of the Agreement is amended by substituting
$2,400,000 for $1,200,000.
Please acknowledge the foregoing by signing below.
Very truly yours,
DR Acquisition Corp.
The Doe Run Resources Corporation
/s/ Ira Leon Rennert
-------------------------------
Ira Leon Rennert
Chairman of the Board
Accepted and agreed to:
/s/ Richard L. Amistadi
- -------------------------------
Richard L. Amistadi
<PAGE>
DR ACQUISITION CORP.
C/O THE DOE RUN RESOURCES CORPORATION
1801 PARK 270 DRIVE
ST. LOUIS, MISSOURI 63146
As of April 7, 1994
Mr.G. E. Boyer
c/o The Doe Run Resources Corporation
1801 Park 270 Drive
St. Louis, Missouri 63146
Re: Net Worth Appreciation Agreement
--------------------------------
Dear Mr. Boyer
This will confirm the understanding of this corporation, (the "Company")
with you, effective upon acquisition by this corporation of the capital stock of
The Doe Run Resources Corporation ("Doe Run"), with respect to your Net Worth
Appreciation benefit, intended to constitute additional incentive compensation
to you as an employee of Doe Run.
1. VESTING. On March 31, 1997, provided that you have been continuously
in the employ of Doe Run from the date hereof through that date, you shall
receive a net worth appreciation credit of 3/5ths of 1% and on March 31 in each
of the years 1998 and 1999 you shall receive an additional net worth
appreciation
<PAGE>
-2-
credit of 1/5th of 1%, provided that you have been continuously in the employ of
Doe Run from the date hereof to the applicable March 31, for a maximum credit,
if you remain in the employ of Doe Run continuously through March 31, 1999, of
1%. You shall not receive any credit unless you remain in the employ of Doe Run
from the date hereof continually until March 31, 1997, and thereafter you shall
not receive credit for any partial year, provided that (a) if your employment
terminates due to death or permanent disability preventing you from performing
your usual employment functions and duties ("disability") on or after March 31,
1995 and prior to March 31, 1997, you shall receive a credit of 1/5th of 1% if
such termination is prior to March 31, 1996 and 2/5ths of 1% if such termination
is on or after March 31, 1996 and prior to March 31, 1997, and (b) if your
employment terminates after March 31, 1997 and before March 31, 1999, due to
death or disability, you shall receive a credit of 1/5th of 1% for the partial
year in which the termination takes place (in addition to all credits previously
accrued).
<PAGE>
-3-
2. NET WORTH APPRECIATION BENEFIT. Upon the termination of your
employment by Doe Run, other than for cause, you shall be entitled to a net
worth appreciation payment ("Payment") equal to the product of (a) the total
percentage credited to you under paragraph 1 (a maximum of 1%) multiplied by (b)
the "net worth increment." The "net worth increment" is the amount, if any, by
which the consolidated net worth of this Company and its subsidiaries, as at
the end of its fiscal quarter immediately preceding the date of your
termination, exceeds its consolidated net worth as of the date hereof, provided,
however, that any increase in net worth resulting from a capital contribution to
the Company or Doe Run or the sale of stock of the Company or Doe Run shall be
disregarded in calculating "net worth increment". The determination of the
independent public accountants for the Company as to the net worth increment,
made in accordance with generally accepted accounting principles, consistently
applied, shall be conclusive on each of us. If there is no "net worth
increment", no amount shall be payable. If your employment is terminated for
legal cause, you shall not be entitled to receive any payment.
<PAGE>
-4-
3. PAYMENT. The Payment shall be payable to you (or your designee or
estate) in 40 equal quarterly installments, without interest, commencing three
(3) months after the termination of your employment, and at 3 month intervals
thereafter.
4. DIVIDENDS; SALE OF SUBSTANTIALLY ALL OF THE COMPANY'S STOCK OR ASSETS.
(a) If and in the event either Doe Run or the Company shall pay
either a dividend or management fee or any other form of distribution in excess
of $1,200,000 annually to The Renco Group, Inc. ("Renco") or any affiliate,
other than a subsidiary of the Company, (this distribution shall include any
transfer of assets from the Company or Doe Run to Renco or any other subsidiary
company of Renco in any form whether as cash or other form of value which shall
have the effect of reducing the net worth of the Company) while you shall be
employed by Doe Run, then you shall be entitled to receive, as additional
compensation, an amount equal to 1% of such cash dividend or distribution. This
provision shall not
<PAGE>
-5-
apply to intercompany payments among the Company and its own wholly-owned
subsidiaries or among two wholly-owned subsidiaries of the Company, or to
reimbursement to Renco for a proportionate part of costs, such as audit charges
and insurance premiums, paid by Renco on behalf of itself and all of its
subsidiaries including the Company and Doe Run;
(b) If, while you shall be employed by Doe Run (and whether
before or after March 31, 1997), all or substantially all the stock or assets of
the Company or of Doe Run shall be sold to a person who is not an affiliate of
Ira Leon Rennert, or if The Renco Group, Inc. sells a controlling interest in
the Company, then, upon the closing of such sale, your full 1% net worth
appreciation credit shall be deemed to be vested, and you shall be entitled to
receive as payment in full of your participation, your pro rata share (1%) of
the "net proceeds" of the sale, in kind, on the same terms and conditions as the
Company or its shareholder is being paid. "Net proceeds", for purposes hereof,
shall mean the amount if any, by which the proceeds
<PAGE>
-6-
of the sale after deducting all expenses of the sale, all applicable federal,
state and local taxes, and all liabilities retained by the seller exceeds the
consolidated net worth of the Company on the date hereof. Except for such
payment, neither you nor this Company nor Doe Run have any further rights or
liabilities hereunder.
5. CONDITION PRECEDENT. The Company's obligation to make the Payment to
you shall be conditioned on your faithful adherence to your employment
arrangements with Doe Run and on your refraining from engaging directly or
indirectly in any activity competitive with the business of the Company or Doe
Run during the period over which such payments are to be made to you. If you
do engage in any such competitive activities, then we shall no longer be
obligated to make any payments to you hereunder.
6. NOTICE. Any notices to be sent pursuant hereto shall be sent by hand,
certified or registered mail or overnight service to you, at the address
indicated above and to the Company, c/o
<PAGE>
-7-
The Renco Group, Inc. at 45 Rockefeller Plaza (36th Floor), New York, New
York 10111 (after October 1, 1994: 30 Rockefeller Plaza, New York, New York -
42nd floor), to the attention of Ira Leon Rennert, or to any other address which
any of us may designate by notice in writing.
Please confirm that the foregoing correctly sets forth our full agreement
with respect to your net worth appreciation benefit by signing and returning the
enclosed copy of this letter.
Very truly yours,
DR ACQUISITION CORP.
/s/ Ira Leon Rennert
----------------------------
Ira Leon Rennert
Chairman of the Board
Accepted and Agreed to:
/s/ G.E. Boyer
- ----------------------------
G.E. Boyer
<PAGE>
FIRST AMENDMENT TO THE NET WORTH APPRECIATION AGREEMENT
MARCH 12, 1998
******************************************************************************
This will confirm our agreement with you to amend your Net Worth
Appreciation Agreement as follows:
1) DR Acquisition Corp. hereby assigns the Net Worth Appreciation
Agreement to The Doe Run Resources Corporation ("Doe Run") and
Doe Run accepts such assignment.
2) The definition of net worth increment will be changed to a)
substitute Doe Run for the Company and b) exclude from
consolidated net worth all preferred stock.
The economic effect of such changes is that the redemption of the
preferred stock of Doe Run will not reduce net worth increment.
3) Paragraph 4(a) of the Agreement is amended by substituting
$2,400,000 for $1,200,000.
Please acknowledge the foregoing by signing below.
Very truly yours,
DR Acquisition Corp.
The Doe Run Resources Corporation
/s/ Ira Leon Rennert
----------------------------
Ira Leon Rennert
Chairman of the Board
Accepted and agreed to:
/s/ Gary E. Boyer
- -------------------------
Gary E. Boyer
<PAGE>
Exhibit 10.2.5
DR ACQUISITION CORP.
C/O THE DOE RUN RESOURCES CORPORATION
1801 PARK 270 DRIVE
ST. LOUIS, MISSOURI 63146
As of April 7, 1994
Mr. K. R. Buckley
c/o The Doe Run Resources Corporation
1801 Park 270 Drive
St. Louis, Missouri 63146
Re: Net Worth Appreciation Agreement
--------------------------------
Dear Mr. Buckley:
This will confirm the understanding of this corporation, (the "Company")
with you, effective upon acquisition by this corporation of the capital stock of
The Doe Run Resources Corporation ("Doe Run"), with respect to your Net Worth
Appreciation benefit, intended to constitute additional incentive compensation
to you as an employee of Doe Run.
1. VESTING. On March 31, 1997, provided that you have been continuously
in the employ of Doe Run from the date hereof through that date, you shall
receive a net worth appreciation credit of 3/10ths of 1% and on March 31 in each
of the years 1998 and 1999 you shall receive an additional net worth
appreciation
<PAGE>
-2-
credit of 1/10th of 1%, provided that you have been continuously in the employ
of Doe Run from the date hereof to the applicable March 31, for a maximum
credit, if you remain in the employ of Doe Run continuously through March 31,
1999, of 1/2 of 1%. You shall not receive any credit unless you remain in the
employ of Doe Run from the date hereof continually until March 31, 1997, and
thereafter you shall not receive credit for any partial year, provided that (a)
if your employment terminates due to death or permanent disability preventing
you from performing your usual employment functions and duties ("disability") on
or after March 31, 1995 and prior to March 31, 1997, you shall receive a credit
of 1/10th of 1% if such termination is prior to March 31, 1996 and 2/10ths of 1%
if such termination is on or after March 31, 1996 and prior to March 31, 1997,
and (b) if your employment terminates after March 31, 1997 and before March 31,
1999, due to death or disability, you shall receive a credit of 1/10th of 1% for
the partial year in which the termination takes place (in addition to all
credits previously accrued).
<PAGE>
-3-
2. NET WORTH APPRECIATION BENEFIT. Upon the termination of your
employment by Doe Run, other than for cause, you shall be entitled to a net
worth appreciation payment ("Payment") equal to the product of (a) the total
percentage credited to you under paragraph 1 (a maximum of 1/2 of 1%) multiplied
by (b) the "net worth increment." The "net worth increment" is the amount, if
any, by which the consolidated net worth of this Company and its subsidiaries,
as at the end of its fiscal quarter immediately preceding the date of your
termination, exceeds its consolidated net worth as of the date hereof, provided,
however, that any increase in net worth resulting from a capital contribution to
the Company or Doe Run or the sale of stock of the Company or Doe Run shall be
disregarded in calculating "net worth increment". The determination of the
independent public accountants for the Company as to the net worth increment,
made in accordance with generally accepted accounting principles, consistently
applied, shall be conclusive on each of us. If there is no "net worth
increment", no amount shall be payable. If your employment is terminated for
legal cause, you shall not be entitled to receive any payment.
<PAGE>
-3-
3. PAYMENT. The Payment shall be payable to you (or your designee or
estate) in 40 equal quarterly installments, without interest, commencing three
(3) months after the termination of your employment, and at 3 month intervals
thereafter.
4. DIVIDENDS; SALE OF SUBSTANTIALLY ALL OF THE COMPANY'S STOCK OR ASSETS.
(a) If and in the event either Doe Run or the Company shall pay
either a dividend or management fee or any other form of distribution in
excess of $1,200,000 annually to The Renco Group, Inc. ("Renco") or any
affiliate, other than a subsidiary of the Company, (this distribution shall
include any transfer of assets from the Company or Doe Run to Renco or any
other subsidiary company of Renco in any form whether as cash or other form
of value which shall have the effect of reducing the net worth of the
Company) while you shall be employed by Doe Run, then you shall be entitled
to receive, as additional compensation, an amount equal to ((4%)) of such
cash dividend or distribution. This provision shall not
<PAGE>
-5-
apply to intercompany payments among the Company and its own wholly-owned
subsidiaries or among two wholly-owned subsidiaries of the Company, or to
reimbursement to Renco for a proportionate part of costs, such as audit
charges and insurance premiums, paid by Renco on behalf of itself and all
of its subsidiaries including the Company and Doe Run;
(b) If, while you shall be employed by Doe Run (and whether before or
after March 31, 1997), all or substantially all the stock or assets of the
Company or of Doe Run shall be sold to a person who is not an affiliate of
Ira Leon Rennert, or if The Renco Group, Inc. sells a controlling interest
in the Company, then, upon the closing of such sale, your full 1/2 of 1%
net worth appreciation credit shall be deemed to be vested, and you shall
be entitled to receive as payment in full of your participation, your pro
rata share (1/2 of 1%) of the "net proceeds" of the sale, in kind, on the
same terms and conditions as the Company or its shareholder is being paid.
"Net proceeds", for purposes hereof, shall mean the amount
<PAGE>
-6-
if any, by which the proceeds of the sale after deducting all expenses of
the sale, all applicable federal, state and local taxes, and all
liabilities retained by the seller exceeds the consolidated net worth of
the Company on the date hereof. Except for such payment, neither you nor
this Company nor Doe Run have any further rights or liabilities hereunder.
5. CONDITION PRECEDENT. The Company's obligation to make the Payment to
you shall be conditioned on your faithful adherence to your employment
arrangements with Doe Run and on your refraining from engaging directly or
indirectly in any activity competitive with the business of the Company or Doe
Run during the period over which such payments are to be made to you. If you
do engage in any such competitive activities, then we shall no longer be
obligated to make any payments to you hereunder.
6. NOTICE. Any notices to be sent pursuant hereto shall be sent by hand,
certified or registered mail or overnight service
<PAGE>
-7-
to you, at the address indicated above and to the Company, c/o The Renco Group,
Inc. at 45 Rockefeller Plaza (36th Floor), New York, New York 10111
(after October 1, 1994: 30 Rockefeller Plaza, New York, New York - 42nd floor),
to the attention of Ira Leon Rennert, or to any other address which any of us
may designate by notice in writing.
Please confirm that the foregoing correctly sets forth our full agreement
with respect to your net worth appreciation benefit by signing and returning the
enclosed copy of this letter.
Very truly yours,
DR ACQUISITION CORP.
/s/ Ira Leon Rennert
-----------------------------
Ira Leon Rennert
Chairman of the Board
Accepted and Agreed to:
/s/ K. R. Buckley
- ----------------------------
K.R. Buckley
<PAGE>
FIRST AMENDMENT TO THE NET WORTH APPRECIATION AGREEMENT
MARCH 12, 1998
******************************************************************************
This will confirm our agreement with you to amend your Net Worth
Appreciation Agreement as follows:
1) DR Acquisition Corp. hereby assigns the Net Worth Appreciation
Agreement to The Doe Run Resources Corporation ("Doe Run") and
Doe Run accepts such assignment.
2) The definition of net worth increment will be changed to a)
substitute Doe Run for the Company and b) exclude from
consolidated net worth all preferred stock.
The economic effect of such changes is that the redemption of the
preferred stock of Doe Run will not reduce net worth increment.
3) Paragraph 4(a) of the Agreement is amended by substituting
$2,400,000 for $1,200,000.
Please acknowledge the foregoing by signing below.
Very truly yours,
DR Acquisition Corp.
The Doe Run Resources Corporation
/s/ Ira Leon Rennert
-----------------------------
Ira Leon Rennert
Chairman of the Board
Accepted and agreed to:
/s/ Kenneth Buckley
- ------------------------------
Kenneth R. Buckley
<PAGE>
Exhibit 10.3
THE DOE RUN RESOURCES CORPORATION
SUPPLEMENTAL EMPLOYEE
RETIREMENT PLAN
WHEREAS, The Doe Run Resources Corporation ("Company") wishes to adopt
The Doe Run Resources Corporation Supplemental Employee Retirement Plan
("Plan") for the benefit of eligible employees to provide for retirement
benefits which would be payable under the Company's qualified retirement plan
except for the limitations of Sections 415 and 401(a)(17) of the Internal
Revenue Code of 1986, as amended ("Code"); and
WHEREAS, the Company desires to do so effective as of November 1, 1996;
NOW, THEREFORE, effective as of November 1, 1996, the Plan is adopted to
read as follows:
SECTION 1
DEFINITIONS
A. "Beneficiary" means the person or persons entitled to a Survivor
Benefit under the Retirement Plan.
B. "Code" means the Internal Revenue Code of 1986, as amended.
C. "Committee" means the Administrative Committee of the "Retirement
Plan" as defined in this Plan.
D. "Company" means The Doe Run Resources Corporation.
<PAGE>
L. "Survivor Benefit" means the survivor benefit payable under the
Retirement Plan on account of the death of a Participant after retirement or
other termination of employment.
SECTION II
ELIGIBILITY
Participation in the Plan shall be limited to those Employees who
participate in the Retirement Plan and whose benefits under such Retirement
Plan are reduced on account of the limitations of Section 415 of the Code or
the amount of compensation which may be taken into account under Section
401(a)(17) of the Code.
SECTION III
BENEFITS
In the event that any retirement benefit payable to a Participant under
the Retirement Plan is limited by Sections 401(a)(17) or 415 of the Code (or
any successor thereto) the Company shall pay to such Participant a benefit
equal to the difference between (i) the retirement benefit the Participant
would have received under the Retirement Plan if Sections 401(a)(17) and 415
of the Code were disregarded and (ii) the retirement benefit the Participant
is entitled to receive under the Retirement Plan.
3
<PAGE>
E. A Participant who believes that he is being denied a benefit to
which he is entitled (hereinafter referred to as "Claimant") may file a
written request for such benefit with the Secretary of the Committee setting
forth his claim.
F. Upon receipt of a claim the Committee shall advise the Claimant that
a reply will be forthcoming within 90 days and shall in fact deliver such
reply in writing within such period. The Committee may, however, extend the
reply period for an additional 90 days for reasonable cause. If the claim is
denied in whole or in part, the Committee will adopt a written opinion using
language calculated to be understood by the Claimant setting forth:
1. the specific reason or reasons for denial,
2. the specific references to pertinent Plan provisions on which
the denial is based,
3. a description of any additional material or information
necessary for the Claimant to perfect the claim and an explanation why such
material or such information is necessary,
4. appropriate information as to the steps to be taken if the
Claimant wishes to submit the claim for review, and
5. the time limits for requesting a review under Subsection G and
for the review under Subsection H.
7
<PAGE>
E. A Participant who believes that he is being denied a benefit to
which he is entitled (hereinafter referred to as "Claimant") may file a
written request for such benefit with the Secretary of the Committee setting
forth his claim.
F. Upon receipt of a claim the Committee shall advise the Claimant that
a reply will be forthcoming within 90 days and shall in fact deliver such
reply in writing within such period. The Committee may, however, extend the
reply period for an additional 90 days for reasonable cause. If the claim is
denied in whole or in part, the Committee will adopt a written opinion using
language calculated to be understood by the Claimant setting forth:
1. the specific reason or reasons for denial,
2. the specific references to pertinent Plan provisions on which
the denial is based,
3. a description of any additional material or information
necessary for the Claimant to perfect the claim and an explanation why such
material or such information is necessary.
4. appropriate information as to the steps to be taken if the
Claimant wishes to submit the claim for review, and
5. the time limits for requesting a review under Subsection G and
for the review under Subsection H.
7
<PAGE>
B. Spendthrift. No Participant or beneficiary shall have the right to
assign, transfer, encumber or otherwise subject to lien any of the benefits
payable or to be payable under this plan.
C. Incapacity. If, in the opinion of the Committee, a person to whom a
benefit is payable is unable to care for his affairs because of illness,
accident or any other reason, any payment due the person, unless prior claim
therefor shall have been made by a duly qualified guardian or other duly
appointed and qualified representative of such person, may be paid to some
member of the person's family, or to some party who, in the opinion of the
Committee, has incurred expense for such person. Any such payment shall be a
payment for the account of such person and shall be a complete discharge of
any liability.
D. Employee Rights. The Employer, in adopting this Plan, shall not be
held to create or vest in any Employee or any other person any benefits other
than the benefits specifically provided herein, or to confer upon any Employee
the right to remain in the service of the Employer.
E. Service of Process and Plan Administrator.
1. The Chairperson of the Committee shall be the agent for service
of legal process.
2. The Company shall constitute the Plan Administrator.
9
<PAGE>
THE DOE RUN COMPANY
Suite 300
1801 Park 270 Drive
St. Louis, MO 63146
FAX 314-453-7198
JEFFREY L. ZELMS
President and Chief Executive Officer
314-453-7140
October 2, 1996
Via Federal Express
Mr. Ira L. Rennert
Chairman & President
The Renco Group, Inc.
42nd Floor
30 Rockefeller Plaza
New York, NY 10112
Dear Ira:
Enclosed please find what I believe to be a self-explanatory memo to me from
Jim Stack. The effected members of management are:
Jeff Zelms
Marv Kaiser
Dick Amistadi
Walter Nowotny
Gary Boyer
John FitzSimmons
Ken Buckley
I would appreciate your review and consideration. We can discuss as
necessary at the next Business Review Meeting.
Sincerely,
/s/ Jeffrey L. Zelms
---------------------------------
Jeffrey L. Zelms
<PAGE>
Internal THE DOE RUN COMPANY Suite 300
Correspondence 1801 Park 270 Drive
St. Louis, MO 63146
CONFIDENTIAL CONFIDENTIAL
TO: J. L. Zelms DATE: September 30, 1996
FROM: J.E. Stack
SUBJ: Supplemental Employee Retirement Plan ("SERP")
The total compensation program of The Doe Run Company has been
significantly altered over the past years by government action that has
resulted in reduction of retirement benefits for a few higher-compensated
executive employees. The reductions have occurred due to the application of
IRS Code Section 415 and/or IRS Code Section 401(a)(17).
The above actions have severely impacted certain employees. I recommend
the adoption of a program (SERP) which would make up the retirement benefits
that are capped or reduced from the level that would otherwise have been
realized under our retirement program.
This program would be in the form of a non-qualified plan which would be
an unfunded liability of the Company requiring the Company to make up from its
general assets any reduction that an affected employee might experience due
to the retirement benefit caps. The Company would be required under FASB 87 to
record this liability as an expense but the Company would not experience any
cash impact until benefits are paid.
Based on January 1, 1996 employee census data as calculated by Buck
Consultants, our pension actuary, the net periodic cost of such plan for the
first year is estimated at $185,000.
My recommendation is based on the following employee-relations issues and
in consideration of the above-mentioned costs:
- Our retirement program now discriminates against a few higher-paid
employees in limiting retirement benefits, not by Company design but
due to regulatory actions.
- The reductions have amounted to a "take-away" in that the benefits
have been reduced by regulation after having been higher by plan design.
- It is very important to Doe Run to attract and retain management
personnel over a long-term relationship due to the cyclicality of
our industry and the commodity pricing structure in which we compete.
- The recorded liability as a FASB 87 expense is approximately one-half
of one percent of our total annual compensation costs.
<PAGE>
DOE RUN
Internal SUITE 300 - 1801 PARK 270 DR
Correspondence
- -------------------------------------------------------------------------------
Exhibit 10.4
THE DOE RUN COMPANY
EXECUTIVE TAX SERVICES PLAN
Purpose
The purpose of this Plan is to provide eligible executives of The Doe Run
Company with assistance in personal tax planning and compliance without undue
diversion of the executive's time and attention from pressing Company
responsibilities.
Eligibility
Only those executives of The Doe Run Company who are in Salary Grade 26 or
above and who are designated by the Chief Executive as participants of this
plan are eligible.
Procedures
Charges for services rendered under this Plan for eligible executives of The
Doe Run Company should be forwarded to the vice president, Human Resources
for approval and payment.
Total costs incurred by an eligible executive covered by this Plan may not
exceed $1,500 for any calendar year. The $1,500 amount will be applied
without regard to the particular tax returns prepared or consulting services
rendered. Costs in excess of $1,500 per calendar year will be charged to the
executive.
Charges, up to the $1,500 maximum payable amount that are paid by The Doe Run
Company, will be included in the executive's total compensation as reported
to federal and state tax authorities.
In the event of the death of an eligible executive, this Plan will continue
in force for expenses resulting from the calendar year in which the death
occurred. Services provided by this Plan will be made available to the
executive's designated beneficiary up to the annual maximum of $1,500, less
any payments previously made during that year.
All benefits under this Plan will immediately cease for those executives who
are terminated from the company for any reason other than death, retirement
or permanent and total disability.
<PAGE>
Effective Date
This Plan is effective upon the divestiture of Doe Run by Fluor and the
resultant expiration of eligibility for participation by an eligible executive
in the Fluor Tax Services Plan.
Plan Termination
This Executive Tax Services Plan is provided solely as a prerogative of The Doe
Run Company and may be modified or terminated at any time by determination of
the President and Chief Executive Officer and immediate notification to the
participant(s).
2
<PAGE>
Exhibit 10.5
[Execution Copy]
LOAN AND SECURITY AGREEMENT
by and among
THE DOE RUN RESOURCES CORPORATION
FABRICATED PRODUCTS, INC.
as Borrowers
and
CONGRESS FINANCIAL CORPORATION
as Lender
Dated: March 12, 1998
<PAGE>
TABLE OF CONTENTS
Page
----
RECITALS............................................................... 1
SECTION 1. DEFINITIONS.................................................1
SECTION 2. CREDIT FACILITY............................................20
2.1 Loans......................................................20
2.2 Letter of Credit Accommodations............................21
2.3 Maximum Credit.............................................23
2.4 Reserves...................................................23
2.5 Mandatory Prepayments......................................23
2.6 Interest...................................................24
2.7 Closing Fee................................................24
2.8 Servicing Fee..............................................24
2.9 Unused Line Fee............................................25
2.10 Authorization to Make Loans................................25
2.11 Use of Proceeds............................................25
SECTION 3. CONDITIONS PRECEDENT TO LOANS AND
OTHER FINANCIAL ACCOMMODATIONS .........................26
3.1 Conditions Precedent to Initial Loans and Letter
of Credit Accommodations................................26
3.2 Conditions Precedent to All Loans and Letter
of Credit Accommodations................................28
SECTION 4. COLLATERAL.................................................29
SECTION 5. REPRESENTATIONS AND WARRANTIES.............................30
5.1 Organization and Qualification.............................31
5.2 Corporate Power and Authority..............................31
5.3 Issuance of Senior Notes; Disposition of Proceeds..........31
5.4 Capitalization.............................................32
5.5 Compliance with Other Agreements and Applicable Law........33
5.6 Governmental Approval......................................34
5.7 Chief Executive Office; Collateral Locations...............34
5.8 Priority of Liens/Title to Properties......................35
5.9 Tax Returns................................................35
5.10 Litigation.................................................35
(i)
<PAGE>
5.11 Intellectual Property......................................36
5.12 Accounts...................................................36
5.13 Employee Benefits..........................................36
5.14 Environmental Compliance...................................37
5.15 Bank Accounts..............................................38
5.16 Investment Company.........................................38
5.17 Regulation G; Securities Exchange Act of 1934..............38
5.18 No Material Adverse Change.................................39
5.19 Financial Statements.......................................39
5.20 Disclosure.................................................39
5.21 Labor Disputes.............................................40
5.22 Corporate Name; Prior Transactions.........................40
5.23 Restrictions on Subsidiaries...............................40
5.24 Material Contracts.........................................40
SECTION 6. ADDITIONAL COVENANTS.......................................41
6.1 Tradenames.................................................41
6.2 Subsidiaries...............................................41
6.3 Indebtedness...............................................42
6.4 Limitation on Liens........................................47
6.5 Loans, Investments, Guarantees, Etc. ......................50
6.6 Transactions with Affiliates...............................52
6.7 Restricted Payments........................................53
6.8 Changes in Business........................................55
6.9 Maintenance of Existence...................................55
6.10 Consolidated Net Worth.....................................55
6.11 Sale of Assets, Consolidation, Merger, Dissolution, Etc. ..55
6.12 Compliance with Laws, Regulations, Etc.....................56
6.13 Payment of Taxes and Claims................................57
6.14 Properties in Good Condition...............................57
6.15 Insurance..................................................58
6.16 Compliance with ERISA......................................59
6.17 Additional Bank Accounts...................................59
6.18 Notice of Default..........................................59
6.19 Financial Statements and Other Information.................59
6.20 Limitation of Voluntary Payments; Preferred Stock;
Amendments or Modifications of Certain Agreements; etc..64
6.21 Limitation on Restrictions Affecting Subsidiaries..........65
6.22 Further Assurances.........................................65
(ii)
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SECTION 7. EVENTS OF DEFAULT AND REMEDIES.............................66
7.1 Events of Default..........................................66
7.2 Remedies...................................................68
SECTION 8. COLLECTION AND ADMINISTRATION..............................71
8.1 Collections; Management of Collateral......................71
8.2 Payments...................................................72
8.3 Borrowers' Loan Account....................................73
8.4 Statements.................................................73
8.5 Right of Inspection; Access................................73
8.6 Accounts Documentation.....................................74
8.7 Specific Powers............................................74
SECTION 9. EFFECTIVE DATE; TERMINATION; COSTS.........................75
9.1 Term.......................................................75
9.2 Expenses and Additional Fees...............................76
9.3 Survival of Agreement......................................77
9.4 No Waiver; Cumulative Remedies.............................77
9.5 Notices....................................................78
9.6 Entire Agreement...........................................78
9.7 Confidentiality............................................78
9.8 Partial Invalidity.........................................79
9.9 Headings...................................................79
9.10 Counterparts...............................................79
SECTION 10. JURY TRIAL WAIVER; OTHER WAIVERS
AND CONSENTS; GOVERNING LAW ...........................79
10.1 Governing Law; Choice of Forum; Service of Process;
Jury Trial Waiver.......................................79
10.2 Waiver of Notices..........................................80
10.3 Amendments and Waivers.....................................81
10.4 Waiver of Counterclaims....................................81
10.5 Indemnification............................................81
10.6 Successors and Assigns.....................................81
(iii)
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EXHIBITS AND SCHEDULES
Exhibit A Borrowing Base Certificate
Schedule 1.5 List of Banco de Credito Agreements
Schedule 1.29 Concentration Criteria for Specific Account Debtors
Schedule 1.39 Existing Letters of Credit
Schedule 1.83 List of Intercompany Services Agreements
Schedule 5.1(a) Jurisdictions of Qualification
Schedule 5.1(b) Subsidiaries
Schedule 5.3 List of Senior Note Agreements
Schedule 5.5 Permits and Missing Permits
Schedule 5.7 Chief Executive Office and Locations of Collateral
Schedule 5.8 Existing Liens
Schedule 5.9 Tax Returns
Schedule 5.10 Pending Litigation
Schedule 5.13 Pension Plans
Schedule 5.14 Environmental Matters
Schedule 5.15 Bank Accounts
Schedule 5.21 Collective Bargaining Agreements
Schedule 5.22 Corporate Name; Tradenames; Prior Transactions
Schedule 5.24 Material Contracts
Schedule 6.3 Existing Indebtedness
Schedule 6.5 Existing Loans, Advances and Guarantees and
(iv)
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Guarantee for Helicopter Purchase
(v)
<PAGE>
LOAN AND SECURITY AGREEMENT
AGREEMENT dated March 12, 1998 is entered into by and among The Doe Run
Resources Corporation, a New York corporation ("Doe Run"), Fabricated Products,
Inc., a Delaware corporation ("Fabricated Products", and together with the Doe
Run, each individually a "Borrower" and collectively, "Borrowers") and Congress
Financial Corporation, a California corporation ("Lender" as hereinafter further
defined).
W I T N E S S E T H:
WHEREAS, Borrowers have requested that Lender enter into certain financing
arrangements with Borrowers pursuant to which Lender may make loans and provide
other financial accommodations to Borrowers; and
WHEREAS, Lender is willing to agree to make such loans and provide such
other financial accommodations on the terms and conditions set forth herein and
the other Financing Agreements (as defined below);
NOW, THEREFORE, in consideration of the mutual conditions and agreements
set forth herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. DEFINITIONS
For purposes of this Agreement and the other Financing Agreements, the
following terms shall have the respective meanings given to them below:
1.1 "Account Debtor" shall mean each debtor or obligor in any way
obligated on or in connection with any Account.
1.2 "Accounts" shall mean all present and future rights to payment arising
out of the sale, lease or other disposition of Inventory (or other goods to the
extent the sale, lease or other disposition of such other goods gives rise to
rights to payment which are included as accounts receivable in any report or
other information received by Lender) or rendition of services.
1.3 "Affiliate" shall mean, with respect to a specified Person, a
partnership, corporation or any other person which directly or indirectly,
through one or more intermediaries, controls or is controlled by or is under
common control with such Person, and without limiting the generality of the
foregoing, includes (a) any Person which beneficially owns or holds five (5%)
percent or more of any class of voting securities of such Person or other equity
interests in such
<PAGE>
Person, (b) any Person of which such Person beneficially owns or holds five (5%)
percent or more of any class of voting securities or in which such Person
beneficially owns or holds five (5%) percent or more of the equity interests and
(c) any director, officer or employee of such Person. For the purposes of this
definition, the term "control" (including with correlative meanings, the terms
"controlled by" and "under common control with"), as used with respect to any
Person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting securities or by contract or otherwise.
1.4 "Banco de Credito" shall mean Banco de Credito Overseas Limited, a
corporation organized under the laws of the Commonwealth of the Bahamas, and its
successors and assigns.
1.5 "Banco de Credito Agreements" shall mean individually and
collectively, the agreements, documents and instruments listed on Schedule 1.5
hereto, as the same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
1.6 "Banco de Credito Deposit Agreement" shall mean the Special Term
Deposit Contract, dated of even date herewith, by and between Banco de Credito
and Doe Run, as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
1.7 "Blocked Accounts" shall have the meaning set forth in Section 8.1
hereof.
1.8 "Board" shall mean the Board of Governors of the Federal Reserve
System or any successor thereto.
1.9 "Borrowers" shall mean, collectively, (a) The Doe Run Resources
Corporation, a New York corporation, formerly known as St. Joe Minerals
Corporation and as successor by operation of law to The Doe Run Company,
formerly a Missouri general partnership, and its successors and assigns and (b)
Fabricated Products, Inc., a Delaware corporation, and its successors and
assigns; being sometimes individually referred to herein as a "Borrower".
1.10 "Borrowing Base" shall mean at any time and from time to time the
amount determined by Lender calculated as follows:
(a) the sum of:
(i) up to eighty-five (85%) percent of the Net Amount of Eligible
Accounts of Borrowers, plus
(ii) up to sixty (60%) percent of the Value of the Eligible
Inventory of Borrowers (other than as to Doe Run, Eligible
Stores Inventory), plus
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(iii) as to Doe Run, the lesser of: (A) up to twenty-five (25%)
percent of the Value of the Eligible Stores Inventory or (B)
$2,500,000,
minus
(b) any reserves established by Lender pursuant to Section 2.4
hereof.
1.11 "Borrowing Base Certificate" shall mean a certificate substantially
in the form of Exhibit A hereto, as such form may from time to time be modified
by Lender, which is duly completed (including all schedules thereto) and
executed by the chief financial officer or other appropriate financial officer
of Doe Run acceptable to Lender and delivered to Lender.
1.12 "Business Day" shall mean any day other than a Saturday, Sunday, or
legal holidays on which commercial banks in New York, New York are authorized or
required to close, and any day on which Lender is open for the transaction of
business.
1.13 "By-Products" shall mean by-products resulting from the processing of
the lead ore of Doe Run consisting of copper, zinc, nickel, sulfuric acid,
silver, sodium sulfate and other minerals and chemicals resulting from such
processing.
1.14 "Capitalized Lease Obligations" shall mean any obligation to pay rent
or other amounts under a lease of (or other agreement conveying the right to
use) any property (whether real, personal or mixed) that is required to be
classified and accounted for as a capital lease obligation under GAAP, and, for
the purposes of this Agreement, the amount of such obligation at any date shall
be the capitalized amount thereof at such date, determined in accordance with
GAAP.
1.15 "Capital Stock" shall mean, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated) of
such Person's capital stock at any time outstanding, and any and all rights,
warrants or options exchangeable for or convertible into such capital stock (but
excluding any debt security that is exchangeable for or convertible into such
capital stock).
1.16 "Cash Equivalents" shall mean, at any time, (a) any evidence of
indebtedness with a maturity of one (1) year or less issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof; provided, that, the full faith and credit of the United
States of America is pledged in support thereof, except in the case of any such
evidence of indebtedness issued by the Student Loan Marketing Association, the
Federal National Mortgage Association, a Federal Farm Credit Bank or a Federal
Home Loan Bank so long as any such evidence of indebtedness issued by such
federal governmental entities is rated at least A-1 by Standard & Poor's Rating
Services, a division of The McGraw Hill Companies,
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Inc. ("S&P") or at least P-1 by Moody's Investor Service, Inc.; (b) certificates
of deposit or bankers' acceptances with a maturity of one (1) year or less of
any financial institution that is a member of the Federal Reserve System having
combined capital and surplus and undivided profits of not less than Two Hundred
Fifty Million Dollars ($250,000,000); (c) commercial paper (including variable
rate demand notes) with a maturity of one (1) year or less issued by a
corporation (except an Affiliate of a Borrower) organized under the laws of any
State of the United States of America or the District of Columbia and rated at
least A-1 by S&P or at least P-1 by Moody's Investor Service, Inc.; (d)
repurchase obligations with a term of not more than thirty (30) days for
underlying securities of the types described in clause (a) above entered into
with any bank meeting the qualifications specified in clause (b) above; (e)
repurchase agreements and reverse repurchase agreements relating to marketable
direct obligations issued or unconditionally guaranteed by the United States of
America, in each case maturing within one (1) year or less from the date of
acquisition; provided, that, the terms of such agreements comply with the
guidelines set forth in the Federal Financial Agreements of Depository
Institutions With Securities Dealers and Others, as adopted by the Comptroller
of the Currency on October 31, 1985; and (f) investments in money market funds
and mutual funds which invest substantially all of their assets in securities of
the types described in clauses (a) through (e) above.
1.17 "Change of Control" shall mean the occurrence of one or more of the
following events: (a) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the assets of Renco Group or a Borrower to any Person or group of related
Persons for purposes of Section 13(d) of the Securities Exchange Act of 1934, as
amended (a "Group"), together with any Affiliates thereof; (b) the approval by
the holders of Capital Stock of Renco Group or a Borrower, as the case may be,
of any plan or proposal for the liquidation or dissolution of Renco Group or
such Borrower, as the case may be; (c) Renco Group or DRA ceases to own one
hundred (100%) percent of the Capital Stock of Doe Run; (d) Renco Group ceases
to own one hundred (100%) percent of the outstanding Capital Stock of DRA; (e)
Doe Run ceases to own one hundred (100%) percent of the Capital Stock of
Fabricated Products; and (f) the Permitted Holders cease to own ninety (90%) of
the outstanding Capital Stock of Renco Group.
1.18 "Code" shall mean the Internal Revenue Code of 1986, as the same now
exists or may from time to time hereafter be amended, modified, recodified or
supplemented, together with all rules, regulations and interpretations
thereunder or related thereto.
1.19 "Collateral" shall have the meaning set forth in Section 4 hereof.
1.20 "Collateral Access Agreement" shall mean an agreement in writing, in
form and substance satisfactory to Lender, from any lessor of premises to a
Borrower, or any other person to whom any Inventory is consigned or who has
custody, control or possession of any Inventory or is otherwise the owner or
operator of any premises on which any Inventory is located pursuant to which
such lessor, consignee or other person, inter alia, acknowledges the first
priority
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security interest of Lender in such Inventory, agrees to waive any and all
claims such lessor, consignee or other person may, at any time, have against
such Inventory, whether for processing, storage or otherwise, and agrees to
permit Lender access to, and the right to remain on, the premises of such
lessor, consignee or other person so as to exercise Lender's rights and remedies
and otherwise deal with the Collateral.
1.21 "Consolidated Net Income" shall mean, with respect to any Person, the
net income (or loss) of such Person and its Subsidiaries, on a consolidated
basis for such period determined in accordance with GAAP (and as to Doe Run,
including for such purpose Doe Run Cayman and its Subsidiaries); provided, that,
(a) the net income of any Person in which such Person or any Subsidiary of such
Person has an ownership interest with a third party (other than a person that
meets the definition of a Wholly-Owned Subsidiary) shall be included only to the
extent of the amount that has actually been received by such Person or its
Wholly-Owned Subsidiaries in the form of dividends or other distributions during
such period (subject to, in the case of any dividend or distribution received by
a Wholly-Owned Subsidiary of such person, the restrictions set forth in clause
(b) below) and (b) the net income of any Subsidiary of such Person that is
subject to any restrictions or limitation on the payment of dividends or the
making of other distributions shall be excluded to the extent of such
restriction or limitation; provided, that, for purposes of this definition, (i)
there shall be excluded (A) the net income (or loss) of any Person (acquired in
a pooling of interests transaction) accrued prior to the date it becomes a
Subsidiary of such Person or is merged into or consolidated with such Person or
any Subsidiary of such Person, (B) any gain (or loss) (and related tax effects)
resulting from an Asset Sale (as defined below), (C) any extraordinary, unusual
or nonrecurring gains or losses (and related tax effects) in accordance with
GAAP, and (D) any compensation-related expenses arising as a result of the
application of the net proceeds from the issuance of the Senior Notes, (ii) the
term "Asset Sale" as used in this definition shall mean any direct or indirect
sale, issuance, conveyance, transfer, lease, assignment or other transfer for
value by a Borrower or any of its Subsidiaries (including, without limitation,
any sale/leaseback) to any person, in one transaction or a series of related
transactions, of (A) any Capital Stock of any Subsidiary, (B) all or
substantially all of the properties and assets of any division or line of
business of a Borrower or its Subsidiaries or (C) any other properties or assets
of a Borrower or its Subsidiaries other than in the ordinary course of business,
and (iii) for purposes of Section 6.7(b) hereof, the amortization of deferred
financing costs relating to the issuance of the Senior Notes shall be excluded
from the definition of Consolidated Net Income.
1.22 "Consolidated Net Worth" shall mean, as to any Person at any time, in
accordance with GAAP, consistently applied, on a consolidated basis for such
Person and its Subsidiaries (and, as to Doe Run, including for such purpose Doe
Run Cayman and its Subsidiaries), the amount equal to (a) the difference
between: (i) the aggregate net book value of all assets of such Person and its
Subsidiaries, calculating the book value of inventory for this purpose on a
first-in-first-out basis, after deducting from such book values all appropriate
reserves in accordance with GAAP consistently applied (including all reserves
for doubtful receivables,
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obsolescence, depreciation and amortization) and (ii) the total aggregate
Indebtedness and other liabilities of such Person and its Subsidiaries,
including accruals for taxes, workmen's compensation liability and other proper
accruals (other than contingent liabilities which would not be included in the
balance sheet under GAAP) of such Person and its Subsidiaries.
1.23 "Credit Facility" shall mean, collectively, the secured Loans and
Letter of Credit Accommodations provided for hereunder and under the other
Financing Agreements.
1.24 "Doe Run" shall mean The Doe Run Resources Corporation, a New York
corporation, and its successors and assigns.
1.25 "Doe Run Cayman" shall mean Doe Run Cayman, Ltd., a company
incorporated under the laws of the Cayman Islands, and its successors and
assigns.
1.26 "Doe Run Mining" shall mean Doe Run Mining S.R. Ltda., Peruvian
company and its successors and assigns.
1.27 "Doe Run Peru" shall mean Doe Run Peru Ltda., a Peruvian company, and
its successors and assigns.
1.28 "DRA" shall mean DR Acquisition Corp., a Missouri corporation, and
its successors and assigns.
1.29 "Eligible Accounts" shall mean Accounts created by a Borrower arising
out of the sale of goods or rendition of services by such Borrower in the
ordinary course of business, which are and at all times shall continue to be
acceptable to Lender in all respects. Standards of eligibility may be fixed and
revised from time to time solely by Lender in its exclusive judgment. In
determining eligibility, Lender may, but need not, rely on agings, reports and
schedules of Accounts furnished to Lender by such Borrower, but reliance by
Lender thereon from time to time shall not be deemed to limit Lender's right to
revise standards of eligibility at any time as to both present and future
Accounts. In general, an Account shall not be deemed eligible if:
(a) such Borrower does not have sole lawful and absolute title to
such Account; or
(b) it arises out of a sale made by such Borrower to an Affiliate or
to an officer, director or employee of such Borrower, or the Account Debtor
includes any such Person; or
(c) such Accounts of a single Account Debtor or its Affiliates
constitute more than ten (10%) percent of all otherwise Eligible Accounts,
except as to Accounts of the Account Debtors listed on Schedule 1.29 hereto, in
which case if Accounts of such Account Debtors constitute more than the
percentage with respect thereto set forth on Schedule 1.29 hereto (but
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the portion of the Accounts not in excess of the applicable percentage may be
deemed Eligible Accounts); or
(d) such Accounts are unpaid within sixty (60) days after the
original due date for them, but in any event if such Accounts are unpaid more
than one hundred twenty (120) days after the date of the original invoice; or
(e) it is from an Account Debtor or one of its Affiliates that has
an Account excluded under clause (d) above and fifty (50%) percent or more of
all Accounts from such Account Debtor and such of its Affiliates are ineligible
under clause (d) or otherwise; or
(f) the payment terms with respect to such Account are greater than
sixty (60) days from the date of the original invoice;
(g) the Account Debtor for the Account is a creditor of such
Borrower or any Obligor, has or has asserted a right of setoff, has disputed its
liability or has made any claim with respect to the Account or any other Account
which has not been resolved, to the extent of the amount owed by such Borrower
or such Obligor to the Account Debtor, the amount of such actual or asserted
right of setoff (whichever is greater), or the amount of such dispute or claim,
as the case may be; or
(h) the Account Debtor is (or its assets are) the subject of a
proceeding under the U.S. Bankruptcy Code or any similar law or statute of any
other Governmental Authority or an assignment for the benefit of creditors, or
its business has failed or it has suspended its business operations, or has had
appointed a receiver or trustee for it or a substantial portion of its assets or
has generally failed or admitted its inability to pay its debts as they become
due; or
(i) the Account is not payable in U.S. Dollars or the Account Debtor
for the Account is either not incorporated under the laws of a jurisdiction of
the United States of America or any State thereof or Canada or any Province
thereof, or is located outside or has its principal place of business or
substantially all of its assets outside the continental United States or Canada,
except to the extent the Account is supported by an irrevocable letter of credit
that shall be (i) satisfactory to the Lender (as to form, substance and issuer),
(ii) assigned to Lender and directly drawable by Lender and (iii) in the
possession of Lender, provided, that, if the Account Debtor is incorporated in
Canada or any Province thereof, or is located or has its principal place of
business or substantially all of its assets in Canada, such Accounts may only be
Eligible Accounts if such Borrower shall have executed and delivered, or caused
to be executed and delivered, such agreements, documents and instruments as may
be required by Lender to perfect the security interests of Lender in the
Accounts owing by such Account Debtor in accordance with the applicable laws of
Canada or any Province thereof (as determined by Lender) and taken or caused to
be taken such other further actions as Lender may request to
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enable Lender as secured party with respect thereto to collect such Accounts
under the applicable laws of Canada and any Province thereof; or
(j) the sale to the Account Debtor is on a bill-and-hold guaranteed
sale (except as otherwise provided below), sale-and-return, ship-and-return,
sale on approval or consignment or other similar basis or made pursuant to any
other written agreement providing for repurchase or return of any merchandise
which has been claimed to be defective or otherwise unsatisfactory; or
(k) the Account Debtor is any Governmental Authority; or
(l) the goods giving rise to such Account have not been shipped and
delivered to the Account Debtor, or the Account otherwise does not represent a
final sale (subject only to the Account Debtor's right to reject non-conforming
goods) except that if the goods giving rise to such Account have not been
shipped and delivered to the Account Debtor, if Lender shall have received a
written agreement, in form and substance satisfactory to Lender, evidencing the
Account Debtor's unconditional obligation to take and pay for such goods; or
(m) the Account does not comply with all applicable law; or
(n) (i) either the perfection, enforceability or validity of
Lender's security interest or Lender's right or ability to receive direct
payments as to such Account is governed by any statutory requirement of any
Governmental Authority other than those of the Uniform Commercial Code, (ii) the
Account Debtor has not waived counterclaims or setoffs as to such Account, (iii)
it is not subject to a valid and perfected first priority security interest,
lien or other encumbrance in favor of the Lender, subject to no security
interest, liens or other encumbrances other than the security interests, liens
or other encumbrances (if any) permitted hereunder or (iv) it does not otherwise
conform to the representations and warranties contained herein or in the other
Financing Agreements; or
(o) as to all or any part of such Account, a check, promissory note,
draft, trade acceptance or other instrument for the payment of money has been
received, presented for payment and returned uncollected for any reason; or
(p) the Account is not payable directly to a lockbox that is subject
to a blocked account arrangement as provided in Section 8.1 hereof; or
(q) Lender in the exercise of its good faith judgment determines it
to be ineligible.
Any Accounts which Lender determines to be ineligible or unacceptable for
purposes of the Borrowing Base at any time shall nevertheless be and remain at
all times part of the Collateral.
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1.30 "Eligible Inventory" shall mean Inventory consisting of finished
goods held for sale in the ordinary course of the business of a Borrower and raw
materials and work-in-process for such finished goods, in each case to the
extent acceptable to Lender in all respects. Standards of eligibility may be
fixed and revised from time to time solely by Lender in its exclusive judgment.
In determining eligibility Lender may, but need not, rely on reports and
schedules of such Inventory furnished to Lender by such Borrower, but reliance
thereon by Lender from time to time shall not be deemed to limit Lender's right
to revise standards of eligibility at any time. In general, except in Lender's
discretion, Inventory shall not be deemed Eligible Inventory if:
(a) it is not owned solely by such Borrower or such Borrower does
not have sole and good, valid and marketable title thereto; or
(b) it is not either (i) located in the continental United States or
(ii) loaded, freight charges and insurance premiums paid, upon a vessel bound
for a port in the continental United States and covered by bills of lading or
other shipping documents, originals of which are in the possession of Lender; or
(c) it is not located at premises owned and operated by such
Borrower or it is on consignment to a third party, provided, that, any Inventory
which would otherwise be deemed Eligible Inventory at locations which are not
owned and operated by such Borrower may nevertheless be considered Eligible
Inventory: (i) if Lender shall have received a Collateral Access Agreement from
the holder of such Inventory or the owner and/or operator of such location, as
the case may be, and (ii) in addition to the agreement described above, if the
Inventory is delivered to the holder, owner and/or operator on consignment and
if required by Lender: (A) the holder, owner and/or operator executes
appropriate UCC-1 financing statements in favor of such Borrower, which are duly
assigned to Lender and (B) any lender to the holder, owner and/or operator with
any interest in Inventory is properly notified of the first priority security
interest in and lien on such Inventory of Lender; or
(d) it is packing or shipping materials or maintenance supplies; or
(e) it is not subject to a valid and perfected first priority
security interest and Lender, except, with respect to Inventory stored at sites
described in clause (c) above, for liens for unpaid rent or normal and customary
warehousing charges, in each case, not yet due; or
(f) it is goods returned or rejected by such Borrower's customers or
goods in transit to third parties (other than to warehouse sites covered by a
Collateral Access Agreement); or
(g) it (i) is prepaid or (ii) is excess (as so reserved by such
Borrower from time to time or as otherwise determined by Lender) or (iii) is
seconds or thirds or (iv) is obsolete, slow moving or unmerchantable, or (v) is
freight/drayage reserves, or (vi) is samples or Inventory on
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hand which is used for promotional and other sales activities, or (vii) does not
otherwise conform to the representations and warranties contained in the credit
documents; or
(h) is used or repossessed, or is attached, seized, made subject to
a writ or distress warrant, levied upon or brought within the possession of any
receiver, trustee, custodian or assignee for the benefit of creditors; or
(i) it is obsolete, defective, damaged or unmerchantable; or
(j) it is goods acquired by such Borrower in or as part of a "bulk"
transfer or sale of assets and such acquisition is not consummated in the
ordinary course of business unless such Borrower has complied with all
applicable bulk sales or bulk transfer laws in connection with such acquisition;
or
(k) it is unmined ore or otherwise constitutes real property; or
(l) Lender in the exercise of its good faith judgment determines it
to be ineligible.
Any Inventory which Lender determines to be ineligible or unacceptable for
purposes of the Borrowing Base at any time shall nevertheless be and remain at
all times part of the Collateral.
1.31 "Eligible Stores Inventory" shall mean Stores Inventory which is
Eligible Inventory.
1.32 "Environmental Laws" shall mean all Federal, State and local laws,
rules, regulations, ordinances, and consent decrees relating to health, safety,
hazardous substances, pollution and environmental matters, as now or at any time
hereafter in effect, applicable to the business and facilities of each Borrower
and its Subsidiaries (whether or not owned by it or any of them), including laws
relating to emissions, discharges, releases or threatened releases of
pollutants, contamination, chemicals, or hazardous, toxic or dangerous
substances, materials or wastes into the environment (including, without
limitation, ambient air, surface water, ground water, land surface or subsurface
strata) or otherwise relating to the generation, manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, chemicals, or hazardous, toxic or dangerous
substances, materials or wastes or relating to or imposing liability or
standards of conduct concerning mining or reclamation of mined land. Such laws
and regulations include, but are not limited to, the Resource Conservation and
Recovery Act of 1976, as amended; the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended; the Superfund Amendments and
Reauthorization Act; the Water Pollution Control Act of 1972; the Solid Waste
Disposal Act; the Insecticide, Fungicide and Rodenticide Act; the Mine Safety
and Health Act of 1977; the Surface Mining Control and Reclamation Act of 1977;
the Safe Drinking Water Act of 1974; the Toxic Substances Control Act, as
amended; the Clean Water Act, as amended; the Clean Air Act,
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as amended; the Hazardous Materials Transportation Act, as amended; U.S.
Department of Transportation and Environmental Protection Agency regulations;
and applicable state counterparts to any of such laws and any common law or
equitable doctrine that may impose liability or obligations for injuries or
damages due to, or threatened as a result of, the presence of or exposure to any
Hazardous Materials.
1.33 "Equipment" shall mean all of each Borrower's now owned and hereafter
acquired equipment and fixtures, of every kind and description, wherever
located, including, without limitation, any and all machinery used in connection
with the manufacture, sale, exchange or lease of goods or rendition of services,
machinery, tooling, tools, telephone equipment, computers, computer hardware and
related computer equipment and accessories (including software and records),
vehicles, dies, jigs, furniture, trade fixtures and fixtures, all attachments,
components, parts, accessions and property now or hereafter affixed thereto,
installed thereon or used in connection therewith, and all additions to and
substitutions and replacements thereof and all existing and future leasehold
interests in equipment and fixtures, wherever located, whether now owned or
hereafter acquired and all licenses and other rights of such Borrower relating
thereto, whether in the possession and control of such Borrower or in the
possession and control of a third person for the account of such Borrower and
all claims to the proceeds of insurance thereon and all maintenance and warranty
records relating thereto.
1.34 "ERISA" shall mean the United States Employee Retirement Income
Security Act of 1974, as the same now exists or may hereafter from time to time
be amended, modified, recodified or supplemented, together with all rules,
regulations and interpretations thereunder or related thereto.
1.35 "ERISA Affiliate" shall mean any (a) corporation which is a member of
the same controlled group of corporations (within the meaning of section 414(b)
of the Code) as a Borrower, (b) partnership or other trade or business (whether
or not incorporated) which is under common control (within the meaning of
Section 414(c) of the Code) with a Borrower, and (c) member of the same
affiliated service group (within the meaning of Section 414(m) of the Code) as a
Borrower.
1.36 "Event of Default" shall have the meaning set forth in Section 7.1
hereof.
1.37 "Excess Availability" shall mean the amount, as determined by Lender,
calculated at any time, equal to: (a) the lesser of (i) the Borrowing Base or
(ii) the Maximum Credit minus (b) the sum of: (i) the amount of all then
outstanding and unpaid Obligations plus (ii) the amount of all then outstanding
Letter of Credit Accommodations (to the extent not included in Obligations in
Section 1.37(b)(i) above), plus (iii) the aggregate amount of (A) all then
outstanding and unpaid trade payables of Borrowers which are outstanding and
unpaid more than sixty (60) days past due as of such time and (B) the book
overdraft of Borrowers.
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1.38 "Existing Lenders" shall mean, collectively, (a) the lenders who are
parties to the Loan and Security Agreement, dated October 23, 1997, by and among
such lenders, BT Commercial Corporation, in its capacity as Agent, Union Bank of
Switzerland, New York Branch, as Syndication Agent, DLJ Capital Funding, Inc.,
as Documentation Agent (in each case pursuant to the Loan and Security
Agreement, dated October 23, 1997, by and among Borrower, DRA, such parties and
the financial institutions who are parties thereto as lenders), and Bankers
Trust Company, as issuing bank, under such Loan and Security Agreement and such
lenders and (b) Bankers Trust Company, as Administrative Agent, Union Bank of
Switzerland, New York Branch, as Syndication Agent, DLJ Capital Funding, Inc.,
as Documentation Agent (in each case pursuant to the Credit Agreement, dated as
of October 23, 1997, by and among such parties and the financial institutions
who are parties thereto as lenders) and such lenders.
1.39 "Existing Letters of Credit" shall mean, collectively, the letters of
credit issued by CoreStates Bank, N.A. for the account of Doe Run set forth on
Schedule 1.39 hereto.
1.40 "Fabricated Products" shall mean Fabricated Products, Inc., a
Delaware corporation, and its successors and assigns.
1.41 "Financing Agreements" shall mean, collectively, this Agreement,
together with all other agreements, documents and instruments now or at any time
hereafter executed and/or delivered by a Borrower or any other person, with, to
or in favor of Lender in connection herewith or pursuant hereto, as this
Agreement and such other agreements, documents or instruments now exist or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.
1.42 "Fixed Rate Notes" shall mean individually and collectively, each and
all of the following (as the same now exist or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced): (a) the 11
1/4% Senior Notes due 2005, Series A (the "Series A Fixed Rate Notes") issued by
Doe Run on the date hereof pursuant to the Senior Note Indenture in the original
principal amount of $200,000,000 and (b) the 11 1/4% Senior Notes due 2005,
Series B (the "Series B Fixed Rate Notes") issued by Doe Run after the date
hereof which have terms identical to the terms of the Series A Fixed Rate Notes
and are offered to the holders of the Series A Fixed Rate Notes pursuant to a
registration statement to be filed by Doe Run with the Securities and Exchange
Commission in exchange for the Series A Fixed Rate Notes held by such person.
1.43 "Floating Rate Notes" shall mean individually and collectively, each
and all of the following (as the same now exist or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced): (a) the
Floating Interest Rate Senior Notes due 2003, Series A (the "Series A Floating
Rate Notes") issued by Doe Run on the date hereof pursuant to the Senior Note
Indenture in the original principal amount of $55,000,000 and (b) the Floating
Interest Rate Senior Notes due 2003, Series B (the "Series B Floating Rate
Notes") issued by
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Doe Run after the date hereof which have terms identical to the terms of the
Series A Floating Rate Notes and are offered to holders of the Series A Floating
Rate Notes pursuant to a registration statement to be filed by Doe Run with the
Securities and Exchange Commission in exchange for the Series A Floating Rate
Notes held by such person.
1.44 "GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time as set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and the statements and pronouncements
of the Financial Accounting Standards Board which are applicable to the
circumstances as of the date of determination except that for purposes of
Section 6.10 hereof, GAAP shall be determined on the basis of such principles in
effect on the date hereof and consistent with those used in the preparation of
the financial statements delivered to Lender prior to the date hereof.
1.45 "Governmental Authority" shall mean any nation or government, any
state, province, or other political subdivision thereof, any central bank (or
similar monetary or regulatory authority) thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
1.46 "Hazardous Materials" shall mean any hazardous, toxic or dangerous
substances or materials and wastes including without limitation, hydrocarbons
(including naturally occurring or man-made petroleum and hydrocarbons),
flammable explosives, asbestos, urea formaldehyde insulation, radioactive
materials, biological substances, polychlorinated biphenyl, pesticides,
herbicides and any other kind and/or type of pollutants or contaminants
(including, without limitation, materials which include hazardous constituents),
sewage, sludge, industrial slag, solvents and/or any other similar substances,
materials, or wastes and including any other substances, materials, or wastes
that are or became regulated under any Environmental Laws (including, without
limitation, any that are or become classified as hazardous or toxic under any
Environmental Laws.) In the event that any of the applicable Environmental Laws
are amended so as to broaden the meaning of any of the above-referenced terms,
such broader meaning shall apply subsequent to the effective date of such
amendment.
1.47 "Hedging Agreements" shall mean any agreement with respect to (a) the
hedging of price risk associated with the purchase or sale of lead, copper,
zinc, gold and silver under which a Borrower or any Subsidiary is a party or
beneficiary and (b) the hedging of currency risks in connection with funding
payroll expenses; so long as any such agreement under clause (a) or clause (b)
above has been entered into in the ordinary course of business consistent with
past price risk or currency management practices of such Borrower and its
Subsidiaries and not for purposes of speculation.
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1.48 "Indebtedness" shall mean, with respect to any Person, any liability
(a) in respect of borrowed money (whether or not the recourse of the lender is
to the whole of the assets of such Person or only to a portion thereof) or
evidenced by bonds, notes, indentures or similar instruments; (b) representing
the balance deferred and unpaid of the purchase price of any property or
services (except any such balance that constitutes an account payable to a trade
creditor (whether or not an Affiliate) created, incurred, assumed or guaranteed
by such Person in the ordinary course of business of such Person in connection
with obtaining goods, materials or services); (c) all Capitalized Lease
Obligations; (d) any contractual obligations, contingent or otherwise, of such
Person to pay or be liable for the payment of any indebtedness described in this
definition of another Person, including, without limitation, any such
indebtedness, directly or indirectly guaranteed, endorsed (other than for
collection or deposit in the ordinary course of business), co-made or discounted
or sold with recourse by such Person, or in respect of which such Person is
otherwise directly or indirectly liable, including contractual obligations
(contingent or otherwise) arising through any agreement to purchase, repurchase,
or otherwise acquire such indebtedness, obligation or liability or any security
therefor, or to provide funds for the payment or discharge thereof (whether in
the form of loans, advances, stock purchases, capital contributions or
otherwise), or to maintain solvency, assets, level of income, or other financial
condition, or to make payment other than for value received; (e) all obligations
with respect to redeemable stock and redemption or repurchase obligations under
any Capital Stock or other equity securities issued by such Person; (f) all
reimbursement obligations and other liabilities, contingent or otherwise, of
such Person with respect to bonds, letters of credit, banker's acceptances or
similar documents or instruments issued for such Person's account; (g) all
indebtedness of such Person in respect of indebtedness of another Person for
borrowed money or indebtedness of another Person otherwise described in this
definition which is secured by any security interest in, or mortgage or lien
upon the interest in any asset of such Person, whether or not such obligations,
liabilities or indebtedness are assumed by or are a personal liability of such
Person, all as of such time; and (h) all obligations, liabilities and
indebtedness of such Person (marked to market) constituting Interest Rate
Protection Obligations, Hedging Agreements or in respect of foreign exchange
agreements. The term "Indebtedness" shall not be construed to include
obligations for rent or similar amounts payable under operating leases.
1.49 "Initial Purchasers" shall mean, collectively, BT Alex. Brown
Incorporated, Donaldson, Lufkin & Jenrette Securities Corporation and UBS
Securities LLC, and their respective successors and assigns.
1.50 "Interest Rate" shall mean a rate of three-quarters (3/4%) percent
per annum above the Prime Rate; provided, that, Lender may, at its option,
increase such rate to a rate two and three-quarters (2 3/4%) percent per annum
above the Prime Rate at any time without notice (a) for the period on and after
(i) the date of termination or non-renewal hereof until such time as all
Obligations are indefeasibly paid in full (notwithstanding entry of any judgment
against a Borrower), or (ii) the date of any Event of Default, and for so long
as such Event of Default exists or is continuing, as determined by Lender and
(b) on the Loans at any time outstanding in
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excess of the Borrowing Base (whether or not such excess(es) arise or are made
with or without Lender's knowledge or consent and whether made before or after
an Event of Default).
1.51 "Interest Rate Protection Obligations" shall mean the obligations of
any Person pursuant to any arrangement with any other Person whereby, directly
or indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such Person
calculated by applying a fixed or a floating rate of interest on the same
notional amount and shall include, without limitation, interest rate swaps,
caps, floors, collars and similar agreements.
1.52 "Inventory" shall mean all of each Borrower's now owned and hereafter
acquired inventory, wherever located, including, without limitation, all raw
materials, work-in-process (including, without limitation, molten lead and slag
and kettle dross), and finished and semi-finished inventory of any kind, nature
or description, and including, without limitation, (a) all metals and minerals
in whatever form, whether ore, powder, sinter, concentrates, pellets, links,
pigs, or ingots, and including without limitation, lead, zinc, copper, nickel
sulfur, silver bullion, copper matte and other By-Products, (b) the Stores
Inventory, (c) all wrapping, packaging, advertising and shipping materials, and
any other personal property held for sale, exchange or lease or furnished or to
be furnished or used or consumed in the business or in connection with the
manufacturing, packaging, shipping, advertising, selling or furnishing or such
goods, inventory, merchandise and other personal property, and all right, title
and interest therein and thereto, wherever located, whether now owned or
hereafter acquired. The term "Inventory" as used herein shall not include
minerals constituting part of Real Property.
1.53 "Lending Formulas" shall mean the percentages with respect to
Eligible Accounts and Eligible Inventory set forth in the definition of the term
Borrowing Base contained herein.
1.54 "Letter of Credit Accommodations" shall mean with respect to the
Credit Facility, the letters of credit or other guaranties which are from time
to time either (a) issued or opened by Lender for the account of a Borrower or
any Obligor or (b) with respect to which Lender has agreed to indemnify the
issuer or guaranteed to the issuer the performance by a Borrower of its
obligations to such issuer (including, without limitation, the Existing Letters
of Credit).
1.55 "Loans" shall mean, the loans made to or for the benefit of Borrowers
by Lender on a revolving basis pursuant to the terms hereof (involving advances,
repayments and readvances) as set forth in Section 2.1 hereof.
1.56 "Management Agreement" shall mean the Management Consultant
Agreement, dated April 7, 1994, between Doe Run and Renco Group, as the same now
exists or may hereafter be amended, modified, supplemented, extended, renewed,
restated or replaced.
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1.57 "Material Adverse Effect" shall mean a material adverse effect on (a)
the condition (financial or otherwise), business, performance, operations or
properties of Borrowers (taken as a whole); (b) the legality, validity or
enforceability of this Agreement or any of the other Financing Agreements; (c)
the legality, validity, enforceability, perfection or priority of the security
interests and liens of Lender upon the Collateral or any other property which is
security for the Obligations; (d) the Collateral or any other property which is
security for the Obligations, or the value of the Collateral or such other
property; (e) the ability of each Borrower to repay the Obligations or of such
Borrower or any Obligor to perform its obligations under this Agreement or any
of the other Financing Agreements; or (f) the ability of Lender to enforce the
Obligations or realize upon the Collateral or otherwise with respect to the
rights and remedies of Lender under this Agreement or any of the other Financing
Agreements.
1.58 "Material Contract" shall mean any contract or other arrangements
(other than the Financing Agreements), whether written or oral, to which a
Borrower or its Subsidiaries is a party as to which the breach, nonperformance,
cancellation or failure to renew by any party thereto could be reasonably
expected to have a Material Adverse Effect.
1.59 "Maximum Credit" shall mean $100,000,000.
1.60 "Net Amount of Eligible Accounts" shall mean the gross amount of
Eligible Accounts less (a) sales, excise or similar taxes included in the amount
thereof and (b) rebates, discounts, claims, credits and allowances of any nature
at any time issued, owing, granted, outstanding or claimed with respect thereto.
1.61 "Obligations" shall mean any and all Loans, Letter of Credit
Accommodations and all other obligations, liabilities and indebtedness of every
kind, nature and description owing by either or both of Borrowers and/or any
Obligor to Lender and/or its affiliates, including principal, interest, charges,
fees, premiums, indemnities, costs and expenses, however evidenced, whether as
principal, surety, endorser, guarantor or otherwise, arising under or in
connection with this Agreement, any of the other Financing Agreements or by
operation of law in connection therewith, whether now existing or hereafter
arising, whether arising before, during or after the initial or any renewal term
of this Agreement, after the commencement of any case with respect to either or
both of Borrowers or any Obligor under the United States Bankruptcy Code or any
similar statute (including the payment of interest and other amounts which would
accrue and become due but for the commencement of such case, whether or not such
amounts are allowed or allowable in whole or in part in such case), whether
direct or indirect, absolute or contingent, joint or several, due or not due,
primary or secondary, liquidated or unliquidated or secured.
1.62 "Obligor" shall mean any guarantor, endorser, acceptor, surety, or
other person liable on or with respect to the Obligations or who is the owner of
any property which is security for the Obligations, other than Borrowers.
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1.63 "Participant" shall mean any financial institution that acquires a
participation in the interest of Lender in any of the Loans and Letter of Credit
Accommodations.
1.64 "Payment Account" shall have the meaning set forth in Section 8.1
hereof.
1.65 "Permits" shall have the meaning set forth in Section 5.5 hereof.
1.66 "Permitted Holders" shall mean Ira Leon Rennert, his wife and his
Affiliates, estate, heirs and legatees, and the legal representatives of any of
the foregoing, including, without limitation, the trustee of any trust of which
one or more of the foregoing are the sole beneficiaries
1.67 "Person" or "person" shall mean any individual, sole proprietorship,
partnership, corporation (including, without limitation, any corporation which
elects subchapter S status under the Code), limited liability company, limited
liability partnership, business trust, unincorporated association, joint stock
corporation, trust, joint venture or other entity or any government or any
agency or instrumentality or political subdivision thereof.
1.68 "Prime Rate" shall mean the rate from time to time publicly announced
by CoreStates Bank, N.A., or any successor, as its prime rate, whether or not
such announced rate is the best rate available at such bank, calculated on the
basis of a three hundred sixty (360) day year and actual days elapsed, which
rate shall increase or decrease by an amount equal to each increase or decrease
effective on the first day of the month after any change in such prime rate
based on the prime rate in effect on the last day of the month in which any such
change occurs.
1.69 "Provision for Taxes" shall mean an amount equal to all taxes imposed
on or measured by net income, whether federal, state or local, and whether
foreign or domestic, that are paid or payable by any Person and its Subsidiaries
in respect of such fiscal year on a consolidated basis in accordance with GAAP.
1.70 "Real Property" shall mean all now owned or hereafter acquired real
property of each Borrower, including leasehold interests, together with all
buildings, structures, fixtures and other improvements relating thereto, and all
metals and minerals which are in, under, upon, or to be produced from such real
property to the extent of the rights of such Borrower to the same (but only to
the extent such metals and minerals have not been extracted from the real
property), wherever located.
1.71 "Receivables" shall have the meaning set forth in Section 4.1 hereof.
1.72 "Records" shall mean all of each Borrower's present and future books
of account of every kind or nature, purchase and sale agreements, invoices,
ledger cards, bills of lading and other shipping evidence, statements,
correspondence, memoranda, credit files and other data relating to the other
Collateral or any account debtor, together with the tapes, disks, diskettes and
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other data and software storage media and devices, file cabinets or containers
in or on which the foregoing are stored (including any rights of such Borrower
with respect to the foregoing maintained with or by any other person).
1.73 "Renco Group" shall mean The Renco Group, Inc., a New York
corporation, and its successors and assigns.
1.74 "Senior Note Agreements" shall mean, individually and collectively,
each and all of the following (as the same now exist or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced): (a)
the Senior Notes, (b) the Senior Note Indenture, (c) the Purchase Agreement,
dated March 12, 1998, between the Initial Purchasers and Doe Run with respect to
the purchase from Doe Run of all of the Senior Notes, and (d) the Senior Note
Registration Agreement.
1.75 "Senior Note Indenture" shall mean the Indenture, dated of even date
herewith, between Doe Run and the Senior Note Trustee with respect to the Senior
Notes, as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
1.76 "Senior Note Registration Agreement" shall mean the Registration
Rights Agreement, dated as of March 12, 1998, between Doe Run and the Initial
Purchasers as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
1.77 "Senior Notes" shall mean, individually and collectively, the
Floating Rate Notes and the Fixed Rate Notes.
1.78 "Senior Note Trustee" shall mean State Street Bank and Trust Company,
and its successors and assigns, and any replacement or other trustee under the
Senior Note Indenture.
1.79 "Stores Inventory" shall mean Inventory consisting of cast iron
fittings, paint, belts and hoses, bolts and nuts, wire and wire products,
welding supplies, tools, steel, rope, timber, railroad spikes, railroad car
parts and railroad crane parts, baghouse parts, pump parts, compressor parts,
electrical parts, bearings, drills, bits and accessories and other parts and
supplies.
1.80 "Subsidiary" or "subsidiary" shall mean any corporation, association
or organization, active or inactive, as to which more than fifty (50%) percent
of the outstanding voting stock or shares or interests shall now or hereafter be
owned or controlled, directly or indirectly, by a Borrower, any subsidiary of a
Borrower, or any subsidiary of such subsidiary, provided, that, the term
"Subsidiary" as used elsewhere in this Agreement, as to Doe Run, shall not
include Doe Run Cayman and its Subsidiaries or DR Exploration Company
(Proprietary)
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Ltd. (South Africa), except (a) as otherwise expressly provided in any specific
section of this Agreement, (b) for purposes of Section 5.1(b) hereof, and (c)
for purposes of this definition.
1.81 "Tax Sharing Agreement" shall mean the Tax Sharing Agreement, dated
February 8, 1990, by and among Renco Group and its Subsidiaries (including Doe
Run Cayman and its Subsidiaries for this purpose), as amended on November 1,
1992, which became applicable to DRA and Doe Run on April 7, 1994 and as the
same now exists or may hereafter be further amended, modified, supplemented,
extended, renewed, restated or replaced, provided, that, such agreement shall
not be amended, modified, supplemented, extended, renewed, restated or replaced
without the prior approval of Lender other than for amendments that do not
relate to or affect a Borrower or its Subsidiaries.
1.82 "Tradename" shall have the meaning set forth in Section 6.1 hereof.
1.83 "U.S. Services Agreements" shall mean, collectively, the agreements
listed on Schedule 1.83 hereto between Doe Run and Doe Run Mining or between Doe
Run and Doe Run Peru, or Doe Run and Doe Run Cayman and any of its other
Subsidiaries providing for Doe Run to provide technical, managerial or other
services to Doe Run Cayman or any of its Subsidiaries, as the same now exist or
may hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.
1.84 "Value" or "value" shall mean, as determined by Lender, with respect
to the Inventory, the lower of (a) cost computed on a first-in-first-out basis
in accordance with GAAP or (b) market value, as determined by Lender.
1.85 "Weighted Average Life to Maturity" shall mean, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding principal amount of such Indebtedness into (b) the total of the
product obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment.
1.86 "Wholly-Owned Subsidiary" shall mean any Subsidiary or such person to
the extent all of the Capital Stock or other ownership interests in such
Subsidiary (other than (a) directors' qualifying shares, (b) with respect to Doe
Run Peru, any shares purchased by employees of Doe Run Peru or the seller of
assets to Doe Run Peru on October 23, 1997, which retained amount shall not
exceed one (1%) percent of the total interests in Doe Run Peru, and (c) an
immaterial interest owned by other persons solely to comply with applicable law)
is owned directly or indirectly by such person or a Wholly-Owned Subsidiary of
such person.
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1.87 Terms. All accounting terms used in this Agreement which are not
specifically defined herein shall be construed in accordance with GAAP
consistently applied, except as otherwise stated herein.
1.88 Other Defined Terms The words "hereof", "herein", "hereunder", "this
Agreement" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement, as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
1.89 Uniform Commercial Code Definitions. All terms used herein which are
not specifically defined herein which are defined or used in the Uniform
Commercial Code as in effect in the State of New York (the "UCC") shall have the
meanings as defined or used in the UCC.
1.90 Interpretation. For purposes of this Agreement, unless the context
otherwise requires, all other terms hereinbefore or hereinafter defined,
including but not limited to those terms defined in the recitals hereto, shall
have the meanings herein assigned to such terms. All references to each Borrower
and other Persons pursuant to the definitions set forth in the recitals hereto
or otherwise herein shall include their respective successors and assigns. All
references to any term in the plural shall include the singular and all
references to any term in the singular shall include the plural.
SECTION 2. CREDIT FACILITY
2.1 Loans
(a) Subject to and upon the terms and conditions contained herein,
at the request of a Borrower, Lender shall make Loans to Borrowers from time to
time in amounts requested by such Borrower, up to the lesser of: (i) the
Borrowing Base or (ii) Maximum Credit.
(b) Notwithstanding anything to the contrary contained herein or in
any of the other Financing Agreements, except in Lender's discretion, (i) the
aggregate unpaid principal amount of the Loans outstanding at any time based on
Eligible Inventory, regardless of the amounts of such Eligible Inventory, shall
not exceed $50,000,000, (ii) the aggregate unpaid principal amount of the Loans
outstanding at any time based on Eligible Stores Inventory, regardless of the
amounts of such Eligible Stores Inventory, shall not exceed $2,500,000, and
(iii) the aggregate unpaid principal amount of the Loans outstanding at any time
based on Eligible Accounts and Eligible Inventory of Fabricated Products,
regardless of the amount of such Eligible Accounts and Eligible Inventory, shall
not exceed $5,000,000.
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(c) Lender may, in its good faith discretion, from time to time,
upon not less than five (5) days prior notice to Doe Run, (i) reduce the Lending
Formula with respect to Eligible Accounts to the extent that Lender determines
that: (A) the dilution with respect to such Accounts for any period (based on
the ratio of (1) the aggregate amount of reductions in such Accounts other than
as a result of payments in cash to (2) the aggregate amount of total sales) has
increased in any respect or may be reasonably anticipated to increase in any
respect above historical levels, or (B) the general creditworthiness of Account
Debtors has declined or (ii) reduce any of the Lending Formulas with respect to
the Eligible Inventory to the extent that Lender determines that: (A) the number
of days of the turnover of such Inventory for any period has changed in any
material respect or (B) the liquidation value of such Eligible Inventory, or any
category thereof, has decreased, or (C) the nature, quality or mix of such
Inventory has deteriorated in any material respect. In determining whether to
reduce any of the Lending Formulas, Lender may consider events, conditions,
contingencies or risks which are also considered in determining Eligible
Accounts, Eligible Inventory or in establishing reserves as provided in Section
2.4. Borrowers may from time to time borrow, repay and reborrow Loans made to it
in accordance with the terms hereof.
2.2 Letter of Credit Accommodations
(a) Subject to and upon the terms and conditions contained herein,
at the request of a Borrower, Lender agrees to provide or arrange for Letter of
Credit Accommodations to be issued for the account of Borrowers containing terms
and conditions acceptable to Lender and the issuer thereof. Any payments made by
Lender to any issuer thereof and/or related parties in connection with the
Letter of Credit Accommodations shall constitute additional Loans pursuant to
this Section 2.
(b) In addition to any customary charges, fees or expenses charged
by any bank or issuer in connection with the Letter of Credit Accommodations,
Borrowers shall pay to Lender a letter of credit fee at a rate equal to one and
one-half (1 1/2%) percent per annum on the daily outstanding balance of the
Letter of Credit Accommodations for the immediately preceding month (or part
thereof), payable in arrears as of the first day of each succeeding month,
except that Lender may require Borrowers to pay to Lender such letter of credit
fee, without notice, at a rate equal to three and one-half (3 1/2%) percent per
annum on such daily outstanding balance for: (i) the period on and after the
date of termination or non-renewal hereof until such time as all Obligations are
indefeasibly paid in full (notwithstanding entry of a judgment against such
Borrower) and (ii) the period from and after the date of the occurrence of an
Event of Default for so long as such Event of Default is continuing, as
determined by Lender. Such letter of credit fee shall be calculated on the basis
of a three hundred sixty (360) day year and actual days elapsed and the
obligation of Borrowers to pay such fee shall survive the termination or
non-renewal of this Agreement. Borrowers shall not be required to pay such
letter of credit fee to Lender in respect of a Letter of Credit Accommodation
unless Lender has duly executed and delivered to
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the issuer of such Letter of Credit Accommodation the application or a guarantee
or indemnification in writing with respect to such Letter of Credit
Accommodation.
(c) No Letter of Credit Accommodations shall be available unless on
the date of the proposed issuance of such Letter of Credit Accommodations, the
Loans available to Borrowers (subject to the Borrowing Base, the Maximum Credit
and any reserves) are equal to or greater than one hundred (100%) percent of the
face amount thereof and all other commitments and obligations made or incurred
by Lender with respect thereto. Effective on the issuance of each Letter of
Credit Accommodation and for so long as such Letter of Credit Accommodation is
outstanding, the amount of Loans which might otherwise be available to Borrowers
shall be reduced by such amount.
(d) Except in Lender's discretion, the aggregate amount of all
outstanding Letter of Credit Accommodations and all other commitments and
obligations made or incurred by Lender in connection therewith shall not at any
time exceed $10,000,000. At any time an Event of Default exists or has occurred
and is continuing, the Lender may require each Borrower to either furnish cash
collateral to secure the reimbursement obligations to the issuer in connection
with any or all Letter of Credit Accommodations or furnish cash collateral to
Lender for the Letter of Credit Accommodations, and in either case, the Loans
otherwise available to Borrowers shall not be reduced as provided in Section
2.2(c) to the extent of such cash collateral.
(e) Each Borrower shall indemnify and hold Lender harmless from and
against any and all losses, claims, damages, liabilities, costs and expenses
which Lender may suffer or incur in connection with any Letter of Credit
Accommodations and any documents, drafts or acceptances relating thereto,
including, but not limited to, any losses, claims, damages, liabilities, costs
and expenses due to any action taken by any issuer or correspondent with respect
to any Letter of Credit Accommodation except resulting from the gross negligence
or wilful misconduct of Lender as determined pursuant to a final non-appealable
order of a court of competent jurisdiction. Each Borrower assumes all risks with
respect to the acts or omissions of the drawer under or beneficiary of any
Letter of Credit Accommodation and for such purposes the drawer or beneficiary
shall be deemed such Borrower's agent. Each Borrower assumes all risks for, and
agrees to pay, all foreign, Federal, State and local taxes, duties and levies
relating to any goods subject to any Letter of Credit Accommodations or any
documents, drafts or acceptances thereunder except resulting from the gross
negligence or wilful misconduct of Lender as determined pursuant to a final
non-appealable order of a court of competent jurisdiction. Each Borrower hereby
releases and holds Lender harmless from and against any acts, waivers, errors,
delays or omissions, whether caused by such Borrower, by any issuer or
correspondent or otherwise with respect to or relating to any Letter of Credit
Accommodation except resulting from the gross negligence or wilful misconduct of
Lender as determined pursuant to a final non-appealable order of a court of
competent jurisdiction. The provisions of this Section 2.2(e) shall survive the
payment of Obligations and the termination or non-renewal of this Agreement.
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(f) Nothing contained herein shall be deemed or construed to grant
Borrowers any right or authority to pledge the credit of Lender in any manner.
Lender shall have no liability of any kind with respect to any Letter of Credit
Accommodation provided by an issuer other than Lender, unless Lender has duly
executed and delivered to such issuer the application or a guarantee or
indemnification in writing with respect to such Letter of Credit Accommodation.
Borrowers shall be bound by any interpretation made in good faith by Lender, or
any other issuer or correspondent under or in connection with any Letter of
Credit Accommodation or any documents, drafts or acceptances thereunder,
notwithstanding that such interpretation may be inconsistent with any
instructions of Borrowers. At any time an Event of Default exists or has
occurred and is continuing, Lender shall have the sole and exclusive right and
authority to, and Borrowers shall not, (i) approve or resolve any questions of
non-compliance of documents, (ii) give any instructions as to acceptance or
rejection of any documents or goods or (iii) execute any and all applications
for steamship or airway guaranties, indemnities or delivery orders. Lender may
take such actions either in its own name or in a Borrower's name. At all times,
Borrowers shall not, without the prior written consent of Lender, grant any
extensions of the maturity of, time of payment for, or time of presentation of,
any drafts, acceptances, or documents or agree to any amendments, renewals,
extensions, modifications, changes or cancellations of any of the terms or
conditions of any of the applications, Letter of Credit Accommodations, or
documents, drafts or acceptances thereunder or any letters of credit included in
the Collateral.
(g) Any rights, remedies, duties or obligations granted or
undertaken by each Borrower to any issuer or correspondent in any application
for any Letter of Credit Accommodation, or any other agreement in favor of any
issuer or correspondent relating to any Letter of Credit Accommodation, shall be
deemed to have been granted or undertaken by such Borrower to Lender. Any
rights, remedies, duties or obligations undertaken by Lender to any issuer or
correspondent in any application for any Letter of Credit Accommodation, or any
other agreement by Lender in favor of any issuer or correspondent relating to
any Letter of Credit Accommodation, shall be deemed to have been granted or
undertaken by the Borrower requesting such Letter of Credit Accommodation to
Lender and to apply in all respects to such Borrower.
2.3. Maximum Credit. Except in Lender's discretion, the aggregate
amount of the Loans and the Letter of Credit Accommodations outstanding at any
time shall not exceed the Maximum Credit.
2.4. Reserves. Without limiting any other rights and remedies of
Lender hereunder or under the other Financing Agreements, all Loans otherwise
available to Borrowers shall be subject to Lender's continuing right in its
discretion, to establish a reserve reducing the amounts of Loans otherwise
available to Borrowers and to increase and decrease such reserve from time to
time, if and to the extent that, in Lender's judgment, such reserve is necessary
to protect Lender against possible non-payment for any reason by Account Debtors
or possible non-payment of any of the Obligations, or in respect of any state of
facts which does or would,
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with notice or passage of time or both, constitute an Event of Default hereunder
or for any other reason.
2.5 Mandatory Prepayments
(a) In the event that the outstanding amount of the Loans to
Borrowers exceed the Borrowing Base, or any component of the Loans exceed the
sublimits set forth in Section 2.1(b), or the aggregate amount of the
outstanding Letter of Credit Accommodations exceed the sublimit for Letter of
Credit Accommodations set forth in Section 2.2(d), or the aggregate amount of
the Loans and the Letter of Credit Accommodations outstanding at any time shall
exceed the Maximum Credit, such event shall not limit, waive or otherwise affect
any rights of Lender in that circumstance or on any future occasions and
Borrowers shall, upon demand by Lender, which may be made at any time or from
time to time, immediately repay to Lender, the entire amount of any such
excess(es) for which payment is demanded.
(b) Subject to Section 9.1(e) hereof, all such payments in respect
of the Loans pursuant to this Section 2.5 shall be without premium or penalty.
All interest accrued on the principal amount of the Loans paid pursuant to this
Section 2.5 shall be paid, or may be charged by Lender to the loan account(s) of
Borrowers, at Lender's option, on the date of such payment.
2.6 Interest.
(a) Interest on all of the Loans and other non-contingent
Obligations shall be payable by Borrowers to Lender at the Interest Rate.
(b) In no event shall the Interest Rate and other charges hereunder
exceed the highest rate permissible under any law which a court of competent
jurisdiction shall, in a final determination, deem applicable hereto. In the
event that a court determines that Lender has received interest and other
charges hereunder in excess of the highest rate applicable hereto, such excess
shall be deemed received on account of, and shall automatically be applied to
reduce, the Obligations other than interest in the inverse order of maturity,
and the provisions hereof shall be deemed amended to provide for the highest
permissible rate.
(c) Subject to the foregoing, all interest charges hereunder or in
connection herewith shall be (i) computed as provided herein and in the other
Financing Agreements and (ii) paid monthly to Lender on the first day of each
calendar month, or, at Lender's option, charged to a Borrower's account(s)
maintained by Lender as of the first day of each calendar month and deemed paid
by the first amounts subsequently credited thereto.
(d) Without limiting the continuing right of Lender to demand
payment of the Loans and other Obligations, or any portion thereof, in
accordance with the terms of this Agreement, or any of the other Financing
Agreements, all interest accruing hereunder on and
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after the date of any Event of Default or termination or non-renewal hereof,
shall be payable on demand.
2.7 Closing Fee. Borrowers shall pay to Lender a closing fee of $500,000,
which fee is fully earned and payable on the date hereof.
2.8 Servicing Fee. Borrowers shall pay monthly to Lender a servicing fee
in an amount equal to $10,000 for each month or part thereof during the term of
this Agreement and for so long thereafter as any of the Obligations are
outstanding, which fee shall be fully earned as of and payable in advance on the
first day of each month.
2.9 Unused Line Fee. Borrowers shall pay to Lender an unused line fee at a
rate equal to one-quarter (1/4%) percent per annum calculated upon the amount
(if any) by which (a) the Maximum Credit exceeds (b) the average aggregate daily
principal balance of the Loans and Letter of Credit Accommodations outstanding
during the immediately preceding month (or part thereof) while this Agreement is
in effect and for so long thereafter as any of the Obligations are outstanding,
which fee shall be payable on the first day of each month in arrears.
2.10 Authorization to Make Loans. Lender is authorized to make the Loans
and provide the Letter of Credit Accommodations based upon telephonic or other
instructions received from anyone purporting to be an officer of a Borrower or
other authorized person or, at the discretion of Lender, if such Loans are
necessary to satisfy any Obligations. All requests for Loans or Letter of Credit
Accommodations hereunder shall specify the date on which the requested Loan is
to be made or Letter of Credit Accommodation established (which day shall be a
Business Day) and the amount of the requested Loan and Letter of Credit
Accommodation. Requests received after 11:00 a.m. New York City time on any day
shall be deemed to have been made as of the opening of business on the
immediately following Business Day. All Loans and Letter of Credit
Accommodations under this Agreement shall be conclusively presumed to have been
made to, and at the request of and for the benefit of, Borrowers when deposited
to the credit of a Borrower or otherwise disbursed or established in accordance
with the instructions of a Borrower or in accordance with the terms and
conditions of this Agreement.
2.11 Use of Proceeds. All Loans made by Lender to or for the account of
Borrowers pursuant to this Agreement and the other Financing Agreements shall be
used by Borrowers for general operating and working capital purposes of
Borrowers and such other purposes as permitted by the terms hereof. In no event
shall any of the proceeds of the Loans be used to repay the existing
Indebtedness of Borrowers or any of their Affiliates to the Existing Lenders.
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2.12 Joint and Several Liability. Borrowers shall be liable for all
amounts due to Lender under this Agreement, regardless of which Borrower
actually receives the Loans or other extensions of credit hereunder or the
amount of such Loans received or the manner in which Lender accounts for such
Loans, Letter of Credit Accommodations or other extensions of credit on its
books and records. The Obligations with respect to Loans made to a Borrower, and
the Obligations arising as a result of the joint and several liability of a
Borrower hereunder, with respect to Loans made to the other Borrower hereunder,
shall be separate and distinct obligations, but all such other Obligations shall
be primary obligations of both Borrowers. The Obligations arising as a result of
the joint and several liability of a Borrower hereunder with respect to Loans,
Letter of Credit Accommodations or other extensions of credit made to the other
Borrower hereunder shall, to the fullest extent permitted by law, be
unconditional irrespective of (a) the validity or enforceability, avoidance or
subordination of the Obligations of the other Borrower or of any promissory note
or other document evidencing all or any part of the Obligations of the other
Borrower, (b) the absence of any attempt to collect the Obligations from the
other Borrower or any other security therefor, or the absence of any other
action to enforce the same, (c) the waiver, consent, extension, forbearance or
granting of any indulgence by Lender with respect to any provisions of any
instrument evidencing the Obligations of the other Borrower, or any part
thereof, or any other agreement now or hereafter executed by the other Borrower
and delivered to Lender, (d) the failure by Lender to take any steps to perfect
and maintain its security interest in, or to preserve its rights and maintain
its security or collateral for the Obligations of the other Borrower, (e) the
election of Lender in any proceeding instituted under the Bankruptcy Code, of
the application of Section 1111(b)(2) of the Bankruptcy Code, (f) any borrowings
or grant or a security interest by the other Borrower, as debtor-in-possession
under Section 364 of the Bankruptcy Code, (g) the disallowance of all or any
portion of the claim(s) of Lender for the repayment of the Obligations of the
other Borrower under Section 502 of the Bankruptcy Code, or (h) any other
circumstances which might constitute a legal or equitable discharge or defense
of a guarantor or of the other Borrower. With respect to the Obligations arising
as a result of the joint and several liability of a Borrower hereunder with
respect to Loans, Letter of Credit Accommodations or other extensions of credit
made to the other Borrower hereunder, each Borrower waives, until the
Obligations shall have been paid in full and this Agreement shall have been
terminated, any right to enforce any right of subrogation or any remedy which
Lender now has or may hereafter have against Borrowers, any endorser or any
guarantor of all or any part of the Obligations, and any benefit of, and any
right to participate in, any security or collateral given to Lender. Upon any
Event of Default, Lender may proceed directly and at once, without notice
(except as otherwise specifically provided for herein), against either Borrower
to collect and recover the full amount, or any portion of the Obligations,
without first proceeding against the other Borrower or any other Person, or
against any security or collateral for the Obligations. Each Borrower consents
and agrees that Lender shall be under no obligation to marshall any assets in
favor of Borrower(s) or against or in payment of any or all of the Obligations.
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SECTION 3. CONDITIONS PRECEDENT TO LOANS AND OTHER FINANCIAL ACCOMMODATIONS
3.1 Conditions Precedent to Initial Loans and Letter of Credit
Accommodations. Each of the following is a condition precedent to the initial
Loans and Letter of Credit Accommodations pursuant to this Agreement and the
other Financing Agreements which shall be satisfied in a manner acceptable to
Lender (any of which may be waived, in whole or in part, only by Lender in
writing):
(a) Lender shall have received, in form and substance satisfactory
to Lender, all releases, terminations and such other documents as Lender may
request to evidence and effectuate the termination and release by the Existing
Lenders of Borrowers and Obligors from obligations, liabilities and indebtedness
of each Borrower and Obligors to the Existing Lenders and the termination and
release by each of them of any interest in and to any assets and properties of
each Borrower and Obligors, duly authorized, executed and delivered by it,
including, but not limited to, (i) UCC termination statements for all UCC
financing statements previously filed by any of them, or on their behalf, as
secured party and each Borrower or Obligor, as debtor and (ii) satisfactions and
discharges of any mortgages, deeds of trust or deeds to secure debt by each
Borrower or Obligor in favor of any of the Existing Lenders, in form acceptable
for recording in the appropriate government office;
(b) Lender shall have received, in form and substance satisfactory
to Lender, a consolidated pro-forma balance sheet of Doe Run and its
Subsidiaries (including for this purpose, Doe Run Cayman and its Subsidiaries)
reflecting the initial transactions contemplated hereunder, including, but not
limited to, the transactions contemplated by the Senior Note Agreements,
accompanied by a certificate dated of even date herewith of the chief financial
officer or treasurer of Doe Run acceptable to Lender stating that such pro-forma
balance sheet represents the reasonable, good faith opinion of such officer as
to the subject matter thereof as of October 31, 1997;
(c) Lender shall have received, in form and substance satisfactory
to Lender, evidence that: (i) the Senior Notes, the other Senior Note Agreements
and all agreements, documents and instruments relating thereto have been duly
authorized, executed and delivered by the parties thereto in accordance with
their terms, (ii) Doe Run has received from or on behalf of the holders of the
Senior Notes cash or other immediately available funds in the aggregate amount
of approximately $248,000,000 constituting the proceeds after the underwriters'
commission from the issuance of the Senior Notes, (iii) Doe Run has received
$23,000,000 in cash or other immediately available funds in repayment of the
loan by Doe Run on October 23, 1997 to Doe Run Mining;
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(d) Lender shall have received, in form and substance satisfactory
to Lender, the Banco de Credito Deposit Agreement providing for, inter alia, the
deposit by Doe Run of $125,000,000 with such bank on the date hereof with a
portion of the proceeds from the issuance of the Senior Notes and the agreement
of such bank to pay to Doe Run amounts equal to the obligations of Borrower in
respect of a principal amount of the Fixed Rate Notes equal to $125,000,000,
duly authorized, executed and delivered by Doe Run and such bank;
(e) Lender shall have received, in form and substance satisfactory
to Lender, all other consents, waivers, acknowledgments, releases, terminations
and other agreements and documents from third persons which Lender may deem
necessary or desirable in order to permit, protect and perfect its security
interests in and liens upon the Collateral or to effectuate the provisions or
purposes of this Agreement and the other Financing Agreements;
(f) each Borrower shall have established a lockbox and the Blocked
Accounts for its collections and the transfer thereof to Lender, which shall be
in form and substance satisfactory to Lender, in accordance with Section 8.1
hereof;
(g) Lender shall have received true, correct and complete copies of
each of the following as duly executed by the parties thereto: (i) the Tax
Sharing Agreement, (ii) the Management Agreement, as amended on or about the
date hereof, (iii) all Material Contracts and (iv) the Banco de Credito
Agreements;
(h) Lender shall have received evidence of insurance and loss payee
endorsements required under this Agreement and under the other Financing
Agreements, in form and substance satisfactory to Lender, and certificates of
insurance policies and/or endorsements naming Lender as loss payee, all at
Borrowers' cost and expense;
(i) Lender shall have received evidence, in form and substance
satisfactory to Lender, that Lender has, or will have upon the filing of
appropriate UCC-1 financing statements, a valid perfected first priority
security interest in all of the Collateral;
(j) Lender shall have received and reviewed UCC search results for
all jurisdictions in which assets of Borrowers are located in the United States,
which search results shall be in form and substance satisfactory to Lender;
(k) the aggregate amount of the Excess Availability of Borrowers, as
determined by Lender, as of the date hereof, shall be not less than $35,000,000
after giving effect to the initial Loans made or to be made, and Letter of
Credit Accommodations issued or to be issued in connection with the initial
transactions hereunder;
(l) Lender shall have received, in form and substance satisfactory
to Lender, an opinion letter of counsel to Borrowers with respect to the Senior
Note Agreements, the
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transactions contemplated therein, the Financing Agreements and such other
matters as Lender or its counsel may request;
(m) this Agreement, the other Financing Agreements and all
instruments and documents hereunder and thereunder shall have been duly
authorized, executed and delivered to Lender, in form and substance satisfactory
to Lender.
3.2 Conditions Precedent to All Loans and Letter of Credit
Accommodations. Each of the following is an additional condition precedent to
the Loans and Letter of Credit Accommodations to Borrowers, including the
initial Loans and Letter of Credit Accommodations and any future Loans and
Letter of Credit Accommodations:
(a) all representations and warranties contained herein and in the
other Financing Agreements shall be true and correct in all respects with the
same effect as though such representations and warranties had been made on and
as of the date of the making of each such Loan or providing each such Letter of
Credit Accommodation and after giving effect thereto, except to the extent that
such representation and warranties expressly relate solely to an earlier date
(in which case such representations and warranties shall have been true and
accurate on and as of such earlier date);
(b) no law, regulation, order, judgment or decree of any
Governmental Authority shall, and Lender shall not have received any notice that
any action, suit, investigation, litigation or proceeding is pending or
threatened in any court or before any arbitrator or Governmental Authority which
(i) purports to enjoin, prohibit, restrain or otherwise affect (A) the making of
the Loans or (B) the consummation of the transactions contemplated pursuant to
the terms hereof of the Financing Agreements or (ii) has or could reasonably be
expected to have a Material Adverse Effect; and
(c) no Event of Default and no event or condition which, with notice
or passage of time or both, would constitute an Event of Default, shall exist or
have occurred and be continuing on and as of the date of the making of such Loan
or providing each such Letter of Credit Accommodation and after giving effect
thereto.
SECTION 4. COLLATERAL
As collateral security for the prompt performance, observance and payment
in full of all of the Obligations, each Borrower hereby grants, pledges and
assigns to Lender continuing security interests in and liens upon, and rights of
setoff against, all of the following now owned and hereafter acquired or
existing assets and properties of such Borrower (which assets and properties,
together with all other collateral security for the Obligations granted to or
otherwise held or acquired by Lender are referred to herein as the
"Collateral"):
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4.1 all now owned or hereafter acquired Accounts, together with all of the
following now owned or hereafter acquired assets and properties of such
Borrower, wherever located (collectively, the "Receivables"): (a) chattel paper,
documents, notes and other instruments which evidence or relate to any of the
Accounts or other property described in this Section 4 and including all
documents of title with respect to any Inventory or which evidence or relate to
indebtedness arising pursuant to Accounts or other property described in this
Section 4; (b) all monies, securities, investment property, credit balances and
other property and the proceeds thereof, now or hereafter held or received or
held by, or in transit to, Lender whether for safekeeping, pledge, custody,
transmission, collection or otherwise to the extent constituting proceeds of the
Accounts or other property described in this Section 4; (c) deposits (general or
special) and balances to the extent held in the Blocked Accounts, or any deposit
account (or other account) used in connection with the collection of Receivables
or other property described in this Section 4 or the remittance thereof to
Lender, or containing proceeds of Receivables or other property described in
this Section 4; (d) all present and future liens, security interests, rights,
remedies, title and interest in, to and in respect of Accounts or any of the
other property described in this Section 4, including, without limitation, (i)
rights and remedies under or relating to guaranties, contracts of suretyship,
letters of credit and credit and other insurance related to the Accounts or any
of the other property described in this Section 4, (ii) rights of stoppage in
transit, replevin, repossession, reclamation and other rights and remedies of an
unpaid vendor, lienor or secured party, (iii) rights to goods described in
invoices, documents, contracts or instruments with respect to, or otherwise
representing or evidencing Accounts or other property described in this Section
4, including, without limitation, returned, repossessed and reclaimed goods, and
(iv) deposits by, and property of, Account Debtors or other persons securing the
obligations of Account Debtors, provided, that, for purposes of this Section
4.1, the Collateral shall not include the U.S. Services Agreements listed on
Schedule 1.83 hereto or Accounts arising in the ordinary course of business
payable by Doe Run Mining or Doe Run Peru to Doe Run under the U.S. Services
Agreements listed on Schedule 1.83 hereof;
4.2 all Inventory;
4.3 all now owned or hereafter acquired contracts, contract rights,
licenses, customer lists and other general intangibles relating to the
Receivables and the Inventory, including, without limitation, (a) trademarks,
patents and other intellectual property to the extent affixed to, or to be
affixed to, any Inventory or other property described in this Section 4 for
purposes of selling the same, or otherwise necessary or reasonably desirable in
connection with the collection, sale or other disposition of the Receivables or
any of the other property described in this Section 4), (b) choses in action,
causes of action and other claims and rights relating to the Receivables and
Inventory, including, without limitation, those against Account Debtors, and
against shippers and carriers, (c) agreements or arrangements with sales agents,
distributors or the like and/or consignees, warehouses or other third persons in
possession of any Inventory, (d) the Blocked Accounts, or any deposit account
(or other account) used in connection with the collection of
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Receivables or other property described in this Section 4 or the remittance
thereof to Lender or containing proceeds of Receivables or other property
described in this Section 4, and (e) guaranty or warranty claims with respect to
Receivables or Inventory;
4.4 all monies, securities, investment property, credit balances and other
property and the proceeds thereof, now of herafter held or received or held by,
or in transit to, Lender, whether for safekeeping, pledge, custody,
transmission, collection or otherwise;
4.5 all Records; and
4.6 all products and proceeds of the foregoing, in any form, including,
without limitation, any insurance proceeds and any claims against third persons
for loss or damage to or destruction of any or all of the foregoing.
SECTION 5. REPRESENTATIONS AND WARRANTIESSECTION 5. REPRESENTATIONS AND
WARRANTIES
Each Borrower hereby jointly and severally represents and warrants to
Lender as follows, which representations and warranties are continuing and shall
survive the execution and delivery hereof, and the truth and accuracy of each,
together with the representations and warranties in the other Financing
Agreements, being a continuing condition of each Loan and Letter of Credit
Accommodations:
5.1 Organization and Qualification.
(a) Each Borrower and its Subsidiaries is a duly organized and
validly existing corporation in good standing under the laws of its state or
jurisdiction of incorporation, with perpetual corporate existence, and has the
corporate power and authority to own its properties and to transact the business
in which it is engaged or presently proposes to engage. Each Borrower and its
Subsidiaries has qualified to do business as a foreign corporation in the states
and other jurisdictions listed on Schedule 5.1(a) hereto, which constitute all
states or other jurisdictions where the nature of its business or the ownership
or use of property requires such qualification.
(b) Each Borrower does not have any Subsidiaries as of the date
hereof, except as set forth on Schedule 5.1(b) hereto.
5.2 Corporate Power and Authority. Each Borrower has the corporate power
and authority to borrow and to execute, deliver and carry out the terms and
provisions of this Agreement and the other Financing Agreements and all other
agreements, instruments and documents delivered by such Borrower and its
Subsidiaries pursuant hereto and thereto applicable to it, and each Borrower and
its Subsidiaries has taken or caused to be taken all
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necessary corporate action to authorize the execution, delivery and performance
of this Agreement, the other Financing Agreements and the other agreements
relating hereto or thereto to which it is a party, the present and future
borrowings by such Borrower hereunder and thereunder and the execution, delivery
and performance of the instruments and documents delivered and to be delivered
by it pursuant hereto and thereto. This Agreement and the other Financing
Agreements to which it is a party constitute and will constitute legal, valid
and binding obligations of each Borrower, enforceable in accordance with their
respective terms.
5.3 Issuance of Senior Notes; Disposition of Proceeds.
(a) The Senior Notes have been duly authorized, issued and delivered
by Doe Run and all agreements, documents and instruments related thereto,
including, but not limited to, the Senior Note Indenture, have been duly
authorized, executed and delivered and the transactions contemplated thereunder
performed in accordance with their terms by the respective parties thereto in
all respects, including the fulfillment (not merely the waiver) of all
conditions precedent set forth herein. All actions and proceedings required by
the Senior Note Agreements and the agreements, documents and instruments related
thereto, applicable law or regulation have been taken and the transactions
required thereunder have been duly and validly taken and consummated. Neither
the execution and delivery of the Senior Notes, any of the other Senior Note
Agreements or any of the instruments and documents to be delivered pursuant
thereto, nor the consummation of the transactions therein contemplated, nor
compliance with the provisions therein contemplated, has violated or will
violate any law or regulation or any order or decree of any court or other
Governmental Authority in any respect or does or will conflict with or result in
the breach of, or constitute a default in any respect under, any indenture,
mortgage, deed of trust, agreement or instrument to which each Borrower or its
Subsidiaries (including for this purpose, Doe Run Cayman and its Subsidiaries)
is a party or may be bound, or result in the creation or imposition of any lien,
charge or encumbrance upon any of the property of a Borrower (except as
specifically contemplated hereunder or under the other Financing Agreements) or
violate any provision of the Certificate of Incorporation or By-Laws of a
Borrower.
(b) No court of competent jurisdiction has issued any injunction,
restraining order or other order which prohibits consummation of the issuance of
the Senior Notes and the transactions described therein and no governmental or
other action or proceeding has been threatened or commenced, seeking any
injunction, restraining order or other order which seeks to void or otherwise
modify the issuance of the Senior Notes.
(c) Borrowers have delivered, or caused to be delivered, to Lender
true, correct and complete copies of the Senior Note Agreements. Set forth in
Schedule 5.3 hereto is a correct and complete list of the Senior Note Agreements
and all other agreements, documents and instruments existing as of the date
hereof by Borrowers and their Affiliates in connection therewith.
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(d) Doe Run has deposited with Banco de Credito $125,000,000 of the
proceeds from the issuance of the Senior Notes, and Banco de Credito has made a
loan to Doe Run Mining in the original principal amount of $125,000,000, the
proceeds of which have been used to repay all of the outstanding Indebtedness of
Doe Run Mining to Bankers Trust Company, Union Bank of Switzerland, New York
Branch and DLJ Capital Funding, Inc. (and any successors or assigns of any of
them) and to repay the Indebtedness of Doe Run Mining to Doe Run arising
pursuant to the $23,000,000 loan made by Doe Run to Doe Run Mining on or about
October 23, 1997. Pursuant to the terms of the Banco de Credito Deposit
Agreement, Banco de Credito has agreed to make payments to Doe Run in amounts
equal to the payments of interest on $125,000,000 of the Fixed Rate Notes at the
times that Doe Run is required to make payments of interest under the Fixed Rate
Notes. Doe Run has received on the date hereof not less than $23,000,000 in cash
or other immediately available funds in payment of the loan by Doe Run to Doe
Run Mining in such amount made by Doe Run to Doe Run Mining on or about October
23, 1997.
5.4 Capitalization.
(a) All of the issued and outstanding shares of Capital Stock of
Fabricated Products are directly and beneficially owned and held by Doe Run and
have been duly authorized and are fully paid and non-assessable, free and clear
of all claims, liens, pledges and encumbrances of any kind. All of the issued
and outstanding shares of Capital Stock of Doe Run are directly and beneficially
owned and held by DRA and have been duly authorized and are fully paid and
non-assessable, free and clear of all claims, liens, pledges and encumbrances of
any kind. All of the issued and outstanding shares of Capital Stock of DRA are
directly and beneficially owned and held by Renco Group and have been duly
authorized and are fully paid and non-assessable, free and clear of all claims,
liens, pledges and encumbrances of any kind.
(b) After the creation of the Obligations, the security interests of
Lender and the other transactions contemplated hereunder, each Borrower shall
continue to be able to pay its debts as they mature and has (and has reason to
believe it will continue to have) sufficient capital (and not unreasonably small
capital) to carry on its business and all businesses in which it is about to
engage. The assets and properties of each Borrower at a fair valuation and at
their present fair salable value are, and will be, greater than the Indebtedness
and other liabilities of such Borrower, and including subordinated and
contingent liabilities computed in the amount which, to the best of Borrowers'
knowledge, represents an amount which can reasonably be expected to become an
actual or matured liability. Each Borrower has sufficient capital to carry on
all businesses and transactions in which it now engages or proposes to engage
in, is solvent and will, in the reasonable, good faith determination of such
Borrower as of the date hereof, continue to be solvent after the creation of the
Obligations and the security interests in favor of Lender, and is able to pay
its debts as they mature.
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5.5 Compliance with Other Agreements and Applicable Law.
(a) Each Borrower and its Subsidiaries is not in default under, in
violation of or in contravention of, in any respect, any indenture, mortgage,
deed of trust, deed to secure debt, agreement or instrument to which it is a
party or by which it or any of its assets or properties may be or are bound, in
each case where such default, violation or contravention has or would have a
Material Adverse Effect.
(b) Neither the execution and delivery of this Agreement, the other
Financing Agreements, or any of the instruments and documents to be delivered
pursuant hereto or thereto, nor the consummation of the transactions herein or
therein contemplated, nor compliance with the provisions hereof or thereof, has
violated any law or regulation or any order or decree of any court or
Governmental Authority in any respect or does or will conflict with or result in
the breach of, or constitute a default in any respect under, any indenture,
mortgage, deed of trust, agreement or instrument to which such Borrower or any
of its Subsidiaries is a party or may be bound, which in any case has or would
have a Material Adverse Effect, or result in the creation or imposition of any
lien, charge or encumbrance upon any of the property of such Borrower or any of
its Subsidiaries (except as specifically contemplated hereunder or under the
other Financing Agreements) or violate any provision of the Certificate of
Incorporation or By-Laws of such Borrower or any of its Subsidiaries.
(c) Each Borrower has obtained all material permits, licenses,
approvals, consents, certificates, orders or authorizations of any Governmental
Authority required for the lawful conduct of its business and is in compliance
in all material respects with the requirements of all applicable laws, rules,
regulations and orders of any Governmental Authority (including, but not limited
to, Federal Mine Safety and Health Administration, Federal Office of Surface
Mining and Reclamation, and the Federal Environmental Protection Agency)
relating to its business (including, without limitation, those set forth in or
promulgated pursuant to ERISA, the Occupational Safety and Health Act of 1970,
as amended, the Surface Mining Control and Reclamation Act of 1977, the Mine
Safety and Health Act of 1977, the Fair Labor Standards Act of 1938, as amended,
the Code, and the Environmental Laws). Schedule 5.5 hereto sets forth all
material permits, licenses, approvals, consents, certificates, orders or
authorizations ("Permits") issued or held by each Borrower as of the date hereof
by any federal, state or local Governmental Authority. The Permits constitute
all permits, licenses, approvals, consents, certificates, orders or
authorizations necessary for each Borrower to own and operate its business as
presently conducted or proposed to be conducted where the failure to have such
Permits would have a Material Adverse Effect. Except as described on Schedule
5.5 hereto, all of the Permits are valid and subsisting and in full force and
effect and there are no actions, claims or proceedings pending or threatened
that seek the revocation, cancellation, suspension or modification of any of the
Permits.
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5.6 Governmental Approval. No consent, approval or other action of, or
filing with, or notice to any Governmental Authority is required in connection
with the execution, delivery and performance of this Agreement, the other
Financing Agreements or any of the instruments or documents to be delivered
pursuant hereto or thereto, except for the filing of UCC financing statements.
5.7 Chief Executive Office; Collateral Locations.
(a) The address of the principal place of business and chief
executive office of each Borrower is as set forth on Schedule 5.7 hereto, which
address is the mailing address for such principal place of business and chief
executive office. The books and records relating to the Accounts of each
Borrower are located at such address. The Collateral is located only at the
locations set forth on Schedule 5.7.
(b) Each Borrower may open any new location within the continental
United States provided it (i) gives Lender thirty (30) days prior written notice
of the intended opening of any such new location, except, that, such Borrower
may only give Lender written notice of any intended new location on the same day
it is established, provided, that, (A) no Event of Default, or act, condition or
event which with notice or passage of time or both would constitute an Event of
Default shall exist or have occurred, (B) the value of all of the Collateral
located at all of such new locations shall not exceed $2,500,000 as to Doe Run
or $100,000 as to Fabricated Products, and (C) within fifteen (15) days after
the date of any such notice from such Borrower, Lender shall have received all
agreements, documents and instruments pursuant to Section 5.7(b)(ii) below as
Lender may require, and (ii) executes and delivers, or causes to be executed and
delivered, to Lender such agreements, documents, and instruments consistent with
the other then existing Financing Agreements to the extent applicable or
otherwise as Lender may deem reasonably necessary or desirable to protect its
interests in the Collateral to be located in such location, including, without
limitation, UCC financing statements and agreements from appropriate Persons
acknowledging the liens of Lender on the Collateral to be located in such
location, waiving any lien or claim by such Person to the Collateral and
permitting Lender access to the premises to exercise its rights and remedies and
otherwise deal with the Collateral.
5.8 Priority of Liens/Title to Properties.
(a) The security interests and liens granted to Lender under this
Agreement and the other Financing Agreements constitute valid and perfected
liens and security interests in and upon the Collateral subject only to the
liens indicated on Schedule 5.8 hereto and the liens permitted under Section 6.4
hereof.
(b) Each Borrower and its Subsidiaries has good and marketable title
to all of its properties and assets subject to no liens, mortgages, pledges,
security interests, encumbrances or charges of any kind, except those directly
in favor of or assigned to Lender and such others as are
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specifically permitted under the provisions of this Agreement as listed on
Schedule 5.8 hereto or under Section 6.4 hereof and the other Financing
Agreements. Each Borrower and its Subsidiaries has peaceful and undisturbed
possession of all Real Property and Equipment and such other assets as may be
necessary for its business as presently conducted or proposed to be conducted
and under all leases, licenses and easements necessary for the operation of its
properties and business. None of such leases, licenses and easements contain any
unusual or burdensome provisions which might materially affect or impair the
operations of such properties and business and all such leases, licenses and
easements are valid and subsisting and in full force and effect.
5.9 Tax Returns. Except as set forth on Schedule 5.9, each Borrower and
its Subsidiaries has filed, or caused to be filed all Federal, State, county,
local, foreign and other tax returns, reports and declarations which are
required to be filed by it and as to which an extension has not been granted and
has paid or caused to be paid all taxes shown to be due and payable on said
returns and reports or in any assessment received by it, to the extent that such
taxes have become due and payable, except taxes the validity of which are being
contested in good faith by appropriate proceedings diligently pursued and
available to such Borrower or Subsidiary and with respect to which adequate
reserves have been set aside on its books. Adequate provision has been made for
the payment of all accrued and unpaid Federal, State, county, local, foreign and
other taxes whether or not yet due and payable and whether or not disputed.
5.10 Litigation. Except as set forth on Schedule 5.10 hereto, there is no
present investigation by any Governmental Authority pending or, to the best of
the knowledge of each Borrower, threatened against or affecting such Borrower or
its Subsidiaries or their respective properties or business and there is no
present action, suit, proceeding or claim by any Person pending or, to the best
of the knowledge of each Borrower, threatened against such Borrower or its
Subsidiaries or its or their assets or goodwill, or against or affecting any
transactions contemplated by this Agreement, the other Financing Agreements, or
other instruments, agreements or documents delivered in connection herewith or
therewith, which if adversely determined with respect to it, would have a
Material Adverse Effect.
5.11 Intellectual Property. Each Borrower and its Subsidiaries owns or
licenses all patents, trademarks, service-marks, logos, tradenames, trade
secrets, know-how, copyrights, or licenses and other rights with respect to any
of foregoing, which are necessary for the operation of its business as presently
conducted or proposed to be conducted. No trademark, service-mark, logo or
similar item at any time used by a Borrower or its Subsidiaries which is owned
by another person or owned by such Borrower or its Subsidiaries subject to any
security interest, lien, collateral assignment, pledge or other encumbrance in
favor of any person other than Lender is affixed to any Eligible Inventory. To
the best of the knowledge of each Borrower, no product, process, method,
substance, part or other material presently contemplated to be sold by or
employed by such Borrower infringes any patent, trademark, service-mark,
tradename, copyright, license or other right owned by any other Person and no
claim or litigation is pending or
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threatened against or affecting either Borrower contesting its right to sell or
use any such product, process, method, substance, part or other material.
5.12 Accounts. Each Eligible Account of a Borrower represents a valid and
legally enforceable indebtedness based upon an actual and bona fide sale and
delivery of goods or rendition of services in the ordinary course of the
business of such Borrower which has been finally accepted by the Account Debtor
and for which the Account Debtor is unconditionally liable to make payment of
the amount stated in each invoice, document or instrument evidencing the
Eligible Account in accordance with the terms thereof, without offset, defense
or counterclaim (except that for sales of By-Products by Doe Run, the amount of
the Account may be subject to adjustment based on the results of the assay (and
final prices and weights) with respect to the By-Products sold giving rise to
such Account). All statements made and all unpaid balances appearing in the
invoices, documents and instruments evidencing each Eligible Account are true
and correct and are in all respects what they purport to be and all signatures
and endorsements that appear thereon are genuine and all signatories and
endorsers have full capacity to contract and each Account Debtor is solvent and
financially able to pay in full the Eligible Account when it matures. None of
the transactions underlying or giving rise to any Account violates any Federal,
State or foreign laws or regulations, and all documents relating to the Accounts
are legally sufficient under such laws or regulations and shall be legally
enforceable in accordance with their terms and all recording, filing and other
requirements of giving public notice under any applicable law have been duly
complied with.
5.13 Employee Benefits.
(a) Each Borrower and its Subsidiaries has not engaged in any
transaction in connection with which such Borrower and its Subsidiaries or any
of its or their ERISA Affiliates, could be subject to either a civil penalty
assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section 4975 of
the Code.
(b) No liability to the Pension Benefit Guaranty Corporation (other
than liability for premiums in the ordinary course of the business of Borrowers)
has been or is expected by either Borrower to be incurred with respect to any
employee pension benefit plan of such Borrower, and its Subsidiaries or any of
its or their ERISA Affiliates. There has been no reportable event (within the
meaning of Section 4043(b) of ERISA) or any other event or condition with
respect to any employee pension benefit plan of either Borrower and its
Subsidiaries or any of its or their ERISA Affiliates which presents a risk of
termination of any such plan by the Pension Benefit Guaranty Corporation.
(c) Full payment has been made of all amounts which each Borrower
and its Subsidiaries or any of its or their ERISA Affiliates is required under
Section 302 of ERISA and Section 412 of the Code to have paid under the terms of
each employee pension benefit plan as contributions to such plan as of the last
day of the most recent fiscal year of such plan ended
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prior to the date hereof, except as set forth on Schedule 5.13 hereto, and no
accumulated funding deficiency (as defined in Section 302 of ERISA and Section
412 of the Code), whether or not waived, exists with respect to any employee
pension benefit plan.
(d) The current value of all vested accrued benefits under all
employee pension benefit plans maintained by each Borrower or its Subsidiaries
that are subject to Title IV of ERISA does not exceed the current value of the
assets of such plans allocable to such vested accrued benefits, except as set
forth on Schedule 5.13 hereto. The terms "current value" and "accrued benefit"
have the meanings specified in Section 4062(b)(1)(A) and Section 3 of ERISA,
respectively.
(e) Except as set forth on Schedule 5.13, neither Borrower and its
Subsidiaries nor any of its or their ERISA Affiliates is or has ever been
obligated to contribute to any "multiemployer plan" (as such term is defined in
Section 4001(a)(3) of ERISA) that is subject to Title IV of ERISA.
5.14 Environmental Compliance.
(a) Except as set forth on Schedule 5.14 hereto, neither Borrower
nor its Subsidiaries have generated, used, stored, treated, transported,
manufactured, handled, produced or disposed of any Hazardous Materials, on or
off its premises (whether or not owned by it) in any manner which at any time
violates any applicable Environmental Law or any license, permit, certificate,
approval or similar authorization thereunder in any material respect and the
operations of each Borrower and its Subsidiaries comply in all material respects
with all Environmental Laws and all licenses, permits, certificates, approvals
and similar authorizations thereunder.
(b) Except as set forth on Schedule 5.14 hereto, there has been no
investigation, proceeding, complaint, order, directive, claim, citation or
notice by any Governmental Authority or any other person nor is any pending or,
to the best of each Borrower's knowledge, threatened, with respect to any
non-compliance with or violation of the requirements of any Environmental Law by
such Borrower or any of its Subsidiaries in any material respect or the release,
spill or discharge, threatened or actual, of any Hazardous Material or the
generation, use, storage, treatment, transportation, manufacturer, handling,
production or disposal of any Hazardous Materials or any other environmental,
health or safety matter, which affects such Borrower or its Subsidiaries or
their businesses, operations or assets or any properties at which such Borrower
or its Subsidiaries transported, stored or disposed of any Hazardous Materials
in any material respect.
(c) Except as set forth on Schedule 5.14 hereto, neither Borrower
nor its Subsidiaries have any material liability (contingent or otherwise) in
connection with a release, spill or discharge, threatened or actual, of any
Hazardous Materials or the generation, use,
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storage, treatment, transportation, manufacture, handling, production or
disposal of any Hazardous Materials.
(d) Except as set forth on Schedule 5.14, each Borrower and its
Subsidiaries has all material licenses, certificates, approvals and other
Permits required to be obtained or filed in connection with the operations of
such Borrower and its Subsidiaries under any Environmental Law and all of such
licenses, permits, certificates, approvals and other Permits are valid and in
full force and effect.
5.15 Bank Accounts. All of the deposit accounts, investment accounts or
other accounts in the name of or used by each Borrower or its Subsidiaries
maintained at any bank or other financial institution are set forth on Schedule
5.15 hereto, subject to the right of each Borrower to establish new accounts in
accordance with Section 6.17 below.
5.16 Investment Company. Each Borrower and its Subsidiaries are not an
"investment company", or an "affiliated person" or "promoter" or "principal
underwriter", as such terms are defined in the Investment Company Act of 1940,
as amended. The making of the Loans by Lender, the application of the proceeds
and the repayment thereof by each Borrower and the performance of the
transactions contemplated herein will not violate any provision of the
Investment Company Act of 1940, as amended, or any rule, regulation or order
issued pursuant thereto.
5.17 Regulation G; Securities Exchange Act of 1934. Neither Borrower owns
any "margin security" as such term is defined in Regulation G, as amended (12
C.F.R. Part 207) of the Board. The proceeds of the borrowings made pursuant to
this Agreement and the other Financing Agreements will be used by each Borrower
only for the purposes contemplated hereunder. None of the proceeds will be used,
directly or indirectly, for the purpose of purchasing or carrying any margin
security or for the purpose of reducing or retiring any Indebtedness which was
originally incurred to purchase or carry any margin security or for any other
purpose which might cause any of the Loans to be considered a "purpose credit"
within the meaning of Regulation G of the Board, as amended. Neither Borrower
will take or permit any agent acting in its behalf to take, any action which
might cause this Agreement or the other Financing Agreements, or instruments
delivered pursuant hereto or thereto, to violate any regulation of the Board or
to violate the Securities Exchange Act of 1934 or any state or other securities
laws, in each case as in effect on the date hereof or as amended hereafter.
5.18 No Material Adverse Change5.18 No Material Adverse Change. There has
been no material adverse change in the business, assets, condition (financial or
otherwise) or results of operations of each Borrower and its Subsidiaries (taken
as a whole) since the date of the most recent financial statements with respect
thereto submitted to Lender or field examination with respect thereto conducted
by Lender.
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5.19 Financial Statements
(a) None of the financial statements, reports and other information
furnished or to be furnished by a Borrower to Lender with respect to such
Borrower and its Subsidiaries contain, as of their respective dates, any untrue
statement of material fact or (taken as a whole) omit to state any material fact
necessary to make the information therein not misleading. Such financial
statements and reports were and will be prepared in accordance with GAAP
consistently applied, and shall fairly present the consolidated and
consolidating financial condition and results of operations of the applicable
Persons, as of the dates and for the periods indicated thereon.
(b) The future cash flow projections for Doe Run and its
Subsidiaries (together with the summaries of assumptions and projected
assumptions, based on historical performance with respect thereto) furnished by
Doe Run to Lender taken as a whole represent the reasonable, good faith opinion
of such Borrower and its management as to the subject matter thereof.
5.20 Disclosure
(a) The information contained in the representations and warranties
of each Borrower set forth in this Agreement, the other Financing Agreements, or
in any other instrument, document, list, certificate, statement, schedule or
exhibit heretofore delivered or to be delivered to Lender, as contemplated in
this Agreement or in the other Financing Agreements, does not contain and will
not contain any untrue statement of a material fact and (taken as a whole) does
not omit and will not omit to state a material fact necessary in order to make
the information contained herein or therein not misleading.
(b) After giving effect to the transactions contemplated by this
Agreement, the other Financing Agreements, and the other instruments or
documents delivered in connection herewith and therewith, there does not exist
and there has not occurred any act, condition or event which constitutes an
Event of Default or which, with notice or passage of time or both would
constitute an Event of Default.
5.21 Labor Disputes.
(a) Set forth on Schedule 5.21 hereto is a list (including dates of
termination) of all collective bargaining or similar agreements between or
applicable to each Borrower or any of its Subsidiaries and any union, labor
organization or other bargaining agent in respect of the employees of such
Borrower and/or any of its Subsidiaries on the date hereof.
(b) Neither Borrower nor any of its Subsidiaries is engaged in any
unfair labor practice that is reasonably likely to have a Material Adverse
Effect. There is (i) no significant unfair labor practice complaint pending
against either Borrower or its Subsidiaries or, to the best
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of each Borrower's knowledge, threatened against either of them, before the
National Labor Relations Board, and no significant grievance or significant
arbitration proceeding arising out of or under any collective bargaining
agreement is pending on the date hereof against either Borrower or any of its
Subsidiaries or, to best of each Borrower's knowledge, threatened against any of
them, (ii) no significant strike, labor dispute, slowdown or stoppage is pending
against either Borrower or any of its Subsidiaries or, to the best of each
Borrower's knowledge, threatened against either Borrower or any of its
Subsidiaries, except (with respect to any matter specified in clause (i) and
(ii) above, either individually or in the aggregate) such as is not reasonably
likely to have a Material Adverse Effect.
5.22 Corporate Name; Prior Transactions. Each Borrower and its
Subsidiaries (including for this purpose Doe Run Cayman and its Subsidiaries)
have not, during the past five years, been known by or used any other corporate
or fictitious name or been a party to any merger or consolidation, or acquired
all or substantially all of the assets of any Person, or acquired any of its
property or assets out of the ordinary course of business, except as set forth
on Schedule 5.22 hereto.
5.23 Restrictions on Subsidiaries. Except for restrictions contained in
any agreement with respect to Indebtedness of either Borrower permitted
hereunder as in effect on the date hereof, there are no contractual or
consensual restrictions on such Borrower or any of its Wholly-Owned Subsidiaries
which prohibit or otherwise restrict (a) the transfer of cash or other assets
(i) between such Borrower and any of its Wholly-Owned Subsidiaries or (ii)
between any Subsidiaries of such Borrower or (b) the ability of such Borrower or
any of its Wholly-Owned Subsidiaries to grant security interests to Lender in
the Collateral.
5.24 Material Contracts. All of the Material Contracts of each Borrower
and its Subsidiaries are set forth on Schedule 5.24 hereto. Each Borrower has
delivered true, correct and complete copies of such Material Contracts to Lender
on or before the date hereof. Neither Borrower nor any of its Subsidiaries is in
breach of or in default under any Material Contract. There has been no breach of
or default under the U.S. Services Agreements.
SECTION 6. ADDITIONAL COVENANTS
In addition to the covenants set forth in the other Financing Agreements,
each Borrower hereby jointly and severally covenants to and agrees with Lender
that Borrowers shall comply with the following covenants, or cause the same to
be complied with, unless Lender shall otherwise consent in writing:
6.1 Tradenames. Some of a Borrower's invoices may from time to time be
rendered to customers under the tradenames listed on Schedule 5.22 hereto
(which, together with any new
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tradenames used after the date hereof are referred to collectively as the
"Tradenames" and individually, as a "Tradename"). As to the Tradenames used by
it, and the related Accounts:
(a) Each Tradename is a tradename (and not an independent
corporation or other legal entity) by which such Borrower may identify and sell
or lease certain of its goods or services and conduct a portion of its business.
(b) All Accounts and proceeds thereof (including any returned
merchandise) which arise from the sale or lease of goods or rendition of
services invoiced under the Tradename shall be owned solely by such Borrower and
shall be subject to the security interests of Lender and other terms of this
Agreement and the other Financing Agreements.
(c) All assignments or confirmatory schedules of Accounts delivered
to Lender by such Borrower, whether in the name of any of the Tradenames or of
such Borrower, shall be executed by such Borrower as owner of such assigned
Accounts, as the case may be.
(d) New Tradenames may be used by a Borrower, but only if (i) Lender
is given at least thirty (30) days prior written notice of the intended use of
any new Tradename and (ii) such supplemental financing statements or similar
instruments as Lender may request shall be executed and delivered to Lender by
such Borrower for filing or recording by Lender prior to the use of such new
Tradename.
6.2 Subsidiaries. Each Borrower shall not form or acquire any Subsidiaries
without the prior written consent of Lender. In the event Lender so consents,
promptly upon such formation or acquisition, (a) such Subsidiary shall be
subject to the terms of this Agreement and bound by the terms and conditions
hereof applicable to the Subsidiaries of a Borrower and (b) each Borrower shall
cause any such Subsidiary to execute and deliver to Lender, in form and
substance satisfactory to Lender and its counsel: (i) an absolute and
unconditional guarantee of payment of any and all present and future Obligations
of Borrowers to Lender containing terms substantially similar to those
guarantees entered into by each Borrower in favor of Lender as of the date
hereof, (ii) a security agreement granting to Lender a first lien (except as
otherwise consented to in writing by Lender) upon the same types and categories
of assets of such Subsidiary as those assets constituting the Collateral
containing terms substantially similar to this Agreement to the extent that
Lender deems appropriate and related Uniform Commercial Code Financing
Statements; provided, that, in the event Lender elects, at its option, not to
include any assets of such Subsidiary in the Borrowing Base or not to make loans
or provide other financial accommodations to or for the benefit of such
Subsidiary, such Subsidiary shall not be required to execute and deliver such a
security agreement, unless (A) the amount of the capital contributions or other
investments by a Borrower in, or loans by a Borrower to, or any other payments
by a Borrower in connection with the acquisition or formation of such
Subsidiary, shall at any time exceed $1,000,000 or (B) a Borrower (1) provides
credit support for, or guarantees any Indebtedness of, such Subsidiary or (2)
is, or agrees to be, directly or indirectly liable for any
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Indebtedness of such Subsidiary or Subsidiary of such Subsidiary or (C) any
default by such Subsidiary in respect of any Indebtedness of such Subsidiary
would permit (upon notice or passage of time or both) any holder of any
Indebtedness of a Borrower or any Obligor to declare a default on such
Indebtedness of such Borrower or Obligor or cause the payment of such
Indebtedness of a Borrower or any Obligor to be accelerated or payable prior to
its final scheduled maturity and (iii) such other agreements, documents and
instruments as Lender may require, including, but not limited to, supplements
and amendments hereto and other loan agreements or instruments evidencing
Indebtedness of such new Subsidiary to Lender.
6.3 Indebtedness. Each Borrower shall not, and shall not permit any
Subsidiary to, create, incur, assume or permit to exist, contingently or
otherwise, any Indebtedness, except:
(a) the Obligations;
(b) Capitalized Lease Obligations and other Indebtedness incurred in
the ordinary course of its business secured only by liens permitted under
Section 6.4(k) hereof;
(c) Indebtedness of Doe Run to the State Environmental Improvement
Authority of Missouri (the "Authority") pursuant to the Installment Sale
Agreement, dated as of December 15, 1973, between the Authority and Doe Run in
connection with the 5 3/4% Pollution Control Revenue Bonds, 1973 Series, due
December 15, 1998, issued by the Authority secured by certain pollution control
equipment located at the Real Property of Doe Run in Herculaneum, Missouri;
provided, that, (i) Doe Run may only make regularly scheduled payments of
principal and interest in respect of such Indebtedness in accordance with the
terms of the agreement or instrument evidencing or giving rise to such
Indebtedness as in effect on the date hereof (except as otherwise permitted
pursuant to Section 6.3(l) below), (ii) Doe Run shall not, directly or
indirectly, (A) amend, modify, alter or change the terms of such Indebtedness or
any agreement, document or instrument related thereto as in effect on the date
hereof, except, that, Doe Run may, after not less than ten (10) Business Days
prior written notice to Lender, amend, modify or change the terms thereof so as
to extend the maturity thereof or defer the timing of any payments in respect
thereof, or to forgive or cancel any portion of such Indebtedness (other than
pursuant to payments thereof), or to reduce the interest rate or any fees in
connection therewith, or to make any covenants contained therein less
restrictive or burdensome as to Doe Run or (B) redeem, retire, defease, purchase
or otherwise acquire such Indebtedness, or set aside or otherwise deposit or
invest any sums for such purpose (except as otherwise permitted pursuant to
Section 6.3(l) below), and (iii) Doe Run shall furnish to Lender all notices or
demands in connection with such Indebtedness either received by it or on its
behalf, promptly after the receipt thereof, or sent by it or on its behalf,
concurrently with the sending thereof, as the case may be;
(d) Indebtedness of Doe Run up to the principal amount of
$255,000,000 consisting of the principal amount of $200,000,000 evidenced by the
Fixed Rate Notes and $55,000,000 evidenced by the Floating Rate Notes, in each
case as reduced by payments of
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principal in respect thereof, plus interest thereon at the rate provided for in
the Senior Notes as in effect on the date hereof; provided, that: (i) Doe Run
shall only make regularly scheduled payments of principal and interest or other
mandatory payments in respect of such Indebtedness in accordance with the terms
of the Senior Notes as in effect on the date of the issuance thereof, except
that Doe Run may prepay, in whole or in part, the Senior Notes as in effect on
the date of the issuance thereof, so long as (A) Doe Run provides Lender with
two (2) Business Days' prior written notice of the intention of Borrower to make
any such prepayment, (B) as of the date of such prepayment and after giving
effect thereto, no Obligations (other than pursuant to Letter of Credit
Accommodations and the costs, expenses and other charges relating thereto) shall
be then outstanding, (C) after giving effect to such prepayment, there shall be
Excess Availability of not less than $10,000,000, and (D) no Event of Default,
exists or has occurred and is continuing, (ii) Doe Run shall not, directly or
indirectly, (A) amend, modify, alter or change the terms of the Senior Note
Agreements or any agreements, documents or instruments executed and/or delivered
in connection therewith as in effect on the original date of the execution and
delivery thereof or (B) redeem, retire, defease, purchase or otherwise deposit
or invest any sums for such purpose, except for (1) prepayments permitted under
Section 6.3(d)(i) above, (2) mandatory repurchases of Senior Notes required in
accordance with the terms of the Senior Note Indebtedness (as in effect on the
date hereof) in connection with (aa) the sales of certain assets of Doe Run and
its Subsidiaries (other than the Collateral) and (bb) changes in control of Doe
Run and (3) the exchange of the Senior Notes consisting of the Series A Fixed
Rate Notes and the Series A Floating Rate Notes for the Series B Fixed Rate
Notes and the Series B Floating Rate Notes, respectively, (iii) Doe Run shall
furnish to Lender copies of all notices, demands or other materials either
received from the Senior Note Trustee or any of the holders of the Senior Notes,
or on its or their behalf, promptly after receipt thereof, or sent by Doe Run or
any of its Affiliates, or on its or their behalf, to the Senior Note Trustee or
any other representative of the holders of the Senior Notes, concurrently with
the sending thereof, as the case may be, and (iv) such Indebtedness is and shall
at all times be unsecured;
(e) Indebtedness of each Borrower or any of its Wholly-Owned
Subsidiaries evidenced by performance bonds, surety bonds or similar guarantees
incurred in the ordinary course of business for purposes of insuring the
performance of such Borrower or Wholly-Owned Subsidiary in an aggregate
principal amount not to exceed at any time outstanding $10,000,000; provided,
that, in the event that the issuer of any such performance bonds, surety bonds
or guarantees has any security interest in, or any other claim or right to any
of the Collateral (whether contingent upon a default by such Borrower or
Subsidiary and/or pursuant to rights of subrogation or otherwise) Lender may, at
its option, either (i) establish a reserve pursuant to Section 2.4 hereof in an
amount equal to the liability of such Borrower or Subsidiary to such issuer as
determined by Lender or (ii) determine that the Receivables and Inventory
related to the bonds or guarantees shall not be Eligible Accounts or Eligible
Inventory;
(f) contingent Indebtedness permitted under Section 6.5 hereof;
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(g) Indebtedness of Doe Run in respect of (i) Interest Rate
Protection Obligations incurred in the ordinary course of business so long as
the same has been approved by Lender and (ii) Hedging Agreements incurred in the
ordinary course of business; provided, that, at no time shall the aggregate
maximum exposure (marked to market) pursuant to such Interest Rate Protection
Obligations and Hedging Agreements exceed $20,000,000;
(h) unsecured Indebtedness of each Borrower to any Subsidiaries
(including for this purpose Doe Run Cayman and its Subsidiaries) arising after
the date hereof pursuant to loans by such Subsidiaries to Borrower, provided,
that, (i) such Indebtedness is subject to, and subordinate in right of payment
to, the right of Lender to receive the prior indefeasible payment and
satisfaction in full of all of the Obligations on terms and conditions
acceptable to Lender (provided that payments shall be permitted in respect of
such Indebtedness to the extent provided in Section 6.3(h)(iii) below), (ii)
Lender shall have received, in form and substance satisfactory to Lender, a
subordination agreement providing for the terms of the subordination in right of
payment of such Indebtedness of such Borrower to the prior indefeasible payment
and satisfaction in full of all of the Obligations, duly authorized, executed
and delivered by such Subsidiaries and such Borrower, (iii) Borrowers shall not,
directly or indirectly make, or be required to make, any payments in respect of
such Indebtedness so long as any of the Obligations are outstanding and unpaid
and this Agreement has not been terminated, except that a Borrower may make
regularly scheduled payments in respect of such Indebtedness in accordance with
the terms of such Indebtedness, to the extent each of the following conditions
is satisfied as determined by Lender: (A) as of the date of any such payment and
after giving effect thereto, no Event of Default, or act, condition or event
which with notice or passage of time or both would constitute an Event of
Default, shall exist or have occurred, (B) as of the date of any such payment
and after giving effect thereto, the daily average of the Excess Availability
for the immediately preceding thirty (30) consecutive day period shall not be
less than $10,000,000, and as of the date of such payment and after giving
effect thereto, Excess Availability shall be not less than $10,000,000, and (C)
Lender shall receive two (2) Business Days prior notice of any such payment,
(iv) Borrowers shall not, directly or indirectly, (A) amend, modify, alter or
change any terms of such Indebtedness or any agreement, document or instrument
related thereto, or (B) redeem, retire, defease, purchase or otherwise acquire
such Indebtedness, or set aside or otherwise deposit or invest any sums for such
purpose, and (v) Borrowers shall furnish to Lender all notices, demands or other
materials in connection with such Indebtedness either received by either
Borrower or on its behalf, promptly after receipt thereof, or sent by either
Borrower or on its behalf, concurrently with the sending thereof, as the case
may be;
(i) unsecured Indebtedness of Subsidiaries of each Borrower to such
Borrower arising after the date hereof pursuant to loans by such Borrower to
such Subsidiaries to the extent such loans by such Borrower are permitted under
Section 6.5 below, provided, that, such Indebtedness shall not be evidenced by
any promissory note or other instrument, unless the original of such note or
other instrument is pledged and delivered to Lender (with such endorsement
thereof as Lender may require);
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(j) Indebtedness of each Borrower existing on the date hereof which
is described on Schedule 6.3 hereto; provided, that: (i) Borrower may only make
regularly scheduled payments of principal and interest as set forth on Schedule
6.3, (ii) Borrowers shall not, directly or indirectly, (A) make any prepayments
or other non-mandatory payments in respect of such Indebtedness (except as
otherwise permitted pursuant to Section 6.3(l) below), or (B) amend, modify,
alter or change the terms of the agreements with respect to such payments or
otherwise, except, that, Borrowers may, after prior written notice to Lender,
amend, modify, alter or change the terms thereof so as to extend the maturity
thereof or defer the timing of any payments in respect thereof, or to forgive or
cancel any portion of such Indebtedness (other than pursuant to payments
thereof), or to reduce the interest rate or any fees in connection therewith, or
to make any covenants contained therein less restrictive or burdensome as to
such Borrower, or (C) redeem, retire, defease, purchase or otherwise acquire
such Indebtedness, or set aside or otherwise deposit or invest any sums for such
purpose (except as otherwise permitted pursuant to Section 6.3(l) below), and
(iii) Borrowers shall furnish to Lender all notices, demands or other materials
in connection with such Indebtedness either received by either Borrower or on
its behalf, promptly after the receipt thereof or sent by either Borrower or on
its behalf concurrently with the sending thereof, as the case may be;
(k) Indebtedness of each Borrower or any of its Subsidiaries,
arising after the date hereof, other than Indebtedness otherwise permitted under
this Section 6.3, provided, that, as to each and all of such Indebtedness: (i)
Lender shall have not received less than ten (10) Business Days prior written
notice of the intention to incur such Indebtedness, which notice shall set forth
in reasonable detail satisfactory to Lender, the amount of such Indebtedness,
whether such Borrower or a Subsidiary of such Borrower is incurring the
Indebtedness, the person to whom such Indebtedness will be owed, the interest
rate, the schedule of repayments and maturity date with respect thereto and such
other information with respect thereto as Lender may request, (ii) Lender shall
have received true, correct and complete copies of all agreements, documents and
instruments evidencing or otherwise related to such Indebtedness, as duly
authorized, executed and delivered by the parties thereto, (iii) such
Indebtedness shall be incurred by such Borrower or Subsidiary at commercially
reasonable rates and terms in an arm's length transaction, (iv) such
Indebtedness shall not at any time include terms and conditions which in any
manner adversely affect Lender or any rights of Lender as determined in good
faith by Lender and confirmed by Lender to such Borrower or Subsidiary in
writing or which are more restrictive or burdensome than the terms or conditions
of any other Indebtedness of such Borrower or Subsidiary as in effect on the
date hereof, (v) as of the date of incurring such Indebtedness and after giving
effect thereto, no Event of Default or act, condition or event which with notice
or passage of time or both would constitute an Event of Default shall exist or
have occurred and be continuing, (vi) in no event shall the aggregate principal
amount of such Indebtedness at any time outstanding exceed $5,000,000, (vii)
such Borrower or Subsidiary may only make regularly scheduled payments of
principal and interest in respect of such Indebtedness (except as otherwise
permitted pursuant to Section 6.3(l) below), (viii) such Borrower or Subsidiary
shall not, directly or
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indirectly, (A) amend, modify, alter or change the terms of the agreements with
respect to such Indebtedness or (B) redeem, retire, defease, purchase or
otherwise acquire such Indebtedness, or set aside or otherwise deposit or invest
any sums for such purpose (except as otherwise permitted pursuant to Section
6.3(l) below), and (ix) such Borrower or Subsidiary shall furnish to Lender all
notices or demands in connection with such Indebtedness either received by such
Borrower or Subsidiary or on its behalf promptly after the receipt thereof, or
sent by such Borrower or Subsidiary or on its behalf, concurrently with the
sending thereof, as the case may be;
(l) Indebtedness issued in exchange for, or the proceeds of which
are used to extend, refinance, replace, substitute or refund Indebtedness
referred to in Sections 6.3(b), 6.3(c), 6.3(e), 6.3(g), 6.3(j) and 6.3(k) hereof
prior to the final maturity thereof (the "Refinancing Indebtedness"); provided,
that, (i) the principal amount of such Refinancing Indebtedness shall not exceed
the principal amount of the Indebtedness so extended, refinanced, replaced,
substituted or refunded (plus the amount of reasonable refinancing fees and
expenses incurred in connection therewith), (ii) the Refinancing Indebtedness
shall have a Weighted Average Life to Maturity and a final maturity equal to or
greater than the Weighted Average Life to Maturity and the final maturity,
respectively, of the Indebtedness being extended, refinanced, replaced,
substituted or refunded, (iii) the Refinancing Indebtedness shall rank in the
right of payment no more senior than, and be at least as subordinated (if
subordinated) to, the Obligations as the Indebtedness being extended,
refinanced, replaced, substituted or refunded, (iv) if the Indebtedness so
extended, refinanced, replaced, substituted or replaced is secured, the
Refinancing Indebtedness may be secured by the same assets that secure the
Indebtedness so extended, refinanced, replaced, substituted or replaced,
provided, that, such security interest with respect to the Refinancing
Indebtedness shall have a priority no more senior than, and be at least as
subordinated (on terms and conditions acceptable to Lender) as the security
interest with respect to the Indebtedness so extended, refinanced, replaced,
substituted or refunded, and (v) the Refinancing Indebtedness shall not include
terms and conditions with respect to a Borrower which are more burdensome or
restrictive than those included in the Indebtedness so extended, refinanced,
replaced, substituted or refunded, (vi) Lender shall have received not less than
ten (10) Business Days prior written notice of the intention to incur such
Indebtedness, which notice shall set forth in reasonable detail satisfactory to
Lender, the amount of such Indebtedness, the person to whom such Indebtedness
will be owed, the interest rate, the schedule of repayments and maturity date
with respect thereto and such other information with respect thereto as Lender
may request, (vii) promptly upon Lender's request, Lender shall have received
true, correct and complete copies of all agreements, documents and instruments
evidencing or otherwise related to such Indebtedness, as duly authorized,
executed and delivered by the parties thereto, (viii) such Indebtedness incurred
by a Borrower or any Subsidiary of such Borrower shall be at rates and with fees
or other charges no higher or greater than the Indebtedness so extended,
refinanced, replaced, substituted or refunded, (ix) as of the date of incurring
such Indebtedness and after giving effect thereto, no Event of Default, or act,
condition or event which with notice or passage of time or both would constitute
an Event of Default, shall exist or have occurred and be continuing, (x) such
Borrower or Subsidiary may only make regularly scheduled payments of
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principal and interest in respect of such Indebtedness (except as otherwise
permitted pursuant to this Section 6.3(l)), (xi) such Borrower or Subsidiary
shall not, directly or indirectly, (A) amend, modify, alter or change the terms
of the agreements with respect to such Indebtedness, except, that, such Borrower
may, after prior written notice to Lender, amend, modify, alter or change the
terms thereof so as to extend the maturity thereof or defer the timing of any
payments in respect thereof, or to forgive or cancel any portion of such
Indebtedness (other than pursuant to payments thereof), or to reduce the
interest rate or any fees in connection therewith, or to make any covenants
contained therein less restrictive or burdensome as to such Borrower or
Subsidiary, and (B) redeem, retire, defease, purchase or otherwise acquire such
Indebtedness, or set aside or otherwise deposit or invest any sums for such
purpose (except as otherwise permitted pursuant to this Section 6.3(l)), and
(xii) such Borrower shall furnish to Lender all notices, demands or other
materials concerning such Indebtedness either received by such Borrower or on
its behalf, promptly after the receipt thereto, or sent by such Borrower on its
behalf, concurrently with the sending thereof, as the case may be.
6.4 Limitation on Liens. Each Borrower shall not, and shall not permit any
Subsidiary to, create or suffer to exist any mortgage, pledge, security
interest, lien, encumbrance, defect in title or restriction upon the use, any of
its assets or properties, whether now owned or hereafter acquired, except:
(a) the security interests in and liens upon the Collateral in favor
of Lender;
(b) mechanics, materialmen, warehousemen and other like statutory
liens arising in the ordinary course of such Borrower's or any of its
Subsidiaries' respective businesses to the extent (i) such liens secure
Indebtedness which is not overdue or (ii) until foreclosure or similar
proceedings shall have been commenced, such liens secure Indebtedness relating
to claims or liabilities which are (A) fully insured and being defended at the
sole cost and expense and the sole risk of the insurer or (B) being contested in
good faith by appropriate proceedings diligently pursued and available to such
Borrower or its Subsidiaries which proceedings have the effect of preventing the
forfeiture or sale of the property or asset subject to such lien and are
adequately escrowed for or reserved against in the judgment of Lender;
(c) liens for taxes not yet due and payable or liens for taxes being
contested in good faith and by appropriate proceedings for which adequate
reserves have been established in accordance with GAAP;
(d) liens (other than any lien imposed by ERISA) incurred on assets
or property other than the Collateral, or deposits of cash made, in each case in
the ordinary course of business, (i) in connection with liability insurance,
workers' compensation, unemployment insurance and other types of social
security, or (ii) to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, contracts, performance and
return-of-money
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bonds and other similar obligations incurred in the ordinary course of business,
in an aggregate amount (in the case of this clause (d)(ii)) not to exceed
$10,000,000 at any time outstanding);
(e) leases or subleases granted to third Persons not interfering
with the ordinary course of business of a Borrower or any of its Subsidiaries;
(f) any attachment or judgment lien arising from a judgment not
giving rise to an Event of Default, or an act, condition or event which with
notice or passage of time or both would constitute an Event of Default so long
as such lien, if encumbering Collateral, has not attached to such Collateral for
more than forty-five (45) days and so long as no enforcement action has
commenced with respect to such Collateral;
(g) easements, rights-of-way, restrictions, encroachments, licenses,
zoning restrictions, and other similar charges or encumbrances, in each case not
interfering in any material respect with the business of a Borrower and its
Subsidiaries;
(h) non-consensual liens which may arise or be created under ERISA
and under Environmental Laws that are being contested in good faith and as to
which adequate reserves have been established to the extent required by GAAP;
provided that, the amount of all of the liabilities secured by all such liens do
not in the aggregate exceed $2,000,000;
(i) liens arising from (i) operating leases and the precautionary
UCC financing statement filings in respect thereof and (ii) equipment borrowed
(but not in connection with, or as part of, the financing thereof) from time to
time in the ordinary course of business and consistent with past practices and
the precautionary UCC financing statement filings in respect thereof;
(j) the security interests in and liens upon the Equipment
consisting of certain pollution control facilities as described in the
Installment Sale Agreement, dated as of December 15, 1973, between the Authority
and Doe Run (as in effect on the date hereof) to secure the Indebtedness of Doe
Run to the Authority permitted under Section 6.3 hereof, which security
interests and liens are, in all respects, senior and prior to the security
interests and liens of Lender in such Equipment;
(k) purchase money mortgages or other purchase money liens or
security interests upon any specific fixed assets hereafter acquired or liens or
security interests existing on any such future fixed assets at the time of
acquisition thereof and including in any event any leases with respect to
Capitalized Lease Obligations; provided, that: (i) no such purchase money lien
or security interest (or lease with respect to Capitalized Lease Obligations, as
the case may be) covering specific future fixed assets or as refinanced shall
extend to or cover any other property other than the specific fixed assets so
acquired, or acquired subject to such lien or security interest (or lease) and
the proceeds thereof, (ii) such lien or security interest only secures the
obligation to pay the purchase price of such specific fixed assets (or the
Capitalized Lease
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Obligations, as the case may be), (iii) the principal amount secured thereby
shall not exceed one hundred (100%) percent of the cost of the fixed assets so
acquired (or leased); and (iv) as of the date of the granting of such mortgage,
lien or security interest and after giving effect thereto, no Event of Default,
or act, condition or event which with notice or passage of time or both would
constitute an Event of Default, shall exist or have occurred and be continuing;
(l) liens on the cash collateral of Doe Run pledged by Doe Run to
Banco de Credito pursuant to the Banco de Credito Deposit Agreement as in effect
on the date hereof in the amount of $125,000,000 from a portion of the proceeds
of the issuance of the Senior Notes, to secure the Indebtedness of Doe Run
Mining to Banco de Credito arising pursuant to the Banco de Credito Agreements
(as in effect on the date hereof), provided, that, (i) Lender shall have
received true, correct and complete copies of the Banco de Credito Agreements
and such other agreements and information with respect thereto as Lender may
request, (ii) in no event shall the total liability of Doe Run for such
Indebtedness of Doe Run Mining to Banco de Credito at any time exceed
$125,000,000, as reduced by any payments of principal in respect of such
Indebtedness, (iii) Doe Run and Doe Run Mining shall not, directly nor
indirectly, amend, modify, alter or change the terms of the Banco de Credito
Deposit Agreement or the Banco de Credito Agreements (except to cancel the
obligations of Doe Run), (iv) the liability of Doe Run in respect of such
Indebtedness of Doe Run Mining to Banco de Credito shall be limited to the cash
collateral pledged by Doe Run to Banco de Credito pursuant to the Banco de
Credito Deposit Agreement and Doe Run shall not have any other or additional
liability to Banco de Credito in connection therewith, and (v) Doe Run shall
furnish to Lender all notices, demands or other materials in connection with the
Banco de Credito Deposit Agreement or the Banco de Credito Agreements either
received by Doe Run or Doe Run Mining, or on its or their behalf, promptly after
the receipt thereof, or sent by Doe Run or Doe Run Mining, or on its or their
behalf, concurrently with the sending thereof, as the case may be;
(m) the liens, encumbrances or security interests listed on Schedule
5.8 hereto, provided, that, such liens, encumbrances or security interests (i)
do not interfere with the use of the property or the ordinary conduct of the
businesses of each Borrower or its Subsidiaries as presently conducted or
proposed to be conducted thereon and (ii) do not impair the value of the
affected property; and
(n) liens on assets of each Borrower or its Subsidiaries (other than
Collateral) not otherwise permitted above, that secure obligations otherwise
permitted hereunder not in excess of $1,000,000 in the aggregate.
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6.5 Loans, Investments, Guarantees, Etc. Each Borrower shall not, and
shall not permit any Subsidiary to, directly or indirectly, make any loans or
advance money or property to any Person, or invest in (by capital contribution,
dividend or otherwise) or purchase or own a futures contract or otherwise become
liable for the purchase and sale of any currency, commodities or raw materials
at a future date in the nature of a futures contract (which for this purpose
shall not include the customary agreements entered into by Doe Run with its
customers for the sale of Inventory in the ordinary course of business
consistent with its current practices as of the date hereof), purchase or
repurchase the Capital Stock or Indebtedness or all or a substantial part of the
assets or property of any Person, or guarantee, assume, endorse, or otherwise
become responsible for (directly or indirectly) the Indebtedness, performance,
obligations or dividends of any Person, or hold any cash or Cash Equivalents, or
agree or commit to do any of the foregoing, except:
(a) the endorsement of instruments for collection or deposit in the
ordinary course of business;
(b) investments in cash or Cash Equivalents so long as no Loans are
outstanding, which shall be pledged and delivered to Lender upon Lender's
request;
(c) capital contributions or other investments by each Borrower in,
or loans by each Borrower to, or any other payments by such Borrower in
connection with the acquisition or formation of, its Wholly-Owned Subsidiaries,
provided, that, (i) as of the date of such capital contribution or other
investments, loans or payments, as the case may be, and after giving effect
thereto, no Event of Default, or act, condition or event which with notice or
passage of time or both would constitute an Event of Default shall exist or have
occurred, (ii) in no event shall the total amount of any capital contributions,
investments, loans or other payments by Borrowers to or in connection with any
such Subsidiaries outstanding at any time exceed $1,000,000 in the aggregate
with respect to all of such Subsidiaries which have not executed and delivered a
security agreement to Lender as described in Section 6.2(b)(ii) or $5,000,000 in
the aggregate with respect to all such Subsidiaries (including both Subsidiaries
which have executed and delivered a security agreement to Lender as described in
Section 6.2(b)(ii) and Subsidiaries which have not executed and delivered a
security agreement to Lender as described in Section 6.2(b)(ii)), in each case
calculated without giving effect to any write-ups, write-downs or write-offs
thereof, but net of dividends or other distributions received by Borrowers from,
or any repayment of any loans or advances made by, the respective Wholly-Owned
Subsidiary after the making of such capital contribution, investment or loan),
(iii) the proceeds of accounts receivable and sales of inventory and goods of
such Subsidiary shall be paid to the Blocked Accounts, and (iv) to the extent
required under Section 6.2 hereof, such Subsidiary has executed and delivered to
Lender such agreements, documents and instruments as are described in Section
6.2 hereof;
(d) loans by Doe Run after the date hereof to Doe Run Cayman or its
Subsidiaries, provided, that, (i) in no event shall the total amount of all such
loans exceed $10,000,000 in the
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aggregate outstanding at any time, (ii) as of the date of each such loan, and
after giving effect thereto, no Event of Default, or act, condition or event
which with notice or passage of time or both would constitute an Event of
Default shall exist or have occurred, (iii) as of the date of each such loan,
and after giving effect thereto, the daily average of the Excess Availability
for the immediately preceding thirty (30) consecutive day period shall be not
less than $10,000,000, and as of the date of such loan and after giving effect
thereto, Excess Availability shall be not less than $10,000,000, (iv) Lender
shall have received not less than three (3) Business Days prior written notice
of the intention of Doe Run to make any such loan, (v) the proceeds of such loan
shall only be used by Doe Run Cayman or its Subsidiaries for working capital in
the ordinary course of business, (vi) Doe Run shall not, directly or indirectly,
amend, modify, alter or change the terms of such loan or any agreement,
documents or instrument related thereto, and (vii) Doe Run shall furnish to
Lender all notices, demands or other materials in connection with such loans
either received by Doe Run or on its behalf, promptly after the receipt thereof,
or sent by Doe Run or on its behalf, concurrently with the sending thereof, as
the case may be;
(e) capital contributions or other investments by Doe Run, in, or
loans by Doe Run to, Doe Run Exploration S.A. (Proprietary) Ltd. (South Africa)
after the date hereof, provided, that, (i) in no event shall the total amount of
all such capital contributions, investments and loans exceed $3,000,000 in any
fiscal year of Doe Run, (ii) as of the date of each such capital contribution,
other investment in or loan to, Doe Run Exploration S.A. (Proprietary) Ltd.
(South Africa), and after giving effect thereto, no Event of Default, or act,
condition or event which with notice or passage of time or both would constitute
an Event of Default shall exist or have occurred, and (iii) as of the date of
each such capital contribution, other investment or loan, and after giving
effect thereto, the daily average of the Excess Availability for the immediately
preceding thirty (30) consecutive day period shall be not less than $10,000,000,
and as of the date of such loan and after giving effect thereto, Excess
Availability shall be not less than $10,000,000;
(f) guarantees by any Wholly-Owned Subsidiary of each Borrower of
the Obligations in favor of Lender;
(g) loans by Subsidiaries of each Borrower to such Borrower or other
Wholly-Owned Subsidiaries of such Borrower after the date hereof to the extent
the Indebtedness of such Borrower to such Subsidiaries or of such Subsidiaries
to other Subsidiaries as a result of such loans is permitted under Section 6.3
hereof;
(h) loans, payments, dividends, investments or distributions of any
kind by Borrower to DRA and Renco Group or by DRA to Renco Group to the extent
permitted under Section 6.7 hereof;
(i) unsecured contingent obligations of each Borrower or any of its
Wholly-Owned Subsidiaries evidenced by guarantees, performance bonds and surety
bonds incurred in
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the ordinary course of business of such Borrower or such Wholly-Owned Subsidiary
to the extent constituting Indebtedness permitted under Section 6.3;
(j) guarantees by each Borrower or any Wholly-Owned Subsidiary of
such Borrower of Indebtedness of such Borrower or Subsidiary permitted under
Section 6.3 hereof and the guarantee by Doe Run of the Indebtedness of Doe Run
Peru arising pursuant to the purchase by Doe Run Peru of the helicopter as
described on Schedule 6.5 hereto;
(k) loans and advances to employees, officers and directors of
Borrowers in an aggregate principal amount not to exceed $500,000 at any time
outstanding;
(l) purchases of raw materials by a Borrower or its Subsidiaries in
the ordinary course of business and consistent with current practices as of the
date hereof (including pursuant to forward purchase agreements so long as
reasonably related to such Borrower's or its respective Subsidiary's anticipated
needs for such raw material in its production process, and so long as such
forward purchase agreements are not speculative in nature and do not extend for
a period longer than twelve (12) months after the date thereof);
(m) investments or other Indebtedness which may be deemed to exist
as a result of Interest Rate Protection Obligations or Hedging Agreements, to
the extent Indebtedness in connection with such arrangements is permitted under
Section 6.3 hereof;
(n) the guarantee by Fabricated Products of the Indebtedness of Doe
Run evidenced by the Senior Notes to the extent such Indebtedness of Doe Run is
permitted under Section 6.3 hereof;
(o) the other existing loans, advances and guarantees by each
Borrower or its Subsidiaries outstanding as of the date hereof as set forth on
Schedule 6.5 hereto not otherwise permitted above; provided, that, as to such
loans, advances and guarantees, (i) such Borrower or its Subsidiary shall not,
directly or indirectly, (A) amend, modify, alter or change the terms of such
loans, advances or guarantees or any agreement, document or instrument related
thereto, or (B) as to such guarantees, redeem, retire, defease, purchase or
otherwise acquire such guarantee or set aside or otherwise deposit or invest any
sums for such purpose and (ii) such Borrower and Subsidiary shall furnish to
Lender all notices, demands or other materials in connection with such loans,
advances or guarantees either received by Borrower or Subsidiary or on its
behalf, promptly after the receipt thereof, or sent by such Borrower or
Subsidiary or on its behalf, concurrently with the sending thereof, as the case
may be.
6.6 Transactions with Affiliates. Each Borrower shall not, and shall not
permit any Subsidiary to, directly or indirectly, purchase, acquire or lease any
property from, or sell, transfer or lease any property to, any shareholder,
officer, director, agent, employee or other Affiliate of either Borrower (and in
any event from or to Renco Group and any Affiliate of Renco Group or
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from or to Doe Run Cayman and any of its Subsidiaries) except (a) in the
ordinary course of and pursuant to the reasonable requirements of such Person's
business, and upon fair and reasonable terms no less favorable to such Borrower
or Subsidiary than such Borrower or Subsidiary would obtain in a comparable
arms'-length transaction with a person who is not an Affiliate (including with
respect to costs, prices and amounts), and (b) payments by Borrower to DRA or
Renco Group to the extent permitted under Section 6.7 hereof.
6.7 Restricted Payments.
(a) Except as set forth in Section 6.7(b) below, each Borrower shall
not, and shall not permit any Subsidiary to, directly or indirectly, (i) declare
or pay any cash dividends or dividends payable in property other than Capital
Stock on account of any shares of any class of Capital Stock of such Borrower
now or hereafter outstanding, or set apart any sums for such purpose, or redeem,
retire, defease, purchase or otherwise acquire any shares of any class of
Capital Stock of such Borrower (or set aside or otherwise deposit or invest any
sums for such purpose) for any consideration other than Capital Stock or apply
or set apart any sums, or make any other distribution (by reduction of capital
or otherwise) in respect of any such shares or agree to do any of the foregoing,
(ii) pay to any shareholder, officer, director, agent, employee or other
Affiliate of a Borrower (and in any event including Renco Group and any
Affiliate of Renco Group) any management, consulting or other fees or any amount
for any management assistance or services rendered by such persons to a
Borrower, or (iii) make any payments in respect of Indebtedness owing to any
shareholder, officer, director or other Affiliate of Borrower (and in any event
including Renco Group and any Affiliate of Renco Group).
(b) Notwithstanding anything to the contrary contained in Section
6.5 or Section 6.7(a) above:
(i) any Subsidiary of a Borrower may declare and pay dividends
to such Borrower or any Wholly-Owned Subsidiary of such Borrower which owns any
equity interests in such Subsidiary;
(ii) any Subsidiary of a Borrower which is not a Wholly-Owned
Subsidiary may declare and pay dividends to its shareholders generally, so long
as such Borrower and/or any other Subsidiary of such Borrower which owns equity
interests in such Subsidiary receives at least its proportionate share (based
upon its respective equity interests) of any dividend so declared paid;
(iii) each Borrower may make payments to Renco Group on behalf
of itself and its Subsidiaries (including for this purpose, Doe Run Cayman and
its Subsidiaries) pursuant to the Tax Sharing Agreement between Borrowers and
their Subsidiaries and Renco Group (as in effect on the date hereof); provided,
that, (A) each Borrower and its Subsidiaries are included in the consolidated
federal income tax return filed by Renco Group as to which such Borrower is
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making such payments, (B) the payments in any year shall not exceed the tax
liability that such Borrower would have been liable for if such Borrower had
filed its tax returns on a stand-alone basis except that such Borrower will not
have the benefit of any of its tax loss carry forwards and any intercompany
items shall, for tax liability purposes, be recorded on a cash basis rather than
on an accrual basis, (C) such payments shall be made by such Borrower no earlier
than ten (10) days prior to the date on which Renco Group is required to make
its payments to the Internal Revenue Service, and (D) in the event that such
Borrower also joins with Renco Group in filing any combined or consolidated (or
similar) state or local income tax returns, then the making of payments to Renco
Group shall be allowed in a manner as similar as possible to that provided
herein with respect to federal income taxes;
(iv) Doe Run may make payments to Renco Group in respect of
the monthly management fee owed by Doe Run to Renco Group under the terms of the
Management Agreement (as in effect on the date hereof); provided, that, (A) the
aggregate amount of all such payments by Doe Run in any month shall not exceed
$200,000, except that in the event Doe Run pays less than $200,000 of such fee
in any month, Doe Run may pay the difference between $200,000 and the amount
actually paid in respect of such fee by Doe Run in such month at any time
thereafter within the same fiscal year and (B) as of the date of each such
monthly payment and after giving effect thereto, no Event of Default, or act,
condition or event which with notice or passage of time or both would constitute
an Event of Default, shall exist or have occurred and be continuing and (C) as
of the date of each such payment and after giving effect thereto, the daily
average of the Excess Availability for the immediately preceding thirty (30)
consecutive day period shall be not less than $1.00, and as of the date of such
payment and after giving effect thereto, Excess Availability shall be not less
than $1.00;
(v) Doe Run may pay dividends on account of any shares of
common stock of Doe Run now outstanding, make any loans or advance money or
property to Renco Group, or make any payments in respect of any Indebtedness
owing by Doe Run to DRA provided, that, in each case as to any of the foregoing,
each of the following conditions is satisfied as determined by Lender:
(A) no Event of Default, or act, condition or event which with
notice or passage of time or both would constitute an Event of Default shall
exist or have occurred and be continuing at the time of or after giving effect
to any such payments;
(B) any dividends or other distributions shall be out of funds
legally available therefor;
(C) as of the date of any such payments and after giving
effect thereto, the aggregate amount of all such payments made in any fiscal
year of Doe Run shall not exceed the amount equal to fifty (50%) percent of the
cumulative Consolidated Net Income of Doe Run (or if cumulative Consolidated Net
Income shall be a loss, minus one hundred (100%) percent of
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such loss) earned subsequent to the date hereof and prior to the date the
payment occurs (treating such period as a single accounting period);
(vi) Doe Run may redeem the shares of preferred stock of Doe
Run held by Renco Group as of the date hereof and pay certain transaction fees
to Renco Group in connection with the issuance of the Senior Notes, in each case
with a portion of the proceeds from the issuance of the Senior Notes; provided,
that, in no event shall the total amount paid by Doe Run to Renco Group to
redeem such shares and to pay such fees exceed $5,000,000 in the aggregate;
(vii) Borrowers may make payments to Renco Group in respect of
premiums and fees for insurance maintained by Renco Group with respect to the
assets and properties of each Borrower and its Subsidiaries and in connection
with the business of each Borrower and its Subsidiaries.
6.8 Changes in Business. Each Borrower and its Subsidiaries shall not
engage in any business other than the businesses of such Borrower and its
Subsidiaries on the date hereof and any businesses reasonably related, ancillary
or complimentary to the businesses in which such Borrower and its Subsidiaries
are engaged on the date hereof.
6.9 Maintenance of Existence. Each Borrower shall, and shall cause each
Subsidiary to, at all times preserve, renew and keep in full force and effect
their corporate existence and rights and franchises with respect thereto and
maintain in full force and effect all licenses, trademarks, tradenames,
approvals, authorizations, leases, contracts and Permits necessary to carry on
the business as presently or proposed to be conducted.
6.10 Consolidated Net Worth. Doe Run shall, at all times, maintain a
Consolidated Net Worth of not less than the amount set forth below for the
period indicated:
=======================================================
Period Amount
------ ------
-------------------------------------------------------
(a) From and including the date $2,500,000
hereof through and
including October 30, 1998
-------------------------------------------------------
(b) From and including October $5,000,000
31, 1998 through and
including April 29, 1999
-------------------------------------------------------
(c) From and including April $10,000,000
30, 1999 to and including
October 30, 1999
-------------------------------------------------------
(d) From and including October 31, $12,500,000
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-------------------------------------------------------
1999 and at all times thereafter
=======================================================
6.11 Sale of Assets, Consolidation, Merger, Dissolution, Etc. Each
Borrower shall not, and shall not permit any Subsidiary to, directly or
indirectly, (a) merge into or with or consolidate with any other Person or
permit any other Person to merge into or with or consolidate with it, or (b)
sell, assign, lease, transfer, abandon or otherwise dispose of any Capital Stock
or Indebtedness to any other Person or any of its properties or assets to any
other Person (except for (i) sales or other dispositions by a Borrower or its
Subsidiaries of assets in the ordinary course of the business of such Borrower
or Subsidiary which consist of Equipment or Real Property; provided, that, as to
each and all such sales, (A) at least eighty (80%) percent of the consideration
received from such sale is in the form of cash or Cash Equivalents, (B) the net
cash proceeds from such sale or other disposition are first used to repay any
Indebtedness secured by the property so sold or otherwise disposed of and any
net cash proceeds thereafter are applied to make an investment, capital
expenditure or other expenditure which is related to the business of such
Borrower as it is conducted on the date hereof and is otherwise permitted
hereunder, within two hundred seventy (270) days of such sale or other
disposition, provided, that, such Borrower shall not be required to make such
investment, capital expenditure or other expenditure with the proceeds of such
sale or other disposition to the extent of such proceeds do not exceed
$5,000,000 in the aggregate, (C) Lender shall have received not less than ten
(10) Business Days prior written notice of such sale, which notice shall set
forth in reasonable detail satisfactory to Lender, the parties to such sale or
other disposition, the assets to be sold or otherwise disposed of, the purchase
price and the manner of payment thereof and such other information with respect
thereto as Lender may reasonably request, and (D) as of the date of such sale or
other disposition and after giving effect thereto, no Event of Default, or act,
condition or event which with notice or passage of time would constitute an
Event of Default shall exist or have occurred, (ii) sales of Inventory in the
ordinary course of business, (iii) the disposition of worn-out or obsolete
Equipment or Equipment no longer used or useful in the business of a Borrower or
its Subsidiaries, and (iv) the sale of a helicopter by Doe Run after the date
hereof as described on Schedule 6.5 hereto), or (c) wind up, liquidate or
dissolve, or (d) agree to do any of the foregoing.
6.12 Compliance with Laws, Regulations, Etc.
(a) Each Borrower shall, and shall cause each Subsidiary to, at all
times comply in all material respects with all applicable provisions of laws,
rules, regulations, licenses, approvals, orders and other Permits and duly
observe all requirements, of any foreign, Federal, State or local Governmental
Authority, including, without limitation, ERISA, the Code, the Occupational
Safety and Health Act of 1970, as amended, the Surface Mining Control and
Reclamation Act of 1977, the Mine Safety Health Act of 1977, the Fair Labor
Standards Act of 1938, as amended, and the rules and regulations thereunder and
all statutes, rules, regulations, orders, permits and stipulations relating to
environmental pollution and employee health and safety, including, without
limitation, all of the Environmental Laws.
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(b) Each Borrower shall, and shall cause each Subsidiary to, take
prompt and appropriate action to respond to any material non-compliance with any
of the Environmental Laws and shall regularly report to Lender with regard to
such response. If a Borrower receives any notice of (i) the happening of any
event involving the use, spill, discharge or clean-up of any Hazardous Material
or (ii) any complaint, order, citation or notice with regard to air emissions,
water discharges, noise emissions or any other environmental, health or safety
matter affecting such Borrower from any Person, including, but not limited to,
the United States Environmental Protection Agency or any state or local
environmental agency or authority, then such Borrower shall give within three
(3) Business Days both oral and written notice of same to Lender if the same has
or could reasonably be expected to have a Material Adverse Effect, or otherwise
ten (10) Business Days written notice of same to Lender. Without limiting the
generality of the foregoing, whenever there is material non-compliance, or any
condition which requires any action by or on behalf of a Borrower in order to
avoid any material non-compliance, with any Environmental Law, such Borrower
shall, at the reasonable request of Lender and such Borrower's expense: (A)
cause an independent environmental engineer reasonably acceptable to Lender to
conduct such tests of the site where such Borrower's material noncompliance or
alleged material non-compliance with Environmental Laws has occurred as to such
material non-compliance and prepare and deliver to Lender a report as to such
material non-compliance setting forth the results of such tests, a proposed plan
for responding to any environmental problems described therein, and an estimate
of the costs thereof and (B) provide to Lender a supplemental report of such
engineer whenever the scope of such material non-compliance, or such Borrower's
response thereto or the estimated costs thereof, shall change in any material
respect.
6.13 Payment of Taxes and Claims. Each Borrower shall, and shall cause
each Subsidiary to, duly pay and discharge all taxes, assessments, contributions
and governmental charges upon or against it or them or its or their properties
or assets, except for taxes the validity of which are being contested in good
faith by appropriate proceedings diligently pursued and available to such
Borrower or Subsidiary prior to the date on which penalties attach thereto.
Borrowers shall be liable for any tax or penalty imposed upon any transaction
under this Agreement or any of the other Financing Agreements or giving rise to
the Accounts or any other Collateral or which Lender may be required to withhold
or pay for any reason, and each Borrower agrees to indemnify and hold Lender
harmless with respect thereto, and to repay to Lender on demand the amount
thereof, and until paid by Borrowers such amount shall be added and deemed part
of the Loans, provided, that, nothing contained herein shall be construed to
require Borrowers to pay any income tax attributable to the income of Lender
from any amounts charged or paid hereunder to Lender.
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6.14 Properties in Good Condition.
(a) Each Borrower shall keep its properties, and shall cause each
Subsidiary to keep its properties, in good repair, working order and condition
(reasonable wear and tear excepted) and, from time to time, make and cause each
Subsidiary to make all needful and proper repairs, renewals, replacements,
additions and improvements thereto, so that the business carried on may be
properly and advantageously conducted at all times in accordance with prudent
business management. The Inventory shall only be used in each Borrower's
business and not for personal, family, household or farming use.
(b) All of the Inventory of each Borrower is and will be held for
sale or lease, or to be furnished in connection with the rendition of services,
in the ordinary course of such Borrower's business, and is and will be fit for
such purposes. Each Borrower shall keep the Inventory of such Borrower in good
and marketable condition, at its own expense. Each Borrower will not acquire or
accept any Inventory on consignment or approval, except if such Inventory is at
all times clearly identified on the books and records of such Borrower as
Inventory held on consignment or approval and such Inventory is separately
reported to Lender and not included in the Inventory of such Borrower as
reported to Lender in a manner satisfactory to Lender. Each Borrower agrees that
all Inventory will be mined and produced in accordance with all applicable laws,
including the Surface Mining Control and Reclamation Act of 1977, the Mine
Safety and Health Act of 1977, the Federal Fair Labor Standards Act of 1938, as
amended, and all rules, regulations, and orders thereunder. Each Borrower shall
conduct a physical count of the Inventory at least once per fiscal year, and at
any time on or after an Event of Default and so long as the same is continuing,
at such other times as Lender reasonably requests, and in each case shall
promptly supply Lender with a copy of such count accompanied by a report of the
Value of such Inventory. Borrowers shall not, without Lender's prior written
consent, sell any Inventory on a bill-and-hold (except if reported to Lender as
bill-and-hold goods), guaranteed sale, sale and return, sale on approval, or
other repurchase or return basis.
6.15 Insurance. Borrowers shall at all times maintain with financially
sound and reputable insurers, insurance with respect to the Collateral against
loss or damage of the kind and in the amounts customarily insured against by
corporations of established reputation engaged in the same or similar businesses
and similarly situated and Borrowers shall maintain public liability insurance
against claims for personal injury, death or property damage occurring upon, in,
about or in connection with the use of any properties owned, occupied or
controlled by Borrowers and occurring in connection with the use (or otherwise)
of any products manufactured or sold by Borrowers, and workmen's compensation
insurance (except as to workmen's compensation insurance to the extent a
Borrower is self-insured with respect thereto). Said policies of insurance shall
be satisfactory to Lender as to form, amount and insurer. Borrowers shall
furnish certificates, policies or endorsements to Lender as proof of such
insurance, and, if a Borrower fails to do so, Lender is authorized, but not
required, to obtain such insurance at the expense of Borrowers. All policies
shall provide for at least thirty (30) days prior written notice
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to Lender of any cancellation or reduction of coverage and that Lender may act
as attorney for each Borrower in obtaining, and at any time on or after the
occurrence of an Event of Default, adjusting, settling and amending such
insurance. Borrowers shall obtain non-contributory lender's loss payable
endorsements to all insurance policies with respect to the Collateral in form
and substance reasonably satisfactory to Lender specifying that the proceeds of
such insurance shall be payable to Lender as its interests may appear and
further specifying that Lender shall be paid regardless of any act or omission
by Borrowers. At its option, Lender may apply any insurance proceeds with
respect to the Collateral received by Lender at any time to the cost of
replacement of Collateral and/or to payment of the Obligations, whether or not
then due, in any order and in such manner as Lender may determine or Lender may
hold such insurance proceeds as cash collateral for the Obligations as Lender
may determine.
6.16 Compliance with ERISA.
(a) Borrowers shall not with respect to all "employee pension
benefit plans" maintained by a Borrower or any of its ERISA Affiliates: (i)
terminate any of such employee pension benefit plans so as to incur any
liability to the Pension Benefit Guaranty Corporation established pursuant to
ERISA, (ii) allow or suffer to exist any prohibited transaction involving any of
such employee pension benefit plans or any trust created thereunder which would
subject Borrower or such ERISA Affiliate to a tax or penalty or other liability
on prohibited transactions imposed under Section 4975 of the Code or ERISA,
(iii) fail to pay to any such employee pension benefit plan any contribution
which it is obligated to pay under Section 302 of ERISA, Section 412 of the Code
or the terms of such plan, (iv) allow or suffer to exist any accumulated funding
deficiency, whether or not waived, with respect to any such employee pension
benefit plan, (v) allow or suffer to exist any occurrence of a reportable event
or any other event or condition which presents a material risk of termination by
the Pension Benefit Guaranty Corporation of any such employee pension benefit
plan that is a single employer plan, which termination could result in any
liability to the Pension Benefit Guaranty Corporation or (vi) incur any
withdrawal liability with respect to any multiemployer pension plan, except as
set forth on Schedule 5.13 hereto.
(b) As used in this Section 6.16, the term "employee pension benefit
plans," "employee benefit plans", "accumulated funding deficiency" and
"reportable event" shall have the respective meanings assigned to them in ERISA,
and the term "prohibited transaction" shall have the meaning assigned to it in
Section 4975 of the Code and ERISA.
6.17 Additional Bank Accounts. Each Borrower shall not, and shall not
permit any Subsidiary to, directly or indirectly, open, establish or maintain
any deposit account, investment account or any other account with any bank or
other financial institution, other than the Blocked Accounts and the accounts
set forth in Schedule 5.15 hereto, except: (a) as to any new or additional
Blocked Accounts and other such new or additional accounts which contain any
Collateral or proceeds thereof, with the prior written consent of Lender and
subject to such
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conditions thereto as Lender may establish and (b) as to any accounts used by
such Borrower or its Subsidiaries to make payments of payroll, taxes or other
obligations to third parties, after prior written notice to Lender.
6.18 Notice of Default. Promptly upon becoming aware of the existence of
any condition or event which constitutes an Event of Default or any condition or
event which, with the passage of time or notice or both would constitute such an
Event of Default, pursuant to the provisions of this Agreement or the other
Financing Agreements, Borrowers shall give Lender written notice thereof
specifying the nature of such condition or event.
6.19 Financial Statements and Other Information.
(a) Each Borrower shall promptly furnish to Lender all such
financial and other information as Lender shall reasonably request relating to
the Collateral and the assets, businesses and operations of Borrowers and their
Subsidiaries, and notify the auditors and accountants of Borrowers that Lender
is authorized to obtain such information directly from them. Without limiting
the foregoing, Borrowers shall furnish to Lender, in such detail as Lender shall
request, the following:
(i) As soon as available, but in any event not later than
ninety (90) days after the close of each fiscal year, audited consolidated
balance sheet, consolidated statement of operations and consolidated statement
of cash flows for Doe Run and its Subsidiaries (including for this purpose, Doe
Run Cayman and its Subsidiaries) for such fiscal year, and the accompanying
notes thereto, and unaudited consolidating balance sheets, statements of
operations and statements of cash flows for Doe Run and its Subsidiaries
(including for this purpose, Doe Run Cayman and its Subsidiaries) for such
fiscal year, and the accompanying notes thereto, setting forth in each case in
comparative form figures for the previous fiscal year, all in reasonable detail,
fairly presenting the financial position and the results of operations of Doe
Run and its Subsidiaries (including for this purpose, Doe Run Cayman and its
Subsidiaries) as at the date thereof and for the fiscal year then ended, and
prepared in accordance with GAAP consistently applied. Such audited consolidated
statements of Doe Run and its Subsidiaries shall be examined in accordance with
generally accepted auditing standards by and accompanied by a report thereon
unqualified as to scope of independent certified public accountants selected by
Doe Run and satisfactory to Lender.
(ii) As soon as available, but in any event not later than
forty-five (45) days after the close of each fiscal quarter other than the
fourth quarter of a fiscal year, consolidated and consolidating unaudited
balance sheets of Doe Run and its Subsidiaries (including for this purpose, Doe
Run Cayman and its Subsidiaries) as at the end of such quarter, and consolidated
and consolidating unaudited statements of operations and statements of cash flow
for Doe Run and its Subsidiaries (including for this purpose, Doe Run Cayman and
its Subsidiaries) for such quarter and for the period from the beginning of the
fiscal year to the end of such quarter,
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together with the accompanying notes thereto, all in reasonable detail, fairly
presenting the financial position and results of operation of Doe Run and its
Subsidiaries (including for this purpose, Doe Run Cayman and its Subsidiaries)
as at the date thereof and for such periods, prepared in accordance with GAAP
consistently applied (subject to normal year-end adjustments). Such statements
shall be certified to be correct by the chief financial officer of Doe Run,
subject to normal year-end adjustments.
(iii) As soon as available, but in any event not later than
thirty (30) days after the end of each month, consolidated and consolidating
unaudited balance sheets of Doe Run and its Subsidiaries (including for this
purpose, Doe Run Cayman and its Subsidiaries) as at the end of such month, and
consolidated and consolidating unaudited statements of operations for Doe Run
and its Subsidiaries (including for this purpose, Doe Run Cayman and its
Subsidiaries) for such month and for the period from the beginning of the fiscal
year to the end of such month, all in reasonable detail, fairly presenting the
financial position and results of operation of Doe Run and its Subsidiaries
(including for this purpose, Doe Run Cayman and its Subsidiaries) as at the date
thereof and for such periods, and prepared in accordance with GAAP consistently
applied (except that such interim financial statements shall not include
accompanying notes and shall be subject to normal year-end adjustments). Such
statements shall be certified to be correct by the chief financial officer of
Doe Run, subject to normal year-end adjustments.
(iv) With each of the audited financial statements delivered
pursuant to Section 6.19 above, a certificate of the independent certified
public accountants that examined such statements to the effect that they have
reviewed and are familiar with the Financing Agreements and that, in examining
such financial statements, they did not become aware of any fact or condition
which then constituted an Event of Default, except for those, if any, described
in reasonable detail in such certificate.
(v) Simultaneously with the delivery of each of the annual
audited and quarterly unaudited financial statements as set forth herein, Lender
shall receive a certificate of the chief financial officer of Doe Run (A)
stating that, except as explained in reasonable detail in such certificate, (1)
all of the representations, warranties and covenants of Borrowers contained in
this Agreement and the other Financing Agreements are correct and complete as at
the date of such certificate and (2) no Event of Default then exists or existed
during the period covered by such financial statements, and (B) describing and
analyzing in reasonable detail all material trends, changes and developments in
each and all financial statements. If such certificate discloses that a
representation or warranty is not correct or complete, or that a covenant has
not been complied with, or that an Event of Default existed or exists, such
certificate shall set forth what action Borrowers have taken or propose to take
with respect thereto.
(vi) No sooner than ninety (90) days prior to, and no less
than, fifteen (15) days after the beginning of each fiscal year of Doe Run,
projected balance sheets, statements of income and expense, and statements of
cash flow for Doe Run and its Subsidiaries (including for
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this purpose, Doe Run Cayman and its Subsidiaries) as at the end of and for each
month of such fiscal year.
(vii) Promptly after delivery thereof, copies of any
management letters and reports by such independent certified public accountants
to a Borrower and its Subsidiaries (including for this purpose, Doe Run Cayman
and its Subsidiaries).
(viii) Monthly accounts receivable agings and inventory
reports (including, without limitation, Inventory consisting of work-in-process)
and such schedules of Accounts and Inventory, together with any further
financial and other information regarding the Collateral, as Lender may request
from time to time.
(ix) Subject to the terms and conditions contained herein,
except as Lender may otherwise agree, Borrowers shall deliver to Lender a
Borrowing Base Certificate setting forth a calculation of the Loans and Letter
of Credit Accommodations available to Borrowers pursuant to the terms and
conditions contained herein, duly completed and executed by the chief financial
officer or other appropriate financial officer acceptable to Lender, together
with all schedules required pursuant to the terms of the Borrowing Base
Certificate duly completed.
(A) Commencing on the date hereof, and for so long as for any
four (4) consecutive week period (1) the average of the daily principal balance
of the outstanding Loans and Letter of Credit Accommodations for such four (4)
week period is less than $5,000,000 and (2) the average of the Excess
Availability for such four (4) week period (calculated based on the Excess
Availability at the end of each day) is greater than $10,000,000, then Borrowers
shall deliver such Borrowing Base Certificate to Lender on a monthly basis, by
no later than the tenth (10th) day of each month, calculating Loans and Letter
of Credit Accommodations available as of the last day of the immediately
preceding month.
(B) If at any time for any one (1) week either (1) the average
of the daily principal balance of the outstanding Loans and Letter of Credit
Accommodations for such week is greater than $20,000,000 (calculated based on
the outstanding amounts at the end of each day) or (2) the average of the Excess
Availability for such week is less than $10,000,000 (calculated based on the
Excess Availability at the end of each day), then Borrowers shall thereafter
deliver such Borrowing Base Certificate to Lender on a daily basis calculating
Loans and Letter of Credit Accommodations available as of the close of business
on the immediately preceding day.
(C) If at any time for any one (1) week both (1) the average
of the daily principal balance of the outstanding Loans and Letter of Credit
Accommodations for such week is greater than $10,000,000 but equal to or less
than $20,000,000 (calculated based on the outstanding amounts at the end of each
day) and (2) the average of the Excess Availability for such week (calculated
based on the Excess Availability at the end of each day) is greater than
$10,000,000, then Borrowers shall thereafter deliver such Borrowing Base
Certificate to Lender
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on a weekly basis calculating Loans and Letters of Credit Accommodations
available as of the last Business Day of the immediately preceding week.
(D) If at any time for any two consecutive two (2) weeks, both
(1) the average of the daily principal balance of the outstanding Loans and
Letter of Credit Accommodations for such two (2) week period is equal to or
greater than $5,000,000 but less than $10,000,000 (calculated based on the
outstanding amounts at the end of each day) and (2) the average of the Excess
Availability for such two (2) week period (calculated based on the Excess
Availability at the end of each day) is greater than $10,000,000, then Borrowers
shall thereafter deliver such Borrowing Base Certificate to Lender every two (2)
weeks calculating Loans and Letter of Credit Accommodations available as of the
last Business Day of the immediately preceding week.
(E) Notwithstanding anything to the contrary contained herein,
without limiting any other rights of Lender, upon Lender's request, Borrowers
shall provide Lender on a daily basis with a schedule of Accounts, collections
received and credits issued and on a daily basis with an inventory report in the
event that at any time either: (1) an Event of Default or act, condition or
event which with notice or passage of time or both would constitute an Event of
Default, shall exist or have occurred, or (2) Borrower shall have failed to
deliver any Borrowing Base Certificate in accordance with the terms hereof, or
(3) upon Lender's good faith belief, any information contained in any Borrowing
Base Certificate is incomplete, inaccurate or misleading.
(F) Nothing contained in any Borrowing Base Certificate shall
be deemed to limit, impair or otherwise affect the rights of Lender contained
herein and in the event of any conflict or inconsistency between the calculation
of the Loans and Letter of Credit Accommodations available to Borrowers as set
forth in any Borrowing Base Certificate and as determined by Lender, the
determination of Lender shall govern and be conclusive and binding upon
Borrowers. Without limiting the foregoing, Borrowers shall furnish to Lender any
information which Lender may reasonably request regarding the determination and
calculation of any of the amounts set forth in the Borrowing Base Certificate.
(G) Borrowers shall promptly notify Lender in writing in the
event that at any time after the delivery of a Borrowing Base Certificate to
Lender but prior to the delivery of the next Borrowing Base Certificate to be
delivered by Borrowers to Lender in accordance with the terms hereof: (1) the
amount of Loans and Letter of Credit Accommodations available to Borrowers
pursuant to the terms and conditions contained herein is less than eighty (80%)
percent of the amount of Loans and Letter of Credit Accommodations available to
Borrowers pursuant to the terms and conditions contained herein reflected in the
most recent Borrowing Base Certificate delivered by Borrowers to Lender pursuant
to Section 6.19 hereof, or (2) the Loans made by Lender to Borrowers and/or
Letter of Credit Accommodations outstanding at such time exceed the amount of
the Loans and Letter of Credit Accommodations then available to Borrowers under
the terms hereof as a result of any decrease in the amount of Loans and Letter
of Credit Accommodations then available and the amount of such excess.
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(H) If any of Borrowers' records or reports of the Collateral
are prepared or maintained by an accounting service, contractor, shipper or
other agent, Borrowers hereby irrevocably authorize such service, contractor,
shipper or agent to deliver such records, reports and related documents to
Lender and to follow Lender's instructions with respect to further services at
any time that an Event of Default exists or has occurred and is continuing.
(x) Promptly and in any event after becoming aware of the
occurrence of any of the following events: (A) any Material Contract of a
Borrower or any of its Subsidiaries is terminated or any new Material Contract
is entered into (in which event such Borrower shall provide Lender with a copy
of such Material Contract); or (B) any of the material terms (other than price)
upon which material suppliers of Borrower or any of its Subsidiaries do business
with such Borrower or Subsidiary are changed or amended in any manner adverse to
such Borrower or Subsidiary in any material respect; or (C) any order, judgment
or decree shall have been entered against Doe Run in excess of $2,500,000 or
against Fabricated Products in excess of $100,000 (in each case after reasonably
expected insurance and indemnity recovery) or any of their respective properties
or assets; or (D) any notification of violation of any law or regulation shall
have been received by a Borrower or any of its Subsidiaries from any
Governmental Authority the results of which are reasonably likely to have a
Material Adverse Effect.
(b) Each Borrower shall promptly notify Lender in writing of any
loss, damage, investigation, action, suit, proceeding or claim relating to the
Collateral or which might result in any material adverse change in its business,
properties, assets, goodwill or condition, financial or otherwise.
(c) Each Borrower shall promptly provide Lender such budgets,
forecasts, projections and other information respecting the business operations
and financial or other condition of such Borrower and its Subsidiaries, as
Lender may, from time to time, reasonably request.
(d) Lender is hereby authorized to deliver a copy of any financial
statement or any other information relating to the business, operations or
financial condition of Doe Run or its Subsidiaries (including for this purpose,
Doe Run Cayman and its Subsidiaries), which may be furnished to it hereunder or
otherwise, to any regulatory body or agency or other Governmental Authority
having jurisdiction over Lender or upon notice to Doe Run (to the extent
permitted under applicable law), to any court or to any other Person which
shall, or shall have any right or obligation to, succeed to all or any part of
Lender's interests in any of the Loans, this Agreement, the other Financing
Agreements or the Collateral, including, without limitation, any assignee or any
Participant (subject to Section 9.7 hereof).
(e) Each Borrower hereby irrevocably authorizes and directs all
accountants, auditors or other third parties to deliver to Lender upon Lender's
reasonable request, at such
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Borrower's expense, copies of the financial statements, and other accounting
records relating to Doe Run and its Subsidiaries of any nature in their
possession.
6.20 Limitation of Voluntary Payments; Preferred Stock; Amendments or
Modifications of Certain Agreements; etc. Each Borrower shall not, and shall not
permit any Subsidiary to: (a) with respect to any Indebtedness make (or give any
notice in respect of) any voluntary or optional redemption of or acquisition for
value of (including, without limitation, by way of depositing with the trustee
with respect thereto money or securities before due for the purpose of paying
when due), exchange, or purchase, redeem or acquire for value (whether as a
result of a Change of Control, the consummation of assets sales or otherwise);
(b) with respect to each Borrower, issue any preferred or preference stock which
is mandatorily redeemable prior to the then current term of this Agreement and
with respect its Subsidiaries, issue any preferred or preference stock; or (c)
amend, modify or terminate, or permit the amendment, modification or termination
of any of (i) the Tax Sharing Agreement, (ii) the Management Agreement, (iii)
the Banco de Credito Deposit Agreement, or (iv) the Banco de Credito Agreements.
6.21 Limitation on Restrictions Affecting Subsidiaries. Each Borrower
shall not, and shall not permit any Subsidiary (including Doe Run Cayman and its
Subsidiaries for this purpose) to, directly, or indirectly, create or otherwise
cause or suffer to exist any encumbrance or restriction which prohibits or
limits the ability of any such Subsidiary of a Borrower to (a) pay dividends or
make other distributions on its Capital Stock or any other interest or
participation in, or measured by, its profits, owned by Borrower or any
Subsidiary of such Borrower, or pay any Indebtedness owed to a Borrower or any
Subsidiary of such Borrower; (b) make loans or advances to a Borrower or any
Subsidiary of such Borrower; or (c) transfer any of its properties or assets to
a Borrower or any Subsidiary of such Borrower; except in each case for such
encumbrances or restrictions existing under or by reason of: (i) applicable law,
(ii) this Agreement or the Senior Note Indenture, (iii) customary non-assignment
provisions of any lease governing a leasehold interest of a Borrower or its
Subsidiaries, (iv) any instruments governing Indebtedness of a Person acquired
by a Borrower or its Subsidiaries at the time of such acquisition, which
encumbrance or restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Person or its Subsidiaries so acquired, (v)
any written agreement existing on the date hereof or amendments or modifications
thereto, provided, that, no such agreement shall be modified or amended in such
a manner as to make the encumbrance or restriction more restrictive than as in
effect on the date hereof, (vi) Indebtedness under one or more working capital
facilities or other working capital or lease financings or programs entered into
by Doe Run Peru and its Subsidiaries from time to time or any refinancings,
refundings, replacements or extensions thereof, provided, that, such
restrictions do not prohibit payments pursuant to the U.S. Service Agreements or
any other intercompany agreements between Doe Run and Doe Run Cayman and its
Subsidiaries (including, without limitation, Doe Run Mining and Doe Run Peru),
or pursuant to any replacements thereof or pursuant to any comparable agreements
thereto, in each case providing for the same or similar payments, and (vii)
Indebtedness of Borrowers permitted hereunder or Indebtedness of Doe Run Cayman
and its
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Subsidiaries permitted under the Senior Note Indenture (as in effect on the date
hereof); provided, that, as to Indebtedness of Borrowers, such encumbrance or
restriction shall be no more restrictive than any encumbrance or restriction
contained in this Agreement and as to Indebtedness of Doe Run Cayman and its
Subsidiaries, such encumbrance or restriction shall be no more restrictive than
any encumbrance or restriction contained in the Senior Note Indenture (as in
effect on the date hereof).
6.22 Further Assurances. Each Borrower has executed or will
contemporaneously herewith execute and deliver to Lender such of the other
Financing Agreements to which it is a party and financing statements pursuant to
the UCC, in form and substance satisfactory to Lender. Each Borrower shall, at
its expense, at any time or times duly execute and deliver, or shall cause to be
duly executed and delivered, such further agreements, instruments and documents,
including, without limitation, additional security agreements, collateral
assignments, UCC financing statements or amendments or continuations thereof,
certificates of title with respect to motor vehicles and applications for
notation of the liens of Lender thereon, landlord's or mortgagee's waivers of
liens and consents to the exercise by Lender of all the rights and remedies
hereunder, under any of the other Financing Agreements or applicable law with
respect to the Collateral, and do or cause to be done such further acts as may
be necessary or proper in Lender's opinion to evidence, perfect, maintain and
enforce the security interest and the priority thereof in the Collateral and to
otherwise effectuate the provisions or purposes of this Agreement or any of the
other Financing Agreements. Where permitted by law, each Borrower hereby
authorizes Lender to execute and file one or more UCC financing statements
signed only by Lender. Upon the request of Lender, at any time and from time to
time, each Borrower shall, at its cost and expense, do, make, execute, deliver
and record, register or file, financing statements, mortgages, deeds of trust,
deeds to secure debt, and other instruments, acts, pledges, assignments and
transfers (or cause the same to be done) and will deliver to Lender such
instruments evidencing items of Collateral as may be requested by Lender.
SECTION 7. EVENTS OF DEFAULT AND REMEDIES
7.1 Events of Default. The occurrence of any one or more of the following
events shall constitute an "Event of Default" hereunder:
(a) a Borrower shall be in default in the payment of any of the
Obligations when due, which default shall continue for three (3) days; or
(b) a Borrower or any Obligor shall fail to observe or perform any
covenants or agreements contained in this Agreement, the other Financing
Agreements or in any other document or instrument referred to herein or therein
other than as described in Section 7.1(a) above and such failure shall continue
for fifteen (15) days, provided, that, such fifteen (15) day period shall not
apply in the case of: (i) any failure to observe any such covenant or agreement
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which is not capable of being cured at all or within such fifteen (15) day
period or which has been the subject of a prior failure within a six (6) month
period or (ii) an intentional breach by a Borrower or its or their management of
any such covenant or agreement, or (iii) the failure to observe or perform any
of the covenants or agreements contained in Sections 6.2, 6.3, 6.4, 6.5, 6.6,
6.17, 6.20, 6.21, 6.22 and 6.23 of this Agreement or any covenants or agreements
covering substantially the same matter as such sections in any of the other
Financing Agreements; or
(c) any present or future representation, warranty or statement of
fact when made by or on behalf of a Borrower or any Obligor to Lender is false
or misleading in any material respect; or
(d) a judgment is rendered against Doe Run or any Obligor in excess
of $1,000,000 in any one case or in excess of $2,500,000 in the aggregate or
against Fabricated Products in excess of $100,000 in any one case or in excess
of $250,000 in the aggregate and the same shall remain undischarged for a period
in excess of thirty (30) days or execution shall at any time not be effectively
stayed except if it is a judgment for which such Borrower or Obligor is fully
insured and with respect to which the insurer has admitted in writing its
liability for the full amount thereof and so long as execution is at all times
effectively stayed; or
(e) a Borrower or any Obligor shall be generally unable to pay its
debts as they mature, suspend or discontinue doing business for any reason,
become insolvent, call a meeting of creditors or have a creditors' committee
appointed, make a general assignment for the benefit of creditors, shall admit
in writing its inability to pay its debts as they become due or shall commence
any action or proceeding for the appointment of any trustee, receiver, custodian
or liquidator of such Borrower or such Obligor or all or any part of their
respective properties or assets; or
(f) a Borrower or any Obligor shall commence any action or
proceeding for relief under the Bankruptcy Code or any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under the Bankruptcy Code or any other present or future statute, law or
regulation or shall take any corporate action to authorize any of such actions
or proceedings; or
(g) a Borrower or any Obligor shall have commenced against it any
action or proceeding for relief under the Bankruptcy Code or any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under the Bankruptcy Code or any other present or future statute, law or
regulation, or any action or proceeding for the appointment of any trustee,
receiver, custodian or liquidator of such Borrower or Obligor or all or any part
of their respective properties or assets, which is not dismissed within
forty-five (45) days of its commencement, or such Borrower or Obligor shall file
any answer admitting or not contesting the allegations of a petition filed
against it in any such proceeding or by any act or
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omission indicates its consent to, acquiescence in or approval of, any such
action or proceeding or if the relief requested is granted sooner; or
(h) a Borrower or any Obligor shall default in the payment of any
amounts at any time due on any Indebtedness for borrowed money in excess of
$2,500,000 (including, without limitation, any Indebtedness evidenced by or
arising under the Senior Notes or the other Senior Note Agreements), Capitalized
Lease Obligations or any contingent Indebtedness in connection with any
guarantee, letter of credit, indemnity or similar type of instrument at any time
owing to any Person other than Lender or in the performance of any other terms
or covenants or any evidence of same or other agreement relating thereto
(including, without limitation, the Senior Note Agreements) or securing same and
which causes or permits the holders of such Indebtedness to cause such
Indebtedness to become due prior to its maturity, and which default continues
for more than the applicable cure period, if any, with respect thereto, but in
no event more than thirty (30) days after the occurrence of any such default; or
(i) any default by Doe Run Mining under the Banco de Credito
Agreements which gives Banco de Credito the right to cease or suspend making
payments to Doe Run thereunder or the failure of Banco de Credito to make any
payment to Doe Run required under the terms of the Banco de Credito Deposit
Agreement for any reason;
(j) there is a Change of Control; or
(k) the occurrence of any default or event of default under any of
the other Financing Agreements.
7.2 Remedies.
(a) Without limiting Lender's rights to demand payment sooner as
provided in this Agreement, upon or at any time after the occurrence or
existence of any one or more of such Events of Default, upon termination of this
Agreement or the other Financing Agreements, or if this Agreement and the other
Financing Agreements are not renewed, in addition to any other rights Lender may
have under the Financing Agreements or otherwise:
(i) Lender may terminate all provisions of this Agreement for
future Loans and Letter of Credit Accommodations (such that no more Loans shall
be made or Letter of Credit Accommodations provided hereunder), without
presentment for payment, demand, notice of dishonor or notice of protest or any
other or further notice, all of which are hereby expressly waived by Borrowers;
or
(ii) Lender may declare any or all of the Obligations to be
immediately due and payable, together with interest at the highest rate of
interest hereunder until fully and indefeasibly paid, without presentment for
payment, demand, notice of dishonor or protest or any
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or other further notice, all of which are hereby expressly waived by Borrowers
(provided, that, upon the occurrence of any Events of Default described in
Sections 7.1(f) or 7.1(g), all Obligations shall automatically become
immediately due and payable); and
(iii) each Participant, to the fullest extent permitted by
applicable law, shall have the right to (A) set off against the Obligations any
and all deposits (whether general or special, time or demand, provisional or
final), credits, balances, accounts, monies or other assets which are the
property of Borrowers and held by such Participant or owed by such Participant
to such Borrower and (B) remit the same to Lender for application to the
Obligations;
(iv) without further notice to Borrowers, Lender may
appropriate, set off and apply to the payment of any or all of the Obligations,
any or all Collateral, in such manner as Lender shall determine, enforce payment
of any Collateral, settle, compromise or release in whole or in part, any
amounts owing on the Collateral, make allowances and adjustments with respect
thereto, issue credits in Lender's or either Borrower's name, sell, assign and
deliver the Collateral (or any part thereof), at public or private sale, at
broker's board, for cash, upon credit or otherwise, at Lender's option and
discretion, and Lender may bid or become purchaser at any such sale, if public,
free from any right of redemption which is hereby expressly waived;
(v) without limiting the generality of the foregoing, Lender
is hereby authorized at any time and from time to time, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other Indebtedness at any time owing by Lender to or for the
credit or the account of Borrowers against any and all of the Obligations,
whether or not then due and payable;
(vi) Lender shall have the right, without notice to Borrowers
(except as otherwise expressly provided herein), at any time and from time to
time in its discretion, with or without judicial process or the aid or
assistance of others and without cost to Lender (A) to enter upon any premises
on or in which any of the Inventory may be located and, without resistance or
interference by Borrowers, take possession of the Inventory, (B) to complete
processing, manufacturing and repair of all or any portion of the Inventory, (C)
to sell, foreclose or otherwise dispose of any part or all of the Inventory on
or in any premises of Borrower or premises of any other party, (D) to require
each Borrower, at its expense, to assemble and make available to Lender any part
or all of the Inventory at any reasonable place and time designated by Lender,
and (E) to remove any or all of the Inventory from any premises on or in which
the same may be located, for the purpose of effecting the sale, foreclosure or
other disposition thereof or for any other purpose.
(b) Lender shall have all of the rights and remedies of a secured
party under the UCC or applicable law of any State in which any Collateral may
be situated, in addition to all of the rights and remedies set forth in this
Agreement and the other Financing Agreements, and in
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any instrument or document referred to herein or therein, and/or under any other
applicable law relating to this Agreement, the other Financing Agreements, the
Obligations or the Collateral.
(c) Each Borrower agrees that the giving of ten (10) days notice to
Doe Run by Lender at Doe Run's address set forth below, designating the place
and time of any public sale or of the time after which any private sale or other
intended disposition of the Collateral is to be made, shall be deemed to be
reasonable notice thereof and each Borrower waives any other notice with respect
thereto.
(d) The proceeds resulting from the exercise of any of the foregoing
rights or remedies shall be applied by Lender to the payment of the Obligations
in such order as Lender may elect, and each Borrower shall remain liable to
Lender for any deficiency. Without limiting the generality of the foregoing, if
Lender enters into any credit transaction, directly or indirectly, in connection
with the disposition of any Collateral, it shall have the option, at any time,
in its discretion, to reduce the Obligations by the principal amount of such
credit transaction or to defer the reduction thereof until actual receipt by
Lender of cash or other immediately available funds in connection therewith.
(e) In the event Lender institutes an action to recover any
Collateral or seeks recovery of any Collateral by way of prejudgment remedy or
otherwise, each Borrower hereby irrevocably waives (i) the posting of any bond,
surety or security with respect thereto which might otherwise be required, (ii)
any demand for possession prior to the commencement of any suit or action to
recover the Collateral, and (iii) any requirement that Lender retain possession
and not dispose of any Collateral until after trial or final judgment.
(f) Lender may, at its option, cure any default by a Borrower under
any agreement with any Person, which constitutes, or with notice or passage of
time or both would constitute, an Event of Default hereunder or under any of the
other Financing Agreements, or pay or bond on appeal any judgment entered
against a Borrower (irrespective of the amount of said judgment or the time
elapsed since entry thereof), and charge such Borrower's account(s) therefor,
such amounts to be repayable by such Borrower on demand, together with interest
thereon at the highest rate of interest payable hereunder; provided, however,
Lender shall be under no obligation to effect such cure, payment or bonding and
shall not, by making any payment for such Borrower's account(s), be deemed to
have assumed any obligation or liability of such Borrower.
(g) The enumeration of the foregoing rights and remedies is not
intended to be exclusive, and such rights and remedies are in addition to and
not by way of limitation of any other rights or remedies Lender may have under
the UCC or other applicable law. Lender shall have the right to determine which
rights and remedies, and in which order any of the same, are to be exercised,
and to determine which Collateral is to be proceeded against and in which order,
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and the exercise of any right or remedy shall not preclude the exercise of any
others, all of which shall be cumulative.
(h) No act, failure or delay by Lender shall constitute a waiver of
any of the rights and remedies of Lender. No single or partial waiver by Lender
of any provision of this Agreement or any of the other Financing Agreements, or
breach or default thereunder, or of any right or remedy which Lender may have
shall operate as a waiver of any other provision, breach, default, right or
remedy or of the same provision, breach, default, right or remedy on a future
occasion.
(i) Each Borrower waives presentment, notice of dishonor, protest
and notice of protest of all instruments included in or evidencing any of the
Obligations or the Collateral and any and all notices or demands whatsoever
(except as expressly provided herein). Lender may, at all times, proceed
directly against either or both of Borrowers to enforce payment of the
Obligations and shall not be required to take any action of any kind to
preserve, collect or protect any rights in the Collateral.
SECTION 8. COLLECTION AND ADMINISTRATION
8.1 Collections; Management of Collateral.
(a) Each Borrower shall establish and maintain, at its expense,
blocked accounts or lockboxes and related blocked accounts (in either case,
"Blocked Accounts"), as Lender may specify, with such banks as are acceptable to
Lender into which such Borrower shall promptly deposit and direct its account
debtors to directly remit all payments on Accounts and all payments constituting
proceeds of Inventory or other Collateral in the identical form in which such
payments are made, whether by cash, check or other manner. The banks at which
the Blocked Accounts are established shall enter into an agreement, in form and
substance satisfactory to Lender, providing that all items received or deposited
in the Blocked Accounts are subject to the security interests and rights of
Lender, that the depository bank has no lien upon, or right to setoff against,
the Blocked Accounts, the items received for deposit therein, or the funds from
time to time on deposit therein and that the depository bank will wire, or
otherwise transfer, in immediately available funds, on a daily basis, at such
time as Lender shall direct, all funds received or deposited into the Blocked
Accounts to such bank account of Lender as Lender may from time to time
designate for such purpose ("Payment Account"). Borrowers agree that all
payments made to such Blocked Accounts or other funds received and collected by
Lender, whether on the Accounts or as proceeds of Inventory or other Collateral
or otherwise shall be subject to the security interests and rights of Lender.
(b) For purposes of calculating interest on the Obligations, such
payments or other funds received will be applied (conditional upon final
collection) to the Obligations one (1)
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Business Day following the date of receipt of immediately available funds by
Lender in the Payment Account (the "Collection Period"). In the event that as of
any day there are no Loans outstanding, Lender shall be entitled to charge
Borrowers an administrative fee equivalent to the interest Lender would have
received for the Collection Period had there been Loans outstanding on such day,
in the amount of the payments and other funds received pursuant to the preceding
sentence by Lender in the Payment Account on such day. For purposes of
calculating the amount of the Loans available to each Borrower such payments
will be applied (conditional upon final collection) to the Obligations on the
Business Day of receipt by Lender in the Payment Account, if such payments are
received within sufficient time (in accordance with Lender's usual and customary
practices as in effect from time to time) to credit such Borrower's loan account
on such day, and if not, then on the next Business Day. To the extent Lender may
hold cash collateral to secure all of the Obligations on terms and conditions
determined by Lender, so long as no Event of Default shall exist or have
occurred and be continuing, the Borrower providing such cash collateral shall
receive a credit to its loan account maintained by Lender at a rate equal to
three (3%) percent per annum less than the Prime Rate. Such credit shall be
applied to the loan account of such Borrower as of the first day of each month.
(c) Each Borrower and all of its Subsidiaries, shareholders,
directors, employees, agents and other Affiliates shall, acting as trustee for
Lender, receive, as the property of Lender according to its interest hereunder,
any monies, checks, notes, drafts or any other payment relating to and/or
proceeds of Accounts or other Collateral which come into their possession or
under their control and immediately upon receipt thereof, shall deposit or cause
the same to be deposited in the Blocked Accounts, or remit the same or cause the
same to be remitted, in kind, to Lender. In no event shall the same be
commingled with such Borrower's own funds. Each Borrower agrees to reimburse
Lender on demand for any amounts owed or paid to any bank at which a Blocked
Account is established or any other bank or person involved in the transfer of
funds to or from the Blocked Accounts arising out of Lender's payments to or
indemnification of such bank or person. The obligation of Borrowers to reimburse
Lender for such amounts pursuant to this Section 8.1 shall survive the
termination or non-renewal of this Agreement.
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8.2 Payments.
(a) All Obligations shall be payable to the Payment Account as
designated under Section 8.1 or such other place as Lender may designate from
time to time. The Obligations shall be payable upon the effective date of
termination or non-renewal or maturity of the Credit Facility, or earlier upon
an Event of Default, or otherwise as provided elsewhere herein or in the other
Financing Agreements. Lender may apply payments received or collected from a
Borrower or for the account of a Borrower (including, without limitation, the
monetary proceeds of collections or of realization upon any Collateral) to such
of the Obligations, whether or not then due, and to such other Obligations then
due, in each case in such order and manner as Lender determines. Lender shall
have the continuing and exclusive right to apply and reverse and reapply any and
all such proceeds and payments to any portion of the Obligations. Upon the
request of Lender, Borrowers shall execute and deliver to Lender one or more
promissory notes, in form and substance satisfactory to Lender, to evidence
further the Loans, or any portion thereof.
(b) If after receipt of any payment of, or proceeds applied to the
payment of, all or any part of the Obligations, Lender is for any reason
required to surrender such payment or proceeds to any Person, because such
payment or proceeds is invalidated, declared fraudulent, set aside, determined
to be void or voidable as a preference, or a diversion of trust funds, or for
any other reason, then the Obligations or any part thereof intended to be
satisfied shall be revived and continue and this Agreement shall continue in
full force as if such payment or proceeds had not been received by such Lender
and Borrowers shall be liable to pay to Lender, and hereby does indemnify Lender
and hold Lender harmless for the amount of such payment or proceeds surrendered.
The provisions of this Section 8.2(b) shall be and remain effective
notwithstanding any contrary action which may have been taken by Lender in
reliance upon such payment or proceeds, and any such contrary action so taken
shall be without prejudice to the rights of Lender under this Agreement and
shall be deemed to have been conditioned upon such payment or proceeds having
become final and irrevocable. The provisions of this Section 8.2(b) shall
survive the termination of this Agreement and the other Financing Agreements.
(c) At Lender's option, all principal, interest, fees, commissions,
costs, expenses, or other charges hereunder, under the other Financing
Agreements or in connection herewith or therewith, and any and all Loans, may be
charged directly to any account(s) of Borrowers maintained by Lender.
(d) Each Borrower shall make all payments in respect of the
Obligations free and clear of, and without deduction or withholding for or on
account of, any setoff, counterclaim, defense, duties, taxes, levies, imposts,
fees, deductions, withholdings, restrictions or conditions of any kind or nature
whatsoever.
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8.3 Borrowers' Loan Account. Lender shall maintain one or more loan
account(s) on its books in which shall be recorded (a) all Loans, Letter of
Credit Accommodations and other Obligations and the Collateral, (b) all payments
made by or on behalf of a Borrower and (c) all other appropriate debits and
credits as provided in this Agreement, including, without limitation, fees,
charges, costs, expenses and interest. All entries in the loan account(s) shall
be made in accordance with Lender's customary practices as in effect from time
to time. All Collateral or other collateral security held by or granted to
Lender by a Borrower or any third persons shall be security for the payment and
performance of any and all Obligations to Lender (including, but not limited to,
the Loans), notwithstanding the maintenance of separate accounts for Borrowers
or third persons or the existence of any notes.
8.4 Statements. Lender shall render to Doe Run each month a statement
setting forth the balance in each Borrower's loan account(s) maintained by
Lender for such Borrower pursuant to the provisions of this Agreement, including
principal, interest, fees, costs and expenses. Each such statement shall be
subject to subsequent adjustment by Lender but shall, absent manifest errors or
omissions, be considered correct and deemed accepted by Borrowers and
conclusively binding upon Borrowers as an account stated except to the extent
that Lender receives a written notice from Borrowers of any specific exceptions
of Borrowers thereto within thirty (30) days after the date such statement has
been mailed by Lender. Until such time as Lender shall have rendered to Doe Run
a written statement as provided above, the balance in such Borrower's loan
account(s) shall be presumptive evidence of the amounts due and owing by such
Borrower to Lender.
8.5 Right of Inspection; Access. Lender and its representatives shall, at
all reasonable times and upon reasonable prior written notice prior to an Event
of Default and at any time and without notice at any time on or after an Event
of Default, have free access to and right of inspection of the Collateral and
have full access to and the right to examine and make copies of the books and
records of Borrowers to confirm and verify all Accounts, to perform general
audits and to do whatever else Lender deems necessary to protect the interests
of Lender. Lender may at any time remove from the premises of Borrowers or
require Borrower or any accountants and auditors employed by Borrowers to
deliver any books and records and Lender may, without cost or expense to any of
it, use such of Borrowers' personnel, supplies, computer equipment and space at
its places of business as may be reasonably necessary for the handling of
collections.
8.6 Accounts Documentation. Each Borrower shall maintain its shipping
forms, invoices and other related documents in a form reasonably satisfactory to
Lender and each Borrower shall maintain its books, records and accounts in
accordance with GAAP consistently applied. Each Borrower shall keep and
maintain, at its cost and expense, satisfactory and complete books and records
of all Accounts, all payments received or credits granted thereon, and all other
dealings therewith. At such times as Lender may reasonably request, each
Borrower shall deliver to Lender, all original documents evidencing the sale and
delivery of
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goods or the performance of services which created any Accounts, including, but
not limited to, all contracts, orders, invoices, bills of lading, warehouse
receipts, delivery tickets and shipping receipts, together with schedules
describing the Accounts and/or written confirmatory assignments to Lender of
each Account, in form and substance satisfactory to Lender and duly executed by
such Borrower, together with such other information as Lender may request. In no
event shall the making or the failure to make or the content of any schedule or
assignment or such Borrower's failure to comply with the provisions hereof be
deemed or construed as a waiver, limitation or modification of the security
interest in, lien upon and assignment of the Collateral or the representations,
warranties or covenants under this Agreement or the other Financing Agreements.
Any documents, schedules, invoices or other papers delivered to Lender, pursuant
to this Section or otherwise, may be destroyed or otherwise disposed of by it
one (1) year after the same are delivered, unless Borrowers make written request
therefor and pay all expenses attendant to their return, in which event Lender
shall return same when its actual or anticipated need therefor has ceased.
8.7 Specific Powers. Each Borrower hereby constitutes Lender and its
designees, as such Borrower's attorney-in-fact, with power of substitution, at
the cost and expense of Borrowers, to exercise at any time all or any of the
following powers which appointment, being coupled with an interest, shall be
irrevocable until all Obligations have been indefeasibly paid in full: (a) to
receive, take, endorse, assign, deliver, accept and deposit, in the name of
Lender or such Borrower, any and all checks, notes, drafts, remittances and
other instruments and documents or chattel paper, in each case to the extent
relating to the Collateral; (b) to transmit to Account Debtors notice of
Lender's interest therein and to request from such Account Debtors at any time,
in the name of Lender or such Borrower or that of Lender's designee, information
concerning the Collateral and the amounts owing thereon; (d) on or after the
occurrence of an Event of Default, or an event which with notice, passage of
time or both would constitute an Event of Default, to notify Account Debtors to
make payment directly to Lender; (e) on or after the occurrence of an Event of
Default, or an event which with notice, passage of time or both would constitute
an Event of Default, to take or bring, in the name of Lender or such Borrower,
all steps, actions, suits or proceedings deemed by Lender necessary or desirable
to effect collection of the Collateral; and (f) to execute in such Borrower's
name and on its behalf any UCC financing statements relating to the Collateral
or amendments thereto. Each Borrower hereby releases Lender and its officers,
employees and designees, from any liability arising from any act or acts under
this Agreement or in furtherance thereof, whether of omission or commission, and
whether based upon any error of judgment or mistake of law or fact, except for
acts of gross negligence or wilful misconduct of Lender as determined pursuant
to a final non-appealable order of a court of competent jurisdiction.
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SECTION 9. EFFECTIVE DATE; TERMINATION; COSTS
9.1 Term.
(a) This Agreement and the other Financing Agreements shall become
effective as of the date hereof and shall continue in full force and effect for
a term ending on the date three (3) years from the date hereof (the "Renewal
Date") and from year to year thereafter, unless sooner terminated pursuant to
the terms hereof; provided, that, Lender or Borrowers may terminate this
Agreement and the other Financing Agreements effective on the Renewal Date or on
the anniversary of the Renewal Date in any subsequent year by giving to the
other parties hereto at least sixty (60) days prior written notice. This
Agreement and all other Financing Agreements must be terminated simultaneously.
(b) In addition, Lender may terminate this Agreement and the other
Financing Agreements, or terminate only the provisions of this Agreement as to
future Loans and Letter of Credit Accommodations, immediately at any time upon
the occurrence of an Event of Default or an act, condition or event which with
notice or passage of time or both would constitute an Event of Default.
(c) Upon the effective date of termination or non-renewal of the
Financing Agreements, Borrowers shall pay to Lender in full, all outstanding and
unpaid Obligations (including, but not limited to, the Loans and all interest,
fees (including the early termination fees provided herein, if applicable),
charges, expenses and other amounts provided for hereunder, under the other
Financing Agreements or otherwise) and shall furnish cash collateral to Lender
in such amounts as Lender determines are reasonably necessary to secure Lender
from loss, cost, damage or expense, including reasonable attorneys' fees and
legal expenses, in connection with any contingent Obligations, including Letter
of Credit Accommodations and any checks or other payments provisionally credited
to the Obligations and/or as to which Lender has not yet received final and
indefeasible payment. Such payments in respect of the Obligations and cash
collateral shall be remitted by wire transfer in Federal funds to such bank
account of Lender, as Lender may, in its discretion, designate in writing to
Borrowers for such purpose. Interest at the Interest Rate shall be due until and
including the next Business Day, if the amounts so paid by Borrower to the bank
account designated by Lender are received in such bank account later than 12:00
noon, New York, New York time.
(d) No termination of all or any part of the Financing Agreements
shall relieve or discharge either Borrower of its duties, obligations and
covenants under the Financing Agreements until all Obligations have been fully
indefeasibly discharged and paid, and the continuing security interests of
Lender in the Collateral shall remain in effect until all such Obligations have
been fully and indefeasibly discharged and paid.
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(e) If this Agreement terminates upon the occurrence of an Event of
Default or at the request of either Borrower prior to the Renewal Date, in view
of the impracticality and extreme difficulty of ascertaining actual damages and
by mutual agreement of the parties as to a reasonable calculation of the lost
profits of Lender as a result thereof, Borrowers hereby agree to pay to Lender,
upon the effective date of such termination, an early termination fee in an
amount equal to:
(i) two (2%) percent of the Maximum Credit, if such
termination is effective on or prior to the first
anniversary of this Agreement; or
(ii) one (1%) percent of the Maximum Credit, if such
termination is effective after the first anniversary of
this Agreement but on or prior to the second anniversary
of this Agreement; or
(iii) one-half (1/2%) percent of the Maximum Credit, if such
termination is effective after the second anniversary of
this Agreement but prior to the third anniversary of
this Agreement, or if the Agreement continues for any
renewal term thereafter, if such termination is
effective prior to the last day of such renewal term.
Such early termination fee shall be presumed to be the amount of damages
sustained by said early termination and Borrowers agree that it is reasonable
under the circumstances currently existing. The early termination fee provided
for in this Section 9.1 shall be deemed included in the Obligations.
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9.2 Expenses and Additional Fees.
(a) Each Borrower shall pay to Lender on demand all reasonable costs
and expenses that Lender may pay or incur in connection with the negotiation,
preparation, consummation, administration, enforcement, and termination of this
Agreement and the other Financing Agreements, including, without limitation: (i)
reasonable attorneys' and paralegals' fees and disbursements of counsel to
Lender and any Participant (including allocated costs of in-house counsel); (ii)
costs and expenses (including reasonable attorneys' and paralegals' fees and
disbursements, and allocated costs of in-house counsel) for any amendment,
supplement, waiver, consent, or subsequent closing in connection with the
Financing Agreements and the transactions contemplated thereby; (iii) costs and
expenses of lien and title searches and title insurance; (iv) taxes, fees and
other charges for recording any agreements or documents with the Office of
Patents and Trademarks, the Copyright Office or any other governmental
authority, and the filing of UCC financing statements and continuations, and
other actions to perfect, protect, and continue the security interests and liens
of Lender in the Collateral; (v) sums paid or incurred to pay any amount or take
any action required of Borrowers under the Financing Agreements that Borrowers
fail to pay or take; (vi) with respect to the Collateral, costs of appraisals,
inspections and verifications thereof (including, without limitation, travel,
lodging, and meals) and inspections of each Borrower's operations by Lender,
Participants or their agents, plus a charge of $650 per person per day for the
field examiners of Lender and any Participant; (vii) costs and expenses of
forwarding loan proceeds, collecting checks and other items of payment, and
establishing and maintaining payment accounts and lock boxes; (viii) costs and
expenses of preserving and protecting the Collateral; and (ix) costs and
expenses (including reasonable attorneys' and paralegals' fees and disbursements
and allocated costs of in-house counsel) paid or incurred to obtain payment of
the Obligations, enforce the security interests and liens of Lender, sell or
otherwise realize upon the Collateral, and otherwise enforce the provisions of
this Agreement and the other Financing Agreements, or to defend any claims made
or threatened against Lender arising out of the transactions contemplated hereby
(including, without limitation, preparations for and consultations concerning
any such matters). The foregoing shall not be construed to limit any other
provisions of the Financing Agreements regarding costs and expenses to be paid
by Borrowers.
(b) Borrowers shall pay to Lender all of its customary charges and
fees in connection with (i) any payment, claim or refund relating to the
dishonor of any checks or other items of Borrowers or Account Debtors, and (ii)
wire transfers to Borrowers.
(c) All sums provided for in this Section 9.2 shall be part of the
Obligations, shall be payable on demand, and shall accrue interest after demand
for payment thereof at the applicable rate of interest then payable hereunder.
Lender is hereby irrevocably authorized to charge any amounts payable hereunder
directly to any of the account(s) maintained by Lender with respect to
Borrowers.
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9.3 Survival of Agreement. All agreements, representations and warranties
contained herein or made in writing by the parties hereto in connection with the
transactions contemplated hereby shall survive the execution and delivery of
this Agreement, the other Financing Agreements and the consummation of the
transactions contemplated herein or therein regardless of any investigation made
by or on behalf of Lender.
9.4 No Waiver; Cumulative Remedies. No failure to exercise, and no delay
in exercising on the part of Lender any right, power or privilege under this
Agreement or under any of the other Financing Agreements or other documents
referred to herein or therein shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder or
thereunder preclude any other or further exercise thereof or the exercise of any
other right, power and privilege. No notice to or demand on a Borrower not
required hereunder or any of the other Financing Agreements shall entitle a
Borrower to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of Lender to any other or
further action in any circumstances without notice or demand. The rights and
remedies of Lender under this Agreement, the other Financing Agreements and any
other present and future agreements between Lender and a Borrower are cumulative
and not exclusive of any rights or remedies provided by law or under any of the
Financing Agreements or such other agreements and all such rights and remedies
may be exercised successively or concurrently.
9.5 Notices. All notices, requests and demands hereunder shall be in
writing and (a) made to the applicable party at its address set forth on the
signature page hereof, or to such other address as either party may designate by
written notice to the other in accordance with this provision, and (b) deemed to
have been given or made: if delivered in person, immediately upon delivery; if
by telex, telegram or facsimile transmission, immediately upon sending and upon
confirmation of receipt; if by nationally recognized overnight courier service
with instructions to deliver the next Business Day, one (1) Business Day after
sending; and if by certified mail, return receipt requested, ten (10) days after
mailing.
9.6 Entire Agreement. This Agreement, the other Financing Agreements, any
supplements hereto or thereto, and any instruments or documents delivered or to
be delivered in connection herewith or therewith represent the entire agreement
and understanding concerning the subject matter hereof and thereof between the
parties hereto, and supersede all other prior and contemporaneous agreements,
understandings, negotiations and discussions, representations, warranties,
commitments, offers and contracts concerning the subject matter hereof and
thereof, whether oral or written.
9.7 Confidentiality.
(a) Lender shall use all reasonable efforts to keep confidential, in
accordance with its customary procedures for handling confidential information
and safe and sound lending practices, any non-public information supplied to it
by Borrowers pursuant to this Agreement
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which is clearly and conspicuously marked as confidential at the time such
information is furnished by Borrowers to Lender, provided, that, nothing
contained herein shall limit the disclosure of any such information: (i) to the
extent required by statute, rule, regulation, subpoena or court order, (ii) to
bank examiners and other regulators, auditors and/or accountants, (iii) in
connection with any litigation to which Lender is a party, (iv) to any Affiliate
of Lender, (v) to any assignee or participant (or prospective assignee or
participant) so long as such assignee or participant (or prospective assignee or
participant) shall have first agreed in writing to treat such information as
confidential in accordance with this Section 9.7, or (vi) to counsel for Lender
or any participant or assignee (or prospective participant or assignee).
(b) In no event shall this Section 9.7 or any other provision of
this Agreement or applicable law be deemed: (i) to apply to or restrict
disclosure of information that has been or is made public by Borrowers or any
third party without breach of this Section 9.7 or otherwise becomes generally
available to the public other than as a result of a disclosure in violation
hereof, (ii) to apply to or restrict disclosure of information that was or
becomes available to Lender on a non-confidential basis from a person other than
Borrowers, (iii) require Lender to return any materials furnished by Borrowers
to Lender or (iv) prevent Lender from responding to routine informational
requests in accordance with the Code of Ethics for the Exchange of Credit
Information promulgated by The Robert Morris Associates or other applicable
industry standards relating to the exchange of credit information. The
obligations of Lender under this Section 9.7 shall supersede and replace the
obligations of Lender under any confidentiality letter signed prior to the date
hereof.
9.8 Partial Invalidity. If any provision of this Agreement or the other
Financing Agreements is held to be invalid or unenforceable, such invalidity or
unenforceability shall not invalidate this Agreement or the other Financing
Agreements as a whole but this Agreement or the particular Financing Agreement,
as the case may be, shall be construed as though it did not contain the
particular provision or provisions held to be invalid or unenforceable and the
rights and obligations of the parties shall be construed and enforced only to
such extent as shall be permitted by law.
9.9 Headings. The headings used herein are for convenience only and do not
constitute matters to be considered in interpreting this Agreement.
9.10 Counterparts. This Agreement may be executed in any number of
counterparts, and by Lender and Borrowers in separate counterparts, each of
which shall be an original, but all of which shall together constitute one and
the same agreement.
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SECTION 10. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW
10.1 Governing Law; Choice of Forum; Service of Process; Jury Trial
Waiver.
(a) The validity, interpretation and enforcement of this Agreement
and the other Financing Agreements and any dispute arising out of the
relationship between the parties hereto, whether in contract, tort, equity or
otherwise, shall be governed by the internal laws of the State of New York
(without giving effect to principles of conflicts of law).
(b) Borrowers and Lender irrevocably consent and submit to the
non-exclusive jurisdiction of the Supreme Court of the State of New York in New
York County and the United States District Court for the Southern District of
New York and waive any objection based on venue or forum non conveniens with
respect to any action instituted therein arising under this Agreement or any of
the other Financing Agreements or in any way connected with or related or
incidental to the dealings of the parties hereto in respect of this Agreement or
any of the other Financing Agreements or the transactions related hereto or
thereto, in each case whether now existing or hereafter arising, and whether in
contract, tort, equity or otherwise, and agree that any dispute with respect to
any such matters shall be heard only in the courts described above. Lender shall
have the right to bring any action or proceeding against either or both of
Borrowers or its or their property in the courts of any other jurisdiction which
Lender deems necessary or appropriate in order to realize on the Collateral or
to otherwise enforce its rights against Borrower or its or their property).
(c) Each Borrower hereby waives personal service of any and all
process upon it and consents that all such service of process may be made by
registered mail, postage prepaid, directed to its address set forth on the
signature pages hereof and service so made shall be deemed to be completed ten
(10) days after the same shall have been so deposited in the U.S. mails,
registered mail, postage prepaid, or, at Lender's option, by service upon
Borrower in any other manner provided under the rules of any of the foregoing
courts. Within thirty (30) days after such service, such Borrower shall appear
in answer to such process, failing which such Borrower shall be deemed in
default and judgment may be entered by Lender against such Borrower for the
amount of the claim and other relief requested.
(d) BORROWERS AND LENDER EACH HEREBY WAIVES ANY RIGHT TO TRIAL BY
JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS
AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR (ii) IN ANY WAY CONNECTED
WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT
OF THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR THE TRANSACTIONS
RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY
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OR OTHERWISE. BORROWERS AND LENDER EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY AND THAT BORROWERS OR LENDER MAY FILE AN ORIGINAL COUNTERPART OF A COPY
OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(e) Lender shall not have any liability to Borrowers (whether in
tort, contract, equity or otherwise) for losses suffered by Borrowers in
connection with, arising out of, or in any way related to the transactions or
relationships contemplated by this Agreement, or any act, omission or event
occurring in connection herewith, unless it is determined by a final and
non-appealable judgment by a court of competent jurisdiction that the losses
were the result of such party's own acts or omissions constituting gross
negligence or willful misconduct. In any such litigation, Lender shall be
entitled to the benefit of the rebuttable presumption that it acted in good
faith and with the exercise of ordinary care in the performance by it of the
terms of this Agreement.
10.2 Waiver of Notices. Borrowers hereby expressly waive demand,
presentment, protest and notice of protest and notice of dishonor with respect
to any and all instruments and commercial paper, included in or evidencing any
of the Obligations or the Collateral, and any and all other demands and notices
of any kind or nature whatsoever with respect to the Obligations, the Collateral
and this Agreement, except such as are expressly provided for herein. No notice
to or demand on a Borrower which Lender may elect to give shall entitle
Borrowers to any other or further notice or demand in the same, similar or other
circumstances. Without limiting the generality of the foregoing, Borrowers waive
(a) notice prior to Lender's taking possession or control of any of the
collateral or any bond or security which might be required by any court prior to
allowing Lender to exercise any of Lender's remedies, including the issuance of
an immediate writ of possession and (b) the benefit of all valuation,
appraisement and exemption laws.
10.3 Amendments and Waivers. Neither this Agreement nor any provision
hereof shall be amended, modified, waived or discharged orally or by course of
conduct, but only by a written agreement signed by an authorized officer of
Lender, and as to amendments, as also signed by authorized officers of
Borrowers. Lender shall not, by any act, delay, omission or otherwise be deemed
to have expressly or impliedly waived any of its rights, powers and/or remedies
unless such waiver shall be in writing and signed by an authorized officer of
Lender. Any such waiver shall be enforceable only to the extent specifically set
forth therein. A waiver by Lender of any right, power and/or remedy on any one
occasion shall not be construed as a bar to or waiver of any such right, power
and/or remedy which Lender would otherwise have on any future occasion, whether
similar in kind or otherwise.
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10.4 Waiver of Counterclaims. Each Borrower waives all rights to interpose
any claims, deductions, setoffs or counterclaims of any nature (other than
compulsory counterclaims) in any action or proceeding with respect to this
Agreement, the Obligations, the Collateral or any matter arising therefrom or
relating hereto or thereto.
10.5 Indemnification. Each Borrower shall indemnify and hold Lender and
its respective officers, directors, agents, employees and counsel, harmless from
and against any and all losses, claims, damages, liabilities, costs or expenses
imposed on, incurred by or asserted against any of them in connection with any
litigation, investigation, claim or proceeding commenced or threatened related
to the negotiation, preparation, execution, delivery, enforcement, performance
or administration of this Agreement, any other Financing Agreements, or any
undertaking or proceeding related to any of the transactions contemplated hereby
or any act, omission, event or transaction related or attendant thereto,
including, without limitation, amounts paid in settlement, court costs, and the
fees and expenses of counsel except to the extent resulting directly from the
gross negligence or wilful misconduct of Lender as determined pursuant to a
final non-appealable order of a court of competent jurisdiction. To the extent
that the undertaking to indemnify, pay and hold harmless set forth in this
Section may be unenforceable because it violates any law or public policy,
Borrowers shall pay the maximum portion which it is permitted to pay under
applicable law to Lender in satisfaction of indemnified matters under this
Section. The foregoing indemnity shall survive the payment of the Obligations
and the termination or non-renewal of this Agreement.
10.6 Successors and Assigns. This Agreement, the other Financing
Agreements and any other document referred to herein or therein shall be binding
upon and inure to the benefit of and be enforceable by Lender, Borrowers, and
their respective successors and assigns, except that Borrowers may not assign
its rights under this Agreement, the other Financing Agreements and any other
document referred to herein or therein without the prior written consent of
Lender. Lender may, after prior notice to Doe Run, assign its rights and
delegate its obligations under this Agreement and the other Financing Agreements
and further may assign, or, after prior notice to Doe Run, sell participations
in, all or any part of the Loans, the Letter of Credit Accommodations or any
other interest herein to another financial institution or other person, in which
event, the assignee or participant shall have, to the extent of such assignment
or participation, the same rights and benefits as it would have if it were the
Lender hereunder, except as otherwise provided by the terms of such assignment
or participation. Upon the request of Doe Run, Lender shall identify any
Participants to Doe Run.
-84-
<PAGE>
IN WITNESS WHEREOF, Lender and Borrowers have caused these presents to be
duly executed as of the day and year first above written.
LENDER BORROWERS
CONGRESS FINANCIAL CORPORATION, THE DOE RUN RESOURCES CORPORATION
By: /s/ Lawrence Forte By: /s/ David A. Chaput
--------------------------- ---------------------------
Title: First Vice President Title: Treasurer
------------------------ ------------------------
Address: Chief Executive Office:
1133 Avenue of the Americas 1801 Park 270 Drive
New York, New York 10036 St. Louis, Missouri 63146
Attention: Mr. Andrew W. Robin Attention: Chief Financial Officer
Telephone: (212) 840-2000 Telephone: (314) 453-7100
Telecopier: (212) 545-4283 Telecopier: (314) 453-7178
FABRICATED PRODUCTS, INC.
By: /s/ David A. Chaput
---------------------------
Title: President
------------------------
Chief Executive Office:
1801 Park 270 Drive
St. Louis, Missouri 63146
Attention: Chief Financial Officer
Telephone: (314) 453-7100
Telecopier: (314) 453-7178
-85-
<PAGE>
EXHIBIT A
TO
LOAN AND SECURITY AGREEMENT
Date: (A)
Number: (B)
BORROWING BASE CERTIFICATE
Pursuant to the Loan and Security Agreement between Congress Financial
Corporation ("Lender") and the undersigned ("Borrower"), and any amendments
thereto (the "Loan Agreement), Borrower hereby certifies to Lender, as of the
above date, as follows:
RECONCILIATION OF COLLATERAL BALANCE
Note: Letters and numbers in the chart correspond to the instructions provided
on the prior four pages.
Accounts Availability - Doe Run
1. Total Accounts as of _________ $_______
2. Less: Collections $_______
3. Less: Credits and Adjustments since
date of prior Certificate $_______
4. Add: New sales since date of prior
Certificate $_______
5. Current total of all Accounts $_______
6. Total amount of Accounts which are
not Eligible Accounts (as per $_______
Schedule I annexed hereto)
7. Net Amount of Eligible Accounts
(item 5 less item 6) $_______
-86-
<PAGE>
8. Accounts Receivable Advance Rate (%) 85%
-------
9. Availability based on Net Amount
of Eligible Accounts $_______
10. Less: Availability Reserves $_______
11. Accounts Availability - Doe Run $_______
Accounts Availability - Fabricated Products
12. Total Accounts as of____ $_______
13. Less: Collections $_______
14. Less: Credits and Adjustments since
date of prior Certificate $_______
15. Add: New sales since date of prior
Certificate $_______
16. Current total of all Accounts $_______
17. Total amount of Accounts which are
not Eligible Accounts (as per $_______
Schedule II annexed hereto)
18. Net Amount of Eligible Accounts
(item 16 less item 17) $_______
19. Accounts Receivable Advance Rate (%) 85%
-------
20. Availability based on Net Amount
of Eligible Accounts $_______
21. Less: Availability Reserves $_______
22. Accounts Availability - Fabricated Products $_______
Inventory Availability - Doe Run
23. Total Value of Inventory as of
______
-87-
<PAGE>
(a) Value of Inventory other than
Stores Inventory $_______
(b) Value of Stores Inventory $_______
24. (a) Total Value of Inventory which
is not Eligible Inventory (other
than Eligible Stores Inventory)
(as per Schedule III annexed hereto) $_______
(b) Value of Eligible Inventory (other
than Eligible Stores Inventory) $_______
(c) Inventory Advance Rate (for other
than Eligible Stores Inventory)(%) 60%
------
(d) Availability based on Eligible Inventory
other than Eligible Stores Inventory $_______
25. (a) Value of Eligible Stores Inventory $_______
(b) Stores Inventory Advance Rate (%) 25%
-------
(c) Formula Availability based on
Eligible Stores Inventory $_______
(d) Stores Sublimit $_______
(e) Availability based on Eligible
Stores Inventory (the lesser of
25(c) or 25(d)) $_______
26. Availability based on Eligible Inven-
tory and Eligible Stores Inventory $_______
27. Less: Availability Reserves $_______
28. Inventory Formula Availability $_______
29. Inventory Sublimit $_______
30. Inventory Availability - Doe Run (lesser of
item 28 or item 29) $_______
-88-
<PAGE>
Inventory Availability - Fabricated Products
31. Total Value of Inventory
as of (D)
-----------------
(a) Value of Inventory $_______
32. (a) Total Value of Inventory which
is not Eligible Inventory (as per
Schedule IV annexed hereto) $_______
(b) Value of Eligible Inventory $_______
(c) Inventory Advance Rate (%) 60%
-------
(d) Availability based on Eligible
Inventory $_______
33. Availability based on Eligible Inven-
tory $_______
34. Less: Availability Reserves $_______
35. Inventory Formula Availability $_______
36. Inventory Sublimit $_______
37. Inventory Availability - Fabricated Products
(lesser of item 35 or item 36) $_______
Total Availability
38. Total Availability based on Accounts
and Inventory (item 38(a) plus item
38(d)).
(a) Total Availability based on Doe Run
Accounts and Inventory (item 11
plus item 30) $_______
(b) Total Availability based on Fabricated
Products Accounts and Inventory
(item 22 plus item 37) $_______
-89-
<PAGE>
(c) Sublimit on advances against Fabricated
Products Accounts and Inventory $ 5,000,000
-----------
(d) Availability based on Fabricated Products
Accounts and Inventory (lesser of
item 38(b) or item 38(c)) $_______
39. Less: 100% of undrawn amounts of
Letter of Credit Accommodations $_______
40. Availability (item 38 minus item 39) $_______
41. Maximum Credit $_______
42. Total Availability (lesser of item 41 or item 42) $_______
RECONCILIATION OF LOAN BALANCE
43. Principal amount of outstanding Loans
as of the date of prior Certificate $_______
44. Less: Net cash collections since
date of prior Certificate $_______
45. Add: Principal amount of Loans made
since date of prior Certificate $_______
46. Current principal amount of outstanding
Loans $_______
47. Current undrawn amount of outstanding
Letter of Credit Accommodations $_______
48. Total Loans and Letters of Credit
Accommodations (item 46 plus item 47) $_______
49. Unused availability (item 42 less item 48) $_______
-90-
<PAGE>
As of the date of this Certificate, no Event of Default exists or has
occurred and is continuing. Borrower acknowledges that the Loans and Letter of
Credit Accommodations by Lender to Borrower are based upon Lender's reliance on
the information contained herein and all representations and warranties with
respect to Accounts and Inventory in the Loan Agreement are applicable to the
Accounts and Inventory included in this Certificate. The reliance by Lender on
this Certificate should not be deemed to limit the right of Lender to establish
or revise criteria of eligibility or Availability Reserves or otherwise limit,
impair, or affect in any manner the rights of Lender under the Loan Agreement.
In the event of any conflict between the determination of Lender of the amount
of the Loans and Letter of Credit Accommodations available to Borrower in
accordance with the terms of the Loan Agreement and the determination by
Borrower of such amounts, the determination of Lender shall govern. All
capitalized terms used in this Certificate shall have the meaning assigned to
them in the Loan Agreement.
By:
Title:
-91-
<PAGE>
SCHEDULE I
to
BORROWING BASE CERTIFICATE
DOE RUN
1. Accounts unpaid more than 60 days
after due date $_______
2. Cross-Age Accounts $_______
3. Credits in past due $_______
4. Concentration Accounts $_______
5. Affiliate Accounts $_______
6. Returns, Discounts, Claims, Credits
Allowances, Taxes $_______
7. Bill and Hold Invoices $_______
8. Foreign Accounts not backed
by L/Cs $_______
9. Contra Accounts $_______
10. Assay pending/retainage $_______
11. Accounts in legal, bankruptcy,
risky credits $_______
12. Sales-in-transit $_______
13. Dilution Reserve $_______
14. Other $_______
15. Other $_______
Total Accounts which are
not Eligible Accounts $
=======
-92-
<PAGE>
SCHEDULE II
to
BORROWING BASE CERTIFICATE
FABRICATED PRODUCTS
1. Accounts unpaid more than 60 days
after due date $_______
2. Cross-Age Accounts $_______
3. Credits in past due $_______
4. Concentration Accounts $_______
5. Affiliate Accounts $_______
6. Returns, Discounts, Claims, Credits
Allowances, Taxes $_______
7. Bill and Hold Invoices $_______
8. Foreign Accounts not backed
by L/Cs $_______
9. Contra Accounts $_______
10. Lone Star accounts less than 60 days $_______
11. Accounts in legal, bankruptcy,
risky credits $_______
12. Other $_______
13. Other $_______
Total Accounts which are
not Eligible Accounts $
=======
-93-
<PAGE>
SCHEDULE III
to
BORROWING BASE CERTIFICATE
DOE RUN
1. Slow Moving/Obsolete $_______
2. Packaging and Supplies $_______
3. Other $_______
4. Other $_______
5. Other $_______
6. Other $_______
7. Other $_______
8. Other $_______
Total Value of Inventory
which is not Eligible Inventory $
=======
-94-
<PAGE>
SCHEDULE IV
to
BORROWING BASE CERTIFICATE
FABRICATED PRODUCTS
1. Slow Moving/Obsolete $_______
2. Packaging and Supplies $_______
3. Other $_______
4. Other $_______
5. Other $_______
6. Other $_______
7. Other $_______
8. Other $_______
Total Value of Inventory
which is not Eligible Inventory $
=======
-95-
<PAGE>
SCHEDULE 1.29
TO
LOAN AND SECURITY AGREEMENT
Concentration Criteria for Specific Account Debtors
Percentage of Total
Account Debtor Eligible Accounts
-------------- -----------------
Big River Zinc Corp. 15%
Johnson Controls, Inc. 20% *
East Penn Mfg. Co., Inc. 15%
Yuasa Exide Corp. 20%
- ----------
* For September and October of any year, may be 30%
<PAGE>
SCHEDULE 1.39
TO
LOAN AND SECURITY AGREEMENT
Existing Letters of Credit
Doe Run Outstanding Letters of Credit
===============================================================================
L/C# Dated Opened Amount Reason Beneficiary
- -------------------------------------------------------------------------------
P13991 June 14, 1996 $250,000.00 Bonded Warehouse American
(Surety Bond Motorist
security) Insurance
- -------------------------------------------------------------------------------
P1512 April 25, 1996 $2,868,012.00 Financial Mercantile Bank/
Assurance Missouri Dept.
of Nat. Res.
- -------------------------------------------------------------------------------
P15522 May 9, 1995 $72,808.00 General Insurance
Liability Company of N.
Insurance America
- -------------------------------------------------------------------------------
P17382 August 29, 1996 $1,000,000.00 Workers Comp. DRC Insurance
Company of N.
America
- -------------------------------------------------------------------------------
P17384 August 29, 1996 $57,000.00 Auto Liability Indemnity
(Old Policy) Insurance of N.
America
- -------------------------------------------------------------------------------
P17383 August 29, 1996 $33,000.00 Workers Comp. LS Indemnity
Insurance of N.
America
- -------------------------------------------------------------------------------
P14568 December 2, 1994 $300,000.00 Auto Liability National
Insurance (New Casualty
Policy) Insurance
===============================================================================
<PAGE>
SCHEDULE 1.5
TO
LOAN AND SECURITY AGREEMENT
Banco de Credito Agreements
1. The Contract for a Loan in Foreign Currency by and between Banco de
Credito Overseas Ltd. and Doe Run Mining S.R. Ltda., dated as of March 12, 1998.
2. The Special Term Deposit Contract between Banco de Credito Overseas
Ltd. and The Doe Run Resources Corporation dated as of March 12, 1998.
3. The Promissory Note by Doe Run Mining S.R. Ltda. in favor of Banco de
Credito Overseas Ltd. dated as of March 12, 1998.
<PAGE>
SCHEDULE 1.83
TO
LOAN AND SECURITY AGREEMENT
List of Intercompany Service Agreements
1. The United States Services Agreement dated as of March 12, 1998 between
The Doe Run Resources Corporation and Doe Run Mining S.R. Ltda.
2. The Technology Assistance Agreement dated as of March 12, 1998 between
The Doe Run Resources Corporation and Doe Run Mining S.R. Ltda.
3. The Professional Services Agreement dated as of March 12, 1998 between
The Doe Run Resources Corporation and Doe Run Mining S.R. Ltda.
4. The Technical, Managerial and Professional Services Agreement dated as
of March 12, 1998 between The Doe Run Resources Corporation and Doe Run Mining
S.R. Ltda.
5. The Sales Agency Agreement dated as of March 12, 1998 between Doe Run
Peru S.R. Ltda. and Doe Run Mining S.R. Ltda.
6. The Technical, Managerial and Professional Services Agreement dated as
of March 12, 1998 between Doe Run Peru S.R. Ltda. and Doe Run Mining S.R. Ltda.
7. The International Sales Agency Agreement dated as of March 12, 1998
between Doe Run Peru S.R. Ltda. and The Doe Run Resources Corporation.
<PAGE>
SCHEDULE 5.1(a)
TO
LOAN AND SECURITY AGREEMENT
Jurisdictions of Qualification
A. The Doe Run Resources Corporation
California
Louisiana
Minnesota
Missouri
New York
Pennsylvania
Tennessee
Wyoming
B. Fabricated Products, Inc.
Arizona
California
Delaware
Louisiana
Missouri
Texas
Washington
<PAGE>
SCHEDULE 5.1(b)
TO
LOAN AND SECURITY AGREEMENT
Subsidiaries
Parent's %
Company Parent Ownership
------- ------ ---------
1. DR Acquisition Corp., Renco Group 100%
a Missouri corporation ("DRA")
2. The Doe Run Resources Corporation, DRA 100%
a New York corporation ("Doe Run")
3. Fabricated Products, Inc., Doe Run 100%
a Delaware corporation
4. Doe Run Exploration S.A. Doe Run 100%
(Proprietary) Ltd. (South Africa)
5. Doe Run Cayman Ltd., Doe Run 100%
a Cayman Islands corporation ("Cayman")
6. Doe Run Mining S.R. Ltda., Cayman 99.9%
a Peruvian company ("DRM")
7. Doe Run Peru S.R. Ltda., DRM 99.9%
a Peruvian company ("DRPeru")
<PAGE>
SCHEDULE 5.10
TO
LOAN AND SECURITY AGREEMENT
Pending Litigation and Environmental Claims
Litigation
a. Lead Exposure
Cortes v. Doe Run Corporation, et al
Superior Court, Hudson County, New Jersey, Case No.
Dixon et al v. The Doe Run Resources Corporation, et al
Circuit Court, Hillsboro, Missouri, Case No. CV195-51, as more
particularly described on Attachment A hereto.
Richardson, et al v. The Doe Run Resources Corporation, et al
Circuit Court, Hillsboro, Missouri, Case No. CV195-5492-CC, as more
particularly described on Attachment A hereto.
Heath et al v. The Doe Run Resources Corporation, et al
Circuit Court, Hillsboro, Missouri, Case No. CV195-6936-CC, as more
particularly described on Attachment A hereto.
Massa, et al v. The Doe Run Resources Corporation, et al
Circuit Court, Hillsboro, Missouri, Case No. CV195-7290-CC, as more
particularly described on Attachment A hereto.
Swarts, et al v. Lendco Investments, Inc., et al
Circuit Court, Hillsboro, Missouri, Case No. CV196-3569
Wright, et al v. Lead Industries Association, et al
Circuit Court, Baltimore, Maryland Case No. 94363042/CL190488 and
Case No. 94363043/CL190488
(case dismissed - on appeal)
b. Wrongful Termination
Wallace v. The Doe Run resources Corporation, et al
Circuit Court, Jefferson County, Case No. CV195-7303-CC
c. Declaratory Relief
St. Joe Minerals Corporation v. Allianz Insurance Company, et al
Orange County Superior Court, California Case No. 697526
(suit for coverage for superfund sites)
<PAGE>
d. Personal injury
Tharp v. The Doe Run Resources Corporation, et al
Superior Court, California, County of Nevada, Case No. 56974
e. Bankruptcy - Creditor's Claims
Doe Run Claim against Eagle-Picher Industries, Inc.
f. Tax
United States of America, v. St. Joe Minerals Corporation*
U.S.D.C. Eastern District, Missouri, Case No. 4:93CV001380
g. Environmental
Amoco Chemical Company v. United States of America, et al
U.S. District Court, South District Texas, Case No. G-76-272
RSR Corporation & Quementco, Inc. et al
Avanti Development, Inc., et al,
U.S. District Court, South District Indiana, Case No. IP95-1359CM/S
Merrill Development Company v. Mo. Electric Works, Inc., et al
Circuit Court, Cape Girardeau, Case no. CV696-438CC
Non-Lead Business
Bailey, Baker, Beane, et al v. R. T. Vanderbilt Company, Inc.,
Gouvemeur Talc Company, Inc., St. Joe Minerals Corporation and Fluor
Corporation*
New York Supreme Court, St. Lawrence County, New York
St. Joe Minerals Corporation v. Allianz Insurance Company, et al
Orange County Superior Court, California Case No. 697526
This is a suit to establish insurance coverage for the company's
superfund liabilities for historic mine and smelter operations.
There is a judgment in favor of St. Joe establishing a duty to
defend, which judgment is on appeal. Coverage under the policies has
not yet been heard.
h. Notice of Potential Claims
Dennis F. Wolk - Notice letter for personal injury on company
property.
Rodney C. Barches - Notice letter for personal injury on company
property.
Burlington Northern - Notice letter for contribution to remediation
of Railroad property.
-2-
<PAGE>
Government Environmental Proceedings/Claims
a. Listed Superfund Sites
Cherokee County Site, Kansas
Jasper County Site, Missouri
Tar Creek Site, Oklahoma
Missouri Electric Works/Cape Girardeau Site, Missouri
Desloge/Big River Mines Site, St. Francois County, Missouri
(negotiated remediation plan in progress)
b. Non-Listed Potential Superfund Sites
Bonne Terre Site, St. Francois County, Missouri (engineering plans
under development)
Leadwood Site, St. Francois County, Missouri (future action)
Rivermines Site, St. Francois County, Missouri (future action)
Indian Creek Site, Washington County, Missouri (possible future
action)
National Site, St. Francois County, Missouri (request to develop
engineering plans)
St. Francois County, Missouri remedial investigation of potential
off-sit contamination.
Federal Site, St. Francois County, Missouri (study underway)
Block "P" Site, Montana
Nacimiento Copper Mine Site, New Mexico*
c. Potential Claims
Bunker Hill Superfund Site
Pintiar Corp. has made a demand by letter for cost Recovery. St. Joe
declined participation on "product sale" basis. EPA issued
information request letter - issued subsequent letter declining to
join St. Joe.
-3-
<PAGE>
Port of Pascagoula, Miss. Lead Storage/Port
Fluor Corporation was incorrectly contacted as a PRP. St. Joe
shipped a small amount of lead to this site, but it has not been
pursued by the state.
d. Stormwater/Dam Safety, Projects
Indian Creek Tailings Dam
Leadwood/Eaton Tailings Dam
Rivermines Tailings Area
e. Settled/Closed/Inactive Sites
Harbor Island Superfund Site
Quemetco, Inc., a dissolved former wholly owned subsidiary of St.
Joe, was a previous owner of the site.
Iiada Energy Superfund Site
EPA claim relates to time period when Amax owned/operated Buick
facility. Claim was forwarded to Amax for handling.
ILCO Superfund Site
Doe Run was a de minimis provider of product.
NL Industries, Inc. Superfund Site
Doe Run was a de minimis provider of product.
Taracorp/Granite City Superfund Site
St. Joe is a PRP; de minimis settlement reached.
f. Non-Lead Superfund Sites
Bartlesville/Balmat/Monaca*
Zinc mining and smelting sites. Flour gave environmental
indemnification to buyer when Zinc business was sold in 1987.
-4-
<PAGE>
Employment Claims
a. Workers Compensation
Southeast Missouri Mining/Milling
As of February 1998, there were approximately 60 open files.
Herculaneum
As of February 1998, there were approximately 400 open files.
St. Joe - Balmat/Bartlesville/Monaca*
As of February 1998, there are approximately 380 open files.
b. EEOC/Missouri Commission on Human Rights
Mathes v. The Doe Run Company, et al, Charge No. 280971177
Freeman v. The Doe Run Company
Charte No. ME-9/91-9645
*Covered by Fluor indemnification to St. Joe
-5-
<PAGE>
SCHEDULE 5.13
TO
LOAN AND SECURITY AGREEMENT
Pension Plans
1. The Doe Run Resources Corporation Supplemental Employee Retirement Plan
effective as of November 1, 1996, as the same has been and may be amended from
time to time.
2. The Doe Run Resources Company Savings Resource Plan effective as of November
1, 1996, as the same has been and may be amended from time to time.
3. The Doe Run Resources Corporation Retirement Plan, Benefits for Salaried
Employees effective as of June 1, 1994, as the same has been and may be amended
from time to time.
4. The Doe Run Resources Corporation Retirement Plan, Benefits for Employees in
Southeast Missouri effective as of June 1, 1994, as the same has been and may be
amended from time to time.
5. The Doe Run Resources Corporation Retirement Plan, Benefits for Employees at
Herculaneum effective as of June 1, 1994, as the same has been and may be
amended from time to time.
<PAGE>
SCHEDULE 5.14
TO
LOAN AND SECURITY AGREEMENT
Environmental Matters
1. Matters with respect to The Doe Run Resources Corporation set forth in the
"Environmental Assessment of the La Oroya Metallurgical Complex and The
Doe Run Company" dated October 1997 prepared for BT Securities Corporation
by Environ International Corporation, a division of APBI's Environmental
Sciences Group, Inc.
2. Matters disclosed on Schedule 5.10 hereto.
3. All active and inactive mine and smelter sites are on the Environmental
Protection Agency CERCLA list. Information requested and submitted on old
Viburnum tailings facility.
4. Primary smelter slag produced by and stored at the Herculaneum smelter is
currently exempt from hazardous waste regulation under the Resource
Conservation and Recovery Act of 1973, as amended ("RCRA"). However, the
Environmental Protection Agency recently published a proposed rule which,
if adopted, would require this slag to be managed as a hazardous waste.
Certain other waste materials, including baghouse dust, generated at the
smelter now recycled in the smelter may also become regulated as hazardous
wastes. If the slag or other wastes at the smelter are regulated as
hazardous waste, the Company may be required to take corrective action
under RCRA at the smelter, as well as to adopt stricter management
practices for these wastes.
5. The Herculaneum smelter, currently has not attained the ambient air
quality standard for lead promulgated under the federal Clean Air Act. The
Company is working with regulators to develop a new three-year compliance
plan to begin after fiscal 1998 to implement identified control measures.
6. The Buick smelter area is designated non-attainment for the air lead
standard. The last 5 years of monitoring demonstrates the smelter is in
compliance and an application has been made to certify the area in
compliance.
7. Doe Run's recycling facility is subject to corrective action requirements
under RCRA, as a result of a storage permit for certain wastes issued in
1989. This has required and may involve future remediation of solid waste
management units at the site.
8. The Environmental Protection Agency is reviewing Maximum Achievable
Control Technology ("MACT") for primary smelters but has not at this time
proposed a MACT rule. In the event a MACT rule for primary smelters is
proposed and adopted by the Environmental Protection Agency, the rule
could increase compliance costs at the Herculaneum smelter.
<PAGE>
9. The Company's operating facilities have waste water discharge permits
issued under the federal Clean Water Act, as amended. It is expected that
stricter discharge limits than previously in effect will be included in
permits now subject to renewal. As a result, there will be additional
treatment facilities required.
10. The Company's mining and milling operations include five mine waste
disposal facilities that are subject to Missouri mine closure permit
requirements.
11. The Missouri Department of Natural Resources ("MDNR") by letter dated
April 11, 1997 issued Notice of Excess Emissions observed on August 1,
1997, at the Herculaneum smelter. After response in writing by Doe Run,
MDNR issued a letter dated September 12, 1997 that they will not take
additional action.
12. The MDNR issued an air inspection report dated May 13, 1997 of potential
Notice of Excess Emissions of an opacity excursion at the Buick facility.
After response by Doe Run, an MDNR official gave verbal response that MDNR
will probably not issue a NOEE.
13. The NDNR, by letter of February 4, 1997, noticed exceedences of water
discharge limits for zinc at the Buick Mine/mill facility. A compliance
agreement was entered into in May, 1997, whereby Doe Run paid a $25,000
penalty and constructed a pump-back basin. Compliance with the zinc
discharge limit was demonstrated within 30 days of construction as
required in the agreement.
-2-
<PAGE>
SCHEDULE 5.15
TO
LOAN AND SECURITY AGREEMENT
Bank Accounts
BANK ACCOUNT NUMBER TITLE/DESCRIPTION
---- -------------- -----------------
Boatman's 10-0101186361 Doe Run Concentration Account
Boatman's 10-0101273991 Fabricated Products-Payroll
Account (for direct deposit)
Boatman's 10-0100012415 Doe Run Hourly Payroll Account
Boatman's 10-0101255072 Doe Run Salary Payroll Account
Boatman's 10-0101234378 DR Acquisition Corp.
Boatman's 10-0101267233 Fabricated Products Inc. Corp.
Account
Boatman's 58-0100090603 Doe Run Disbursement
Account/Smelting
58-0100090638 Doe Run Disbursement
Account/Mining
58-0100090611 Doe Run Disbursement
Account/Hdqtrs.
58-0100090654 Doe Run Disbursement Account/Buick
58-0100082163 Doe Run Disbursement Account/Lone
Star
58-0100083402 Disbursement Account/Seafab Metals
Boatman's 35-0119027465 Doe Run/Herculaneum Payroll
Account
Mercantile Bank 1001107919 Doe Run Lockbox 95619
1001109790 Doe Run Lockbox returns account
FX account
Texas Commerce 00100915850 Lone Star Lead-Payroll Account
Seafirst Bank 68501014 Seafab Metals payroll account-WA
Bank of America 2552260249 Seafab Metals payroll account-AZ
Quad State Bank 0133634701 Doe Run Real Estate Account
(Options)
0133675801 Doe Run Savings Bond Account
Standard Bank of South 421-032-928 DR Exploration Pty. Ltd.
Africa
First National Bank of 1000013625 DR Exploration Field Expenses
South Africa-Griguantown (imprest)
<PAGE>
SCHEDULE 5.21
TO
LOAN AND SECURITY AGREEMENT
Collective Bargaining Agreements
1. The Doe Run Resources Corporation: None
2. Fabricated Products, Inc.: Agreement by and between Fabricated
Products, Inc. and Sheet Metal Workers'
Union, Local No. 66, dated June 6, 1997.
The Agreement is in effect from
September 1, 1996 through December 31,
1997 and continues in full force and
effect from year to year thereafter,
until a minimum 60 days written notice
of intent to terminate. No notice of
termination has been sent or received as
of March 6, 1998.
<PAGE>
SCHEDULE 5.22
TO
LOAN AND SECURITY AGREEMENT
Corporate Name; Tradenames;
Prior Transactions
1. The Doe Run Resources Corporate
a) Tradename: The Doe Run Company
b) Prior Transactions: None
2. Fabricated Products, Inc.
a) Tradenames: Seafab Metals Company
Fab Division
Oxide Division
Lone Star Lead Construction
b) Prior Transactions:
Acquisition of all of capital stock of Seafab Metal Corporation, a
Washington Corporation pursuant to Asset Purchase Agreement, dated
August 30, 1996, by and among Seafab Metal Corporation, Nils P.
Vensen, George D. Tamblyn and Fabricated Products, Inc.
Acquisition of all of assets of Lone Star Lead Construction Corp., a
New York Corporation, pursuant to the Asset Purchase Agreement,
dated as of August 31, 1995, by and among Lone Star Lead
Construction Corp., ASARCO Incorporated, and the Doe Run Resources
Corporation.
3. Doe Run Peru S.R. Ltda.
a) Tradename: Doe Run Peru
b) Prior Transactions:
Acquisition of substantially all of capital stock of Empresa
Metalurgica La Oroya S.A. ("Metaloroya") from Empresa Minera del
Centro del Peru S.A., a Peruvian government-owned conglomerate. On
December 30, 1997, Metaloroya was merged into Doe Run Peru.
<PAGE>
SCHEDULE 5.24
TO
LOAN AND SECURITY AGREEMENT
Material Contracts
JOHNSON CONTROLS/DOE RUN
TOLL CONVERSION AGREEMENT - LEAD ACID BATTERIES
OCTOBER 17, 1996-SEPTEMBER 30, 1999
BIG RIVER ZINC/DOE RUN
SALES AGREEMENT - ZINC CONCENTRATES
ORIGINAL TERM - JULY 1, 1996-DECEMBER 31, 1997
EVERGREEN RENEWED IN TWO-YEAR PERIODS UNLESS CANCELLED -
PRESENTLY RENEWED TO DECEMBER 31, 1999
JOHNSON CONTROLS/FABRICATED PRODUCTS (SEAFAB DIVISION)
SALES AGREEMENT - LEAD OXIDE
NOVEMBER 1, 1996-OCTOBER 31, 2002
THE PURCHASE AGREEMENT AND RELATED FINANCING AGREEMENTS PURSUANT TO WHICH DOE
RUN WILL PURCHASE A HELICOPTER, AS MORE PARTICULARLY DESCRIBED ON SCHEDULE 6.5,
THE AGREEMENT PURSUANT TO WHICH DOE RUN SELLS SUCH HELICOPTER TO DOE RUN PERU
AND ANY GUARANTY BY DOE RUN OF DOE RUN PERU IN CONNECTION WITH THE FOREGOING
TRANSACTION.
<PAGE>
SCHEDULE 5.3
TO
LOAN AND SECURITY AGREEMENT
List of Senior Note Agreements
1. Fixed Interest Senior Notes due 2005, Series A, issued by The Doe Run
Resources Corporation on March 12, 1998, in the original principal amount of
$200,000,000.
2. Floating Interest Senior Notes due 2003, Series A, issued by The Doe Run
Resources Corporation on March 12, 1998, in the original principal amount of
$55,000,000.
3. The Indenture by and among The Doe Run Resources Corporation, Fabricated
Products, Inc., Doe Run Cayman Ltd., Doe Run Mining S.R. Ltda., and Doe Run Peru
S.R., Ltda., and State Street Bank and Trust Company, as Trustee, dated as of
March 12, 1998, with respect to the Senior Notes due 2005 in the original
principal amount of $180,000,000 and Senior Notes due 2003 in the original
principal amount of $75,000,000.
4. Purchase Agreement dated as of March 6, 1998 by and among The Doe Run
Resources Corporation, Fabricated Products, Inc., Doe Run Cayman Ltd., Doe Run
Mining S.R. Ltda., and BT Alex, Brown Incorporated, Donaldson, Lufkin & Jenrette
Corporation and UBS Securities, LLC.
5. Registration Rights Agreement dated as of March 12, 1998, by and among The
Doe Run Resources Corporation, Fabricated Products, Inc., Doe Run Cayman Ltd.,
Doe Run Mining S.R. Ltda., and BT Alex, Brown Incorporated, Donaldson, Lufkin &
Jenrette Corporation and UBS Securities, LLC.
6. Each of the Guaranties of Fixed Interest Rate Senior Notes and the Floating
Interest Senior Notes by Fabricated Products, Inc., Doe Run Cayman Ltd., and Doe
Run Mining S.R. Ltda.
<PAGE>
SCHEDULE 5.5
TO
LOAN AND SECURITY AGREEMENT
Permits
a. Bureau of Land Management Development Contracts
(Contracts for mining government mineral leases)
BUICK DEVELOPMENT CONTRACT
Buick Mine/Mill
Seven producing and five inactive leases
VIBURNUM DEVELOPMENT CONTRACT
No. 28 (Viburnum), No. 29 and No. 35 (Casteel) Mines serving
the Viburnum Mill
Four producing and seven inactive leases
FLETCHER DEVELOPMENT CONTRACT
Fletcher Mine/Mill
Two producing and two inactive leases
BRUSHY CREEK DEVELOPMENT CONTRACT
Brushy Creek Mine/Mill
Two producing and one inactive lease
b. Environmental permits
WATER PERMITS
Mine/Mill operations - five permits Herculaneum smelter - one
permit
Buick recycling facility - one permit
Fabricated Products, Lonestar Division - one permit
Seafab Division - one permit
MISSOURI METALLIC MINERAL WASTE MANAGEMENT PERMITS Mine/Mill
operations - four permits Smelter Operations - two permits
RCRA (Hazardous Waste) PERMITS
Buick Recycling Facility - Part B Storage Permit
Every operating facility has a Generator's I.D. Number
<PAGE>
MISSOURI DAM SAFETY PERMITS
No. 29 Mine Ore Haul Road-North (Queen Mary Dam)
Viburnum City Lake Dam
Old Viburnum Tailings Dam
New Viburnum Tailings Dam
Bushy Creek Mill Reservoir Dam
Buick Tailings Dam
Buick Clear Water Dam
Railroad Embankment Dam
No. 27 Culvert Dam
Fletcher Tailings Dam
Fletcher Clarification Dam
Brushy Creek Tailings Dam
Brushy Creek Clarification Dam
Viburnum No. 35 West Dam (pending)
Viburnum No. 35 East Dam
Leadwood Tailings Dam
Indian Creek Mine Lower Dam (pending)
Indian Creek Mine Upper Dam (pending)
Eaton Tailings Dam
STORMWATER PERMITS
The following closed tailings facilities:
Leadwood
Rivermines
Indian Creek
MISSOURI RESOURCE RECYCLING PERMIT
Herculaneum smelter
Buick recycling facility
AIR PERMITS
Fabricated Products,
Seafab Division - Seattle - operating permit
Casa Grande - construction permit
Vancouver Washington - construction permit
-2-
<PAGE>
SCHEDULE 5.7
TO
LOAN AND SECURITY AGREEMENT
Chief Executive Office, Principal Place of Business, and Equipment
A. The Doe Run Resources Corporation
1. Chief Executive Office: 1801 Park 270 Drive
St. Louis, Missouri 63146
2. Principal Place of Business: 1801 Park 270 Drive
St. Louis, Missouri 63146
3. Equipment:
Mines in the following areas (leased and owned)
County State
------ -----
Niobrara County Wyoming
Bollinger County Missouri
Camden County Missouri
Crawford County Missouri
Dent County Missouri
Iron County Missouri
Jefferson County Missouri
Madison County Missouri
Oregon County Missouri
Perry County Missouri
Reynolds County Missouri
Shannon County Missouri
St. Francis County Missouri
Washington County Missouri
Jackson County Tennessee
<PAGE>
4. Inventory:
Mines in the following areas (leased and owned)
County State
------ -----
Niobrara County Wyoming
Jackson County Tennessee
Bollinger County Missouri
Camden County Missouri
Crawford County Missouri
Dent County Missouri
Iron County Missouri
Jefferson County Missouri
Madison County Missouri
Oregon County Missouri
Perry County Missouri
Reynolds County Missouri
Shannon County Missouri
St. Francis County Missouri
Washington County Missouri
5. Consigned Inventory Locations:
C&D Power Systems, Inc.
200 West Main Street, Attica, Ind. 47918
1835 Industrial Blvd., Conyers, GA 30207
82 East Main Street, Leola, PA 17540
Route No. 209, Huguenot, NY 12746
Johnson Controls Inc.
900 East Keepe Avenue, Milwaukee, WI 53212
4722 Pear Street, ST. Joseph, MO 64503
10300 Industrial Road, Holland, Ohio 43528
Old Greensboro Rd., Winston-Salem, NC 27102
c/o Powerlab, South Hwy. 94, Savana IL 61074
c/o Water Gremlin, 1610 Whitaker Ave., White Bear Lake, MN
55110
Yuasu Exide Corp.
One Exide Road, Hays, Kansas 67601
Olin Corporation
427 Shamrock Street, E. Alton, IL 62024
-2-
<PAGE>
6. Warehouse Locations:
The Doe Run Company
Herculaneum Smelter (Owned)
881 Main Street
Herculaneum, MO 63048
The Doe Run Company
Buick Resource, Recycling Facility (Owned),
HC 1 Box 1395, Boss, MO 65440
Bussen Underground (3rd Party)
5000 Bussen Road, St. Louis, MO 63129
7. The location of cash proceeds and inventory in transit is indeterminate
and cannot be specified at this time.
B. Fabricated Products, Inc.
1. Chief Executive Office: 1801 Park 270 Drive
St. Louis, Missouri 63146
2. Warehouse Locations:
Alamac Transportation
14863 East Clark Ave, Hacienda Heights, CA 91745
Seafab Metals Company, a division of Fabricated Products, Inc.
2700 16th Avenue, S.W., Seattle, WA 98134
Fab Division of Fabricated Products, Inc.
1112 VIP Blvd., Casa Grande, AZ 85222
Oxide Division of Fabricated Products, Inc.
3103 N.W. Lower River Rd., Bld. 2575, P.O. Box 1180,
Vancouver, WA 98666
Lone Star Lead Construction, a division of Fabricated Products, Inc.
9200 Market Street Road, Houston, TX 77229
3 The location of cash proceeds and inventory in transit is indeterminate
and cannot be specified at this time.
-3-
<PAGE>
SCHEDULE 5.8
TO
LOAN AND SECURITY AGREEMENT
Existing Liens
THE DOE RUN RESOURCES CORPORATION
I. UCC Filings in Missouri
A. Secretary of State, Missouri
Number Date Secured Party Description of Collateral
1. 2559042 07/05/95 Associates One (1) Ingersoll Rand Model
Leasing XP750WCU Air Compressor S/N
Incorporated 246099 together with all
Suite 250 present 10561 Barkley and
Overland Park, KS future attachments, Rd.,
67212 accessories, replacement parts,
repairs, additions and all
proceeds thereof.
2. 2595395 10/24/95 Associates Leasing One (1) Moxy Model MT30S
Incorporated Articulated Truck S/N 352076
10561 Barkley Rd., together with all present and
Suite 250 future attachments,
Overland Park, KS accessories, replacement parts,
67212 repairs, additions and all
proceeds thereof.
3. 2694214 08/06/96 Roland Machinery One (1) Ingersoll-Rand Model
Company HP1300AWC Portable Air
816 N. Dirksen Pkwy. Compressor s/n:247988 together
Springfield, IL with all present and future
62702 attachments, accessories,
replacement parts, additions,
and all proceeds thereof.
4. 2731179 11/25/96 Roland Machinery One (1) Moxy Model MT30 30 Ton
Company 6 Wheel Drive Articulated Truck
5920 North Lindbergh S/N: 353215 together with all
Blvd. present and future attachments,
Hazelwood, MO 63042 accessories, replacement parts,
additions, and all proceeds
thereof.
5. 2488415 12/30/94 Caterpillar Financial (1) Caterpillar Model 980F
Services Corporation Wheel Loader S/N:8JN00319. and
901 Warrenville Road substitutions, replacements,
#304 additions, and accessions
Lisle, IL 60532-1359 thereto, now owned or hereafter
acquired, and proceeds thereof.
6. 2728643 11/26/96 Caterpillar Financial 1 - Used Caterpillar 980F Wheel
Services Corporation Loader S/N 8CJ00460 "and
901 Warrenville Road substitutions, replacements,
#304 additions and accessions
Lisle, IL 60532 thereto, now owned or hereafter
acquired and proceeds thereof.
<PAGE>
7. 2768235 03/18/97 Caterpillar Financial (1) Used 920 Caterpillar Wheel
Services Corporation Loader S/N: 62K05665 and
901 Warrenville Road substitutions, replacements,
#304 additions, and accessions
Lisle, IL 60532 thereto, now owned or hereafter
acquired, and proceeds thereof.
Equipment location: Buick Mine,
Viburnum, MO 65566, Iron County
8. 2768237 03/18/97 Caterpillar Financial (1) Used 950B Caterpillar Wheel
Services Corporation Loader S/N: 31R00918 and
901 Warrenville Road substitutions, replacements,
#304 additions, and accessions
Lisle, IL 60532 thereto, now owned or hereafter
acquired, and proceeds thereof.
Equipment Location: Buick Mine,
Viburnum, MO 65566 Iron County
9. 2768238 03/18/97 Caterpillar Financial (1) Used 930 Caterpillar Wheel
Services Corporation Loader S/N: 41K07081 and
901 Warrenville Road substitutions, replacements,
#304 additions, and accessions
Lisle, IL 60532 thereto, now owned or hereafter
acquired, and proceeds thereof.
Equipment Location: Brushy
Creek Mine, Boss, MO 65440 Dent
County
10. 2768236 03/18/97 Caterpillar Financial (1) Used 930 Caterpillar Wheel
Services Corporation Loader S/N: 71H02832 and
901 Warrenville Road substitutions, replacements,
#304 additions, and accessions
Lisle, IL 60532 thereto, now owned or hereafter
acquired, and proceeds thereof.
Equipment Location: Brushy
Creek Mine, Boss, MO 65440 Dent
County
11. 2501179 01/30/95 Clarklift of Cape, 1- GC30S Daewoo Forklift - S/N
Inc. 06-01400 W/ Fork Positioner
P.O. Box 752 1- G30S Daewoo Forklift - S/N
Cape Girardeau, MO 12-01176 W/ Fork Rotator
63702-0752 1- G30S Daewoo Forklift - S/N
12-01177 W/ Fork Rotator
1- G30S Daewoo Forklift - S/N
12-01178 W/ Drum Clamp
12. 2515102 03/06/95 Clark Credit Four Daewoo Forklift model
Corporation GC30S s/n 06-01400; model G30S
500 Circle Drive S/N 12-01176, 12-01177
Buchanan, MI49107- & 12-01178
1395 Assigned to: Clarklift of Cape,
CAP114 K#472715-8 Inc., POBox 752, Cape
Girardeau, MO 63702-0752
2
<PAGE>
13. 2505000 02/10/95 Lessor(s) 2 - 1995 Bobcat Loaders, S/N
Clarklift Of Cape, 512719000 & 512719001
Inc. W. Flot. Tires, Boss
P.O. Box 752 Aux. Hyd. & Bucket
Cape Girardeau, MO
63702-0752
14. 2698940 08/22/96 Metlife Capital, Proceeds of collateral also
Limited covered. This is a true lease
Partnership filed for public record.
10900 NE 4th St. 1033695-006,007 MM/KRD
Suite 500
Bellevue, WA 98004 One used Wagner ST-8B Loader
DA15P0399 to be located at the
Buick Mine, Route KK, City of
Boss, State of Missouri, One
used Volvo L180C Wheel Loader
s/n L180CV60325 to be located
at the #28 Mine, City of
Viburnum, State of Missouri,
together with all accessions,
attachments and additions
thereto and substitutions and
replacement thereof.
15. 2594653 10/20/95 MetLife Capital Proceeds of Collateral also
Limited Partnership covered.
10900 NE 4th St.
Suite 500 THIS IS A TRUE LEASE FILED FOR
Bellevue, WA 98004 PUBLIC RECORD. 1033695--
VAR/MM/PJR
One (1) new Komatsu PC3000LC-5
Crawler Excavator, serial no.
A30252, One (1) new Caterpillar
Model D6HLGP Tractor, serial
no. 3YG06216 with Engine,
serial no. 8Z86847 and Dozer,
serial no. 1AH01978, and Three
(3) Moxy MT30 Articulated Dump
Trucks, serial nos. 353328,
353138 and 353327, together
with all accessions,
attachments and additions
thereto and substitutions and
replacements thereof.
16. 2728220 11/25/96 MetLife Capital, Two (2) Moxy Model MT30X 30 Ton
Limited Partnership Six Wheel Drive Articulated
10900 NE 4th Street Trucks with Tailgates, S/N's
Suite 500 353565, 353566 together with
Bellevue, WA 98004 all accessions, attachments and
additions thereto and
replacements and substitutions
thereof. Proceeds of collateral
also covered. This is a true
lease filed for public record.
1033695-008/MM/KRD
3
<PAGE>
17. 2759029 02/21/97 MetLife Capital, One (1) used Wagner ST-8B 4
Limited Partnership Wheel Drive Scooptram Loader
10900 NE 4th Street DA15P0396 together with all
Suite 500 accessions, attachments and
Bellevue, WA 98004 additions thereto and
replacements thereof. This is a
true lease filed for public
record. 1033695-009
MM/KRD/Secretary Of State MO.
Proceeds of collateral also
covered.
18. 2729241 11/25/96 Lessor(s) 1 - Daewoo Forklift Model G30S
Forklifts Of Cape, w/ S/N 12-04808 Side Shifting
Inc. Fork Positioner. This financing
P.O. Box 752 statement was filed for
Cape Girardeau, MO information purposes only and
63702-0752 was intended to protect the
rights of lessor in the
collateral described above. The
transaction between the parties
is a lease and not a secured
transaction.
19. 2735886 12/11/96 Lessor(s) 1 - 1996 Sellick Forklift Model
Forklifts Of Cape, SD-100 S/N 28586111032-4 w/
Inc. Grapple Attachment. This
P.O. Box 752 financing statement was filed
Cape Girardeau, MO for information purposes only
63702-0752 and was intended to protect the
right of lessor in the
collateral described. The
transaction between the parties
is a lease and not a secured
transaction.
20. 2747676 01/21/97 Lessor(s) 3 - Daewoo Forklifts Model G30S
Forklifts Of Cape, S/N 12-05345 12-05346,
Inc. 12-05347. This financing
P.O. Box 752 statement was filed for
Cape Girardeau, MO information purposes only and
63702-0752 was intended to protect the
right of lessor in the
collateral described above. The
transaction between the parties
is a lease and not a secured
transaction.
21. 2755542 02/10/97 Lessor(s) 1 - Daewoo Forklift Model G30S
Forklifts Of Cape, S/N 06-04034 w/ 117" Std.
Inc. Upright. This financing
P.O. Box 752 statement was filed for
Cape Girardeau, MO information purposes only and
63702-0752 was intended to protect the
right of lessor in the
collateral described above. The
transaction between the parties
is a lease and not a secured
transaction.
22. 2652440 04/08/96 Forklifts Of Cape, 2 G30S Daewoo Forklifts S/N's
Inc. 12-03970 & 12-03990 w/ fork
P.O. Box 752 rotators
Cape Girardeau, MO
63702-0752 1 GC30S Daewoo Forklift S/N
06-02937 w/ fork positioner
4
<PAGE>
23. 2779658 04/16/97 Lessor(s) 1 - 1997 Sellick Forklift Model
Forklifts Of Cape, SG-60 S/N 2969703652-4. This
Inc. financing statement was filed
P.O. Box 752 for information purposes only
Cape Girardeau, MO and was intended to protect the
63702-0752 rights of lessor in the
collateral described. The
transaction between the parties
is a lease and not a secured
transaction.
24. 2815961 07/29/97 Lessor(s) 1 - Daewoo Forklift Model G30S
Forklifts Of Cape, s/n 12-06356 w/ fork positioner
Inc. attachment. This financing
P.O. Box 752 statement was filed for
Cape Girardeau, MO information purposes only and
63702-0752 was intended to protect the
right of Lessor in the
collateral described above. The
transaction between the parties
is a lease and not a secured
transaction.
25. 2436986 08/03/94 Lessor One (1) Moxy Model MT30S, 30
The CIT ton articulated off-road truck
Group/Equipment s/n 352065 with 6 wheeldrive,
Financing, Inc. Scandia D8905, 254 h.p. engine;
2110 Walnut Hill enclosed cab and air
Lane conditioning
Irving, TX 75038
26. 2513111 03/06/95 Lessor(s) 1 - 1994 Bobcat Loader S/N
Clark Rental 512212699 w/Flot. tires, boss,
System, Inc. aux. hyd. 66" Ind. Grapple -
500 Circle Drive 66" L.P. Bucket. Pallet forks
Buchanan, MI 49107 and frame
27. 2617724 01/02/96 Clark Rental 1 New Melroe Model 453 Bobcat
System, Inc. Loader S/N 561811357
500 Circle Drive
Buchanan, MI 49107
28. 2632895 02/14/96 Associates 1 - 1996 Sellick Forklift Model
Commercial Corp. SG60 Rough Terrain Forklift S/N
P.O. Box 410587 2601601652
Kansas City, MO 1 - 1996 Sellick Forklift Model
64141 SG60 Rough Terrain Forklift S/N
2602601652
29. 2760981 02/27/97 Forklifts Of Cape, 2 - Daewoo Forklifts Model G30S
Inc. S/N 12-06003 & 12-06076. This
P.O. Box 752 financing statement was filed
Cape Girardeau, for information purposes only
MO 63702-0752 and was intended to protect the
right of lessor in the
collateral described above. The
transaction between the parties
is a lease and not a secured
transaction.
5
<PAGE>
30. 2672236 06/03/96 Lessor(s) 1 - New Clark Forklift Model
Forklifts Of Cape, CDP20 S/N P365D-0033-9410
Inc.
P.O. Box 752
Cape Girardeau,
MO 63702-0752
31. 2673063 06/04/96 Lessor(s) 1 - 1996 Daewoo Forklift Model
Forklifts Of Cape, G30S S/N 12-04049 w/ revolving
Inc. drum clamp S/N 15308-00010P.
P.O. Box 752 This financing statement was
Cape Girardeau, filed for information purposes
MO 63702-0752 only and was intended to
protect the rights of lessor in
the collateral described above.
The transaction between the
parties is a lease and not a
secured transaction.
32. 2780509 04/18/97 General Electric This financing statement was
Capital Corporation filed solely as a precaution if
1415 W. 22nd Street contrary to the intention of
4th Floor the parties described above as
Oak Brook, IL Lessee and Lessor, the
60521 transaction relating to the
property described herein is
deemed to be other than a lease
within the meaning of 1-201
(37) of the Uniform Commercial
Code. The equipment being
covered consists of one (1)
Cannon Jumbo Drill, Model DP
12-HD, S/N 200919 and one (1)
Reynolds Ejector Wagon, Model
RW45SP, S/N 27926 with all
additions, attachments,
accessories and proceeds now
existing or hereafter acquired.
33. 2742107 01/06/97 General Electric This financing statement was
Capital Corporation filed solely as a precaution if
1415 W. 22nd Street contrary to the parties
Suite 300 described above as
Oak Brook, IL Debtor/Lessee and Secured
60521 Party/Lessor, the transaction
relating to the property
described herein is deemed to
be other than a lease within
the meaning of 1-201 (37) of
the Uniform Commercial Code.
The property being covered are
One (1) Volvo Model L120C Wheel
Loader S/N: L120CV61561, Two
(2) Model L180C Wheel Loaders
S/N's: L180CV60425 and
L180CV60429, One (1) Volvo
Model A35C Articulated Truck
S/N: A35CV4331 and One (1)
Caterpillar Model 120H Road
Grader S/N: 4MK00223, including
all attachments, accessories,
additions and proceeds now
existing or hereafter acquired.
6
<PAGE>
34. 2753181 02/06/97 General Electric This financing statement was
Capital Corporation filed solely as a precaution if
1415 W. 22nd Street contrary to the parties
Suite 300 described above as
Oak Brook, IL Debtor/Lessee and Secured
60521 Party/Lessor, the transaction
relating to the property
described herein is deemed to
be other than a lease within
the meaning of 1-201 (37) of
the Uniform Commercial Code.
The property being covered
consists of One (1) Komatsu
Model D58-1B Crawler Dozer S/N:
81306 with all attachments,
accessories, additions and
proceeds now existing or
hereafter acquired. Equipment
Location: #100 Airport Road,
Viburnum, Missouri 65566.
35. 2771456 03/26/97 General Electric This financing statement was
Capital Corporation filed solely as a precaution,
1415 W. 22nd Street if contrary to the intention of
Suite 400 the parties described above as
Oak Brook, IL Lessee/Debtor and
60521 Lessor/Secured Party, the
transaction relating to the
property described herein is
deemed to be other than a lease
within the meaning of 1-201
(37) of the Uniform Commercial
Code. The property being
covered is: One (1) MTI/JCI 400
M LHD Scoop Tram, S/N:
21891RB97
36. 2785957 05/07/97 General Electric This financing statement was
Capital Corporation filed solely as a precaution if
1415 W. 22nd Street contrary to the intention of
Suite 400 the parties described above as
Oak Brook, IL Lessee and Lessor, the
60521 transaction relating to the
property described herein is
deemed to be other than a lease
within the property being
covered consists of One (1)
Jarvis-Clark/Tamrock Drilling
Machine, Model RBM11-14H, S/N
463, one (1) Mining
Technologies Load Haul Dump,
Model 700M LHD, S/N
60363/4933/97 and two (2)
Charging Rigs, Model 975A, S/N
9750897 and 9750898 together
with all additions,
attachments, accessories and
proceeds now existing or
hereafter acquired.
7
<PAGE>
37. 2823105 08/21/97 General Electric This financing statement was
Capital Corporation filed solely as a precaution
1415 W. 22nd Street Lessee and Lessor, the
Suite 400 transaction relating to the
Oak Brook, IL property described herein is
60521 deemed to be other than a lease
within the meaning of 1-201
(37) of the Uniform Commercial
Code. The property being
covered is one (1) Getman
Scaler, Model S330, S/N6519,
together with all additions,
attachments, accessories and
proceeds now existing or
hereafter acquired. Filed with
Secretary Of State of Missouri
Acct. #40654-008
38. 2761380 02/27/97 Unicyn Funding "This financing statement was
Group filed for informational
7501 W. Oakland purposes only to give notice of
Park Blvd the secured party's ownership
Suite 301 of the equipment."
Lauderhill, FL
33319
23-2333786
39. 2819216 08/07/97 Trinity Capital All equipment leased or
Corporation financed by Trinity Capital
475 Sansome Street Corporation including but not
19th Floor limited to the items set forth
San Francisco, CA in Lease No. 0012881-001,
94111 including proceeds.
40. 2826730 09/02/97 Rental Equipment Used Coleman MH4000 Light Tower
Service Company Serial #5462.
Bowman Field
P. O. Box 5245
Louisville, KY
40205-0245
41. 2862594 12/29/97 Caterpillar 1 - New Caterpillar Model IT38F
Financial Integrated Tool Carrier S/N
Services 6FN00364, "and substitutions,
Corporation replacements, additions and
901 Warrenville accessions thereto, now owned
Road or hereafter acquired and
Lisle, IL 60532 proceeds thereof."
8
<PAGE>
42. 2852648 11/20/97 IBM Credit All computer, information
Corporation processing and other peripheral
1133 Westchester equipment and goods (including
Avenue all additions, accessions,
White Plains, NY upgrades, and replacements)
10604 referenced on IBM supplement
#397476 dated 11/05/97 Qty-IBM
type: 001-9406 001-C74303
001-C96527 001-F06372
(11/17/97) referenced on IBM
supplement #397476 dated
11/05/97 Qty-IBM Type:
001-M22473 001-M50642
001-N91770 referenced on IBM
supplement #397476 dated
11/05/97 Qty-IBM Type:
001-S51798 001-T37001
001-V04636 referenced on IBM
Supplement #397476 dated
11/05/97 Qty-IBM type:
001-W48844 001-Y07592 UCC Log
Number: CPC00397476 7838309.
43. 2720940 10/30/96 IBM Credit IBM Equipment (including all
Corporation additions, accessions,
1133 Westchester upgrades, and replacements)
Avenue referenced on IBM Sup#291297
White Plains, NY Dated 10/18/96 Qty-Type
10604 002-9337 001-9406 001-C74303
001-C96527 001-F06372
001-M50642 001-N91770
001-S51798 001-T37001
001-T37012 001-T39959
001-U72260 001-V04636
001-W48844 001-Y07592
001-Y17093 001-Y52778
(10/24/96) UCC Log Number:
CP7MW291297 7838309.
44. 2719639 10/23/96 KDC Financial One (1) Komatsu WA420-3 Wheel
Limited Loader S/N 30006.
Partnership
1333 Butterfield This transaction is a lease and
Road, Suite 600 is not intended by the Debtor
Downers Grove, IL as a security transaction; the
60515 filing is only intended to make
the lease a matter of public
record. Claiming proceeds does
not constitute permission for
the Debtor to dispose of the
collateral.
45. 2719640 10/23/96 KDC Financial One (1) Komatsu WA600-1L Wheel
Limited Loader S/N A50103.
Partnership
1333 Butterfield This transaction is a lease and
Road is not intended by the Debtor
Suite 600 as a security transaction; the
Downers Grove, IL filing is only intended to make
60515 the lease a matter of public
record. Claiming proceeds does
not constitute permission for
the Debtor to dispose of the
collateral.
9
<PAGE>
46. 2760089 02/24/97 KDC Financial One Komatsu WA320-3L Wheel
Limited Partnership Loader, s/n A30013.
1333 Butterfield
Road This transaction is a lease and
Suite 600 is not intended by the Debtor
Downers Grove, IL as a security transaction; the
60515 filing is only intended to make
the lease a matter of public
record. Claiming proceeds does
not constitute permission for
the Debtor to dispose of the
collateral.
47. 2760090 02/24/97 KDC Financial One Komatsu WA320-3L Wheel
Limited Partnership Loader, s/n A30012.
1333 Butterfield
Road This transaction is a lease and
Suite 600 is not intended by the Debtor
Downers Grove, IL as a security transaction; the
60515 filing is only intended to make
the lease a matter of public
record. Claiming proceeds does
not constitute permission for
the Debtor to dispose of the
collateral.
48. 2809941 07/14/97 KDC Financial One Komatsu PC300LC-5 Hydraulic
Limited Partnership Excavator, s/n A71618.
1333 Butterfield
Road This transaction is a lease and
Suite 600 is not intended by the Debtor
Downers Grove, IL as a security transaction; the
60515 filing is only intended to make
the lease a matter of public
record. Claiming proceeds does
not constitute permission for
the Debtor to dispose of the
collateral.
49. 2758859 02/19/97 Machinery, Inc. 1997 JCB 212S Backhoe Loader
5081 Manchester S/N SLP212ASVE0760796. Equipped
Avenue with cab, 24" Backhoe Bucket,
St. Louis, MO Pallet Forks, 73" .80 cu yd
63110 loader bucket and 12.8 x 18 10
ply tires.
50. 2761499 02/27/97 Mercantile Leasing 1 - MDX1000 Multi-Dispersive
Corporation X-Ray Fluorescence Spectrometer
1200 35th St., (MDXRF) S/N X-R153.889.00 - IBM
West Des Moines, PC, Suite 504 Printer, and
IA 50266 Software.
This is a lease transaction.
51. 2774751 04/03/97 Mercantile Leasing 1 - Used 1992 Model MR-937
Corporation Sellick Boom Lift S/N 23811937.
1200 35th St.,
Suite 504
West Des Moines, IA
50266
10
<PAGE>
52. 2729111 11/25/96 Mercantile Leasing 1 - Pillar Recovery Drill Jumbo
Corporation S/N 441, rebuilt 1996, as per
1200 35th St., following spec: Mine jack
Suite 504 carrier c/w F6L912W Duetz
West Des Moines, diesel engine, Jarvis Clark
IA 50266 MBE-8 Boom modified, Jarvis
Clark MBE-8 Boom c/w manbasket
modified with Taxxon head,
Tamrock drilling components
including HL538 drill, KS140H
feed, RC510 rod handler, Pito
11 centralizer, TA400 control
panel, KVL-10-1 lubricator, air
water mist flushing system,
emergency hydraulic lowering
kit, Danfoss proportional
electric control valves,
stabilizing jacks, front and
rear diesel hydraulic operation
for underground use,
manufactured in Canada.
53. 2743015 01/06/97 Mercantile Leasing 1988 International Harvester
Corporation Truck F-2375
1200 35th St., VIN#1HTZEGFR3HHB12026.
Suite 504
West Des Moines,
IA 50266
54. 2791255 05/20/97 Oce-USA, Inc. One Oce 7055, together with all
5450 No. spare parts, accessories,
Cumberland Avenue attachments, replacements,
Chicago, IL 60656 substitutions, and additions
thereto, now or hereafter
acquired and the proceeds
thereof (including insurance
proceeds).
55. 2795449 06/02/97 Rudd Equipment New Euclid Model R600/406LD
Company Rear Dump Hauler, s/n 75795.
4344 Poplar Level
Road
Louisville, KY
40213
56. 2872670 01/20/98 Shipping (1) Hyster lift truck Model
Utilities, Inc. H60XM together with all tires,
10539 Liberty wheels, and all other
Avenue attachments and accessories.
St. Louis, MO
63132
II. LEASED EQUIPMENT:
1. 3/97 (2) 385 Sweepers SN7017 and
SN7073
2. 8/97 KDC Financial (2) Komatsu WA-420 Loaders, s/n
Partnership Limited A30006 and s/n A30064.
1333 Butterfield
Road
Suite 600
Downers Grove, IL
60515
3. (1) PC150 Excavator, s/n 7820
11
<PAGE>
4. (2) Komatsu WA-320 Loaders, s/n
A30013 and s/n A30012.
5. (1) Moxy Model MT20, s/n 353214
6. 12/13/96 KDC Financial PC 400LC-5 Hydraulic Excavator,
Limited Partnership s/n A70662
1333 Butterfield
Road
Suite 600
Downers Grove, IL
60515
7. 7/9/97 KDC Financial PC 300LC-5 Excavator, s/n
Limited Partnership A71618
1333 Butterfield
Road
Suite 600
Downers Grove, IL
60515
8. 10/24/96 KDC Financial WA 600-IL Wheel Loader, s/n
Limited Partnership A50103
1333 Butterfield
Road
Suite 600
Downers Grove, IL
60515
9. 1/31/96 Mercantile Leasing Ford 555D Backhoe Breaker
Corporation
1200 35th St.,
Suite 504
West Des Moines,
IA 50266
10. 1/9/98 Hyster Credit Co. Hyster Lift Truck Model 860XM,
P.O. Box 4366 s/n D177B39827U
Portland, OR 97208
11. 11/21/97 Caterpillar Caterpillar Integrated Tool
Financial Center, s/n 6FN00365
Services
Corporation
901 Warrenville
Road
Lisle, IL 60532
12. 1/31/96 Mercantile Leasing (8) Hyster Spacesaver
Corporation Automotive Lift Trucks Model
1200 35th St., 860XM
Suite 504
West Des Moines,
IA 50266
12
<PAGE>
13. 3/25/96 Mercantile Leasing EnviroWhirl I Surface Cleaner,
Corporation s/n EVH0081694
1200 35th St.,
Suite 504
West Des Moines,
IA 50266
III. LEASED EQUIPMENT - South East Missouri
See Attachment A
LONE STAR LEAD CONSTRUCTION CORP.
I. Jurisdiction: Texas
A. Secretary of State, Texas
1. 199981 10/07/96 GTE Leasing 1 - Option 11E Package AC/DC
Corporation 1 - RTU-R21 Software Cartridge-
500 East Carpenter Gen.
Freeway 1 - Analog Message Waiting Line
Irving, TX 75062 Card
2 - Universal Trunk Card
1 - Digital Line Card
1 - Console/Line Card Package
1 - ONEAC Power Conditioner
10 - M2008 Basic Sets, Ash
9 - N2616 Basic Sets, Ash
19 - Pre-Printed Key Package
2 - M1 Modular Telephone User
Guides
1 - DEC Terminal Package
2 - 50 Pair Lighting Protector
1 - Ground Wire
4 - Paging Horns
9 - Inside Cables
13
<PAGE>
SCHEDULE 5.9
TO
LOAN AND SECURITY AGREEMENT
Tax Returns
None.
<PAGE>
SCHEDULE 6.3
TO
LOAN AND SECURITY AGREEMENT
The Doe Run Resources Corporation
Schedule of Existing Indebtedness
1. The following other indebtedness in the total amount
of $2,392,000.00
Financial Statement
Balance
-------
(in 000's)
Contingent purchase price - payable only if certain
net income levels are met, non-interest bearing, the
expected face amount at January 31, 1998 of
$3,963,000 discounted to an effective rate of 13.5%.
Expires January 29, 2002. Payee - Seafab Metal $1,867
Corporation.
Contingent purchase price - payable only if certain
net income levels are met, non-interest bearing.
Expires January 29, 2000, maximum payments for
remainder of agreement are $525 total long term
debt. Payee - ASARCO. $525*
$2,392
------
* $118,000 represents amount paid in fiscal year 1997; estimated
amount to be paid in each of 1998, 1999 and 2000 is $50,000.
<PAGE>
SCHEDULE 6.4
TO
LOAN AND SECURITY AGREEMENT
Helicopter Transaction
The Doe Run Resources Corporation ("Doe Run") will be purchasing a
helicopter for an amount not to exceed $4.500,000. Doe Run may finance the
purchase of such helicopter and grant purchase money security interests in same.
Doe Run will in turn, directly or indirectly sell such helicopter to Doe Run
Peru for an amount not less than the amount Doe Run expended in connection with
purchasing such helicopter, and Doe Run may guaranty any debt incurred by Doe
Run Peru (up to but not exceeding $4,500,000) in connection with such direct or
indirect sale.
<PAGE>
SCHEDULE 6.5
TO
LOAN AND SECURITY AGREEMENT
Existing Loans, Advances, and Guarantees
1. Doe Run will be purchasing a helicopter for an amount not to exceed
$4,500,000. Doe Run may finance the purchase of such helicopter and grant
purchase money security interests in same. Doe Run may in turn, directly or
indirectly sell such helicopter to Doe Run Peru for cash or other immediately
available funds in an amount not less than the amount Doe Run expended in
connection with purchasing such helicopter, and Doe Run may guaranty any debt
incurred by Doe Run Peru (up to but not exceeding $4,500,000) in connection with
such direct or indirect sale.
<PAGE>
Exhibit 10.6
================================================================================
Anibal Corvetto Romero
Notario - Abogado
Plaza 27 de Noviembre 250
(Av. Central) - San Isidro
Tel. 422-9564 - 442-9369
Tel. 422-9564 - 442-9369 - 440-7299
Testimonio
De la Escritura de
CONTRATO DE TRANSFERENCIA DE ACCIONES,
AUMENTO DEL CAPITAL SOCIAL Y SUSCRIPCION
DE ACCIONES DE LA EMPRESA METALURGICA LA
OROYA S.A., "METALOROYA S.A."
Otorgada por
EMPRESA MINERA DEL CENTRO DEL PERU S.A.
(CENTROMIN PERU S.A.)
A favor de
DOE RUN PERU S.R. LTDA CON INTERVENCION DE:
EMPRESA METALURGICA LA OROYA S.A.,
"METALOROYA S.A.", THE DOE RUN RESOURCES
CORPORATION Y THE RENCO GROUP, INC.
Lima 23 de OCTUBRE de 1997
Fs 21,215 No.
Ka 28,469
================================================================================
<PAGE>
ANIBAL CORVETTO ROMERO
NOTARIO DE LIMA
PLAZA 27 DE NOVIEMBRE No 250
(AV. CENTRAL) - SAN ISIDRO
FAX: 421-8778 TEL.: 422-9564 - 442-9369
e-mail: ancoro @ amauta.rcp.net.pe
KARDEX: 28469 FJAS: 21,215
CONTRATO DE TRANSFERENCIA DE ACCIONES, AUMENTO DEL CAPITAL SOCIAL Y
SUSCRIPCION DE ACCIONES DE LA EMPRESA METALURGICA LA OROYA S.A.,
"METALOROYA S.A."
QUE OTORGAN:
EMPRESA MINERA DEL CENTRO DEL PERU S.A. (CENTROMIN PERU S.A.)
Y DE LA OTRA PARTE:
DOE RUN PERU S.R.LTDA.
CON INTERVENCION DE:
EMPRESA METALURGICA LA OROYA S.A., "METALOROYA S.A.", THE DOE RUN RESOURCES
CORPORATION Y THE RENCO GROUP, INC.
================================================================================
EN LA CIUDAD DE LIMA A LOS VEINTITRES DIAS DEL MES DE OCTUBRE DE MIL NOVECIENTOS
NOVENTA Y SIETE, ANTE MI ANIBAL
1
<PAGE>
CORVETTO ROMERO, ABOGADO NOTARIO PUBLICO DE ESTA CAPITAL.
COMPARECEN LAS SIGUIENTES PERSONAS:
CESAR POLO ROBILLIARD. DE NACIONALIDAD PERUANA, QUIEN MANIFESTO SER DE ESTADO
CIVIL CASADO, DE PROFESION: INGENIERO, DEBIDAMENTE IDENTIFICADO CON LIBRETA
ELECTORAL NUMERO 10540500, CON LIBRETA MILITAR NUMERO: 22388545.
QUIEN PROCEDE EN NOMBRE Y EN REPRESENTACION DE EMPRESA MINERA DEL CENTRO DEL
PERU SOCIEDAD ANONIMA, (CENTROMIN PERU S.A.) CON REGISTRO UNICO DE CONTRIBUYENTE
NUMERO: 10017653, DEBIDAMENTE FACULTADO SEGUN COMPROBANTE QUE SE INSERTA EN EL
CUERPO DE LA PRESENTE ESCRITURA PUBLICA.
JEFFREY L. ZELMS. DE NACIONALIDAD NORTEAMERICANA, DEBIDAMENTE IDENTIFICADO CON
PASAPORTE NORTEAMERICANO NUMERO 153205339, DE ESTADO CIVIL CASADO, DE PROFESION:
INGENIERO.
QUIEN PROCEDE EN NOMBRE Y EN REPRESENTACION DE DOE RON PERU SOCIEDAD DE
RESPONSABILIDAD LIMITADA Y THE DOE RUN RESOURCES CORPORATION, DEBIDAMENTE
FACULTADO SEGUN PODERES QUE CORREN INSCRITOS EN LAS FICHAS NUMEROS 143658 DEL
REGISTRO DE PERSONAS JURIDICAS DE LIMA Y 6864 DEL REGISTRO DE PODERES ESPECIALES
DE LIMA, RESPECTIVAMENTE.
JORGE MERINO TAFUR. DE NACIONALIDAD PERUANA, QUIEN MANIFESTO SER DE ESTADO CIVIL
SOLTERO, DE PROFESION: INGENIERO
2
<PAGE>
ANIBAL CORVETTO ROMERO
NOTARIO DE LIMA
PLAZA 27 DE NOVIEMBRE No 250
(AV. CENTRAL) - SAN ISIDRO
FAX: 421-8778 TEL.: 422-9564 - 442-9369
e-mail: ancoro @ amauta.rcp.net.pe
MECANICO ELECTRICISTA, DEBIDAMENTE IDENTIFICADO CON LIBRETA ELECTORAL NUMERO:
07341351, CON LIBRETA MILITAR NUMERO: 214030551.
QUIEN PROCEDE EN NOMBRE Y EN REPRESENTACION DE LA EMPRESA METALURGICA LA OROYA
S.A., "METALOROYA S.A.", CON REGISTRO UNICO DE CONTRIBUYENTE NUMERO: 33526610,
DEBIDAMENTE FACULTADO SEGUN PODER QUE CORRE INSCRITO EN EL ASIENTO 1 DE LA FICHA
NUMERO: 040367 DEL REGISTRO DE PERSONAS JURIDICAS DEL REGISTRO PUBLICO DE
MINERIA.
MARVIN M. KOENIG. DE NACIONALIDAD NORTEAMERICANO, QUIEN MANIFESTO SER DE ESTADO
CIVIL CASADO, DE PROFESION: CONTADOR EMPRESARIO. DEBIDAMENTE IDENTIFICADO CON
PASAPORTE NORTEAMERICANO NUMERO: 156205648.
QUIEN PROCEDE EN NOMBRE Y EN REPRESENTACION DE THE RENCO GROUP, INC. DEBIDAMENTE
FACULTADO SEGUN PODER QUE CORRE INSCRITO EN LA FICHA NUMERO 6863 DEL LIBRO DE DE
PODERES ESPECIALES DE LOS REGISTROS PUBLICOS DE LIMA.
LOS COMPARECIENTES, SON MAYORES DE EDAD, HABILES PARA CONTRATAR E INTELIGENTES
EN EL IDIOMA CASTELLANO Y A QUIENES HE IDENTIFICADO DE LO QUE DOY FE, CON
CAPACIDAD, LIBERTAD Y CONOCIMIENTO PARA OBLIGARSE, DE LO QUE TAMBIEN DOY FE; Y
ME ENTREGAN UNA MINUTA DEBIDAMENTE FIRMADA Y AUTORIZADA, PARA
3
<PAGE>
QUE SU CONTENIDO SEA ELEVADO A ESCRITURA PUBLICA, LA MISMA QUE QUEDA ARCHIVADA
EN SU LEGAJO MINUTARIO RESPECTIVO Y CON EL NUMERO DE ORDEN CORRESPONDIENTE DE LO
QUE TAMBIEN DOY FE Y CUYO TENOR LITERAL ES EL SIGUIENTE:
MINUTA: SENOR NOTARIO DOCTOR ANIBAL CORVETTO ROMERO:
SIRVASE EXTENDER EN SU REGISTRO DE ESCRITURAS PUBLICAS, EL CONTRATO DE
TRANSFERENCIA DE ACCIONES, AUMENTO DEL CAPITAL SOCIAL Y SUSCRIPCION DE ACCIONES
DE LA EMPRESA METALURGICA LA OROYA S.A., "METALOROYA S.A.", QUE CELEBRAN DE UNA
PARTE, EMPRESA MINERA DEL CENTRO DEL PERU S.A. (CENTROMIN PERU S.A.), CON
REGISTRO UNICO DEL CONTRIBUYENTE NUMERO 10017653, CON DOMICILIO EN AVENIDA
JAVIER PRADO ESTE NUMERO 2155, SAN BORJA, LIMA 41, REPRESENTADA POR SU GERENTE
CENTRAL DE FINANZAS Y COMERCIAL, INGENIERO CESAR POLO ROBILLIARD, CON LIBRETA
ELECTORAL NUMERO 10540500, AUTORIZADO POR ACUERDO DEL DIRECTORIO DE CENTROMIN DE
FECHA 28 DE AGOSTO DE 1997. EN ADELANTE CENTROMIN: Y, DE LA OTRA PARTE DOE RUN
PERU S.R.LTDA., LA CUAL ES UNA SUBSIDIARIA INDIRECTA QUE ES TOTALMENTE DE
PROPIEDAD DE THE DOE RUN RESOURCES CORPORATION, REPRESENTADA POR JEFFREY L.
ZELMS, NORTEAMERICANO. PASAPORTE NUMERO 153205339, QUIEN ESTA AUTORIZADO SEGUN
PODER INSCRITO EN LA FICHA NUMERO 143658 DEL REGISTRO
4
<PAGE>
ANIBAL CORVETTO ROMERO
NOTARIO DE LIMA
PLAZA 27 DE NOVIEMBRE No 250
(AV. CENTRAL) - SAN ISIDRO
FAX: 421-8778 TEL.: 422-9564 - 442-9369
e-mail: ancoro @ amauta.rcp.net.pe
DE PERSONAS JURIDICAS DE LIMA, PARA CELEBRAR EL PRESENTE CONTRATO, QUE EN
ADELANTE SE DENOMINARA EL INVERSIONISTA.
INTERVIENE EN EL PRESENTE CONTRATO LA EMPRESA METALURGICA LA OROYA S.A.,
"METALOROYA S.A." CON REGISTRO UNICO DEL CONTRIBUYENTE NUMERO 33526610, CON
DOMICILIO EN AVENIDA JAVIER PRADO ESTE NUMERO 2175, SAN BORJA, LIMA 41,
REPRESENTADA POR SU GERENTE GENERAL, INGENIERO JORGE MERINO TAFUR, CON LIBRETA
ELECTORAL NUMERO 07341351, SEGUN PODER INSCRITO EN EL ASIENTO 1 DE LA FICHA
NUMERO 040367 DEL REGISTRO DE PERSONAS JURIDICAS DEL REGISTRO PUBLICO DE
MINERIA, EN ADELANTE LA EMPRESA.
ANTECEDENTES.
I. POR DECRETO LEGISLATIVO NUMERO 674 DEL 25 DE SETIEMBRE DE 1991, SE DECLARO DE
INTERES NACIONAL LA PROMOCION DE LA INVERSION PRIVADA DE LAS EMPRESAS QUE
CONFORMAN LA ACTIVIDAD EMPRESARIAL DEL ESTADO.
II. MEDIANTE RESOLUCION SUPREMA NUMERO 102-92-PCM SE RATIFICA EL ACUERDO
ADOPTADO POR LA COMISION DE PROMOCION DE LA INVERSION PRIVADA (COPRI), CONFORME
AL CUAL SE INCLUYE A CENTROMIN EN EL PROCESO PROMOCION DE LA INVERSION PRIVADA A
QUE SE REFIERE EL DECRETO LEGISLATIVO NUMERO 674.
III. POR RESOLUCION SUPREMA NUMERO 016-96-PCM SE RATIFICA EL
5
<PAGE>
ACUERDO ADOPTADO POR COPRI CONFORME AL CUAL SE APRUEBA EL NUEVO PLAN DE
PROMOCION DE LA INVERSION PRIVADA EN RELACION A CENTROMIN.
IV. POR ACUERDO DE COPRI TOMADO EN SESION DEL 17 DE ABRIL DE 1996, SE AUTORIZO
LA CONSTITUCION DE EMPRESAS EN BASE A LAS UNIDADES OPERATIVAS DE CENTROMIN. DE
CONFORMIDAD CON EL ARTICULO 10 DEL DECRETO LEGISLATIVO NUMERO 674.
V. LA EMPRESA METALURGICA LA OROYA SOCIEDAD ANONIMA "METALOROYA S.A." ES UNA
EMPRESA, CONSTITUIDA SOBRE LA BASE DEL COMPLEJO METALURGICO DE LA OROYA, DE
CENTROMIN (EN ADELANTE, "COMPLEJO METALURGICO LA OROYA" CUYAS ACCIONES SON
INTEGRAMENTE DE PROPIEDAD DE CENTROMIN Y CUYO OBJETO SOCIAL ES PRINCIPALMENTE
PARTICIPAR EN ACTIVIDADES QUE CORRESPONDEN A LA INDUSTRIA MINERO-METALURGICA,
TALES COMO LA FUNDICION, REFINACION, INDUSTRIALIZACION, EXTRACCION MINERA Y
COMERCIALIZACION DE SUS PRODUCTOS.
VI. POR RESOLUCION SUPREMA NO. 018- 97-PCM SE RATIFICA EL ACUERDO ADOPTADO POR
COPRI, CONFORME AL CUAL SE APRUEBA LA MODALIDAD BAJO LA CUAL SE PROMUEVE EL
CRECIMIENTO DE LA INVERSION PRIVADA EN LA EMPRESA METALURGICA LA OROYA S.A.
"METALOROYA S.A." EN ADELANTE LA EMPRESA.
VII. DE CONFORMIDAD CON LOS ANTECEDENTES EXPUESTOS, EL
6
<PAGE>
ANIBAL CORVETTO ROMERO
NOTARIO DE LIMA
PLAZA 27 DE NOVIEMBRE No 250
(AV. CENTRAL) - SAN ISIDRO
FAX: 421-8778 TEL.: 422-9564 - 442-9369
e-mail: ancoro @ amauta.rcp.net.pe
COMITE ESPECIAL DE PRIVATIZACION EN LA EMPRESA MINERA DEL CENTRO DEL PERU
SOCIEDAD ANONIMA (CEPRI-CENTROMIN) CONVOCO Y HA LLEVADO A CABO EL CONCURSO
PUBLICO INTERNACIONAL NUMERO PRI-16-97 PARA PROMOVER LA PROMOCION DE LA
INVERSION PRIVADA EN LA EMPRESA. MEDIANTE LA TRANSFERENCIA DE ACCIONES Y EL
AUMENTO DE SU CAPITAL SOCIAL EN VIRTUD DE NUEVOS APORTES DE UNA EMPRESA O
CONSORCIO QUE CUMPLAN LOS REQUISITOS DE PRECALIFICACION ESTABLECIDOS POR EL
CEPRI.
VIII. REALIZADO EL CONCURSO PUBLICO INTERNACIONAL NUMERO PRI-16-97 Y DE
ACUERDO CON LA CARTA DE FECHA 10 DE JULIO DE 1997 FUE DECLARADO EL GANADOR Y POR
CONSIGUIENTE SE LE ADJUDICO LA BUENA PRO AL CONSORCIO CONFORMADO POR THE DOE RUN
RESOURCES CORPORATION Y THE RENCO GROUP, INC.
DE CONFORMIDAD CON LAS BASES EL CONSORCIO ANTES SENALADO HA CEDIDO SU DERECHO A
EL INVERSIONISTA Y ESTA CESION HA SIDO AUTORIZADA POR EL ACUERDO DE
CEPRI-CENTROMIN DE FECHA 11 DE SETIEMBRE DE 1997.
SEGUN LO DISPUESTO POR LAS BASES, CENTROMIN HA APORTADO A LA EMPRESA LOS ACTIVOS
CON RELACION AL COMPLEJO METALURGICO LA OROYA Y HA TRANSFERIDO LOS PASIVOS
REFLEJADOS EN EL BALANCE PROYECTADO, EN LOS MONTOS REGISTRADOS EN LOS LIBROS
CONTABLES DE LA EMPRESA. LOS ACTIVOS EN REFERENCIA (EN
7
<PAGE>
ADELANTE, LOS "ACTIVOS"), SERAN TRANSFERIDOS MEDIANTE UN ACTA DE ENTREGA,
RECEPCION Y VALORIZACION DE BIENES.
CENTROMIN GARANTIZA QUE TODOS ELLOS SON LOS QUE SE NECESITAN PARA LA NORMAL
OPERACION DE LA EMPRESA, CON EXCEPCION DE CAJA, CUENTAS POR COBRAR Y PRODUCTOS
TERMINADOS.
EN VIRTUD DE LOS ANTECEDENTES EXPUESTOS, LAS EMPRESAS QUE FIGURAN EN EL
ENCABEZADO CELEBRAN EL PRESENTE CONTRATO, EN LOS TERMINOS Y CONDICIONES
SIGUIENTES:
CLAUSULA PRIMERA
TRANSFERENCIA
1.1 CENTROMIN ASEVERA, GARANTIZA Y CONVIENE EN QUE: (A) HA RECIBIDO DIEZ MIL
(10,000) ACCIONES DE LA CAPITALIZACION INICIAL DE LA EMPRESA; (B) QUE HA
TRANSFERIDO COMPLETAMENTE EL COMPLEJO METALURGICO LA OROYA A LA EMPRESA, A
CAMBIO DE LO CUAL. RECIBIO 160'604,467 (CIENTO SESENTA MILLONES SEISCIENTOS
CUATRO MIL CUATROCIENTOS SESENTISIETE) ACCIONES CON UN VALOR NOMINAL DE UN NUEVO
SOL (S/. 1.00); (C) EL NUMERO TOTAL DE ACCIONES DE LA EMPRESA, CADA UNA DE LAS
CUALES TIENE UN VALOR NOMINAL DE UN NUEVO SOL (S/.1.00). ES 160'614,467 (CIENTO
SESENTA MILLONES SEISCIENTOS CATORCE MIL CUATROCIENTOS SESENTISIETE) ACCIONES;
(D) CENTROMIN ES PROPIETARIO DE 160,614,467 ACCIONES CON UN VALOR NOMINAL DE UN
NUEVO SOL (S/.1.00), QUE HAN SIDO TOTALMENTE SUSCRITAS Y
8
<PAGE>
ANIBAL CORVETTO ROMERO
NOTARIO DE LIMA
PLAZA 27 DE NOVIEMBRE No 250
(AV. CENTRAL) - SAN ISIDRO
FAX: 421-8778 TEL.: 422-9564 - 442-9369
e-mail: ancoro @ amauta.rcp.net.pe
PAGADAS. LAS CUALES CONSTITUYEN EL CIEN POR CIENTO (100%) DEL CAPITAL SOCIAL
REPRESENTATIVO DE LA EMPRESA; (E) CENTROMIN TRANSFERIRA A LOS TRABAJADORES DE
CENTROMIN, DE ACUERDO CON LO PREVISTO EN LAS BASES, 106,688 (CIENTO SEIS MIL
SEISCIENTOS OCHENTIOCHO) ACCIONES, LAS CUALES CONSTITUYEN EL 0.0664249% DEL
CAPITAL SOCIAL REPRESENTATIVO DE LA EMPRESA. (F) CENTROMIN DECLARA QUE LAS
ACCIONES SENALADAS EN EL LITERAL (D) SON LAS UNICAS ACCIONES EMITIDAS; Y, (G)
TODAS LAS TRANSFERENCIAS A LOS TRABAJADORES SE HARAN LEGALMENTE Y NO HAY NINGUNA
OTRA OBLIGACION DE PARTE DE LA EMPRESA CON RELACION A DICHAS ACCIONES, NI HABRA
NINGUNA OTRA OBLIGACION PARA CUALQUIER EMISION. CENTROMIN MANTENDRA CUALESQUIER
OBLIGACIONES Y RESPONSABILIDADES QUE HUBIERAN CON RELACION A LAS ACCIONES
TRANSFERIDAS A LOS TRABAJADORES, INCLUYENDO CUALESQUIER RECLAMACIONES QUE
PUDIERAN HACER DICHOS TRABAJADORES. EL INVERSIONISTA ASUME EL COMPROMISO DE
ADQUIRIR LAS ACCIONES QUE LOS TRABAJADORES NO ADQUIERAN EN EJERCICIO DE SU
DERECHO PREFERENTE, EN EL MISMO PRECIO.
1.2 EN VIRTUD DEL PRESENTE CONTRATO CENTROMIN TRANSFIERE A EL INVERSIONISTA LA
TITULARIDAD DE 160,507,779 (CIENTO SESENTA MILLONES QUINIENTOS SIETE MIL
SETECIENTOS
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SETENTINUEVE) ACCIONES QUE REPRESENTAN EL 99.9335751% DEL CAPITAL SOCIAL DE LA
EMPRESA.
1.3 EN LA FECHA DE SUSCRIPCION DEL PRESENTE CONTRATO SE HA COMUNICADO A LA
EMPRESA LA TRANSFERENCIA DE LAS ACCIONES SENALADAS EN EL NUMERAL 1.2. PARA SER
ASENTADA EN EL LIBRO DE TRANSFERENCIA DE ACCIONES DE LA EMPRESA.
CLAUSULA SEGUNDA
CONTRAPRESTACION
COMO CONTRAPRESTACION POR LA TRANSFERENCIA DESCRITA EN EL NUMERAL 1.2, EL
INVERSIONISTA SE OBLIGA, EN FAVOR DE CENTROMIN A PAGAR LA SUMA DE US$
121,440,608 (CIENTO VEINTIUN MILLONES CUATROCIENTOS CUARENTA MIL SEISCIENTOS
OCHO DOLARES DE LOS ESTADOS UNIDOS DE NORTEAMERICA), AL CONTADO A LA SUSCRIPCION
DEL PRESENTE CONTRATO.
EL PAGO SE EFECTUARA EN DOLARES DE LOS ESTADOS UNIDOS DE NORTEAMERICA.
CLAUSULA TERCERA
AUMENTO DEL CAPITAL SOCIAL DE
LA EMPRESA
3.1 LA EMPRESA A LA FECHA DE SUSCRIPCION DEL PRESENTE CONTRATO, CUENTA CON UN
CAPITAL SOCIAL DE S/.160,614,467 (CIENTO SESENTA MILLONES SEISCIENTOS CATORCE
MIL CUATROCIENTOS SESENTISIETE NUEVOS SOLES), REPRESENTADAS POR 160,614,467
ACCIONES DE UN VALOR NOMINAL DE UN NUEVO SOL
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ANIBAL CORVETTO ROMERO
NOTARIO DE LIMA
PLAZA 27 DE NOVIEMBRE No 250
(AV. CENTRAL) - SAN ISIDRO
FAX: 421-8778 TEL.: 422-9564 - 442-9369
e-mail: ancoro @ amauta.rcp.net.pe
(S/.1.00).
CENTROMIN ES TITULAR DE 160,614,467 (CIENTO SESENTA MILLONES SEISCIENTOS CATORCE
MIL CUATROCIENTOS SESENTA Y SESENTISIETE) ACCIONES, DE UN VALOR NOMINAL DE UN
NUEVO SOL (S/.1.00) INTEGRAMENTE SUSCRITAS Y PAGADAS, QUE CONSTITUYEN EL 100 POR
CIENTO DE LAS ACCIONES REPRESENTATIVAS DEL CAPITAL SOCIAL DE LA EMPRESA.
3.2. EL INVERSIONISTA REALIZA UN APORTE A LA EMPRESA DE US$ 126,481,383.24
(CIENTO VEINTISEIS MILLONES CUATROCIENTOS OCHENTIUN MIL TRESCIENTOS OCHENTITRES
DOLARES CON VEINTICUATRO CENTAVOS DE LOS ESTADOS UNIDOS DE NORTEAMERICA). EL
INVERSIONISTA REPRESENTA MEDIANTE ESTE APORTE EL 51% DEL CAPITAL SOCIAL DE LA
EMPRESA.
EL PAGO DEL APORTE SE HARA EN DOLARES DE LOS ESTADOS UNIDOS DE NORTEAMERICA Y SE
ACREDITA CON LA CONSTANCIA DE DEPOSITO BANCARIO A NOMBRE DE LA EMPRESA.
3.3. EL APORTE SENALADO EN EL NUMERAL 3.2 COMPRENDE EL APORTE DINERARIO
DESTINADO A AUMENTAR EL CAPITAL SOCIAL DE LA EMPRESA Y LA PRIMA POR LA EMISION
DE ACCIONES.
CONTABLEMENTE EL APORTE DINERARIO SERA REGISTRADO EN NUEVOS SOLES, AL TIPO DE
CAMBIO DE VENTA DEL DIA Y LUGAR DE LA SUSCRIPCION DEL PRESENTE CONTRATO. DEL
MONTO RESULTANTE,
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S/. 167,170,160 (CIENTO SESENTISIETE MILLONES CIENTO SETENTA MIL CIENTO SESENTA
NUEVOS SOLES) SERAN REGISTRADOS EN LA CUENTA CAPITAL SOCIAL. LA DIFERENCIA SERA
REGISTRADA COMO PRIMA DE EMISION.
QUEDA ENTENDIDO QUE NO SE EXIGIRA A LA EMPRESA QUE MANTENGA EN EFECTIVO LAS
SUMAS APORTADAS PARA AUMENTAR EL CAPITAL SOCIAL DE LA EMPRESA AL AMPARO DE LOS
NUMERALES 3.2 Y 3.3, SINO QUE DICHOS FONDOS PODRAN SER UTILIZADOS PARA OTROS
FINES U OPERACIONES COMERCIALES U OTROS.
3.4. COMO CONSECUENCIA DEL AUMENTO DE CAPITAL SENALADO EN EL NUMERAL 3.3, LA
EMPRESA EMITIRA 167,170,160 ACCIONES DE UN VALOR NOMINAL DE UN NUEVO SOL
(S/.1.00).
EL INVERSIONISTA. A LA SUSCRIPCION DEL PRESENTE CONTRATO, SUSCRIBE Y PAGA LA
TOTALIDAD DE LAS ACCIONES EMITIDAS.
3.5 RESPECTO AL PRESENTE CONTRATO, CENTROMIN RENUNCIA A SU DERECHO DE
SUSCRIPCION PREFERENTE.
3.6 SIMULTANEAMENTE, A LA FECHA DE SUSCRIPCION DEL PRESENTE CONTRATO, EL
INVERSIONISTA Y CENTROMIN SE OBLIGAN A REALIZAR UNA JUNTA GENERAL EXTRAORDINARIA
DE ACCIONISTAS DE LA EMPRESA CON EL FIN DE TOMAR LOS ACUERDOS QUE SEAN
NECESARIOS PARA LA EJECUCION DEL PRESENTE CONTRATO.
CLAUSULA CUARTA
COMPROMISO DE INVERSION
12
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ANIBAL CORVETTO ROMERO
NOTARIO DE LIMA
PLAZA 27 DE NOVIEMBRE No 250
(AV. CENTRAL) - SAN ISIDRO
FAX: 421-8778 TEL.: 422-9564 - 442-9369
e-mail: ancoro @ amauta.rcp.net.pe
4.1 DENTRO DE UN PERIODO DE CINCO (5) ANOS A PARTIR DE LA SUSCRIPCION DEL
PRESENTE CONTRATO, LA EMPRESA SE COMPROMETE A INVERTIR LA SUMA DE
US$120,000,000.00 (CIENTO VEINTE MILLONES DE DOLARES DE LOS ESTADOS UNIDOS DE
NORTEAMERICA) PARA LOS FINES DESCRITOS EN EL NUMERAL 4.3 DEL PRESENTE CONTRATO
EN SU COMPLEJO METALURGICO LA OROYA, TAL COMO SE DESCRIBE EN LOS ANTECEDENTES
DEL PRESENTE CONTRATO.
QUEDA ENTENDIDO QUE LA EMPRESA TENDRA UN PLAZO MAXIMO DE (5) CINCO ANOS PARA
EFECTUAR DICHA INVERSION Y QUE NO HAY REQUERIMIENTOS ANUALES.
4.2 PARA VERIFICAR EL MONTO DE LA INVERSION QUE SE HA HECHO, LA EMPRESA
PRESENTARA UNA DECLARACION JURADA INFORMADA POR UNA FIRMA DE AUDITORES
INDEPENDIENTES DE RECONOCIDO PRESTIGIO INTERNACIONAL, ELEGIDA POR CENTROMIN
ENTRE UN MINIMO DE TRES FIRMAS PROPUESTAS POR EL INVERSIONISTA.
LA PROPUESTA DE EL INVERSIONISTA DEBERA SER PRESENTADA A CENTROMIN, TREINTA (30)
DIAS ANTES DEL VENCIMIENTO DEL PLAZO SENALADO EN EL NUMERAL 4.1. EN CASO
CONTRARIO CENTROMIN DESIGNARA A LA FIRMA DE AUDITORES SIN TOMAR EN CUENTA LAS
PROPUESTAS POR EL INVERSIONISTA.
LA DECLARACION JURADA DEBERA SER PRESENTADA A CENTROMIN DENTRO DE LOS SESENTA
(60) DIAS CONTADOS DESDE EL
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VENCIMIENTO DEL PERIODO INDICADO EN EL NUMERAL 4.1. O DE LA FECHA EN QUE
CENTROMIN COMUNIQUE A LA EMPRESA LA DESIGNACION DEL AUDITOR INDEPENDIENTE, LO
QUE OCURRA ULTIMO.
ANUALMENTE LA EMPRESA DEBERA PRESENTAR A CENTROMIN UN INFORME SOBRE LAS
INVERSIONES REALIZADAS HASTA ESE MOMENTO. DENTRO DE UN PLAZO DE SESENTA (60)
DIAS CONTADOS DESDE EL DIA Y MES DEL ANO CORRESPONDIENTE QUE COINCIDA CON EL DIA
Y MES DE LA FECHA EN QUE FUE SUSCRITO EL CONTRATO. LOS INFORMES DEBERAN ESTAR
REFRENDADOS POR UNA FIRMA DE AUDITORES INDEPENDIENTES SEGUN EL PROCEDIMIENTO
INDICADO EN EL PRESENTE NUMERAL.
LOS HONORARIOS DE LOS AUDITORES SERAN ASUMIDOS POR CENTROMIN.
4.3 EL PERIODO PREVISTO EN EL NUMERAL 4.1 SE SUSPENDERA SI, EN EL CURSO DE LA
EJECUCION DEL COMPROMISO DE INVERSION SOBREVINIESE UN CASO FORTUITO O FUERZA
MAYOR DE ACUERDO CON LO ESTABLECIDO EN EL ARTICULO 1315 DEL CODIGO CIVIL O SEGUN
SE ESTIPULA EN LA CLAUSULA DECIMO QUINTA O HECHOS NO DIRECTAMENTE ATRIBUIBLES A
NEGLIGENCIA DE LA EMPRESA. LA SUSPENSION SE MANTENDRA MIENTRAS DUREN E IMPIDAN A
LA EMPRESA EJERCER LAS OBLIGACIONES ESTIPULADAS EN EL COMPROMISO DE INVERSION.
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ANIBAL CORVETTO ROMERO
NOTARIO DE LIMA
PLAZA 27 DE NOVIEMBRE No 250
(AV. CENTRAL) - SAN ISIDRO
FAX: 421-8778 TEL.: 422-9564 - 442-9369
e-mail: ancoro @ amauta.rcp.net.pe
4.4 SI SE PRODUJERAN ACONTECIMIENTOS TALES COMO LOS QUE SE SENALARON EN EL
NUMERAL 4.3. QUE AFECTEN EL CUMPLIMIENTO DEL COMPROMISO DE INVERSION, LA EMPRESA
DARA A CONOCER POR ESCRITO LA SITUACION A CENTROMIN DENTRO DE LOS QUINCE (15)
DIAS SIGUIENTES DE CONOCIDO LOS EFECTOS DEL ACONTECIMIENTO. LA EMPRESA INDICARA
DE MANERA PRECISA EN LA MISMA COMUNICACION LA RELACION DE CAUSALIDAD ENTRE EL
ACONTECIMIENTO Y EL IMPEDIMENTO PARA CUMPLIR EL COMPROMISO DE INVERSION, ASI
COMO LOS ASPECTOS DEL MISMO COMPROMISO DE INVERSION QUE SERAN AFECTADOS Y QUE
DICHOS ACONTECIMIENTOS IMPEDIRAN.
4.5 PARA EFECTOS DE LA PRESENTE CLAUSULA, SE CONSIDERARAN INVERSION, LOS MONTOS
EFECTIVAMENTE DESEMBOLSADOS EN:
A) LOS ESTUDIOS DE FACTIBILIDAD, LOS ESTUDIOS TECNICOS Y/O FINANCIEROS.
INCLUYENDO ESTUDIOS AMBIENTALES Y DESEMBOLSOS NECESARIOS PARA EL CUMPLIMIENTO DE
LAS OBLIGACIONES DE LA EMPRESA PARA EL PROGRAMA DE ADECUACION Y MANEJO AMBIENTAL
(PAMA DE METALOROYA), QUE SE DESCRIBEN EN LA CLAUSULA QUINTA, Y CUALESQUIERA
OTROS REQUERIMIENTOS AMBIENTALES EXIGIDOS POR LA LEY.
B) DESARROLLO, MEJORAS, MODERNIZACION, AMPLIACION Y EXPANSION DE LA CAPACIDAD DE
PRODUCCION DE LA EMPRESA. ASI
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COMO INVERSIONES PARA CARRETERAS Y PARA PROPORCIONAR ELECTRICIDAD Y AGUA, QUE
PERMITAN CUBRIR SUS NECESIDADES, ASI COMO SEGURIDAD, SALUD, PROGRAMAS SOCIALES E
INVERSIONES E INFRAESTRUCTURA DE SERVICIO PUBLICO QUE SE RELACIONEN CON SUS
FINES.
C) LA COMPRA, INSTALACION O CONSTRUCCION DE LAS PLANTAS Y EQUIPOS. ADEMAS, DE
TODOS LOS DEMAS DESEMBOLSOS DE CAPITAL: ASI COMO MANTENIMIENTOS Y REPARACIONES
EXTRAORDINARIAS QUE IMPLIQUEN INCREMENTOS EN LA CAPACIDAD DE PRODUCCION Y/O
EFICIENCIA, ASI COMO LA EXTENSION DE LA VIDA UTIL DE LAS PLANTAS Y EQUIPOS.
D) SEGUROS, FLETES, DERECHOS DE IMPORTACION Y OTROS TRIBUTOS RELACIONADOS CON
LOS RUBROS ANTERIORES.
E) GASTOS ADMINISTRATIVOS RELACIONADOS CON LOS RUBROS ANTERIORES.
F) CAPITAL DE TRABAJO PROVENIENTE DE APORTE AL PATRIMONIO.
LA INVERSION DEBERA EFECTUARSE NECESARIAMENTE CON EL APORTE SENALADO EN EL
NUMERAL 3.2 Y LA PRIMA DE EMISION INDICADA EN EL NUMERAL 3.3, SIN PERJUICIO DE
LO ESTABLECIDO EN EL ULTIMO PARRAFO DEL NUMERAL 3.3.
CLAUSULA QUINTA
RESPONSABILIDAD DE LA EMPRESA EN ASUNTOS
AMEBIENTALES
16
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ANIBAL CORVETTO ROMERO
NOTARIO DE LIMA
PLAZA 27 DE NOVIEMBRE No 250
(AV. CENTRAL) - SAN ISIDRO
FAX: 421-8778 TEL.: 422-9564 - 442-9369
e-mail: ancoro @ amauta.rcp.net.pe
CENTROMIN Y LA EMPRESA RECONOCEN QUE EL PROGRAMA DE ADECUACION Y MANEJO
AMBIENTAL (PAMA) DE LA UNIDAD DE PRODUCCION "LA OROYA" DE CENTROMIN PERU, QUE
FUERA APROBADO POR RESOLUCION DIRECTORAL No 017-97-EM/DGM, CON FECHA 13 DE ENERO
DE 1997, Y MODIFICADO POR RESOLUCION DIRECTORAL No 325-97-EM/DGM. DE FECHA 6 DE
OCTUBRE DE 1997, HA SIDO DIVIDIDO EN EL PROGRAMA DE ADECUACION Y MANEJO
AMBIENTAL (PAMA) DEL COMPLEJO METALURGICO DE LA OROYA DE METALOROYA S.A. (EN
ADELANTE, "PAMA DE METALOROYA"), QUE FUERA APROBADO POR RESOLUCION DIRECTORAL No
334-97-EM/DGM, CON FECHA 16 DE OCTUBRE DE 1997 Y EN EL PROGRAMA DE ADECUACION Y
MANEJO AMBIENTAL (PAMA) DE LA OROYA DE CENTROMIN PERU S.A. (EN ADELANTE "PAMA DE
CENTROMIN"), QUE FUERA APROBADO POR RESOLUCION DIRECTORAL No 334-97-EM/DGM DE
FECHA 16 DE OCTUBRE DE 1997.
LA EMPRESA ASUME LA RESPONSABILIDAD UNICAMENTE CON RESPECTO A LOS SIGUIENTES
ASUNTOS AMBIENTALES:
5.1 EL CUMPLIMIENTO DE LAS OBLIGACIONES CONTENIDAS EN EL PAMA DE METALOROYA Y
SUS EVENTUALES MODIFICACIONES APROBADAS DE CONFORMIDAD CON LAS DISPOSICIONES
LEGALES VIGENTES QUE HAYAN SIDO O QUE SEAN EMITIDAS POR LA AUTORIDAD COMPETENTE.
EN RELACION CON LOS EFLUENTES, EMISIONES Y RESIDUOS
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<PAGE>
GENERADOS POR:
A) LAS INSTALACIONES DE FUNDICION Y REFINACION DE LA EMPRESA.
B) LAS INSTALACIONES DE SERVICIO Y VIVIENDAS DE LA EMPRESA.
C) LOS DEPOSITOS DE FERRITAS DE ZINC EXISTENTES A LA FECHA DE SUSCRIPCION DEL
PRESENTE CONTRATO, INCLUIDAS LAS FERRITAS DE ZINC QUE SEAN ANADIDAS POR LA
EMPRESA EN EL CASO DE QUE LA EMPRESA NO DEVUELVA LOS MISMOS DENTRO DE TRES (3)
ANOS A PARTIR DE LA FECHA DE SUSCRIPCION DEL PRESENTE CONTRATO O NO PAGUE EL
MONTO ESTABLECIDO EN EL NUMERAL 5.6.
DURANTE UN PERIODO DE TRES (3) ANOS A PARTIR DE LA FECHA DE LA SUSCRIPCION DEL
PRESENTE CONTRATO LA EMPRESA PODRA UTILIZAR, SIN COSTO, LAS AREAS QUE CENTROMIN
Y LA EMPRESA HAN ACORDADO ASIGNAR A LA EMPRESA EN LOS DEPOSITOS QUE CENTROMIN Y
SUS PREDECESORES ESTUVIERON USANDO. MIENTRAS QUE LA EMPRESA ESTABLEZCA NUEVAS
AREAS DONDE DEPOSITAR LA ESCORIA, EL TRIOXIDO DE ARSENICO Y LAS FERRITAS DE
ZINC. DICHO PLAZO VENCERA EL 24 DE OCTUBRE DEL ANO 2000, SUSCRIBIENDO LA EMPRESA
Y CENTROMIN LA RESPECTIVA ACTA DE DEVOLUCION. SIN PERJUICIO DE ELLO, LA EMPRESA
PODRA DEVOLVER LOS DEPOSITOS DADOS EN USO EN CUALQUIER MOMENTO ANTES DEL
VENCIMIENTO DEL REFERIDO PLAZO, QUEDANDO LIBERADA DE LAS
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ANIBAL CORVETTO ROMERO
NOTARIO DE LIMA
PLAZA 27 DE NOVIEMBRE No 250
(AV. CENTRAL) - SAN ISIDRO
FAX: 421-8778 TEL.: 422-9564 - 442-9369
e-mail: ancoro @ amauta.rcp.net.pe
OBLIGACIONES CORRESPONDIENTES. CENTROMIN Y LA EMPRESA SUSCRIBIRA EL ACTA DE
ENTREGA EN ESE MOMENTO.
LA EMPRESA SE RESPONSABILIZARA UNICAMENTE POR EL MANTENIMIENTO RUTINARIO
OPERATIVO DE LAS AREAS DE LOS DEPOSITOS QUE HAYAN SIDO ASIGNADOS EN USO A LA
EMPRESA POR EL PERIODO DE TRES (3) ANOS.
CENTROMIN SE RESPONSABILIZARA POR EL MANTENIMIENTO DE LAS OTRAS AREAS DE LOS
DEPOSITOS QUE NO SE HAYAN ASIGNADO EN USO A LA EMPRESA. DICHAS RESPONSABILIDADES
DE MANTENIMIENTO ASIGNADAS A LA EMPRESA NO RELEVARAN A CENTROMIN DEL
CUMPLIMIENTO DE LAS OBLIGACIONES CONTENIDAS EN EL PAMA DE CENTROMIN QUE SE
RELACIONEN CON DICHOS DEPOSITOS DURANTE EL PERIODO DE USO DE TRES (3) ANOS POR
PARTE DE LA EMPRESA. EL ABANDONO TECNICO DE LOS MISMOS SE REGIRA POR LO
ESTABLECIDO EN EL NUMERAL 6.1. Y EL PAMA DE CENTROMIN. AL TERMINO DEL PERIODO DE
TRES (3) ANOS, LOS DEPOSITOS DE ESCORIAS Y DE TRIOXIDO DE ARSENICO, INCLUYENDO
LOS RESIDUOS ADICIONALES DEPOSITADOS EN ELLOS POR LA EMPRESA DURANTE EL PERIODO
DE TRES (3) ANOS, SERAN POSTERIORMENTE DE LA EXCLUSIVA RESPONSABILIDAD DE
CENTROMIN PARA TODOS EFECTOS. CENTROMIN RETENDRA EL TITULO SOBRE LOS TERRENOS EN
QUE ACTUALMENTE ESTAN UBICADOS LOS DEPOSITOS DE ESCORIAS Y DE TRIOXIDO DE
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<PAGE>
ARSENICO EXISTENTES A LA SUSCRIPCION DEL PRESENTE CONTRATO Y QUE SERAN
UTILIZADOS TEMPORALMENTE POR LA EMPRESA.
CENTROMIN Y LA EMPRESA DECLARAN CONOCER, QUE LOS DEPOSITOS DE ESCORIAS, TRIOXIDO
DE ARSENICO Y FERRITAS DE ZINC, FUERON SEPARADOS Y DESAFECTADOS DE LAS
CONCESIONES DE BENEFICIOS TRANSFERIDAS POR CENTROMIN A LA EMPRESA. RETENIENDO
CENTROMIN EL DOMINIO SOBRE LOS MISMOS Y LAS OBLIGACIONES QUE DE ELLO SE
DESPRENDEN. ADICIONALMENTE, EN CONSIDERACION A LA INCLUSION EN EL PAMA DE
METALOROYA DE LA OBLIGACION DE CENTROMIN DE INVERTIR EN 1997 US$ 1'145,668.00
(UN MILLON CIENTO CURENTICINCO MIL SEISCIENTOS SESENTIOCHO DOLARES DE LOS
ESTADOS UNIDOS DE NORTEAMERICA), EN LOS PROYECTOS DE TRATAMIENTO DE EFLUENTES
LIQUIDOS INDUSTRIALES Y NUEVO SISTEMA DE GRANULACION DE ESCORIAS, CENTROMIN
DEBERA PAGAR A EL INVERSIONISTA DICHA SUMA EN EFECTIVO, EN LA FECHA DE
SUSCRIPCION DE ESTE CONTRATO.
D) CUALQUIER NUEVO DEPOSITO DE RESIDUOS QUE LA EMPRESA PUEDA ESTABLECER O
HABILITAR.
5.2 FUTURO CIERRE Y DESMANTELAMIENTO AL TERMINO DE LA VIDA OPERATIVA DE:
A) LAS INSTALACIONES DE FUNDICION Y DE REFINACION DE LA EMPRESA.
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[LETTERHEAD OF ANIBAL CORVETTO ROMERO]
B) CUALQUIER NUEVO DEPOSITO DE ESCORIA, FERRITAS DE ZINC O TRIOXIDO DE ARSENICO
Y OTROS QUE LA EMPRESA PUEDA ESTABLECER.
C) LOS DEPOSITOS DE FERRITAS DE ZINC EN EL CASO DE QUE LA EMPRESA NO DEVUELVA
LOS MISMOS A CENTROMIN DENTRO DE TRES (3) ANOS CONTADOS A PARTIR DE LA FECHA DE
SUBSCRIPCION DEL PRESENTE CONTRATO O NO PAGUE EL MONTO ESTABLECIDO EN EL NUMERAL
5.6.
5.3 DURANTE EL PERIODO APROBADO PARA LA EJECUCION DEL PAMA DE METALOROYA, LA
EMPRESA ASUMIRA LA RESPONSABILIDAD POR DANOS, PERJUICIOS Y RECLAMOS DE TERCEROS
ATRIBUIBLES A ELLA A PARTIR DE LA SUSCRIPCION DEL PRESENTE CONTRATO, SOLO EN LOS
SIGUIENTES CASOS:
A) AQUELLOS DIJE SURJAN DIRECTAMENTE DEBIDO A ACTOS NO RELACIONADOS CON EL PAMA
DE METALOROYA QUE SON EXCLUSIVAMENTE ATRIBUIBLES A LA EMPRESA, PERO SOLO EN LA
MEDIDA QUE DICHOS ACTOS FUERAN EL RESULTADO DE LA APLICACION POR PARTE DE LA
EMPRESA DE NORMAS Y PRACTICAS QUE FUERAN MENOS PROTECTORAS DEL MEDIO AMBIENTE O
DE LA SALUD PUBLICA QUE AQUELLAS QUE FUERAN SEGUIDAS POR CENTROMIN HASTA LA
FECHA DE LA SUSCRIPCION DEL PRESENTE CONTRATO.
EN CASO DE CONTROVERSIA SOBRE LA DETERMINACION DE SI LAS
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NORMAS O PRACTICAS UTILIZADAS POR LA EMPRESA HAN SIDO O NO MENOS PROTECTORAS DEL
MEDIO AMBIENTE O DE LA SALUD PUBLICA QUE LAS APLICADAS POR CENTROMIN, Y DE NO
LLEGARSE A UN ACUERDO AL RESPECTO EN TREINTA DIAS CALENDARIOS DESDE LA FECHA EN
QUE SE RECIBIO EL RECLAMO, CENTROMIN Y LA EMPRESA SOMETERAN DICHA DETERMINACION
A LA OPINION DE UN PERITO, SIGUIENDO PARA ELLO EL TRAMITE DESCRITO EN EL NUMERAL
5.4.C.
B) AQUELLOS QUE RESULTEN DIRECTAMENTE DEL INCUMPLIMIENTO DE LAS OBLIGACIONES DEL
PAMA DE METALOROYA POR PARTE DE LA EMPRESA, O DE LAS OBLIGACIONES ESTABLECIDAS
MEDIANTE EL PRESENTE CONTRATO EN LOS NUMERALES 5.1 Y 5.2.
5.4 DESPUES DEL VENCIMIENTO DEL PLAZO LEGAL DEL PAMA DE METALOROYA, LA EMPRESA
ASUMIRA LA RESPONSABILIDAD DE DANOS, PERJUICIOS Y RECLAMOS DE TERCEROS DE LA
MANERA SIGUIENTE:
A) AQUELLOS QUE RESULTEN DIRECTAMENTE DE ACTOS QUE SEAN EXCLUSIVAMENTE
ATRIBUIBLES A SUS OPERACIONES POSTERIORES A DICHO PERIODO.
B) AQUELLOS QUE RESULTEN DIRECTAMENTE DEL INCUMPLIMIENTO DE LAS OBLIGACIONES DEL
PAMA DE METALOROYA POR PARTE DE LA EMPRESA, O DE LAS OBLIGACIONES ESTABLECIDAS
MEDIANTE EL PRESENTE CONTRATO EN LOS NUMERALES 5.1 Y 5.2.
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[LETTERHEAD OF ANIBAL CORVETTO ROMERO]
C) EN CASO EN QUE LOS DANOS Y PERJUICIOS SEAN ATRIBUIBLES A CENTROMIN Y A LA
EMPRESA, LA EMPRESA ASUMIRA RESPONSABILIDAD EN PROPORCION A SU CONTRIBUCION AL
DANO.
EN LOS CASOS EN QUE NO HAYA CONSENSO ENTRE CENTROMIN Y LA EMPRESA RESPECTO DE
LAS CAUSAS DEL SUPUESTO DANO MATERIA DEL RECLAMO O LA PROPORCION EN QUE SE
DISTRIBUIRA LA RESPONSABILIDAD ENTRE ELLAS, DE NO ALCANZARSE UN ACUERDO EN EL
TERMINO DE TREINTA (30) DIAS CONTADOS A PARTIR DE LA RECEPCION DEL RECLAMO, EL
ASUNTO SERA SOMETIDO A LA DECISION DE UN PERITO EN LA MATERIA A SER DESIGNADO DE
MUTUO ACUERDO, EL CUAL DEBERA EVACUAR SU DECISION A LA BREVEDAD POSIBLE.
SI EL MONTO DEL RECLAMO FUERA MENOR A US$50,000.00, CENTROMIN Y LA EMPRESA
QUEDARAN OBLIGADAS A LA DECISION DEL PERITO. SI EL MONTO DEL RECLAMO FUERA MAYOR
A US$50,000.00, CENTROMIN Y LA EMPRESA PODRAN SOMETER EL ASUNTO A ARBITRAJE,
CONFORME A LA CLAUSULA DECIMO SEGUNDA DEL PRESENTE CONTRATO, SI ES QUE UNA O
AMBAS PARTES NO ESTEN DE ACUERDO CON LA DECISION DEL PERITO.
5.5 A PARTIR DE LA SUSCRIPCION DEL PRESENTE CONTRATO. LA EMPRESA NO TENDRA NI
ASUMIRA NINGUNA RESPONSABILIDAD POR DANOS Y PERJUICIOS O POR LOS RECLAMOS DE
TERCEROS ATRIBUIBLES A CENTROMIN, EN LA MEDIDA QUE LOS MISMOS FUERAN
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EL RESULTADO DE LAS OPERACIONES DE CENTROMIN Y SUS PREDECESORES HASTA LA
SUSCRIPCION DEL PRESENTE CONTRATO O QUE SE DEBAN AL INCUMPLIMIENTO POR PARTE DE
CENTROMIN DE LAS OBLIGACIONES ESPECIFICADAS EN EL NUMERAL 6.1.
5.6 EN EL CASO QUE LA EMPRESA DEVOLVIERA A CENTROMIN LOS DEPOSITOS DE FERRITAS
DE ZINC REFERIDOS EN EL NUMERAL 5.1.C., DEFIERA ABONAR A ESTE ULTIMO
US$ 7,200,000 (SIETE MILLONES DOSCIENTOS MIL DOLARES DE LOS ESTADOS UNIDOS DE
NORTEAMERICA), POR CONCEPTO DE COSTOS POR REMEDIACION DE LOS MISMOS Y
POSTERIORMENTE CENTROMIN ASUMIRA LA EXCLUSIVA RESPONSABILIDAD SOBRE LOS MISMOS E
INDEMNIZARA Y SALVAGUARDARA A LA EMPRESA CONTRA CUALQUIER RECLAMO, COSTO,
DEMANDA U OTRA OBLIGACION REFERIDA A ELLOS. LAS PARTES SUSCRIBIRAN EL ACTA DE
DEVOLUCION A QUE SE REFIERE EL NUMERAL 5.1.C. DEBIENDO LA EMPRESA REALIZAR EL
PAGO ANTES MENCIONADO DENTRO DE LOS DIEZ (10) DIAS UTILES SIGUIENTES A LA
SUSCRIPCION DE DICHA ACTA.
EN EL CASO QUE LA EMPRESA NO DEVOLVIERA LOS DEPOSITOS DE FERRITAS DE ZINC DENTRO
DE TRES (3) ANOS CONTADOS A PARTIR DE LA SUSCRIPCION DEL PRESENTE CONTRATO,
CENTROMIN TRANSFERIRA A LA EMPRESA EL TITULO SOBRE LA PROPIEDAD Y LA CONCESION
DE BENEFICIO CORRESPONDIENTES A LOS DEPOSITOS DE
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[LETTERHEAD OF ANIBAL CORVETTO ROMERO]
FERRITAS DE ZINC EXISTENTES A LA SUSCRIPCION DEL PRESEMTE CONTRATO.
5.7 CENTROMIN SE RESERVA EL DERECHO DE REALIZAR LAS INSPECCIONES QUE FUERAN
NECESARIAS PARA VERIFICAR EL CUMPLIMIENTO DE LO SENALADO EN EL NUMERAL 5.1.C.
LA EMPRESA PROPORCIONARA PERIODICAMENTE A CENTROMIN COPIAS DE LOS INFORMES DE
MONITOREO, REPORTES METALURGICOS Y CUMPLIMIENTE DEL PAMA DE METALOROYA
PRESENTADOS ANTE LA AUTORIDAD COMPETENTE.
5.8 LA EMPRESA PROTEGERA Y MANTENDRA INDEMNE A CENTROMIN CONTRA RECLAMOS DE
TERCEROS Y LA INDEMNIZARA POR CUALQUIER DANO, RESPONSABILIDAD U OBLIGACION QUE
SE PUEDE SOBREVENIR POR LOS CUALES HA ASUMIDO RESPONSABILIDAD Y OBLIGACION.
5.9 TODAS LAS DEMAS RESPONSABILIDADES QUEDARAN A CARGO DE CENTROMIN DE ACUERDO
CON LA CLAUSULA SEXTA.
CLAUSULA SEXTA
RESPONSABILIDAD DE CENTROMIN EN ASUNTOS
AMBIENTALES
6.1 CENTROMIN ASUME LA RESPONSABILIDAD DE LOS SIGUIENTES ASUNTOS AMBIENTALES:
A) CUMPLIMIENTO CON EL PAMA DE CENTROMIN DE ACUERDO CON SUS EVENTUALES
MODIFICACIONES APROBADAS POR LA AUTORIDAD COMPETENTE Y LOS REQUERIMIENTOS
LEGALES VIGENTES APLICABLES
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<PAGE>
QUE HAYAN SIDO O QUE SEAN EXPEDIDOS POR LA AUTORIDAD COMPETENTE.
B) EL ABANDONO TECNICO DE LOS DEPOSITOS DE ESCORIA Y TRIOXIDO DE ARSENICO
EXISTENTES EN LA FECHA DE LA SUSCRIPCION DEL PRESENTE CONTRATO Y LAS
OBLIGACIONES RELACIONADAS CON LOS MISMOS, INCLUYENDO LOS RESIDUOS ADICIONALES
DEPOSITADOS EN ELLOS POR LA EMPRESA EN AQUELLAS AREAS QUE SEAN PERMITIDAS DE
CONFORMIDAD CON LA CLAUSULA QUINTA.
C) REMEDIACION DE LAS AREAS AFECTADAS POR LAS EMISIONES GASEOSAS Y DE MATERIAL
PARTICULADO DE LAS OPERACIONES DE LA FUNDICION Y DE LA REFINERIA QUE SE HAYAN
EMITIDO HASTA LA FECHA DE LA SUSCRIPCION DEL PRESENTE CONTRATO Y DE EMISIONES
ADICIONALES DURANTE EL PERIODO PREVISTO POR LA LEY PARA EL PAMA DE METALOROYA,
SALVO AQUELLAS AREAS DE RESPONSABILIDAD DE LA EMPRESA AL AMPARO DE LA CLAUSULA
QUINTA.
D) EL ABANDONO TECNICO DE LOS DEPOSITOS DE FERRITAS DE ZINC Y LAS OBLIGACIONES
RELACIONADAS CON LOS MISMOS, SI LA EMPRESA LOS DEVUELVE A CENTROMIN DENTRO DEL
PLAZO DE TRES (3) ANOS A PARTIR DE LA FECHA DE SUSCRIPCION DEL PRESENTE CONTRATO
Y PAGA LA SUMA ESTABLECIDA EN EL NUMERAL 5.6.
E) REMEDIACION Y ABANDONO TECNICO DE CUALQUIER DEPOSITO DE
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[LETTERHEAD OF ANIBAL CORVETTO ROMERO]
RESIDUOS GENERADOS POR CENTROMIN O SUS PREDECESORES ANTES DE LA FECHA DE LA
TRANSFERENCIA DEL COMPLEJO METALURGICO LA GROYA, NO IDENTIFICADO O CUYA
EXISTENCIA NO SE HAYA DECLARADO ANTES DE LA FECHA DE LA TRANSFERENCIA.
6.2 DURANTE EL PERIODO APROBADO PARA LA EJECUCION DEL PAMA DE METALOROYA,
CENTROMIN ASUMIRA LA RESPONSABILIDAD POR CUALESQUIER DANOS, PERJUICIOS Y
RECLAMOS DE TERCEROS ATRIBUIBLES A LAS ACTIVIDADES DE LA EMPRESA, CENTROMIN Y/O
SUS PREDECESORES, EXCEPTO POR LOS DANOS, PERJUICIOS Y RECLAMOS DE TERCEROS QUE
SEAN DE RESPONSABILIDAD DE LA EMPRESA DE CONFORMIDAD CON EL NUMERAL 5.3.
6.3 DESPUES DEL VENCIMIENTO DEL PLAZO LEGAL DEL PAMA DE METALOROYA, CENTROMIN
ASUMIRA LA RESPONSABILIDAD POR CUALESQUIER DANOS Y RECLAMOS DE TERCEROS
ATRIBUIBLES A LAS ACTIVIDADES DE CENTROMIN Y/O SUS PREDECESORES EXCEPTO POR LOS
DANOS, PERJUCIOS Y RECLAMOS DE TERCEROS QUE SEAN LA RESPONSABILIDAD DE LA
EMPRESA DE CONFORMIDAD EN EL NUMERAL 5.4.
EN EL CASO QUE LOS DANOS Y PERJUICIOS SEAN ATRIBUIBLES A CENTROMIN Y LA EMPRESA
SERA DE APLICACION LO ESTABLECIDO EN EL NUMERAL 5.4.C)
6.4 LA EMPRESA SE RESERVA EL DERECHO DE REALIZAR LAS
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INSPECCIONES QUE FUERAN NECESARIAS PARA VERIFICAR LA EJECUCION DEL PAMA DE
CENTROMIN.
CENTROMIN PROPORCIONARA PERIODICAMENTE A LA EMPRESA COPIAS DE LOS INFORMES DE
MONITOREO, ESTUDIOS E INFORMES DE CUMPLIMIENTO DEL PAMA DE CENTROMIN PRESENTADOS
ANTE LA AUTORIDAD COMPETENTE.
6.5 CENTROMIN PROTEGERA Y MANTENDRA INDEMNE A LA EMPRESA CONTRA RECLAMOS DE
TERCEROS Y LA INDEMNIZARA POR CUALQUIER DANO, RESPONSABILIDAD U OBLIGACION QUE
PUEDE SOBREVENIR POR LOS CUALES HA ASUMIDO RESPONSABILIDAD Y OBLIGACION.
CLAUSULA SEPTIMA
DECLARACIONES Y GARANTIAS DE EL
INVERSIONISTA
7.1 EL INVERSIONISTA DECLARA HABER REALIZADO SU PROPIA INVESTIGACION, EXAMEN,
INFORMACION Y EVALUACION DURANTE EL PROCESO DE "DUE DILIGENCE", DIRECTAMENTE O A
TRAVES DE TERCEROS, EN BASE A LA INFORMACION ACCESIBLE, DISPONIBLE Y
PROPORCIONADA POR CENTROMIN.
DE ACUERDO A LO QUE CONOCE EL INVERSIONISTA, LA INFORMACION RELATIVA A LA
EMPRESA HA SIDO PROPORCIONADA A TRAVES DEL "INFORMATION MEMORANDUM", LA
DOCUMENTACION QUE HA SIDO INCLUIDA EN EL "DATA ROOM" Y LA SOLICITADA POR EL
INVERSIONISTA, DIRECTAMENTE O A TRAVES DE TERCEROS
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[LETTERHEAD OF ANIBAL CORVETTO ROMERO]
AUTORIZADOS PARA ELLO. DE ACUERDO A LO QUE CONOCE EL INVERSIONISTA, LA
INFORMACION RESPECTO A LA EMPRESA HA ESTADO A TOTAL DISPOSICION DE EL
INVERSIONISTA DURANTE EL DESARROLLO DEL PROCESO DE "DUE DILEGENCE". DENTRO DE
ESTE CONTEXTO, EL INVERSIONISTA ASUME LA RESPONSABILIDAD DE LA DEBIDA DILIGENCIA
SOBRE LA BASE DE LA INFORMACION ACCESIBLE Y PROPORCIONADA POR CENTROMIN. EN
CONSECUENCIA, EL INVERSIONISTA NO PODRA RECLAMAR RESPONSABILIDAD ALGUNA A LA
COPRI, A SUS MIEMBROS, AL CEPRI-CENTROMIN, A SUS MIEMBROS O A SUS ASESORES, A
CENTROMIN, NI AL ESTADO PERUANO, POR LA INFORMACION QUE EL INVERSIONISTA NO HAYA
REVISADO CON RESPECTO A LA EMPRESA O EL COMPLEJO METALURGICO LA OROYA Y QUE HA
SIDO SUMINISTRADA A EL INVERSIONISTA DENTRO DEL PROCESO DE "DUE DILIGENCE".
LO SENALADO EN EL PARRAFO ANTERIOR ES SIN PERJUICIO DE LAS DECLARACIONES Y
GARANTIAS DE CENTROMIN MENCIONADAS EN LA CLAUSULA OCTAVA.
7.2. EL. INVERSIONISTA RECONOCE QUE LA ADJUDICACION DE LA BUENA PRO HA SUPUESTO
CUMPLIR CON LOS REQUISITOS DE PRECALIFICACION ESTABLECIDOS POR EL
CEPRI-CENTROMIN. EN TAL SENTIDO, SE OBLIGA A MANTENER HASTA EL CUMPLIMIENTO DEL
COMPROMISO DE INVERSION, LA TITULARIDAD DE UN NUMERO DE
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<PAGE>
ACCIONES QUE REPRESENTE NO MENOS DEL 25% DEL CAPITAL PAGADO. EL INVERSIONISTA
HABRA CUMPLIDO TAMBIEN CON AQUELLA OBLIGACION SI POR LO MENOS EL 25% DE LA
EMPRESA O DE CUALQUIER EMPRESA SUCESORA QUE SEA DE PROPIEDAD, DIRECTA O
INDIRECTA, DE CUALQUIER MIEMBRO DEL CONSORCIO O CUALQUIER MIEMBRO SUBSIDIARIO
DEL GRUPO DE COMPANIAS EN QUE ELLOS SEAN PROPIETARIOS DIRECTA O INDIRECTAMENTE.
EL REQUERIMIENTO DE SER DUENO DEL 25% NO IMPIDE QUE SE DEN EN PRENDA TODAS LAS
ACCIONES DE LA EMPRESA A BANCOS U OTRAS ENTIDADES QUE PROPORCIONEN PRESTAMOS A
LA EMPRESA.
7.3. CENTROMIN ACUERDA QUE HA OTORGADO Y EL INVERSIONISTA HABER RECIBIDO DE
CENTROMIN A LA FIRMA DEL PRESENTE CONTRATO LOS SIGUIENTES DOCUMENTOS:
A) UN EJEMPLAR DEL ACTA DE JUNTA GENERAL DE ACCIONISTAS DE CENTROMIN DE FECHA 30
DE MAYO DE 1996 EN VIRTUD DE LA CUAL SE FACULTA AL DIRECTORIO DE CENTROMIN A
REALIZAR LA TRANSFERENCIA DE ACTIVOS Y PASIVOS A LA EMPRESA. UN EJEMPLAR DEL
ACTA DE DIRECTORIO DE CENTROMIN, LEGALIZADA NOTORIALMENTE, EN EL CUAL SE ACUERDA
Y SE COMPROMETE A (I) APORTAR TODOS LOS ACTIVOS RELACIONADOS CON EL COMPLEJO
METALURGICO LA OROYA, QUE SERAN TRANSFERIDOS MEDIANTE UN ACTA DE ENTREGA,
RECEPCION Y VALORIZACION DE BIENES (II)
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ANIBAL CORVETTO ROMERO
NOTARIO DE LIMA
PLAZA 27 DE NOVIEMBRE NUMERO 250
(AV. CENTRAL)-SAN ISIDRO
FAX: 421-8778 TEL.: 422-9564 - 442-9369
e-mail: [email protected]
TRANSFERIR EL PASIVO CORRIENTE EN LOS MONTOS REGISTRADOS EN LOS LIBROS CONTABLES
DE LA EMPRESA SIN CAMBIOS EN LOS PASIVOS NO CORRIENTES QUE CONSTAN EN EL BALANCE
PROYECTADO DE LA EMPRESA, HABIENDO SIDO HECHAS TODAS ESTAS TRANSFERENCIAS EN O
PREVIAMENTE A LA FECHA DE LA SUSCRIPCION DEL PRESENTE CONTRATO.
B) UN EJEMPLAR DEL ACTA DE LA JUNTA GENERAL DE ACCIONISTAS DE LA EMPRESA EN QUE
ACUERDAN AUMENTAR EL CAPITAL SOCIAL A S/. 160,614,467 (CIENTO SESENTA MILLONES
SEICIENTOS CATORCE MIL CUATROCIENTOS SESENTISIETE NUEVOS SOLES), COMO RESULTADO
DEL APORTE DE ACTIVOS ARRIBA MENCIONADO HECHO POR CENTROMIN Y DE LA MINUTA DE
AUMENTO DE CAPITAL, DEBIDAMENTE FIRMADO POR EL REPRESENTANTE LEGAL DE LA
EMPRESA.
C) UNA COPIA LEGALIZADA NOTARIALMENTE DE LA SESION DE DIRECTORIO DE LA EMPRESA
EN LA CUAL SE HA APROBADO LA VALORIZACION DE LOS APORTES EFECTUADOS POR
CENTROMIN, CONFORME A LO DISPUESTO EN EL ARTICULO 98o. DEL TEXTO UNICO ORDENADO
DE LA LEY GENERAL DE SOCIEDADES, APROBADO POR DECRETO SUPREMO NO.
003-85-JUS.
D) UN TESTIMONIO DE LA ESCRITURA PUBLICA DE CONSTITUCION SOCIAL DE LA EMPRESA.
E) LOS CERTIFICADOS REPRESENTATIVOS DE LAS ACCIONES DE LA
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EMPRESA QUE HAN SIDO LEGALMENTE TRANSFERIDOS POR CENTROMIN A EL INVERSIONISTA
PARA LOS EFECTO DE QUE ESTA ANULE Y PUEDA EMITIR OPORTUNAMENTE LOS TITULOS A
NOMBRE DE EL INVERSIONISTA.
F) UN ACTA DE ENTREGA Y RECEPCION DE BIENES QUE CONSTITUYEN LOS ACTIVOS Y
EXISTENCIAS DE LA EMPRESA.
G) UN EJEMPLAR DEL ACTA DE SESION DEL DIRECTORIO DE CENTROMIN, LEGALIZADA
NOTARIALMENTE, EN LA CUAL SE AUTORIZA LA VENTA AL INVERSIONISTA DE TODAS LAS
ACCIONES DE LA EMPRESA MENOS LAS ACCIONES DE LOS TRABAJADORES TRANSFERIDAS AL
AMPARO DE LA CLAUSULA PRIMERA DEL PRESENTE CONTRATO.
H) UN EJEMPLAR DEL ACTA DE LA JUNTA GENERAL DE ACCIONISTAS DE LA EMPRESA,
LEGALIZADA NOTARIALMENTE, EN LA CUAL SE ACUERDA EL AUMENTO DEL CAPITAL SOCIAL DE
LA EMPRESA DESCRITO EN LA CLAUSULA TERCERA DEL PRESENTE CONTRATO.
CLAUSULA OCTAVA
DECLARACIONES Y GARANTIAS DE
CENTROMIN Y DE LA EMPRESA
8.1 CENTROMIN DECLARA Y GARANTIZA QUE ES EL UNICO Y EXCLUSIVE PROPIETARIO DE LAS
ACCIONES QUE SON MATERIA DEL PRESENTE CONTRATO, QUE LAS ACCIONES Y TODOS LOS
ACTIVOS DE LA EMPRESA, TODOS LOS CUALES HAN SIDO TRANSFERIDOS A LA EMPRESA POR
CENTROMIN ESTAN LIBRES DE TODO GRAVAMEN, PRENDA,
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ANIBAL CORVETTO ROMERO
NOTARIO DE LIMA
PLAZA 27 DE NOVIEMBRE NUMERO 250
(AV. CENTRAL)-SAN ISIDRO
FAX: 421-8778 TEL.: 422-9564 - 442-9369
e-mail: [email protected]
IMPUESTOS, RECLAMACIONES, OPCIONES O RESTRICCIONES Y DECLARA QUE NINGUNA OTRA
PERSONA POSEE NINGUN DERECHO REAL O EXPECTATICIO SOBRE ELLOS. DICHOS ACTIVOS
CONSTITUYEN TODOS LOS ACTIVOS QUE CENTROMIN POSEE A LA FECHA DE SUSCRIPCION DEL
CONTRATO DEL COMPLEJO METALURGICO LA OROYA Y SE MENCIONAN EN EL NUMERAL 7.3(A)
QUE ANTECEDE.
CENTROMIN ASEVERA Y GARANTIZA QUE TODOS LOS ACTIVOS QUE SE NECESITAN PARA LA
OPERACION DE LAS ACTIVIDADES HAN SIDO TRANSFERIDOS A LA EMPRESA, SALVO CAJA,
CUENTAS POR COBRAR, Y PRODUCTOS TERMINADOS.
8.2 CENTROMIN HA ENTREGADO A EL INVERSIONISTA EL BALANCE DE LA EMPRESA
PROYECTADO AL 30 DE JUNIO DE 1997 (LO CUAL SE DENOMINARA DE AQUI EN ADELANTE EL
BALANCE PROYECTADO). DICHO BALANCE PROYECTADO SE HA ELABORADO DE ACUERDO CON LOS
PRINCIPIOS CONTABLES PERUANOS GENERALMENTE ACEPTADOS.
8.3 CENTROMIN DECLARA IGUALMENTE QUE NO CONOCE DE LA EXISTENCIA DE PASIVOS, NI
DE CUALESQUIER CONTINGENCIAS DERIVADAS DE RESPONSABILIDADES TRIBUTARIAS,
LABORALES O LEGALES O DE CUALQUIER OTRA NATURALEZA DISTINTOS A LOS REGISTRADOS
EN LOS LIBROS DE LA EMPRESA QUE ESTAN REFLEJADOS EN EL BALANCE PROYECTADO AL 30
DE JUNIO DE 1997, ASI COMO EL AJUSTADO POR EL BALANCE DE VERIFICACION. EN CASO
LA EMPRESA
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DESCUBRA: YA SEAN PASIVOS O CONTINGENCIAS NO REGISTRADOS DERIVADOS DE EVENTOS
PREVIOS A LA FECHA DE SUSCRIPCION DEL PRESENTE CONTRATO, ELLOS SERAN ASUMIDOS
POR CENTROMIN EN LA MEDIDA QUE SE HAYAN ORIGINADO EFECTIVAMENTE PREVIAMENTE A LA
FECHA DEL PRESENTE CONTRATO Y QUE LAS RECLAMACIONES SURJAN DENTRO DE DOS (2)
ANOS DESPUES DE LA FECHA DE SUSCRIPCION DEL PRESENTE CONTRATO, SALVO
EVENTUALIDADES TRIBUTARIAS QUE SE REGIRAN POR LO ESTIPULADO EN EL NUMERAL 8.15
DEL PRESENTE CONTRATO, LAS CUALES SERAN RESPONSABILIDAD DE CENTROMIN POR EL
PERIODO INTEGRO EN EL CUAL DICHAS CONTINGENCIAS TRIBUTARIAS PUEDAN ALEGARSE DE
ACUERDO CON LA LEY Y SALVO POR AQUELLAS RECLAMACIONES Y OBLIGACIONES QUE NO SEAN
EXPRESAMENTE ASUMIDAS POR LA EMPRESA AL AMPARO DEL PRESENTE CONTRATO. QUEDA
ENTENDIDO QUE AL AMPARO DE LA PRESENTE CLAUSULA, TODAS LAS RECLAMACIONES Y
OBLIGACIONES QUE SURJAN DE ASUNTOS PREVIOS A LA FECHA DEL PRESENTE CONTRATO QUE
SE RELACIONEN EN CUALQUIER FORMA CON EL COMPLEJO METALURGICO LA OROYA SEGUIRAN
SIENDO RESPONSABILIDAD EXCLUSIVA DE CENTROMIN SALVO EN LO QUE SEAN
ESPECIFICAMENTE ASIGNADOS A LA EMPRESA AL AMPARO DEL PRESENTE CONTRATO. DICHAS
RECLAMACIONES Y OBLIGACIONES DE CENTROMIN INCLUYEN EXPRESAMENTE AQUELLAS QUE
SURJAN DESPUES DE LA FECHA DE SUSCRIPCION DEL PRESENTE
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ANIBAL CORVETTO ROMERO
NOTARIO DE LIMA
PLAZA 27 DE NOVIEMBRE NUMERO 250
(AV. CENTRAL)-SAN ISIDRO
FAX: 421-8778 TEL.: 422-9564 - 442-9369
e-mail: [email protected]
CONTRATO QUE SE RELACIONEN CON ASUNTOS PREVIOS A LA FECHA DE SUSCRIPCION DEL
PRESENTE CONTRATO.
LOS REEMBOLSOS A QUE SE REFIERE EL PARRAFO ANTERIOR SE EFECTUARAN SOLO A PARTIR
DE MONTOS INDIVIDUALES O ACUMULADOS, IGUALES O SUPERIORES A DOSCIENTOS CINCUENTA
MIL DOLARES DE LOS ESTADOS UNIDOS DE NORTEAMERICA (US $ 250,000.00) Y SUJETO A
QUE LA EMPRESA, DENTRO DEL PLAZO DE DIEZ (10) DIAS NATURALES DE CONOCIDA LA
EXISTENCIA DE LA CONTINGENCIA, LO HAGA SABER A CENTROMIN. EN TODO CASO, LA
EMPRESA DEBERA HACER DEFENSA ACTIVA DE LOS INTERESES DE CENTROMIN EL LOS
POSIBLES RECLAMOS ADMINISTRATIVOS O JUDICIALES QUE PUDIERAN PRESENTARSE HASTA LA
ASUNCION POR CENTROMIN, CONFORME AL NUMERAL 8.14 Y CENTROMIN REEMBOLSARA A LA
EMPRESA POR LOS COSTOS DE DICHA DEFENSA CUANDO LE SEA SOLICITADO. CADA REEMBOLSO
SERA PAGADO POR CENTROMIN A LA EMPRESA DENTRO DE LOS TREINTA (30) DIAS
SIGUIENTES A LA FECHA EN QUE LE SEA REQUERIDO POR LA EMPRESA.
AL VENCIMIENTO DEL PLAZO DE DOS (2) ANOS, CENTROMIN REEMBOLSARA EL MONTO QUE
QUEDE PENDIENTE A ESA FECHA, INCLUSO SI FUERA MENOR A DOSCIENTOS CINCUENTA MIL
DOLARES DE LOS ESTADOS UNIDOS DE NORTEAMERICA (US $ 250,000.00).
DENTRO DE LOS 180 DIAS SIGUIENTES A LA SUSCRIPCION DEL
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PRESENTE CONTRATO, SI LA EMPRESA RECIBIERA CUALQUIER SUMA DE DINERO QUE
CORRESPONDA A CENTROMIN, LA EMPRESA REEMBOLSARA A CENTROMIN DENTRO DE LOS
TREINTA (30) DIAS SIGUIENTES DEL REQUERIMIENTO DE PAGO POR CENTROMIN.
EN EL CASO DE LAS CUENTAS POR PAGAR, ORIGINADAS EN LAS PRACTICAS NORMALES, DE
CONTRATOS DE COMPRA DE MATERIALES, NO ENTREGADAS A LA EMPRESA A LA FECHA DE
SUSCRIPCION DEL PRESENTE CONTRATO, ESTAS DEBERAN SER ASUMIDAS POR LA EMPRESA.
SI PARA LA ATENCION DE DICHAS ADQUISICIONES, CENTROMIN TUVIERA QUE EMITIR,
CARTAS DE CREDITO EN MONTOS PREVIAMENTE ACORDADOS Y OTRAS SIMILARES, LA EMPRESA
DEBERA HACER EL REEMBOLSO CORRESPONDIENTE A CENTROMIN.
8.4 EL ANEXO 8.4 CONTIENE LA INFORMACION COMPLETA SOBRE CONTRATOS DE TRABAJO Y
CONVENIOS COLECTIVOS DE LOS TRABAJADORES (SE ENTIENDE QUE INCLUYE A LOS
EMPLEADOS) DE LA EMPRESA, CON INDICACION DE SUS REMUNERACIONES, TIEMPO DE
SERVICIOS Y DISTRIBUCION POR CATEGORIA, CENTROMIN ACUERDA QUE CUALESQUIER
OBLIGACION LEGAL O CONVENCIONAL GENERADA POR EL VINCULO LABORAL CON LOS
TRABAJADORES MENCIONADOS HASTA LA FECHA DE SUSCRIPCION DEL PRESENTE CONTRATO
SERA DE SU EXCLUSIVA RESPONSABILIDAD, INCLUYENDO REMUNERACIONES,
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ANIBAL CORVETTO ROMERO
NOTARIO DE LIMA
PLAZA 27 DE NOVIEMBRE NUMERO 250
(AV. CENTRAL)-SAN ISIDRO
FAX: 421-8778 TEL.: 422-9564 - 442-9369
e-mail: [email protected]
BENEFICIOS, PENSIONES Y CONTRIBUCIONES SOCIALES. EN LOS TERMINOS SENALADOS EN
EL BALANCE PROYECTADO.
CENTROMIN HA FIRMADO EL CONVENIO COLECTIVO CON LOS TRABAJADORES CON FECHA 20 DE
SETIEMBRE DE 1997 Y HA TRANSFERIDO A LOS TRABAJADORES CUBIERTOS POR AQUEL
CONVENIO A LA EMPRESA, ESTIPULANDOSE, SIN EMBARGO QUE, CENTROMIN SE
RESPONSABILIZARA DE CUALESQUIER SUELDOS O BENEFICIOS (INCLUYENDO SIN LIMITACION
CUALESQUIER BENEFICIOS SOCIALES) QUE SE ADEUDEN O DEVENGUEN PREVIAMENTE A LA
FECHA DE SUSCRIPCION DEL PRESENTE CONTRATO (INCLUYENDO SIN LIMITACION
CUALESQUIER SUELDOS O BENEFICIOS) QUE SE ADEUDEN, DEVENGUEN O QUE SEAN
RETROACTIVOS A PARTIR DE 25 DE JULIO DE 1997 CON RESPECTO A CUALQUIER NUEVO
CONVENIO CON LOS TRABAJADORES Y CUALESQUIERA QUE SEAN ADEUDADOS, DEVENGADOS O
RETROACTIVOS A PARTIR DEL 1 DE MAYO DE 1997, PARA CUALESQUIERA PROFESIONALES O
GERENTES Y LA PORCION DE CUALQUIER CESANTIA QUE DEVENGUE EN LA FECHA DE
SUSCRIPCION DEL PRESENTE CONTRATO. CENTROMIN INDEMNIZARA, DEFENDERA Y
SALVAGUARDARA A LA EMPRESA DE LOS MISMOS.
LA EMPRESA Y EL INVERSIONISTA DECLARAN CONOCER QUE LAS REMUNERACIONES,
BENEFICIOS Y CONDICIONES DE TRABAJO DE LOS TRABAJADORES QUE HAN SIDO
TRANSFERIDOS SON LOS QUE CONSTAN
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<PAGE>
EN LOS CONVENIOS COLECTIVOS VIGENTES A LA FECHA DE SUSCRIPCION DEL PRESENTE
CONTRATO.
EN EL CASO DE RECLAMOS O ACCIONES, ADMINISTRATIVAS O JUDICIALES, QUE SE
PRESENTEN CONTRA LA EMPRESA POR REMUNERACIONES, BENEFICIOS U OTROS ASUNTOS DE
CARACTER LABORAL DERIVADOS DE HECHOS ANTERIORES A LA SUSCRIPCION DEL PRESENTE
CONTRATO, SE CONVIENE QUE LA EMPRESA INFORMARA A CENTROMIN DE LAS INDICADAS
ACCIONES DENTRO DE UN PLAZO RAZONABLE DESDE LA NOTIFICACION QUE PERMITA A
CENTROMIN EJERCER SU DEFENSA, SIN PERJUICIO DE INICIAR LAS ACCIONES INMEDIATAS
QUE SEAN REQUERIDAS PARA LA DEFENSA.
SERAN DE RESPONSABILIDAD DE CENTROMIN LA DEFENSA DE LAS INDICADAS ACCIONES Y
ASUMIR EL PAGO DE LAS OBLIGACIONES ECONOMICAS QUE RESULTEN DE LAS MISMAS.
ASIMISMO SE COMPROMETE A INFORMAR PERIODICAMENTE A LA EMPRESA SOBRE LAS
INDICADAS ACCIONES.
8.5 EL ANEXO 8.5 CONTIENE UNA LISTA COMPLETA DE TODAS LOS TERRENOS
SUPERFICIALES, CONCESIONES Y DERECHOS MINEROS Y LICENCIAS DE USO DE AGUA
RELATIVOS AL COMPLEJO METALURGICO LA OROYA, TODOS LOS TITULOS DE LOS BIENES
INMUEBLES, CONCESIONES Y DERECHOS MINEROS Y LICENCIAS DE USO DE AGUAS: (I) HAN
SIDO DEBIDAMENTE TRANSFERIDOS Y REGISTRADOS
38
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ANIBAL CORVETTO ROMERO
NOTARIO DE LIMA
PLAZA 27 DE NOVIEMBRE NUMERO 250
(AV. CENTRAL)-SAN ISIDRO
FAX: 421-8778 TEL.: 422-9564 - 442-9369
e-mail: [email protected]
CENTROMIN A LA EMPRESA; (II) SE ENCUENTRAN LIBRES DE DEFECTOS, VALIDOS, EN
CORRECTA SITUACION LEGAL Y DESPLIEGAN TODOS SUS EFECTOS, Y (III) ESTAN LIBRES DE
CUALQUIER CARGA, GRAVAMEN, EMBARGO, HIPOTECA, USUFRUCTO, Y SERVIDUMBRES, EN
ADELANTE GRAVAMENES, EXCEPTO POR LAS SERVIDUMBRES CORRESPONDIENTES AL SISTEMA
ELECTRICO DE CENTROMIN.
LA EMPRESA ES PROPIETARIA DE TODOS LOS BIENES MUEBLES QUE SE REFLEJAN EN EL
BALANCE PROYECTADO, LOS CUALES SE ENCUENTRAN LIBRES DE CARGAS, GRAVAMENES,
GARANTIAS O CUALQUIER OTRA RESTRICCION.
SI LOS TITULOS NO HAN SIDO OBTENIDOS POR CENTROMIN Y TRANSFERIDOS A LA EMPRESA O
TODOS LOS GRAVAMENES NO HAN SIDO LEVANTADOS PREVIAMENTE A LA SUSCRIPCION DEL
PRESENTE CONTRATO, CENTROMIN SE COMPROMETE A CONCLUIR LOS TRAMITES QUE SEAN
NECESARIOS DENTRO DE UN PLAZO NO MAYOR A SESENTA (60) DIAS CONTADOS A PARTIR DEL
REQUERIMIENTO DE LA EMPRESA. VENCIDO DICHO PLAZO SIN HABER CUMPLIDO CON OBTENER
LOS TITULOS Y TRANSFERIRLOS A LA EMPRESA O SIN HABER LEVANTADO LOS GRAVAMENES,
CENTROMIN OTORGARA UN PODER IRREVOCABLE PARA DICHO FIN. CENTROMIN REEMBOLSARA
LOS COSTOS A LA EMPRESA DENTRO DE LOS RANGOS DE PRECIOS RAZONABLES DEL MERCADO
LOCAL PARA DICHO TIPO DE SERVICIO.
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8.6 EL ANEXO 8.6, CONTIENE UNA LISTA COMPLETA DE TODOS LOS ACTIVOS FIJOS
RELATIVOS AL COMPLEJO METALURGICO LA OROYA. TODOS LOS TITULOS, TODOS LOS
DERECHOS DE PROPIEDAD Y DERECHOS DE USO DE LOS ACTIVOS FIJOS LISTADOS EN EL
INDICADO ANEXO (I) HAN SIDO DEBIDAMENTE TRANSFERIDOS POR CENTROMIN A LA EMPRESA,
(II) SE ENCUENTRAN LIBRES DE DEFECTOS, VALIDOS, EN CORRECTA SITUACION LEGAL Y
DESPLIEGAN TODOS SUS EFECTOS Y (III) ESTAN LIBRES DE GRAVAMENES, U OTROS
DERECHOS O RECLAMOS DE CUALQUIER TERCERO. SI LOS TITULOS Y OTROS DERECHOS DE
PROPIEDAD Y DE USO NO HUBIESEN SIDO OBTENIDOS PREVIAMENTE A LA SUSCRIPCION DEL
PRESENTE CONTRATO, CENTROMIN SE COMPROMETE A CONCLUIR LOS TRAMITES QUE SEAN
NECESARIOS DENTRO DE UN PLAZO NO MAYOR A SESENTA (60) DIAS CONTADOS A PARTIR DEL
REQUERIMIENTO DE LA EMPRESA. VENCIDO DICHO PLAZO SIN HABER CUMPLIDO CON OBTENER
LOS TITULOS Y TRANSFERIRLOS A LA EMPRESA O SIN HABER LEVANTADO LOS GRAVAMENES,
CENTROMIN OTORGA UN PODER IRREVOCABLE PARA DICHO FIN. CENTROMIN REEMBOLSARA LOS
COSTOS A LA EMPRESA, LOS CUALES SERAN PAGADOS DENTRO DE LOS TREINTA (30) DIAS
SIGUIENTES DEL REQUERIMIENTO POR LA EMPRESA DENTRO DE LOS RANGOS DE PRECIOS
RAZONABLES DEL MERCADO LOCAL PARA DICHO TIPO DE SERVICIO.
40
<PAGE>
ANIBAL CORVETTO ROMERO
NOTARIO DE LIMA
PLAZA 27 DE NOVIEMBRE No 250
(AV. CENTRAL) - SAN ISIDRO
FAX: 421-8778 TEL: 422-9564 - 442-9369
e-mail: ancoro @ amauta.rcp.net.pe
OPERACIONES DEL COMPLEJO METALURGICO LA OROYA, HABIENDOLO OPERADO UNICAMENTE EN
EL TRANSCURSO NORMAL DEL NEGOCIO, SIN HABER EFECTUADO CAMBIOS PERJUDICIALES EN
LOS METODOS DE OPERACION O LAS PRACTICAS DE REEMPLAZO DE EQUIPO, NI
MANTENIMIENTO Y QUE A LA FECHA DE SUSCRIPCION DEL PRESENTE CONTRATO HAY
SUFICIENTE INVENTARIO EN PRODUCTOS EN PROCESO Y DE MATERIALES Y REPUESTOS PARA
LA OPERACION NORMAL DEL COMPLEJO METALURGICO LA OROYA A NIVELES DE EFICIENCIA NO
MENORES QUE LOS OBTENIDOS DURANTE 1996.
CENTROMIN ASEVERA Y GARANTIZA QUE LOS CAMBIOS HABIDOS DESDE EL 11 DE ABRIL DE
1997 DE ACTIVOS O PASIVOS DEL COMPLEJO METALURGICO LA OROYA SON PROPIOS DE LA
MARCHA NORMAL DEL NEGOCIO.
8.18 SI LUEGO DE HABERSE CUMPLIDO CON EL ACTA DE ENTREGA, RECEPCION Y
VALORIZACION, SE ENCONTRARA ACTIVOS QUE DEBIERON SER TRANSFERIDOS Y NO LO
FUERON; ESTOS DEBERAN SER TRANSFERIDOS POR CENTROMIN A LA EMPRESA, AL SOLO
REQUERIMIENTO DE UNA DE CENTROMIN Y LA EMPRESA. EN CASO DE EXISTIR DESACUERDOS
EN LA TRANSFERENCIA DE ESTOS ACTIVOS DICHAS PARTES DEBERAN ACUDIR A UNA
DIRIMENCIA EFECTUADA POR UN PERITO. A SER NOMINADO DE COMUN ACUERDO Y REAL IZADA
POR UNA FIRMA ACREDITADA RE AUDITORIA. SI CENTROMIN Y LA EMPRESA
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NO LOGRASEN PONERSE DE ACUERDO EN LA NOMINACION DEL PERITO, SERA SELECCIONADA
POR LA EMPRESA ENTRE LAS FIRMAS AUDITORAS SENALADAS EN EL NUMERAL 4.2. SI EL
VALOR DE LOS ACTIVOS EXCEDIERA LOS US$50,000, DICHAS PARTES DEBERAN REGIRSE POR
LO DISPUESTO EN LA CLAUSULA DECIMO SEGUNDA.
8.19 CENTROMIN OTORGA A EL INVERSIONISTA UN DERECHO DE PREFERENCIA EN LA
ADQUISICION DE HASTA EL 30% DE LAS ACCIONES O DE LA EMPRESA MINERA PARAGSHA S.A.
O DE LA EMPRESA DE ELECTRICIDAD DE LOS ANDES S.A.
EL INVERSIONISTA DEBERA MANIFESTAR SU INTERES EN MANTENER UNA U OTRA OPCION, A
MAS TARDAR EN LA FECHA LIMITE PARA PRESENTAR CONSULTAS EN EL CONCURSO PARA LA
VENTA DE LAS ACCIONES DE LA EMPRESA QUE CORRESPONDA SU INTERES Y, LUEGO
CONFIRMAR SU INTENCION DE EJERCER LA OPCION DENTRO DE LOS 10 DIAS NATURALES
INMEDIATAMENTE SIGUIENTES A LA FECHA DE LOS RESPECTIVOS OTORGAMIENTOS DE LA
BUENA PRO.
8.20. DESPUES DE LA FECHA DE SUSCRIPCION DEL PRESENTE CONTRATO, CENTROMIN
EJECUTARA Y ENTREGARA TODOS LOS INSTRUMENTOS DE TRANSFERENCIA, CESION Y ENTREGA
Y REALIZARA LAS ACCIONES QUE LA EMPRESA PUEDA REQUERIR PARA EFECTIVIZAR LA
TRANSFERENCIA, CESION, Y LA ENTREGA A LA EMPRESA Y COLOCAR A LA EMPRESA EN
POSESION Y CONTROL DE TONOS LOS
52
<PAGE>
ANIBAL CORVETTO ROMERO
NOTARIO DE LIMA
PLAZA 27 DE NOVIEMBRE No 250
(AV. CENTRAL) - SAN ISIDRO
FAX: 421-8778 TEL.: 422-9564 - 442-9369
e-mail: ancoro @ amauta.rcp.net.pe
ACTIVOS.
CLAUSULA NOVENA
AJUSTE DE BALANCE 9.1 DENTRO DE LOS NOVENTA (90) DIAS SIGUIENTES A LA
SUSCRIPCION DEL PRESENTE CONTRATO, SE PREPARARA UN BALANCE QUE MUESTRE LA
SITUACION DE LA EMPRESA A LA FECHA DE SUSCRIPCION DEL PRESENTE CONTRATO, (EN
ADELANTE EL BALANCE DE VERIFICACION), EN LA PREPARACION DE ESTE BALANCE SE
DEBERA UTILIZAR LOS MISMOS CRITERIOS, PRINCIPIOS Y CONSIDERACIONES ASUMIDOS EN
LA ELABORACION DE EL BALANCE PROYECTADO.
DICHO BALANCE DE VERIFICACION SE ELABORARA DE ACUERDO CON LOS PRINCIPIOS
CONTABLES PERUANOS GENERALMENTE ACEPTADOS APLICADOS SOBRE UNA BASE CONSISTENTE Y
DE ACUERDO CON LAS MISMAS PRACTICAS USADAS PARA LA ELABORACION BE EL BALANCE
PROYECTADO.
9.2 EL BALANCE DE VERIFICACION SERA PREPARADO POR LA EMPRESA E INFORMA POR UNA
FIRMA DE AUDITORES INDEPENDIENTES DE PRESTIGIO INTERNACIONAL, ELEGIDA POR
CENTROMIN ENTRE UN MINIMO DE TRES FIRMAS PROPUESTAS POR EL INVERSIONISTA.
LOS HONORARIOS DE LOS AUDITORES SERAN ASUMIDOS POR CENTROMIN.
9.3 EL BALANCE PROYECTADO SERA COMPARADO CON EL BALANCE DE
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<PAGE>
VERIFICACION, SI LA DIFERENCIA ENTRE LOS ACTIVOS CORRIENTES NETOS Y LOS PASIVOS
CORRIENTES PRESENTADOS EN EL BALANCE PROYECTADO, EXCEDIERA EN MAS DEL 5% A LA
DIFERENCIA ENTRE LOS ACTIVOS CORRIENTES NETOS Y LOS PASIVOS CORRIENTES
PRESENTADOS EN EL BALANCE DE VERIFICACION, CENTROMIN PAGARA A LA EMPRESA UN
MONTO EQUIVALENTE AL EXCESO POR ENCIMA DE DICHO 5%.
SI, POR EL CONTRARIO, LA DIFERENCIA ENTRE LOS ACTIVOS CORRIENTES NETOS Y LOS
PASIVOS CORRIENTES PRESENTADOS EN EL BALANCE DE VERIFICACION EXCEDIERA, EN MAS
DEL 5% DE ESTA MISMA DIFERENCIA, A LA DIFERENCIA ENTRE LOS ACTIVOS CORRIENTES
NETOS Y LOS PASIVOS CORRIENTES PRESENTADOS EN EL BALANCE PROYECTADO, LA EMPRESA
PAGARA A CENTROMIN EL MONTO EQUIVALENTE AL EXCESO SOBRE ESTE 5%.
9.4 LA DIFERENCIA A SER REINTEGRADA POR CENTROMIN A LA EMPRESA, O VICEVERSA,
ESTA REFERIDA EXCLUSIVAMENTE A LA DIFERENCIA ENTRE ACTIVOS Y PASIVOS CORRIENTES
Y NO DARA CONSIDERACION DE NINGUNA NATURALEZA A ACTIVOS FIJOS, ACTIVOS
INTANGIBLES, OTROS ACTIVOS U OTROS PASIVO, LOS QUE SERAN ASUMIDOS EN LO QUE SE
INDIQUE EN EL BALANCE DE VERIFICACION Y EN LA CONDICION Y SITUACION FISICA EN
QUE ESTOS SE ENCUENTREN, Y QUE TALES EQUIPOS Y FACILIDADES ESTAN
54
<PAGE>
ANIBAL CORVETTO ROMERO
NOTARIO DE LIMA
PLAZA 27 DE NOVIEMBRE No 250
(AV. CENTRAL) - SAN ISIDRO
FAX: 421-8778 TEL.: 422-9564 - 442-9369
e-mail: ancoro @ amauta.rcp.net.pe
FUNCIONANDO DE LA MISMA MANERA COMO LO ESTABAN EL 11 DE ABRIL DE 1997.
LOS CRITERIOS DE VALUACION DE LOS ACTIVOS Y PASIVOS CORRIENTES CON QUE SE
EFECTUO EL BALANCE PROYECTADO SE USARAN DE IGUAL MODO AL PREPARAR EL BALANCE DE
VERIFICACION. CENTROMIN HABRA SUMINISTRADO PREVIAMENTE A EL INVERSIONISTA LAS
PRACTICAS Y NORMAS EN BASE A LAS CUALES SE ELABORO EL BALANCE PROYECTADO.
9.5 LA DIFERENCIA SERA PAGADA POR LA PARTE QUE SE HUBIESE BENEFICIADO, DENTRO DE
LOS TREINTA (30) DIAS POSTERIORES A LA PRESENTACION DE EL BALANCE DE
VERIFICACION, CON LA INCLUSION DEL INTERESES A LA TASA LIBOR ACTIVA A TRES MESES
PUBLICADO POR REUTER Y APLICABLE A PARTIR DE LA FECHA DE SUSCRIPCION DEL
PRESENTE CONTRATO.
EL PAGO SE EFECTUARA EN DOLARES DE LOS ESTADOS UNIDOS DE NORTEAMERICA.
9.6 EN GARANTIA DE LA POSIBLE RESTITUCION QUE PUDIERA ORIGINARSE A FAVOR DE LA
EMPRESA, EL 5% DE LA SUMA DE LOS ACTIVOS CORRIENTES MAS LOS PASIVOS CORRIENTES
DE EL BALANCE PROYECTADO, SE MANTENDRA EN RESERVA EN UNA CUENTA DE AHORRO
CONJUNTA QUE EL BANCO SANTANDER ABRIRA A NOMBRE DE CENTROMIN Y LA EMPRESA, HASTA
LA DEFINICION PREVISTA EN EL NUMERAL
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9.3.
9.7 EN GARANTIA DE LA POSIBLE RESTITUCION QUE PUDIERA ORIGINARSE A FAVOR DE
CENTROMIN, EL INVERSIONISTA ENTREGARA UNA CARTA FIANZA BANCARIA EMITIDA POR UN
BANCO LOCAL CON CARACTER IRREVOCABLE, INCONDICIONADA, SIN BENEFICIO DE EXCUSION,
SOLIDARIA 0 UNA CARTA DE CREDITO BAJO LA FORMA DE "STAND BY LETTER OF CREDIT",
EMITIDA POR CUALQUIERA DE LOS BANCOS MENCIONADOS EN LA CIRCULAR NO. 018-97-EF/9O
DEL BANCO CENTRAL DE RESERVA, CON CARACTER IRREVOCABLE, AVISADA Y CONFIRMADA POR
UN BANCO LOCAL. AMBAS DE REALIZACION AUTOMATICA, VALIDAS POR UN PERIODO NO MENOR
A CIENTO CINCUENTA (150) DIAS CONTADOS A PARTIR DE LA SUSCRIPCION DEL PRESENTE
CONTRATO, EMITIDA A FAVOR DE CENTROMIN, POR UN MONTO EQUIVALENTE AL 5% DE LA
SUMA DE LOS ACTIVOS CORRIENTES MAS LOS PASIVOS CORRIENTES DE EL BALANCE
PROYECTADO.
EL INFORME QUE EMITIRA LA EMPRESA DE AUDITORES RESPECTO A LA COMPARACION DE EL
BALANCE PROYECTADO Y EL BALANCE DE VERIFICACION SERA FINAL.
SI EN APLICACION DE LO SENALADO EN LOS NUMERALES 9.3 Y 9.4 HUBIERA UN PAGO A
FAVOR DE CENTROMIN, LA EMPRESA CUMPLIRA CON EL MISMO SEGUN SENALA EN EL NUMERAL
9.5. EN CASO DE INCUMPLIMIENTO, CENTROMIN PROCEDERA A COBRAR LA SUMA QUE
56
<PAGE>
ANIBAL CORVETTO ROMERO
NOTARIO DE LIMA
PLAZA 27 DE NOVIEMBRE No 250
(AV. CENTRAL) - SAN ISIDRO
FAX: 421-8778 TEL.: 422-9564 - 442-9369
e-mail: ancoro @ amauta.rcp.net.pe
CORRESPONDA CONTRA LA FIANZA BANCARIA 0 LA CARTA DE CREDITO BAJO LA FORMA DE
"STAND BY LETTER OF CREDIT", SENALADA EN EL NUMERAL 9.7, LA SUMA QUE CORRESPONDA
CON SUS INTERESES, QUEDANDO DE LIBRE DISPOSICION EL SALDO, QUEDANDO, ASIMISMO,
LIBERADO DEL DEPOSITO SENALADO EN EL NUMERAL 9.6, SIENDO DE LIBRE DISPONIBILIDAD
LA SUMA RETENIDA.
SI EN APLICACION DE LO SENALADO EN LOS NUMERALES 9.3 Y 9.4 EXISTIESE UN PAGO A
FAVOR DE LA EMPRESA, CENTROMIN CUMPLIRA CON EL MISMO SEGUN SE SENALA EN EL
NUMERAL 9.5. EN CASO DE INCUMPLIMIENTO, LA EMPRESA PODRA COBRAR LA SUMA QUE
CORRESPONDA CON SUS INTERESES AL BANCO SANTANDER CONTRA EL DEPOSITO SENALADO EN
EL NUMERAL 9.6, QUEDANDO EL SALDO DE LIBRE DISPOSICION DE CENTROMIN Y QUEDANDO
LIBERADA, ASIMISMO, LA FIANZA BANCARIA O LA CARTA DE CREDITO BAJO LA FORMA DE
"STAND BY LETTER OF CREDIT" SENALADA EN EL NUMERAL 9.7.
CLAUSULA DECIMA
CESION DE DERECHOS Y/U OBLIGACIONES EL INVERSIONISTA Y LA EMPRESA OTORGAN SU
APROBACION, POR ADELANTADO A LA SUBSTITUCION DE LA POSICION CONTRACTUAL DERIVADA
DEL PRESENTE CONTRATO O LA CESION DE LOS DERECHOS Y/U OBLIGACIONES QUE PUDIERA
ORIGINAR EN BASE A ELLA QUE CENTROMIN PUDIERA CUMPLIR Y CENTROMIN OTORGA LOS
DERECHOS Y
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APROBACIONES CORRESPONDIENTES A EL INVERSIONISTA Y A LA EMPRESA, SUJETO A LA LEY
APLICABLE Y AL PRESENTE CONTRATO EN EL NUMERAL 7.2 QUE ANTECEDE.
LA SUBSTITUCION SERA COMUNICADA A EL INVERSIONISTA Y A LA EMPRESA EN EL CASO DE
CENTROMIN Y A CENTROMIN EN EL CASO DE EL INVERSIONISTA Y LA EMPRESA MEDIANTE
CARTA NOTARIAL. EL SUCESOR ASUMIRA LOS DERECHOS Y OBLIGACIONES QUE SE ORIGINEN
EN BASE AL PRESENTE CONTRATO A PARTIR DE LA FECHA DE DICHA, COMUNICACION.
EN RAZON DEL DECRETO SUPREMO No 042-97-PCM APROBADO EL 19 DE SETIEMBRE DE 1997 Y
DE ACUERDO CON EL DECRETO LEY NO. 25570 Y LA LEY NO. 26438 Y AL CONTRATO DE
GARANTIA CORRESPONDIENTE CELEBRADO AL AMPARO DE AQUEL DECRETO, EL GOBIERNO DEL
PERU ESTA OBLIGADO A GARANTIZAR TODAS LAS OBLIGACIONES DE CENTROMIN AL AMPARO
DEL PRESENTE CONTRATO; DICHA GARANTIA SOBREVIVIRA LA TRANSFERENCIA DE
CUALESQUIERA DE LOS DERECHOS Y OBLIGACIONES DE CENTROMIN Y CUALQUIER LIQUIDACION
DE CENTROMIN.
CLAUSULA DECIMO PRIMERA
LEY APLICABLE EL PRESENTE CONTRATO SE REGIRA Y EJECUTARA DE ACUERDO A LAS LEYES
DE LA REPUBLICA DEL PERU. LAS PARTES HAN ELABORADO, FIRMADO Y ACEPTADO TAMBIEN
UNA TRADUCCION OFICIAL EN INGLES
58
<PAGE>
ANIBAL CORVETTO ROMERO
NOTARIO DE LIMA
PLAZA 27 DE NOVIEMBRE No 250
(AV. CENTRAL) - SAN ISIDRO
FAX: 421-8778 TEL.: 422-9564 - 442-9369
e-mail: ancoro @ amauta.rcp.net.pe
DEL PRESENTE CONTRATO PERO ENTIENDEN QUE LA VERSION EN CASTELLANO DEL PRESENTE
CONTRATO ES LA VERSION LEGAL QUE PRIMA.
CLAUSULA DECIMO SEGUNDA
ARBITRAJE CUALQUIER LITIGIO, CONTROVERSIA, DESAVENENCIA, DIFERENCIA O
RECLAMACION QUE SURJA ENTRE LAS PARTES RELATIVOS A LA INTERPRETACION, EJECUCION
O VALIDEZ DERIVADO O RELACIONADO CON EL PRESENTE CONTRATO QUE NO PUEDA SER
RESUELTO DE MUTUO ACUERDO ENTRE ELLAS, SERA SOMETIDO A ARBITRAJE DE DERECHO, DE
CARACTER INTERNACIONAL AL AMPARO DE LAS REGLAS Y PROCEDIMIENTOS TAL COMO FUERON
ESTABLECIDOS POR UNCITRAL. EL LUGAR DE DICHO ARBITRAJE SERA EN LONDRES,
INGLATERRA O EN AQUELLA OTRA UBICACION QUE LAS PARTES PUEDAN ACORDAR. CADA PARTE
TENDRA EL DERECHO DE CONVOCAR Y CONTRAINTERROGAR A TESTIGOS Y EMPRENDER EL
DESCUBRIMIENTO.
LOS ARBITROS SERAN TRES (3), DE LOS CUALES CADA UNA DE LAS PARTES DESIGNARA A
UNO Y LOS DOS ARBITROS ASI DESIGNADOS NOMBRARAN AL TERCERO, QUIEN PRESIDIRA EL
TRIBUNAL ARBITRAL. SI UNA PARTE NO NOMBRA AL ARBITRO QUE LE CORRESPONDE DENTRO
DE LOS QUINCE (15) DIAS NATURALES DE RECIBIDO EL REQUERIMIENTO ESCRITO DE LA
PARTE QUE SOLICITA EL ARBITRAJE O SI DENTRO DE UN PLAZO IGUALMENTE DE QUINCE
(15) DIAS
59
<PAGE>
NATURALES CONTADOS A PARTIR DEL NOMBRAMIENTO DEL SEGUNDO ARBITRO, LOS DOS
ARBITROS NO CONSIGUEN PONERSE DE ACUERDO SOBRE LA DESIGNACION DEL TERCER
ARBITRO, LA DESIGNACION DE CUALQUIERA DE DICHOS ARBITROS SERA HECHA, A PETICION
DE CUALQUIERA DE LAS PARTES, POR EL INSTITUTO DE DERECHO DE MINERIA Y PETROLEO.
EN CASO QUE POR CUALQUIER CIRCUNSTANCIA DEBA DESIGNARSE UN ARBITRO SUSTITUTO,
ESTE SERA DESIGNADO SIGUIENDO EL MISMO PROCEDIMIENTO SENALADO PRECEDENTEMENTE
PARA LA DESIGNACION DEL ARBITRO QUE SE SUSTITUYE.
LAS PARTES RENUNCIAN A SU DERECHO A APELAR DE LA DECISION ARBITRAL, EXCEPTO EN
EL CASO QUE DICHA DECISION SEA CONSECUENCIA DE FRAUDE, DEFECTO O EL NO
SEGUIMIENTO DE LOS PROCEDIMIENTO REQUERIDOS U OTROS DEFECTOS DE ACUERDO A LOS
ESTANDARES INTERNACIONALES.
CLAUSULA DECIMO TERCERA
DOMICILIO
13.1 PARA LOS EFECTOS DE LA EJECUCION DEL PRESENTE CONTRATO LAS PARTES
ESTABLECEN COMO SUS DOMICILIOS EN EL PERU LOS SENALADOS EN EL ENCABEZADO DEL
PRESENTE CONTRATO.
13.2 EL CAMBIO DE DOMICILIO DE ALGUNA DE LAS PARTES NO PUEDE OPONERSE A LA OTRA
SI NO HA SIDO PUESTO EN SU CONOCIMIENTO MEDIANTE CARTA NOTARIAL.
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<PAGE>
ANIBAL CORVETTO ROMERO
NOTARIO DE LIMA
PLAZA 27 DE NOVIEMBRE No 250
(AV. CENTRAL) - SAN ISIDRO
FAX 421-8778 TEL: 422-9564 - 442-9369
e-mail: ancoro @ amauta.rcp.net.pe
13.3 PARA EFECTO DE ESTE CONTRATO SE ENTENDERA QUE LAS COMUNICACIONES,
REQUERIMIENTOS O NOTIFICACIONES, QUE EN EL SE REFIEREN SE CONSIDERAN CONOCIDAS
EN EL MOMENTO EN QUE LLEGAN AL DOMICILIO DEL DESTINATARIO.
CLAUSULA DECIMO CUARTA
GASTOS Y TRIBUTOS
14.1 LOS GASTOS QUE OCASIONE LA ELEVACION DE LA PRESENTE MINUTA A ESCRITURA
PUBLICA SERAN DE CUENTA DE EL INVERSIONISTA.
14.2 CADA UNA DE LAS PARTES DEL PRESENTE CONTRATO ASUME LOS TRIBUTOS QUE LE
CORRESPONDEN DE ACUERDO CON LA LEGISLACION VIGENTE. CADA PARTE PAGARA SUS
PROPIOS HONORARIOS LEGALES, COSTOS Y GASTOS EN LA REALIZACION DEL "DUE
DILIGENCE" Y EN LA NEGOCIACION Y EJECUCION DEL PRESENTE CONTRATO Y DE LAS
TRANSFERENCIAS DE LOS ACTIVOS Y PASIVOS DE LA EMPRESA.
CLAUSULA DECIMO QUINTA
FUERZA MAYOR
NINGUNA DE LAS PARTES CONTRATANTES PODRA EXIGIR DE LA OTRA EL CUMPLIMIENTO DE
LAS OBLIGACIONES CONTRATADAS EN EL PRESENTE CONTRATO, CUANDO EL CUMPLIMIENTO SEA
DEMORADO, OBSTACULIZADO O IMPEDIDO POR CAUSALES SOBREVINIENTES NO IMPUTABLE A LA
PARTE OBLIGADA Y ESTA OBLIGACION NO HAYA SIDO AL MOMENTO DE SUBSCRIPCION DEL
PRESENTE CONTRATO TALES CAUSAS ESTAN CONSTITUIDAS, PERO NO EN FORMA
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LIMITATIVA, POR LA FUERZA MAYOR 0 CASO FORTUITO COMO TERREMOTOS, INUNDACIONES,
INCENDIOS, HUELGAS DECLARADAS LEGALES 0 ILEGALES, CONMOCION CIVIL, ALTERACIONES
ECONOMICAS EXTRAORDINARIAS. FACTORES QUE AFECTEN LOS TRANSPORTES EN GENERAL,
PROHIBICIONES GUBERNAMENTALES Y CATASTROFES EN GENERAL, DE CONFORMIDAD A LO
ESTABLECIDO EN EL ARTICULO 1135 DEL CODIGO CIVIL. RUEDA EXPRESAMENTE ACORDADO,
SIN EMBARGO, QUE EL HECHO QUE EL GOBIERNO DEL PERU NO SUMINISTRE FINANCIACION
PARA LAS OBLIGACIONES DE CENTROMIN NO CONSTITUIRA UN CASO DE FUERZA MAYOR AL
AMPARO DE LA PRESENTE CLAUSULA.
CLAUSULA DECIMO SEXTA
NOTIFICACION Y REMEDIO
SALVO DONDE HAYA UNA DISPOSICION ESPECIFICA PARA NOTIFICACION Y REMEDIO,
DISPUESTA EN EL PRESENTE CONTRATO, NO SE DECLARARA A UNA PARTE QUE ESTA EN
INCUMPLIMIENTO CON RELACION A CUALQUIERA DE SUS OBLIGACIONES DE ACUERDO AL
PRESENTE CONTRATO SALVO QUE SE HAYA DADO UNA NOTIFICACION ESCRITA PREVIA DE
DICHO INCUMPLIMIENTO A DICHA PARTE, LA CUAL ESPECIFICA EN DETALLE LA NATURALEZA
DE DICHO INCUMPLIMIENTO (I) EN EL CASO DE CUALQUIER EXIGENCIA DEL PAGO DE
DINERO, LA PARTE NO HA CUMPLIDO CON REMEDIAR DICHO INCUMPLIMIENTO DENTRO DE 30
DIAS; Y (II) EN EL CASO DE
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ANIBAL CORVETTO ROMERO
NOTARIO DE LIMA
PLAZA 27 DE NOVIEMBRE No 250
(AV. CENTRAL) - SAN ISIDRO
FAX 421-8778 TEL: 422-9564 - 442-9369
e-mail: ancoro @ amauta.rcp.net.pe
CUALQUIER OTRO INCUMPLIMIENTO, LA PARTE NO COMPLETA LA REMEDIACION DENTRO DE 90
DIAS SALVO QUE (A) UN PERIODO MAS BREVE DE TIEMPO SEA EXIGIDO POR LA LEY
APLICABLE, TAL COMO ES EL CASO DE LAS OBLIGACIONES ASIGNADAS A LAS PARTES BAJO
EL PAMA 0 (B) SI LA NATURALEZA DEL ASUNTO ES TAL QUE NO PUEDA SER RAZONABLEMENTE
REMEDIADO DENTRO DE DICHO PLAZO DE 90 DIAS, PERO LA PARTE COMENZARA DE INMEDIATO
A REMEDIAR EL MISMO Y COMPLETARA LA REMIDIACION TAN PRONTO COMO SEA POSIBLE.
CLAUSULA DECIMO SEPTIMA
CONFIDENCIALIDAD
DESPUES DEL CIERRE Y EN LA MAXIMA MEDIDA QUE LO PERMITE LA LEY, CENTROMIN
CONVIENE EN MANTENER Y EN EXIGIR QUE SUS OTRAS UNIDADES COMERCIALES MANTENGAN,
LA CONFIDENCIALIDAD DE TODOS LOS DATOS, INFORMACION FINANCIERA, INFORMACION
COMERCIAL, LISTAS DE CLIENTES, INFORMACION DE PROCESOS Y DE TECHNOLOGIA Y TODA
LA DEMAS INFORMACION CON RELACION AL COMPLEJO METALURGICO LA OROYA Y DEL
CONSORCIO Y DE EL INVERSIONISTA Y DE LA EMPRESA. DICHA OBLIGACION NO SE APLICARA
A:
(I) INFORMACION QUE CENTR0MIN PUEDA DEMOSTRAR QUE VA HA SIDO REVELADA AL PUBLICO
EN GENERAL;
(II) INFORMACION QUE CENTROMIN REVELA A SUS ASESORES,
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CONTADORES Y OTROS CONSEJEROS, LOS CUALES QUEDAN BAJO UNA OBLIGACION DE
CONFIDENCIALIDAD;
(III) INFORMACION QUE ES NECESARIA PARA QUE CENTROMIN PUEDA PROTEGER SUS
DERECHOS EN CUALQUIER ARBITRAJE AL AMPARO DEL PRESENTE CONTRATO.
(IV) INFORMACION QUE SE EXIGE SEA REVELADA POR ACCION DE LA LEY;
CLAUSULA DECIMO OCTAVA
INTERPRETACION DEL CONTRATO
18.1 EN LA INTERPRETACION DEL PRESENTE CONTRATO Y EN LO QUE NO ESTE EXPRESAMENTE
NORMADO EN EL, LAS PARTES RECONOCERAN VALIDEZ SUPLETORIA A LOS SIGUIENTES
INSTRUMENTOS:
A) LAS RESPUESTAS A LAS CONSULTAS CON CARACTER OFICIAL, CIRCULADOS POR
CEPRI-CENTROMIN ENTRE LOS PRE-CALIFICADOS; Y
B) LAS BASES DEL CONCURSO PUBLICO INTERNACIONAL NO. PRI-16-97 PARA LA PROMOCION
DE LA INVERSION PRIVADA EN LA EMPRESA.
C) SI EXISTIERA UNA DISCONFORMIDAD ENTRE LAS BASES Y EL CONTRATO PREVALECERA
ESTE ULTIMO.
18.2 LOS TITULOS DE LAS CLAUSULAS USADOS EN ESTE CONTRATO SON ILUSTRATIVOS Y
PARA REFERENCIA Y NO TENDRAN NINGUN EFECTO EN LA INTERPRETACION DEL PRESENTE
CONTRATO.
18.3 TODAS LAS REFERENCIAS EN EL CONTRATO A UNA CLAUSULA 0 NUMERAL, HACEN
REFERENCIA A LA CLAUSULA 0 NUMERAL.
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ANIBAL CORVETTO ROMERO
NOTARIO DE LIMA
PLAZA 27 DE NOVIEMBRE No 250
(AV. CENTRAL) - SAN ISIDRO
FAX 421-8778 TEL: 422-9564 - 442-9369
e-mail: ancoro @ amauta.rcp.net.pe
CORRESPONDIENTE A ESTE CONTRATO. LAS REFERENCIAS EN EL CONTRATO A UNA CLAUSULA
INCLUYEN TODOS LOS NUMERALES DENTRO SE DICHA CLAUSULA Y LAS REFERENCIAS A UN
NUMERAL INCLUYEN TODOS LOS PARRAFOS DE ESTE.
18.4 TODOS LOS ANEXOS MENCIONADOS EN EL PRESENTE CONTRATO SE INCORPORAN DENTRO
DE Y FORMAN PARTE INTEGRAL DEL MISMO.
18.5 COMO ASUNTO DE ACLARACION, LAS OBLIGACIONES DE EL INVERSIONISTA ESTAN
ESTRICTAMENTE LIMITADAS A LAS OBLIGACIONES ESPECIFICAMENTE ASIGNADAS A EL
INVERSIONISTA. EL INVERSIONISTA NO TIENE OBLIGACIONES QUE SON ASIGNADAS A LA
EMPRESA. INCLUYENDO SIN LIMITACION LAS OBLIGACIONES DE LA EMPRESA EN EL NUMERAL
4.5, Y EN LAS CLAUSULAS QUINTA Y SEXTA.
CLAUSULA DECIMO NOVENA
NO COMPETENCIA
CENTROMIN ACUERDA, QUE POR UN PERIODO DE DIEZ (10) ANOS CONTADOS A PARTIR DE LA
SUSCRIPCION DEL PRESENTE CONTRATO, NO SERA PROPIETARIA, NI FINANCIARA, NI
OPERARA, DIRECTA 0 INDIRECTAMENTE, FUNDICIONES Y/O REFINERIAS SIMILARES AL
COMPLEJO METALURGICO LA OROYA.
CLAUSULA ADICIONAL
EL CONSORCIO INTEGRADO POR THE DOE RUN RESOURCES CORPORATION Y THE RENCO GROUP,
INC., GARANTIZAN EL CUMPLIMIENTO DE LAS
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OBLIGACIONES CONTRAIDAS POR EL INVERSIONISTA, DOE RUN PERU S.R.LTDA., EN
CONSECUENCIA SUSCRIBEN EL PRESENTE CONTRATO THE DOE RUN RESOURCES CORPORATION,
DEBIDAMENTE REPRESENTADO POR JEFFREY L. ZELMES, CON PASAPORTE DE LOS ESTADOS
UNIDOS DE NORTEAMERICA NUMERO 153205339, CON DOMICILIO TRANSITORIO EN HOTEL LOS
DELFINES LOS EUCALIPTOS 555, SAN ISIDRO, QUIEN PROCEDE DEBIDAMENTE AUTORIZADO
SEGUN PODER INSCRITO EN LA FICHA NUMERO 6863 DEL REGISTRO DE PODERES ESPECIALES
DE LIMA. Y THE RENCO GROUP, INC., DEBIDAMENTE REPRESENTADA POR MARVIN M. KOENIG,
CON PASAPORTE DE LOS ESTADOS UNIDOS DE NORTEAMERICA NUMERO 156205648, CON
DOMICILIO TRANSITORIO EN HOTEL LOS DELFINES LOS EUCALIPTOS 555, SAN ISIDRO,
QUIEN PROCEDE DEBIDAMENTE AUTORIZADO SEGUN PODER INSCRITO EN LA FICHA NUMERO
6863 DEL REGISTRO DE PODERES ESPECIALES DE LIMA.
DE CONFORMIDAD CON LAS BASES CENTROMIN PODRA LIBERAR DE ESTA GARANTIA A
CUALQUIERA DE LOS MIEMBROS DEL CONSORCIO BASTANDO PARA ELLO UNA COMUNICACION POR
ESCRITO.
AGREGUE USTED, SENOR NOTARIO, LO DEMAS QUE FUERE DE LEY.
LIMA, VEINTITRES DE OCTUBRE DE MIL NOVECIENTOS NOVENTISIETE. FIRMADO: CESAR POLO
ROBILLIARD, EN REPRESENTACION DE EMPRESA MINERA DEL CENTRO DEL PERU SOCIEDAD
ANONIMA, (CENTROMIN PERU
66
<PAGE>
ANIBAL CORVETTO ROMERO
NOTARIO DE LIMA
PLAZA 27 DE NOVIEMBRE No 250
(AV. CENTRAL) - SAN ISIDRO
FAX 421-8778 TEL: 422-9564 - 442-9369
e-mail: ancoro @ amauta.rcp.net.pe
S.A.).
FIRMADO: JEFFREY L. ZELMS, EN REPRESENTACION DE DOE RUN PERU SOCIEDAD DE
RESPONSABILIDAD LIMITADA Y THE DOE RUN RESOURCES CORPORATION.
FIRMADO: JORGE MERINO TAFUR, EN REPRESENTACION DE LA EMPRESA METALURGICA LA
OROYA S.A. "METALOROYA S.A."
FIRMADO: MARVIN N. KOENIG, EN REPRESENTACION DE THE RENCO GROUP, INC.
AUTORIZA LA PRESENTE MINUTA EL DOCTOR LUCIANO BARCHI VELAOCHAGA, ABOGADO CON
REGISTRO DEL COLEGIO DE ABOGADOS DE LIMA NUMERO: 15455.
INSERTO : COMPROBANTE.
ANIBAL CORVETTO ROMERO, ABOGADO - NOTARIO PUBLICO DE ESTA CAPITAL; CERTIFICO:
QUE, HE TENIDO A LA VISTA EL LIBRO DENOMINADO; ACTAS DE DIRECTORIOS,
PERTENECIENTE A LA RAZON SOCIAL; EMPRESA MINERA DEL CENTRO DEL PERU S.A.
"CENTROMIN PERU S.A.", DEBIDAMENTE LEGALIZADO CON FECHA DOCE DE DICIEMBRE DE MIL
NOVECIENTOS NOVENTA Y CINCO POR ANTE LA NOTARIA DEL DOCTOR ALBERTO FLOREZ
BARRON, QUEDANDO REGISTRADO BAJO EL NUMERO DIECISEIS MIL CIENTO TREINTA Y CINCO;
Y HE CONSTATADO QUE DE FOJAS TRESCIENTOS OCHENTA Y NUEVE Y SIGUIENTES CORRE EL
ACTA DE
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<PAGE>
FECHA VEINTIOCHO DE AGOSTO DE MIL NOVECIENTOS NOVENTA Y SIETE; CUYO TENOR
LITERAL EN SU PARTE PERTINENTE, ES EL SIGUIENTE:
EMPRESA MINERA DEL CENTRO DEL PERU S.A.- CENTROMIN PERU S.A. ACTA SESION DE
DIRECTORIO.
SESION No. 16-97.
FECHA LIMA, 28 DE AGOSTO DE 1997.
HORA DE INICIO 01:00 HORAS.
HORA DE CIERRE 17:30 HORAS.
QUORUM REGLAMENTARIO.
ASISTENTES.
PRESIDENTE ING. JUAN CARLOS BARCELLOS MILLA.
MISPIBROS ING. ALFONSO ZUZUNAGA GUTIERREZ.
ING. GERWER CAMPERO ELIAS.
ING. LUIS HIROTA TANAKA.
DR. HERNAN NOPO ODAR.
FUNCIONARIOS ING. CESAR POLO.
GERENTE GENERAL (E).
ING. ANGEL ALVAREZ.
GERENTE DE OPERACIONES MINERAS.
ING. ANTONIO CORNEJO.
GERENTE DE OPERACIONES METALURGICAS
68
<PAGE>
ANIBAL CORVETTO ROMERO
NOTARIO DE LIMA
PLAZA 27 DE NOVIEMBRE No 250
(AV. CENTRAL) - SAN ISIDRO
FAX 421-8778 TEL: 422-9564 - 442-9369
e-mail: ancoro @ amauta.rcp.net.pe
INS. LUIS PEREZ PIRA.
GERENTE DE SERVICIOS TECHNICOS.
SR. JUAN BEGAZO.
JEFE DE LA OFICINA DE CONTABILIDAD.
DR. ROBERTO ROTTA.
GERENTE LEGAL.
ING. HERBERT GUTIERREZ.
COORDINADOR DE PRIVATIZACION.
ING. PEDRO ANDIA.
COORDINADOR DE PRIVATIZACION.
DR. LUIS GUTIERREZ ADRIANZEN.
SECRETARIO GENERAL.
A. ACTAS.
SESION 15-97 APROBADA SIN OBSERVACIONES.
5. TRANSFERENCIA DE METALOROYA S.A. - AUTORIZACION PARA SUSCRIPCION DE CONTRATO.
ACUERDO No 77-22.
CONSIDERANDO:
QUE, HABIENDOSE OTORGADO LA BUENA PRO DEL CONCURSO PUBLICO INTERNACIONAL No
PRI-16-97, PARA LA PROMOCION DE LA INVERSION PRIVADA EN LA EMPRESA METALURGICA
DE LA OROYA S.A. (METALOROYA S.A.) RESULTA NECESARIO FORMALIZAR LA
69
<PAGE>
TRANSFERENCIA DE LAS ACCIONES DE DICHA EMPRESA.
DE CONFORMIDAD CON EL INCISO "M" DEL ARTICULO 40 DEL ESTATUTO DE CENTROMIN PERU
S.A., APROBADO POR DECRETO SUPREMO No 019-82-EM/VM.
SE ACUERDA POR UNANIMIDAD:
1. AUTORIZAR A LOS INGENIEROS CESAR POLO ROBILLIARD Y ANGEL ALVAREZ ANGULO, PARA
QUE, UNO U OTRO, SUSCRIBA EL CONTRATO DE AUMENTO DE CAPITAL Y TRANSFERENCIA DE
ACIONES DE METALOROYA S.A., CON LA EMPRESA DOE RUN PERU S.R.LTDA.
2. AUTORIZAR A LOS CITADOS INGENIEROS PARA QUE, UNO U OTRO. PUEDAN SUSCRIBIR LA
DOCUMENTACION QUE FUERA NECESARIA PARA LA TRANSFERENCIA PREVIO EL CUMPLIMIENTO
DE LAS DISPOSICIONES ADMINISTRATIVAS Y LEGALES APLICABLES AL ASUNTO.
SIN MAS ASUNTOS QUE TRATAR SE DIO POR CONCLUIDA LA SESION.
SIGUEN SEIS FIRMAS ILEGIBLES.
CONCLUSION. FORMALIZADO EL INSTRUMENTO INSTRUI A LOS OTORGANTES DE SU OBJETO Y
RESULTADOS, ASI COMO SE DIO LECTURA DE TODO EL CONFORME A LEY POR LOS OTORGANTES
DE LO QUE DOY FE Y DESPUES DE LO CUAL SE AFIRMARON Y RATIFICARON EN SU CONTENIDO
Y PROCEDIERON A FIRMARLA POR ANTE MI, DE LO QUE DOY FE, DEJANDO CONSTANCIA QUE
ESTA ESCRITURA SE INICIA
70
<PAGE>
ANIBAL CORVETTO ROMERO
NOTARIO DE LIMA
PLAZA 27 DE NOVIEMBRE No 250
(AV. CENTRAL) - SAN ISIDRO
FAX 421-8778 TEL: 422-9564 - 442-9369
e-mail: ancoro @ amauta.rcp.net.pe
EN LA FOJA NUMERO DE SERIE: 0523315 Y CONCLUYE EN LA FOJA NUMERO DE SERIE:
0523385, DE LO QUE DOY FE.
FIRMADO: CESAR POLO ROBILLIARD, EN REPRESENTACION DE EMPRESA MINERA DEL CENTRO
DEL PERU SOCIEDAD ANONIMA, (CENTROMIN PERU S.A.).
FIRMADO: JEFFREY I. ZELMS, EN REPRESENTACION DE DOE RUN PERU SOCIEDAD DE
RESPONSABILIDAD LIMITADA Y THE DOE RUN RESOURCES CORPORATION.
FIRMADO: JORGE MERINO TAFUR, EN REPRESENTACION DE LA EMPRESA METALURGICA LA
OROYA S.A. "METALOROYA S.A."
FIRMADO: MARVIN M. KOENIG, EN REPRESENTACION DE THE RENCO GROUP, INC.
CONCLUYE LA SUSCRIPCION DE ESTA ESCRITURA EL VEINTITRES DE OCTUBRE DE MIL
NOVECIENTOS NOVENTISIETE.
ANTE MI: ANIBAL CORVETTO ROMERO, ABOGADO NOTARIO DE ESTA CAPITAL.
CONCUERDA; EL PRESENTE TESTIMONIO CON LA ESCRITURA ORIGINAL DE SU REFERENCIA
CORRIENTE A FOJAS VEINTIUN MIL DOSCIENTOS QUINCE, DE MI REGISTRO DE ESCRITURAS
PUBLICAS CORRESPONDIENTE AL BIENIO EN CURSO, Y A SOLICITUD DE PARTE INTERESADA
SE EXPIDE EL PRESENTE TESTIMONIO EN TREINTIOCHO FOJAS UTILES LAS NISMAS QUE
SIGNO, SELLO, RUBRICO Y FIRMO EN
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<PAGE>
LA CIUDAD DE LIMA, A LOS VEINTITRES DIAS DEL MES DE OCTUBRE DE MIL NOVECIENTOS
NOVENTA Y SIETE.
[LOGO] [SEAL] /s/ ANIBAL CORVETTO ROMERO
COLEGIO DE
NOTARIO DE LIMA ======================
ANIBAL CORVETTO ROMERO
NOTARIO ABOGADO
LIMA PERU
======================
72
<PAGE>
CONTRACT OF STOCK TRANSFER, CAPITAL INCREASE AND STOCK SUBSCRIPTION IN THE
EMPRESA METALURGICA LA OROYA S.A.
Mr. Notary:
Kindly enter into your Registry of Public Deeds, the CONTRACT OF STOCK TRANSFER,
CAPITAL INCREASE AND STOCK SUBSCRIPTION IN THE EMPRESA METALURGICA LA OROYA S.A,
"METALOROYA S.A.", entered into on the one part by EMPRESA MINERA DEL CENTRO DEL
PERU S.A. (CENTROMIN PERU S. A.), with Taxpayer's Single Registration Nr.
10017653, domiciled at Av. Javier Prado Este Nr. 2155, San Borja, Lima 41,
represented by its Financial and Commercial Central Manager, Eng. Cesar Polo
Robilliard, with Voter's Register Card Nr. 10540500, authorized by resolution of
the Board of Directors of CENTROMIN, dated August 28, 1997, hereinafter
CENTROMIN; and on the other part DOE RUN PERU S.R.LTDA.which is an indirect
wholly owned subsidiary of The Doe Run Resources Corporation, represented by
JEFFREY L. ZELMS, US Citizen, Passport Nr. 153205339 authorized as per power of
attorney registered on Filing Card Nr. 143658 of the Registry of Business
Corporations of Lima to execute this Contract, hereinafter THE INVESTOR.
Intervenes in this Contract the EMPRESA METALURGICA LA OROYA, S.A. (METALOROYA
S.A.) with Taxpayer's Single Registration Nr. 33526610, domiciled at Av. Javier
Prado Este Nr. 2175, San Borja, Lima 41, represented by its General Manager,
Eng. Jorge Merino Tafur, with Voter's Register Card Nr. 07341351, by virtue of
power-of-attorney registered in Entry 1 under Filing Card Nr. 040367 of the
Register of Business Corporations of the Public Mining Registry, hereinafter THE
COMPANY.
<PAGE>
BACKGROUND
I. Legislative Decree Nr. 674 dated September 25, 1991 states it is of
national interest to promote private investment in enterprises comprising
the State's Entrepreneurial Activity.
II. Supreme Resolution Nr. 102-92-PCM ratifies the agreement adopted by the
Commission for the Promotion of Private Investment (COPRI), which includes
CENTROMIN in the private investment process referred to in Legislative
Decree Nr. 674.
III. Supreme Resolution Nr. 016-96-PCM ratifies the agreement adopted by COPRI,
approving the new Plan for the Promotion of Private Investment in
connection with CENTROMIN.
IV. COPRI by decision of April 17, 1996, authorized the organization of
companies based on CETROMIN's operative units, in accordance with Article
Nr. 10 of Legislative Decree Nr. 674.
V. EMPRESA METALURGICA LA OROYA SOCIEDAD ANONIMA "METALOROYA S.A." is a
corporation organized under the basis of the La Oroya Metallurgical
Complex of CENTROMIN (hereinafter "La Oroya Metallurgical Complex"), whose
stock is wholly owned by CENTROMIN and whose corporate objective is mainly
to engage in activities proper to the metallurgical and mining industry,
such as smelting, refining, industrialization, mining and marketing of its
products.
VI. Supreme Resolution Nr. 018-97-PCM ratifies COPRI's agreement approving the
modality for promoting the increase of private investment in the EMPRESA
MINERA
2
<PAGE>
METALURGICA LA OROYA SOCIEDAD ANONIMA, hereinafter THE COMPANY.
VII. In accordance with the preceding background, the Special Committee on
Privatization of the Empresa Minera del Centro del Peru, Sociedad Anonima
(CEPRI-CENTROMIN) called and carried out Public International Bidding Nr.
PRI-16-97 to promote private investment in THE COMPANY, through the stock
transfer and the increase of its stock capital in virtue of new
contributions from a corporation or consortium that would fulfill the
pre-qualification requirements established by CEPRI.
VIII. Public International Bidding Nr. PRI-16-97 was carried out, and in
accordance with the letter dated July 10, 1997 the winner was announced
and therefore the award was given to the Consortium composed by the Doe
Run Resources Corporation and The Renco Group, Inc.
In accordance with the Bidding Conditions, the aforementioned consortium
has assigned its rights to THE INVESTOR and this assignment has been
authorized by CEPRI-CENTROMIN agreement dated September 11, 1997.
In accordance with the provisions that appear on the Bidding Conditions,
CENTROMIN has contributed to THE COMPANY the assets which refer to the La
Oroya Metallurgical Complex. It has also transferred the liabilities that
are reflected in the Projected Balance Sheet, for the amounts that are
recorded on the accounting books of METALOROYA S.A. The aforementioned
assets (hereinafter, the "Assets") shall be transferred by means of a
Certificate of Delivery, Reception and Valuation of Properties. CENTROMIN
guarantees that all these assets are those that are needed for the normal
3
<PAGE>
operation of THE COMPANY, except for the cash, accounts receivable and
finished products.
By virtue of the above background, the corporations appearing in the
caption enter into this Contract under the following terms and conditions:
FIRST CLAUSE TRANSFER
1.1 CENTROMIN represents, guarantees and agrees that: (A) it has received ten
thousand (10,000) shares on the initial capitalization of THE COMPANY; (B)
it has fully transferred the La Oroya Metallurgical Complex to THE COMPANY
for which it has received 160,604,467 (ONE HUNDRED SIXTY MILLION, SIX
HUNDRED AND FOUR THOUSAND, FOUR HUNDRED AND SIXTY-SEVEN) shares with a
nominal value of one nuevo sol (S/.1.00); (C) the total number of shares
of THE COMPANY, each with a nominal value of one nuevo sol (S/. 1.00), is
160,614,467 (ONE HUNDRED SIXTY MILLION, SIX HUNDRED FOURTEEN THOUSAND,
FOUR HUNDRED AND SIXTY-SEVEN) shares; (D) CENTROMIN is owner of
160,614,467 shares of a nominal value of one nuevo sol (S/.1.00) wholly
subscribed and paid for, which constitute one hundred per cent (100%) of
THE COMPANY's representative stock capital; (E) CENTROMIN will transfer to
CENTROMIN's workers, according to the Bidding Conditions, 106,688 (ONE
HUNDRED AND SIX THOUSAND, SIX HUNDRED EIGHTY-EIGHT) shares, which
constitute 0.0664249% of THE COMPANY's representative stock capital, (F)
CENTROMIN declares that shares indicated in numeral (D) are the only
shares issued; and, (G) all transfers to the workers will be lawfully made
and there are no obligations on the part of THE COMPANY for
4
<PAGE>
such shares nor will there be any such obligation for any issuance.
CENTROMIN shall retain any liabilities and responsibilities whatsoever
relating to the shares transferred to the workers, including any claims by
such workers. THE INVESTOR assumes the commitment of acquiring the shares
that the workers may not acquire in exercising its preferential right at
the same price.
1.2 In virtue of this Contract CENTROMIN transfers to THE INVESTOR the
ownership of 160,507,779 (ONE HUNDRED SIXTY MILLION, FIVE HUNDRED AND
SEVEN THOUSAND, SEVEN HUNDRED SEVENTY-NINE) shares that represent the
99.9335751% of THE COMPANY's stock capital.
1.3 In virtue of this Contract it has been communicated to THE COMPANY the
transfer of the shares described in numeral 1.2 to be recorded on the
respective Book of Stock Transfer of THE COMPANY.
SECOND CLAUSE RECIPROCATION
In reciprocation for the transfer described in 1.2, THE INVESTOR commits
itself to pay to CENTROMIN the amount of US$ 121,440,608 (one hundred
twenty-one million, four hundred forty thousand, six hundred and eight
Dollars of the United States of North America) in cash on the signing of
this Contract.
Payment will be made in Dollars of the United States of North America.
THIRD CLAUSE INCREASE OF THE COMPANY'S STOCK CAPITAL
3.1 On the date of signing this Contract, THE COMPANY has a stock capital of
S/.160,614,467 (one hundred sixty million, six hundred fourteen thousand,
four hundred
5
<PAGE>
and sixty-seven Nuevos Soles) represented by 160,614,467 shares of a
nominal value of S/. 1.00 (One Nuevo Sol).
CENTROMIN is the owner of 160,614,467 (one hundred sixty million, six
hundred fourteen thousand, four hundred and sixty-seven) shares of a
nominal value of S/. 1.00 (one nuevo sol) wholly subscribed and paid for,
which constitute 100 per cent of THE COMPANY's representative stock
capital.
3.2 THE INVESTOR makes a monetary contribution of US$ 126,481,383.24 (one
hundred twenty-six million, four hundred eighty-one thousand, three
hundred eighty-three United States Dollars and twenty-four cents for the
purpose of increasing THE COMPANY's stock capital. With this contribution,
THE INVESTOR represents fifty one percent (51 %) of THE COMPANY's stock
capital.
Payment of the contribution will be made in Dollars of the United States
of North America, to be credited with the evidence of a bank deposit
receipt in THE COMPANY's name.
3.3 The contribution referred to in Numeral 3.2 comprises the monetary
contribution destined to increase the stock capital of THE COMPANY and the
premium for the issue of shares.
For accounting purposes, the monetary contribution will be recorded in
Nuevos Soles, at the sale exchange rate of the day and place of the
signing of this Contract. Out of the resulting amount, S/. 167,170,160
(one hundred sixty-seven million, one hundred seventy thousand, one
hundred sixty Nuevos Soles) will be recorded in the Stock Capital Account.
The difference will be recorded as issue Premium.
6
<PAGE>
It is hereby understood that THE COMPANY will not be obliged to maintain
in cash the amounts contributed to increase the stock capital of THE
COMPANY, pursuant to Numerals 3.2 and 3.3, but such funds may be used for
other purposes, commercial operations or others.
3.4 As a consequence of the stock capital referred to in Numeral 3.3, THE
COMPANY will issue 167,170,160 shares of a nominal value of one Nuevo Sol
(S/.-. 1.00).
3.5 With regard to this Contract, CENTROMIN waives its right to preferential
subscription.
3.6 Simultaneously to the date of the signing of this Contract, THE INVESTOR
and CENTROMIN commit themselves to hold a Special General Meeting of
Shareholders of THE COMPANY for the purpose of adopting the necessary
agreements for the execution of this Contract.
FOURTH CLAUSE INVESTMENT COMMITMENT
4.1 Within a period of five (5) years from the date of the signing of this
Contract, THE COMPANY commits to invest the amount of US$120,000,000.00
(One Hundred Twenty Million and 00/100 Dollars of the United States of
North America) for uses described in numeral 4.5 of this Contract in its
La Oroya Metallurgical Complex, as it is described in the Background
above.
It is understood that THE COMPANY will have a maximum period of five (5)
years to make such investment and that there are no annual requirements.
4.2 To verify the amount of the investment made, THE COMPANY will present a
sworn statement signed by a firm of independent auditors of acknowledged
international
7
<PAGE>
prestige elected by CENTROMIN from among a minimum of three firms proposed
by THE INVESTOR.
THE INVESTOR's proposal will be submitted to CENTROMIN thirty (30) days
prior to the expiration of the term specified in numeral 4.1, otherwise
CENTROMIN will designate the firm of auditors without taking into account
those proposed by THE INVESTOR.
The sworn statement will be submitted to CENTROMIN within sixty (60) days
from the expiration of the period specified in numeral 4.1 or from the day
on which CENTROMIN communicates to THE COMPANY the appointment of the
independent auditor, whichever occurs later.
Annually, THE COMPANY will submit to CENTROMIN a report on the investment
made up to that moment within a term of sixty (60) days from the day and
month of the corresponding year that coincides with the day and month of
the date the contract was signed. Their reports will be countersigned by a
firm of independent auditors according to the procedure indicated in this
numeral.
The auditors' fees will be CENTROMIN's responsibility.
4.3 The period foreseen in numeral 4.1 will be suspended if, in the course of
executing the investment commitment, an act of God or force majeure should
occur, according to article 1315 of the Civil Code; or as provided in the
Fifteenth Clause below or if matters non-attributable to THE COMPANY's
negligence occur. The suspension will remain while such events continue
and prevent THE COMPANY from exercising the obligations stipulated in the
investment commitment.
8
<PAGE>
4.4 Should events as those pointed out in numeral 4.3 happen, affecting the
compliance of the investment commitment, THE COMPANY will make the
situation known to CENTROMIN, in writing, within fifteen (15) days after
the effects of the event have become known. THE COMPANY will state exactly
in the same communication the relationship of causality between the event
and the impediment to fulfill the investment commitment, as well as the
aspects of the same investment commitment which will be affected and
rendered impossible by such events.
4.5 To the effects of this clause, the amounts actually disbursed for the
items that follow, will be considered as investments:
a) Feasibility studies, technical and/or financial, including
environmental studies and disbursements necessary for the compliance
with the obligations of THE COMPANY for the Environmental Adjustment
and Management Program (PAMA for METALOROYA) described in the Clause
5 below, and any other environmental requirements demanded by law.
b) Development, improvements, modernization, amplification and
expansion in the production capacity of THE COMPANY, as well as
investments for roads and for providing electricity and water, which
enable to cover its needs, as well as safety, health, social
programs and investments, as well as public utilities infrastructure
related to its purposes.
c) The purchase, installation or construction of plants and equipment.
In addition, all other capital expenditures, as well as
extraordinary maintenance and repairs
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which imply increases in the production capacity and/or efficiency,
as well as extension of the useful life of plants and equipment.
d) Insurance, freight, import duties and other taxes related with the
preceding items.
e) Administrative expenses related to the preceding items.
f) Working capital resulting from the contributions to the equity.
The investment must be made necessarily with the contribution stated in
numeral 3.2 and the issue premium indicated in numeral 3.3, without
prejudice to what is established in the last paragraph of numeral 3.3.
FIFTH CLAUSE THE COMPANY'S RESPONSIBILITY IN ENVIRONMENTAL MATTERS
The parties acknowledge that the Environmental Adjustment and Management
Program (PAMA) of the "La Oroya" Production Unit of CENTROMIN-PERU, that
was approved by Directorial Resolution Nr. 017-97-EM/DGM, dated January
13, 1997, and modified by Directorial Resolution Nr. 325-97-EM/DGM dated
October 6, 1997, has been divided up into the Environmental Adjustment and
Management Program (PAMA) of the La Oroya Metallurgical Complex of
Metaloroya S.A. (hereinafter "Metaloroya's PAMA") that was approved by
Directorial Resolution Nr. 334-97-EM/DGM dated October 16, 1997, and the
Environmental Adjustment and Management Program (PAMA) of La Oroya of
CENTROMIN Peru S.A. (hereinafter "CENTROMIN's PAMA") that was approved by
Directorial Resolution Nr. 334-97-EM/DGM dated October 16, 1997.
THE COMPANY assumes the responsibility only for the following
environmental matters:
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5.1 Compliance with the obligations contained in Metaloroya's PAMA, as the
same may be amended or supplemented in accordance with the law, in
accordance with the legal requirements in force that apply to the subject
which have been or may be issued by the relevant legal authority with
regard to the effluents, emissions and waste generated by:
a) The smelting and refining facilities of THE COMPANY.
b) The service facilities and housing of THE COMPANY.
c) The zinc ferrite deposits that exist on the date of the signing of
this contract, including the zinc ferrites that may be added by THE
COMPANY, should THE COMPANY not return the same within three (3)
years counted from the date of the signing of this contract or not
pay the amount established in numeral 5.6.
During a three (3) year period from the date of the signing of this
contract, THE COMPANY may use, at no cost, the areas that the
parties have agreed to assign to THE COMPANY in the deposits that
CENTROMIN and its predecessors were using, until THE COMPANY sets up
new areas to deposit the slag, the arsenic trioxide and the zinc
ferrites. This term will expire on October 24, 2000, when THE
COMPANY and CENTROMIN shall sign the respective certificate of
return. Without prejudice to this, THE COMPANY may return the
deposits that it was given to use at any time before the expiration
of the aforementioned term and shall then be freed from the
respective obligations. CENTROMIN and THE COMPANY shall then sign
the certificate of delivery.
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THE COMPANY shall only be responsible for the routine operative
maintenance of the deposit areas that were assigned to THE COMPANY
for its use during the three (3) year period.
CENTROMIN will be responsible for the maintenance of the other areas of
the deposits that were not assigned for use by THE COMPANY. Said
maintenance responsibilities assigned to THE COMPANY will not relieve
CENTROMIN from the fulfillment of the obligations contained in CENTROMIN's
PAMA, which are related with those deposits during the period during which
they will be used by THE COMPANY, that is three (3) years. The technical
abandonment of the same will be governed by the provisions of numeral 6.1
and by CENTROMIN's PAMA. At the end of the three (3) year period, the slag
and arsenic trioxide deposits including the additional waste deposited in
them by THE COMPANY during the three (3) year period, will afterwards
become the sole responsibility of CENTROMIN under all circumstances.
CENTROMIN will retain title over the lands in which the existing slag and
arsenic trioxide deposits are on the date of the signing of this contract
and which will be temporarily used by THE COMPANY.
CENTROMIN and THE COMPANY declare that they know that the slag, arsenic
trioxide and zinc ferrite deposits were separated and detached from the
smelting concessions that were transferred by CENTROMIN to THE COMPANY and
that CENTROMIN kept ownership over them and over the obligations that may
arise from them. Additionally, taking into consideration the inclusion
within METALOROYA's PAMA of CENTROMIN's obligation to invest in 1997 the
sum of US$ 1,145,668.00 (one million, one hundred forty-five thousand, six
hundred sixty-eight and 00/100 US
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Dollars) in projects for the treatment of industrial liquid effluents and
the new system for the granulation of slag, CENTROMIN must pay this sum in
cash to THE INVESTOR on the date of the signing of this Contract.
d) Any new waste deposit that THE COMPANY may establish or provide.
5.2 The future closing and dismantling at the end of the operational life of:
a) The smelting and refining facilities of THE COMPANY.
b) Any new deposit of slag, zinc ferrite or arsenic trioxide and others
that THE COMPANY may establish.
c) The existing zinc ferrite deposits should THE COMPANY not return the
same to CENTROMIN within three (3) years from the date of the
signing of this Contract or should not pay the amount that was
stipulated in numeral 5.6.
5.3 During the period approved for the execution of Metaloroya's PAMA, THE
COMPANY will assume liability for damages and claims by third parties
attributable to it from the date of the signing of this Contract, only in
the following cases:
a) Those that arise directly due to acts that are not related to
Metaloroya's PAMA which are exclusively attributable to THE COMPANY
but only insofar as said acts were the result of THE COMPANY's use
of standards and practices that were less protective of the
environment or of public health than those that were pursued by
CENTROMIN until the date of signing of this contract.
Should there be any controversy on the determination of whether the
standards or practices used by THE COMPANY were or were not less
protective of the environment or of the public health than those
that were applied by
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CENTROMIN and should no agreement be reached with regard to this
within thirty (30) calendar days from the date on which the claim
was made, the parties shall submit this determination to the opinion
of an expert and shall apply for this purpose the procedure that is
described in numeral 5.4 (c).
b) Those that result directly from a default on the METALOROYA'S PAMA
obligations on the part of THE COMPANY or of the obligations
established by means of this contract in numerals 5.1 and 5.2.
5.4 After the expiration of the legal term of METALOROYA's PAMA, THE COMPANY
will assume liability for damages and third party claims in the following
manner:
a) Those that result directly from acts that are solely attributable to
its operations after that period.
b) Those that result directly from a default on the METALOROYA's PAMA
obligations on the part of THE COMPANY or of the obligations
established by means of this contract in numerals 5.1 and 5.2
c) Should the damages be attributable to CENTROMIN and to THE COMPANY,
THE COMPANY will assume liability proportionately to its
contribution to the damage.
In those cases in which no consensus was reached between CENTROMIN
and THE COMPANY with regard to the causes of the presumed damage
that is the subject of the claim or with regard to the manner in
which the liability will be shared amongst them, should no agreement
be reached within the term of thirty (30) days counted from the
reception of the claim, the matter will be submitted to
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the decision of an expert on this matter that will be designated by
mutual agreement. This expert must render a decision as soon as
possible.
If the amount of the claim were for less than US$50,000.00,
CENTROMIN and THE COMPANY will be bound by the decision of the
expert. If the amount of the claim were higher than US$50,000.00,
CENTROMIN and THE COMPANY may submit the matter to arbitration, in
accordance with Clause 12 of this Contract, should one or both
parties not be in agreement with the decision of the expert.
5.5 From the signing of this Contract, THE COMPANY will not have nor will it
assume any liability for damages or for third party claims attributable to
CENTROMIN insofar as the same were the result of CENTROMIN's operations or
those of its predecessors up to the signing of this Contract or are due to
a default on the part of CENTROMIN of its obligations that are specified
in numeral 6.1
5.6 Should THE COMPANY return to CENTROMIN the Zinc Ferrite deposits referred
to in numeral 5.1 c), it must pay the latter US$7,200,000 (SEVEN MILLION
TWO HUNDRED THOUSAND DOLLARS OF THE UNITED STATES OF AMERICA) for
remediation costs regarding the same and CENTROMIN will afterwards assume
the sole responsibility for the same and will indemnify and hold THE
COMPANY harmless against any claim, cost, demand or other obligation
arising from the same. The parties shall sign the certificate of return
that is referred to in numeral 5.1.c), and THE COMPANY must make the
aforementioned payment within ten (10) working days after the signing of
this certificate.
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Should THE COMPANY not return the zinc ferrite deposits within three (3)
years from the signing of this contract, CENTROMIN will transfer to THE
COMPANY the title over the lands and the smelting concession that refer to
the zinc ferrite deposits existing at the signing of this contract.
5.7 CENTROMIN reserves for itself the right to carry out the inspections that
may be necessary to verify the fulfillment of the provisions set forth in
numeral 5.1.c).
THE COMPANY will periodically provide CENTROMIN with copies of the
monitoring reports, metallurgical reports and the fulfillment of
Metaloroya's PAMA submitted to the competent authority.
5.8 THE COMPANY shall protect and hold CENTROMIN harmless against third party
claims and indemnify it for any damage, liability or obligation that may
come for which it has assumed liability and obligation.
5.9 All other liabilities shall correspond to CENTROMIN in accordance with the
Sixth Clause.
SIXTH CLAUSE CENTROMIN'S RESPONSIBILITY IN ENVIRONMENTAL MATTERS
6.1 CENTROMIN assumes responsibility in the following environmental matters:
a) Compliance with the obligations contained in CENTROMIN's PAMA
according to its eventual amendments approved by the relevant
authority and the legal requirements in force applicable, that have
been issued or which may be issued by the relevant legal authority.
b) Technical abandonment of the slag and arsenic trioxide deposits that
exist on the date of the signing of this Contract, and the
obligations related thereto, including
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the additional waste deposited by THE COMPANY in those areas which
are permitted in accordance with Clause Fifth.
c) Remediation the areas affected by gaseous and particles emissions
from the smelting and refining operations that have produced up
until the date of the signing of this contract and of additional
emissions during the period that is provided for in the law for
METALOROYA's PAMA except for those areas which are the
responsibility of THE COMPANY in accordance with the Fifth Clause.
d) Technical abandonment of the zinc ferrite deposits and the
obligations related thereto, should THE COMPANY return them to
CENTROMIN within a three (3) year period from the date of the
signing of this Contract and pay the amount specified in Numeral
5.6.
e) Remedies and technical abandonment of any waste deposit in which the
waste was generated by CENTROMIN or its predecessors before the date
of the transfer of the La Oroya Metallurgical Complex which was not
identified or whose existence was not declared before the date of
the transfer.
6.2 During the period approved for the execution of METALOROYA's PAMA,
CENTROMIN will assume liability for any damages and claims by third
parties that are attributable to the activities of THE COMPANY, of
CENTROMIN and/or its predecessors, except for the damages and third party
claims that are THE COMPANY's responsibility in accordance with numeral
5.3.
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6.3 After the expiration of the legal term of METALOROYA's PAMA, CENTROMIN
will assume liability for any damages and third party claims attributable
to CENTROMIN's and/or its predecessors' activities except for the damages
and third party claims for which THE COMPANY is liable in accordance with
numeral 5.4.
In the case that damages may be attributable to CENTROMIN and THE COMPANY,
the provisions set forth in numeral 5.4.c shall apply.
6.4 THE COMPANY reserves the right to carry out the inspections required to
verify the execution of CENTROMIN's PAMA.
CENTROMIN will periodically provide THE COMPANY with copies of the
monitoring reports, studies and reports on compliance with CENTROMIN's
PAMA that are submitted to the competent authority.
6.5 CENTROMIN will protect and hold THE COMPANY harmless against third party
claims and will indemnify it for any damage, liability or obligation that
may arise for which it has assumed liability and obligation.
SEVENTH CLAUSE REPRESENTATIONS AND GUARANTEES OF THE INVESTOR
7.1 THE INVESTOR represents that it has carried out its own investigation,
examination, information and evaluation during the "due diligence"
process, directly or through third parties, on the basis of information
accessible, available and provided by CENTROMIN.
To the INVESTOR's knowledge, the information concerning THE COMPANY has
been provided through an "Information Memorandum", the documentation
included in the "Data Room" and that requested by THE INVESTOR, directly
or through third
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parties authorized for it. To THE INVESTOR's knowledge, the information
concerning THE COMPANY has been entirely available to THE INVESTOR through
the "due diligence" process. Within this context, THE INVESTOR assumes the
responsibility of the due diligence on the basis of information accessible
and provided by CENTROMIN. Consequently, THE INVESTOR cannot claim any
responsibility for COPRI, its members, to CEPRI-CENTROMIN, its members or
advisers, to CENTROMIN, or the Peruvian State for the information that the
INVESTOR has failed to review concerning the COMPANY or the La Oroya
Metallurgical Complex, which has been provided to THE INVESTOR through the
due diligence process.
The information contained in the previous paragraph is without prejudice
to the representations and guarantees by CENTROMIN mentioned in Clause
Eight.
7.2 THE INVESTOR acknowledges that the awarding of the bidding has supposed
the compliance with the pre-qualification requirements established by
CEPRI-CENTROMIN. In that sense, THE INVESTOR agrees to maintain the
entitlement of a number of shares that represents no less than 25% of the
paid Capital, up to the fulfillment of the Investment Commitment. THE
INVESTOR's fulfillment of that obligation will also be made if at least
25% of THE COMPANY or any successor company is owned directly or
indirectly by either member of the Consortium, or any subsidiary member of
the group of companies owned directly or indirectly by them.
The requirement of ownership of the 25% will not preclude the pledge of
all of the shares of THE COMPANY to banks or other entities providing
loans to THE COMPANY.
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7.3 CENTROMIN agrees that it has granted and THE INVESTOR agrees that it has
received from CENTROMIN at the signing of this contract, the following
documents:
a) A copy of the Minutes of the Stockholders General Meeting of
CENTROMIN dated May 30, 1996, in accordance with which the Board of
Directors of CENTROMIN was authorized to convey Assets and
Liabilities to THE COMPANY. A copy of the Minutes of the Session of
the Board of Directors of CENTROMIN, which has been authenticated by
a Notary Public, in which it was resolved and pledged to (i)
contribute all the Assets related to the La Oroya Metallurgical
Complex, that will be transferred by means of a Certificate of
delivery, reception and valuation of properties (ii) transfer the
current liabilities for the amount that is recorded in the
accounting books of THE COMPANY without changes in the deferred
liabilities that appear in the Projected Balance Sheet of THE
COMPANY. All these transfers will have been made at the time of the
signing of this contract or previously to that time.
b) A copy of the Minutes of the Stockholders General Meeting of THE
COMPANY in which it was resolved to increase the Stock capital to
S/. 160,614,467 (one hundred sixty million, six hundred fourteen,
four hundred sixty-seven Nuevos Soles) as a result of the
aforementioned contribution of Assets made by CENTROMIN and of the
Contract for Capital Increase which was duly signed by the legal
representative of THE COMPANY.
c) A copy authenticated by a Notary Public of the Minutes of the
Session of the Board of Directors of THE COMPANY in which the
valuation of the
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contributions made by CENTROMIN was approved in accordance with the
provisions of article 98 of the Single Revised Text of the Business
Corporations Law, approved by Supreme Decree No. 003-85-JUS.
d) A Certified Copy of the Public Deed of the Articles of Incorporation
of THE COMPANY.
e) The certificates that represent the shares of THE COMPANY that have
been legally transferred by CENTROMIN to THE INVESTOR so that the
latter may cancel them and opportunely issue the certificates under
the name of THE INVESTOR.
f) A Certificate of Delivery and Reception of Properties that
constitute the Assets and inventory of THE COMPANY.
g) A copy of the minutes of the Board of Directors of CENTROMIN,
authenticated by a Notary Public in which the sale to THE INVESTOR
of all the shares of THE COMPANY is authorized except for the worker
shares that were transferred under the First Clause of this
contract.
h) A copy of the Minutes of the Stockholders General Meeting of THE
COMPANY, which was authenticated by a Notary Public in which the
increase of stock capital of THE COMPANY that was described in the
Third Clause of this contract.
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EIGHTH CLAUSE REPRESENTATIONS AND GUARANTEES
OF CENTROMIN AND THE COMPANY
8.1 CENTROMIN represents and guarantees that it is the sole and exclusive
owner of the shares which are the subject matter of this contract, that
the shares and all Assets of THE COMPANY, all of which have been
transferred to THE COMPANY by CENTROMIN are free from all liens, pledges,
taxes, claims, options or restrictions and represents that no other person
has any right, real or contingent over them. Such Assets constitute all of
the assets owned by CENTROMIN on the date of signing of the contract for
the La Oroya Metallurgical Complex, and which are mentioned in numeral
7.3(a) above.
CENTROMIN represents and guarantees that all the assets necessary for the
operations of the activities have been transferred to THE COMPANY, except
for, cash, accounts receivable and finished products.
8.2 CENTROMIN has delivered to THE INVESTOR the balance sheet of THE COMPANY
projected to June 30, 1997 (the same which will be referred to hereinafter
as THE PROJECTED BALANCE SHEET). Such Projected Balance Sheet has been
elaborated according to the Peruvian generally accepted accounting
principles.
8.3 Likewise, CENTROMIN represents that it does not know the existence of
other liabilities or any contingencies derived from tax, labor or legal
responsibilities, or of any other nature different from those recorded on
the books of THE COMPANY that are reflected in the PROJECTED BALANCE SHEET
as of June 30, 1997, as well as that adjusted by THE VERIFICATION BALANCE
SHEET. In case of THE COMPANY's discovery of either liabilities or
non-recorded contingencies derived from
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events prior to the date of signing of this contract, they will be assumed
by CENTROMIN to the extent that they have effectively originated prior to
the date of this Contract and that the claims arise within two (2) years
from the date of signing of this contract except tax contingencies that
are governed as stipulated in numeral 8.15 of this contract which shall be
the responsibility of CENTROMIN for the entire period on which such tax
contingencies may be asserted in accordance with law and except for such
claims and liabilities as are not expressly assumed by THE COMPANY under
this Contract. It is understood that under this Clause, all claims and
liabilities arising from matters prior to the date of this Contract
relating in any way to the La Oroya Metallurgical Complex shall remain the
sole responsibility of CENTROMIN, except as specifically allocated to THE
COMPANY under this Contract. Such claims and liabilities of CENTROMIN
expressly include those that arise after the date of signing of this
Contract that pertain to matters prior to the date of signing of this
Contract.
The reimbursements referred to in the previous paragraph will only be
effected starting with individual or accumulated sums, equal or higher
than two hundred fifty thousand United States Dollars (US$250,000.00) and
subject to THE COMPANY, within a term of ten (10) calendar days of
learning of the contingency; makes it known to CENTROMIN. In any case, THE
COMPANY will have to actively defend the interests of CENTROMIN in the
possible administrative or judicial claims that could arise until the
assumption by CENTROMIN, according to numeral 8.14 and CENTROMIN will
reimburse the Company for the costs of such defense, upon demand.
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Each reimbursement will be paid by CENTROMIN to THE COMPANY within the
thirty (30) days following the demand of payment by THE COMPANY.
At the expiration of the period of two (2) years CENTROMIN will reimburse
the amount pending on that date, even if it were lower than two hundred
fifty thousand Dollars of the United States of America (US$ 250,000.00).
Within 180 days following the signing of this contract, if THE COMPANY
receives any sum which corresponds to CENTROMIN, THE COMPANY will
reimburse to CENTROMIN within thirty (30) days following the demand of
payment by CENTROMIN.
In the case of Accounts payable, originating in the ordinary practices of
contracts of purchase of materials, which have not been delivered to THE
COMPANY at the date of signing of this Contract, they shall be assumed by
THE COMPANY. If for honoring such acquisitions, CENTROMIN should have to
issue letters of credit for amounts previously agreed upon and other
similar, THE COMPANY shall make the corresponding reimbursement to
CENTROMIN.
8.4 Annex 8.4 contains complete information on employment contracts and
collective agreements of workers (it is understood that employees are
included) of THE COMPANY, indicating their salaries, time of service and
distribution by category. CENTROMIN agrees that any legal or conventional
obligation resulting from the labor relationship with the mentioned
workers until the date of signing of this contract shall be the sole
responsibility of CENTROMIN, including salaries, benefits, pensions and
social contributions in the terms indicated in the PROJECTED BALANCE
SHEET.
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CENTROMIN has signed the Collective Agreement with the workers on
September 20, 1997, and has transferred to the workers covered by such
agreement to THE COMPANY, however providing that CENTROMIN shall be
responsible for any wages or benefits (including without limitation any
social benefits) due of accrued before the date of signing of this
contract, including without limitation any wages or social benefits due or
accrued or which may be retroactive as of July 25, 1997 regarding any new
agreement with the workers and any one due or accrued or retroactive as of
May 1, 1997 for any professionals or managers and the portion of any
severance accrued on the date of signing of this contract.
CENTROMIN will indemnify, defend and hold THE COMPANY harmless from the
same.
THE COMPANY and THE INVESTOR declare that they know that the salaries,
benefits and labor conditions of workers who have been transferred are
those appearing on the collective agreements in force at the date of
signing of this contract.
In case of administrative and judicial claims or actions filed against THE
COMPANY for salaries, benefits or other labor matters resulting from facts
preceding the signing of this contract, it is agreed upon that THE COMPANY
will inform to CENTROMIN the referred actions within a reasonable term
since the service of notice which allows CENTROMIN to exercise its
defense, without prejudice of initiating immediate actions required for
its defense.
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CENTROMIN shall be responsible for defending the referred actions and for
assuming the payment of the economic obligations resulting therefrom.
Likewise, CENTROMIN is bound to regularly inform to THE COMPANY about the
indicated actions.
8.5 Annex 8.5 contains a complete list of all the surface lands, concessions
and mining rights and licenses for water use which refer to the La Oroya
Metallurgical Complex. All the titles of real estate, concessions and
mining rights and water use licenses (i) have been duly transferred and
registered by CENTROMIN to THE COMPANY; (ii) are free from faults, valid,
in a correct legal situation and display all their effects, and (iii) are
free from any burden, lien, attachment, mortgage, usufruct, and easement,
hereinafter Liens, except for those easements which correspond to
CENTROMIN's electrical system.
THE COMPANY is the owner of all the personal properties, appearing on THE
PROJECTED BALANCE SHEET, which are free from charges, Liens, guaranties or
any other restrictions.
If the titles have not been obtained by CENTROMIN and transferred to THE
COMPANY or all the Liens have not been released before the signing of this
contract, CENTROMIN binds itself to finish the proceedings necessary
within a term not longer than sixty (60) days from the demand of THE
COMPANY. If such term expires without the acquisition and transfer of the
titles to THE COMPANY or without the release of the liens, CENTROMIN will
grant an irrevocable power-of attorney for such purpose. CENTROMIN will
refund the expenses to THE COMPANY within the reasonable price range of
the local market for said type of service.
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8.6 Annex 8.6 contains a complete list of all the fixed assets which refer to
the La Oroya Metallurgical Complex. All the titles, all the property
rights and rights of use of fixed assets listed in said Annex (i) have
been duly transferred by CENTROMIN to THE COMPANY. (ii) are free from
faults, valid in a correct legal situation and display all their effects,
and (iii) are free from any Lien, or other rights or claims of any third
party. If the titles and other property and use rights were not obtained
prior to the signing of this contract, CENTROMIN pledges to conclude the
proceedings that may be necessary within a term of not more than sixty
(60) days counted from the demand made by THE COMPANY. Once this term has
expired without having complied with obtaining the titles and transferring
them to THE COMPANY or without having released the liens, CENTROMIN grants
an irrevocable power of attorney for this purpose. CENTROMIN will
reimburse THE COMPANY for its expenses which shall be paid within the
thirty (30) days after THE COMPANY has demanded them, within the
reasonable price range of the local market for said type of service.
8.7 THE COMPANY has complied with all mining obligations corresponding to
their mining rights, formal as well as substantive.
All mining rights are in force and have not incurred in any cause for
lapsing and all obligations arising under the General Mining Law have been
satisfied by CENTROMIN through 1997.
Mining good standing rights of concessions belonging to THE COMPANY have
been paid for 1997.
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8.8 Annex 8.8 contains a list of judicial, arbitration, administrative suits
or other outstanding procedures, all of which shall be CENTROMIN's
responsibility and not that of THE COMPANY. CENTROMIN represents and
guarantees that there is no demand, procedures (judicial, arbitration or
of any other kind) that is pending or is threatened with regard to (1) THE
COMPANY ; (2) the Assets or Liabilities of THE COMPANY; (3) any
environmental matter that has occurred before the date of this Contract;
(4) or on the basis of transactions contemplated under this Contract,
including without limitation, any demands by any prior bidder.
8.9 All those contracts and agreements, leases and other contracts and
guarantees that are related to them with regard to the La Oroya
Metallurgical Complex are listed in Annex 8.9. All of these have been duly
and legally assigned to THE COMPANY, all of which are fully in force and
in effect and no delay has been notified nor according to CENTROMIN's best
knowledge does there exist any reason to assert any cases of delay or
noncompliance.
CENTROMIN assumes responsibility for any matters that may arise from any of
those Contracts prior to the date of this Contract and shall indemnify and hold
THE COMPANY harmless of the same, including without limitation, all demands
(including demands for products outside of those specified), infringement of
contracts, returns and similar measures insofar as they are not reflected in the
Verification Balance Sheet.
Numeral 8.16 lists all information, data, intellectual property rights,
intangible rights, and technology that are relevant for the La Oroya
Metallurgical Complex and all the processes and other intellectual property
rights that are required for the same. All of them will be transferred to
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THE COMPANY without royalties and are free from liens, obligations and lawsuits
or other demands whatever they may be and CENTROMIN shall indemnify and hold THE
COMPANY harmless from any demands related to the same.
CENTROMIN has informed THE COMPANY that "material damages and loss of
profits insurance policy" shall remain in force until December 16, 1997.
THE COMPANY shall have the option of continuing to enjoy the coverage of
the policy until its conclusion at no cost whatsoever. For that purpose,
THE COMPANY must communicate its wish to maintain or not this policy
within a term of fifteen (15) days counted from the signing of this
contract. Once this term has expired without the reception of any
communication, it shall be understood that there is no intention to
continue with the policy.
8.10 Annex 8.10 contains a list of all licenses, permits, rights,
certifications, franchises, authorizations, approvals and consents related
to the La Oroya Metallurgical Complex (hereinafter the "Licenses"). All
the "Licenses" (i) have been duly transferred by CENTROMIN to THE COMPANY;
(ii) are free from faults, valid, in a correct legal situation and display
all their effects and (iii) are free from any Lien, rights or claims by
any third party; (iv) constitute all the "Licenses" required by THE
COMPANY to comply with all the laws, rules and regulations. CENTROMIN
agrees to indemnify, defend and protect from damages THE COMPANY and its
shareholders, directors, officers, employees, agents and independent
contractors from claims, demands, suits, actions, procedures and harm
caused by or as a result of any inaccuracy in the aforementioned
declaration.
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8.11 All raw materials, work in process, spare parts and supplies, inventories
and samples that are found, which are related to the La Oroya
Metallurgical Complex: (i) have been conveyed by CENTROMIN to THE COMPANY,
(ii) are marketable and suitable for the respective purpose.
8.12 All books, documents, records, accounting books, files, general
correspondence and correspondence with regard to the environment, lists,
topographical maps, information on soil mechanics, creative material,
information on sales, publicity and promotion, personnel and financial
records and related documents, studies, reports and any other written or
printed document related to the La Oroya Metallurgical Complex has been
transferred by CENTROMIN to THE COMPANY.
8.13 On the date of the signing of this contract, all the facilities, lands,
personal property and intangible property and other assets which are
within the boundaries of the different plants, buildings and generally,
properties of the La Oroya Metallurgical Complex have been transferred by
CENTROMIN to THE COMPANY and are solely owned by THE COMPANY.
8.14 Should THE COMPANY or THE INVESTOR receive any demand or judicial,
administrative notice or notice of any kind, related to any act or fact
included within the responsibilities, declarations and guarantees offered
by CENTROMIN, they pledge to report it to CENTROMIN within a reasonable
term which will allow CENTROMIN to exercise its right to a defense,
releasing THE COMPANY or THE INVESTOR from any obligation with regard to
the same and CENTROMIN shall be obliged to immediately assume those
obligations as soon as it is notified. THE COMPANY shall
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also be entitled to be represented in those procedures by lawyers it has
chosen and whose fees shall be solely assumed by it. CENTROMIN shall keep
THE COMPANY fully informed on all the aspects and activities related to
that defense, including the supplying of copies of all the legal papers,
pleadings and other matters.
8.15 CENTROMIN has complied with the presentation of all tax returns of
national, regional and municipal taxes which were their obligation
regarding La Oroya Metallurgical Complex of THE COMPANY and has paid all
the taxes corresponding to them, whether they appear or not in those tax
returns, or has established the corresponding reserve in THE PROJECTED
BALANCE SHEET.
CENTROMIN therefore states that it will assume the payment of the tax
contingencies originated by taxes comprised within the National Tax System
or of any other public entity after the date of signing of this contract
and that correspond to obligations derived from taxable facts, or payments
accrued prior to that date, provided that they are not reflected in THE
PROJECTED BALANCE SHEET. CENTROMIN will assume the payment for such taxes,
as well as for interest, penalties and late fees that there may be, and
any adjustment to the tax debt.
8.16 On the date of signing of this Contract, CENTROMIN has transferred to THE
COMPANY all of its rights, titles and interests and all intangible rights
to the information and data of business, financial accounting, technical,
environmental and legal activities relating to the La Oroya Metallurgical
Complex, whether or not located at the offices of CENTROMIN, or at the La
Oroya Metallurgical Complex, including those that relate to the
information concerning the La Oroya Metallurgical Complex prior to the
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date of signing of this Contract, other than those absolutely necessary
for CENTROMIN to comply with its obligations under this Contract, and when
those obligations are performed, such records will be transferred to THE
COMPANY and THE COMPANY and its representatives will have copies and full,
free and complete access to the information. Such information transferred
to THE COMPANY includes, without limitation, all of the following:
a) All data and information in the Data Room;
b) All lists of customers, contracts, and other business information of
the La Oroya Metallurgical Complex;
c) All accounting records of the La Oroya Metallurgical Complex;
d) All information concerning production, equipment, maps, engineering
drawings, buildings, process specifications, assays, metallurgical
information, process information and all processes and other
intellectual properties, as well as similar or dissimilar
information concerning the operations of the La Oroya Metallurgical
Complex;
e) All records relating to land and water, and all correspondence
concerning the environmental obligations of the La Oroya
Metallurgical Complex;
f) All patents, intellectual property rights, trademarks, (including
those from "London Metal Exchange"), trade secrets and other
intellectual property and intangibles, relating to the La Oroya
Metallurgical Complex;
g) All other business, legal, and technical information relating to the
La Oroya Metallurgical Complex;
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h) All geological information concerning mining activities for the La
Oroya Metallurgical Complex, including without limitation,
limestone, clay and aggregate quarries, the amount and quality of
the reserves, and any alternate sources of supply.
i) All intangible rights with regard to claims against third parties
with regard to any of the Assets.
j) The insurance policy for material damages and loss of profits under
the terms stipulated in the last paragraph of numeral 8.9;
k) All the operation permits and licenses and any other necessary
governmental authorization for the operation of the La Oroya
Metallurgical Complex.
CENTROMIN represents and guarantees that, immediately prior to the
transfer of the same to THE COMPANY, it had the sole right, title and
interests on all of the Assets referred to in this Contract, including
without limitation those identified in numerals (a) to (k) above. All of
such assets, including without limitation those described in numerals (a)
to (k) above, are free of all liens, claims, obligations and interests of
any third party whatsoever. CENTROMIN shall indemnify, defend and hold THE
COMPANY harmless from and against any and all demands, claims, actions and
proceedings asserting any rights, titles, interests or Liens relating to
the same and will secure such rights, titles and interests on behalf of
THE COMPANY to the extent that it is not fully transferred to THE COMPANY
on or prior to the date of signing of this Contract to enable THE COMPANY
to have the benefit of the use of the same. CENTROMIN shall have the
responsibility to carry out such transfers within no more than sixty (60)
days. If said
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period expires without having complied with such transfers, CENTROMIN will
grant an irrevocable power-of-attorney to THE COMPANY for such purpose.
CENTROMIN shall reimburse the costs and expenses of such transfers,
including any actions or litigations necessary to carry out such
transfers, to THE COMPANY, the same which shall be paid within thirty (30)
days following the demand by THE COMPANY. Said costs and expenses shall
not exceed the reasonable local market prices.
8.17 CENTROMIN represents and guarantees that it has made available to THE
INVESTOR all the information and data in its possession or control to
enable THE INVESTOR to conduct its "due diligence". CENTROMIN further
represents and guarantees that such information remains correct.
CENTROMIN also guarantees that since April 11, 1997 there have been no
adverse changes to the business and operations of the La Oroya
Metallurgical Complex, having operated it only in the ordinary course of
business, and it has made no adverse changes in the operation methods or
in the replacement practices of equipment or maintenance and that on the
date of signing of this contract there is sufficient inventory of products
in process and materials and spare parts for the normal operation of the
LA OROYA Metallurgical Complex at efficiency levels not less than those
achieved through 1996. CENTROMIN represents and guarantees that the
changes that have occurred from April 11, 1997 of assets or liabilities of
the La Oroya Metallurgical Complex are those that correspond to normal
business operation.
8.18 If after having complied with the Certificate of Delivery, Reception and
Valuation, assets should be found that should have been transferred and
were not; these must be transferred
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by CENTROMIN to THE COMPANY whenever this should be demanded by CENTROMIN
and THE COMPANY. Should there be any disagreement in the conveyance of
these assets, the parties must seek a decision made by an expert to be
appointed by mutual agreement and which will be executed by an
acknowledged auditing firm or if the parties should not manage to agree on
the naming of the expert, he will be selected by THE COMPANY from the
auditing firms stipulated in Numeral 4.2. If the value of the assets
should exceed US$50,000, the parties shall be governed by the provisions
of the Twelfth Clause.
8.19 CENTROMIN shall grant THE INVESTOR a preference right in the purchase of
up to 30% of the shares of the EMPRESA MINERA PARAGSHA S.A. or the EMPRESA
DE ELECTRICIDAD DE LOS ANDES S.A.
THE INVESTOR must express his interest in maintaining one or the other
option, at the latest by the limit date to submit consultations in the
tender to sell the shares of the company that corresponds to his interest
and afterwards confirm his intention of exercising the option within 10
calendar days immediately after the date of the respective granting of an
award to a bidder.
8.20 After the date of the signing of this contract, CENTROMIN shall execute
and deliver all the documents of transfer, assignment and delivery and
shall take the measures that THE COMPANY may request to execute the
transfer, assignment and delivery to THE COMPANY and to place THE COMPANY
in possession and control of all the Assets.
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NINTH CLAUSE BALANCE SHEET ADJUSTMENT
9.1 Within ninety (90) days following the signing of this contract, a balance
sheet will be prepared showing the condition of THE COMPANY to the date on
which this contract is signed (hereinafter THE VERIFICATION BALANCE
SHEET). In preparing this balance sheet, the same criteria, principles and
considerations assumed in the elaboration of the PROJECTED BALANCE SHEET
shall be used.
Such VERIFICATION BALANCE SHEET will be prepared in accordance with
Peruvian generally accepted accounting principles applied on a consistent
basis and in accordance with the same practices used for the preparation
of the PROJECTED BALANCE SHEET.
9.2 THE VERIFICATION BALANCE SHEET will be prepared by THE COMPANY and
reported by a firm of independent auditors of international prestige
elected by CENTROMIN among a minimum of three firms proposed by THE
INVESTOR.
The auditor's fees will be paid by CENTROMIN.
9.3 THE PROJECTED BALANCE SHEET will be compared with the VERIFICATION BALANCE
SHEET. If the difference between the net current assets and the current
liabilities presented in the PROJECTED BALANCE SHEET exceeds by more than
5% the difference between the net current assets and the current
liabilities presented in the VERIFICATION BALANCE SHEET, CENTROMIN will
pay THE COMPANY an amount equivalent to the excess above said 5%.
If, on the contrary, the difference between the net current assets and the
current liabilities presented in the VERIFICATION BALANCE SHEET, exceeds
by more than 5% of
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this same difference, the difference between the net current assets and
the current liabilities presented in the PROJECTED BALANCE SHEET, THE
COMPANY will pay CENTROMIN an amount equivalent to the excess above this
5%.
9.4 The difference to be reimbursed by CENTROMIN to THE COMPANY, or vice
versa, refers exclusively to the difference between the current assets and
current liabilities and no consideration of any nature will be given to
fixed assets, intangible assets, other assets or other liabilities, which
will be assumed in what is indicated in the VERIFICATION BALANCE SHEET and
in the condition and physical situation in which they are, and that such
equipment and facilities are functioning in the same way as they were on
April-11, 1997.
The valuation criteria of current assets and liabilities which were used
to prepare the PROJECTED BALANCE SHEET, will also be used in the same
manner to prepare the VERIFICATION BALANCE SHEET, CENTROMIN has previously
furnished to the INVESTOR the practices and standards by which the
PROJECTED BALANCE SHEET was prepared.
9.5 The difference will be paid by the party that has benefited, within thirty
(30) days after the presentation of the VERIFICATION BALANCE SHEET,
including interest at the three- month active LIBOR rate, published by
Reuters and applicable from the date of signing of this contract.
Payment will be made in Dollars of the United States of America.
9.6 As a guarantee of the possible restitution that may be originated in favor
of THE COMPANY, the 5% of the sum of the current assets plus the current
liabilities of the
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PROJECTED BALANCE SHEET will be kept as a reserve in a Joint Savings
Account that Banco SANTANDER will open in THE COMPANY's and in CENTROMIN's
name, until the definition foreseen in numeral 9.3.
9.7 As guarantee of the possible restitution which may be originated in favor
of CENTROMIN, THE INVESTOR will deliver an irrevocable, unconditional
banking letter of guaranty issued by a local bank, without the benefit of
excussio and joint and several, or an irrevocable letter of credit in the
form of "stand by letter of credit" issued by any of the Banks mentioned
in Circular Letter Nr. 018-97-EF/90 of the Central Reserve Bank of Peru,
of irrevocable nature, notified and confirmed by a local bank. Both of
them will be of automatic execution, valid for a period of no less than
one hundred and fifty (150) days from the signing of this contract, issued
in favor of CENTROMIN for a sum equivalent to 5% of the sum of the current
assets plus the current liabilities of the PROJECTED BALANCE SHEET.
The report that will be issued by the firm of auditors regarding the
comparison of THE PROJECTED BALANCE SHEET and THE VERIFICATION BALANCE
SHEET will be final.
If on applying what is pointed out in numerals 9.3 and 9.4, a payment in
favor of CENTROMIN will exist, THE COMPANY will comply with it as
stipulated in the numeral 9.5. In case of non-compliance CENTROMIN will
proceed to collect the corresponding sum with interest against the banking
letter of guaranty or the letter of credit under the form of "stand by
letter of credit", mentioned in numeral 9.7, leaving a
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balance of free disposal and releasing, the deposit stipulated in numeral
9.6 being of free disposal the retained sum.
If on applying the provision of numerals 9.3 and 9.4 a payment in favor of
THE COMPANY will exist, CENTROMIN will comply with it, as stipulated in
numeral 9.5. In case of non-compliance, THE COMPANY may collect the
corresponding sum with interest from Banco SANTANDER against the deposit
pointed out in numeral 9.6 with the balance remaining at CENTROMIN's free
disposal and releasing, likewise, the banking letter of guaranty or the
letter of credit under the form of "stand by letter of credit" mentioned
in numeral 9.7.
TENTH CLAUSE ASSIGNMENT OF RIGHTS AND/OR OBLIGATIONS
THE INVESTOR and THE COMPANY grant their approval, in advance, to the
substitution of the contractual position derived from this contract or the
assignment of the rights and/or obligations that might originate from it
that CENTROMIN might fulfill and CENTROMIN grants the corresponding rights
and approvals to THE INVESTOR and THE COMPANY, subject to applicable law
and this Contract in numeral 7.2 above. The substitution will be
communicated to THE INVESTOR and THE COMPANY in the case of CENTROMIN, and
to CENTROMIN in the case of THE INVESTOR and THE COMPANY through notarial
letter. From the date of such communication, the rights and obligations
originating in this contract will be assumed by the successor.
By reason of Supreme Decree Nr. 042-97-PCM approved on September 19, 1997
in accordance with Decree Law Nr. 25570 and Decree Law Nr. 26438, and the
corresponding guaranty contract entered into under that Decree, the
Government of Peru
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is obliged to guarantee all of the obligations of CENTROMIN under this
Contract, and said guaranty shall survive the transfer of any of the
rights and obligations of CENTROMIN and any liquidation of CENTROMIN.
ELEVENTH CLAUSE GOVERNING LEGISLATION
This contract will be governed and executed in accordance with the laws of
the Republic of Peru. The parties have also prepared, signed and accepted
an official English translation of this Contract, but it is understood
that the Spanish version of this Contract is the legal prevailing version.
TWELFTH CLAUSE ARBITRATION
Any litigation, controversy, disagreement, difference or claim that may
arise between the parties with regard to the interpretation, execution or
validity derived or in relation to this contract that cannot be resolved
by mutual agreement between them, will be submitted to legal arbitration
of international character under the rules and procedures as established
by UNCITRAL. The place of such arbitration shall be in London, England, or
such other location as the parties may agree. Each party shall have the
right to call and cross examine witnesses and to undertake discovery. The
arbitrators will be three (3) of which each of the parties will designate
one of them, and the two arbitrators so designated will appoint the third,
who will preside the arbitral court. If one of the parties does not name
its corresponding arbitrator within fifteen (15) calendar days of
receiving the written request from the party asking for the arbitration or
if within an equal term of fifteen (15) calendar days starting from the
appointment of the second arbitrator, the two arbitrators do not reach an
agreement about the designation of the third arbitrator, the designation
of
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any of the three arbitrators will be done, upon the request of any of the
parties, by the Institute of Mining and Petroleum Law.
In the case in which, for any circumstances a substitute arbitrator has to
be designated, he will be designated following the same procedure as
indicated before for the designation of the arbitrator that is
substituted.
The parties waive the right to appeal the arbitral award, except in the
case that such decision may be a consequence of fraud, failure or the
non-compliance with the procedures required or other failures according to
international standards.
THIRTEENTH CLAUSE DOMICILE
13.1 For the purpose of the execution of this contract, the parties establish
as their domiciles in Peru those addresses indicated in the caption of
this contract.
13.2 The change of domicile of any of the parties cannot oppose the other if it
has not been made known to him through notarial letter.
13.3 For the purpose of this contract, it is understood that communications,
requirements or notices mentioned therein, are considered to be known at
the moment they arrive at the addressee's domicile.
FOURTEENTH CLAUSE EXPENSES AND TAXES
14.1 Expenses incurred by converting this preliminary deed into a Public Deed
will be paid by THE INVESTOR.
14.2 Each of the parties of this contract assumes the corresponding taxes in
accordance to the laws in force. Each party will pay for its own legal
fees, costs and expenses in the
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conducting of "due diligence" and the negotiating and execution of this
Contract and of the transfers of the assets and liabilities of THE
COMPANY.
FIFTEENTH CLAUSE FORCE MAJEURE
Neither of the contracting parties may demand from the other the
fulfillment of the obligations assumed in this contract, when the
fulfillment is delayed, hindered or obstructed by causes that arise that
are not imputable to the obliged party and this obligation has not been
foreseen at the time of the signing of this contract. All those causes are
constituted, but not in a restrictive manner, by force majeure or act of
God such as earthquakes, floods, fires, strikes whether declared legal or
illegal, civil disturbances, extraordinary economic alterations, factors
that affect transport generally, governmental prohibitions and
catastrophes in general, in accordance with the provisions of Article 1135
of the Civil Code. It is expressly agreed, nevertheless, that the fact
that the Government of Peru does not supply financing for CENTROMIN's
obligations shall not constitute a case of force majeure under this
clause.
SIXTEENTH CLAUSE NOTICES AND REMEDIES
Except where there is a specific provision for notice and remedy elsewhere
under this contract, a party to this Contract shall not be declared to be
in default of any of its obligations under this Contract unless prior
written notice of such default has been given to such party, which
specifies in detail the nature of such default and (i) in the case of any
requirement for the payment of money, the party has failed to remedy such
default within 30 days; and (ii) in the case of any other default, the
party does not complete the remedy within 90 days unless (a) an earlier
period of time is required by the applicable law, such
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as in the case of the obligations destined to the parties under the PAMA;
or (b) if the nature of the matter is such that it cannot reasonably be
remedied within such 90 day period, but the party shall immediately
commence to remedy the same and shall complete the remedy as soon as
possible.
SEVENTEENTH CLAUSE CONFIDENTIALITY
Following the Closing and in the maximum extent allowed by law, CENTROMIN
agrees to maintain and to require its other commercial units to maintain,
the confidentiality of all data, financial information, business
information, customer lists, process and technology information and all
other information concerning the La Oroya Metallurgical Complex, and of
the Consortium and THE INVESTOR and THE COMPANY. Such obligation shall not
apply to:
(i) information that CENTROMIN can show has already been disclosed to
the public in general;
(ii) information that CENTROMIN discloses to its advisors, accountants
and other advisors, who are placed under a duty of confidentiality;
(iii) information necessary for CENTROMIN to protect its rights in any
arbitration under this Contract.
(iv) information that is required to be disclosed as a matter of law
EIGHTEENTH CLAUSE INTERPRETATION OF THE CONTRACT
18.1 In the interpretation of this contract and in what is not expressly
stipulated therein, the parties will acknowledge suppletory validity to
the following documents:
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(a) The answers to consultations with official character, circulated by
CEPRI-CENTROMIN among those pre-qualified bidders; and
(b) The bidding conditions of the International Public Bidding Nr.
PRI-16-97 for the Promotion of Private Investment in THE COMPANY.
(c) If there were a controversy between the bidding conditions and the
contract, the latter shall prevail.
18.2 Titles of the Clauses used in this contract are illustrative and for
reference and will have no effect in the interpretation of this contract.
18.3 All references in the contract to a clause or numeral refer to the
corresponding clause and numeral in this contract. References in the
contract to a clause include all the numerals within such clause and
references to a numeral include all the paragraphs of the same.
18.4 All the annexes mentioned in this contract are incorporated into and form
an integral part of this contract.
18.5 As a matter of clarification, the obligations of THE INVESTOR are strictly
limited to the obligations specifically assigned to THE INVESTOR. THE
INVESTOR has no obligations that are assigned to THE COMPANY including
without limitation, the obligations of THE COMPANY in numeral 4.5 and in
Fifth and Sixth Clauses.
NINETEENTH CLAUSE NO COMPETITION
CENTROMIN agrees that, for a period of ten (10) years from the signing of
this contract, it will not be the owner, nor will fund, operate, directly
or indirectly, smelters and/or refineries similar to the La Oroya
Metallurgical Complex.
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ADDITIONAL CLAUSE
The Consortium composed by THE DOE RUN RESOURCES CORPORATION and THE RENCO
GROUP, INC., warrants the compliance with the obligations contracted by
THE INVESTOR, DOE RUN PERU S.R.LTDA., therefore this contract is
subscribed by THE DOE RUN RESOURCES CORPORATION, duly represented by
JEFFREY L. ZELMS, identified by Passport Nr. 153205339 of the United
States of America, transitorily domiciled at Hotel "Los Delfines", Los
Eucaliptos 555, San Isidro, who proceeds duly authorized under
power-of-attorney registered on Filing Card Nr. 6864 of the Registry of
Special Powers of Attorney of Lima; and THE RENCO GROUP, INC., duly
represented by MARVIN M. KOENIG, identified by Passport Nr. 156205648 of
the United States of America, transitorily domiciled at Hotel "Los
Delfines", Los Eucaliptos 555, San Isidro, who proceeds duly authorized as
per power-of-attorney registered on Filing Card Nr. 6863 of the Registry
of Special Powers of Attorney of Lima.
In accordance with the bidding conditions, CENTROMIN may release any of the
members of the Consortium from this guaranty, for which effect a written
communication is sufficient.
Kindly insert, Mr. Notary, all the other clauses required by law.
Lima, October 23, 1997
Signature
/s/ Luciano Barchi
Legal Counsel
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CEPRI-Centromin Peru
Lawyer's Register (CAL) No. 15455
Signatures:
/s/ Jorge Merino Tafur
/s/ Cesar Polo Robilliard
/s/ Jeffrey L. Zelms
/s/ Marvin M. Koenig
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Exhibit 10.7
[LOGO] EMPRESA MINERA DEL CENTRO DEL PERU S.A.
Casilia 2412 o Lima 1 Peru. Fax: 476-9729, Telefono: 476-1010
cc. Dr. Craig Johnson
Mr. Daniel Vonverg
Dr. Jorge Gutierrez
GPR1-602-97/21.09.04
Lima, 16 de octubre de 1997
Senores
ESTUDIO FERRERO ABOGADOS
Atencion: DR. RAUL FERRERO
Asesor Legal de The Doe Run Company
Asunto: Resolucion Directoral aprobando Division del PAMA del Complejo
Metalurgico de La Oroya
Estimado Dr. Ferrero:
Por favor, sirvase encontrar adjunto copia de la Resolucion Directoral No.
334-97-EM/DGM de fecha 16 de octubre de 1997, en la que se el Ministerio de
Energia y Minas aprueba la solicitud presentada por Centromin Peru para la
Division del PAMA del Complejo Metalurgico de La Oroya, de conformidad con los
compromisos de inversion acordados con The Doe Run Company para el PAMA de
Metaloroya y el PAMA de Centromin Peru.
Tambien se adjunta copia de la Resolucion Directoral No. 325-97-EM/DGM de fecha
6 de octubre de 1997, en la que el Ministerio de Energia y Minas aprueba la
solicitud presentada por Centromin Peru para la Modificacion del Cronograma de
Acciones e Inversiones del PAMA del Complejo Metalurgico de La Oroya, de
conformidad con los compromisos de inversion acordados con The Doe Run Company
para el PAMA de Metaloroya y el PAMA de Centromin Peru.
La suscripcion de los respectivos contratos de estabilidad administrativa
ambiental esta en proceso y tan pronto el Vice Ministro de Minas firme los
mismos, se los estaremos remitiendo.
Por favor, le agradeceremos hacer llegar copia de los documentos adjuntos a los
representantes de The Doe Run Company.
Muy atentamente,
/s/ Ing. Hugo Aragon
Ing. Hugo Aragon
Gerente de Privatizacion
Adjtos. (4)
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[LOGO]
MINISTERIO DE ENERGIA Y MINAS
INFORME No 1047-97EM-DGM-DFM-DFT
SENOR : Director General de Mineria
ASUNTO: Division del PAMA del Complejo Metalurgico La Oroya
de Centromin Peru S.A.
REF. : Rec. No 1152485 del 19-09-97
Rec. No 1155365 del 10-10-97
Informe No 107-97-EM/DGAA/LC
Memo No 2159-97-EM/DGAA
En relacion al asunto, tengo a bien de informar a Ud., lo siguiente:
Con el informe de la referencia, la Direccion General de Asuntos
Ambientales he efectuado la evaluacion de los documentos de la referencia
presentado por la empresa CENTROMIN PERU S.A., solicitando la Division del PAMA
del COMPLEJO METALURGICO DE LA OROYA, para los efectos de transferencia por
venta de dicho complejo, considerando necesario compartir los compromisos
asumidos en el Programa de adecuacion y Manejo Ambiental (PAMA) con la EMPRESA
METALOROYA S.A., la Division de los compromisos han sido hechos de conocimiento
del Ministerio de Energia y Minas mediante al Recurso No 1152485; luego de la
evaluacion efectuada se puede indicar lo siguiente:
o Los montos que corresponden asumir a CENTROMIN PERU S.A. y METALOROYA S.A.
para cumplir con sus compromisos del PAMA seran los Sgtes: US$ 24'167,000
(18.34%) para CENTROMIN PERU S.A. y US$ 107'575,000 (81.66%) para METALOROYA
S.A., la suma de los montos menclonados es la que corresponde a la cifra de
reprogramacion del PAMA aprobado con R.D. No 325-97-EM/DGM de fecha 06-10-97.
o El Cronograma de Accionese e Inversiones de CENTROMIN PERU S.A. sera
ejecutado en un periodo que comprendera hasta el ano 2005 (09 anos), minetras
que el de METALOROYA S.A. abarcara hasta el ano 2006 (10 anos).
o En el recurso No 1155365, que se solicita la division del PAMA, se presenta
un resumen de los resultados economicos financieros consolidados hasta el mes
de agosto de 1997 y una proyeccion hasta el mes de diciembre, en esta
proyeccion se puede observar que el volumen de ventas de METALOROYA S.A. para
1997 sera de US$ 263,359,500, determinadose por lo tanto que el 1% seria de
US$ 2'633,695. Lo que se proyecta invertir en cada uno de los anos que durara
la ejecucion del PAMA, superando lo calculado, el 1% de las ventas de
METALOROYA S.A.
La Direccion General de Asuntos Ambientales, segun el informe y memo de la
referencia, opina, que en base a lo expuesto y considerando que lo propuesto
<PAGE>
[LOGO]
MINISTERIO DE ENERGIA Y MINAS
se encuentra dentro de lo que senala el Reglamento Ambiental para la Actividades
Minero-Metalurgicas, D.S. No 016-93-EM y D.S. No 059-93-EM, por lo que
recomienda la division del PAMA comprometiendo a las mencionadas empresas a
ejecutar las acciones e inversiones de la reprogramacion aprobada.
En consecuencia por lo antes expresado, el suscrito es de opinion
aprobar la division del PAMA aprobado por R.D. No 325-97-EM/DGM de fecha 6 de
octubre de 1997, a favor de CENTROMIN PERU S.A. y METALOROYA S.A. con los montos
anteriormente mencionados para cada empresa, asi como la reprogramacion de
acciones e inversiones y tiempo de adecuacion ambiental de su Programa de
Adecuacion y Manejo Ambiental, por las razones tecnicas-economicas que se
exponen en el informe de la referencia.
Lima, 16 OCT, 1997
/s/ JAVIER F. GUERRERO VALERA
---------------------------------
JAVIER F. GUERRERO VALERA
Reg. del CIP. No 40602
[ILLEGIBLE] FISC. TECNICA
Lima, 16 OCT. 1997
Estando de acuerdo con el informe que antcede, ELEVEBE a la Direccion General
de Mineria, para los fines consiguientes.
/s/ CESAR LAVADO HUYHUA
---------------------------------
Ing. CESAR LAVADO HUYHUA
Director de [ILLEGIBLE]
Lima, 16 OCT. 1997
Visto el informe precedente que esta Direccion encuentra conforme. EXPIDASE la
R.D. que deje sin efecto el ART. 2o de la R.D. No 325-97-EM/DGM de fecha 06 de
octubre de 1,997, quedando vigente las demas disposiciones que la contiene Y
MODIFIQUESE e INCLUYASE la Division del PAMA del Complejo Metalurgico La Oroya,
con un monto total de US$ 24'167,000 para CENTROMIN PERU S.A. cuyo periodo de
ejecucion sera hasta el ano 2005 (09 anos), y un monto total de US$ 107'575,000
para METALOROYA S.A. cuyo periodo de ejecucion sera hasta el ano 2006 (10
anos)., por las razones tecnicas-economicas sustentadas por el titular. Hecho
vuelva a la Division de Fiscalizacion Minera.
/s/ Jorge [ILLEGIBLE]
---------------------------------
Ing. Jorge [ILLEGIBLE]
DIRECTOR GENERAL DE MINERIA
<PAGE>
[LOGO]
MINISTERIO DE ENERGIA Y MINAS
Resolucion Directoral No 334-97-EM/DGM
Lima, 16 OCT. 1997
Visto, el informe No/047 97-EM-DGM-DFT de fecha No. de octubre de
1997, sobre Division del PAMA del Complejo Metalurgico La Oroya de CENTROMIN
PERU S.A., ubicada en el distrito de la Oroya, provincia de Yaull y departamento
de Junin.
CONSIDERANDO.
Que, de conformidad con el Art. 9o del Reglamento para la Proteccion
Ambiental en la Actividad Minero-Metalurgica, aprobado por Decreto Supremo No
016-93-EM y el Art. 3o del Decreto Supremo No 059-93-EM que modifica en parte el
Reglamento aprobado por Decreto Supremo No 016-93-EM, establece que los
Programas de Adecuacion y Manejo Ambiental seran aprobados u observados por la
Direccion General de Mineria mediante Resolucion, segun opinion de la Direccion
General de Asuntos Ambientales y modificados por la [ILLEGIBLE] Direccion
General de Mineria mediante R.D., de oficio o a solicitud del interesado,
sustentandose los fundamentos tecnicos, economicos, sociales y ambientales.
Que, con Recursos Nos 1152485 y 1156365, del 19 de setiembre y 10 de
octubre de 1,997, CENTROMIN PERU, S.A. solicito la Division del PAMA del
Complejo Metalurgico La Oroya, para afectos de transferencia por venta de dicho
Complejo, considerando necesario compartir los compromisos asumidos en el
Programa de Adecuacion y Manejo Ambiental con la Empresa Metaloroya S.A.,
sustentado ante la Direccion General de Asuntos Ambientales, la misma que ha
dado su opinion favorable conforme al informe No 107-97-DGAA/LC de fecha 14 de
octubre de 1,997 y Memorandum No 2159-97-EM/DGAA de fecha 14 de octubre de
1,997.
De conformidad con el Reglamento aprobado por D.S.No 016-93-EM y su
modificatoria D.S.No 059-93-EM.
SE RESUELVE:
Articulo 1.-Dejar sin efecto el Art. 2o de la R.D. No 325-97-EM/DGM
de fecha 06 de octubre de 1,997, que aprueba la modificacion del conograma de
acciones e inversiones por un monto total de US$ 131'742,000, para un periodo de
adecuacion ambiental de diez (10) anos (1997-2006), del Programa de Adecuacion y
Manejo Ambiental del COMPLEJO METALURGICO LA OROYA de CENTROMIN PERU S.A..
Articulo 2.-Aprobar la Division del PAMA del COMPLEJO METALURGICO LA
OROYA, con un monto total de US$ 24'167,000 para CENTROMIN PERU S.A. para un
periodo de ejecucion hasta el ano 2005 (09 anos) y un monto total de US$
107'675,000 para METALOROYA S.A. para un periodo de ejecucion hasta el ano 2006
(10 anos), conforme al cronograma de acciones e inversiones que deben ejecutar
ambas empresas en cumplimiento a las Normas de Medio Ambiente vigentes.
Registrese y Comuniquese.
/s/ [ILLEGIBLE]
----------------------------
[ILLEGIBLE]
DIRECTOR GENERAL DE MINERIA
<PAGE>
RESOLUCION DIRECTORAL No 325-97-EM/DGM
Lima, 06 OCT. 1997
Visto, el informe No 949 97-EM-DGM-DFM-DFT de fecha 30 de setiembre
de 1997, sobre Modificacion del cronograma de acciones e inversiones de
ejecucion del Programa de Adecuacion y Manejo Ambiental de la U.P. "La Oroya" de
CENTROMIN PERU S.A., ubicada en el distrito de la Oroya, provincia de Yaull y
departamento de Junin.
CONSIDERANDO.
Que, de conformidad con el Art. 9o del Reglamento para la Proteccion
Ambiental en la Actividad Minero-Metalurgica, aprobado por Decreto Supremo No
016-93-EM y el Art. 3o del Decreto Supremo No 059-93-EM que modifica en parte el
Reglamento aprobado por Decreto Supremo No 016-93-EM, establece que los
Programas de Adecuacion y Manejo Ambiental seran aprobados u observados por la
Direccion General de Mineria mediante Resolucion, segun opinion de la Direccion
General de Asuntos Ambientales y modificados por la misma Direccion General de
Mineria mediate R.D., de oficio o a solicitud del interesado, sustentandose los
fundamentos tecnicos, economicos, sociales y ambientales.
Que, con Recursos Nos 1149473 y 1151912, del 15 y 16 de setiembre de
1,997, CENTROMIN PERU S.A. solicito la Modificacion de los PAMA's de sus
diversas Unidades de Produccion, en lo referente al cronograma de acciones e
inversiones, en la cual esta incluida la U.P. "La Oroya", sustentando ante la
Direccion General de Asuntos Ambientales dicha Modificacion, mereciendo opinion
favorable conforme al Informe No 91-97-DGAA/LC de fecha 18 de setiembre de 1,997
y Memorandum No 1184-97-EM/DGAA de fecha 19 de setiembre de 1,997.
De conformidad con el Reglamento aprobado por D.S.No 016-93-EM y su
modificatoria D.S.No 059-93-EM.
SE RESUELVE:
Articulo 1.-Dejar sin afecto el Art. 2o de la R.D. No 017-97-EM/DGM
de fecha 13 de enero de 1,997, que aprueba el periodo de adecuacion de diez (10)
anos, para un cronograma de acciones e inversiones por un monto de US$
129'125,000 inicialmente presentado, quedando vigente las demas disposiciones
que la contiene.
Articulo 2.-Aprobar la modificacion del cronograma de acciones e
inversiones por un monto total de US$ 131'742,000, para al periodo de adecuacion
ambiental de diez (10) anos (91997-2006), del Programa de Adecuacion Y Manejo
Ambiental de la U.P. "La Oroya" de CENTROMIN PERU S.A.
Registrese y Comuniquese.
/s/ [ILLEGIBLE]
---------------------------------
[ILLEGIBLE]
DIRECTOR GENERAL DE MINERIA
<PAGE>
EMPRESA MINERA DEL CENTRO DEL PERU S.A.
cc: Dr. Craig Johnson
Mr. Daniel Vornberg
Dr. Jorge Gutierrez
GPRI-602-97/21.09.04
Lima, October 16, 1997
Messrs
Ferrero Law Office
Attention: DR RAUL FERRERO
Legal Advisor of The Doe Run Company
Re: Directoral Resolution approving the PAMA Division of La Oroya Metallurgical
Complex
Dear Dr. Ferrero:
Please find attached a copy of Directoral Resolution No. 334-97-EM/DGM dated
October 16, 1997 in which the Ministry of Energy and Mines approves the request
presented by Centromin Peru for the Pama Division of La Oroya Metallurgical
Complex, in accordance with the pledges of investment agreed upon with The Doe
Run Company for the Metaloroya PAMA and the Centromin Peru PAMA.
Also attached is a copy of Directoral Resolution No. 325-97-EM/DGM dated October
6, 1997 in which the Ministry of Energy and Mines approves the request presented
by Centromin Peru for the Modification of the Timetable of Shares and
Investments, of La Oroya Metallurgical Complex PAMA, in accordance with the
pledges of investment agreed upon with The Doe Run Company for the Melaloroya
PAMA and the Centromin Peru PAMA.
The subscription of the respective contracts of environmental administrative
stability is under way and as soon as the Vice Minister of Mines signs these, we
will send them to you.
Please send a copy of the attached documents to the representatives of The Doe
Run Company.
Sincerely,
Hugo Aragon, Eng.
Manager of Privatization
<PAGE>
MINISTRY OF ENERGY AND MINES
REPORT NO. ????-97-EM/DGM-DFM-DFT [Note that numbers on fax were not ligible]
TO: Director General of Mining
RE: PAMA Division, La Oroya Metallurgical Complex,
Centromin Peru S.A.
REF: Rec. No. 1152485 dated September 19, 1997
Rec. No. 1155365 dated October 10, 1997
Report No. 107-97-EM/DGAA/LC
Memo No. 2159-97-EM/DGAA
In regard to this affair, I am informing you of the following:
With the aforementioned report, the Director General of
Environmental Affairs has completed the evaulation of the reference documents
presented by the company CENTROMIN PERU S.A. requesting the PAMA DIVISION OF LA
OROYA METALLURGICAL COMPLEX for the purposes of transferral through the sale of
said complex, considering it necessary to divide the pledges assumed in the
Program of Adaptation and Environmental Management (PAMA) with EMPRESA
METALOROYA S.A. the division of the Appeal has been made with the knowledge of
the Ministry of Energy and Mines through Appeal No. 1152485. From the evaluation
done the following is indicated:
o The sums which are to be assumed by CENTROMIN PERU S.A. and METALOROYA
S.A. in order to complete their PAMA pledges will be the following:
US$24,187,000 (18.34%) for CENTROMIN PERU S.A. and US$107,575,000 (81.66%)
for METALOROYA S.A. the sum of the amounts mentioned corresponds to the
figure for the reprogramming of the PAMA approved in R.D. No.
325-97-EM/DGM dated October 6, 1997.
o The Timetable of Shares and Investments of CENTROMIN PERU S.A. will be
executed within a period lasting until 2005 (9 years) while that of
METALOROYA S.A. will last until 2006 (10 years).
o Appeal No. 1155365 which requests the division of PAMA presents a summary
of the financial economic results consolidated up to August 1997 and a
projection up to the month of December. In this projection one can observe
that the volume of sales of METALOROYA S.A. for 1997 will be
US$263,359,500 which indicates that 1% would be US$2,633,595. What is
projected to be invested in each year of PAMA surpasses this calculation
of 1% of the sales of METALOROYA S.A.
The Director General of Environmental Affairs, according to the report and memo
referred to, on the basis of what is stated and considering that that which is
proposed
<PAGE>
is found within the boundaries contained in Environmental Regulation for
Mining-Metallurgical Activities, D.S. No. 016-93-EM and D.S. No. 059-93-EM,
through which is recommended the PAMA division binding the aforementioned
companies to execute the shares and investments of the approved reprogramming.
In consequence of the aforementioned, the undersigned is of the
opinion to approve the division of the PAMA approved by R.D. 326-97-EM/DGM dated
October 6, 1997 in favor of CENTROMIN PERU S.A. and METALOROYA S.A. with the
amounts aforementioned for each company, as well as the reprogramming of the
shares and investments and time of environmental adaptation of their Program of
Adaptation and Environmental Management for the technical-economic reasons that
are shown in the reference report.
Lima, October 16, 1997
Javier F. Guerrero Valero
Lima, October 16, 1997
Being in agreement with the preceding report, it is sent to the Director General
of Mining for his consideration.
Ing. Cesar Lavado Huyhua
Lima, October 16, 1997
In view of the preceding report with which this Office finds itself in
agreement, expedite the R.D. which leaves not in effect Art 2 of R.D. No
325-97-EM/DGM dated October 6, 1997 keeping in effect the remaining dispositions
which it contains and MODIFY AND INCLUDE the Division of PAMA of La Oroya
Metallurgical Complex with a total sum of US$24,1?7,000 [Note: Numbers not
legible on fax] FOR CENTROMIN PERU S.A. whose execution period will last until
2006 (9 years) and a total sum of US$107,575,000 for METALOROYA S.A. whose
execution period will last until 2006 (9 years) for the technical-economic
reasons sustained by the titleholder. Return to the Division of Mining
Fiscalization.
Ing. Jorge [Note: Fax not legible]
DIRECTOR GENERAL OF MINING
<PAGE>
MINISTRY OF ENERGY AND MINES
DIRECTORAL RESOLUTION NO. 334-97-EM/DGM
LIMA, OCTOBER 16, 1997
In view of report No ????-97-EM-DGM-DFM-DT [Note: numbers not legible] dated
October 10, 1997 on the Division of PAMA of La Oroya Metallurgical Complex of
CENTROMIN PERU S.A. located in the district of La Oroya, province of Yaull,
department of Jumin.
CONSIDERING
That in accordance with Art. 8 of the Regulation for the
Environmental Protection of Mining-Metallurgical Activity, approved by Supreme
Decree No. 016-93-EM and Article 3 of Supreme Decree No. 059-93-EM which
modifies in part the Regulation approved by Supreme Decree No. 016-93-EM
establishes that the Programs of Adaptation and Environmental Management will be
approved or observed by the General Direction of Mining by means of Resolution,
according to the opinion of the General Direction of Environmental Affairs and
modified by the same General Direction of Mining by means of R.D. officially or
on request of the interested party, technical, economic, social and
environmental fundamentals being sustained.
That with Appeals Nos. 1152485 and 1156385, dated September 19 and
October 10, 1997, CENTROMIN PERU S.A. requested the Division of PAMA of La Oroya
Metallurgical Complex because of the transferral by sale of said Complex, it
being cosidered necessary to divide the pledges assumed in the Program of
Adaptation and Environmental Management with Empresa Metaloroya S.A., sustained
before the General Direction of Environmental Affairs, which has given its
favorable opinion in accordance with report No. 107-97-DGAA/LC dated October 14,
1997 and Memorandum No. 2159-97-EM/DGAA dated October 14, 1997.
In conformance with the Regulation approved by D.S. No. 018-93-EM
and its modifying D.S. No. 059-93-EM.
BE IT RESOLVED
Article 1.-To leave not in effect Article 2 of R.D. No.
326-97-EM/DGM dated October 6, 1997, which approves the modification of the
timetable of shares and investments for a total sum of US$131,742,000 for a
period of environmental adaptation of ten (10) years (1997-2006) of the Program
of Adaptation and Environmental Management of LA OROYA METALLURGICAL COMPLEX OF
CENTROMIN PERU S.A.
Article 2.-To approve the Division of the PAMA of LA OROYA
METALLURGICAL COMPLEX with a total sum of US$24,1?7,000 [Note: numbers not
legible] for CENTROMIN PERU S.A. for an execution period lasting until 2005 (9
years) and a total amount of US$107,575,000 for an execution period lasting
until 2006 (10 years) in conformance with the timetable of shares and
investments which both companies must execute in completion of the Environmental
Rules in effect.
<PAGE>
MINISTRY OF ENERGY AND MINES
DIRECTORAL RESOLUTION NO. 334-97-EM/DGM
LIMA, OCTOBER 16, 1997
In view of report No ????-97-EM-DGM-DFM-DT [Note: numbers not legible] dated
October 10, 1997 on the Division of PAMA of La Oroya Metallurgical Complex of
CENTROMIN PERU S.A. located in the district of La Oroya, province of Yaull,
department of Jumin.
CONSIDERING
That in accordance with Art. 8 of the Regulation for the
Environmental Protection of Mining-Metallurgical Activity, approved by Supreme
Decree No. 016-93-EM and Article 3 of Supreme Decree No. 059-93-EM which
modifies in part the Regulation approved by Supreme Decree No. 016-93-EM
establishes that the Programs of Adaptation and Environmental Management will be
approved or observed by the General Direction of Mining by means of Resolution,
according to the opinion of the General Direction of Environmental Affairs and
modified by the same General Direction of Mining by means of R.D. officially or
on request of the interested party, technical, economic, social and
environmental fundamentals being sustained.
That with Appeals Nos. 1152485 and 1156385, dated September 19 and
October 10, 1997, CENTROMIN PERU S.A. requested the Division of PAMA of La Oroya
Metallurgical Complex because of the transferral by sale of said Complex, it
being cosidered necessary to divide the pledges assumed in the Program of
Adaptation and Environmental Management with Empresa Metaloroya S.A., sustained
before the General Direction of Environmental Affairs, which has given its
favorable opinion in accordance with report No. 107-97-DGAA/LC dated October 14,
1997 and Memorandum No. 2159-97-EM/DGAA dated October 14, 1997.
In conformance with the Regulation approved by D.S. No. 018-93-EM
and its modifying D.S. No. 059-93-EM.
BE IT RESOLVED
Article 1.-To leave not in effect Article 2 of R.D. No.
326-97-EM/DGM dated October 6, 1997, which approves the modification of the
timetable of shares and investments for a total sum of US$131,742,000 for a
period of environmental adaptation of ten (10) years (1997-2006) of the Program
of Adaptation and Environmental Management of LA OROYA METALLURGICAL COMPLEX OF
CENTROMIN PERU S.A.
Article 2.-To approve the Division of the PAMA of LA OROYA
METALLURGICAL COMPLEX with a total sum of US$24,1?7,000 [Note: numbers not
legible] for CENTROMIN PERU S.A. for an execution period lasting until 2005 (9
years) and a total amount of US$107,575,000 for an execution period lasting
until 2006 (10 years) in conformance with the timetable of shares and
investments which both companies must execute in completion of the Environmental
Rules in effect.
Registered and Communicated
Ing. Jorge......
[Note: Signature not legible]
<PAGE>
DIRECTORAL RESOLUTION NO. 325-97-EM/DGM
LIMA, OCTOBER 6, 1997
In view of report No ????-97-EM-DGM-DFM-DT [Note: numbers not
legible] dated September 10, 1997 on Modification of the timetable of shares and
investments of execution of the Program of Adaptation and Environmental
Management of U.P. "La Oroya" of CENTROMIN PERU S.A., located in the district of
La Oroya, provinces of Yaull and department of Junin.
CONSIDERING
That, in accordance with Art. 8 of the Regulation for the
Environmental Protection of Mining-Metallurgical Activity, approved by Supreme
Decree No. 016-93-EM and Article 3 of Supreme Decree No. 059-93-EM which
modifies in part the Regulation approved by Supreme Decree No. 016-93-EM
establishes that the Programs of Adaptation and Environmental Management will be
approved or observed by the General Direction of Mining by means of Resolution,
according to the opinion of the Director General of Environmental Affairs and
modified by the same General Direction of Mining by means of R.D. officially or
on request of the interested party, technical, economic, social and
environmental fundamentals being sustained.
That with Appeals Nos. 1149473 and 1151952, dated September 15 and
16, 1997, CENTROMIN PERU S.A. requested the modification of the PAMA's of its
diverse Production Units, in that referring to the timetable of assets and
investments, in which is included Production Unit "La Oroya", sustaining before
the General Direction of Environmental Affairs said Modification, meeting
favorable opinion in accordance to report No. 91-97-DGAA/LC dated September 18,
1997 and Memorandum No. 1184-97-EM/DGAA dated September 19, 1997.
In conformance with the Regulation approved by D.S. No. 018-93-EM
and its modifying D.S. No. 059-93-EM.
BE IT RESOLVED
Article 1.-To leave not in effect Article 2 of R.D. No.
017-97-EM/DGM dated January 13, 1997, which approves the period of adaptation of
ten (10) years for a timetable of shares and investments for a sum of
US$129,125,000 initially preserved, with the other dispositions which it
contains remaining in effect.
Article 2.-To approve the modification of the timetable of assets
and investments for a total sum of US$131,742,000 for the period of
environmental adaptation of ten (10) years (1997-2006) of the Program of
Adaptation and Environmental Management of the Production Unit "La Oroya" of
CENTROMIN PERU, S.A..
Registered and Communicated
Ing. Jorge.... [fax not legible]
<PAGE>
[LOGO]
MINISTERIO DE SALUD
Direccion General de Salud Ambiental
Lima, 01 OCT. 1997
OFICIO Nro. 297-0-97/DIGESA/DG
Senor
DAN VERNBEG
THE DOE RUN COMPANY
Presente.
Tengo el agrado de dirigirme a usted, a fin de acusar recibo de su comunicacion
de fecha 29 de setiembre de 1997, en la cual nos informan que su empresa
adquirire la Empresa Metaloroya S.A., asumiando las obligaciones del PAMA de
CENTROMIN y que desean realizar acciones complementarias que conlleven a
alcanzar los limitos maximos permisibles de calidad de agua vigentes.
La Direccion General de Salud Ambiental (DIGESA), en calidad de Autoridad
Sanitaria encargada del control de la calidad de los vertimientos considera
positivos e importantes los esfuerzos que su empresa tiene programada realizar y
en este sentido requerimos contar con la informacion pertinente a fin de poder
realizar el angliais respectivo.
Sin otro particular, Aprovecho la ocasion para manifestarle los sentimientos de
mi consideracion.
Atentamente,
MINISTERIO DE SALUD
Direccion General de Salud Ambiental
/s/ JORGE [ILLEGIBLE]
------------------------------------
JORGE [ILLEGIBLE]
Director General
Deema/JVCH/AGV/gv.
- --------------------------------------------------------------------------------
Los ???????? 350-LINCE. .... [ILLEGIBLE].......
<PAGE>
DECLARACION DE LA EMPRESA MINERA DEL CENTRO DEL PERU-
CENTROMIN PERU S.A.
Senores
BANKERS TRUST COMPANY
ADMINISTRATION AGENT
CUIDAD.
DE NUESTRA CONSIDERACION:
ESTA DECLARACION ES EMITIDA POR CENTROMIN EN RELACION A LOS CONTRATOS DE CREDITO
SUSCRITOS ENTRE DOE RUN MINING SCRLTDA., THE DOE RUN RESOURCES CORPORATION, DOE
RUN CAYMAN LTD., DOE RUN PERU SCRLTDA, Y EMPRESA METALURGICA LA OROYA
S.A.-METALOROYA S.A., PARA AL PROCESO DE PRIVATIZACION DE PROMOCION DE LA
INVERSION PRIVADA EN LA EMPRESA METALURGICA DE LA OROYA S.A., METALOROYA S.A.,
CONCURO PRI-16-97, Y AL CONTRATO DE TRANSFERENCIA DE ACCIONES, AUMENTO DE
CAPITAL Y SUSCRIPCION DE ACCIONES. AL RESPECTO, CENTROMIN DECLARA QUE NO HA
FORMADO PARTE DE LOS CONTRATOS DE CREDITO ANTES REFERIDOS.
PARA PARTICIPAR EN LA MATERIA, CENTROMIN CERTIFICA QUE EL PROGRAMA DE ADECUACION
Y MANEJO AMBIENTAL (PAMA), DE LA UNIDAD DE PRODUCCION "LA OROYA" DE CENTROMIN,
QUE FUERA APROBADO POR RESOLUCION DIRECTORAL NO. 017-97-EM/DGM, CON FECHA 13 DE
ENERO DE 1997, Y MODIFICADO POR RESOLUCION DIRECTORAL NO. 325-97-EM/DGM, DE
FECHA 06 DE OCTUBRE DE 1997, HA SIDO DIVIDIDO EN EL PROGRAMA DE ADECUACION Y
MANEJO AMBIENTAL DEL COMPLEJO METALURGICO DE LA OROYA DE METALOROYA S.A., QUE
FUERA APROBADO POR RESOLUCION DIRECTORAL NO. 334-97-EM/DGM, CON FECHA 16 DE
OCTUBRE DE 1997 Y EN EL PROGRAMA DE ADECUACION Y MANEJO AMBIENTAL DE LA OROYA DE
CENTROMIN PERU S.A., QUE FUERA APROBADO POR RESOLUCION DIRECTORAL NO.
334-97-EM/DGM, DE FECHA 16 DE OCTUBRE DE 1997.
ASIMISMO, CENTROMIN DECLARA Y CERTIFICA QUE NINGUNA ACCION LEGAL HA SIDO
INTERPUESTA O PRESENTADA CONTRA CENTROMIN EN RELACION AL PROGRAMA DE ADECUACION
Y MANEJO AMBIENTAL - PAMA.
LIMA, 21 DE OCTUBRE DE 1997
/s/ CESAR POLO ROBILLIARD
- ---------------------------------------
EMPRESA MINERA DEL CENTRO DEL PERU S.A.
CESAR POLO ROBILLIARD
Gerente Central
Finanzas y Comercial
<PAGE>
[LOGO]
MINISTERIO DE ENERGIA Y MINAS
Lima, 21 OCT. 1997
OFICIO No 1113-97-EM/DGM
Senor
Ing. JORGE MERINO TAFUR
Gerente General
EMPRESA METALURGICA LA OROYA S.A., (METALOROYA S.A.)
Asunto : Remite Contrato de Estabilidad
Administrativa Ambiental
Referencia : Recurso No 1152487 del 19-09-97
Tengo el agrado de dirigirme a usted, para remitirle adjunto al
presente el Contrato de Estabilidad Administrativa Ambiental suscrito entre el
Estado Peruano y la Empresa Metalurgica La Oroya S.A., de acuerdo al Articulo
18o del Reglamento del Titulo Decimo Quinto del Texto Unico Ordenado de la Ley
General de Mineria, aprobado por Decreto Supremo No 016-93-EM.
Hago propicia la ocasion, para expresarle las seguridades de mi
especial consideracion y estima personal.
Atentamente,
/s/ [ILLEGIBLE]
----------------------------
[ILLEGIBLE]
DIRECTOR GENERAL DE MINERIA
LSC/mpa.
<PAGE>
Senor Notario:
Sirvase Usted extender en su Registro de Escrituras Publicas, El
Contrato de Estabilidad Administrativa Ambiental que celebran de una parte el
Ministerio de Energia y Mines en representacion del Estado Peruano, debidamente
representado por el Senor Vice Ministro de Minas Ing. Juan MENDOZA MARSANO,
identificado con Libreta Electoral No 09179432, autorizado por Resolucion
Ministerial No 292-97-EM/VMM de fecha 7 de Julio de 1997; y de la otra parte, la
Empresa METALURGICA LA OROYA S.A. titular de actividad minera, con Registro
Unico de Contribuyente numero 33526610, sociedad existente y constituida de
acuerdo con las leyes de la Republica del Peru, inscrita en el Asiento 1 de la
Ficha No 040367, del Libro de Sociedades del Registro Publico de Mineria,
domiciliada en Av. Javier Prado Este No 2175, San Borja, a quien en adelante se
le denominara "El Titular", debidamente representada por su Gerente General Ing.
Jorge MERINO TAFUR, identificado con Libreta Electoral No 07341351 segun poder
que Usted Senor Notario se servira insertar, en los terminos y condiciones
siguientes:
CLAUSULA PRIMERA - ANTECEDENTES
1.1. Las Normas de Proteccion del Ambiente establecidas en el Codigo del
Medio Ambiente, y los Recursos Naturales, asi como las relacionadas con la
Actividad Minero - Metalurgica contenidas en la Ley General de Mineria y sus
reglamentos aprobados por los Decretos Supremos Nos 016-93-EM y 059-93-EM,
Resoluciones Ministeriales Nos. 011-96-EM/VMM y 315-96-EM/VMM, concordantes con
el Decreto Ley No 25763, su Reglamento Decreto Supremo No 012-93-EM y sus
modificatorias Decretos Supremos Nos 036-93-EM y 058-93-EM, establecen que el
Ministerio de Energia y Minas es el encargado de fijar la politica de proteccion
del ambiente en la actividad minero-metalurgica.
1.2 Por Decreto Legislativo No 674 del 25 de Setiembre de 1991, se declaro
de interes nacional la Promocion de la Inversion Privada en las empresas que
conforman la Actividad Empresarial del Estado.
1.3 Mediante Resolucion Suprema No 102-92-PCM se ratifica el acuerdo
adoptado por la Comision de Promocion de la Inversion Privada (COPRI) conforme
al cual se aprueba el nuevo Plan de Promocion de la inversion privada a que se
refiere el Decreto Legislativo No 674.
1.4 Por Resolucion Suprema No 016-96-PCM se ratifica el acuerdo adoptado
por COPRI conforme al cual se apruebe el nuevo Plan de promocion de la Inversion
Privada en relacion a CENTROMIN PERU S.A.
1.5 Por acuerdo de COPRI tomado en sesion del 17 de Abril de 1996, se
autorizo la constitucion de empresas en base a las unidades operativas de
CENTROMIN, de conformidad con el articulo 10(degrees) del Decreto Legislativo No
674.
[SEAL]
[SEAL]
[SEAL]
[SEAL]
<PAGE>
1.6 Dentro del contexto expresado se constituyo la Empresa Metalurgica La
Oroya S.A..- denominada tambien METALOROYA S.A., sobre la base de la Unidad de
Produccion de La Oroya, cuyas acciones son integramente de propiedad de
CENTROMIN y cuyo objeto social consiste principalmente, en el ejercicio de todas
las actividades propias de la industria minero metalurgica.
1.7 CENTROMIN PERU S.A. transferira a la Empresa Metalurgica La Oroya
S.A.-METALOROYA S.A., a la suscripcion del contrato de transferencia de acciones
entre CENTROMIN PERU S.A. y DOE RUN PERU S.R.Ltda, ganador de la Buena - Pro en
el Concurso PRI -16 - 97, las operaciones de la ex-Unidad de Produccion La
Oroya. METALOROYA S.A., asumira la responsabilidad sobre asuntos ambientales
derivados de estas operaciones, por las concesiones mineras y de beneficio que
le sean cedidas.
1.8 Mediante Resolucion Diretoral No 017-97-EM-DGM, de fecha 13 de Enero
de 1997 la Direccion General de Mineria aprobo el Programa de Adecuacion y
Manejo Ambiental de la Unidad Operativa de La Oroya, cuya reprogramacion ha sido
aprobada por Resolucion Directoral No 325-97-EM/DGM del 06 de Octubre de 1997.
1.9 CENTROMIN PERU S.A. con recurso No 1152485 del 19 de Setiembre de
1997, solicito a la Direccion General de Mineria la division del PAMA de la
Unidad de Produccion LA OROYA, la que se aprobo mediante Resolucion Directoral
No 334-97-EM/DGM, del 16 de Octubre de 1997, correspondiendole a "El Titular"
ejecutar el Plan y Cronograma de Inversiones incluidos en el Anexo No 2 que se
circunscribe a las concesiones mineras y de beneficio senaladas en el Anexo No
1. Los Anexos mencionados, en adelante "EL PAMA", forman parte integrante del
presente contrato.
1.10 Por Recurso No 1152487 de feche 19 de Setiembre de 1997 "El Titular",
de acuerdo con lo dispuesto por los Articulos 4(degrees) y 18(degrees) del
Decreto Supremo No 016-93-EM solicito ante el Ministerio de Energia y Minas se
le otorgue la Garantia de Estabilidad Administrativa Ambiental, en relacion a
"EL PAMA".
1.11 El PAMA elaborado, entre sus objetivos establece acciones para
mitigar y prevenir el deterioro ambiental causado por las operaciones minero
metalurgicas de la Unidad Metalurgica LA OROYA, e incluye el cronograma de
ejecucion de las inversiones sobre las medidas a ejecutar para la mitigacion de
los impactos ambientales identificados.
CLAUSULA SEGUNDA - OBJETO DEL CONTRATO
El objeto del presente contrato es garantizar a "El Titular" estabilidad
administrativa ambiental para los trabajos de solucion de problemas ambientales
comprendidos en "EL PAMA" de tal forma que los posibles cambios en las normas y
niveles maximos permisibles, no los afecten negativamente durante la vigencia
del presente contrato.
[SEAL]
[SEAL]
[SEAL]
<PAGE>
CLAUSULA TERCERA.-VIGENCIA DEL CONTRATO.
El presente Contrato entrara en vigencia en la fecha de su suscripcion por
las partes, debiendo culminar en el plazo de diez anos desde la aprobacion del
PAMA.
CLAUSULA CUARTA.-DE LAS GARANTIAS CONTRACTUALES.
4.1 Los niveles maximos permisibles son los determinados en el Anexo No 2
del la Resolucion Ministerial No 011-96-EM/VMM y Resolucion Ministerial No
315-96-EM/VMM los que se encuentran vigentes a la suscripcion del presente
contrato. Estos niveles no estaran sujetos a modificacion durante el plazo de
vigencia del contrato.
4.2 Quedara entendido que las referencias a leyes, decretos legislativos,
decretos leyes, decretos supremos y otras disposiciones legales en el presente
instrumento, han sido cumplidos de acuerdo con los textos existentes a la fecha
de la aprobacion de "EL PAMA"; y no interferiran, limitaran ni reduciran los
derechos del "El Titular" de gozar de todos los beneficios dispuestos por la
legislacion vigente aplicable en la fecha de aprobacion de "EL PAMA", para cuyo
efecto el presente contrato constituye una garantia; ni queda exento de cumplir
con las obligaciones establecidas en la legislacion vigente aplicable en la
fecha de aprobacion de "EL PAMA" o en otras disposiciones aprobadas
posteriormente siempre que las mismas no se opongan a las garantias otorgadas
por el presente.
CLAUSULA QUINTA.-OBLIGACIONES DEL TITULAR
"El Titular" esta obligado a realizar durante la vigencia de "EL PAMA", el
programa de monitoreo operacional, cuyos resultados debera reportar al
Ministerio de Energia y Minas en concordancia con las Resoluciones Ministeriales
Nos. 011-96-EM/VMM y 315-96-EM/VMM.
CLAUSULA SEXTA.-DEL PAMA Y SU PLAZO DE EJECUCION
6.1 El plazo de ejecucion de "EL PAMA" es de diez anos, que vencera el 13
de Enero del 2006.
6.2 El Plan de Inversiones incluido en "EL PAMA" referido en el Articulo
18o del Decreto Supremo No 016-93-EM, comprende en detalle las obras y
adquisiciones necesarias para la puesta en marcha de los proyectos.
6.3 Las metas, los principales controles ambientales, obras de mitigacion
ambiental y labores contenidas en el Plan de Inversiones de "EL PAMA" figuran en
el Anexo 2, que forma parte integrante del presente contrato.
<PAGE>
CLAUSULA SEPTIMA.-DE LA MODIFICACION DEL PAMA
"EL PAMA", podra ser modificado en concordancia con lo especificado en el
Articulo 17o Decreto Supremo No 016-93-EM.
CLAUSULA OCTAVA.-DE LA TRANSFERENCIA O CESION
Este contrato podra ser objeto de cesion, adjudicacion, aporte u otro modo
de transferencia o adjudicacion, con consemtimiento previo y expreso del Estado.
Para el consentimiento que otorgue el Estado, bastara la suscripcion de la
correspondiente minuta y escritua publica.
CLAUSULA NOVENA.-DEL CASO FORTUITO O FUERZA MAYOR.
En concordancia con el Articulo 1315o del Codigo Civil, si por causas de
caso fortuito o fuerza mayor, se impidiera cumplir o se demorase el
cumplimiento de las obligaciones previstas en la ejecucion de "EL PAMA", dicho
impedimento o demora no constituira incumplimiento del contrato y el plazo para
cualquier obligacion prevista en "El PAMA" o en el presente instrumento, sera
extendido por el tiempo correspondiente al periodo o periodos durante los cuales
"El Titular" haya estado impedido de cumplir o haya demorado sus obligaciones
contractuales como consecuencia de las razones especificadas en la presente
clausula.
"El Titular" dara aviso en el dia que empezo el acontecimiento a la
Direccion General de Mineria, acreditando los hechos acompanado de un informe de
su auditor ambiental, dentro de los cinco dias siguientes al acontecimiento.
CLAUSURA DECIMA.-GASTOS
Todos los gastos relacionados con el perfeccionamiento e inscripcion en el
Registro Publico de Mineria de este contrato seran de cargo exclusivo de "El
Titular", incluyendo un juego del testimonio para la Direccion General de
Mineria y una copia simple para la Direccion General de Asuntos Ambientales.
CLAUSULA DECIMO PRIMERA.-RESOLUCION DEL CONTRATO
Es causal de resolucion del presente contrato, la omision de cumplir con
"EL PAMA" dentro del plazo senalado en el numeral 6.1 de la Clausula Sexta,
salvo por causas de fuerza mayor o caso fortuito.
<PAGE>
CLAUSURA DECIMO SEGUNDA.-DOMICILIO
Para los efectos de este contrato y de toda notificacion judicial o
extrajudicial que se le dirija, el titular senala como su domicilio el que
figura en la introduccion de este instrumento. Todo cambio debera ser comunicado
a la Direccion General de Mineria a traves de Carta Notarial.
Agregue Usted Senor Notario las clausuras de Ley y pase los partes
respectivos al Registro Publico de Mineria para su inscripcion.
Firmen las partes, en senal de expresa aceptacion del contenido de los
terminos y condiciones del presente contrato, por triplicado a los 17 dias del
mes de octubre de 1997.
/s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
------------------------ ----------------------
EL ESTADO EL TITULAR
-----------------------
Ing. JUAN MENDOZA [ILLEGIBLE]
Vice Ministro de Minas
<PAGE>
ANEXO No 1
METALOROYA S.A.
CONCESIONES MINERAS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
NOMBRE INSCRIPCION EN REGISTRO PUBLICO DE MINERIA
- -----------------------------------------------------------------------------------------------------------------------
FICHA ASIENTO
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
La Oroya -1 11030 01
- -----------------------------------------------------------------------------------------------------------------------
La Oroya -2 11031 01
- -----------------------------------------------------------------------------------------------------------------------
La Oroya -3 11032 01
- -----------------------------------------------------------------------------------------------------------------------
La Oroya -4 11033 01
- -----------------------------------------------------------------------------------------------------------------------
La Oroya -5 11034 01
- -----------------------------------------------------------------------------------------------------------------------
La Oroya -7 12333 01
- -----------------------------------------------------------------------------------------------------------------------
Cerro de Pasco Seis 11090 01
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
CONCESIONES DE BENEFICIO
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
NOMBRE INSCRIPCION EN REGISTRO PUBLICO DE MINERIA
- -----------------------------------------------------------------------------------------------------------------------
FICHA ASIENTO
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Complejo Metalurgico La Oroya
- -----------------------------------------------------------------------------------------------------------------------
Refineria 1 (Fundicion) 011135 001
- -----------------------------------------------------------------------------------------------------------------------
Refineria 2 (Refineria de Cu y Pb)
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
ANEXO No 2
CUADRO No 1
PLAN DE INVERSIONES
COMPLEJO METALURGICO DE LA OROYA (METALOROYA)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
PROYECTO METAS PRINCIPALES CONTROLES AMBIENTALES/
OBRAS DE MITIGACION
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Nuevas Plantas de Acido Sulfurico Fijar el SO(2) de las emisiones producto de las Se instalaran 2 plantas de acido
operaciones metalurgicas y alcanzar los niveles sulfurico: Planta de acido de la
maximos permisibles fundacion de Cu de 235,000 T/ano
Planta de acido de la fundicion de Pb /
circuito de Zn de 270,000 T/ano
Resultados de la mitigacion: Se fijara
como minimo el 83% del SO(2) generado
Para el ingreso de 515 T/dia (188,261
T/ano) de azufre se emitira al medio
ambiente 110 T/dia de SO(2) Respecto a la
calidad de aire la concentracion diaria
de SO(2) estara por debajo de 572 ug/m3 y
la emision de material particulado por
debajo de 100 mg/m3 cumpliendo asi, lo
dispuesto en la R.M. No 315-96-EM//VMM.
- ---------------------------------------------------------------------------------------------------------------------------------
Planta de tratamiento de agua Tratar las soluciones acido ferrosas de la Proceso de predilucion,
madre de la Refineria de Cobre refineria de cobre que se descargan al rio Yaull intercambio ionico/electrowining
y obtener una solucion neutralizada apia para (SX-EW), neutralizacion
reciclar y/o descartar previa recuperacion del
niquel y purificar la solucion Raff para obtener
un efluente final con contenidos de impurezas
por debajo de los limites maximos permisibles
establecidos por el M.E.M.
- ---------------------------------------------------------------------------------------------------------------------------------
Muro de contencion para los lodos Instalar un muro de concreto para Recuperar las soluciones acidas y
de plomo en la Planta Zileret - almacenar los lodos de plomo descargados recircularlas al circuito de
Division de zinc (*) de la unidad de hidrometalurgia de la lixiviacion acida de la unidad
planta Ziteret. hidrometalurgia
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Van...
<PAGE>
Viene...
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
PROYECTO METAS PRINCIPALES CONTROLES AMBIENTALES/
OBRAS DE MITIGACION
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Planta de tratamiento de Obtener un efluente hacia el rio Mantaro con Implementacion de una planta de
efluentes liquidos industriales contenidos de elementos contaminantes segun tratamiento de efluentes, con capacidad
de fundicion y refineria - La los niveles maximos permisibles ( R.M. No de tratamiento de 9m^3/min. y un proceso
Oroya 011-96-EM/VMM) para la actividad minero - de neutralizacion y precipitacion con
metalurgicos. floculante. R.M No 011-96-EM/VMM.
- --------------------------------------------------------------------------------------------------------------------------------
Recirculacion del agua utilizada Eliminar la contaminacion del rio Mantaro por Utilizar las aguas de granulacion de
en la granulacion de speiss del sustancias contaminantes y solidos en spiess en circuito cerrado.
horno de espumaje-Fundicion de suspension en las aguas de granulacion de
Plomo. speiss.
- --------------------------------------------------------------------------------------------------------------------------------
Nuevo sistema de lavado de anodos Eliminar la contaminacion del rio Mantaro. Optimizar el cosumo de agua mediante
- - Refineria de Zinc automatizacion del lavado de anodos. El
volumen residual sera tratado en la
planta de tratamiento de efluentes
liquidos industriales.
- --------------------------------------------------------------------------------------------------------------------------------
Manejo y disposicion de las Eliminar la contaminacion del rio Mantaro por Se instalaran 2 desaguadores rotatorios
escorias de cobre y plomo sustancias contaminantes y solidos en tipo IBA, sistemas nuevos de
suspension en las aguas de granulacion de granulacion, recirculacion de agua de
escorias de cobre y plomo. granulacion y trasnporte. Con esta
implementacion se elimina la evacuacion
de las aguas de granulacion y se
evitaran las perdidas de escorias al
rio Mantaro.
- --------------------------------------------------------------------------------------------------------------------------------
Nuevo desposito de escorias de Preparar un nuevo deposito a 9 Km. de La Oroya Minimizar la contaminacion hacia el rio
Cobre y Plomo (Cochabamba) camino a Huancayo en la margen izquierda del Mantaro de acuerdo a las normas
rio Mantaro. ambientales vigentes.
- --------------------------------------------------------------------------------------------------------------------------------
Nuevo Deposito de Trioxido de Construccion de un nuevo deposito con Consiste de un sistema compuesto de
Arsenico tecnologia de avanzada y que se ajuste a las forrado de fondo de los depositos, una
normas de control ambiental. cubierta compuesta y un sistema de
deteccion y monitoreo de lixiviado,
disenados para controlar la liberacion
de contaminantes en el medio ambiente y
control del pontencial de exposicion
del publico. La calidad de aire del
medio ambiente como del agua que
descurre al rio Mantaro, estaran acorde
a los niveles maximos permisibles
establecidos por el Ministerio de
Energia y Minas.
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Van...
<PAGE>
Viene...
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PROYECTO METAS PRINCIPALES CONTROLES AMBIENTALES/
OBRAS DE MITIGACION
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Tratamiento de aguas servidas y Ejecucion de obras, adquisicion e instalacion Instalacion de dos plantas de
disposicion de basura en La de equipo para el tratamiento de aguas iratamiento de aguas servidas, una en
Oroya. servidas y deposicion de basura de las zonas Chulec y la otra en Sudete para tener
de vivienda dependiente de CENTROMIN PERU S.A. un efluente de solo 30ppm de DBO y 40
ppm de solidos suspendidos.
Disponer de una planta de disposicion
final bajo las tecnicas de un relieno
sanitario eliminando la contaminacion
al rio Manataro.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
[ILLEGIBLE]
Nota:
(*) Inversiones consideradas en continuidad operativa de proceso, iniciadas por
CENTROMIN PERU S.A., y seran continudas por METALOROYA S.A..
<PAGE>
ANEXO No 2
CUADRO No 2
CRONOGRAMA DE INVERSIONES DEL PROGRAMA DE ADECUACION Y MANEJO AMBIENTAL(PAMA)
COMPLEJO METALURGICO DE LA OROYA - METALOROYA S.A.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
N
PROYECTOS Proy 1997 1998 1999 2000 2001 2002 2003
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CIRCUITO DE COBRE:
Nueva Planta de Acido Sulfurico 1 3,800
CIRCUITO DE PLOMO:
Nueva Planta de Acido Sulfurico 1
CIRCUITO DE ZINC:
Nueva Planta de Acido Sulfurico 1
EFLUENTES LIQ. INSDUSTRIALES:
Planta de tratamiento de agua madre de la Ref.
de Cobre 5 500
Planta de tratamiento de efluentes liquidos 6 1,000 500 1,000
Muro de contencion para todos de Pb. en Planta
Ziterel 9 5
Solucion Barren, Cadmio.
Recirculacion del agua utilizada en granulacion de
[ILLEGIBLE] del 10 55
Horno de espumaje - Fundicion de Plomo
Nuevo sistema de lavado de inodos - Refineria de Zinc. 11 15
Manejo de Escorias - Nuevo sistema (Agua Granul.)
Escorias de Cu/Pb. 12 650 2,302 ???? 1,200
Depositos
Nuevos (Cochabamba) 13 200 2,300
[ILLEGIBLE] de Arsenico (As(2)O(3)- Depositos
Nuevos 14 450 550 1,000
Desagua/Basura 15 400 200 1,100 1,100 700
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL 2,700 3,612 4,963 3,300 3,000 3,800
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ---------------------------------------------------------------------------------------------------
N TOTAL
PROYECTOS Proy 2004 2005 2006 Miles US$
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CIRCUITO DE COBRE:
Nueva Planta de Acido Sulfurico 1 2,775 16,200 18,425 41,200
CIRCUITO DE PLOMO:
Nueva Planta de Acido Sulfurico 1 22,500 22,500
CIRCUITO DE ZINC:
Nueva Planta de Acido Sulfurico 1 26,300 26,300
EFLUENTES LIQ. INSDUSTRIALES:
Planta de tratamiento de agua madre de la Ref.
de Cobre 5 500
Planta de tratamiento de efluentes liquidos 6 2,500
Muro de contencion para todos de Pb. en Planta
Ziterel 9 5
Solucion Barren, Cadmio.
Recirculacion del agua utilizada en granulacion de
[ILLEGIBLE] del 10 65
Horno de espumaje - Fundicion de Plomo
Nuevo sistema de lavado de inodos - Refineria de Zinc. 11 15
Manejo de Escorias - Nuevo sistema (Agua Granul.)
Escorias de Cu/Pb. 12 6,500
Depositos
Nuevos (Cochabamba) 13 2,500
[ILLEGIBLE] de Arsenico (As(2)O(3)- Depositos
Nuevos 14 2,000
Desagua/Basura 15 3,500
- ---------------------------------------------------------------------------------------------------
TOTAL 2,775 18,700 44,725 107,575
- ---------------------------------------------------------------------------------------------------
</TABLE>
NOTA:
En caso de que METALOROYA devuelva dentro de dos anos,
[ILLEGIBLE]
<PAGE>
[LOGO]
MINISTERIO DE ENERGIA Y MINAS
Resolucion Directoral No 330-97-EM/DGM
Lima, 09 OCT, 1997
Visto el expediente No 1120022 relativo al procedimiento ordinario para
concension de beneficio para depositos de residuos solidos denominados "Huachan
Lote A" de 44.1885 Has., "Huanchan Lote B" de 2.5685 Ha. Y "Vado" de 6.9974 Has.
De extensiones respectivamente, formulado el 10 de abril de 1997 por Empresa
Minera del Centro de Peru S.A.-CENTROMIN PERU S.A. con RUC No 10017653, inscrita
en el As. 30, fojas 324 del Tomo 28 del Registro de Sociedades Contractuales,
representado por el Sr. Mario Guevarra Tarazona con poder inscrito en el As. 37,
ficha 14423 del Registro Publico de Minera, con domicilio legal en A. De la
Poesia 155. San Borja, las areas se encuentran ubicadas en los parajas Huanchan
y Vado, distrito de La Oroya, provincia de Yauli, departamento de Junin.
CONSIDERADO:
Que, el tramite del expediente se ha efectuado con sujecion a las normas
que para el efecto establece el Texto Unico Ordenado de la Ley General de
Mineria y sus Reglamentos.
Que, La Empresa Minera del Centro del Peru S.A. con recurso No 1099939 del
13 de diciembre de 1,996, cumplio con presentar El Programa de Adecuacion de
Manejo Ambiental - PAMA del "COMPLEJO METALURGICO LA OROYA", donde estan
incluidos los depositos de residuos solidos "huanchan Lote A", "Huancha Lote B",
y "Vado", ademas las actividades minerametalurgicas que la recurrente ha vendio
desarrollando antes de la entrada en vigencia del Reglamento de Medio Ambiente
aprobado por D.S. No 016-93-EM del 28 de abril de 1,993;
Que, la recurrente acredita la titularidad del terreno superficial donde
estan los depositos de residuos solidos antiguos y que actualmente se encuentran
en operacion "Huanchan Lote A", "Huanchan Lote B" y "Vado", con Testimonio de la
Escritura Publica, inscrito el titulo en el Registro de Propiedades Inmuebles de
Huancayo.
Que, la Empresa Minera del Centro de Peru S.A. solicita se considere como
consecion de beneficio para depositos de residous solidos las area denominadas
"Huanchan Lote A, Lote B", y "Vado", otrogadas como ampliacion de areas mediante
R.D. No 255-97-EM/DGM del 14-07-97;
Estando con la opinion favorable de la Direccion de Promocion y Desarrollo
Minero y de conformidad con el inciso a) del Art. 101o del Texto Unico Ordenado
de la Ley General de Mineria.
SE RESUELVE:
ARTICULO 1o.- Aprobar el titulo de la concesion de beneficio para
depositos de residuos solidos denominados "Huanchan Lote A" de 44.1885 Has.,
"Huanchan Lote B" de 2.5685 Has. Y "Vado" de 6.9974 Has. De extensiones
respectivamente a la Empresa Minera del Centro del Peru S.A.- CENTROMIN PERU
S.A., ubicados en los parajes Huanchan y Vado, distrito de La Oroya, provincia
de yauli, departamento de Junin, cuyas coordenadas U.T.M. de los vertices de las
poligonales que encierran las areas son:
<PAGE>
"HUANCHAN LOTE A" (44.1885 HAS.)
VERTICE NORTE ESTE
------- ----- ----
1 8'724,228.250 403,715.800
2 8'724,349.750 403,727.500
3 8'725,191.200 402,862.400
4 8'725,191.200 402,813.300
5 8'724,884.600 402,802.100
6 8'724,676.900 402,862.850
7 8'724,380.820 403,019.130
8 8'724,265.130 403,120.450
9 8'724,195.750 403,237.050
10 8'724,195.000 403,390.200
11 8'724,240.120 403,658.600
"HUANCHAN LOTE B" (2.5685 HAS.)
VERTICE NORTE ESTE
------- ----- ----
1 8'725,191.200 402,774.200
2 8'725,191.200 402,765.500
3 8'725,008.500 402,714.300
4 8'724,822.800 402,715.000
5 8'724,638.500 402,812.200
6 8'724,451.300 402,936.300
7 8'724,663.700 402,825.050
8 8'724,886.800 402,762.250
"VADO" (6.9974 HAS.)
VERTICE NORTE ESTE
------- ----- ----
S-1 8'730,711.331 396,398.979
S-2 8'730,776.263 396,843.278
3-3 8'730,835.913 396,767.028
AS2 8'730,830.614 396,625,872
S-4 8'730,812.307 396,487.334
S-5 8'730,806.933 396,398.867
S-6 8'730,761.785 396,427.280
V-4 8'730,616.429 396,575.050
<PAGE>
[LOGO]
MINISTERIO DE ENERGIA Y MINAS
Resolucion Directoral No 330-97-EM/DGM
09 OCT, 1997
ARTICULO 2o.- La presente concesion de beneficio para depositos de
residuos solidos, se concede a la Empresa Minera del Centro del Peru
S.A.-CENTROMIN PERU S.A. sin perjuicio del cumplimiento, de parte de la titular,
de las disposiciones del D.S. No 016-93-EM del 28 de abril de 1,993 y su
modificatoria, D.S. No 059-93-EM de fecha 10 de diciembre de 1,993.
ARTICULO 3o.- La estabilidad de los depositos de residuos solidos debera
ser garantizado con el cumplimiento de lo dispuesto en la R.D. No 440-96-EM/DGM
del 6 de diciembre de 1,996 y la R.D. No 019-97-EM/DGAA del 20 de junio de
1,997.
ARTICULO 4o.- La titular de la concesion de beneficio aprobada, esta
obligada a respetar la integridad de los monumentos arqueologicos o historicos,
red vial nacional, oleoductos, cuarteles, puertos o obras de defensa nacional
que se encuentren dentro del ara otorgada en concesion de beneficio; conforme
establece el Art. 1o del D.S. No 022-94-EM, que modifica el Art 22o del
Reglamento de Procedimientos Mineros, aprobado por D.S. No 018-92-EM.
ARTICULO 5o.- Dejese sin efecto la R.D. No 255-97-EM/DGM del 14 de julio
de 1,997, que aprobo la ampliacion de area de la concesion de beneficio
"Compleojo Metalurgico La Oroya-Refineria 1 y 2" con la inclusion de los
depositos de residuos solidos denominados "Huanchan Lote A", Huanchan Lote B" y
"Vado".
ARTICULO 6o.- Trancribase la presente Resolucion, consentida que sea, al
Registro Publico de Mineria, paa los fines de Ley.
Registrese, comuniquese y archivese.
/s/ [ILLEGIBLE]
---------------------------
Ing. [ILLEGIBLE]
DIRECTOR GENERAL DE MINERIA.
<PAGE>
[LOGO]
MINISTERIO DE ENERGIA Y MINAS
INFORME No 544-97-EM-DGM/DPDM
Senor : Director General de Mineria
Asunto : Procedimiento Minero de concesion de beneficio para
deposito De residuos solidos "Huanchan Lote A",
Huanchan Lote B" y "Vado" De Empresa Minera del
Centro del Peru S.A.-CENTROMIN PERU S.A.
Ref. : Expediente No 1120022
Revisado el expediente y el recurso de la referencia, sobre el
asunto que se indica, Informo a usted lo siguiente:
1.- UBICACION
El petitorio de concesion de beneficio para disposicion de residuos
solidos denominados "Huanchan Lote A", "Huanchan Lote B" y "Vada" se
encuentran ubicados en los parajes Huanchan y Vado, distrito de La Oroya,
provincia de Yauli, departamento de Junin.
2.- ANTECENDENTES
Mediante Resolucion Directoral No 133-93-EM-DGM del 27 de agosto de 1,993,
la Direccion General de Mineria aprobo el titulo de concesion de beneficio
"Complejo Metalurgico La Oroya-Refineria 1" de 36.40 Has. Y "Complejo
Metalurgico La Oyora-Refineria 2" de 5.9275 Has.
Empresa Minera del Centro de Peru S.A.-CENTROMIN PERU S.A. con el recurso
No 11120022 del 10 de abril de 1,997, solicito en vias de regularizacion
la ampliacion del area de la concesion de beneficio "COMPLEJO METALURGICO
LA OROYA-REFINERIA 1 Y 2" para disposicion de residuos solidos denominadas
"Huanchan" y "Vado", adjuntando una copia del PAMA y otros requisitos.
La Direccion General de Mineria mediante resolucion de fecha 14 de mayo de
1,997 de acuerdo con el informe No 350-97-EM-DGM/DPDM, notifico a la
Empresa Minera del Centro del Peru S.A. para que cumpla con presentar el
diseno de los depositos de residuos solidos, reduccion de las areas de
acuerdo el requerimiento real y otros.
Empresa Minera del Centro del Peru S.A.-CENTROMIN PERU S.A. con el recurso
No 1131566 del 11 de junio de 1,997, presento la boleta de pago faltante
por derecho de tramite y asimismo adjunto la copia del titulo de propiedad
inscrito en el Registro de Propiedades Inmuebles de Huancayo, acreditando
la titularidad del terreno superficial.
La Direccion General de Mineria mediante R.D. No 255-97-EM/DGM del 14 de
julio de 1,997, aprobo la ampliacion del area de la concesion de beneficio
"COMPLEJO METALURGICO LA
<PAGE>
[LOGO]
MINISTERIO DE ENERGIA Y MINAS
OROYA-REFINERIA 1 Y 2" con la inclusion de los depositos de residuos
soldios "Huanchan Lote A", "Huanchan Lote B" y "Vado".
Empresa Mienra del Centro del Peru S.A. con recurso No 1153609 del 29 de
seteimbre de 1,997, solicito division de los titulos otorgados del
"COMPLEJO METALURGICO LA OROYA-REFINERIA 1 Y 2" a nombre de Metal Oroya
S.A. y los depositos de residuos solidos "Huanchan Lote A", "Huanchan Lote
B" y "Vado" a nombre de Empresa Minera del Centro del Peru S.A.
Empresa Minera del Centro del Peru S.A. con recurso No 1155077 del 9 de
octubre de 1,997, solicito se deje sin efecto la R.D. No 255-97-EM/DGM del
14-07-97, que aprobo la ampliacion de area de la concesion de beneficio
"COMPLEJO METALURGICO LA OROYA-REFINERIA 1 Y 2" con la inclusion de los
depositos de residuos solidos "Huanchan Lote A", "Huanchan Lote B" y
"Vado".
3.- EVALUACION
De las dos peticiones solicitadas por CENTROMIN PERU S.A. la primera
consistente en otorgar el titulo del "COMPLEJOMETALURGICO LA
OROYA-REFINERIA 1Y 2" a nombre de Metal Oroya S.A. no es procedente pro
cuanto ello debe ser realizado por transferencia, la misma que debe estar
inscrita en el RegistroPublico de Mineria. En cuanto a la solicitud de
considerar como concesion de beneficio a nombre de CENTROMIN PERU S.A. las
areas denominadas "Huanchan Lote A", "Huanchan Lote B" y "Vado" para el
cumplimiento de las normas de control ambiental como el Programa de
Adecuacion y Manejo Ambiental y por encontrarse en proceso de
privatizacion, es atendible.
En consecuencia, sugiero a usted Senor Director se deje sin efecto la R.D.
No 255-97-EM/DGM y se apruebe la concesion de beneficio para depositos de
residuos solidos denominadas "Huanchan Lote A" de 44.1885 has., "Huanchan Lote
B" de 2.5685 Has. y "Vado" de 6.9974 Has. A nombre de Empresa Minera del Centro
del Peru S.A.-CENTROMIN PERU S.A. Lima, 09 OCT. 1997
/s/ [ILLEGIBLE] /s/ Hugo Mendiera Espinoza
------------------------------- ----------------------------
Ing. [ILLEGIBLE] Ing. Hugo Mendiera Espinoza
[ILLEGIBLE] CIP No 52272
Lima, 02 OCT. 1997
Visto el informe No 544-97-EM/DPDM, que antecede y estnado de acuerdo con lo
opinado PROYECTESE la resolucion correspondiente de aprobacion de la concesion
de beneficio para depositos de residuos solidos "Huanchan Lote A", "Huanchan
Lote B" y "Vado" a nombre de Emrpesa Minera del Centro del Peru S.A.-CENTROMIN
PERU S.A., NOTIFIQUESE para su conocimiento y fines pertinentes. Hecho, vuelva
el expediente a la Direccion de Promocion y Desarollo Minero.
/s/ [ILLEGIBLE]
----------------------------
[ILLEGIBLE]
<PAGE>
[LOGO]
EMPRESA MINERA DEL CENTRO DEL PERU
PROGRAMA DE ADECUACION Y MANEJO AMBIENTAL
PAMA
[GRAPHIC]
- --------------------------------------------------------------------------------
Complejo Metalurgico La Oroya
- --------------------------------------------------------------------------------
<PAGE>
[LOGO] EMPRESA MINERA DEL CENTRO DEL PERU S.A.
Casilla 2412 - Lima 1 Peru, Cables: cantromin Peru, Telefono: 35-5467
GEGE-822-96
San Borja, 12 de diciembre, 1996
Ingeniero
Jose Magrovejo Castillo
Director General Asuntos Ambientales
Ministerio de Energia y Minas
Presente
Ref: Respuesta a las Observaciones del PAMA - Unidad Metalurgica La Oroya
Oficio No 334-96-EM/DGAA, del 28 de octubre de 1996
Estimado Ingeniero:
Nos dirigimos a usted, para hacerle llegar las absoluciones a las observaciones
del Programa de Adecuacion y Manejo Ambiental (PAMA) de la Unidad Metalurgica de
La Oroya, las cuales fueron respondidas de conformidad con las coordinaciones
realizadas en la reunion llevada acabo en su despacho.
Asimismo, le adjuntamos dos ejemplares de la version revisada del PAMA de la
Oroya.
Aprovecho la oportunidad para saludarlo.
Atentamente,
/s/ Jorge Merino Tafur
-------------------------------------
Ing. Jorge Merino Tafur
Gerente General
PGA/Doris s.
<PAGE>
MINISTERIO DE ENERGIA Y MINAS Fecha : 13/12/1996
VENTANILLA DE TRAMITE CAJA Hora : 12:00:47
INGRESO DE EXPEDIENTES
Numero : 1089839
Antecedente :
Interesado : CONTROMIN PERU S.A.
Descripcion : 2974 INFORMES
REF. OFICIO No 834-00/EM-DGAA/OBSERVACIONES PAMA
Referencia :
Oficina Recibe : DIRECCION GENERAL DE ASUNTOS AMBIENTALES
Folio : 13
Observacion : 4 ANILLADOS
[ILLEGIBLE]
<PAGE>
RESPUESTAS A LAS OBSERVACIONES AL PAMA DE LA UNIDAD
METALURGICA DE LA OROYA
INTRODUCCION
Con fecha 23 de Octubre de 1996, su despacho emitio un documento, sobre la
Evaluacion del Cumplimiento del PAMA de la Unidad Metalurgica de La Oroya,
en el cual luego de comentar los siguientes puntos: Diagnositico de los
problemas ambientales, Soluciones propuestas a nivel de perfil, Montos y
Cronograma de Inversiones y Sanciones, concluia que el PAMA presentado no
cumplia con lo requerido para una evaluacion cabal del programa de
mitigacion, por existir observaciones de precision y detalle que debian
subsanarse dentro de los 60 dias siguientes.
Adicionalmente con fecha 28 de Octubre de 1996, se recibio el Oficio No
334-96-EM/DGAA, en cual se remitia la relacion de 37 observaciones
planteadas al PAMA, que era el detalle de la Evaluacion de Cumplimiento.
EVALUACION DE CUMPLIMIENTO DEL PAMA
Los comentarios y observaciones realizados al respecto, se refieren
principalmente a falta de informacion, profundidad de analisis y precision
de las inversiones, que aparentemente no le dan al PAMA la solidez que el
programa amerita y que la ley exige.
2.1 DIAGNOSTICO DE LOS PROBLEMAS AMBIENTALES
Se reclama informacion existente y que fuera presentada y aprobada en el
EVAP, como es el caso de los efluentes liquidos, residuos solidos y
depositos. Adicionalmente se solicita muestreo de suelos afectados de La
Oroya, con la finalidad de una mejor cuantificacion de los impactos, para
lograr las mejores medidas de mitigacion.
2.2 SOLUCIONES PROPUESTAS A NIVEL DE PERFIL
Se considera que las soluciones propuesta de mitigacion son descriptivas y
generales, no siendo congruentes con los montos y cronogramas, en especial
lo referente al problema del SO2.
2.3 MONTOS Y CRONOGRAMA DE INVERSIONES
Se requiere un mayor sustento de montos y tiempos, en especial debe
considerarse los montos minimos de iversion annual, equivalente al 1% de
las ventas anuales, senalado por ley.
2.4 RELACION DE LAS OBSERVACIONES PLANTEADAS
Las 37 observaciones planteadas, se refieren a puntos especificos que
deben ser subsanadso, a fin de que el PAMA, cumpla con los dispositivos
legales vigentes, y se constituya como el elemento de gestion que permita
alcanzar los niveles amibientales esperados, adecuadonse a las
regulaciones amibientales vigentes.
<PAGE>
RESPUESTAS A LAS OBSERVACIONES PLANTEADAS
3.1 CONSIDERACIONES GENERALES
Debe indicarse que el PAMA presentado el 30 de Agosto, ??????????????????
Reiterativamente al EVAP, documento aprobado, considero que no era
pertinente repetir la informacion que en el se consignaba, motivo por el
cual el PAMA adolece de esta informacion dando la apariencia de
superficialidad.
Esite informacion detallada referente a los puntos observados, que no
fueron reportados en el PAMA, por consideraciones de simplificacion, que
fue objeto de una interpretacion de omision.
Las soluciones propuestas al Control Ambiental, han sido desarrolladas en
su mayoria por empresas extranjeras consultoras de reconocido prestigio,
quienes propusieron tecnologias de aplicacion de alta eficiencia, por lo
que consideramos soluciones viables y confiables.
Los montos indicados para inversiones, supera a la inversion minima annual
exigida por ley, no existiendo riesgo en la ejecucion del programa, pro
tratarse de montos inferiores a los que normalmente se manejan y que no
comrprometen la gestion empresarial.
3.2 RESPUESTAS
Con el proposito de dar respuestaa las observaciones planteadas, el PAMA
ha sido sometido a una revision exhaustiva, complementando detalles,
incrementandto informacion adicional, que en algunos casos supera lo
solicitado y mejorando su estructura para ofrecer un documento de mas
facil comprension.
En el cuadro de respuestas que se adjunta, se absuelven cada una de las 37
observaciones planteadas, en forma concreta, senalandose el acapite,
cuadros, talbas y otros donde se encuentra el detalle respectivo.
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
RESPUESTA A LAS OBSERVACIONES AL PAMA - UNIDAD METALURGICA LA OROYA
- ----------------------------------------------------------------------------------------------------
No. Pag. Sec Descripcion Observacion
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 7 2.1.3 Efluentes Debe indicarse en forma explicita para cada efluente si
liquidos, este se descarga directamente
tratamiento y
disposicion
- ----------------------------------------------------------------------------------------------------
2 En la Tabla 2,3A y otras similares, debe indicarse el
valos limite referencial (LMP), de la Ley General de Agua
u otra fuente para los elementos cuyos LMP no considerdos
en el DS 011-96-EM/VMM. Des ese modo el lector puede
formarse una idea de la gravedad de la contaminacion de
cada element.
- ----------------------------------------------------------------------------------------------------
3 15 2.1.3. Indicar si 7 efluentes seleccionados como los de mayor
caudal, corresponden tambien a los de mayor carga
contaminante. Debe indicarse asimismo, la magntud (caudal
o carga) de este grupo con respecto al
resto de efluentes.
- ----------------------------------------------------------------------------------------------------
4 Indicar si los promedios de las concentraciones reportadas
en la tabla 2.4 son artimeticos o ponderados.
- ----------------------------------------------------------------------------------------------------
5 Corregir talba No 2, 3B, los valores de pH (>200)
concetraciones, etc. son muy incogruentes.
- ----------------------------------------------------------------------------------------------------
<CAPTION>
- ----------------------------------------------------------------
- ----------------------------------------------------------------
Respuesta
- ----------------------------------------------------------------
<C>
En la tabla 4.1.2/1 (Pagina 80), se detalla la descarga de
cada efluente.
- ----------------------------------------------------------------
Las tablas No, 2, 3A y otras, han sido reemplazadas por la
4.1.2/2, 2A,3 y 3A en las paginas 125 a 128, en las cuales
se incluyen los limites maximos permisibles (LMP).
- ----------------------------------------------------------------
En las tablas 4.1.2/4, 3, 4 y 4A, 5 y 5A de las paginas 129
a 132, se detalla als descargas de los 7 efluentes de mayor
contaminacion, los cuales alcanzaron el 94% del total.
- ----------------------------------------------------------------
La tabla 2.4 ha sido reemplazada por la 4.1.2/4 y 4A
(Paginas 129 y 130), donde se indica que los promedios
reportados son aritmeticos.
- ----------------------------------------------------------------
Las tablas No 2 y 3B, han sido reemplazadas por la 4.1.2/2 y
2A (Pags. 125 y 126). Donde se han corregido los valores de
pH y corresponden a los efluentes cuyos codigos son 131 al
137.
- ----------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
No. Pag. Sec. Descripcion Observacion
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
6 Se deberia la concentracion de grasa/ aceites en los
efluentes de Talleres (Cuadro No. 2, 3D)
- ---------------------------------------------------------------------------------------------------------
7 La tabla 2.4 de efluentes liquidos mas importantes, debe
reportar tambien la concetracion de Cd, As y Mn que son
sumamente altas en varios de esos efluentes. El hecho de
que el MEM no haya fijado el LMP para esos elementos, no
implica de ningun modo que se dejen de reportar y
controlar. La tabla 2.16 reporta, aparentemente, las
concentraciones promedios en los rios Mantaro y Yauli, el
titulo debe indicar la fecha de muestreo y/o si corresponden
a promedio anual aritmetico o ponderado. La contaminacion
del rio es mucho mayor en epoca de estio.
- ---------------------------------------------------------------------------------------------------------
8 16 2.1.4 Residuos La descripcion de los residuos solidos es insuficiente para
etc. Solidos caracterizarlas desde el punto de vista ambiental. Debe
Tratamiento complementarse con granulometira, contenido metalico soluble
disposicion final. en agua, pH de pasta, etc. Ya qu estos residuos estaran
expuestos a las lluvias y otros agentes naturales. Lo mismo
depositos de Iroxido de arsenico, escorias de Cu y Pb y es
aplicable a la informacion reportada en la tabla 2.5. Lo
ferritas de Zinc, efecutado por empresas consultoras. ideal
hubiera sido correr pruebas de resistencia quimica a los
agentes naturales (intemperismo), para establecer el grado de
disolucion que experimentaran los metales en el futuro.
- ---------------------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------
Respuesta
- -----------------------------------------------------------
<C>
Las grasas y aceites se recircula a los tanques de
petroleo pesado Bunker No. 6, lo cual se indica en el
acapite 4.1.3, Residuos Soldios Industriales (Capitulo
IV-Pagina 85).
- -----------------------------------------------------------
La tabla 2.4 has sido reemplazada por las tablas 4.1.2/5
y5A (Paginas 131 y 132), en las que se reportan los
contenidos de Cd, As y Mn.
La tabla 2.16 ha sido reemplazada por las tablas 4.1.2/6
y 6A (Paginas 133 y 134) que se refieren a los rios
mantaro y Yauli, indicandose en ellas la fecha de
muestreo y las cifras reportadas corresponden al promedio
aritmetico anual.
- -----------------------------------------------------------
La caracterizacion y la granulometria de los residuos
solidos se indican en las Tablas 4.1.3/1, 4.1.3/2 y 2A.
La informacion adicional solicitada sobre resistencai
quimica, se indican en los esudios de abandono de los
- -----------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
No. Pag. Sec. Descripcion Observacion
- -------------------------------------------------------------------------------------------------------------
<S> <C>
9 Aclarar el concepto de "almacenado en las riberas del
rio Mantaro" cando se refieren al residuo de dioxido de
manganeso. Describir el tip de confinamiento adoptado
para almacenar este residuo.
- -------------------------------------------------------------------------------------------------------------
10 Las canchas o stokpiles de escoria, todos (ZLR), etc. no
han sido descritas apropiadamente. Se requiere area,
dimensiones, alto, profundidad, humedad, % soldios,
ubicacion precisa con respecto a carretera, poblado,
rios, ares verdes, etc., y coordenadas, tambien
pendiente de taludes, canales perimetricos de coleccion
de escorrentias si los hay, calidad del susbtracto.
Indicar si este ha sido impermeabilizado o no, volumen
estimado de cada cancha, tiempo de vida.
- -------------------------------------------------------------------------------------------------------------
11 19 2.1.5 Emisiones Las gases que emite la Planta de Coque no son, o no
etc. gaseosas, debieran ser, de combustion, son gases fugitivos de
tratamiento destilacion. No es cierto que sean poco nocivas,
disposicion final. gerenarlmente contienen tenoles, gases nitrosos, etc.y
ello debio ser confirmado/descartado mediante
muestreo/analisis. La tabla 2.7 debio incluir analisis
de este tipo para los gases de la Planta de Coque.
- -------------------------------------------------------------------------------------------------------------
12 Los gases emitidos de la Pia, de Residuos Anodicos debe
analizarse para determinar concentracion de gases
nitrosos. (Tabla 2,7H)
- -------------------------------------------------------------------------------------------------------------
<CAPTION>
- -------------------------------------------------------
Respuesta
- -------------------------------------------------------
<C>
El dioxido de manganeso no es un residuo, es un
reactivo de consumo diario y su almacenamiento es
temporal y minimo, y se encuentra a mas de 100
metros de la ribera del rio Mantaro.
- -------------------------------------------------------
El detalle solicitado se encuentra en el Plano No
M-03-96-02, Capitulo IV, Proyecto No 03, sobre
escorias de Cu/Pb. Las ferritas de zinc en el
plano No M-03-96-04 del Proyecto No 15; y el
trioxido de arsenico en las figuras 1 y 2 del
proyecto No 14, se explican en el acapite 4.1.3
(Paginas 81, 82, 85).
- -------------------------------------------------------
Las tablas 4.1.1/5, 5A, 5B y 5C (Paginas 106 a
109), reafirman que se tratan de gases de
combustion y con respecto a los gaes fugitivos de
la destilacion, estos se consignan en el Proyecto
No 2 del Capitulo V.
- -------------------------------------------------------
La tabla 2, 7H ha sido reemplazada por la 4.1.1/8 y
8A (Pags. 114 y 115). Los gases nitrosos son
genrados por el uso de nitrato de sodio en el
proceso de copelacion, operacion que se realiza una
vez por semana.
No existen analisis de gases nitrosos representati-
- -------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
No. Pag. Sec. Descripcion Observacion
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
13 28 2.2.2. Ambiente Precisar en que unidades mm/mes, mm/ano, etc. estan
Fisico expresados los valores de precipitacion pluvial. La
Clima accion de lavado indicada amerita que caraterice mejor
los residuos solidos (ver nota 8).
- --------------------------------------------------------------------------------------------------------------
14 29 Cantidad de Los LMP para gases establecidos por la R.M. 315-96 deben
Aire ser incluidos junto con las concentraciones de elementos
reportados durante el monitoreo de aire (Tabla 2.13 y
otras).
- --------------------------------------------------------------------------------------------------------------
15 34 2.2.5 Suelos Aclarar el concepto de "ligeramente acidos" cuando se
refiere a suelos con pH en el orden de 3.5 (talba 2.1.4);
la gravedad de la contaminacion parece ser mayor que la
sugerida por dicho comentario.
- --------------------------------------------------------------------------------------------------------------
16 35 2.3 Ambiente El cuadro 2.15 sobre composicion quimica de Plantas debe
etc. Biologico ser contrastado con analisis de Plantas similares
correspondientes a lugares no contaminados. El cuadro
debe ser comentado con amplitud.
- --------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------
Respuesta
- ------------------------------------------------------
<C>
Vos. Al respecto se presenta el Proyecto No 3 del
Capitulo V, para la eliminacion del consumo de
nitrato de sodio.
- ------------------------------------------------------
Las unidades on expresada en mm H20/ano y se
especifican en las Tablas 2.1.3/2 y 2.1.3/3
(Paginas 34 y 35).
- ------------------------------------------------------
Los solicitado se puede observar en las Tablas
2.1.4/2 y 2A (Paginas 38 y 39).
- ------------------------------------------------------
El termino "ligerament acidos", se refiere a un
termino tecnico agropecuaro, pero cabe indicar
que los suelos son afectado por las emisiones de
SO2, los cuales on lavados por accion de la
lluvia, lo que se explica en el Capitulo IV,
Acapite 4.2.1 (Pagina 87).
- ------------------------------------------------------
El cuadro 2.15 ha sido reemplazado por la Tabla
2.2.2/1 (Pagina 42), en la que se indica el
contenido de elementos esenciales en las plantas;
el Diagrama 7.2.4/3 y el Plano 1-559-01-2008 del
Anexo No 8.
- ------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
No. Pag. Sec. Descripcion Observacion
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
El texto que describe los impactos y se acompana
con con fotos, deberla ser complementado con
planos de ubicacionde las areas descritas. Los
planos de Anexos 8 y 10 deben ser mejorados
con informacion topografica, areas verdes, lagunas,
rios, etc. e incoporados en esta seccion del texto.
Los planos son de mala calidad.
- ---------------------------------------------------------------------------------------------------------------
17 37 2.4 Ambiente La incidencia de uno u otro tipo de enfermedad en La
etc. Socio Oroya debe estar sustentada mediante cuadros estadisticos.
Economico
- ---------------------------------------------------------------------------------------------------------------
18 50 2.5 Ambiente de Debe indicarse que La Oroya es el punto donde convergen
Interes Humano las vias principales hacia la zona de Huancayo,
Chanchamayo, Huanuco - Pucallpa. Todo este transito es
frecuentemente afectado por interrupciones en las calles
de La Oroya, drecta e indirectamente realcionadas con las
actividades de Centromin Peru.
- ---------------------------------------------------------------------------------------------------------------
19 63 4.0 Resumen de la Falta la Tabla mencionada en la pag. 65, parrafo 1.
etc. Evaluacion y Tampoco esta la tabla 4.1 mencionada en el texto. No es
Analisis de posible entonces interpretar el texto. Estas omisiones
Impactos son serias.
Ambientales
- ---------------------------------------------------------------------------------------------------------------
20 Los impactos deben ser descritos con mucho mayor
amplitud, se debio indicar por lo menos la carga de cada
metal vertida a cada rio por cada efluente liquido. Otro
tanto se debio hacer con las
- ---------------------------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------
Respuesta
- -----------------------------------------------------
<C>
Los planos de Anexos 8 y 10, son reemplazados
por el Diagrama 7.2.4/3 del Capitulo VII y el Plano
1.3/1 en Anexo del Capitulo 1; asimismo el Plano
1-559-01-2008 del Capitulo V (Proyecto No 4).
- -----------------------------------------------------
Segun lo conversado con la Direccion de Asuntos
Ambientales del MEM, dicha pregunta fue
descartada.
- -----------------------------------------------------
Aunque esta pregunta fue eliminada, se contesta
en el Capitulo II, Acapite 2.3.1 (Paginas 30 y
31), (Vias de comunicacion).
- -----------------------------------------------------
Se omitio la tabla mencionada, y esta
informacion se indica en las tablas 4.1.2/2, 2A,
3 y 3A (Pags. 125 a128).
La Tabla 4.1 omitida se detalla en el Acapite
4.1.1 (paginas 72a 77).
- -----------------------------------------------------
La carga vertida en cada efluente liquido se
aprecia en las Tablas 4.1.2/3 (Pag. 127) y
4.1.2/3A (Pag. 128) las emisiones gaseosas y
polvos por la chimenea principal, se aprecia en
la Tabla No.
- -----------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
No. Pag. Sec. Descripcion Observacion
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Emisiones gaseosa y polvos. Debio hacerse un registro
historico de los polvos contaminantes vertidos al area
circundate para determinar si la disolucion de ellos
continuara contaminando suelos y aguas. El analisis de
suelos de la tabla No 2.1.4 es insuficiente. Debio
hacerse analizado por contenido metalico muestras de
suelos de toda la zona de influencia de esta actividad,
para tener una idea mas "cuantificable" del dano,
impacto ambiental y de las medidas requeridas para la
mitigacion y su rehabilitacion.
- ---------------------------------------------------------------------------------------------------------------
21 67 5.0 Plan de El costo de la Planta de Acido Sulfurico debe expresarse
etc. Medidas de correctamente (en millones US$). Las medidas de
Mitigacion mitigacion debieron ser presentadas a un nivel de
por lo menos de "Perfil de Proyecto" no ha sido asi
como tampoco se ha incluido informacion relevante como
balances metalurgicos, diagramas de flujo, resultados
de pruebas experimentales, etc.
- ---------------------------------------------------------------------------------------------------------------
22 La fabricacion de acido no resuelve el problema ambiental
sino existe mercado, el perfil debe incluir informacion
acerca del destino del acido fabricado. Debe indicarse
tambien porque no se evaluaron otras alternativas y si
lo hicicieron, deben reportarse. Alternativas mas
costosas como la simple neutralizacion con caliza, cal,
etc. u otros metodos de fijacion del azufre, son sin
embargo las unicas soluciones difinitivas.
- ---------------------------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------
Respuesta
- -----------------------------------------------------
<C>
4.1.1/3B (Pagina 100).
La Tabla No. 2.1.4 ha sido reemplazada por la
Tabla No. 2.1.6/1 (Pagina 41), que muestra los
resultados de analisis efectuados en el
Laboratorio de la Universidad Agraria.
- -----------------------------------------------------
La respuesta se encuentra en el Proyecto No 1,
Capitulo V, Pagina 155 (nuevas plantas de acido
sulfurico).
- -----------------------------------------------------
La respuesta se encuentra en le Proyecto No. 1,
Capitulo V, Pagina 155, (nuevas plantas de acido
sulfurico).
- -----------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
No. Pag. Sec. Descripcion Observacion
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
23 El proyecto con codigo 119, contempla el tratamiento de
soluciones muy acidas en la Planta de Cadmio para evitar
su vertimiento al rio. Debe adjuntarse un diagrama de
flujo y balance metalurgico que demuestre que el acido
adicionalmente alimentado a esa planta no rebasara su
capacidad y finalmente se vertira al medio receptor,
ello implica que solo se estaria modificando el punto
de vertimiento, mas no la carga contaminante.
- ---------------------------------------------------------------------------------------------------------------
24 En la descripcion del proyecto con codigo 123, debe
incluirse la composicion quimica del nuevo efluente una
vez recuperados Cu yAg, para aserar que se ha controlado
la contaminacion.
- ---------------------------------------------------------------------------------------------------------------
25 En la descripcion del proyecto con codigo 118, debe
incluirse la composicion quimica pH, TSS del nuevo
efluente una vez terminado el tratamiento, para asegurar
que se ha controlado la contaminacion.
- ---------------------------------------------------------------------------------------------------------------
26 El la descripcion del proyecto con codigo 118, debe
incluirse la composicion quimica, pH, TSS del nuevo
efluente una vez terminado el tratamiento, para
asegurar que se ha controlado la contaminacion.
- ---------------------------------------------------------------------------------------------------------------
27 En la descripcion del proyecto con codigo 118, debe
incluirse la compcosicion quimica, pH, TSS del nuevo
efluente una vez terminado el tratamiento,
- ---------------------------------------------------------------------------------------------------------------
<CAPTION>
- ----------------------------------------------------
Respuesta
- ----------------------------------------------------
<C>
No es proyecto, la observacion se refiere al
efluente con codigo No 119 y explica por si solo
con el Proyecto No 7, Capitulo V, Pagina 197.
- -----------------------------------------------------
El el Proyecto No 8 (Pagina 198); Planta de
Tratamiento de Efluentes Liquidos Industriales,
que vertera un efluente final al rio Mantaro
dentro de los Niveles MaximosPermisibles.
- -----------------------------------------------------
Se detalla en el Proyecto No 10 del Capitulo V
donde se considera una recirculacion de este
efluente.
- -----------------------------------------------------
Repeticon de la pregunta 25.
- -----------------------------------------------------
Respuesta similar a la Pregunta No 24.
- -----------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
No. Pag. Sec. Descripcion Observacion
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Para asegurar que se ha controlado la contaminacion. Se
menciona que se han realizado estudios por la firma
ECOLAB S.R.L., porque no se ha adjuntado los
resultados. Debe incluirse tambien un plano que indique
la ubicacion relativa de la Planta (Cochabamba).
- ----------------------------------------------------------------------------------------------------------------
28 En la descripcion del proyecto con codigo 124, debe
incluirse lo composicion quimica, pH, TSS del nuevo
efluente una vez terminado el tratamiento, para asegurar
que se ha controlado la contaminacion.
- ----------------------------------------------------------------------------------------------------------------
29 En la descripcion del proyecto con codigo 136, se cuenta
con el tiempo de construccion y el costo estimado, como
entonces no se incluyen las dimensiones, 5 millones de
dolares es ciertamente una cifra elevada para un muro de
contencion.
- ----------------------------------------------------------------------------------------------------------------
30 El proyecto con codigo 135, tiene un caudal sumamente
alto junto con concentraciones de metales que esta muy
por encima del LMP. Sin embargo, no se describe sobre
el tratamiento, inversion, cronograma, etc. de que sera
objeto este efluente. Simplemente se indica que se hara
igual que "el efluente X o neutralizacion con lechada
de cal". Cosideramos que esta es una omision sumamente
grave porque se trata de uno de los principales
efluentes conlaminates que se vierten rectamente al rio
Mantaro.
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
- ----------------------------------------------------
Respuesta
- ----------------------------------------------------
<C>
- ----------------------------------------------------
Se detalla en la Pagina 211 con le Proyecto No
11 (Capitulo V), donde se indica que el efluente
final sera tratado segun el Proyect No 8 (Planta
de Tratamiento de Efluentes Liquidos).
- ----------------------------------------------------
Error en el cuestionario de las observaciones,
la misma que fue absuelta en el MEM, el monto
debe ser US$ 5,000 (Cinco Mil Dolares). Se
detalla en el Proyecto No 9 del Capitulo V.
- ----------------------------------------------------
Respuesta similar a la pregunta No 24.
- ----------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
No. Pag. Sec. Descripcion Observacion
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
31 En la descripcion del proyecto con codigo R4, debe
incluirse la composicion quimica, pH, TSS del nuevo
efluente una vez terminado el tratamiento, para asegurar
que se ha controlado el contaminacion. Es de suponerse
que se cuenta con la informacion del Estudio realizado
por el Dpto. De Inv. Metalurgicas.
- ----------------------------------------------------------------------------------------------------------------
32 En la descripcion proyecto con codigo R4, incluirse la
composicion quimica, pH, TSS del nuevo efluente comparado
con la practica anterior. Observar tambien que la
concentracion de Cu esta aun sobre el LMP.
- ----------------------------------------------------------------------------------------------------------------
33 Se cita varias veces al EVAP como fuente de datos de
concentracion de metales y se senala al mismo tiempo
como fecha Abril `96-Junio'96. El EVAP fue realizado en
Marzo de 1995.
- ----------------------------------------------------------------------------------------------------------------
34 Si bien el cronograma de inversiones de la tabla 5.1
indica que se invertira un total de 2 millones de US$
para rehabilitar el area afectada por los humos, no se
explica como se hara ello. No hay perfil del proyecto
ni tampoco un diagnostico apropiado. Ver nota 20 en
este mismo cuadro.
- ----------------------------------------------------------------------------------------------------------------
35 98 ANEXOS La tabla que resume (no tiene No.), las
medidas/inversiones de mitigacion es incompleta, se
asemeja mas a un indice porque hace referencias a otras
secciones del texto y no registra ni las medidas ni el
costo en todos los casos.
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
- ----------------------------------------------------
Respuesta
- ----------------------------------------------------
<C>
Error de tiopo en el PAMA, debe decir R-1 y se
consigna en el Proyect No. 5 del Capitulo V
(Pag. 188).
- ----------------------------------------------------
Se consigna en el Proyecto No 5 Capitulo V (Pag.
188).
- ----------------------------------------------------
Se efecuaron las correcciones correspondientes.
- ----------------------------------------------------
Se explica por si solo en el Proyecto No 4 del
Capitulo V (Pagina 178).
- ----------------------------------------------------
Se explica en el Capitulo V, segun Talba 5.1.1
(Pag. 141).
- ----------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
No. Pag. Sec. Descripcion Observacion
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
36 El nuevo sistema INBA propuesto para la granulacion de la
escoria usa una relacion agua/escoria de 10, debe
indicarse cual es el valor de esta relacion con la
practica actual. Lo emnos que debe indicarse en una
propuesta de 6.5 millones de US$ es el diagrama de flujo
y balance de materias. Indicar si el nuevo sistema
implica un nuevo sistema ("de punta") de granulacion o
es simplemente un buen metodo de recuperacion de agua
que nuna se implemento anteriormente. Ello permite
establecer si el cronograma propuesto es correcto.
- ----------------------------------------------------------------------------------------------------------------
37 El proyecto de Cierre de Depositos de escorias de Cu y
Pb, menciona varios estudios que estan siendo
realizados. Debe incluirse el Estudio de Factibilidad
quimica de esos materiales. Debe tambien incluirse un
Estudio de construccion, "sand blasting" (actualmente en
practica), etc.
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
- ----------------------------------------------------
Respuesta
- ----------------------------------------------------
<C>
La relacion es 1:40, es tecnologia de punta y
uno de estos sistemas opera en Hoboke, Belgica,
el diagrama de flujo y balance se detalla en el
Proyecto No 12 del Capitulo V (Pagina 212). El
equipo principal del sistema es a pedido y su
constuccion demora de 8 a 12 meses.
- ----------------------------------------------------
De acuerdo al reporte de la consultora Rescan
S.A. las escorias son quimicamente estables
Proyecto No 13, (Pagina 220). El uso
alternativo de escorias se ha estudiado en le
Empresa por mas de 30 anos encontrandose su
factibilidad en multiples usos como los que se
indican en las obervaciones, e incluso en la
fabricacion de cemento y lana de vidrio. Si bien
a nivel experimental dio resultados positivos,
su altocosto de procesamiento y limitado mercado
para estos productos, no lo hace viable.
- ----------------------------------------------------
</TABLE>
<PAGE>
[LOGO] Empresa Minera del Centro del Peru S.A.
GERENCIA CENTRAL DE OPERACIONES
COMPLEJO METALURGICO LA OROYA
================================================================================
PROGRAMA DE ADECUACION
Y MANEJO AMBIENTAL
PAMA
================================================================================
1996
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Resumen Ejecutivo I
- --------------------------------------------------------------------------------
EMPRESA MINERA DEL CENTRO DEL PERU S.A. (CENTROMIN PERU S.A.)
COMPLEJO METALURGICO LA OROYA
PROGRAMA DE ADECUACION Y MANEJO AMBIENTAL (PAMA)
RESUMEN EJECUTIVO
INTRODUCCION
o CENTROMIN PERU S.A. se creo el 01 de nero de 1974 como una Empresa Estatal de
Derecho Privado y como tal se rige por la Ley de la Actividad Empresarial del
Estado (Ley No 24948) y demas dispositivos legales vigentes aplicables. Esta
dedicaba a la actividad minero-metalurgica no ferrosa conforme a lo
establecido en la Ley General de Mineria. Opera siete (7) centros mineros y
cuya produccion de concetrados junto con toros de terceros son procesados en
su Complejo Metalgurgico La Oroya, donde se obtiene (11) metales y (9)
subproductos que comercializa en los mercado interno y externo.
o El Complejo Metalurgico La Oroya esta localizada en la Region Andres Avelino
Caceres (Departamento de Junin), sobre el falnco oriental de los Andes
Orientales a 3 750 m.s.n.m., al N.E. y a 175 km. De la ciudad de Lima;
Provincia de Yauli, Distrito de La Oroya en un emplazamiento caracterizado por
una topgrafia muy accidentada.
MARCO LEGAL
o Centromin Peru S.A., esta obligada a cumplir lo dispuesto en el Codigo del
Medio Ambiente y los Recursos Naturales (D.Leg. No 613), Titulo XV del T.U.O
de la Ley General de Mineria (D.S. No 014-95-EM) su reglamento y
modificaciones (D.S. No 016-93-EM y No 059-93-EM), R.M. No 011-96-EM/VMM
Niveles maximos permisibles para efluentes liquidos mienro metalurgicos (NMP)
y RM., No 315-96-EM/VMM (Niveles maximos permisibles de elementos y compuestos
presentes en emisiones gaseosas provenientes en las unidades
minero-metalurgicas).
o El Ministerio de Energia y Minas (M.E.M.), como Autoridad Competente del
Sector, ejerce sus funciones normativas de control, de fiscalizacion y
asesoramiento que el Decreto Legislativo No 613 le otorga a traves de la
Direccion General de Asuntos Ambientales (D.G.A.A.) y la Direccion General de
Mineria (D.G.M).
ESTRUCTURA Y DESARROLLO
o El PAMA ha sido estructurado v desarrollado considerando los lineamientos
dados en la Guia Ambiental correspondiente, asi como las recomendaciones y
sugerencias de los funcionarios involucrados del Sector, en un comun esfuerzo
para cumplir satisfactoriamente y a cabalidad lo normado en los dispositivos
legales viegentes. Contiene en siete (7) capitulos la informacion general, las
acciones e inversiones necesarias para incorporar a las operaciones y procesos
metalurgicos los adelantos tecnologicos y/o medidas alternativas que tenga co-
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Resumen Ejecutivo II
- --------------------------------------------------------------------------------
Mo proposito reducir o eliminar las emisiones y/o vertimientos para poder
cumplir con los Niveles Maximos Permisibles establecidos por la Autoridad
Competente.
COMPONENTES AMBIENTALES
o Las actividades del Complejo Metalurgico La Oroya, originan emisiones gaseosas
con materiales particulados, efluentes liquidos y residuos solidos que afectan
a la calidad del aire, los cursos de agua receptores y los suelos.
o El ambiente fisico del emplazamiento se caracteriza por tener una topografia
agreste, surcado por lor ios Yauli y Mantaro. El clima es firo, seco entre los
meses de mayo a octubre y lluvioso de noviembre a abril. Los vientos son de
baja velocidad y de direccion predominante Sur-Este.
El agua para uso domestico tiene como fuente el rio Tishgo (185 1/s), mientras
que para uso industrial (1 076 1/s) se tiene los rios Mantaro, Tishgo y el
manantial de Cuchimachay. Para emergencias existen las fuentes del subsuelo
Hidro y Mayupampa. Gran parte de los efluentes liquidos domesticos e
industriales, se descargan sin ningun tratamiento a los rios Yauli y Mantaro.
El aire recibe la descarga de las emisiones gaseosas y material particulado
que se generan en los procesos metalurgicos que son diariamente monitoreadas
en cinco estaciones (Huancha, Sindicato, Hotel Inca, Cushurupampa y Casaracra)
distribuidas en un radio de 10 km del punto de ubicacion del emisor principal
(chimenea de 167,5 m de alto).
Las rocas mas antiguas del emplazamiento pertenecen al Grupo pucara
sobreyaciendo a las rocas del Grupo Mitu. Estan presentes tambien rocas del
Grupo Goyllarisquizga y del Grupo Machay. Pueden apreaciarse en las
proximadades al Complejo, afloramientos importantes de roca clacarea con muy
pequenas areas de suelo con escasa vegetacion.
o El ambiente biologico del eplamzamiento se enmarca en la bioregion de la
Serrania Esteparia en las vertientes Occidentales de los Adnes entre los 1000
y 3800 m.sn.m, caracterizada por la presencia de vegetacion que forma una
estepa de gramineas que constituyen los pastos naturales. Los rios son de
aguas rapidas y tormentosas que disminuyen su temperatura con la altura
originando diversos habitats acuaticos.
En La Oroya con excepcion de la forestacion conducida por Centromin Peru S.A.
la forla y la fauna es escasa, debido a sus caracteristicas
geologicas,altitud, topografia y en parta a la accion de las emisiones
gaseosas de la Fundicion, lo que contrasta con el escenario de gramieneas y
herbaceas de habitos perennes que se encuentra en Casaracra a 10 km de
distancia. Las aguas del rio Tishgo en este lugar son utilizadas en
acuicultura de la trucha arcoiris, observandose adiconalmente la presencia de
gviotas de la puna, aves que se ven a lo largo de las riveras del rio Mantaro
incluso hasta las proximadades de l Fudicion. Al Sur de La Oroya siguiendo el
curso del rio mantaro en un radio de 7 km., no se ha observado especies
representativas de fauna, ni existe vegetacion tipica con excepcion de escas
presencia de ichu. En general las condiciones del emplazamiento y su entorno,
asi como la calidad de sus suelos, no permiten el uso de la tierra para fines
productivos, habiendose efectuado forestaciones con plantas traidas por
Centromin Peru, de otros lugares o ciudades proximas, algunas de las cuales se
han adaptado al lugar. Ademas, las pracitcas ganaderas
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Resumen Ejecutivo III
- --------------------------------------------------------------------------------
Desordenas y el sobrepastoreo de algunas areas, limitan la regenreracion
natural de los pastos, no favoreciendo el mejoramiento del habitat para un
mayor desarrollo de la flora y fauna de esta zona.
o El ambiente socio-economico del emplazamiento incluye a los grupos humanos de
la Comunidad de huari y Hacienda Quilla en la ruta hacia Huancayo, la
Comunidad de Hauynacancha en la ruta hacia Lima y la Hacienda Antahuaro,
Paccha y Casaracra en la ruta hacia Tarma.
De los 67 700 habitantes de la Provincia de Yauli, 30 900 corresponden a La
Oroya de los cuales 3 215 son trabajadores de Centromin Peru S.A y de quienes
dependen economicamente 13 728 personas.
La Oroya se divide en dos grandes sectores: La Oroya Antigua asentada en la
margen izquierda del rio Manataro al Nor-Oeste de las instalaciones de la
Fundacion y la Oroya Nueva en la margen derecha. A 11 km., de la Oroya en la
ruta hacia Lima se ubica el proyecto de viviendas "Curipata", patrocinado por
Centromin Peru S.A. en beneficio de sus trabajadores, dentro de un plan de
reordenamiento urbano.
El emplazamiento se caracteriza por estar ubicado en la unica ruta de acceso a
Lima y otras ciudades de la Costa y de retorno desde Lima a las ciudades de
toda la Sierra y Selva Central.
Las actividades productivas del Complejo Metalurgico La Oroya sustentan la
existencia de una zona urbana importante. Las acitividades artesanales son
practicamente inexistentes destacando las acitvidades comerciales (987
establecimientos) de servicios (228 establecimientos) e industriales (83
establecimientos). Destaca la presencia de empresas de Servicios Publicos
(Telefonos, Correo, Bancos, Transportes, y Emisoras Radiales y de TV locales).
Existen 56 escuelas y colegios, a los que asisten un total de 13 192 alumnos
de todos los niveles. Existe un Policlinico del IPSS con 72 camas, el
Ministerio de Salud cuenta con tres centros de salud y Centromin Peru S.A.,
cuenta con un Hospital con 50 camas.
o El ambiente de interes humano del emplazamiento, esta reducido a constituir
una ruta de accesoa ciudades y lugares donde existen recursos arqueologicos
(Tarma, Jauja, Huancayo), areas naturales protegidas, parques y reservas
nacionales (Bosque de rocas de Huayllay en Cerro de Pasco y Lago de
Chinchaycocha en Junin), circuitos turisticos (Lima-Tarma-Valle de Chancahnayo
y Valle del Mantaro) y razones socio-economicas.
OPERACIONES METALURGICAS
o El Complejo Meetalurgico esta conformado por (3) circuitos integrados para el
tratamiento de concentrados de Cobre, Plomo y Zinc. En 1995 se procesaron 255
109 t de concentrados de Cobre, 191575t de concentrado de Plomo y 154 710t de
concentrado de Zinc. Se estima que para 1996 el procesamiento de concentrados
alcance el mismo orden de las cifras mencionadas.
o Las caracteristicas de los coentrados tratados, de naturaleza polimetalica,
colocan al Complejo dentro de las cuatro (4) del mundo, capaces del procesar
este tip de materia prima, obteniendo productos de reconcida calidad
internacional.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Resumen Ejecutivo IV
- --------------------------------------------------------------------------------
IMPACTOS AMBIENTALES
o Se ha identificado tres generadores de impacto: Las emisiones de gases y
material particulado, los efluentes liquidos y los residuos solidos. En 1995
se descargaron a la atmosfera por la chimenea principal 899,8 t/dia de SO2 y
8,9 t/dia de material particulado, representando este ultimo solo el 3% del
total generado. El 7,2% de azufre que ingreso al proceso, se fijo en forma de
acido sulfurico, el 4,3% se fijo en los residuos solidos y el 80,5% se
descargo a la atmosfera en forma de anhidrido sulfuroso. Las emisiones
gaseosas fugitivas impactan igualmente al aire, pero dificiles de cuantificar
por no ser regulares y generalmente se dispersan rapidamente.
o Los efluentes liquidos generados en la Fundicion se descargan al rio mantaro
por (37 emisores y los generadores en las Refinerias de Cobre y Plomo se
descargan por (3) emisores al rio Yauli. De ellos (6) en la Fundicion y uno
(1) en la Refineria de Cobre, se caracterizan por se los principales
contribuyentes de contaminacion. Debe indicarse, que ambos rios en especial el
Yauli, llegan a La Oyora con un alto contenido de contaminantes industriales.
o Los residuos solidos industriales: Escorias de Cobre y Plomo y pulpa de
Ferritas de Zinc, se depositan en la zona de Huanchan a ters (3) Km., al Sur
de la Fundicion. El Trioxido de Arsenico en cambio, se deposita en la zona de
Vado distante 9 km., al Norte de la Fundicion. La basura industrial es
incenerada tanto en la Fundicion como el la Refineria de Cobre y Plomo,
mientras que la basura domestica es depositada en el lugar denominado
Cochabamba, distante 9 km., al Sur de la Fundicion. Estos depositos tnato de
residuos solidos como de basura, por no haber considerado en su disenos
originales los aspectos ambientales, actualmente se constituyen en elementos
que contaminan los suelos y el agua de lso rios que se encuentran proximos a
ellos.
MEDIDAS DE MITIGACION
o Desde 1922 segun las demandas de la epoca, se ha venido incorporando mejoras
ambientales en el Complejo Metalurgico La Oroya sin alcanzar los NMP vigentes
al presente. Las necesidad de mejorar las condiciones ambientales dentro del
area de influencia impulso entre 1981 y 1983 la construccion y puesta en
marcha de la Nueva Planta de Aglomeracion. Entre 1990 y 1992 se iniciaron y
completaron las pruebas metalurgicas para cambiar los indice de las camas de
cobre que han permitido reducir la generacion de SO2 escorias y materiales
particulados en 50 000, 80 000 y 1 40 t/ano respectivamente. En enero de 1994
se concluyo la construccion y montaje de la Nueva Planta de Oxigeno de 312
t/dia de capacidad y en febrero se puso en marcha el reverbero de cobre con
quemadores oxy fuel, reduciendose el consumo de petroleo pesado en 20 000
t/ano. A la fecha, se ha desarrollado un Programa de Modernizacion e
Innovacion Tecnologica, que adiconado a la implementacion de diversas mejo
ambientales que se vienen ejecutando, evidencian un cambio de actitud humana
hacia el manejo ambiental responsable, dirigido a mitigar los impactos
existentes.
o Para mitigar los impactos originados por la descarga de SO2 y materiales
particualdos a la atmosfera, se ha proyectado la construccion de 2 modulos,
para fijar de acuerdo con la norma ambiental el 83% del total de SO2 generado,
produciendo un volumen de 505 000
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Resumen Ejecutivo V
- --------------------------------------------------------------------------------
Totaliza 90 millones de US$ y conforme al cronograma los modulos entrarian en
operacion en los anos 2003 y 2005.
o Para mitigar los impactos ambientales originados por los efluentes liquidos de
la Fundicion que se descargan al rio Mantaro, se proyecta la construccion de
una Planta de Tratamiento, solucion de tecnologia comprobada que ha sido
propuesta por la Consultora ECOLAB SRL, donde se ha considerado, la reduccion
de volumenes de agua industrial, la recirculacion parcial del agua de
recirculacion y la eliminacion de cinco efluentes. El costo del proyecto
asciende a 3,3 millones de US$, de los cuales 2,5 corresponden a la Planta, su
implementacion se ha programado para los anos 1998-1999.
o La mitigacion planteada para los impactos de contaminacion liquida y solida
del rio Mantaro, originados por la disposicion de escorias de cobre y plomo,
plantea el uso de 2 dessguadores rotatorios INBA y n nuevo sistema de
transporte para escorias granuladas a un costo de 6,5 millones de US$. El
proyecto se ejecutara en el periodo 1997-1998.
o El proyecto para Abandono de los Depositos de Escorias propuesto por RESCAN
PERU S.A., plantea la estabilizacion de taludes, obras de captacion de
efluentes de infiltracion y escorrentias que comtaminan suelo y aguas, con un
costo de 5,25 millones de US$. El proyecto que considera adicionalmente, la
recuperacion y restauracion del area, se implemenatra en el periodo 1997-2001.
Para el nuevo deposito ubicado en Cochabamba y cuya construccion se iniciara
el ano 2002, se tiene una inversion de 25, millones de US$.
o Para le proyecto de Abandono de los Depositos de Trioxido de Arsenico, se
efectuara el encapsulamiento de los residuos de Malpaso y Vado, con
geotextiles y geomembranas, solucion propuesta por ADI INTERNATIONAL INC., con
una inversion de 8,7 millones de US$. Se contempla tambien, la construccion de
un nuevo deposito en el ex-aeropuerto de Vado, por un monto de 2,0 millones de
US$, que se ejecutara a partir del ano 1999. Este tipo de solucion es
recomendad por la EPA de los Estado Unidos.
o El proyecto de Abandono de las Ferritas de Zinc, considera los trabajos de
estabilidad, controlo de efluentes acidos y el de arrastre de particulas por
accion eolica. La solucion planteada por RESCN PERU S.A., y que alcanza la
suma de 5,6 millones de US$, incluye la respectiva restauracion del area y
sera ejecutada en el periodo 1997-2000. Sin embargo, debido al alto valor de
los contenidos metalicos de las Ferritas de Zinc (230 millones de US$), como
medida alternativa de remediacion, se ha contemplado el reprocesamiento de las
mismas con tecnologia de punta, aspecto que se viene evaluando.
PLAN DE CIERRE
o La importancia que el Complejo Metalurgico tiene dentro del desarrollo
soci-economico de la region, hacne que la probabilidad de cierre de sus
operaciones no sea predecible en el corto ni mediano plazo.
o La decision de cierre, estar suepeditada a considerar no solo aspectos, sino
tambien aspectos economicos, y politicos, que involucran acciones de
planeamiento detallado, cuyo proceso de ejecucion podria realizarse en forma
glogal o parcial. En esta direccion, se ha concebido y estruturado un Plan de
Cierre/Abandono eficaz, dirigido a proteger la salud y seguridad publica,
mitigar los efectos ambientales detrimentales y promover su pronta recu-
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PAMA COMPLEJO METALURGICO - LA OROYA Resumen Ejecutivo VI
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Peracion, a partir del cese de las operaciones metalurgicas, dentro de un
marco tecnico y encomicno factible. Asi mismo, se considera la utulizacion
productiva futura de las areas del emplazamiento.
PLAN DE MONITOREO DE EMISIONES Y EFLUENTES
o Centromin Peru S.A.,es responsible de implementar y mantener programas de
monitoreo a tiempo real, basados en sitemas de muestreo adeacuado y en
analisis mecanicos, fisicos y quimicos, permitiendo la realizacion de una
evaluacion y control de emisiones gaseosas, efluentes liquidos, residuos
solidos, ruido y otros elementos que puedan ser generados dentro del Complejo
Metalurgico La Oroya y que afecten al entorno de su influencia.
o El plan para el monitoreo ambiental del Complejo Metalurgico, que ha sido
elaborado en base a los protocols emitidos por la autoridad respectiva, sera
reajustada conforme ser vayan implementando los proyectos de mitigacion. La
infraestructura exitente permite cumplir con las exigencias vigentes,
proviendose su modernizacion permantente y la adquisicion de nuevos
instrumentos. El plan contempla asi mismo, un programa de capacitacion
tecnico, legla y de relaciones institucionales.
INVERSIONES
o Para solucionar el problema ambiental del Complejo Matalurgico, se ha
considerado dos (2) principales rubros de inversion.
El primer, una modernizacion con cambio de tecnologia de los procesos, con
la finalidad de lograr mejores niveles de comepetividad y mejora
ambiental, principalmetente para la concentracion de SO2, facilitando de
esta manera la fabricacion de acido sulfurico. Estimandose para tal fin
una inversion de 141,0 millones de US$.
El segundo, para el Programa de Adecuacion y Manejo Ambiental (PAMA), con
una inversion estimada de 129,1 millones de US$, el cual en gran medida
complementara con la modernizacion de los procesos.
o Ambos rubros que totalizaron un monto de 270,1 millones de US$, se ha
programado para el perido 1997-2006. Esta cantidad estimada, fue confirmado
por la firma consultora KILBORN-SNC-LAVALIN EUROPE, en octubre de 1996.
o De acuerdo a ley, se tiene una obligacion minima para el PAMA, del equivalente
al 1% del valor de las ventas anuales. En ese sentido, el Complejo le
conrresponderia un monto de inversion annual minima de 4,5 millones de US$.
o Si se tiene en cuenta que el nivel de inversion que realiza el Complejo para
su continuidad operativa mejora de proceso y control amibiental, ha sido del
roden de los 8 a 16 millones de US$ anuales en los ultimos anos, sin tener en
cuenta los proyectos de modernizacion ejecutados que superan el monto senalado
para el PAMA, se considera que el programa presentado es viable y no afectara
los resultados economicos de la gestion empresarial.
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PAMA COMPLEJO METALURGICO - LA OROYA Resumen Ejecutivo VII
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CONCLUSIONES
o La ejecucion del presente PAMA, permitira alcanzar los NMP exigidos por las
autoridades del sector.
o El programa es viable desde el punto de vista tecnico, al ser necesario
tecnologias reconocidas y probadas. En el aspecto economico no significa un
deterioro de la gestion empresarial y sera completado en los 10 anos asignados
para la adecuacion de las operaciones metalurgicas.
o El monto de ivnersion para el PAMA sera de 129,1 millones de US$ y de 141,0
para la modernizacion.
o Las emisiones gaseosas, constituyen el principal agente contaminante del
emplazamiento, razon por la cual, el 70% de la inversion del programa esta
orientado a la fijacion del SO2, enforma de acido sulfurico, cuya demanda de
mercado esta garantizado, por su aplicacion a nivel mundial en megaproyetos de
yacimientos de Cobre, oreintados a la lixiviacion.
o La implementacion del programa, permitira colocar al Complejo Metalurgico,
entre la empresas que garantizan un desarrollo sustentable de su emplazamiento
y entorno, mejorando el habitar y el nivel socio-economico de las futuras
generaciones.
<PAGE>
INDICE
<TABLE>
<S> <C>
CAPITULO I
1. INTRODUCCION 001
1.1 Antecedentes 001
1.2 Objetivos del PAMA 002
1.3 Breve Resumen del Emplazamiento del Complejo Metalurgico La Oroya 002
1.4 Resena Historica 003
CAPITULO II
2.Descripcion de los Componentes Ambientales 010
2.1 Ambiente Fisico 010
2.1.1 Topografia - La Oroya 010
2.1.2 Abastecimiento Hidrico 010
2.1.3 Clima y Meteorologia 011
a) Direccion y Velocidad del Viento 012
b) Precipitaciones 012
c) Temperaturas y Humedades Relativas 013
d) Presiones Barometicas 013
2.1.4 Aire 013
Materiales Particulados en Suspension (MPS) 014
Contenidos Metalicos en los MPS 014
2.1.5 Geologia y Sismicidad - La Oroya 015
a) Geologia 015
b) Plegamiento y Fallamiento 015
c) Geomorfologia 016
d) Area Sismica 016
2.1.6 Evaluacion de Suelos 016
2.2 Ambiente Biologico 017
2.2.1 Caracterizacion 017
a) Ecosistema Terrestre 017
</TABLE>
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<TABLE>
<S> <C>
b) Ecosistema Acuatico 018
2.2.2 Ecosistemas - Complejo Metalurgico La Oroya y su entorno 018
a) Ecosistema Terrestre 018
b) Ecosistema Acuatico 019
2.3 Ambiente Socio Economico 020
2.3.1 Descripcion del Componente Socio-Economico 020
a) Ubicacion y descripcion del Complejo Metalgurgico La Oroya como
Asentamiento Minero y los Asentamientos Humanos de
su entorno
b) Actividad Economica de La Oroya y su entorno 024
c) Infraestructura habitacional y de Servicios Basicos - La Oroya 026
2.4 Ambiente de Interes Humano 032
2.4.1 Recursos Arqueologicos 032
2.4.2 Areas Naturales Protegidas 032
ANEXOS - Capitulo II
CAPITULO III
3. Descripcion de las Operaciones Metalurgicas 053
3.1 Caracteristicas del Complejo 053
3.2 Incremento de la capacidad instalada y produccion historica 053
3.3 Materia prima tratada en los circuitos de fundicion 053
3.3.1 Concentrados de cobre 054
3.3.2 Concentrados de plomo 055
3.3.3 Concentrados de zinc 055
3.4 Descripcion del proceso productivo - extractivo 055
3.4.1 Circuito de cobre 055
3.4.2 Circuito de Plomo 057
3.4.3 Circuito de Zinc 058
3.4.4 Procesos asociados: 060
3.5 Mediciones de parametros de equipos de recuperacion de polvos, monitoreo de 062
emisiones gaseosasy efluentes liquidos
3.6 Actividades/Instalaciones de apoyo a las operaciones 063
3.6.1 Plantas de generacion de energia 063
3.6.2 Laboratio Analitico 063
</TABLE>
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<TABLE>
<S> <C>
3.6.3 Talleres 063
3.6.4 Agua industrial y potable 064
3.6.5 Alcantarillado y disposicion de basura 064
CAPITULO IV
4. Resumen de la evaluacion y analisis de los impactos ambientales 072
4.1 Fuentes Generadores de Impactos 072
4.1.1 Emisiones Gaseosas y Material Particulado 072
a) Emisiones por la Chimenea Principal 073
b) Emisiones por las Chimeneas Secundarias 075
c) Emisiones Fugitivas 076
4.1.2 Efluentes Liquidos 077
4.1.3 Residuos Solidos 081
a) Escorias de Cobre y Plomo 081
b) Trioxido de Arsenico 082
c) Residuos Lixiviados de Zinc (Ferritas de Zinc) 083
d) Otros Residuos (Residuo de Talio, Basura Industrial y Domestica) 085
4.2 Evaluacion de los Impactos Ambientales 086
4.2.1 Impacto sobre el Ambiente Fisico 086
4.2.2 Impacto sobre el medio ambiente biologico 087
4.2.3 Impacto sobre el ambiente socio-economico 088
4.2.4 Imapacto sobre el ambiente de interes humano 088
CAPITULO V
5 Plan de medidas de mitigacion 138
5.1 Introduccion 138
5.2 Proyectos ejecutados destinados al control y reduccion del Impacto Ambiental 138
5.3 Relacion de Proyectos para el paln de medidas de mitigacion - montos de inversion 145
5.3.1 Por emisiones gaseosas y material particulado 146
Proyecto No 1 Nuevas Plantas de Acido Sulfurico 146
Proyecto No 2 Eliminacion de gases fugitivos de la Planta de Coque 146
</TABLE>
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<TABLE>
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Proyecto No 3 Uso de oxigeno gaseoso en la Planta de Residuos Anodicos 147
Proyecto No 4 Area afectada por los humanos 147
5.3.2 Por Efluentes Liquidos
Proyecto No 5 Planta de Tratamiento del agua madre de la Refineria de Cobre 147
Proyecto No 6 Sistema de recirculacion de agus de refrigeracion 148
Proyecto No 7 Manejo y disposicion de la solucion de particion de la Refineria de Plata 148
Proyecto No 8 Planta de tratatmiento de efluentes liquidos industriales de Fundicion 149
y Refineria - La Oroya
Proyecto No 9 Muro de contencion de los ldos de plomo en la Planta Zileret - Divison 149
de Zinc
Proyecto No 10 Recirculacion del agua de utilizada en la granualcion de speiss 149
del horno de espumaje - Fundicion de Plomo.
Proyecto No 11 Nuevo sistema de lavado de anodos - Refineria de Zinc 150
5.3.3 Por Residuos Solidos.
Proyecto No 12 Manejo y disposicion de las escoria de cobre y plomo 150
Proyecto No 13 Abandono del deposito de escorias de cobre y plomo 151
Proyecto No 14 Deposito de Tiroxido de Arsenico, abandono del depositos de 151
Malpaso, cierre del deposito de Vado y nuevo deposito de Vado.
Proyecto No 15 Ferritas de Zinc 152
Proyecto No 16 Tratamiento de aguas servidas y disposicion de basura en La Oroya. 154
5.4 ANEXOS - Detalle de los proyectos No-1 al 16, paginas 155 al 247
CAPITULO VI
6. Plan de cierre 248
6.1 Escenario 248
6.2 Alcance 248
6.3 Situacion Actual 248
6.4 Objetivo 249
6.5 Plan de cierre 249
6.5.1 Fases de Cierre 249
6.6 Presupuesto de inversiones 250
</TABLE>
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<TABLE>
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6.7 Cronograma de ejecucion 250
6.8 Mitigacion propuesta 250
6.9 Analisis economico 251
CAPITULO VII
7. Plan de monitoreo de emisiones y efluentes 256
7.1 Objetivo 256
7.2 Plan de Monitoreo 256
7.2.1 Recursos Humanos 256
7.2.2 Infraestrutura y/o equipos 256
7.2.2.1 Para Emisiones 256
7.2.2.2 Para Calidad del Aire 257
7.2.2.3 Para Efluentes 257
7.2.2.4 Equipos Nuevos a ser Adquiridos 258
7.2.3 Protocolos Existentes 258
7.2.3.1 Para Emisiones y Calidad de Aire 258
7.2.3.2 para Calidad de Agua 259
7.2.3.3 Otros monitoreos 259
7.2.4 Estaciones y/o Puntos de Monitoreo 259
7.2.4.1 Emisiones 260
7.2.4.2 Efluentes 261
7.2.5 Capacitacion 261
</TABLE>
<PAGE>
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CAPITULO I
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<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo 1 Pag. 1
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COMPLEJO METALURGICO LA OROYA
1 INTRODUCCION
1.1 Antecedentes
La Empresa Minera del Centro del Peru S.A. (CENTROMIN PERU S.A.), fue
creada el 01 de enero de 1974 sobre la base del negocio mienor expropiado
y psoteriormente compensado a la sucursal en el Peru de la Cerro de Pasco
Corporation.
CENTROMIN PERU S.A., es un empresa estatal de derecho privado, organizada
como una sociedad anonima (D. Leg. No 216), inscrita en la Ficha 10180 del
Registro de las Sociedades Mercatiles de los Registros Publicos de Lima y
en asiento 4, foja 424, Tomo 14 del Libro de Sociedades de Registro
Publico de Mineria.
Se rige bsicamente por su ley organica, Decreto Ley No 21117; su Estuto
Social, Decreto Supremo No 019-82-EM/VM; la Ley de la Actividad
Empresarial de Estado, Ley No 24948 y su Reglamento, Decreto Supremo No
027-90-MIPRE y otras normas legales complementarias, accesorias y
modificatorias, entre las que principalmente se cuentan la Ley de
Presupuesto de la Republica y las Normas de Austeridad y Operatividad de
cada ano y la Ley de Promocion de la Inversion Privada en las Empresas del
Estado, Decreto Legislativo No 674 y su Reglamento, Decreto Supremo No
070-92-PCM.
Las autorizaciones de funcionamiento, uso de agua y de vertimientos de
residuos industriales son los siguientes:
a) Resolucion de autorizacion de funcionamiento de planta (MEM) R.D. No
155-93-EM/DGM.
b) Autorizacion de uso de aguas (Ministerio de Agricultura)
1. La Oroya - Rio Mantaro - R.S. 853
2. La Oroya - Riachuelo Huaynacancha - R.S. 08
3. Sacco - Riachuelo Sacco - R.S. 460
4. La Oroya - Rio Mantaro - R.A. 027/94
5. Paccha - Rio Tishgo - R.A. 028/94
6. Santa Rosa de Sacco - Rio Yauli - R.M. 01420-77
7. La Oroya - Riachuelo Tinco Cancha - R.A. 086-93
c) Autorizacion de vertimiento de residuos industriales (Ministerio de
Salud)
1. Refineria de Plomo - 023/V-93
2. Alambron - 024/V-93
3. Fundicion y Moldeo de Cobre - 025/V-93
4. Cristalizacionde Sulfato de Cobre - 026/V-93
5. Acido Hidrofluosilisico - 027/V-93
6. Piloto de Cadmio - 028/V-93
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PAMA COMPLEJO METALURGICO - LA OROYA Capitulo 1 Pag. 2
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7. Electrolitica de Zinc - 029/V-93
8. Algomeracion - 030/V-93
9. Residuos Anodicos - 031/V-93
10. Indio - 032/V-93
11. Fundicion de Cobre - 033/V-93
En lo relativo a los aspectos ambientales la empresa esta obligada a
cumplir lo dispuesto en la ley del Codigo del Medio ambiente y los
Recursos Naturales (D. Leg. No 613), Titulo XV del T.U.O. de la Ley
General de Mineria (D.S. No 016-93-EM Y No 059-93 EM), R.M. No
315-96-EM/VMM (Niveles maximos permisibles de elementos y compuestos
presentes en emisones gaseosas provenientes de las unidades
mienerometalurgicas). De igual manera la R.M. No 011-96-EM/VMM (Niveles
maximos permisibles pra efluentes liquidos miner0-metalurgicos).
En concordancia con la normatividad, ambiental para la actividad
metalurgica establecida, presento la Evaluacion Ambiental Preliminar
(EVAP) con fecha marzo de 1995. Habiendo absuelto las observaciones a la
EVAP mediante documentos alcanzados a la Direccion General de Asuntos
Ambientales del Ministerio de Energia y Minas, con fecha 31 de julio de
1995, se fijo como fecha de presentacion del Programa de Adecuacion y
Manejo Ambiental (PAMA) el 30 de Agosto de 1996.
1.2 Objetivos del PAMA
Los principales objetivos que persigue el PAMA son:
o Evaluar la situacion actual de los componentes naturales que puedan
estar siendo afectdos por la actividad minero-mealurgica y otras
actividades complementarias e identificar las fuentes y/o causas del
deterioro ambiental, actual y potencial.
o Establecer acciones para mitigar y prevenir el terioro abmiental con
las inversones necesarias para incorporar a las operaciones y procesos
metalurgicos los adelantos tecnologicos y/o medidas alternativas que
tangan como proposito reducir o elimar las emisiones y/o vertimientos
para cumplir con las normas y procedimientos establecidos por el M.E.M.
o Senalar los procedimientos de ejecucion, de inversiones, de monitoreo y
control de efluentes y de labores de restauracion. Ademas establecer
acciones y medidas de prevencion del deterioro ambiental en situaciones
extremas (Plan de contingencias).
1.3 Breve resumen del emplazamiento del complejo metalurgico La Oroya
Se encuentra ubicado al N.E. de la Capital a 175 Kn., en lazona lata
andina, en el flanco oriental de los andes occidentales, a 3 750
m.s.n.m. en la region Caceres, ocupando una extension de intalaciones
de 9 209 Has., y sus coordenada UTM son;
o Fundicion 8 126 087.1 norte
402 225.3 este
o Refinerias de Cobre y Plomo 8 725 007.5 norte
399 573.6 este
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo 1 Pag. 3
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En los Planos 1.3/1, 1.3/2 y 1.3/3 se muestra el emplazamiento del
complejo metalurgico La Oroya y sus alrededores, en un radio de 10 Km.,
haciendo centro en la chimenea principal de la Fundicion. Estos planos
muestran las curvas de nivel de la topografia de la zona, observando
presencia de cerros que alcanzan hasta 4 400 m.s.n.n.m. y el area de
concesion minera de la unidad de La Oroya. Tambien se arpecia que las
cuenca de los rios Yauli y Mantaro, forman una "Y" cuay interseccion
esta proxima a la fundicion. Los centros poblados y las zonas de
cultivo se encuentran proximos a las cuencas de los rios Yauli, Mantaro
y Tishgo.
1.4 Resena historica
A nivel empresa
o Los principales eventos que antecedieron al establecimiento del
complejo metalurgico Lo Oroya, fueron:
1902 Se inician las operaciones mineras en Cerro de Pasco.
1904 Finalizacion del ferrocarril de La Oroya a Cerro Pasco.
1906 Obtencion de la primera barra de cobre blister en Tnyaharco -
Cerro de Pasco.
1913 se inician las operaciones en Morococha.
1918 Se inician las operaciones en Casapalca.
1922 Se establecio el complejo metalurgico La Oroya.
1937 Se inician las operaciones en San Cristobal, entre otras.
Complejo metalgurico La Oroya
o En 1922 se establecio el complejo metalurgico La Oroya con la
Fundacion de Cobre; en 1928 se construyo la Fundicion de Plomo y en
1952 la Refineria de Zinc.
o A partir de esas fechas, la empresa consciente de los problemas
ambientales, promovio medidas de mitigacion destinadas al control y
reduccion del impacto ambiental de los efluentes y emisones, asi
como al manejo dy disposicion , se fueron construyendo plantas para
la recuperacion de subproductos.
o A continuacion algunsos principales eventos por orden cronologico:
1922 Obtencion de la primera barra de cobre blister en la
Fundicion de Cobre de La Oroya.
1928 Los hornos de manga para plomo comienzan a operar.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo 1 Pag. 4
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1929 Formacion del Departamento de Investigaciones metalurgicas.
1937 Se inicia la refinacion electrolitica de plomo a escala
industrial en la Planta de Residuos Anodicos, la misma que
comienza a operar.
1939 Se inicia las operaciones de la Planta de Acido Sulfurico que
capta los gases de los tostadores de cobre.
1941 * Se instalan precipitadores electorstaticos para la
recuperacion del polvos (sistema de cottrel central).
* La Planta de Antimonio entra en funcionamiento.
1944 La palnta de coque empieza a operar.
1948 Se termina la construccionn de la palnat industrial para la
refinacion electrolitica de cobre.
1950 Se completa la Refineria de Plata.
1951 * Se traslada la Refineria de Plomo a Huaymanta doblando su
capacidad.
* Entra en operacion la Planta de Oxigeno a partir de arire
liquido.
* Se completa la construccion de la planta industrial de
refinacion electrolitica de zinc.
* Se cambia el nombre de la empresa Cerro de Pasco Copper
Corporation pro Cerro de Pasco Corporation.
1952 La Planta electrolitica de Zinc comienza a operar.
1953 Se produce selenio por primera vez a escala comercial.
1955 Se produce telurio pr primera vez a escala comercial.
1957 * Se erige la segunda planta de oxigeno a partir de aire
liquido.
* Se incrementa el ancoho de los hornos reverbero de cobre.
* La planta de espuamdo del plomo inica su opreaciones.
1958 Si instala el sistema de ventilacion en la zona de carga de
los hornos de plomo.
1960 * Se completa el sistema de ventilacion de la Planta de
Aglomeracion.
* La Refineria de Cobre incrementa su capacidad mediante la
instalacion de un generador.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo 1 Pag. 5
- --------------------------------------------------------------------------------
1962 La planta de zinc se expande a 150 TC/dia. (136,4 t/d)
1964 * Se mejora la ventilacion de los peechos de escoria de los
hornos de manga, cnales y pozo de plomo
* Se instala el techo de ladrillos suspendidos en el horno
reverbero de conbre No 2
1965 Se instala el Horno Asarco para fundicion de catodos.
1966 * Un nuevo caldero y precalentador de aire se instala en el
reverber de cobre No 2.
* La venticlaion de la Planta de Aglomeracion es mejorada
mediante la instalacion de lavadores de gases.
* El la Planta de Coque se instalan 10 hornos adicionales.
* El tostador de cama turbelna de zinc es instalado.
1967 * La Nueva Planta de acido sulfurico de 200 t/d comienza a
operar.
* La Planta de Alambron CIDECSA es inaugarado.
* Comienza la modernizacion del Cottrell Central.
1968 * El sistema de extraccion continua tipo "Roy Tapper" es
isntalado en el horno de plomo No 1
* Se completa la construccion de lla Planta de Resuos de
Lixivacion de Zinc.
* La planta Electrolitica de Zinc es expandida de 150 a 200
TC/dia. (181,82t/d)
1969 * El nuevo cottrell caliente de la Planta de Arsenico
comienza a operar.
* La fase I de la Planta de Tratamiento de Polvos se pone en
operacion.
* Un rectificador nuevo de silicion ITE se instala en la
Refineria de Cobre.
* Se completa el programa d modernicazion de Cottrell
Central.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo 1 Pag. 6
- --------------------------------------------------------------------------------
1970 El sistema de extraccion continua de escoria es instalado en
el horno de plomo No 2
1971 El techo de ladrillos suspendidos se instala en el reverbero
No 1
1974 El dia 1ro de enero el Gobierno Peruano nacionaliza la "Cerro
de Pasco Corporation" y funda la "Empresa Minera del Centro
del Peru S.A." CENTIROMIN PERU S.A.
1976 Se amplia la Refineria de Cobre hasta 20 blocks.
1978 * El nuevo Horno Ajax de 048 t/d de catodos de zinc entra en
operacion en la Diviosn de Zinc.
* La Planta de Flotacion de sufuros de zinc y plata fue
puesta en funcionamiento.
* Se instala un nuevo precipitador electrostatico humedo en
la Planta de Acido Sulfurico.
1979 * La unidad de separacion de solidos de 3 380 m3 por dia de
solucion impura de sulfato de zinc entra en operacion.
* Fue instalada una nueva copela en la Planta de residuos
anodicos.
1980 Se interconecta la nueva tuberia de agua de Tishgo.
La planta de Oxignoe tipo GO 800 de 25 t/d, fabricada por la
firma LINDE, entro en operacion.
1981 Se inicia la construccion de la nueva Planta de Aglomeracion.
1983 La nueva Planta de Aglomeracion entra en operacion. Cap. 810
t/d. Reemplaza a 11 maquinas (5 up draft y 6 down draft) por
una sola, tipo up draft con una iversion de US$ 60 millones
1987 Estudio de prefactibilidad del proyecto de la Planta de
Oxigeno quemadores oxy-fuel, efectuado por SNC.
1990 Si inician las pruebas metalurgicas del cambio de indices
metalurgicos en la Fundicion de Cobre. En diciembre de 1990
se optimizan las pruebas.
1991 * Se realizan los ajustes de evaluacion a escala industrial
de los cambios de indices meaturgicos en los lechos de
fusion de cobre.
* Se modifica el horno de plomo No 3. Se cambio de colada
intermitente a colada continua; el diseno antiguo
correspondia a un sifon Arents y el modificado es con cajon
tipoo Roy Tapper.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo I Pag 7.
- --------------------------------------------------------------------------------
1992 o Queda implementado el cambio de indices metalurgicos de
los lechos de fusion de cobre y tomando como base la
produccion de 70 000t/ano de Cu, los logros principales
se muestran en el ano 1994 en el proyecto oxy-fuel
o Se recircula lodos del tanque espesador (provenientes de
los scrubbers de la Planta de Aglomeracion),
eliminandose el filtro Oliver, contribuyendo a la
reduccion de contaminacion del rio Mantaro.
o En el mes de marzo se inician las obras civiles de la
nueva planta de oxigeno LINDE con una inversion de US$
24 millones.
o En octubre, se instala el bag house (60 bolsas) para
mejorar el ambiente de trabajo en la unidad de cernido y
molienda.
o En el mes de diciembre, entra en operacion la
lixiviacion continua implementado con controles
automaticos de operacion y proceso.
o Se reconstruye y modifican dos convertidores, con los
cuales se incrementa la capacidad de los convertidores 2
y 4 en un 15%.
1993 o En el mes de enero se instala el nuevo sistema de
ventilacion (SVEL) para los tostadores FBR de zinc.
o En el mes de marzo, se inicia el montaje
electro-mecanico de la Planta de Oxigeno y el lro. de
diciembre Centromin recibe el certificado de aceptacion
y conformidad de la Planta de Oxigeno, alcanzandose la
capacidad instalada de 312 t/dia, con una pureza de 95%
de O(2).
o Se instala un tanque de 20 000 gl para reciclar agua de
refrigeracion de chaquetas de los hornos de plomo.
o Se paraliza las operaciones del reverbero No. 2 de
cobre, para realizar los trabajos de mantenimiento y
modificaciones para adecuarlo al sistema oxy-fuel.
o Se instala el sistema de ventilacion para el descarguio
de calcina de cobre.
o En octubre, se puso en operacion la Planta de
Tratamiento de Ferritas de Zinc. Noviembre, entro en
operacion la purificacion continua.
1994 o El 17 de enero, se concluye el montaje electro-mecanico
e instrumental del Proyecto Oxy-Fuel. Este proyecto fue
ejecutado por personal tecnico de Centromin con el
asesoramiento de las empresas INCO, ENICO y SNC LAVALIN
de Canada y con una inversion de US$ 2 millones.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo I Pag 8.
- --------------------------------------------------------------------------------
o El 18 de enero, se inicia el encendido del quemador
vertical oxy-fuel No 8 y en forma progresiva se empiezan
a apagar la quemadores horizontales convencionales.
o El 6 de febrero en el reverbero No 2 se prueba
industrialmente los 11 quemadores verticales y su
operacion desde esa fecha, se lleva a cabo con un
promedio de 6 quemadores verticales oxy-fuel y 2
quemadores horizontales. Con este proyecto se incremento
la capacidad de la fundicion de 62 000 a 75 000 t/ano de
cobre blister (capacidad potencial 80 000t/ano).
o Los logros alcanzados por el cambio de indices
metalurgicos y el proyecto oxy-fuel, respecto al ano
1989, fueron:
- Reduccion de 100 193 t de piritas equivalente a 82
158 t de SO(2) y a 127 757 t de H(2)SO(4)
(reduccion de indices de 1,9899 a 0,07239 t de
pirita/t de Cu entre los anos 1989 y 1995).
- Reduccion de 124 800 t de escorias (reduccion de
indices de 5,52 a 3,13 t de escoria/t Cu entre los
anos 1989 y 1995).
- Reduccion de 30 220 t de petroleo residual No 6
(reduccion de indices de 0,935 a 0,36 t de
petroleo/t de Cu entre los anos 1989 y 1995).
- Reduccion del volumen de gases generados de 72 600
a 50 220 Nm^3/h (19 000 Nm^3/h teorico) mejorando
la calidad de aire del entorno.
- Compactacion de la fundicion por desactivacion del
reverbero No 1, 2 calderos y 6 tostadores de Cu.
o Se desmantela el reverbero de cobre No 1 y los calderos.
o Se inicia la construccion de las bases de concreto para
una nueva ventiladora del sistema de ventilacion (SVEL
4), el objetivo es mejorar la eficiencia de captacion de
gases en los hornos de plomo.
o Se desmantela la planta antigua de Aglomeracion.
1995 o La Refineria de Cobre incrementa su capacidad instalada
a 66 500 t/ano (block No. 22 entra en operacion).
o Se incrementa la recuperacion en la Refineria de Zinc de
80% a 86% disminuyendo la produccion de ferritas en 9
200 t/ano.
o Reparacion general del reverbero No 2 (oxy-fuel)
o Se reduce el numero de unidades de tostacion de 18 a 12
(8 para Cu, .2 para Pb, 1 para As y 1 para Sb),
optimizandose la captacion de gases y polvos.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo I Pag 9.
- --------------------------------------------------------------------------------
1996 o Se inicia el desmantelamiento de 6 tostadores, este
trabajo concluira en el primer trimestre de 1997.
o El 7 de junio en la Refineria de Plomo entra en
operacion, el proyecto: Recuperacion del acido
fluorsilisico, por filtrado de los lodos anodicos de
plomo (filtro LAROX), retornando soluciones acidas
filtradas a las celdas electroliticas cerrando el
circuito, y con ello se obtuvo CERO de emision de
efluentes al rio Yauli.
o Se inician los trabajos de reubicacion e instalacion de
nuevos tanques de petroleo que abastece a las
fundiciones de cobre y plomo.
o Se aprueba la compra de la tornamesa de moldeo de cobre
blister y se desembolsa el 20% de su valor, se tiene el
compromiso de embarque para el 10 de mayo de 1997
o El primero de julio ingreso a operar el doceavo block,
con lo que se incremento la capacidad de la Refineria de
Plomo de 91 000 a 99 000 t/ano.
o Se efectuo el tendido de tuberias para el uso de oxigeno
en las plantas de Aglomeracion y Residuos Anodicos. El
uso de oxigeno permitira: Incrementar la capacidad de
ambas plantas, menor generacion de polvos y emisiones
gaseosas, menor consumo de combustibles y eliminar el
consumo de nitrato de sodio generador de gases nitrosos.
<PAGE>
[MAP OMITTED]
CENTROMIN - PERU S.A.
UNIDAD LA OROYA
PLANO DE LA CONCESION MINERA
"LA OROYA - "
<PAGE>
CAPITULO II
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo II Pag 10.
- --------------------------------------------------------------------------------
2. DESCRIPCION DE LOS COMPONENTES AMBIENTALES
Los componentes ambientales se agrupan en 4 categorias ambientales:
o Ambiente Fisico
o Ambiente Biologico
o Ambiente Socio-Economico
o Ambiente de Interes Humano
2.1 Ambiente Fisico
2.1.1 Topografia - La Oroya
El entorno topografico al Complejo Metalurgico La Oroya es
accidentado, esta formado por grandes depresiones. El rio
Yauli, tributario del rio Mantaro, en su recorrido pasa por un
cinturon de topografia plana donde se han formado varios
poblados.
El rio Mantaro cruza la ciudad de La Oroya de Norte a Sur
formando un valle muy estrecho. Aguas abajo del rio Mantaro,
despues de La Oroya y en la ruta hacia Huancayo, el valle se
hace mas estrecho y abrupto predominando los macizos rocosos
de gran altura.
En la parte alta, por la margen derecha del rio Mantaro, la
topografia se hace ligeramente plana con muchas huellas de
surcos producidos por las lluvias intensas que caen en esta
parte de la zona. En la parte mas alta sigue predominando la
topografia accidentada.
En los planos No 1.3/1 y 1.3/2 del Capitulo 1 se presenta la
descripcion del entorno topografico en el area de influencia
del Complejo Metalurgico de La Oroya.
2.1.2 Abastecimiento Hidrico
El abastecimiento de agua industrial y de consumo humano en La
Oroya, es esquematizado en el diagrama 2.1.2/1, indicandose
los siguientes sistemas:
Sistema Tishgo: Tiene como fuente de abastecimiento al rio
Tishgo, y su punto de captacion se encuentra ubicado a 14 Km.
al norte de la ciudad de La Oroya.
Sistema Cuchimachay: Tiene como fuente de abastecimiento el
manantial de Cuchimachay, el agua captada se destina para
abastecer de agua potable a la poblacion de La Oroya Antigua y
a la Fundicion para el sistema de los calderos de vapor.
Bombas Rio Mantaro: El agua captada del rio Mantaro es
destinado integramente para granular las escorias de la
Fundicion de cobre y plomo.
Sistema de Emergencia: Estos sistemas entran en operacion
cuando falla el sistema Tishgo y son los siguientes:
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo II Pag 11.
- --------------------------------------------------------------------------------
- Bombas Hidro: Este sistema capta el agua de subsuelo en
la zona de Hidro y lo envia al tanque de Railway.
- Bombas Mayupampa: El sistema es similar al anterior. El
agua captada es enviada al tanque Chulec.
La siguiente tabla, muestra el analisis fisico-quimico del
agua captada de los tres sistemas.
Analisis Fisico-Quimico del Agua Captada por los Tres Sistemas
- --------------------------------------------------------------------------------
Rio Tishgo Manantial Cu- Rio Mantaro Agua Clase III
Elementos mg/I chimachay mg/I mg/I LMP mg/I
- --------------------------------------------------------------------------------
Pb 0,12 0,09 0,06 0,10
- --------------------------------------------------------------------------------
Cr 0,01 0,01 -- 0,05
- --------------------------------------------------------------------------------
Ag 0,01 0,01 -- 0,05
- --------------------------------------------------------------------------------
NO(3) 0,39 0,08 -- 0,10
- --------------------------------------------------------------------------------
Fe 0,43 0,13 0,37 1,00
- --------------------------------------------------------------------------------
Mn 0,26 0,01 1 273,35 0,50
- --------------------------------------------------------------------------------
Cu 0,05 0,06 0,07 0,50
- --------------------------------------------------------------------------------
Zn 2,22 0,07 1,07 25,00
- --------------------------------------------------------------------------------
SO(4) 130,78 629,00 -- 400,00
- --------------------------------------------------------------------------------
Mg 106,00 91,00 -- 150,00
- --------------------------------------------------------------------------------
Ca CO(3) 163,00 618,00 --
- --------------------------------------------------------------------------------
OD^1 9,50 5,00 -- 3,00
- --------------------------------------------------------------------------------
JTU (Pt)^(2) 3,02 0,32 --
- --------------------------------------------------------------------------------
pH 8,23 7,80 7,8 5-9
- --------------------------------------------------------------------------------
(1) Oxigeno disuelto
(2) Julios Turbulent Unit.
2.1.3 Clima y Meteorologia
El clima de La Oroya y alrededores es frigido con dos
estaciones bien marcadas: la humeda entre noviembre y abril
con precipitaciones liquidas y a veces solidas (nieve o
granizo), y la seca durante el resto del ano. Las
precipitaciones se canalizan por pequenas quebradas como
tributarios de arroyos y/o al rio Mantaro que es el colector
de la cuenca regional.
Las caracteristicas meteorologicas son de gran importancia en
los fenomenos de contaminacion atmosferica y sus efectos
adversos. El registro de los parametros meteorologicos
(direccion y velocidad de vientos) en el area de La Oroya, se
lleva a cabo en tres estaciones ubicadas: la primera, en la
zona de Fundicion y las otras dos restantes con monitores
Kimoto Tipo 332-TW en Cushurupampa (NO de la Fundicion) y
Huanchan (SE de la Fundicion), respectivamente.
La Estacion Meteorologica del complejo metalurgico data desde
el ano 1925, la misma que registra parametros como: direccion
y velocidad de vientos, precipitaciones pluviales, temperatura
ambiental-humedad relativa y presion barometrica. Los
resultados obtenidos no son de uso exclusivo de la Empresa,
sino que se comparten mediante informacion continua
pre-establecida, con el organismo ofi-
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo II Pag 12
- --------------------------------------------------------------------------------
cial de meteorologia del pais, formando parte de la red de estaciones del
Servicio Nacional de Meteorologia e Hidrologia - SENAMHI, bajo cuyos
lineamientos se opera.
a) Direccion y Velocidad del Viento
La informacion correspondiente se registra en el diagrama 2.1.3/1 y tabla
2.1.3/1 del analisis de tales datos destacan caracteristicas relacionadas
con la direccion de los vientos. El viento matinal (entre las 7 y 10
a.m.), sopla de norte a sur por el valle del Mantaro, y despues de las 10
am., se invierte de sur a norte. Las rosas de viento, (Diagramas Nos.
2.1.3/1, 2.1.3/2 y 2.1.3/2A) para las dos estaciones urbanas muestran con
claridad la ausencia de vientos predominantes; las direcciones registradas
forman practicamente las rosas de viento completas, lo que significa que
la generacion de los vientos y su recorrido ocurren en todas las
direcciones posibles.
Relacionando este fenomeno con la distribucion de contaminantes, en una
primera aproximacion, resulta facil comprender que no existen zonas
continuamente expuestas sino que la difusion se dinamiza segun las
circunstancias dominantes particulares y tienden mas bien a estabilizarse
sobre la estrecha cuenca del Mantaro - Yauli.
En las tablas y diagramas que muestran los promedios de velocidades, se
aprecian vientos por debajo de 2 m/s, que para la contaminacion
atmosferica se consideran poco favorables, pues no permiten las "barridas"
de aire deseables.
Excepcionalmente en la rosa de viento de la Estacion Huanchan (Diagrama
2.1.3/1) se aprecia que los vientos van hacia el Sur-Oeste (rio abajo de
las aguas del Mantaro), lo que resulta favorable a su difusion.
Un aspecto importante que merece atencion en los fenomenos
micro-meteorologicos y mas directamente relacionados a vientos, es la
influencia de la orografia de la zona. El comportamiento de los vientos en
la atmosfera de La Oroya parece ser condicionada en gran medida por la
abrupta orografia que limita las zonas industrial y urbana.
b) Precipitaciones
El mes mas lluvioso es enero y el de menos precipitacion julio (106,5 mm
H20 y 0,0 mm H20 respectivamente). Normalmente las precipitaciones
(liquidas como lluvia o solidas como nieve) en zonas de contaminacion
atmosferica se consideran beneficas porque "lavan" el aire ambiental. Sin
embargo, en el caso de La Oroya se le relaciona con un efecto negativo,
pues constituyen una fuente adicional de contaminacion al Rio Mantaro,
porque esa accion de "lavado" ocurre sobre superficies que han acumulado
contaminantes a traves del tiempo y que son disueltos y arrastrados hacia
los rios receptores Yauli y Mantaro.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo II Pag 13
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Se cuenta con la estacion de la Fundicion, y la sub-estacion de Mayupampa
para las mediciones pluviales. Los valores promedio anual senalan 568,10
mm de agua para la estacion Fundicion en un periodo de 72 anos y de 563,70
para la de Mayupampa en un periodo de 39 anos (Tabla 2.1.3/2).
c) Temperaturas y Humedades Relativas
La temperatura en La Oroya y alrededores oscila con marcada diferencia
(tabla No. 2.1.3/3 y diagrama 2.1.3/3), llegando a la maxima temperatura
(26 degrees C) en el mes de diciembre y la minima (-4 degrees C) en mayo.
En cuanto a la humedad relativa tambien es muy variada, oscilando desde 5%
en los meses de julio-setiembre, hasta 72% en los meses de enero-marzo.
Estos datos que no corresponden a las condiciones meteorologicas locales
normales, en conjunto, generan condiciones meteorologicas contradictorias
que aumentan o reducen los efectos de la contaminacion ambiental.
d) Presiones Barometricas
En la Estacion de la Fundicion se miden tambien las presiones barometricas
expresadas en KPa (kilo pascales), cuyos valores promedio mensuales
horaria se condensan en la Tabla 2.1.3/4. Estos valores, son fundamentales
para los calculos de dispersion de las emisiones. En cuanto a promedios
mensuales, la presion maxima sucede en el mes de octubre y la minima en
diciembre (66,14 KPa y 65,14 KPa respectivamente), siendo la variacion
minima.
2.1.4 Aire
El aire del ambiente circundante al Complejo Metalurgico La Oroya ha
sufrido alteraciones en su calidad a consecuencia de las emisiones
gaseosas y material particulado propio de las operaciones metalurgicas.
Se tiene 5 estaciones de monitoreo, ubicadas en diferentes puntos de las
zonas perifericas de la fundicion (tabla 2.1.4/1), habiendose determinado
y evaluado los contaminantes respecto a la calidad del aire ambiental. Los
contaminantes evaluados comprenden a los gases sulfurosos expresados en
SO2, los materiales particulados en suspension (MPS) y contenidos
metalicos (As y Pb).
Los resultados del monitoreo en las cinco estaciones, se muestran en las
Tablas 2.1.4/2, 2.l.4/2A, 2.1.4/3 y 2.l.4/3A y ademas se detalla en la
tabla 7.2.4/1 del Capitulo 7, la descripcion de las estaciones de
monitoreo en el area circundante del complejo.
A continuacion se indican los valores de la calidad del aire del monitoreo
por parte de la Empresa versus los niveles maximos permisibles.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo II Pag 14
- --------------------------------------------------------------------------------
CALIDAD DEL AIRE AMBIENTAL NIVELES MAXIMOS
CIRCUNDANTE AL COMPLEJO PERMISIBLES RM-
PARAMETRO UNIDAD (5 ESTACIONES DE MONITOREO) 315-96-EM/VMM
ppm
SO2 Media aritmetica De 0,06 a 0,24(*) 0,20
diaria
Mu g/m3
Pb Media aritmetica De 0,07 a 2,94(*) 0,50
anual
As mu g/m3
Media arjunetica De 0,1 a 1,7(*) 6,00
diaria
mu g/m3
MPS Media artitmetica De 86,0 a 294,0(*) 350
diaria
(*) Generalmente los valores mas altos arrojan cuando se presenta las
inversiones termicas.
Materiales Particulados en Suspension (MPS)
La evaluacion de los contaminantes particulados se efectua por dos metodos
independientes uno del otro, pero en las mismas estaciones de muestreo, de modo
que es interesante referirlos comparativamente.
En un caso, los monitores Kimoto tipo 331- TW, son capaces de evaluar los MPS
igual que los equipos de alto volumen (Hi-Vol). Sin embargo, existe la
diferencia fundamental de que los Hi-Vol manejan volumenes muy altos de aire de
donde se filtran los MPS totales, de manera integral en periodos de 24 horas
continuas o mas; en cambio, en los muestreadores de cinta, el muestreo es
secuencial (cada 3 minutos) y en consecuencia pueden obtenerse valores maxirnos,
minimos y promedios.
Algo mas importante aun es que en el metodo de la cinta o mancha de papel, las
particulas evaluadas son unicamente la fraccion de dimensiones menores a 10
micras, conocidas como PM10. Es decir que del total de particulas flotantes del
aire, el equipo es capaz de discriminar (mediante un sistema de cicloneo) las
porciones de PM10, llamadas tambien respirables, que por esa razon tienen mayor
valor respecto a la salud publica.
Los Hi-Vol como ya se dijo, colectan todos los materiales no sedimentables,
entre los cuales abundan las particulas mayores a 10 micras. Estas diferencias
conceptuales y de operacion explican a su vez, las diferencias en los valores
hallados.
Contenidos Metalicos en los MPS
Tanto en muestras de MPS captadas por la cinta de papel o por el metodo Hi-Vol
se hacen determinaciones para detectar tres elementos quimicos contaminantes
(As, Pb y Cd), presentes en los materiales procesados. Estas determinaciones se
efectuan mediante marchas analiticas de laboratorio en compositos mensuales
representativos.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo II Pag 15
- --------------------------------------------------------------------------------
2.1.5 Geologia y Sismicidad - La Oroya
a) Geologia
Las rocas mas antiguas que afloran en el ambito de La Oroya son las
pertenecientes al Grupo Pucara de edad Triasico-Jurasico, compuestas
principalmente por calizas gris claro a blanco que deben estar
sobreyaciendo a las rocas del Grupo Mitu de edad Permica. Tambien
estan presentes rocas del Grupo Goyllarisquizga, compuestas de
areniscas y lutitas rojas, capas de calizas, interestratificadas con
capas basalticas o diabasas. Sobreyaciendo a estas rocas se
encuentra el Grupo Machay, compuesta de calizas gris azuladas y
bituminosas de la formacion Pariatambo y las calizas claras,
lutaceas, margosas y fosfatadas de la formacion Chulec.
Al Sur de La Oroya se encuentran afloramientos correspondiente a las
Capas Rojas de edad Terciaria; cubriendo a estos afloramientos se
tienen una serie de depositos cuaternarios, habiendose distinguido
los siguientes:
o Depositos Aluviales
Estos depositos irregulares se encuentran en los rios Mantaro
y Yauli formando terrazas de diferente edad y dimensiones
dentro del Cuaternario. La Fundicion de La Oroya y las
Refinerias de Huaymanta, se encuentran asentadas sobre este
tipo de depositos. Las dimensiones de los fragmentos varian
entre bloques, gravas, gravillas y algo de arena. La
composicion de estos materiales es variada.
o Depositos Fluvioglaciares
Este tipo de deposito se encuentra en las partes altas como
restos de antiguos glaciares, en muchos casos solo quedan
remanentes de antiguos depositos grandes.
o Depositos Coluviales
Estos depositos se encuentran formando los taludes de las
escarpas rocosas que se han formado por erosion de las rocas.
Son depositos pequenos e irregulares.
o Depositos Eluviales
En algunas partes es posible encontrar rocas que se estan
transformando a suelos y son pequenos depositos que estan
dando origen a suelos.
b) Plegamiento y Fallamiento
Las rocas adyacentes al curso del rio Mantaro se encuentran
fuertemente plegadas con buzamientos proximos a la vertical y
en algunos casos se han dislocado formando fallas regionales.
Hacia el Suroeste y Noreste del rio, el plegamiento se suaviza
formando anticlinales y sinclinales amplios.
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PAMA COMPLEJO METALURGICO - LA OROYA Capitulo II Pag 16
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c) Geomorfologia
En el ambito circundante al Complejo Metalurgico La Oroya, se
pueden distinguir algunas caracteristicas geomorfologicas,
tales como: el rio Mantaro con algunos tributarios como el rio
Yauli, Shincamachay, Huashango (Paccha), Pacchapata (La Oroya
Antigua), rio Seco y algunas otras quebradas menores que han
excavado su cauces en rocas calcareas, areniscas, lutitas,
etc. de las diferentes formaciones rocosas. En las partes
altas se puede distinguir remaentes de la superficie puna
inicial.
Sobre los cauces antiguos de los rios Mantaro y Yauli
principalmente, se aprecian terrazas fluviales y en algunos
lugares depositos de precipitacion quimica (travertinos) tales
como, los depositos de Sacco-Tambo, Shincamachay, confluencia
del rio Tishgo y Mantaro y otros mas pequenos como en La Oroya
Antigua (cubierta por la poblacion).
La altitud varia, dentro del ambito de La Oroya, entre los 3
600 y 4 600 m.s.n.m., ubicandose la Fundicion y Refinerias a
una altura promedio de 3 750 m.s.n.m.
Tambien son muy claras las formaciones actuales de carcavas
(grietas de erosion), producidas por las lluvias acidas en los
alrededores de La Oroya, sobre la superficie del suelo que ha
quedado sin proteccion vegetal natural (ichu). Este efecto
erosivo es intenso en los alrededores de la Fundicion y
disminuye paulatinamente conforme se aleja de este centro.
d) Area Sismica
Desde el punto de vista Tectonica, el Complejo Metalurgico La
Oroya se encuentra localizado en la Zona 1 (Reglamento
Nacional de Construcciones) que corresponde a una zona de alta
sismicidad, indicando esta que para las construcciones se debe
tener en cuenta los parametros antisismicos que indica el
Reglamento entre otros y que los edificios deben ser
principalmente de dos pisos o menos.
2.1.6 Evaluacion de Suelos
Es de enorme importancia el estudio y la evaluacion de estos
recursos naturales, los cuales son estudiados en sus aspectos
fisicos, quimicos y biologicos. Los estudios se hicieron sobre
muestras tomadas en las zonas afectadas, asi como de las zonas
aledanas.
Los resultados de los analisis mostrados en la Tabla 2.1.6/1,
indican que se trata de suelos empobrecidos estando sin cobertura
vegetal. No hay presencia de nitrogeno (por falta de vegetacion),
asi mismo carecen de calcio; en su mayoria son suelos ligeramente
acidos debido precisamente a la remocion del calcio por efecto de
las precipitaciones pluviales sobre suelos pobres en vegetacion y al
efecto adverso de los humos de la Fundicion.
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PAMA COMPLEJO METALURGICO - LA OROYA Capitulo II Pag 17
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En las muestras tomadas en la zona de La Oroya Antigua, frente aal
complejo metalurgico los resultados del analisis indican la
presencia de carbonato de calcio en gran porcentaje, lo cual se
deberia a la disgregacion que sufren las rocas calizas que coronan
el cerro en su parte alta. Asi mismo, su pH tambien es ligeramente
alcalino y su textura es de un terreno que difiere de los suelos del
sector Huaynacancha que son aridos y arenosos.
2.2 Ambiente Biologico
2.2.1 Caracterizacion
La Bioregion de la Serrania Esteparia, abarca desde el Departamento
de La Libertad hasta el norte de Chile y en la vertiente Occidental
de los Andes, entre los 1 000 y 3 800 m.s.n.m. con una interesante
formacion ecologica caracterizada por factores climatologicos,
edaficos, floristicos y faunisticos propios. Toma el nombre de
serrania esteparia por la formacion vegetal mas sobresaliente.
Presenta un clima muy diferente al desierto costero y al de la Puna,
con los cuales limita al Oeste y Este respectivamente. (Diagrama
2.2.1/1).
a) Ecosistema Terrestre
Caracterizado por la presencia de una vegetacion que forma una
estepa de gramineas, comunidades de Lupinus, algunas plantas
herbaceas de los Generos Baccharis, Polylepis, Buddelia, Alnus
asociadas con gramineas como: Stipa ichu, Stipa bhrachyphylla,
Calamagrostis vicunarum, Calamagrostis antoniana y Festuca
heterophylla que constituyen los pastos naturales. (Diagrama
2.2.1/2).
En la Serrania Esteparia las intensas y desordenadas practicas
ganaderas, destruyen la vegetacion silvestre impidiendo la
regeneracion natural y ocasionando la erosion de los suelos.
La principal causa de la desaparicion de las especies en esta
zona, tanto de la flora como la fauna silvestre y
especialmente las endemicas que presentan distribucion
restringida, es la destruccion del habitat, por la perdida de
la vegetacion natural.
La fauna esta representada por la Vizcacha (Lagidium puna). La
fauna de esta zona esta altamente influenciada por elementos
de la Puna, llegando las especies de la serrania esteparia a
su limite superior de distribucion. Entre la Avifauna podemos
destacar la presencia de la "tortolita peruana" (Euphelia
cruziana), los picaflores (Myrtis fanny) y (Thaumastura cora)
el "negro" (Dives warszewiezi) el "tordo negro" (Molothrus
bonariensis) el "chisco" (Mimus longicaudatus).
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PAMA COMPLEJO METALURGICO - LA OROYA Capitulo II Pag 18
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b) Ecosistema Acuatico
Los rios de las vertientes occidentales son de aguas rapidas y
torrentosas, disminuyendo la temperatura de los mismos con la
altura, lo que trae como consecuencia una interesante zonacion
de habitats acuaticos, entre los que podemos mencionar. Lechos
de rio con corriente, arroyos andinos, barrancos de tierra y
piedras, orillas desnudas con piedra, orillas rocosas, orillas
de rio con vegetacion baja.
Entre las aves mas caracteristicas de este ecosistema
mencionaremos al "Pato de los torrentes" (Merganetta armata) y
al "Mirlo acuatico" (Cinclus lencocephalus) prefiriendo los
rios, arroyos de aguas cristalinas y de corriente rapida.
Entre los anfibios son frecuentes: el "Sapo comun" (Bufo
spinolusus), asi mismo especies como (Telematobius jelskii) y
(Telematobius runac).
Los peces nativos han sido poco estudiados, pero podemos
mencionar a la "Chalwa" (Oretias spp.) y las introducidas como
la trucha (Salmo spp).
2.2.2 Ecosistemas - Complejo Metalurgico La Oroya y su entorno
El Complejo Metalurgico esta ubicado en la quebrada que forma la
cuenca de los rios Mantaro y Yauli a 3 750 m.s.n.m.
Los centros poblados y las zonas de cultivo se encuentran proximos a
las cuencas de los rios Yauli y Tishgo.
Se hace una descripcion de los ecosistemas terrestre y acuatico en
un radio de 10 Km haciendo centro en la chimenea principal de la
Fundicion.
a) Ecosistema Terrestre
El Complejo Metalurgico La Oroya, se encuentra ubicado dentro
de los valles mesoandinos, con una superficie total de 9
209.83 Ha, las que se encuentran distribuidas de la siguiente
manera:
1. Seis concesiones mineras no metalicas : 4 500.00 Ha
2. Nueve predios rusticos : 2 669.83 Ha
3. Tres canteras : 2 040.00 Ha
Geograficamente el complejo ocupa la parte occidental de los
Andes de la zona central entre los 3 700 y 3 800 m.s.n.m. y
esta aledana a las haciendas y comunidades siguientes:
- Hacienda Antahuaro - Comunidad Oroya Antigua
- Hacienda Tallapuquio - Comunidad Huaynacancha
- Hacienda Huaymanta - Comunidad de Huari
- Hacienda Quiulla
El relieve topografico es accidentado con laderas fuertes y
suelos acidos con tonos rojizos o pardos. Asi mismo se
encuentran suelos poco fertiles (combisoles districos) y
eutricos (fertiles)
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PAMA COMPLEJO METALURGICO - LA OROYA Capitulo II Pag 19
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La flora propios de la zona adyacente al Complejo Metalurgico
se viene dando en forma espontanea, en la Tabla 2.2.2/1
podemos observar el analisis quimico de las plantas. (Foto
2.2.2/1).
A 10 Km al norte de La Oroya se encuentra Casaracra. Este
lugar esta constituido por gramineas y herbaceas de habitos
perennes que son dominantes como la Festuca heterophylla y la
Stipa ichu. Debido al pastoreo prolifera la "Choca"
(Chuquiragua huamanpinta), el "Caqui Caqui" (Adesmia
spinosisima) y algunas cactaceas. (Foto 2.2.2/2); la fauna del
lugar son ovinos y vacunos. Las aves son muy escasas entre las
que podemos mencionar a la "Gaviota de la puna" (Lorus
serranus).
En todo este recorrido se ha podido observar especies
arbustivas solo por actividad de repoblacion forestal tales
como el colle (Buddleia coriacea) el Polylepis racemora.
Tambien se ha identificado a la retama y el maguey (Agave
americana).
Al Sur de La Oroya y bordeando el rio Mantaro y en un radio de
7 Km. no se observa vegetacion tipica de la region a excepcion
del Stipa ichu y en forma muy escasa debido a la accion de los
humos de la Fundicion. A partir de esta zona se comienza a
observar vegetacion mas tupida asi como en la parte alta y del
talud del rio, gramineas como la Festuca sp y la Stupa ichu.
Asimismo algunas especies como Quishuar y algunas cactaceas
propias de la zona. (Foto 2.2.2/3).
En la parte alta, al Oeste de La Oroya (aproximadamente a 4
000 m.s.n.m.) se observa directamente el efecto de los humos
de la fundicion sobre el ecosistema. Se ha calculado un area
de 3 829 Has aun pendiente por recuperarse, se ve claramente
los efectos sobre el suelo (Foto 2.2.2/4).
En la parte media del valle de Huaynacancha existe una pequena
laguna formada por los deshielos y lluvias donde toman agua
algunas vicunas y se aposentan aves como la "Huallata" o
"Washwa" y en forma muy escasa especies de vegetacion
almohadilla y gramineas.
A 10 kms a la redonda del complejo, se puede comprobar la
existencia forestal frente a la residencia de empleados (Hotel
Inca), de las oficinas generales del complejo y en las
poblaciones aledanas con especies como el Colle, Quinhual,
Cipres, Quishuar, etc., propios de la zona.
b) Ecosistema Acuatico
Ambiente Lotico: Rio Tishgo, rio Mantaro y rio Yauli.
El rio Tishgo se une al rio Mantaro a la altura de la Hacienda
Casaracra y sus agua son utilizadas, previo tratamiento para
uso domestico y hace algun tiempo, utilizadas en acuicultura
de la "Trucha arco iris", no se han reportado especies de
peces en otros organismos acuaticos. La vegetacion riberena
esta formada principalmente por gramineas.
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PAMA COMPLEJO METALURGICO - LA OROYA Capitulo II Pag 20
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El rio Mantaro que discurre de Norte a Sur, trae en su
recorrido altas concentraciones de contaminantes y que a su
paso por La Oroya recibe el aporte de los efluentes de la
Refinerias de Cobre y Plomo a traves del Rio Yauli que trae
algunos contaminantes como residuos de relaves. El efluente de
agua de granulacion de escorias de cobre y plomo, del canal
principal No. 2 de Fundicion de Cobre y Plomo, de las
soluciones de la Planta Electrolitica de Zinc, del canal
principal No. 1, del canal paralelo del punto 135 y del
efluente de las pozas de ferrita de Zinc.
En los rios receptores Yauli y Mantaro, no se ha observado
organismos representativos de flora y fauna excepto la
"gaviota de la puna" (Lorus serranus) y la Huallata.
En la Tabla No. 2.2.2/2 se presenta los valores del monitoreo
de los rios Tishgo, Yauli y Mantaro.
Como se puede apreciar los rios Yauli y Mantaro estan
contaminados con plomo en concentraciones mayores que el
Limite Maximo Permisible, el cadmio considerado como uno de
los elementos mas peligrosos tambien se reporta en el Rio
Mantaro. El fierro aumenta su concentracion en el Mantaro a su
paso por la fundicion y el manganeso aumenta 5 veces su
concentracion. Tambien se encuentra presente el arsenico;
ademas, ambos rios reciben emisiones domesticas de toda la
poblacion.
2.3. Ambiente Socio Economico
El Complejo Metalurgico La Oroya contribuye al bienestar y
desarrollo socio-economico del pais y en particular de la region
central, mediante la produccion de metales refinados de alta calidad
y sub-productos requeridos en la industria nacional en primer lugar
y dando atencion al mercado externo.
2.3.1 Descripcion del Componente Socio-Economico
a) Ubicacion y descripcion del Complejo Metalurgico La
Oroya como Asentamiento Minero y los Asentamientos
Humanos de su entorno
Las instalaciones del Complejo Metalurgico La Oroya se
ubican en la Ciudad de La Oroya.
Los principales centros poblados del entorno cercano
son:
En la via que conecta con Huancayo: La Comunidad de
Huari, Hacienda Quiulla
En la via a Lima: La Comunidad de Huaynacancha.
En la via de Salida a Tarma estan: La Hacienda
Antahuaro, y despues de Paccha la zona de Casaracra.
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PAMA COMPLEJO METALURGICO - LA OROYA Capitulo II Pag 21
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En la ruta Oroya - Cerro de Pasco existe 8 poblados mas.
Los principales indices demograficos comparados se dan
en la Tabla siguiente.
Principales Indicadores Demograficos - La Oroya
Dpto. Prov. Distritos:
--------------------------------
Indicadores Junin Yauli La Oroya Paccha Sta. Rosa
Sacco
- ---------------------- -------- ------- -------- ------ ---------
Poblacion Total (miles 1 093,0 67,7 30,9 2,2 12,5
habitantes) 1993
Tasa crec. 81-93 1,7 -1,4 -1,4 -0,8 3,2
% Poblacion rural 36,0 9,0 2,0 32,7 0,5
Tasa analfabetismo 13,4 9,1 9,1 5,2 6,1
(% l5 anos y+)
Tasa mort. Infantil 63,0 56,8
(x 1 000)
PEA 15 anos a mas 50,5 48,7 49,3 45,9 43,1
Tasa Depen Econo. 242,6 266.5 251,8 302,9 304,6
FUENTE: INEI Censo poblacional y vivienda 1993 Departamento Junin y datos
Centromin. Mapa de Necesidades Basicas Insatisfechas de los Hogares. INEI 1995.
Vemos que entre el Distrito de La Oroya y Santa Rosa de Sacco
absorben el 64,1% de la poblacion de la Provincia de Yauli; y ambos
son Distritos altamente urbanizados.
En lo que se refiere a los trabajadores de la Empresa, encontramos
que el 92% son casados y proceden en su mayoria de la zona central
del Pais: 79% de Junin, 5% de Cerro de Pasco, 5% de Huancavelica y
11% de otros.
El 33% de trabajadores tienen de 1 a 3 hijos y un 40% de 4 a 5
hijos. Ademas el 90,4% de las esposas de trabajadores viven en La
Oroya. De los 3 215 trabajadores dependen economicamente 13 728
personas. El 43% de los trabajadores tienen entre 31 y 45 anos y un
32% mas de 46 anos. El 63% de trabajadores tienen instruccion
secundaria.
Por otra parte debemos senalar que el crecimiento demografico de La
Oroya sigue mostrando una tasa negativa respecto a 1981. La
disminucion de la poblacion de La Oroya en el periodo 81-93 (-1.4)
se debe esencialmente a las politicas de Racionalizacion de Personal
que Centrormin implemento en la epoca de crisis de la mineria y en
el proceso previo a la privatizacion.
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PAMA COMPLEJO METALURGICO - LA OROYA Capitulo II Pag 23
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En el diagrama 2.3.1/1 se muestra el croquis de las instalaciones de
CMP en la Oroya.
A continuacion se muestran los sectores habitados por los
trabajadores de Centromin Peru y particulares.
- ------------------------------ ---------------------------------------
Sectores Centromin Sectores Particulares
- ------------------------------ ---------------------------------------
PP.JJ.9 de Octubre
AA.HH Alto Marcavalle
Marcavalle PP.JJ. Tupac Amaru
PP.JJ. Santa Anita
PP.JJ. Las Brisas
- ------------------------------ ---------------------------------------
AA.HH. San Pablo II
Buenos Aires AA.HH. San Vicente de Paul
AA.HH. Micaela Bastidas
AA.HH. Santa Rosa
- ------------------------------ ---------------------------------------
Huaymanta Asociacion de vivienda "Victoria Peru"
- ------------------------------ ---------------------------------------
AA.HH. Tayapuquio
AA.HH. Leoncio Prado
Los Plomos AA.HH. Enafer
AA.HH. Ramiro Priale
AA.HH. Victor R. Haya de la Torre
- ------------------------------ ---------------------------------------
Calle Lima Barrio San Juan
- ------------------------------ ---------------------------------------
Alto Peru AA.HH. Las Mercedes
AA.HH. Norman King
- ------------------------------ ---------------------------------------
En el sector de la calle Lima que es la principal de este sector,
agrupa viviendas de obreros y empleados de Centromin, gran cantidad
de comercios muchos de ellos en kioscos y ambulantes. En este sector
hay un pequeno mercado.
En el sector de Alto Marcavalle (Foto 2.3.1/2) en el Cerro de
Yantacancha que pertenece al Distrito de Santa Rosa de Sacco se
produce un fenomeno que tipifica el proceso de urbanizacion de los
cinturones poblacionales del entorno de la ciudad de La Oroya y esta
constituido por los AA.HH. Tambo del Sol (Villa Sol), Muruhuay,
Maria Concepcion y Tacarpana. Estos cuatro presentan caracteristicas
semejantes y colindan unos a otros teniendo servicios comunes como
una Antena Parabolica, una Radio-Emisora (Super A.M.) y un Estadio.
El AA. HH. mas grande es "Tambo del Sol"; el 90% de los habitantes
son trabajadores de Centromin, propietarios de lotes de 200 m2 con
casa de 2 pisos de adobe, con huertas y crianza de animales. Cuenta
con 130 familias y todos los terrenos estan ocupados. Los pobladores
para poder obtener los terrenos se constituyeron en Nuevos Comuneros
integrados a la Comunidad Santa Rosa de Sacco proceso que empezo en
1981. (Foto 2.3.1/3).
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PAMA COMPLEJO METALURGICO - LA OROYA Capitulo II Pag 24
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Urbanizacion Curipata
A 11 km de La Oroya en la ruta hacia Lima se encuentra el
proyecto de viviendas Urb. Curipata patrocinado por Centromin
para sus trabajadores. Se situa al lado de la carretera en una
zona plana y bien planificada (proyecto de Postas, Estadio,
Colegio, Iglesia, Mercado, etc.). (Foto 2.3.1/4).
En cuanto al Complejo Metalurgico de La Oroya sus
instalaciones productivas se encuentran ubicadas en una zona
mas o menos amplia (Ver Diagramas 2.3.1/1 y 2.3.1/2). Asi:
En la ruta hacia Lima a lo largo de la Carretera Central y el
Rio Yauli en el sector Huaymanta estan situados una Bodega, la
Planta de Alambron de Cobre, la Refineria de Cobre y Plomo.
En la ruta hacia Tarma se ubica el Club y el Hotel "Inca" la
Central Hidroelectrica de La Oroya, el sector de Chulec con el
Hospital y el Colegio Mayupampa.
A lo largo de la Av. Horacio Zevallos estan ubicados:
o El canal de TV de Centromin Peru S.A., RR.PP., el Hotel
Junin, las oficinas de recursos Humanos Sierra y
Relaciones Industriales y al final de la Av. Horacio
Zevallos frente a La Oroya Antigua (al otros margen del
rio Mantaro) esta la Fundicion de Cobre, Fundicion de
Plomo, Refinerias de Zinc, El area de Capacitacion,
Seguridad, Medicina Ocupacional, asi como la Gerencia
Central de Operaciones. (Foto 2.3.1/5)
b) Actividad Economica de La Oroya y su entorno
La ciudad de La Oroya esta rodeada por zonas agricolas,
ganaderas y mineras de la Sierra Central caracterizadas por
sus explotaciones agricolas medianas, orientadas hacia el
abastecimiento de los mercados de Huancayo, Tarma y
Chanchamayo, productos alimenticios como la carne de la zona
de Junin; verduras, papas, legumbres de la zona de Tarma y del
Valle del Mantaro; frutas y cafe de la region de Chanchamayo;.
insumos industriales de origen pecuario (lana); materias
primas minerales (esencialmente Cobre, Plomo, Zinc y Plata)
para el mercado nacional y externo, provenientes de Centromin
(Morococha, Casapalca, San Cristobal, Yauricocha, Cobriza y
Andaychagua).
La Oroya es tambien punto de retorno para abastecer de
alimentos (abarrotes) y productos finales de vestir,
mobiliario, etc. a toda la zona de la Sierra y Selva Central.
Hacia la zona de Tarma, Huancayo y Junin encontramos una serie
de pequenas poblaciones (generalmente estancias o poblados
correspondientes a Comunidades Campesinas) ubicadas en las
inmediaciones de la Carretera Central las que deben su
existencia principalmente a las actividades ganaderas y
agricolas a pequena escala (autoconsumo, vendiendo lo poco
excedente) y pequenos servicios orientados al transporte
(restaurantes, mecanicas, etc.). Sin em-
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PAMA COMPLEJO METALURGICO - LA OROYA Capitulo II Pag 25
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bargo, pese a su cercania de La Oroya, su relacion se reduce a
la comercializacion de sus productos en las dos ferias
semanales de esta ciudad, ya que la mayoria de los productos
alimenticios acabados (abarrotes) proceden de la ciudad de
Lima. (Foto 2.3.1/6).
Las actividades artesanales propias del lugar son
practicamente inexistentes, pues, como hemos visto el
porcentaje de la poblacion dedicada a la actividad metalurgica
y junto con sus familiares dependientes constituye el 34,1% de
la PEA de la Ciudad, existe un 51,9% de la PEA estable
repartida entre el comercio y servicios de diferente indole
entre los que se cuentan a los empleados de la Instituciones
Publicas y privadas. Todos los cuales si bien dependen directa
o indirectamente de la actividad de la Empresa constituyen
rubros diferentes. Un ejemplo que demuestra esta dependencia,
es el hecho que las ferias semanales y quincenales realizados
en La Oroya y Santa Rosa de Sacco coinciden con los dias de
Pago de la Planilla Diaria de los trabajadores.
En lo que se refiere al sector comercial, se han encontrado
987 establecimientos entre formales e informales, de los
cuales el 59,9% pertenecen al rubro alimentos (abarrotes,
verduras, etc.), 6,9% a vestido y calzado y en menor medida a
enseres domesticos y artefactos electricos.
El 74,8% de las empresas comerciales son de tipo familiar que
involucran a mas de dos miembros de la familia.
En el sector de servicios se han registrado 228
establecimientos de los cuales el 31,1% son restaurantes
formales y el 8,3% son vendedores informales de comida, y
existe 29 Mecanicas y Factorias dedicadas a prestar servicio a
los transportistas.
El sector industrial de la ciudad de La Oroya, esta conformado
por 83 establecimientos de los cuales el 36,3% son lugares de
expendio de bebidas alcoholicas, siguiendo en importancia los
rubros de confecciones y panaderia con el 15,6%, la
fabricacion de muebles con el 21,6%. Tambien existe una
embotelladora y fabricas de cal y yeso.
El 15,9% de los trabajadores de Centromin realizan actividades
economicas complementarias: 5,9% se dedican al comercio, 9,2%
a servicios (albanileria, gasfiteria, mecanica) y 0,78% a
otros. Un 13,6% de esposas de trabajadores se dedican a otra
actividad economica aparte de las actividades de ama de casa
(mayormente se dedican al comercio 8,5%, y lo hacen en la
Oroya).
Dada la importancia que ha adquirido la Ciudad de La Oroya en
los ultimos anos en ella vienen funcionando distintas
Instituciones Gubernamentales, Municipales y Privadas y varias
ONG.
Existen 35 Instituciones entre Publicas y Privadas.
En cuanto a empresas privadas de servicios publicos estan: La
Telefonica del Peru, Correos, Bancos, Servicios de Transporte
y Emisoras Radiales locales.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo II Pag 25
- --------------------------------------------------------------------------------
bargo, pese a su cercania de La Oroya, su relacion se reduce a
la comercializacion de sus productos en las dos ferias
semanales de esta ciudad, ya que la mayoria de los productos
alimenticios acabados (abarrotes) proceden de la ciudad de
Lima. (Foto 2.3.1/6).
Las actividades artesanales propias del lugar son
practicamente inexistentes, pues, como hemos visto el
porcentaje de la poblacion dedicada a la actividad metalurgica
y junto con sus familiares dependientes constituye el 34,1% de
la PEA de la Ciudad, existe un 51,9% de la PEA estable
repartida entre el comercio y servicios de diferente indole
entre los que se cuentan a los empleados de la Instituciones
Publicas y privadas. Todos los cuales si bien dependen directa
o indirectamente de la actividad de la Empresa constituyen
rubros diferentes. Un ejemplo que demuestra esta dependencia,
es el hecho que las ferias semanales y quincenales realizados
en La Oroya y Santa Rosa de Sacco coinciden con los dias de
Pago de la Planilla Diaria de los trabajadores.
En lo que se refiere al sector comercial, se han encontrado
987 establecmientos entre formales e informales, de los
cuales el 59,9% pertenecen al rubro alimentos (abarrotes,
verduras, etc.). 6,9% a vestido y calzado y en menor medida a
enseres domesticos y artefactos electricos.
El 74,8% de las empresas comerciales son de tipo familiar que
involucran a mas de dos miembros de la familia.
En el sector de servicios se han registrado 228
establecimientos de los cuales el 3 1,1% son restaurantes
formales y el 8,3% son vendedores informales de comida, y
existe 29 Mecanicas y Factorias dedicadas a prestar servicio a
los transportistas.
El sector industrial de la ciudad de La Oroya, esta conformado
por 83 establecimientos de los cuales el 36,3% son lugares de
expendio de bebidas alcoholicas, siguiendo en importancia los
rubros de confecciones y panaderia con el 15,6%, la
fabricacion de muebles con el 21,6%. Tambien existe una
embotelladora y fabricas de cal y yeso.
El 15,9% de los trabajadores de Centromin realizan actividades
economicas complementarias: 15,9% se dedican al comercio, 9,2%
a servicios (albanileria, gasfiteria, mecanica) y 0,78% a
otros. Un 13,6% de esposas de trabajadores se dedican a otra
actividad economica aparte de las actividades de ama de casa
(mayormente se dedican al comercio 8,5%, y lo hacen en la
Oroya).
Dada la importancia que ha adquirido la Ciudad de La Oroya en
los ultimos anos en ella vienen funcionando distintas
Instituciones Gubernamentales, Municipales y Privadas y varias
ONG.
Existen 35 Instituciones entre Publicas y Privadas.
En cuanto a empresas privadas de servicios publicos estan: La
Telefonica del Peru, Correos, Bancos, Servicios de Transporte
y Emisoras Radiales locales.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo II Pag 26
- --------------------------------------------------------------------------------
Existen 4 cooperativas entre las que se encuentran la
"Cooperativa de Ahorro y Credito CENTROMIN Coop 299".
Aparte de esto La Oroya tiene ocho comedores populares con
organizaciones de base integradas por mujeres de bajos
recursos economicos y 18 Clubes de Madres participan en:
Programa de Vaso de Leche, PANFAR.
c) Infraestructura habitacional y de Servicios Basicos - La Oroya
o Infraestructura Habitacional
La infraestructura habitacional de La Oroya se divide en
dos clases, la primera a cargo de la administracion de
Centromin Peru y la segunda a cargo de particulares.
Esta ultima, es la que se constituye en una problematica
social, por su tugurizacion, construcciones de mala
calidad, falta de servicios basicos y otros, situacion
que se agrava por las invasiones de las partes altas,
lugares de mayor exposicion al impacto de las emisiones
gaseosas.
La Empresa en La Oroya cuenta con un total de 3 395
viviendas que asigna a sus trabajadores, de las cuales 1
064 (31%) estan en condiciones adecuadas de
habitabilidad y 2 331 (69%) en condiciones regulares.
Estas viviendas albergan aproximadamente. una poblacion
de 15 376 personas con un promedio de 5 a 6 personas por
familia.
Estas viviendas estan situadas en los siguientes
sectores:
Tras el Mercado, Calle Lima, Railway, Cantagallo, La
Florida, Alto Peru, Plomo 1 piso, Plomo 2 pisos,
Huaymanta, Buenos Aires "A", Esmeralda, Santa Rosa,
Buenos Aires "B", Huampani, Marcavalle, Tras Estacion.
El 83% de los trabajadores viven en casas asignadas por
la Empresa (742 en zonas particulares) las que en su
mayor parte consta de 2 habitaciones. (Foto 2.3.1/8)
En las viviendas ubicadas en blocks y que son
departamentos cuenta con los servicios higienicos,
lavanderia y duchas en el interior; en cambio en los
sectores donde se tiene la construidos blocks de
cuartos, los servicios son colectivos: letrinas
lavanderia, pozas y duchas. Se observa que el 38% de
trabajadores tienen casa propia (el 9,74% en La Oroya);
el 27% tienen tereno (el 7,28% en La Oroya). Foto
2.3.1/9.
El promedio de viviendas de La Oroya es de 2 pisos y 60
m(2) de area de terreno y 50 m(2) de construccion por
piso, son de material noble, en su mayoria con pisos de
cemento, ventanas de madera y techos de madera y
calamina. Tambien existen casas de adobe, sobre todo en
la parte particular de La Oroya Antigua.
En total en La Oroya existen 11 256 viviendas. Las
condiciones de las viviendas, sobre todo en los
sectores: Tras el Mercado, Av. Wilson, Alto Peru Tras
Estacion, Railway y los Plomos presentan un alto grado
de deterio-
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo II Pag 27
- --------------------------------------------------------------------------------
En cuanto al programa de demolicion de viviendas en
estado avanzado de deterioro y tugurizacion, a la fecha
se ha demolido la totalidad de viviendas del sector
"Club Peruano" (existian 460 viviendas), en este espacio
se ha sembrado grass. En la zona de la Fundicion se han
demolido practicamente todas las viviendas existentes
habiendose dispuesto convenientemente del material de
demolicion.
La Urbanizacion Curipata patrocinada por Centromin Peru
para sus trabajadores orientada a la casa propia y
despoblar la zona industrial
o Educacion
En materia de educacion, existen dos sistemas de
Educacion en La Oroya uno de ellos bajo la
administracion de la USE (Unidad de Servicios Educativos
Fiscalizados) que tiene a su cargo 09 Colegios
Fiscalizados (3 de Educacion Inicial, 4 de Primaria y 2
de Secundaria) de Centromin Peru S.A, los que cuentan
con buena infraestuctura, equipamiento y un plantel
docente de excelente calidad integrados por 296
trabajadores.
Estas unidades gozan de prestigio academico y cuenta con
un total de 4 408 alumnos (setiembre de 1996) que
representa el 33,5% de la poblacion escolar. (Foto
2.3.1/7). El otro 66,5% de la poblacion escolar lo
constituye los 8 744 alumnos que estudian en los 45
centros de educacion, Primaria, Secundaria, Tecnico
Ocupacional y Superior del sector publico y privado que
constituye el otro sector del sistema educativo de La
Oroya: El ADE (Area de Desarrollo Educativo) que cuenta
con 450 trabajadores, existiendo tambien Institutos de
computacion, enfermeria y educacion.
Actualmente los 9 Centros Educativos Fiscalizados
(C.E.F.), debido al proceso de privatizacion de CMP
S.A., se encuentran en etapa de transferencia al
Ministerio de Educacion.
o Salud
En lo que respecta a salud, la ciudad de La Oroya,
incluyendo a Paccha y Santa Rosa de Sacco cuenta con
tres sistemas de atencion de salud.
-- EL IPSS (Instituto Peruano de Seguridad Social)
que cuenta con un Policlinico orientado mayormente
a la atencion de personas de la tercera edad y con
un Hospital General Regional que cuenta con 25
medicos de todas las especialidades, 35
enfermeras, 72 camas, servicios de rayos X,
analisis y atiende operaciones quirurgicas mayores
y menores. Brinda servicios de prevencion y
asistencia a los asegurados y sus dependientes en
su mayoria son trabajadores de CMP.
-- EL Ministerio de Salud que cuenta con tres centros
de Salud de precaria infraestructura y
equipamiento, que brindan servicios (consultas,
operaciones menores, analisis, partos) dirigidos a
la poblacion que carece de Seguro Social, los
casos de salud que requieren mayor atencion son
derivados a Tarma, Huancayo y Lima.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo II Pag 28
- --------------------------------------------------------------------------------
-- Finalmente Centromin administra el Hospital de
Chulec que cuenta con 14 medicos de distintas
especialidades, 13 enfermeras, 50 camas y atiende
operaciones mayores (16 como promedio mensual) y
operaciones menores, rayos X, analisis,
ecografias, larascopias, etc. Brinda sus servicios
a familiares de trabajadores de la Empresa que no
tienen derechos de atencion en el IPSS, ver tabla
siguiente:
TIPO DE ATENCION POR SUBPOBLACION
<TABLE>
<CAPTION>
Ambu- Hospi- Examen Accid. Emer- Total %
latorio tal Trab. gencia
------- ------ ------ ------ ------ ------ -----
<S> <C> <C> <C> <C> <C> <C> <C>
Planilla Administ. Superior 4 515 138 186 33 451 5 323 25,01
P. Mensual Superior 1 749 51 13 30 119 1 962 9,22
Planilla Mensual 957 96 1 31 35 1120 5,26
Planilla Diaria 4 578 370 2 59 153 5 162 24,25
Plan de Becas 477 24 14 6 83 604 2,84
Familiar Prof. 425 24 17 466 2,19
SECOF 148 4 3 155 0,73
ENTEL 185 5 15 205 0,96
Particular 4 832 650 3 803 6 288 29,54
TOTAL 17 866 1 362 219 159 1 679 21 285 100
Porcentaje 83,94 6,40 1,03 0,75 7,89 100
</TABLE>
Fuente: Estudio de Analisis Organizacional "Informe Produccion y Rendimiento del
Hospital General Chulec
Entre las enfermedades en general mas atendidas en los
diferentes Centros de Salud de La Oroya figuran en
primer lugar las gastrointestinales, diarreicas e
infecciosas con el 50%, siguen las bronquiales en las
que influye el clima frio y la contaminacion, siguiendo
en menor proporcion enfermedades quisticas, endemicas
(hepatitis), parasitarias y reumaticas.
Entre las enfermedades laborales, son frecuentes los
traumatismos por accidentes de trabajo, las dermatitis
arsenicales y el saturnismo (contaminacion por plomo) la
cual es objeto de control frecuente. Las neumoconiosis y
silicosis son poco frecuentes tal como se observa en la
tabla siguiente:
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo II Pag 29
- --------------------------------------------------------------------------------
EVALUACION PERIODICAS POR EL CENTRO DE MEDICINA OCUPACIONAL
=======================================================================
Trabajadores Trabajadores Porcentaje de
Tipos de examenes Expuestos Evaluadas Cobertura (%)
- -----------------------------------------------------------------------
Oftalmologico 5 933 5 701 96.09
- -----------------------------------------------------------------------
Por exposicion a polvo de
silice 3 773 3 733 100
- -----------------------------------------------------------------------
Audiologico 6 113 6 113 100
- -----------------------------------------------------------------------
De control anual, no
ocupacional 6 215
- -----------------------------------------------------------------------
Por exposicion al Arsenico
1995 - 1. 165 165 100
- -----------------------------------------------------------------------
Por exposicion al Arsenico
1995 -2. 148 148 100
- -----------------------------------------------------------------------
Por exposicion al Cadmio
1995 - 1. 49 47 100
- -----------------------------------------------------------------------
Por exposicion al Cadmio
1995 - 2. 47 47 100
- -----------------------------------------------------------------------
Por exposicion al Plomo
1995 - 1. 1 067 1 066 99,88
- -----------------------------------------------------------------------
6 500
=======================================================================
Fuente: Estudio de Analisis Organizacional "Informe Produccion y Rendimiento del
Hospital General Chulec.
o Abastecimiento de Agua Potable
El agua es proporcianada gratuitamente por Centromin a sus trabajadores Se
presentan problemas de poca presion por el uso indiscriminado, agudizado
por el deficiente estado del sistema de redes de abastecimiento.
El sistema de alcantarillado administrado por la Municipalidad, es
insatisfactorio en las viviendas inadecuadas ubicadas en La Oroya Antigua,
donde se observa un sistema de canalizacion de aguas residuales a traves
de canales abiertos o descubiertos caracterizados por sus constantes
atoros constituyendo focos de acumulacion de basura y madrigueras de
roedores. (Fotos 2.3.1/10 y 2.3.1/11).
Actualmente las aguas servidas no reciben ningun tratamiento y son
descargadas en los rios Mantaro y Yauli respectivamente, solo el 41,6% de
las viviendas cuentan con servicios sanitarios adecuados, 4682 viviendas
tienen servicios conectados a la red publica, 2758 viviendas cuentan con
un pozo ciego, los pobladores de 742 viviendas usan como servicios
sanitarios las acequias o canales de regadio y 3 074 viviendas usan los
descampados y laderas de los cerros para hacer sus necesidades. biologicas
(Foto 2.3.1/12).
Se cuenta con las fuentes naturales del Rio Tishgo; agua de uso domestico,
industrial y para EMSAPA (Empresa Municipal de Agua Potable y
Alcantarillado de La Oroya); Cuchimachay: Industrial y para EMSAPA; Rio
Mantaro: agua Industrial; Pozo Marcavalle: Agua para EMSAPA; Manantial
Pichjapuquio: Agua para EMSAPA.
La cantidad de agua suministrada a EMSAPA esta sujeta a cobro a partir de
Agosto de 1994 en que se transfirio el dominio total de las fuentes del
Pozo Marcavalle y Manantial de Pichjapuquio a EMSAPA, en la misma fecha
Centromin comenzo a suministrar agua domestica para que dicha Empresa
(EMSAPA) la distribuyera a los sectores: Calle Lima y Av. Haracio
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo II Pag 30
- --------------------------------------------------------------------------------
Zevallos, actualmente 5 909 viviendas cuentan con conexiones a la red
publica, 4302 viviendas se abastecen en los pilones publicos, 164
viviendas con agua de pozo, 54 la adquieren de los camiones cisternas y
514 la recogen de acequias o manantial.
o Servicio de Energia Electrica
La energia electrica, tambien es proporcionada gratuitamente por Centromim
a sus trabajadores y esta sujeto a racionamiento que lo restringe de 7:30
am a 10:00 am y 1:30 pm a 4:30 pm.
El suministro de luz a La Oroya en el sector particular lo proporciona
Electro Centro. En cuanto a Centromin, con su red interconectada,
proporciona electricidad para su uso industrial y para el uso domestico de
la poblacion trabajadora de la Empresa.
o Tratamiento de desechos y depositos
Para el tratamiento de los desechos industriales el complejo metalurgico
cuenta con 2 hornos crematorios: uno en la Fundicion y otro en la
Refineria de Cobre y Plomo.
En cuanto a los Residuos Solidos domesticos (Basura) no existe ningun
tratamiento sanitario y la basura es acumulada por los camiones
recolectores del Municipio y de Centromin en el sector de Cochabamba, en
la ruta hacia Huancayo a 9 km. de La Oroya.
La poblacion no colabora con la limpieza y arroja constantemente la basura
a la calle, canaletas y a los rios Mantaro y Yauli, no se observa la
existencia de recipientes (cilindros o bolsas) para disponer la basura en
las calles (Fotos 2.3.1/13 y 2.3.1/13A).
Frente al area de operaciones de la Fundicion, los pobladores de La Oroya
Antigua han originado botaderos de basura a orillas del Rio Mantaro.
En la zona conocida coma Huanchan en la carretera hacia Huancayo a 3 Kms
del complejo, existen los depositos de Ferritas de Zinc y los de escorias
de Cobre y Plomo. A 12 kms del complejo en el lugar llamado Malpaso,
existe un deposito abandonado de Trioxido de Arsenico y otro en uso por el
mismo sector en la zona de la Hacienda Antahuaro (Vado).
o Tratamiento de la Zona Urbana La Oroya - Vias de Comunicacion
En lo que respecta a vias de comunicacion, La Oroya cuenta con dos
sistemas terrestres (carretero y ferroviario), constituyendose en una
ciudad estrategica en la zona de la sierra central, por ser el lugar del
cual se bifurca la carretera por un lado a la selva central (Huanuco,
Tingo Maria, Pucallpa) via Cerro de Pasco, por otro lado hacia la sierra
del Valle del Mantaro (Jauja, Huancayo, Huancavelica) y hacia el valle de
Chanchamayo via Tarma. El sistema ferroviario (ENAFER - PERU S.A.),
actualmente realiza
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo II Pag 31
- --------------------------------------------------------------------------------
solamente servicio de transporte de carga hacia Lima, mientras que el de
la Empresa (CMP), transporta carga propia (concentrados, minerales y
maquinarias) entre Cerro de Pasco y La Oroya.
Con relacion al tratamiento de la zona urbana La Oroya se tiene previsto
los estudios y ejecucion (Setiembre 1997), de una variante terrestre a la
altura del Km. 156 de la Carretera Central, en el lugar conocido como
Pachachaca. Esta variante unira directamente Lima con Cerro de Pasco sin
pasar por La Oroya.
El Ministerio de Transportes, Comunicaciones, Vivienda y Construccion,
cuenta con el financiamiento respectivo para el Proyecto anteriormente
senalado, el cual forma parte de la Rehabilitacion de la Carretera Central
entre el Puente Santa Anita (Lima), y Tingo Maria (Huanuco), incluyendo la
ruta a La Oroya.
o Comunicacion radial, televisiva y telefonica
En lo que concierne a las comunicaciones y recreacion de la poblacion la
ciudad de La Oroya cuenta con dos canales de television y una
retransmisora. Algunos sectores, como Tambo de Sol, cuenta con antena
parabolica.
Existen 5 emisoras radiales, dos de ellas con alcance a la poblacion de
Junin.
La Empresa Telefonica del Peru ha realizado un plan de expansion y
mejoramiento de su Servicio de Discado Directo. Por su parte CMP cuenta
con una central privada de comunicaciones telefonicas y de Fax que
interconecta todas sus dependencias y campamentos incluidas las oficinas
de Lima y Callao.
o Comedores, recreacion y capacitacion
Existen en la Ciudad un total de 25 campos deportivos la mayor parte de
los cuales, estan en estado regular de mantenimiento. Tambien se encuentra
9 parques infantiles.
La Oroya carece de areas verdes para recreacion pasiva, sea en forma de
parques o plazas. Siendo el antiguo Campo de Golf de La Oroya la unica
area de recreacion al aire libre.
-- Se cuenta con 7 comedores de los cuales la mayor parte da una
atencion regular/aceptable.
-- Ademas la Empresa a traves de su area de Servicio Social promueve
programas de Recreacion para los trabajadores y sus familiares con
ocasion de los dias festivos.
La oficina de Servicio Social da cursos de: Planificacion del Ingreso
Familiar, Salud preventiva, Manipulacion de Alimentos e Higiene, Uso
Adecuado de Viviendas y Crianza de Animales, Relaciones Familiares, Salud
Madre - Nino, Campanas de Despistaje de Salud, Organizacion y Liderazgo.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo II Pag 32
- --------------------------------------------------------------------------------
Por otro lado se dan cursos de capacitacion a los trabajadores en sus
distintos niveles y especialidades: Administracion, Seguridad, Medio
Ambiente, Relaciones Humanas, especialidades tecnicas (Metalurgicas,
Mecanicas, etc.)
Con respecto a la proyeccion social en La Oroya el Departamento de
Relaciones Publicas mantiene buenas y adecuadas relaciones con las
diferentes instituciones publicas y privadas de la localidad.
2.4 Ambiente de Interes Humano
2.4.1 Recursos Arqueologicos
La Oroya no cuenta con recursos arqueologicos propias y solo es via
de acceso a la zona Central del Pais, rica en tales recursos como la
zona de Tarma, Jauja y Huancayo.
2.4.2 Areas Naturales Protegidas
No existe areas Naturales protegidas y solo es via de acceso al
Parque Nacional donde se encuentra el Bosque de Rocas de Huayllay,
Cerro de Pasco y la Reserva Nacional de Junin alrededor del Lago
Chinchaycocha (Lago Junin) el segundo mas grande del Pais, en la
Meseta de Junin. Proximos a la zona, estan los banos termales de
Yauli.
2.4.3 Lugares de Interes Cientifico y Turistico
La Oroya es via de acceso para el Circuito Turistico
Costa-Sierra-Selva que va desde la zona de Lima a Tarma y el Valle
de Chanchamayo y por otra parte la ruta Turistica al Valle del
Mantaro, con visitas guiadas al Convento de Ocopa que data de la
epoca colonial.
<PAGE>
TABLA NO 2.1.3/1
FRECUENCIA DE DIRECCION DE VIENTO (%) Y
VELOCIDAD MEDIA POR DIRECCION (m/s) - 1995
<TABLE>
<CAPTION>
=================================================================================================================================
Direccion
Velocidad Mes N NNE NE ENE E ESE SE SSE S SSO SO OSO O
=================================================================================================================================
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
D Ene 7,7 5,4 15,4 0,8 5,4 3,1 15,4 7,7 10,0 0,8 5,4 1,5 5,4
- ---------------------------------------------------------------------------------------------------------------------------------
i Feb 13,3 3,3 15,8 2,5 3,3 3,3 20,0 4,2 15,0 1,7 5,8 2,5 2,5
- ---------------------------------------------------------------------------------------------------------------------------------
r Mar 14,0 6,6 25,7 0,7 3,7 0,7 8,1 7,4 11,8 2,9 5,9 0,7 2,2
- ---------------------------------------------------------------------------------------------------------------------------------
e Abr 13,9 4,3 15,8 3,5 4,3 0,9 13,0 8,7 8,7 0,9 5,2 0,9 6,1
- ---------------------------------------------------------------------------------------------------------------------------------
c May 12,6 4,4 25,9 7,4 5,9 6,7 8,1 5,2 8,1 2,2 1,5 1,5 2,2
- ---------------------------------------------------------------------------------------------------------------------------------
c Jun 11,5 5,4 28,5 8,5 5,4 6,9 10,0 3,1 3,8 3,1 0,8 1,5 2,3
- ---------------------------------------------------------------------------------------------------------------------------------
i Jul 10,9 4,7 20,3 7,8 9,4 5,5 9,4 7,0 1,6 4,7 0,8 2,3 1,6
- ---------------------------------------------------------------------------------------------------------------------------------
o Ago 9,8 5,3 25,0 4,5 6,1 2,3 8,3 5,3 3,8 1,5 5,3 6,1 3,0
- ---------------------------------------------------------------------------------------------------------------------------------
n Set 20,0 5,4 23,8 4,6 4,6 1,5 7,7 2,3 4,6 1,5 1,5 2,3 6,9
- ---------------------------------------------------------------------------------------------------------------------------------
Oct 14,0 10,8 15,5 2,3 6,2 1,6 10,9 3,1 0,8 1,6 3,9 1,6 9,3
- ---------------------------------------------------------------------------------------------------------------------------------
% Nov 12,3 10,8 13,1 2,3 6,2 8,5 16,9 2,3 0,8 0,8 4,6 1,5 7,7
- ---------------------------------------------------------------------------------------------------------------------------------
Dic 21,2 8,0 10,6 3,5 8,0 7,1 15,9 0,9 0,9 2,7 3,5 1,8 5,3
=================================================================================================================================
Total 161,2 75,3 235,4 48,4 68,5 48,1 143,7 57,2 69,9 24,4 44,2 24,2 54,5
- ---------------------------------------------------------------------------------------------------------------------------------
Prom.: 13,4 6,3 19,6 4,0 5,7 4,0 12,0 4,8 5,8 2,0 3,7 2,0 4,5
=================================================================================================================================
- ---------------------------------------------------------------------------------------------------------------------------------
V Ene 0,8 0,7 0,9 1,9 0,9 0,9 0,9 1,1 1,3 0,3 1,4 1,4 0,9
- ---------------------------------------------------------------------------------------------------------------------------------
e Feb 0,9 0,6 0,8 0,6 0,5 0,1 1,2 0,9 0,9 0,8 0,8 1,1 0,6
- ---------------------------------------------------------------------------------------------------------------------------------
l Mar 0,7 0,6 1,0 0,3 0,3 1,4 0,9 0,7 1,0 0,3 0,7 1,1 0,3
- ---------------------------------------------------------------------------------------------------------------------------------
o Abr 0,6 0,8 0,8 0,6 0,7 0,3 0,9 0,9 0,7 0,3 1,3 1,7 0,7
- ---------------------------------------------------------------------------------------------------------------------------------
c May 0,9 1,1 0,7 0,7 0,6 1,0 1,1 1,3 1,0 1,6 1,0 0,7 1,9
- ---------------------------------------------------------------------------------------------------------------------------------
i Jun 1,0 0,9 0,9 0,8 1,4 0,9 1,0 1,1 1,3 1,0 0,6 0,8 0,5
- ---------------------------------------------------------------------------------------------------------------------------------
d Jul 1,0 0,9 0,8 0,9 1,1 0,8 1,3 1,8 0,3 0,8 1,1 1,5 1,5
- ---------------------------------------------------------------------------------------------------------------------------------
a Ago 1,1 0,7 0,8 0,5 1,0 0,3 0,9 1,1 1,1 0,4 0,9 1,0 1,5
- ---------------------------------------------------------------------------------------------------------------------------------
d Set 0,7 0,7 0,9 1,1 0,9 0,3 0,9 0,3 0,9 1,0 0,6 1,2 0,9
- ---------------------------------------------------------------------------------------------------------------------------------
Oct 1,1 1,1 1,1 1,8 0,6 0,3 1,1 1,1 1,1 0,6 1,4 0,4 0,7
- ---------------------------------------------------------------------------------------------------------------------------------
m/s Nov 1,0 0,8 1,0 2,2 1,4 1,1 1,4 1,4 1,4 0,8 1,3 1,1 0,9
- ---------------------------------------------------------------------------------------------------------------------------------
Dic 1,1 0,7 0,7 0,4 1,0 1,1 1,2 0,6 1,1 0,8 1,2 0,8 0,6
=================================================================================================================================
Total 10,9 9,6 10,4 11,8 10,4 8,5 12,8 12,3 12,1 8,7 12,3 12,8 11,0
- ---------------------------------------------------------------------------------------------------------------------------------
Prom.: 0,9 0,8 0,9 1,0 0,9 0,7 1,1 1,0 1,0 0,7 1,0 1,1 0,9
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
==========================================================
Direccion
Velocidad Mes ONO NO NNO C V
==========================================================
D Ene 2,3 9,2 2,9 0,8 0,8
- ----------------------------------------------------------
i Feb 0,8 0,8 2,7 1,7 0,8
- ----------------------------------------------------------
r Mar 0,7 4,4 3,8 0,0 1,5
- ----------------------------------------------------------
e Abr 2,6 7,8 2,6 0,9 0,0
- ----------------------------------------------------------
c May 0,7 4,4 1,8 0,7 0,7
- ----------------------------------------------------------
c Jun 4,6 1,5 1,5 0,8 0,8
- ----------------------------------------------------------
i Jul 2,3 6,3 5,4 0,0 0,0
- ----------------------------------------------------------
o Ago 1,5 8,3 3,1 0,0 0,8
- ----------------------------------------------------------
n Set 0,8 7,7 4,0 0,0 0,8
- ----------------------------------------------------------
Oct 2,3 9,3 5,9 0,0 0,8
- ----------------------------------------------------------
% Nov 0,8 10,0 1,4 0,0 0,0
- ----------------------------------------------------------
Dic 0,9 6,2 2,7 0,0 0,0
==========================================================
Total 20,3 75,9 37,8 4,9 7,0
- ----------------------------------------------------------
Prom.: 1,7 6,3 3,2 0,4 0,6
==========================================================
- ----------------------------------------------------------
V Ene 1,1 1,0 0,8 0,8 2,8
- ----------------------------------------------------------
e Feb 0,3 0,8 0,3 1,0 2,8
- ----------------------------------------------------------
l Mar 0,3 0,5 0,7 0,0 1,7
- ----------------------------------------------------------
o Abr 1,7 0,9 1,0 0,3 0,0
- ----------------------------------------------------------
c May 2,8 0,4 0,8 0,6 2,5
- ----------------------------------------------------------
i Jun 0,6 1,1 0,8 0,0 0,8
- ----------------------------------------------------------
d Jul 1,6 1,6 1,5 0,0 0,0
- ----------------------------------------------------------
a Ago 1,1 1,0 1,5 0,0 1,4
- ----------------------------------------------------------
d Set 0,6 0,8 1,2 0,0 1,4
- ----------------------------------------------------------
Oct 1,5 1,0 1,1 0,0 1,7
- ----------------------------------------------------------
m/s Nov 0,6 1,0 1,1 0,0 0,0
- ----------------------------------------------------------
Dic 1,4 1,1 0,6 0,0 0,0
==========================================================
Total 13,6 11,2 11,4 2,7 15,1
- ----------------------------------------------------------
Prom.: 1,1 0,9 1,0 0,2 1,3
- ----------------------------------------------------------
FRECUENCIA DE DIRECCION DE VIENTO (%) Y
VELOCIDAD MEDIA POR DIRECCION (m/s) - 1995
<TABLE>
<CAPTION>
=================================================================================================================================
Direccion
Velocidad N NNE NE ENE E ESE SE SSE S SSO SO OSO O
=================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
% 13,4 6,3 19,6 4,0 5,7 4,0 12,0 4,8 5,8 2,0 3,7 2,0 4,5
- ---------------------------------------------------------------------------------------------------------------------------------
m/s 0,9 0,8 0,9 1,0 0,9 0,7 1,1 1,0 1,0 0,7 1,0 1,1 0,9
=================================================================================================================================
</TABLE>
=============================================================
Direccion
Velocidad ONO NO NNO C V
=============================================================
% 1,7 6,3 3,2 0,4 0,6
- -------------------------------------------------------------
m/s 1,1 0,9 1,0 0,2 1,3
=============================================================
[ILLEGIBLE] Calma V: Viento Variado
Pag 33
<PAGE>
TABLA NO 2.1.3/2
DATOS DE LLUVIA ANUAL
ESTACION METEOROLOGICA - FUNDICION DE LA OROYA ESTACION DE MAYUPAMPA
<TABLE>
<CAPTION>
========================================================================================================================
Lluvia mm Lluvia mm Lluvia mm Lluvia mm Lluvia mm Lluvia mm
ANOS H20/a ANOS H2O/a ANOS H2O/a ANOS H2O/a ANOS H2O/a ANOS H2O/a
========================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1924 564,30 1948 551,3 1972 472,8 1957 595,40 1980 515,50
- ------------------------------------------------------------------------------------------------------------------------
1925 569,00 1949 503,30 1973 748,40 1958 603,50 1981 675,00
- ------------------------------------------------------------------------------------------------------------------------
1926 491,70 1950 673,30 1974 411,00 1959 686,40 1982 690,50
- ------------------------------------------------------------------------------------------------------------------------
1927 473,60 1951 628,90 1975 557,80 1960 664,80 1983 423,00
- ------------------------------------------------------------------------------------------------------------------------
1928 394,60 1952 651,60 1976 522,20 1961 693,80 1984 538,30
- ------------------------------------------------------------------------------------------------------------------------
1929 504,10 1953 655,50 1977 506,20 1962 423,40 1985 533,50
- ------------------------------------------------------------------------------------------------------------------------
1930 474,60 1954 642,90 1978 521,60 1963 458,00 1986 653,60
- ------------------------------------------------------------------------------------------------------------------------
1931 439,00 1955 531,10 1979 489,30 1964 627,80 1987 654,10
- ------------------------------------------------------------------------------------------------------------------------
1932 694,00 1956 520,90 1980 515,20 1965 526,10 1988 628,70
- ------------------------------------------------------------------------------------------------------------------------
1933 622,10 1957 523,20 1981 665,70 1966 425,80 1989 611,70
- ------------------------------------------------------------------------------------------------------------------------
1934 609,80 1958 484,10 1982 675,50 1967 608,10 1990 714,50
- ------------------------------------------------------------------------------------------------------------------------
1935 588,90 1959 606,30 1983 408,30 1968 626,80 1991 449,20
- ------------------------------------------------------------------------------------------------------------------------
1936 447,60 1960 601,40 1984 532,80 1969 569,70 1992 338,30
- ------------------------------------------------------------------------------------------------------------------------
1937 569,30 1961 649,60 1985 579,10 1970 557,80 1993 759,00
- ------------------------------------------------------------------------------------------------------------------------
1938 507,60 1962 426,00 1986 676,70 1971 491,50 1994 625,30
- ------------------------------------------------------------------------------------------------------------------------
1939 736,80 1963 547,40 1987 681,20 1972 469,80 1995 534,00
- ------------------------------------------------------------------------------------------------------------------------
1940 579,10 1964 541,90 1988 630,50 1973 694,70
- ------------------------------------------------------------------------------------------------------------------------
1941 715,90 1965 456,10 1989 621,40 1974 384,10
- ------------------------------------------------------------------------------------------------------------------------
1942 663,50 1966 551,10 1990 767,60 1975 530,80
- ------------------------------------------------------------------------------------------------------------------------
1943 670,30 1967 689,50 1991 507,80 1976 504,90
- ------------------------------------------------------------------------------------------------------------------------
1944 548,70 1968 646,70 1992 346,50 1977 468,90
- ------------------------------------------------------------------------------------------------------------------------
1945 600,60 1969 602,00 1993 668,50 1978 526,20
- ------------------------------------------------------------------------------------------------------------------------
1946 698,00 1970 598,90 1994 568,20 1979 601,00
- ------------------------------------------------------------------------------------------------------------------------
1947 411,30 1971 469,80 1995 502,80
========================================================================================================================
mm H2O/a mm H2O/a
Promedio: (72 anos) 568,10 Promedio: (39 anos) 563,70
Maximo: 1990 767,60 Maximo: 1993 759,00
Minimo: 1992 346,50 Minimo: 1992 423,00
========================================================================================================================
</TABLE>
Pag 34
<PAGE>
Pag. 35
CENTROMIN PERU S.A.
Direccion de Asuntos Ambientales
TABLA No 2.1.3/3
INFORMACION DE LAS ESTACIONES METEOROLOGICAS DE LA OROYA y MAYUPAMPA
1995
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Temp. [degrees] C % Humedad Relativa Cant. lluvia: mmH(2)0/a Lectura Barometro: kPa
--------------------------------------------------------------------------------------------------------------
Meses Max. Min. Prom. Max. Min. Prom. Oroya Mayup. Max. Min. Prom.
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Ene 24,00 3,00 9,90 72,00 8,00 34,00 106,50 88,50 65,82 65,29 65,58
Feb 25,00 2,50 9,40 72,00 9,00 35,00 96,70 76,00 65,99 65,38 65,61
Mar 23,00 3,50 10,00 70,00 9,00 35,00 62,80 79,00 65,88 65,30 65,59
Abr 24,00 0,00 9,80 69,00 8,00 30,00 48,30 68,90 65,91 65,26 65,60
May 24,00 -4,00 8,20 72,00 5,00 27,00 7,10 7,40 65,99 65,24 65,65
Jun 22,50 -3,00 7,80 56,00 8,00 26,00 0,00 0,00 66,02 65,36 65,70
Jul 23,50 -0,50 7,40 65,00 8,00 30,00 10,50 16,80 65,93 65,26 65,59
Ago 23,50 -2,00 8,90 55,00 6,00 25,00 2,80 0,60 66,03 65,39 65,69
Set 24,50 -1,00 8,50 63,00 7,00 26,00 19,60 26,40 66,09 65,33 65,71
Oct 24,00 2,50 10,20 61,00 8,00 27,00 30,20 34,60 66,14 65,14 65,56
Nov 25,00 1,00 9,70 60,00 8,00 25,00 41,98 60,30 65,87 65,17 65,54
Dic 26,00 -2,00 9,40 63,00 7,00 25,00 76,70 75,50 65,94 65,14 65,55
- -------------------------------------------------------------------------------------------------------------------------
Promedio: 9,10 28,75 65,61
- -------------------------------------------------------------------------------------------------------------------------
Extremos: 26,00 -4,00 72,00 5,00 66,14 65,14
- -------------------------------------------------------------------------------------------------------------------------
<CAPTION>
TOTAL DE LLUVIA - 1995 mm H(2)O/a LECTURA DEL BAROMETRO: kPa
<S> <C> <C> <C> <C> <C> <C>
La Oroya 502,80 8:00 10:00 12:00 14:00 16:00
Mayupampa 534,00 65,78 65,73 65,62 65,50 65,44
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Pag. 36
CENTROMIN PERU S.A.
DIRECCION DE ASUNTOS AMIBIENTALES
TABLA No 2.1.3/4
LECTURA DEL BAROMETRO: kPa
Ano : 1995
- ------------------------------------------------------------------
Mes 8:00 10:00 12:00 14:00 16:00
- ------------------------------------------------------------------
Ene 65,72 65,65 65,57 65,48 65,44
- ------------------------------------------------------------------
Feb 65,76 65,71 65,63 65,52 65,46
- ------------------------------------------------------------------
Mar 65,72 65,68 65,60 65,52 65,44
- ------------------------------------------------------------------
Abr 65,76 65,71 65,63 65,51 65,42
- ------------------------------------------------------------------
May 65,82 65,78 65,67 65,54 65,46
- ------------------------------------------------------------------
Jun 65,88 65,82 65,69 65,58 65,53
- ------------------------------------------------------------------
Jul 65,77 65,71 65,59 65,47 65,39
- ------------------------------------------------------------------
Ago 65,88 65,81 65,68 65,55 65,51
- ------------------------------------------------------------------
Set 65,88 65,84 65,72 65,58 65,52
- ------------------------------------------------------------------
Oct 65,72 65,68 65,57 65,42 65,38
- ------------------------------------------------------------------
Nov 65,72 65,65 65,57 65,40 65,36
- ------------------------------------------------------------------
Dic 65,71 65,66 65,54 65,42 65,41
- ------------------------------------------------------------------
Total 789,34 788,70 787,46 785,99 785,32
- ------------------------------------------------------------------
Promedio: 65,78 65,73 65,62 65,50 65,44
- ------------------------------------------------------------------
<PAGE>
Pag. 37
CENTROMIN PERU
DIRECCION DE ASUNTOS AMBIENTALES
TABLA 2.1.4/1
ESTACIONES DE MONITOREO - CALIDAD DE AIRE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Nombre Altura Respecto Altura Respecto Tipo Tipos
Y al nivel del mar Nivel del Suelo del Parametros Fre- de Observaciones
Situacion msnm (m) Area Muestreados cuencia Equipos
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Hotel Inca 3 742 22 Urbano SO2, MPS Diaria Automatico Kimoto 331 B, Hi-Volumen
- --------------------------------------------------------------------------------------------------------------------------------
Cushurupampa 3 801 19 Semiurbano SO2, MPS, Diaria Automatico Kimoto 332 TW, Hi-Volumen
veloc. y
direc. del
viento.
- --------------------------------------------------------------------------------------------------------------------------------
Sindicato 3 731 11 Urbano SO2, MPS Diaria Automatico Kimoto 331 B, Hi-Volumen
Obreros
- --------------------------------------------------------------------------------------------------------------------------------
Huanchan 3 792 21 Rural SO2, MPS, Diaria Automatico Kimoto 332 TW, Hi-Volumen
veloc. y
direc. del
viento.
- --------------------------------------------------------------------------------------------------------------------------------
Casaracra 3 719 72 Rural SO2, MPS Dairia Automatico DKK, Hi-Volumen
</TABLE>
<PAGE>
Pag. 38
CENTROMIN PERU S.A.
DIRECCION DE ASUNTOS AMBIENTALES
TABLA No 2.1.4/2
CALIDAD DEL AIRE EN LAS ESTACIONES DE MONITOREO DEL COMPLEJO METALURGICO DE LA
OROYA
ANALISIS DE GAS SO(2) Y MATERIAL PARTICULADO
PERIODO: Ene - Dic. 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Velocidad del
SO(2) : ppb PM-10 : (micro)g/m^3 MPS Contenido metalico: (micro)g/m^3 viento: m/s
Estacion de ------------------------------------------------------------------------------------------------------------
Monitorco Mes Max. Min. Prom. Max. Min. Prom. Hi-Vol As Pb Cd Max. Min. Prom.
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Hotel Inca Ene 95 1039,6 2,5 45,8 229,0 2,0 35,2 56,255 0,090 0,068 0,002
Feb 1147,9 1,9 49,4 206,0 3,0 37,5 103,296 0,671 0,258 0,010
Mar 1108,5 2,3 69,0 216,0 2,0 34,8 93,377 0,093 0,121 0,004
Abr 1252,5 3,1 50,9 228,0 0,0 38,0 98,242 0,363 0,255 0,010
May 1131,6 2,8 48,4 709,0 1,0 37,0 131,070 0,210 0,131 0,013
Jun 1089,6 2,8 40,4 407,0 1,0 38,0 111,276 0,100 0,100 0,011
Jul 1125,0 1,9 43,8 4O5,0 2,0 45,5 213,519 0,384 0,214 0,021
Ago 823,6 0,3 27,8 287,0 8,0 59,6 121,597 0,122 0,182 0,012
Set 755,6 0,6 12,1 193,0 4,0 49,0 159,182 0,271 0,287 0,016
Oct 629,9 0,6 22,2 198,0 1,0 36,8 124,899 0,325 0,375 0,012
Nov 880,9 0,0 36,3 395,0 1,0 37,2 72,823 0,131 0,371 0,007
Dic 1060,0 0,0 33,2 209,0 1,0 37,1 137,612 0,427 0,991 0,014
----------------------------------------------------------------------------------------------
Prom. 1003,7 1,6 39,9 315,1 2,2 42,9 118,596 0,266 0,279 0,011
- ------------------------------------------------------------------------------------------------------------------------------------
2. Cushurupampa Ene 95 1036,9 0,8 61,1 41,629 0,062 0,079 0,004 9,5 0,0 1,9
Feb 995,2 0,6 37,5 51,579 0,258 0,093 0,003 9,7 0,0 1,7
Mar 998,2 1,1 53,7 41,495 0,062 0,162 0,004 7,2 0,0 1,6
Abr 1034,7 1,5 36,4 40,247 0,056 0,072 0,004 9,4 0,0 1,7
May 1003,2 1,7 36,9 77,669 0,210 0,156 0,008 9,4 0,0 1,8
Jun 1033,0 1,7 30,7 41,254 0,136 0,095 0,004 7,5 0,0 2,0
Jul 898,5 1,1 35,3 67,307 0,269 0,182 0,007 7,6 0,0 1,9
Ago 990,7 0,8 30,8 122,238 0,220 0,293 0,012 7,6 0,0 2,1
Set 638,7 1,7 23,5 106,088 0,297 0,255 0,011 8,1 0,0 2,1
Oct 721,3 0,8 28,6 96,240 0,144 0,327 0,010 8,2 0,0 1,9
Nov 1038,2 1,7 46,8 49,814 0,149 0,289 0,005 7,3 0,0 1,6
Dic 1037,0 1,4 53,5 79,315 0,190 0,286 0,008 9,3 0,0 1,8
-------------------------------------------------------------------------------------------------------------------
Prom. 243,3 2,2 40,0 67,906 0,171 0,191 0,007 8,4 0,0 1,8
- ------------------------------------------------------------------------------------------------------------------------------------
3. Sindicato de Ene 95 1156,8 0,7 73,7 344,0 1,0 46,5 111,254 0,189 0,367 0,011
Obreros Feb 731,3 1,8 50,8 357,0 1,0 50,8 87,884 1,230 0,615 0,018
Mar 625,1 0,0 32,6 300,0 1,0 43,7 84,362 0,726 0,456 0,008
Abr 1384,6 0,0 50,3 370,0 1,0 49,3 349,273 2,794 2,480 0,035
May 1389,9 1,8 98,9 540,0 1,0 40,7 161,815 0,679 0,356 0,016
Jun 1379,7 2,2 84,3 579,0 1,0 33,8 94,577 0,747 0,615 0,019
Jul 1388,2 1,5 86,0 465,0 1,0 38,1 87,967 0,853 0,607 0,018
Ago 1391,7 1,8 72,9 276,0 1,0 43,3 145,584 0,524 0,437 0,015
Set 1224,9 1,8 30,0 327,0 1,0 39,3 164,103 0,394 0,919 0,016
Oct 1380,7 2,9 70,2 408,0 1,0 44,0 132,424 0,331 0,569 0,013
Nov 1376,6 2,9 92,4 531,0 1,0 49,5 199,276 1,813 4,185 0,060
Dic 1377,0 2,9 85,0 567,0 1,0 48,9 188,575 2,640 3,772 0,057
----------------------------------------------------------------------------------------------
Prom. 348,3 3,7 68,6 148,9 6,0 43,9 150,591 1,077 1,282 0,024
- ------------------------------------------------------------------------------------------------------------------------------------
4. Huanchan Ene 95 1207,9 1,6 124,5 59,611 0,244 0,370 0,012 9,5 0,1 1,7
Feb 1259,6 1,3 104,9 88,420 0,633 0,567 0,018 9,5 0,1 1,7
Mar 1168,6 1,9 528,6 44,945 0,153 0,162 0,009 8,4 0,1 1,6
Abr 1199,7 2,3 162,8 349,865 8,747 3,499 0,105 7,6 0,1 2,0
May 1209,0 2,9 213,5 169,661 2,206 3,902 0,102 6,1 0,1 2,2
Jun 1192,0 4,8 193,8 306,612 35,260 58,256 2,054 7,9 0,1 2,1
Jul 1314,6 4,8 211,6 254,051 30,740 51,572 1,956 9,0 0,1 2,0
Ago 1578,0 5,9 211,6 187,924 8,081 11,851 0,244 8,3 0,1 2,4
Sit 1200,3 3,2 130,7 137,684 1,143 3,580 0,055 9,9 0,1 2,3
Oct 1178,3 7,4 129,7 145,831 1,750 2,333 0,058 8,8 0,1 2,0
Nov 1083,2 6,4 146,8 140,150 1,402 1,009 0,070 8,0 0,1 2,4
Dic 1066,4 0,0 92,7 89,185 0,705 2,765 0,045 8,2 0,0 2,0
-------------------------------------------------------------------------------------------------------------------
Prom. 556,1 11,0 152,9 164,495 7,589 11,656 0,394 8,4 0,1 2,0
- ------------------------------------------------------------------------------------------------------------------------------------
5. Casaracra Ene 95 1000,0 0,5 51,9 71,075 0,001 0,100 0,004
Feb 1000,0 0,0 55,9 205,750 1,410 0,123 0,004
Mar 1000,0 0,0 47,4 93,375 0,019 0,047 0,019
Abr 935,0 0,0 15,9 58,972 0,012 0,035 0,006
May 680,0 0,0 12,9 82,026 0,041 0,049 0,008
Jun 352,0 0,0 4,1 69,235 0,u35 0,048 0,007
Jul 467,0 0,2 5,0 171,235 0,185 0,171 0,017
Ago 176,0 0,0 5,2 328,539 0,031 0,296 0,033
Sit Fuera de servicio n.t. 263,104 0,474 0,210 0,026
Oct 1000,0 0,0 25,7 204,348 0,266 0,163 0,020
Nov 1000,0 0,0 33,3 118,999 0,059 0,119 0,012
Dic 1000,0 0,3 42,8 111,741 0,078 0,134 0,011
----------------------------------------------------------------------------------------------
Prom. 261,3 0,6 28,4 148,200 0,229 0,125 0,014
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTA: La estacion de Casaraca, analizador de SO(2) fuera de servicio en los mes
de Septiembre.
: La estacion de Huanchan, fuera de servicio del 11 de Octubre al 20 de
Noviembre de 1995.
<PAGE>
Pag. 39
TABLA No 2.1.4/2A
CALIDAD DEL AIRE EN LAS ESTACIONES DE MONITOREO DEL COMPLEJO METALURGICO DE LA
OROYA
ANALISIS DE GAS S02 Y MATERIAL PARTICULADO
PERIODO: Ene - Jun. 1 996
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Velocidad del
Estacion de SO(2) : ppb PM-10 : (micro)g/m^3 MPS Contenido metalico: (micro)g/m^3 viento: m/s
- ------------------------------------------------------------------------------------------------------------------------------------
Monitoreo Mes Max. Min. Prom. Max. Min. Prom. Hi-Vol As Pb Cd Max. Min. Prom.
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Hotel Inca Ene.96 1109,9 1,6 43,3 131,0 1,0 23,8 162,187 0,146 0,292 0,016
Feb 1140,1 2,5 44,7 195,0 1,0 20,1 58,737 0,106 0,100 0,006
Mar 1144,5 2,8 79,2 119,0 1,0 20,6 164,772 0,593 0,676 0,016
Abr 1157,2 1,9 53,2 291.0 0,0 19,5 120,839 0,520 0,375 0,012
May 1129,3 2,1 59,7 268.0 1,0 26,8 131,343 0,355 0,657 0,026
Jun 1124,0 1,6 49,9 241,0 2,0 22,3 84,287 0,388 0,927 0,034
Jul
Ago
Set
Oct
Nov
Dic
-------------------------------------------------------------------------------------------
Prom. 1134,2 2,1 55,0 207,5 1,0 22,2 120,361 0,351 0,505 0,018
- ------------------------------------------------------------------------------------------------------------------------------------
2. Cushurupampa Ene.96 945,3 2,4 34,4 38,453 0,035 0,104 0,004 9,9 0,0 1,6
Feb 741,4 2,8 50,1 39,193 0,020 0,110 0,004 9,7 0,0 1,5
Mar 996,9 2,3 60,8 18,077 0,025 0,049 0,002 8,5 0,0 1,3
Abr 709,0 2,0 38,4 55,662 0,134 0,223 0,006 8,0 0,0 1,3
May 1046,6 2,4 42,6 75,179 0,060 0,150 0,008 8,7 0,0 1,2
Jun 1013,5 2,3 35,8 85,720 0,223 0,309 0,009 6,1 0,0 1,3
Jul
Ago
Set
Oct
Nov
Dic
-------------------------------------------------------------------------------------------------------------------
Prom. 908,8 2,4 43,7 52,047 0,083 0,158 0,006 8,5 0,0 1,4
- ------------------------------------------------------------------------------------------------------------------------------------
3. Sindicato de Ene.96 1279,6 4,2 73,3 677,0 1,0 47,8 93,637 0,534 0,440 0,009
Obreros Feb 1358,2 2,9 84,3 373,0 1,0 45,2 103,933 0,582 0,696 0,010
Mar 1384,3 9,3 154,7 554,0 1,0 60,0 116,749 1,401 2,101 0,047
Abr 1386,4 6,2 96,2 759,0 1,0 51,4 85,600 0,835 0,648 0,017
May 1393,7 6,2 106,0 709,0 2,0 52,1 117,726 0,059 0,235 0,012
Jun 1373,4 1,0 15,5 1084,0 2,0 48,9 112,215 0,314 0,550 0,011
Jul
Ago
Set
Oct
Nov
Dic
-------------------------------------------------------------------------------------------
Prom. 1362,6 5,0 88,3 692,7 1.3 50,9 104,977 0,621 0,778 0,018
- ------------------------------------------------------------------------------------------------------------------------------------
4. Huanchan Ene.96 1100,0 0,0 82,1 71,517 0,036 0,215 0,007 12,3 0,1 1,7
Feb 1100,1 2,1 151,9 120,143 0,493 1,105 0,024 10,1 0,1 1,7
Mar 1815,2 9,3 237,8 60,422 0,453 0,906 0,024 6,1 0,1 1,3
Abr 1836,4 10,7 217,5 79,713 0,797 1,036 0,032 8.6 0,0 1,6
May 1810,7 6,7 216,5 175,617 2,107 4,390 0,263 8,6 0,0 1,8
Jun 1109,4 5,7 186,6 294,007 6,468 9,996 0,470 9,9 0,0 2,0
Jul
Ago
Set
Oct
Nov
Dic
-------------------------------------------------------------------------------------------------------------------
Prom. 1462,0 5,8 182,1 133,570 1,726 2,941 0,137 9,3 0,1 1,7
- ------------------------------------------------------------------------------------------------------------------------------------
5. Casaracra Ene.96 1000,0 0,3 49,9 63,965 0,064 0,077 0,006
Feb 1000,0 0,4 40,6 68,996 0,028 0,062 0,007
Mar 1000,0 0,5 56,9 116,052 0,093 0,116 0,012
Abr 1000,0 0,6 25,9 61,107 0,110 0,086 0,006
May 1000,0 0,0 18,9 116,266 0,023 0,035 0,012
Jun 870,0 0,0 9,8 123,304 0,197 0,037 0,012
Jul
Ago
Set
Oct
Nov
Dic
-------------------------------------------------------------------------------------------
Prom. 978,3 0,3 33,7 91,615 0,086 0.069 0.009
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Pag. 40
TABLA No 2.1.4/3
CALIDAD DEL AIRE EN LAS ESTACIONES DE MONITOREO DEL COMPLEJO METALURGICO DE LA
OROYA
ANALISIS DE GAS SO(2) Y MATERIAL PARTICULADO
PERIODO: Ene - Dic. 1 995
<TABLE>
<CAPTION>
==============================================================================================================
Estacion SO(2): ppb PM-10: (mico)g/m^3 MPS: (micro)g/m^3
de -------------------------------------------------------------------------------------
Monitoreo Max. Max. Prom. Max. Max. Prom. Max. Max. Prom.
1 hr 24 hrs(1) Anual(4) 1 hr 24 hrs(1) Anual(4) 1 hr 24 hrs(1) Anual(4)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Hotel Inca 1253 69 40 709,0 59,6 42,9 N/D 214 112
2. Cushurupampa 1038 61 40 N/D N/D N/D N/D N/D N/D
3. Sindiento de obreros 1392 99 69 579,0 50,8 43,9 N/D 349 138
4. Huanchan 1578 529 153 N/D N/D N/D N/D N/D N/D
5. Casaracra 1000 56 28 N/D N/D N/D N/D N/D N/D
- --------------------------------------------------------------------------------------------------------------
Normas Peruanas N/D 200(1) 60(4) N/D N/D N/D N/D 350(1) 150(2)
- --------------------------------------------------------------------------------------------------------------
Banco Mundial N/D 191(1) 38(4) N/D N/D N/D N/D 260(1) 75(2)
- --------------------------------------------------------------------------------------------------------------
Normas Canada 344 115(1) 23(4) N/D N/D N/D N/D N/D N/D
- --------------------------------------------------------------------------------------------------------------
Normas U.S.A. N/D 139(1) 31(4) N/D N/D N/D N/D 150(1) 50(2)
==============================================================================================================
</TABLE>
==============================================================================
Velocidad del
Estacion Contenido metalico: (micro)g/m^3 viento: m/s
de -----------------------------------------------------
Monitoreo As Pb Cd Max. Min. Prom.
24 hrs(1) 24 hrs(1) 24 hrs(1)
- ------------------------------------------------------------------------------
1. Hotel Inca 0,3 0,3 0,011 N/D N/D N/D
2. Cushurupampa 0,2 0,2 0,007 8,4 0,0 1,8
3. Sindiento de obreros 1,1 1,3 0,024 N/D N/D N/D
4. Huanchan 7,6 11,7 0,394 8,4 0,1 2,0
5. Casaracra 0,2 0,1 0,014 N/D N/D N/D
- ------------------------------------------------------------------------------
Normas Peruanas 6,0(1) 0,5(4) N/D N/D N/D N/D
- ------------------------------------------------------------------------------
Banco Mundial N/D N/D N/D
- ------------------------------------------------------------------------------
Normas Canada N/D N/D N/D
- ------------------------------------------------------------------------------
Normas U.S.A. N/D N/D N/D
==============================================================================
TABLA No 2.1.4/3A
CALIDAD DEL AIRE EN LAS ESTACIONES DE MONITOREO DEL COMPLEJO METALURGICO DE LA
OROYA
ANALISIS DE GAS SO(2) Y MATERIAL PARTICULADO
PERIODO: Ene - Jun. 1 996
<TABLE>
<CAPTION>
==============================================================================================================
Estacion SO(2): ppb PM-10: (mico)g/m^3 MPS: (micro)g/m^3
de -------------------------------------------------------------------------------------
Monitoreo Max. Max. Prom. Max. Max. Prom. Max. Max. Prom.
1 hr 24 hrs(1) Anual(4) 1 hr 24 hrs(1) Anual(4) 1 hr 24 hrs(1) Anual(4)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Hotel Inca 1157 79 291 27 N/D 165
2. Cushurupampa 1017 61 0 0 N/D 86
3. Sindiento de obreros 1836 238 1084 60 N/D 294
4. Huanchan 1836 238 0 0 N/D 294
5. Casaracra 1000 57 0 0 N/D 123
- --------------------------------------------------------------------------------------------------------------
Normas Peruanas N/D 200(1) 60(4) N/D N/D N/D N/D 350(1) 150(2)
- --------------------------------------------------------------------------------------------------------------
Banco Mundial N/D 191(1) 38(4) N/D N/D N/D N/D 260(1) 75(2)
- --------------------------------------------------------------------------------------------------------------
Normas Canada 344 115(1) 23(4) N/D N/D N/D N/D N/D N/D
- --------------------------------------------------------------------------------------------------------------
Normas U.S.A. N/D 139(1) 31(4) N/D N/D N/D N/D 150(1) 50(2)
==============================================================================================================
</TABLE>
==============================================================================
Velocidad del
Estacion Contenido metalico: (micro)g/m^3 viento: m/s
de -----------------------------------------------------
Monitoreo As Pb Cd Max. Min. Prom.
24 hrs(1) 24 hrs(1) 24 hrs(1)
- ------------------------------------------------------------------------------
1. Hotel Inca 0,4 0,505 0,018 N/D N/D N/D
2. Cushurupampa 0,1 0,158 0,006 8,5 0,0 1,4
3. Sindiento de obreros 0,6 0,778 0,018 N/D N/D N/D
4. Huanchan 1,7 2,941 0,137 9,3 0,1 1,7
5. Casaracra 0,1 0,069 0,009 N/D N/D N/D
- ------------------------------------------------------------------------------
Normas Peruanas 6,0(1) 0,5(4) N/D N/D N/D N/D
- ------------------------------------------------------------------------------
Banco Mundial N/D N/D N/D
- ------------------------------------------------------------------------------
Normas Canada N/D N/D N/D
- ------------------------------------------------------------------------------
Normas U.S.A. N/D N/D N/D
==============================================================================
Notas: (1) Concentracion media aritmetica diaria.
(2) Concentracion media geometrica anual.
(3) Concertracion de Arsenico en 30 min. (No debe ser excedido mas de una
vez al ano).
(4) Concentracion media aritmetica anual
N/D = Estandar no especificado.
<PAGE>
Pag. 41
CENTROMIN PERU S.A.
DIRECCION DE ASUNTOS AMBIENTALES
TABLA 2.1.6/1
ANALISIS DE LOS SUELOS
LABORATORIO: UNIVERSIDAD NACIONAL AGRARIA - LA MOLINA
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
C.E. Arena Limo Arcilla CaCO(3) M.O. P K(2)O
Zona de muestreo Estrato Clave mmhos/cm % % % Textura pH % % ppm Kr/Ha.
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Huaynacancha Bajo Superficie HCIB-A 0,59 66 32 2 Franco Arenoso 3,5 0 1,62 46.4 268
- ------------------------------------------------------------------------------------------------------------------------------------
Huaynacancha Bajo Superficie HCIB-B 0,39 76 20 4 Arena franca 3,7 0 2,36 6.9 349
- ------------------------------------------------------------------------------------------------------------------------------------
Huaynacancha Medio Superficie HCIM-A 0,64 76 20 4 Arena Franca 7 9,32 2,06 37.0 235
- ------------------------------------------------------------------------------------------------------------------------------------
Huaynacancha Medio Superficie HCIM-B 0,42 56 30 14 Franco Arenoso 8 21,89 0,59 11.6 79
- ------------------------------------------------------------------------------------------------------------------------------------
Huaynacancha Alto Superficie HCIA-A 1,33 72 26 2 Franco Arenoso 3,5 0 1,77 18.2 92
- ------------------------------------------------------------------------------------------------------------------------------------
Huaynacancha Alto Subsuelo HCIA-B 0,59 78 20 2 Arena Franca 3,7 0 1,32 6.0 84
- ------------------------------------------------------------------------------------------------------------------------------------
Huaynacancha 2 Bajo Superficie HC2B-A 2,09 70 28 2 Franco Arenoso 3,4 0 2,21 57.7 221
- ------------------------------------------------------------------------------------------------------------------------------------
Huaynacancha 2 Bajo Subsuelo HC2B-B 0,73 64 30 6 Franco Arenoso 3,7 0 1,47 19.1 235
- ------------------------------------------------------------------------------------------------------------------------------------
Huaynacancha 2 Medio Superficie HC2M-A 0,57 72 26 2 Franco Arenoso 3,5 0 1,77 18.2 396
- ------------------------------------------------------------------------------------------------------------------------------------
Huaynacancha 2 Medio Subsuelo HC2M-B 0,38 66 26 8 Franco Arenoso 4 0 0,88 3.1 680
- ------------------------------------------------------------------------------------------------------------------------------------
Huaynacancha 2 Alto Superficie HC2A-A 0,57 80 12 0 Arenoso 3,5 0 1,47 12.5 396
- ------------------------------------------------------------------------------------------------------------------------------------
Huaynacancha 2 Alto Subsuelo HC2A-B 0,47 76 16 8 Franco Arenoso 3,9 0 1,47 3.1 319
- ------------------------------------------------------------------------------------------------------------------------------------
Huari Superficie HRI-AS 0,29 80 20 0 Arena Franca 3,5 0 3,1 35.1 652
- ------------------------------------------------------------------------------------------------------------------------------------
Huari Subsuelo HRI-BSb 0,47 71 20 6 Franco Arenoso 4,3 0 2,06 4.1 574
- ------------------------------------------------------------------------------------------------------------------------------------
Oraya Antigua Superficie OA-A 2,33 68 26 6 Franco Arenoso 7,2 54,26 1,47 88.7 695
- ------------------------------------------------------------------------------------------------------------------------------------
Oraya Antigua Subsuelo OA-B 0,82 50 38 12 Franco 7,9 22,84 2,06 69.9 850
- ------------------------------------------------------------------------------------------------------------------------------------
Oraya Antigua Panteon Superficie OAP-A 0,83 44 36 20 Franco 6,2 0 1,62 37.0 1179
- ------------------------------------------------------------------------------------------------------------------------------------
Oraya Antigua Panteon Subsuelo OAP-B 1,22 46 32 22 Franco 7,5 0 1,32 33.0 811
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Pag. 42
CENTROMIN PERU
DIRECCION DE ASUNTOS AMBIENTALES
TABLA 2.2.2/1
ANALISIS DE PLANTAS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Nombre de No. Clave N P K Ca Mg
la Planta Laboratorio Campo % % % % %
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Llanten 642 1 1,51 0,12 1,56 3,02 0,25
- ---------------------------------------------------------------------------------------------------
Achicoria 643 2 2,49 0,21 1,59 2,38 0,35
- ---------------------------------------------------------------------------------------------------
Menta 644 3 2,74 0,23 1,75 3,08 0,24
- ---------------------------------------------------------------------------------------------------
Humanjasha 646 5 1,31 0,03 1,23 4,65 0,42
- ---------------------------------------------------------------------------------------------------
Stipa sp 647 6 0,67 0,06 0,38 0,54 0,11
- ---------------------------------------------------------------------------------------------------
Ishga 648 7 3,27 0,36 5,26 4,47 0,66
- ---------------------------------------------------------------------------------------------------
Romero 649 8 1,34 0,19 2,01 2,55 0,30
- ---------------------------------------------------------------------------------------------------
<CAPTION>
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Contenido adecuado de elementos 1,00 - 3,00 0,1 - 0,3 1,4 - 4,0 0,05 - 0,15 0,05 - 0,15
esenclales en las plantas
- ---------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
Nombre de No. Clave Fe Zn Cu Mn B
la Planta Laboratorio Campo ppm ppm ppm ppm ppm
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Llanten 642 1 3265 290 75 77 47
- ----------------------------------------------------------------------------------------
Achicoria 643 2 7790 352 85 164 52
- ----------------------------------------------------------------------------------------
Menta 644 3 1103 840 266 45 26
- ----------------------------------------------------------------------------------------
Humanjasha 646 5 3170 505 143 122 36
- ----------------------------------------------------------------------------------------
Stipa sp 647 6 6750 720 296 129 16
- ----------------------------------------------------------------------------------------
Ishga 648 7 3155 795 127 121 57
- ----------------------------------------------------------------------------------------
Romero 649 8 2660 1455 478 214 62
- ----------------------------------------------------------------------------------------
<CAPTION>
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Contenido adecuado de elementos 300 - 800 30 - 150 5 - 30 30 - 200 50 - 200
esenclales en las plantas
- ----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Pag. 43
CENTROMIN PERU
DIRECCION DE ASUNTOS AMBIENTALES
TABLA 2.2.2/2
RESULTADOS ANALITICOS DE LOS CURSOS DE AGUAS NATURALES QUE ATRAVIESAN LA OROYA
Periodo :Enero - Junio de 1996
Laboratorio :Analitico de Centromin Peru S.A.
Fuente :Informes de Pruebas de Control
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
Codigo uS Eh m^3/min
No Conduct mV Fujo pH Temp TSS OD NO(3) SO(4)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Rio Tishgo T-1 344,25 221,95 58,42 8,00 13,06 9,88 28,25 1,33 122,79
- ------------------------------------------------------------------------------------------------
Rio Mantaro M-1 430,22 204,43 3 333,67 7,98 12,11 12,25 31,56 0,81 155,86
Puente Chulec
- ------------------------------------------------------------------------------------------------
Rio Mantaro M-3 587,44 206,59 3 594,24 7,60 12,06 33,17 32,69 1,19 210,13
Union con Yuall
- ------------------------------------------------------------------------------------------------
Rio Yuall Y-1 1 251,22 207,9 656,37 7,64 12,60 136,94 35,82 3,51 733,83
- ------------------------------------------------------------------------------------------------
Rio Mantaro M-5 549,11 205,68 4 930,85 7,67 12,97 28,91 36,30 1,38 277,23
Despues de
Efluente 137
- ------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LMP, Agua Clase III 5 - 9 5,00 0,10 400,00
- ------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
Codigo mg/lt Col Fec
No TDS As Cd Cu Fe Mn Pb Zn DBO c/100 ml
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Rio Tishgo T-1 239,63 0,02 0,01 0,03 0,30 0,01 0,21 0,65 3,50 3,50
- ------------------------------------------------------------------------------------------------
Rio Mantaro M-1 348,33 0,11 0,00 0,05 1,12 0,33 0,09 0,66
Puente Chulec
- ------------------------------------------------------------------------------------------------
Rio Mantaro M-3 1 308,60 0,07 0,01 0,08 2,72 1,11 0,10 1,34
Union con Yuall
- ------------------------------------------------------------------------------------------------
Rio Yuall Y-1 1 389,11 1,42 0,01 2,35 26,76 5,75 1,25 4,38
- ------------------------------------------------------------------------------------------------
Rio Mantaro M-5 504,13 0,21 0,03 0,52 4,49 2,83 0,34 5,31
Despues de
Efluente 137
- ------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
LMP, Agua Clase III 0,20 0,05 0,50 1,00 0,50 0,10 25,00
- ------------------------------------------------------------------------------------------------
</TABLE>
Nota: Los datos proporcionados corresponden a promedios aritmeticos.
<PAGE>
Pag 44
COMPLEJO METALURGICO
LA OROYA
[PHOTO OMITTED]
FOTO 2.2.2./1 ECOSISTEMAS ADYACENTE AL COMPLEJO METALURGICO SE OBSER-
VA ROCA CALIZA DISPERSA POR TODA EL AREA.
[PHOTO OMITTED]
FOTO 2.2.2/2 CASARACRA: VEGETACION DE GRAMINEAS
<PAGE>
Pag 45
COMPLEJO METALURGICO
LA OROYA
[PHOTO OMITTED]
FOTO 2.2.2/3 Km 7 AL SUR DE LA OROYA, COMIENZA A APARECER VEGETACION AR-
BUSTIVA Y ESCASAS GRAMINEAS
[PHOTO OMITTED]
FOTO 2.2.2/4 CUSHRUPAMPA: AL FRONDO SE APRECIA EMANCIONES DE GASES
[ILLEGIBLE]
<PAGE>
Pag 46
COMPLEJO METALURGICO
LA OROYA
[PHOTO OMITTED]
FOTO 2.3.1./1 SECTOR RESIDENCIAL DE CHULEC, EN LA CARRETERA HACIA TARMA
CUENTA CON AREAS BIEN PLANIFICADAS, CAMPO DEPORTIVO Y VEGETACION, ALLI
HABITAN FUNCIONARIOS DE CENTROMIN Y SE ENCUENTRA EL HOSPITAL DE CHULEC.
[PHOTO OMITTED]
FOTO 2.3.1./2 SECTOR DE MARCAVALLE, SE OBSERVA UN MERCADILLO Y ASENTA-
MIENTOS HUMANOS EN LAS LADERAS DEL CERRO. ESTA EN LA ZONA CERCANA AL
HOSPITAL DEL IPPS EN LA SALIDA A LIMA.
<PAGE>
Pag 47
COMPLEJO METALURGICO
LA OROYA
[PHOTO OMITTED]
FOTO 2.3.1./3 TAMBO DEL SOL EN LA COMUNIDAD SANTA ROSA DE SACCO, EN LA
CARRETERA HACIA LIMA. TODOS LOS TERRENOS PERTENECEN A TRABAJADORES Y
EXTRABAJADORES DE CENTROMIN.
[PHOTO OMITTED]
FOTO 2.3.1./4 PROYECTO DE VIVIENDA DE CURIPATA A 20 MINUTOS DELCENTRO DE
LA OROYA, PATROCINADO POR CENTROMIN PARA SUS TRABAJADORES. SE HA PRO-
YECTADO, COLEGIO MEDCADO, ESTADIO, ETC.
<PAGE>
Pag 48
COMPLEJO METALURGICO
LA OROYA
[PHOTO OMITTED]
FOTO 2.3.1/5 EN PRIMER PLANO, LAS OFICINAS DE LA GERENCIA CENTRAL DE OPE-
RACIONES EN EL COMPLEJO METALURGICO - LA OROYA
[PHOTO OMITTED]
FOTO 2.3.1./6 AMBULANTES EN LAS CALLES DE LA OROYA VIEJA. LAS CASAS HAN
SIDO CONSTRUIDAS HASTA LAS LADERAS DE LOS CERROS.
<PAGE>
Pag 49
COMOPLEJO METALURGICO
LA OROYA
[PHOTO OMITTED]
FOTO 2.3.1/7 COLEGIO MAYUPAMPA EN EL SECTOR DE CHULEC, ALLI ESTUDIAN HI-
JOS DE FUNCIONARIOS DE CENTROMIN, SE ENCUENTRA BIEN EQUIPADO Y LA ENSE-
NANZA ES DE CALIDAD.
[PHOTO OMITTED]
FOTO 2.3.1/8 JIRONES DE VIVIENDAS QUE ALBERGAN A TRABAJADORES DE CEN-
TROMIN. LA DISPOSICION ESPECIAL DE LAS CONSTRUCCIONES FAVORECE EL DESA-
RROLLO DE RELACIONES COMUNITARIAS DE VECINDAD.
<PAGE>
Pag 50
COMPLEJO METALURGICO
LA OROYA
[PHOTO OMITTED]
FOTO 2.3.1/9 SECTOR DE HUAYMANTA QUE ALBERGA VIVIENDAS DE TRABAJADO-
RES QUE CUENTAN CON SERVICIOS HIGIENICOS Y DE LAVANDERIA COLECTIVOS.
[PHOTO OMITTED]
FOTO 2.3.1./10 EL SISTEMA DE ALCANTARILLADO ADMINISTRADO POR LA MUNICI-
PALIDAD. ESTRECHAS Y ANTIGUAS CALLES DE LA OROYA VIEJA, OBSERVESE LAS
CANALETAS ABIERTAS DE LOS DESAGUES, LOS CUALES VAN DIRECTAMENTE AL RIO
MANTARO. SE EXPENDE ALIMENTOS JUNTO A LAS AGUAS SERVIDAS.
<PAGE>
Pag 51
COMPLEJO METALURGICO
LA OROYA
[PHOTO OMITTED]
FOTO 2.3.1/11 LA OROYA VIEJA ES UNO MAS DE LOS SECTORES DE LA CIUDAD QUE CARECEN
DE ALCANTARILLADO, PROPICIANDOSE LA TUGURIZACION Y EL HACINA-
MIENTO
[PHOTO OMITTED]
FOTO 2.3.1/12 SECTOR DE NORMAN KING, CAMINO A LIMA, ASENTAMIENTO HUMANO QUE
ALBERGA A UN SECTOR DE LA POBLACION DE LA OROYA NUEVA
<PAGE>
Pag 52
COMPEJO METALURGICO
LA OROYA
[PHOTO OMITTED]
FOTO 2.3.1/13 LA BASURA ES RECOLECTADA POR LOS CAMIONES DE LA MUNICIPA-
LIDAD, LA POBLACION NO COLABORA EN LA LIMPIEZA Y ARROJA
CONSTANTEMENTE LA BASURA A LA CALLE.
[PHOTO OMITTED]
FOTO 2.3.1/13A LA CRIANZA DE ANIMALES EN ESPECIAL CERDOS EN LAS VIVENDAS,
ES COMUN EN LA OROYA. VIEJA ESTOS ANIMALES SE PASEAN LI-
[ILLEGIBLE]
<PAGE>
-----------------------------
ANEXOS DEL
CAPITULO II
-----------------------------
<PAGE>
CENTROMIN PERU S.A. Anexo A
DIRECCION DE ASUNTOS AMBIENTALES
ABASTECIMIENTO DE AGUA INDUSTRIAL Y DE CONSUMO DOMESTICO - CENTROMIN PERU - LA
OROYA
[FLOW CHART OMITTED]
DIAGRAMA 2.1.2/1
<PAGE>
CENTROMIN PERU S.A. Anexo B
DIRECCION DE ASUNTOS AMBIENTALES
DIAGRAMA 2.1.3/1
ROSA DE VIENTOS-PROMEDIO ANUAL 1995
ESTACION HUANCHAN
[WIND GRAPHIC OMITTED]
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Direccion N NNE NE ENE E ESE SE SSE S SSO SO OSO O ONO NO NNO TOTAL
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Velocidad m/sg 2,1 2,2 2,6 2,2 1,7 2,0 1,2 1,2 0,6 1,9 1,1 1,5 1,3 1,7 2,0 1,8 Prom. 1,7 m/s
- ---------------------------------------------------------------------------------------------------------------------------------
Frecuencia % 4,1 6,6 21,3 17,0 3,6 4,6 4,3 2,4 0,8 0,6 0,4 2,0 6,1 9,7 9,5 7,1 100%
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
[NORTH ARROW OMITTED]
<PAGE>
- ------------
CAPITULO III
- ------------
<PAGE>
CENTROMIN PERU S.A. Anexo C
DIRECCION DE ASUNTOS AMBIENTALES
DIAGRAMA 2.1.3/2
ROSA DE VIENTOS-PROMEDIO ANUAL 1995
ESTACION CUSHURUPAMPA
[WIND GRAPHIC OMITTED]
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Direccion N NNE NE ENE E ESE SE SSE S SSO SO OSO O ONO NO NNO TOTAL
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Velocidad m/sg 1,8 1,5 2,1 2,8 1,7 1,2 1,3 1,0 0,7 1,3 1,8 2,4 1,5 0,8 1,0 1,5 Prom. 1,6 m/s
- --------------------------------------------------------------------------------------------------------------------------------
Frecuencia % 9,9 8,4 11,2 18,4 12,8 8,0 4,9 2,1 2,3 3,4 5,7 3,0 1,2 1,5 2,5 4,8 100%
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
[NORTH ARROW OMITTED]
<PAGE>
CENTROMIN PERU S.A. Anexo D
DIRECCION DE ASUNTOS AMBIENTALES
DIAGRAMA 2.1.3/2A
ROSA DE VIENTOS-PROMEDIO ANUAL 1995
ESTACION FUNDICION
[WIND GRAPHIC OMITTED]
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Direccion N NNE NE ENE E ESE SE SSE S SSO SO OSO O ONO NO NNO C V TOTAL
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Velocidad m/sg 0,9 0,8 0,9 1,0 0,9 0,8 1,1 1,0 1,0 0,7 1,0 1,1 0,9 1,1 0,9 1,0 0,2 1,3 Prom. 0,9 m/s
- ------------------------------------------------------------------------------------------------------------------------------------
Frecuencia % 13,4 6,3 19,6 4,0 5,7 4,0 12,0 4,8 5,8 2,0 3,6 2,0 4,5 1,7 6,3 3,3 0,4 0,6 100%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
[NORTH ARROW OMITTED]
<PAGE>
Anexo F
[MAP OMITTED]
DIAGRAMA 2.2.1/1 Ubicacion geografica de la serrania
<PAGE>
PAMA COMPLEJO METALURGICO-LA OROYA Capitulo III Pag 55.
- --------------------------------------------------------------------------------
3.3.2 Concentrados de plomo
a) Concentrados de plomo de CENTROMIN PERU S.A.
En el estudio microscopico de las muestras de concentrados de
plomo procedentes de las unidades de Andaychagua, Paragsha,
Casapalca, Morococha, San Expedito, Yauricocha, Mahr Tunel, se
han determinado los siguientes minerales:
Esfalerita (ZnS) Galena (PbS)
Tetraedrita (Cu(3)SbS(3)) Pinta (FeS(2))
Ganga (SiO(2) + roca) Arsenopirita (FeAs(2))
Calcopirita (CuFeS)
Hematita (Fe(2)O(3))
b) Concentrados de plomo de particulares
En el estudio microscopico de las muestras de concentrados de
plomo procedentes de: Serminco, Ayssa, B.H.L.,
Transmine/Yauli, Huaron, Uchuchacua, Buenaventura, etc. se han
determinado los siguientes minerales:
Esfalerita (ZnS) Galena (PbS)
Arsenopirita (FeAsS) Proustita (3Ag(2)S.As(2)S(3))
Pirrotita (Fe l-XS) Alabandita (MnS)
Pirita (FeS(2))
Ganga (SiO + roca)
Arcanita (K(2)SO(4))
Tetraedrita (Cu(3)SbS(3))
Bornita (CuSFeS(4))
3.3.3. Concentrados de zinc
a) Concentrados de zinc de CENTROMIN PERU S.A.
En el estudio microscopico de las muestras de concentrados de
zinc, procedentes de las unidades de Mahr Tunel y Paragsha, se
han determinado los siguientes minerales:
Pirita (FeS(2)) Calcopirita (CuFeS(2))
Marcasita (FeS(2)) Magnetita (Fe(3)O(4))
Calcita (CaCO(3)) Covelita (CuS)
Arsenopirita (FeAsS)
Esfalerita (ZnS) Galena (PbS)
Hematita (Fe(2)O(3)) Geothita (FeO-OH)
Tetrahedrita (Cu(3)SbS(3))
Ganga (SiO(2) + roca)
El mineral que predomina en las muestras es la esfalerita,
asimismo, la pirita se encuentra en gran porcentaje como
particulas libres y entrelazadas con otros minerales.
3.4. Descripcion del proceso productivo - extractivo
3.4.1. Circuito de cobre (Diagrama No. 3.4.1/1 y 3.4.1/2)
Fundicion de cobre
El proceso de fundicion de cobre se inicia en la Planta de
Preparacion, en donde se dosifica el material recirculante, los
fundentes y los concentrados formando las camas de cobre. Esta
mezcla es sometida a un proceso de
<PAGE>
Anexo G
[GRAPH OMITTED]
DIAGRAMA 2.2.1/2 PERFIL ECOLOGICO DE LAS VERTIENTES OCCIDENTALES DE LOS ANDES
PERUANOS (Koepcke M.1954)
<PAGE>
PAMA COMPLEJO METALURGICO-LA OROYA Capitulo III Pag 56.
- --------------------------------------------------------------------------------
tostacion para eliminar la mayor cantidad de arsenico (As), azufre
(S), algo de antimonio (Sb) y plomo (Pb). Los solidos de los humos
del proceso son recuperados en precipitadores electrostaticos
(cottrell). En esta planta se obtiene el trioxido de arsenico
(As(2)O(3)), que se separa de los procesos metalurgicos, se
transporta a granel a la cancha de almacenamiento de Vado, por su
baja calidad y mercado restringido.
La calcina, producto de la tostacion, pasa a ser fundida en un horno
de reverbero con quemadores oxy-fuel, en donde se separan los
sulfuros metalicos en la calcina (FeS y Cu(2)S) de la ganga
(escoria) y se produce una mata de cobre adecuada para ser cargada y
procesada en los convertidores. La escoria es descargada por una
abertura ubicada en la pared opuesta a la de los quemadores
horizontales, y luego granulada con agua a presion para
posteriormente, ser transportada y almacenada en el deposito de
escorias de Huanchan. El agua utilizada para la granulacion alcanza
los 694 l.p.s. que se descargan al rio Mantaro, situacion que sera
eliminada en cuanto se implemente el sistema de recirculacion de
agua que se encuentra en su fase final de evaluacion.
Una vez carga da la mata a los convertidores, se le insufla aire
para generar los oxidos ferrosos, los cuales reaccionan con la
silice alimentada, produciendose las escorias, que regresan al
reverbero. En una segunda etapa, el sulfuro cuproso es oxidado por
el aire, el cual a su vez, reacciona con el mismo sulfuro
produciendo el cobre ampollado (cobre blister), que se transfiere al
horno de retencion para ser moldeado como anodos. Aqui se tiene en
ejecucion un proyecto de instalacion de una tornamesa de moldeo, que
usara agua atomizada, disminuyendo el consumo de agua industrial en
el enfriamiento de los anodos, permitiendo adicionalmente, el
mejoramiento de su calidad fisica.
Los solidos contenidos en los humos de las etapas de fusion y
conversion son recuperados en precipitadores electrostaticos. Los
gases de SO(2) son evacuados a la atmosfera por la chimenea
principal.
Refineria de Cobre
En la Refineria de Cobre, los anodos de cobre blister provenientes
de la fundicion de cobre, son sometidos a un proceso de
electrolisis, obteniendose un catodo de cobre refinado, el cual es
vendido como catodo o fundido y moldeado como wire bar.
El electrolito se purga (bleed off) diariamente, separandose
aproximadamente 30 000 l/d para mantener el nivel de impurezas en
los rangos requeridos por el proceso.
Esta solucion es saturada por adicion de chatarra de cobre refinado
y evaporacion para producir sulfato de cobre de grado comercial. El
75% de la solucion es retornada como electrolito y el 25% restante
es sometida a cementacion con chatarra de fierro para recuperar el
cobre. La solucion acida agotada se vierte sin neutralizacion al rio
Yauli. Se estudia incorporar un circuito para extraccion por
solventes u otro proceso para evitar la contaminacion de este rio.
Los lodos anodicos obtenidos son tratado en la Planta de Residuos
Anodicos.
<PAGE>
PAMA COMPLEJO METALURGICO-LA OROYA Capitulo III Pag 57.
- --------------------------------------------------------------------------------
Horno Asarco
Los catodos de cobre refinado obtenidos de las celdas
electroliticas, luego de ser lavados y fundidos en un horno Asarco
de columna y el metal moldeado en diferentes formas: barras (wire
bars), tapones (pechos) de cobre, lingotes, canales y moldes. El
agua de enfriamiento pasa por unas pozas de decantacion y filtracion
con paneles de yute que minimizan su contenido de TSS antes de ser
vertidas al rio Yauli.
Planta Alambron
Las barras de cobre son roladas en caliente hasta convertirlas en
alambron negro de 5/16" y alambre trefilado de 6,5 mm de diametro.
Se dispone de un horno de recocido tipo SALEM que usa como
combustible petroleo Diesel, y la reduccion de la seccion de la
barra se obtiene a traves de 14 pasos de rodillos trefiladores.
3.4.2. Circuito de Plomo (Diagrama No. 3.4.2/1 y 3.4.2/2)
Fundicion de Plomo
Se inicia el proceso en la Planta de Preparacion, en donde se
dosifica el material recirculante, los fundentes y los concentrados
formando las camas de plomo. La cama es tratada en la Planta de
Aglomeracion de Plomo en donde se reduce la cantidad de azufre
contenido mediante un proceso de tostacion (up draft), produciendose
un material aglomerado (sinter) con caracteristicas fisicas
apropiadas para ser tratado en los hornos de manga.
El material fino originado por el proceso es recuperado en filtros
de bolsas y los humos en el precipitador electrostatico central.
El aglomerado (sinter) de plomo grueso, es fundido en hornos de
manga usando como reductor y combustible el coque, y un porcentaje
de chatarra de fierro con el fin de prevenir la formacion de
magnetita y evitar la perdida de metales (Pb, Ag) en las escorias.
El producto de fusion que sale de los hornos de manga se denomina
plomo de obra.
Al separar la escoria del plomo de obra, esta se granula con agua a
presion para luego ser transportada y almacenada en el deposito de
escorias de Huanchan. El agua utilizada en la operacion de
granulacion como en el caso de escoria del circuito de cobre, es
vertida al rio Mantaro.
El plomo, producido en los hornos de manga denominado plomo de obra,
es transportado a ollas receptoras donde es espumado. Las espumas
son cargadas a un horno de reverbero donde se separa la mata de
cobre, el "speiss" (Cu-As, Sb) y el plomo bullon. El plomo bullon
retorna a la olla receptora mezclandose con el plomo de obra limpio.
Esta mezcla es "decoperizada" con la finalidad de eliminar impurezas
(Cu, As y Sb).
El plomo, una vez "decoperizado", se calienta y se bombea a las
ollas de la seccion moldeo donde se mantiene a 350 - 380(degrees)C,
a fin de llevar a cabo el moldeo de anodos en dos tornamesas
horizontales.
<PAGE>
PAMA COMPLEJO METALURGICO-LA OROYA Capitulo III Pag 58.
- --------------------------------------------------------------------------------
Refineria de Plomo
El plomo bullon producido en la fundicion, con contenidos de
antimonio (Sb), bismuto (Bi) y plata (Ag), se refina
electroliticamente, por el proceso Betts modificado en la refineria
de Huaymanta.
Completado el proceso electrolitico, los anodos corroidos quedan con
las impurezas insolubles adheridas a sus paredes, y con electrolito
ocluido que debe recuperarse. Luego, los lodos son desprendidos con
agua a presion (35 000 l/d) y la pulpa se envia al filtro automatico
"Larox", obteniendose una torta de lodo anodico con aproximadamente
27% de humedad, listo para su posterior tratamiento en la Planta de
Residuos Anodicos. La solucion (filtrado) que sale del filtro Larox
es recirculada al circuito de la refineria de plomo.
Luego del periodo requerido de deposicion catodica, los catodos son
removidos de las celdas de deposicion a los tanques de lavado para
recuperar el electrolito y luego ser fundidos en una de las tres
ollas de 160 t de capacidad, las que son calentadas con petroleo. El
plomo fundido es calentado hasta 450(degrees)C y agitado
vigorosamente con hidroxido de sodio (NaOH) para espumar el
arsenico, antimonio y estano remanentes. El plomo refinado es
moldeado en barras de 46 kg para su comercializacion.
El acido hidrofluosilicico requerido para el proceso de electrolisis
es fabricado haciendo reaccionar fluoruro de calcio (CaF(2)) con
acido sulfurico (H(2)SO(4)), obteniendose por condensacion acido
fluorhidrico (NF), el que posteriormente se hace reaccionar con
silice fina (Si0(2)) en un reactor. El residuo solido (CaSO(4)), es
descargado directamente al rio Yauli, por lo que se esta viendo la
posibilidad de construir canchas de almacenamiento para este
subproducto.
Planta de Residuos Anodicos
Procesa los lodos anodicos provenientes de las Refinerias de Cobre y
Plomo para la obtencion del DORE (Ag-Au), y otros subproductos como:
bismuto, selenio y telurio.
La planta dispone de 2 reverberos de fusion de lodos y uno de
reduccion de escorias de bismuto; 4 convertidoras; 3 copelas; 7
ollas de bismuto y la seccion Hidrometalurgia y Electrometalurgia
para recuperar el selenio y telurio, respectivamente.
Refineria de Plata
Electrorefina el DORE (Ag-Au) para separar la plata del oro. Se
dispone de 124 celdas tipo THUM.
3.4.3. Circuito de Zinc (Diagrama No. 3.4.3/1)
Tostacion
Los concentrados de zinc provenientes de Paragsha y Mahr Tunel son
tratados en tres tostadores de cama fluida (FER) y otro de cama
turbulenta (TLR).
<PAGE>
PAMA COMPLEJO METALURGICO-LA OROYA Capitulo III Pag 59.
- --------------------------------------------------------------------------------
Una parte de los concentrados de zinc es mezclada con polvo de oxido
de zinc recuperado en el precipitador electrostatico central, para
luego ser perdigonado con acido sulfurico. Los concentrados son
luego tratados en los tres tostadores de cama fluida, obteniendose
perdigones calcinados los que son enviados a la unidad de molienda y
cernido. Este producto es almacenado en los silos de la unidad de
lixiviacion.
Con el SO(2) que se obtiene en el tostador de cama turbulenta se
produce acido sulfurico de grado comercial (45 000 t/a).
El oxido de zinc recuperado en los ciclones y precipitador
electrostatico tambien es almacenado en los silos de la unidad de
lixiviacion.
Lixiviacion
El objetivo principal de la etapa de lixiviacion es el de disolver
el oxido de zinc y el sulfato de zinc presentes en la calcina.
El proceso de lixiviacion se lleva a cabo en tanques agitadores
donde se carga el electrolito gastado y calcina fina. El hierro
presente se oxida con bioxido de manganeso y precipita como un
compuesto insoluble denominado ferrita de zinc, junto con el As, Sb
y otras impurezas.
La pulpa obtenida antes de ser enviada a la Unidad de Separacion de
Solidos es clasificada en un hidrociclon, separandose la fraccion
gruesa (+ 100 mallas) que retorna al primer reactor de Lixiviacion.
En la planta de separacion de solidos se separa la solucion impura
(overflow) del residuo (underflow); este ultimo es lavado y filtrado
para asegurar la maxima extraccion de sulfato de zinc.
El residuo (ferritas de zinc), es enviado a la planta de flotacion,
en donde se recupera el zinc y la plata en forma de concentrado. Una
parte de la cola (ferritas de zinc) remanente es tratada en la
planta de residuos lixiviados de zinc (Zileret) y la otra enviada en
forma de pulpa al deposito de Huanchan, donde es almacenada, para su
probable posterior tratamiento.
Purificacion
La solucion impura de sulfato de zinc, es derivada a la unidad de
purificacion en donde las impurezas como el cobre, cadmio y pequenas
cantidades de arsenico y antimonio son precipitadas usando polvo de
zinc. Esta solucion es filtrada y el residuo es enviado a la Planta
de Cadmio para su tratamiento, mientras que la solucion purificada
es enviada a la unidad de electrolisis. La electrolisis de la
solucion de sulfato de zinc se realiza entre catodos de aluminio y
anodos de plomo-plata Luego de una etapa de deposicion de 16 horas
los catodos son extraidos de las celdas y el zinc electrolitico es
deslaminado y enviado para ser fundido en un horno de induccion.
Fusion y Moldeo
Los catodos de zinc obtenidos electroliticamente son fundidos y
moldeados en lingotes de 26 kg para su comercializacion.
<PAGE>
PAMA COMPLEJO METALURGICO-LA OROYA Capitulo III Pag 61.
- --------------------------------------------------------------------------------
o La absorcion del gas SO(3) frio se logra por disolucion
en H(2)SO(4) de 98,5% - 98,85. En estas condiciones el
SO(3) se une al agua del acido en la torre de absorcion.
b) Planta de coque
Esta planta consta de dos baterias independientes que operan
paralelamente, cada una con 10 hornos de coquificacion,
aprovechando la generacion del propio gas de coque para la
combustion y calentamiento de los hornos.
El proceso de coquificacion considera los siguientes pasos:
o El carbon es descargado de las tolvas hacia el molino de
martillos para ser elevado despues por los cangilones
hasta la tolva de alimentacion, con una granulometria
uniforme.
o Luego el material es cargado a cada uno de los hornos
horizontales para su coquificacion.
o Durante la descarga, cumplido el ciclo de coquificacion
el coque producido es evacuado de cada horno, por un
"empujado de trompa" hacia un transportador de cadena de
arrastre, que lo lleva hasta un "pozo de coque" para
finalmente ser enfriado por rociado de agua.
o Los gases calientes que salen de los hornos se enfrian
por rociado de agua con lo cual se condensa el
alquitran, el cual es llevado a un tanque de
sedimentacion.
o El alquitran libre de agua es enviado al reverbero de
cobre para ser utilizado como combustible y el coque, al
circuito de fundicion de plomo.
c) Planta de oxigeno
En esta planta se fracciona el aire liquido en sus
componentes, aprovechando las diferentes temperaturas de
ebullicion de los mismos.
Para llevar a cabo la operacion de fraccionamiento de aire, la
planta industrial esta equipada para:
Comprimir el aire
Evaporar la humedad y el dioxido de carbono del aire
Enfriar el aire a la temperatura de licuacion
Producir frio
Licuar el aire
Fraccionar el aire (rectificacion)
Separar las impurezas
d) Planta de acido fluosilicico
La primera etapa de la produccion de acido fluosilicico se
realiza en un horno cilindrico rotatorio el cual recibe
fluoruro de calcio en polvo y acido
<PAGE>
PAMA COMPLEJO METALURGICO-LA OROYA Capitulo III Pag 62.
- --------------------------------------------------------------------------------
sulfurico lentamente. El control de la temperatura es
importante ya que la reaccion al inicio es violenta.
El acido fluorhidrico (NF) gaseoso formado en el horno, es
conducido a un sistema de dos condensadores enfriados
exteriormente con agua en los cuales el gas es absorbido por
el agua que fluye en contracorriente a la direccion del gas.
El gas que no ha podido ser absorbido por el agua en el primer
condensador pasa al segundo condensador a traves de una
tuberia de plomo.
El acido fluorhidrico obtenido en los condensadores, es
enviado a un tanque de mezcla, donde reacciona con silice
finamente granulada manteniendo la mezcla en constante
agitacion con aire, para producir asi la solucion de acido
fluorsilicico (H(2)SiF(6)) para el electrolito de la Refineria
de Plomo.
3.5. Mediciones de parametros de equipos de recuperacion de polvos, monitoreo
de emisiones gaseosas y efluentes liquidos
El COMPLEJO METALURGICO-La Oroya, cuenta con la seccion de Pruebas de
Control del Departamento de Control de Procesos, que es responsable de los
siguientes trabajos:
o Medicion de emisiones en chimenea de concreto, reverbero para
espumado de plomo, reverbero de cobre, horno "Kiln" de la planta
Zileret, hornos de coque.
o Control de temperatura, tiraje, volumen y perdida de polvo en los
diferentes ductos de la fundicion (convertidoras, aglomeracion,
reverbero de cobre, hornos de plomo, espumaje, tostadores de zinc y
cobre, eficiencia de cottrell caliente, planta de acido sulfurico,
eficiencia de los cottrell de arsenico y anodicos, perdida del
sistema de ventilacion de reverbero de anodicos, chimenea de
concreto, chimenea del reverbero de cobre).
o Operacion y control de los muestreadores automaticos de polvo en los
ductos de fundicion, de reverbero de cobre, convertidoras,
aglomeracion, chimenea de concreto, tostadores de cobre.
o Medicion de tiraje y temperatura en el sistema de reverbero de cobre
y cocinas de arsenico.
o Medicion del volumen de gas en los hornos de coque.
o Medicion de lluvia, en las estaciones meteorologicas de La Oroya y
Mayupampa.
o Medicion de la presion barometrica, temperatura ambiental horaria, y
humedad relativa de La Oroya.
o Medicion de flujo y muestreo de los 40 puntos para monitoreo de
efluentes liquidos.
o Control y toma de datos de los equipos instalados en Huanchan: % de
SO(2), material particulado de alto volumen y direccion y velocidad
de viento. En el
<PAGE>
PAMA COMPLEJO METALURGICO-LA OROYA Capitulo III Pag 63.
- --------------------------------------------------------------------------------
Sindicato de Obreros: % de SO(2) y material particulado de bajo y alto
volumen. En Casaracra: % de SO(2) y material particulado de alto volumen.
En el Hotel Inca: % de SO(2) y material particulado de bajo y alto volumen
y en la Subestacion Cushurupampa: % de SO(2) y material particulado de
alto volumen, direccion y velocidad de viento.
3.6. Actividades/Instalaciones de apoyo a las operaciones
3.6.1. Plantas de generacion de energia
Centromin Peru cuenta con cuatro centrales hidroelectricas, con
183,4 Mw de potencia instalada.
Hidroelectrica de Yaupi : 108.0 Mw
Hidroelectrica de La Oroya : 9.0 Mw
Hidroelectrica de Malpaso : 54.4 Mw
Hidroelectrica de Pachachaca : 12.0 Mw
El COMPLEJO METALURGICO-La Oroya y las residencias de sus
trabajadores consumen un total de 63,0 MW.
3.6.2. Laboratorio Analitico
Los analisis quimicos son ejecutados por el Laboratorio Analitico de
La Oroya, el cual cuenta con tecnicas de analisis instrumentales
modernas y los metodos clasicos. El Laboratorio de Instrumentacion
esta equipado con aparatos de rayos X, espectrofotometria de
absorcion atomica, espectroscopia de emision optica, espectrometria
de rayos X, UV.VIS, colorimetria, y espectrografia de emision. De
este ultimo, se han utilizado sucesivamente equipos de tres
generaciones. Actualmente ya esta en funcionamiento un
espectrofotometro de absorcion atomica Varian 20 BQ PLUS con horno
de grafito GTA-96 y generador de hidruros VGA-76 que son utilizados
para el analisis de muestras ambientales.
El Laboratorio Analitico de Centromin Peru S.A., fue registrado como
participante en el Programa de Capacitacion Analitica en el marco
del Programa de Monitoreo dispuesto por el D.S. No. 016-93-EM y su
Modificatoria D.S. No. 059-93-EM, asi como para completar el
diagnostico de la performance del laboratorio involucrado en el
Programa de Monitoreo de Calidad de Agua, Aire y Emisiones;
habiendose realizado a la fecha los analisis de las muestras
correspondientes al Estudio 01 de la Evaluacion, de Desempeno,
solicitado por la Direccion General de Asuntos Ambientales del MEM.
3.6.3. Talleres
Se cuenta con el servicios de los siguientes talleres: Maestranza,
Estructural, Garaje, Instrumental, Mecanico, Electrico, Seguridad y
Electronica.
<PAGE>
PAMA COMPLEJO METALURGICO-LA OROYA Capitulo III Pag 64.
- --------------------------------------------------------------------------------
3.6.4. Agua industrial y potable
En cuanto al abastecimiento de agua las fuentes son:
Rio Thisgo: Agua de uso domestico, industrial y para EMSAPA (Empresa
Municipal de Agua Potable y Alcantarillado de la Oroya).
Cuchimachay : Industrial y para EMSAPA.
Rio Mantaro : Agua industrial.
Pozo Marcavalle : Agua para EMSAPA.
Manantial Pichjapuquio : Agua para EMSAPA.
3.6.5. Alcantarillado y disposicion de basura
El volumen de descarga de aguas servidas, de las areas residenciales
de propiedad de la empresa y de las diferentes plantas de produccion
y servicios, se estima en 227 l/s. Se cuenta con dos pozos septicos
en la fundicion, para tratar las aguas servidas.
Los desechos o basura son de dos tipos: industrial y domestica. La
basura industrial es tratada en dos incineradores ubicados uno en la
fundicion y el segundo en las refinerias de cobre y plomo. La basura
domestica es recolectada de las viviendas de la empresa, en camiones
y se traslada a la zona de Cochabamba, a 9 Km. de la localidad de La
Oroya no recibiendo ningun tratamiento.
<PAGE>
Pag 65.
CENTROMIN PERU
DIRECCION DE ASUNTOS AMBIENTALES
TABLA 3.2/1
INCREMENTO DE LAS CAPACIDADES INSTALADAS EN EL
CORTO PLAZO VIA MEJORAS DE PROCESO
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Potencial de Incremento
CAPACIDADES INSTALADAS -----------------------
--------------------------------------------- Cap. Inst.
1,993 1,994 1,995 % Increm. 1,996 % Increm.
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Cobre Blister** 62,000 70,000 75,000 7.14 75,000
- ------------------------------------------------------------------------------------------------------
Cobre Refinado** 58,000 63,500 66,500 4.72 66,500
- ------------------------------------------------------------------------------------------------------
Plomo Bullon* 90,000 95,000 100,000 5.26 105,000 5.00
- ------------------------------------------------------------------------------------------------------
Plomo Refinado** 87,000 90,000 91,000 1.11 99,000 8.79
- ------------------------------------------------------------------------------------------------------
Plata Refinada 809 809 809 809
- ------------------------------------------------------------------------------------------------------
Oro Bullon 1,720 2,350 2,350 2,350
- ------------------------------------------------------------------------------------------------------
Zinc Refinado 70,000 70,000 70,000 70,000
- ------------------------------------------------------------------------------------------------------
Bismuto Refinado 816 1,000 1,000 1,080 8.00
- ------------------------------------------------------------------------------------------------------
Selenio 24 24 24 24 8.00
- ------------------------------------------------------------------------------------------------------
Teluro 21 21 21 30 42.96
- ------------------------------------------------------------------------------------------------------
Antimonio 530 530 530 530
- ------------------------------------------------------------------------------------------------------
Cadmio 215 215 215 215
- ------------------------------------------------------------------------------------------------------
Indio 3,500 3,500 3,500 5,260 50.29
- ------------------------------------------------------------------------------------------------------
Acido Sulfurico 45,000 45,000 45,000 45,000
- ------------------------------------------------------------------------------------------------------
Oleum 10,000 10,000 10,000 10,000
- ------------------------------------------------------------------------------------------------------
Polvo de Zinc 2,200 2,200 2,200 2,200
- ------------------------------------------------------------------------------------------------------
Sulfato de Zinc 2,270 2,270 2,270 2,270
- ------------------------------------------------------------------------------------------------------
Concentrado Zn/Ag 3,000 3,000 3,100 3.33 5,260 69.68
- ------------------------------------------------------------------------------------------------------
Trioxido de Arsenico 4,236 4,236 4,236 4,236
- ------------------------------------------------------------------------------------------------------
Sulfato de Cobre 6,000 6,000 6,000 6,000
- ------------------------------------------------------------------------------------------------------
</TABLE>
(*) Incremento de Capacidad via mejoras de proceso
(**) Incremento de Capacidad via mejoras de proceso y PAMA
<PAGE>
Pag 66.
CENTROMIN PERU
DIRECCION DE ASUNTOS AMBIENTALES
TABLA 3.2/2
PRODUCION DE METALES REFINADOS Y SUB-PRODUCTOS(Kg)
- --------------------------------------------------------------------------------
Cobre Cobre Plomo Plomo Zinc Oro
Blister Refinado Bullion Refinado Refinado Bullion
- --------------------------------------------------------------------------------
39 928 904 40 458 689 91 891 967 86 557 969 61 291 316 1 163,3
- --------------------------------------------------------------------------------
42 967 405 36 186 498 92 685 724 88 531 269 61 303 626 1 038,0
- --------------------------------------------------------------------------------
40 575 428 35 610 358 86 809 065 81 651 471 61 658 869 1 124,7
- --------------------------------------------------------------------------------
55 965 473 38 496 076 95 025 719 86 346 369 65 825 403 1 037,1
- --------------------------------------------------------------------------------
49 846 232 34 464 279 80 065 590 77 539 688 62 299 716 1 243,1
- --------------------------------------------------------------------------------
50 917 528 36 175 614 77 686 041 71 960 893 68 688 663 1 007,5
- --------------------------------------------------------------------------------
44 205 078 32 561 472 70 829 349 67 103 636 57 196 161 778,3
- --------------------------------------------------------------------------------
54 120 892 39 207 229 91 883 136 85 305 101 67 160 508 1 059,7
- --------------------------------------------------------------------------------
59 453 421 39 375 892 89 543 504 82 854 759 67 095 372 890,3
- --------------------------------------------------------------------------------
58 626 158 38 952 473 86 163 783 80 090 232 68 956 918 928,3
- --------------------------------------------------------------------------------
52 803 567 36 586 867 76 050 022 70 965 675 63 241 284 965,8
- --------------------------------------------------------------------------------
55 537 734 45 785 495 79 314 258 74 065 995 64 542 279 1 078,6
- --------------------------------------------------------------------------------
58 425 216 55 021 763 84 389 872 80 844 836 66 950 132 1 006,8
- --------------------------------------------------------------------------------
55 382 878 51 896 976 79 697 816 74 254 740 62 851 466 1 001,9
- --------------------------------------------------------------------------------
59 268 355 54 290 172 91 128 993 85 111 992 68 195 607 1 335,5
- --------------------------------------------------------------------------------
57 957 005 54 104 430 87 535 630 81 976 187 63 828 687 1 320,5
- --------------------------------------------------------------------------------
53 955 693 50 026 215 85 233 827 79 236 015 67 966 362 1 319,6
- --------------------------------------------------------------------------------
55 620 833 53 555 517 83 020 838 76 990 188 68 489 173 1 406,4
- --------------------------------------------------------------------------------
50 868 993 47 259 872 72 812 457 67 733 843 63 941 450 1 592,3
- --------------------------------------------------------------------------------
54 689 969 50 035 881 75 737 587 70 262 061 64 772 251 1 643,1
- --------------------------------------------------------------------------------
60 377 661 57 346 095 87 764 331 81 890 910 69 202 221 1 722,3
- --------------------------------------------------------------------------------
48 753 579 47 053 687 71 115 489 66 324 339 59 765 946 1 566,3
- --------------------------------------------------------------------------------
54 514 895 51 471 971 71 378 326 66 509 379 66 284 200 935,4
- --------------------------------------------------------------------------------
31 788 561 30 315 296 46 873 847 44 287 584 50 574 600 769,7
- --------------------------------------------------------------------------------
53 230 741 53 230 741 73 255 469 68 827 153 64 804 900 918,9
- --------------------------------------------------------------------------------
52 540 877 49 277 247 74 516 684 69 803 251 61 687 700 1 203,4
- --------------------------------------------------------------------------------
52 324 400 51 796 664 80 782 050 74 585 504 62 038 300 1 168,4
- --------------------------------------------------------------------------------
60 022 803 55 042 828 89 677 230 84 036 562 63 197 162 1 013,8
- --------------------------------------------------------------------------------
62 614 640 60 576 569 94 076 550 87 285 486 66 535 241 2 281,6
- --------------------------------------------------------------------------------
63 607 990 59 695 441 94 548 554 88 713 625 67 242 825 1 742,9
- --------------------------------------------------------------------------------
71 479 594 65 162 841 96 554 970 89 695 816 68 373 574 1 596,8
- --------------------------------------------------------------------------------
Plata (b) Bismuto (a) Cadmio Antimonio Indio
Refinada Refinado Refinado Crudo Selenio Telurio Refinado
- --------------------------------------------------------------------------------
630 541,8 745 295 214 590 281 119 8 777 18 138
- --------------------------------------------------------------------------------
620 565,4 747 112 200 464 378 659 6 077 18 344 540,6
- --------------------------------------------------------------------------------
593 032,6 774 527 150 684 300 034 4 903 15 008 159,8
- --------------------------------------------------------------------------------
544 762,5 791 696 170 097 360 697 5 772 16 049 311,9
- --------------------------------------------------------------------------------
486 245,3 652 020 168 555 97 432 6 848 17 322 997,1
- --------------------------------------------------------------------------------
566 527,8 763 100 186 245 6 760 28 285 1 557,3
- --------------------------------------------------------------------------------
490 636,5 600 406 171 277 7 076 23 933 1 868,2
- --------------------------------------------------------------------------------
661 435,0 677 285 210 376 8 029 1 793 2 397,6
- --------------------------------------------------------------------------------
517 721,2 512 430 211 737 7 659 26 200 3 458,7
- --------------------------------------------------------------------------------
548 969,7 615 039 182 163 7 747 36 474 2 369,2
- --------------------------------------------------------------------------------
555 547,5 500 410 159 302 163 203 6 675 21 208 1 587,4
- --------------------------------------------------------------------------------
598 048,5 455 606 173 908 343 007 8 752 12 331 3 271,4
- --------------------------------------------------------------------------------
670 975,1 516 148 181 800 527 529 15 936 18 370 3 734,2
- --------------------------------------------------------------------------------
649 954,9 610 825 169 553 477 361 12 941 15 418 3 301,6
- --------------------------------------------------------------------------------
792 769,3 526 984 190 055 460 034 18 325 21 228 3 484,7
- --------------------------------------------------------------------------------
745 568,1 497 607 171 912 426 559 22 908 20 920 3 610,0
- --------------------------------------------------------------------------------
741 915,6 638 688 182 344 447 605 222 478 21 310 3 489,0
- --------------------------------------------------------------------------------
768 395,0 604 163 178 716 432 274 20 974 20 726 3 673,4
- --------------------------------------------------------------------------------
765 731,8 526 144 158 122 322 958 19 553 15 116 2 706,8
- --------------------------------------------------------------------------------
733 548,7 651 071 147 327 372 309 20 800 14 094 2 906,0
- --------------------------------------------------------------------------------
715 416,0 738 057 176 901 377 117 14 535 15 037 3 867,4
- --------------------------------------------------------------------------------
615 147,2 605 296 138 074 358 701 12 035 9 836 3 332,9
- --------------------------------------------------------------------------------
597 358,9 412 476 143 500 318 200 11 438 7 457 3 890,1
- --------------------------------------------------------------------------------
416 968,8 363 030 108 300 346 400 4 937 4 079 2 119,6
- --------------------------------------------------------------------------------
592 212,3 646 573 141 700 304 000 9 384 8 354 3 025,5
- --------------------------------------------------------------------------------
588 779,5 520 861 129 600 307 300 8 864 8 143 2 801,3
- --------------------------------------------------------------------------------
583 674,0 576 800 137 700 277 700 12 446 13 380 3 145,5
- --------------------------------------------------------------------------------
608,893,0 418 547 149 000 311 091 14 425 18 668 3 053,1
- --------------------------------------------------------------------------------
539 426,0 937 045 157 122 214 694 17 131 17 399 3 192,5
- --------------------------------------------------------------------------------
579 446,0 887 180 145 750 410 789 19 338 28 641 4 049,1
- --------------------------------------------------------------------------------
613 361,0 581 962 150 710 230 115 14 549 30 147 5 074,7
- --------------------------------------------------------------------------------
Reportes Metalurgicos do diciembre 1965 a 1995 - Contabilidad Metalurgica
D'esde el ano 1966 a 1972 se considera a produccion total de Bi como Bi Refinado
+ Bi en Base Bullion
La produccion de Plata refinada es igual a la Plata Fina + a Planta Esterlina
(925)
Del ano 1965 a 1986 las producciones eran reportadas en unidades inglesas, a
partir del ano 1987 las producciones se reportan segun el SLUMP
La produccion del ano 1992 segun Reportes Mersuales de Fundicion y Refinerias
La produccion de Indio de los anos 1965 a 1986 se tomo del Reporte Estadistico
de Produccion de Contabilidad Metalurgica del ano 1987 a 1997 del Reporto Anual
de F&R
La Refineria de Cobre amplio su capacidad de 14 a 20 blocks (610 celdas)
<PAGE>
Pag 67.
DIAGRAMA 3.4.1/1
DIVISION FUNDICION DE COBRE
ENERO - DICIEMBRE 1995
(toneladas metricas secas)
[FLOWCHART OMITTED]
<PAGE>
Pag 68.
DIAGRAMA 3.4.1/2
REFINERIA DE COBRE
ENERO - DICIEMBRE 1995
(toneladas metricas secas)
[FLOWCHART OMITTED]
<PAGE>
Pag 69.
DIAGRAMA 3.4.2/1
DIVISION FUNDICION DE PLOMO
ENERO - DICIEMBRE 1995
(Toneladas metricas)
[FLOWCHART OMITTED]
<PAGE>
Pag 70.
DIAGRAMA 3.4.2/2
REFENERIA DE PLOMO
ENERO - DICIEMBRE 1995
(toneladas metricas secas)
[FLOWCHART OMITTED]
<PAGE>
Pag 71.
DIAGRAMA 3.4.3/1
DIVISION REFINERIA DE ZINC
ENERO - DICIEMBRE 1995
(toneladas metricas secas)
[FLOWCHART OMITTED]
<PAGE>
CAPITULO IV
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo IV Pag 72.
- --------------------------------------------------------------------------------
4. RESUMEN DE LA EVALUACION Y ANALISIS DE LOS IMPACTOS AMBIENTALES
La evaluacion de los impactos ambientales se realiza en base a informes
tales como: la EVAP (Evaluacion Ambiental Preliminar), efectuada con datos
de monitoreo del ano 1994, la declaracion de Emisiones y Vertimientos con
informacion del ano 1995, la Auditoria Ambiental de Emisiones y
Vertimientos a junio de 1996, la caracterizacion de los componentes
ambientales producto de la actividad metalurgica descritos en los
capitulos II y III.
4.1 Fuentes Generadoras de Impactos
Se ha identificado tres fuentes generadores de impactos, producto de
las operaciones metalurgicas:
o Emisiones gaseosas y material paniculado
o Efluentes Liquidos
o Residuos Solidos
Asi mismo otros problemas ambientales determinados son: Efluentes de
Aguas Servidas y Residuos domesticos.
4.1.1 Emisiones Gaseosas y Material Particulado
Estas emisiones generadas en los circuitos de fundicion son
descargadas a la atmosfera por la chimenea principal de 167,5
m de altura, 95 chimeneas secundadas de altura variable, de
las cuales 33 estan destinadas para gases de combustion, 39
para gases industriales y 23 para vapor de agua o aire. En las
Tablas 4.1.1/1, 2 y 2A se consigna el inventario de los
principales puntos de emision asi como la composicion de los
gases y material paniculado emitidos.
En 1 995 se descargaron a la atmosfera por la chimenea
principal 899,8 t de SO(2)/dia y 8,9 t/dia de material
particulado. El 7.2 % del azufre que ingreso al proceso, se
fijo en forma de acido sulfurico, el 4,3% se fijo en residuos
solidos y el 88,5 % se descargo a la atmosfera en forma de
anhidrido sulfuroso. De los materiales particulados generados
el 97% se recupero en los sistemas existentes de precipitacion
electrostatica y el 3% se descargo a la atmosfera por la
chimenea principal. En la tabla siguiente se adjunta el
balance de azufre del ano 1995.
--------------------------------------------------------------
Ingreso ton de S %
--------------------------------------------------------------
Concentrados de Cobre 78 080,1 41,08
--------------------------------------------------------------
Concentrados de Plomo 43 282,5 22,77
--------------------------------------------------------------
Concentrados de Zinc 51 011,7 26,84
--------------------------------------------------------------
Fundentes para Cobre 9 441,4 4,97
--------------------------------------------------------------
Fundentes para Plomo 6 934,0 3,65
--------------------------------------------------------------
Otros 1 320,0 0,69
--------------------------------------------------------------
Total ingreso 190 069,7 100,00
--------------------------------------------------------------
Fijado ton de S %
--------------------------------------------------------------
Acido Sulfurico 13 681,7 7,20
--------------------------------------------------------------
Escoria de Cobre 4 239,3 2,23
--------------------------------------------------------------
Escoria de Plomo 1 427,6 0,755
--------------------------------------------------------------
Concentrados Zn/Ag 652,0 0,34
--------------------------------------------------------------
Efluentes liquidos 551,1 0,20
--------------------------------------------------------------
Ferritas de Zn 786,5 0,41
--------------------------------------------------------------
Polvo de la chimenea principal 300,2 0,16
--------------------------------------------------------------
Otros (CuSO(4), ZnSO(4),etc.) 224,7 0,12
--------------------------------------------------------------
Total fijado 21 863,2 11,50
--------------------------------------------------------------
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo IV Pag 73.
- --------------------------------------------------------------------------------
Las emisiones gaseosas fugitivas impactan igualmente al aire,
pero son dificiles de cuantificar por no ser regulares y
generalmente se dispersan rapidamente.
TABLA N0 4.1.1/1
PUNTOS DE EMISIONES GASEOSAS Y MATERIAL PARTICULLADO
<TABLE>
<CAPTION>
--------------------------------------------------------------------------
Cod. Puntos de Emision Altura Equipo de
m tratamiento
--------------------------------------------------------------------------
<S> <C> <C> <C>
1 Chimenea Principal 168 Precipitador electrostati-
co
--------------------------------------------------------------------------
2 Chimeneas secundarias
o Chimenea de Fierro 91 Ninguno
o Chimenea de Coque Bateria A 19 Ninguno
o Chimenea de Coque Bateria B 19 Ninguno
o Sist.Vent. Ollas de Bismuto 15 Lavador de gases
P.R.A.
o Sist.Vent. Convertidores P.R.A. 19 Filtros de bolsas
o Sist.Vent. Copelas - P.R.A. 15 Precipitador Electrostatico
o Sist.Vent. Tostadores de Zinc 30 Lavador de gases, filtros
de bolsas
o Emisiones en las Refinerias de 19 chimeneas de venti-
Cu, Pb y Otros lacion
--------------------------------------------------------------------------
3 Emisiones Fugitivas Ninguno
--------------------------------------------------------------------------
</TABLE>
P.R.A: Planta de Residuos Anodicos
a) Emisiones por la Chimenea Principal
Ver Tablas 4.1.1/3 y 4.l.1/3A y Fotos 4.l.1/l y 4.1.l/2.
o Volumen de gases y concentracion de SO(2).
Para 1 995 el volumen de gases y su respectiva
concentracion de SO(2) descargado por esta
chimenea al ambiente a condiciones de operacion,
fue como sigue:
<TABLE>
<CAPTION>
------------------------------------------------------
Volumen (m^3/seg) SO(2)(mg/m^3)
------------------------------------------------------
<S> <C> <C>
Chimenea principal 1 145,61 9 379,00
------------------------------------------------------
</TABLE>
Las Plantas generadoras de SO(2) segun
distribucion porcentual, son:
- Tostadores de Cobre 4,10%
- Reverbero de Cobre 18,31%
- Convertidores de Cobre 24,37%
- Aglomeracion de Plomo 21,83%
- Hornos de Plomo 4,35%
- Tostadores de Zinc (FBR) 19,32%
- Residuos Anodicos 7,72%
TOTAL 100,00%
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo IV Pag 74.
- --------------------------------------------------------------------------------
o Material Particulado
En el cuadro siguiente se observa las emisiones de
material particulado generado por las diferentes
plantas hacia la chimenea principal, asi mismo las
eficiencias de recuperacion de los diferentes
precipitadores electrostaticos (Cottreles).
- --------------------------------------------------------------------------------
CARGA DE COTT.CENTRAL COTT.ARSENICO COTT.P.R.A.
POLVO: t/d
- --------------------------------------------------------------------------------
CIRCUITO DUCTO INGRESO SALIDA INGRESO SALIDA INGRESO SALIDA
- --------------------------------------------------------------------------------
Tostadores 32,704 1,676
COBRE Reverberos 25,255 0,857
Converti. 62,139 2,109
- --------------------------------------------------------------------------------
Aglomerac. 1,582 0,053
PLOMO Hornos Pb. 15,029 0,510
Espumado 2,549 0,087
- --------------------------------------------------------------------------------
ZINC Tost (FBR) 90,982 3,088
- --------------------------------------------------------------------------------
REF.(PRA) Rever.Fus. 3,615 0,470
Ventilac. 0,046
- --------------------------------------------------------------------------------
TOTAL 197,536 6,704 32,704 1,676 3,615 0,516
(*)
- --------------------------------------------------------------------------------
EFICIENC. 96,6% 94,9% 87,0%
- --------------------------------------------------------------------------------
Fuente: informe Anual de Pruebas de Control.
(*) Valor determinado por calculo.
El Diagrama 4.1.1/1 muestra el manipuleo de gases
y polvos en los cottrelles.
Para 1 995 la cantidad de solidos descargados al
ambiente fueron:
<TABLE>
<CAPTION>
---------------------------------------------------------------
Contenidos metalicos Solidos suspendidos
mg/m^3 mg/m^3
--------------------
As Cd Pb
---------------------------------------------------------------
<S> <C> <C> <C> <C>
Chimenea principal 17,96 0,92 23,25 89,88
---------------------------------------------------------------
</TABLE>
Las emisiones particuladas totalizan
aproximadamente 8,896 ton. metricas por dia; de
ellas se han cuantificado como constituyentes los
siguientes elementos pesados:
Plomo 2.30 t/d
Arsenico 1.78 t/d
Zinc 0.33 t/d
Antimon 0.24 t/d
Cadmio 0.09 t/d
Adicionalmente se adjunta las estadisticas (Tabla
No 4.l.l/3B) y Graficos No 1, 2 y 3 de los ultimos
20 anos de las emisiones gaseosas y material
particulado por la chimenea principal, donde se
aprecia la reduccion tanto de emisiones de SO(2)
como de material particulado, pese a que se ha
incrementado la capacidad de la Fundicion de 60
000 a 75 000 t/ano de cobre blister, esta
reduccion de emisiones al ambiente se debe
fundamentalmente a los cambios de indices
metalurgicos y al proyecto oxy-fuel implementados
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo IV Pag 75.
- --------------------------------------------------------------------------------
b) Emisiones por las Chimeneas Secundarias
o Emisiones por la Chimenea de fierro
La chimenea de fierro esta ubicada junto al
reverbero de cobre y las emisiones gaseosas y de
material particulado provienen del sistema de
ventilacion de los pechos y canales de escoria y
mata. Estas emisiones alcanzan no mas del 9% del
caudal emitido por la chimenea principal. Sin
embargo, son significativas por sus
concentraciones de plomo y arsenico (ver Tablas
4.1.1/4 y 4.l.l/4A.
o Emisiones por las Chimeneas de Planta de Coque -
Baterias A y B
Este emisor conduce un flujo de 14,86 Nm^3/seg.,
de gases, conocidos como gases de desecho.
Los gases emitidos por las chimeneas de las
baterias A y B son producto de la combustion
llevados a cabo en las camaras de calentamiento
del proceso de coquificacion, cuyos analisis se
consignan en las Tablas 4.1.1/5, 4.1.1/5A,
4.1.l/5B, 4.1.1/5C.
o Sistema de Ventilacion de Ollas de Bismuto -
Planta de Residuos Anodicos
La emision de gases de las ollas de bismuto Nos.
4, 5 y 6 es producto de la oxidacion y clorinacion
en la etapa de refinacion de bismuto. Las
emisiones gaseosas son previamente purificadas en
un lavador de gases. El analisis de las emisiones
son consignadas en las Tablas 4.1.1/6 y 4.1.1/6A
o Sistema de Ventilacion de Convertidores - Planta
Residuos Anodicos
La emision de gases de los Convertidores Nos. 1,
2, 3 y 4 es producto de la oxidacion selectiva de
antimonio y bismuto en los convertidores y de la
reduccion de Bismuto en el reverbero No 3. El
material paniculado que acompana a los gases es
previamente recuperado en tres unidades de filtros
de bolsas. Los analisis de las emisiones son
detallados en las Tablas 4.1.1/7 y 4.l.1/7A.
o Sistema de Ventilacion de Copelas Planta Residuos
Anodicos
El sistema de ventilacion de copelas permite la
captura de humas metalicos de las copelas Nos. 1,
2 y 3, producto del proceso de oxidacion selectiva
de selenio, teluro, y otros elementos menores los
que son recuperados en un lavador de gases y
precipitador electrostatico humedo. Los gases
remanentes se evacuan por una chimenea cuyos
analisis son consignados en las Tablas 4.1.1/8 y
4.1.1/8A.
o Sistema de Ventilacion de Tostadores de Zinc
Las emisiones son de las unidades de perdigonacion
y tostacion de cama finida. Las emisiones estan
constituidas por gases residuales de SO(2),
combustion y material particulado, no recuperado
en los lavadores de gaes y
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo IV Pag 76.
- --------------------------------------------------------------------------------
filtros bolsa, de los procesos de tostacion y del
manipuleo de materiales (concentrados, perdigones
y calcina). Los analisis de las emisiones se
consignan en la Tablas 4.1.1/9 y 4.1.1/9A.
o Emisiones en las Refinerias de Cobre y Plomo y
Otros
El sistema comprende un conjunto de 19 chimeneas
ubicadas en la refineria de cobre, plomo, horno
asarco y planta de alambron.
En la refineria de cobre por la naturaleza del
proceso de electro-refinacion, produccion de
sulfato de cobre y lixiviacion de lodos anodicos
requiere elevar la temperatura de los procesos
generando emisiones de vapor de agua y
contaminantes menores de acido sulfurico y sulfato
de cobre.
Las operaciones del horno asarco incluye el
enfriamiento de las barras de cobre que producen
emisiones de vapor de agua que arrastran
particulas inertes de bone ash (desmoldante).
La planta de alambron emite vapor de agua (libre
de contaminantes) producto del enfriamiento de los
rollos de alambron.
En la refineria de plomo las emisiones provienen
del proceso de electrorefinacion de plomo las que
consiste de vapor de agua y contenidos menores de
acido fluorsilisico. Tambien hay emisiones de
acido fluorhidrico en la planta de acido
fluorsilicico.
Durante la fusion de catodos de plomo refinado se
desprenden vapores metalicos que son captados por
medios de campanas y derivados a un filtros
bolsas, evacuandose al ambiente los gases
residuales. Los gases de combustion con su
composicion tipica son evacuados al ambiente
independientemente de los gases de fusion.
c) Emisiones Fugitivas
o Fundicion de Cobre
En la planta de preparacion, se producen estas
emisiones por arrastre de materiales solidos fuera
del alcance de las campanas y esto ocurre
basicamente cuando excede la capacidad de los
extractores.
En la planta de tostadores se reproducen
emanaciones de gases SO(2) y solidos que descargan
al ambiente directamente desde el piso de carga,
por falta de tiro en el ducto principal de
evacuacion.
Asimismo, se ha observado fugas de gases y polvos
generados en las operaciones de descarga de los
tostadores de cobre hacia los carros calcineros,
al no ser captados por las campanas del sistema de
ventilacion.
El inadecuado sistema de ventilacion de los
convertidores permite la fuga de polvo y emisiones
de gases SO(2) al ambiente durante el carguio del
material frio recirculante.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo IV Pag 77
- --------------------------------------------------------------------------------
En los hornos de retencion para el moldeo de cobre blister, los
gases de combustion y de SO2, se difunden libremente por falta de un
sistema de captacion.
En la Tabla 4.1.1/10 se presenta la caracterizacion de estas
emisiones fugitivas.
o Fundicion de Plomo
En los hornos de plomo se registran emisiones fugitivas
especialmente durante las operaciones de emergencia como parada de
hornos, limpieza de columnas de hornos, cambios de tanques de
asentamiento, etc. y en las ollas de recepcion y de decoperizado de
la planta de tratamiento de espuma por falta de sistemas de
captacion.
En el horno reverbero de tratamiento de espuma existen emisiones
fugitivas especialmente durante las coladas del producto y carga de
materiales.
En la Tabla 4.1.1/10, se adjuntan las caracteristicas de estas
emisiones.
o Circuito de Zinc
En la planta de tostadores de cama fluida y perdigonacion se
producen emisiones fugitivas de material particulado en los sistemas
de transporte de calcina.
Presencia de material particulado en el ambiente de tostadores de
lecho turbulento (TLR)
Presencia de vapor de agua con trazas de acido sulfurico en area de
enfriadoras de la planta electrolitica de zinc.
En la planta zileret existe emisiones de gases y material
particulado durante la descarga de esponja de fierro del horno kiln.
En la Tabla 4.1.1/10, se resume la descripcion de las emisiones
fugitivas de este circuito.
o Residuos Anodicos y Refineria de Plata
Existe emisiones gaseosas y material particulado durante la descarga
del reverbero de fusion y en el trasvase de los materiales fundidos
a los convertidores. Esta situacion se agrava por la baja eficiencia
de los sistemas de ventilacion.
En la Tabla 4.1.1/10 se muestran las caracteristicas de las
emisiones fugitivas en esta planta.
4.1.2 Efluentes Liquidos
Los efluentes liquidos producto de las operaciones metalurgicas que tienen
impacto en los rios receptores Yauli y Mantaro, suman en total 40
efluentes. Estos efluentes estan constituidos por soluciones propias de
los procesos, aguas de re-
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo IV Pag 78
- --------------------------------------------------------------------------------
frigeracion de equipos electricos, chaquetas, etc. y por efluentes de
aguas servidas de banos y lavaderos que se mezclan.
En el cuadro adjunto se especifican los 40 efluentes, su No de codigo y su
descripcion.
- --------------------------------------------------------------------------------
EFLUENTES LIQUIDOS - COMPLEJO METALURGICO LA OROYA
- --------------------------------------------------------------------------------
PUNTO CODIGO DESCRIPCION CIRCUITO
- --------------------------------------------------------------------------------
1 R-l Refineria de Cobre (Ex-Refineria de Plomo) Ref. Cu
- --------------------------------------------------------------------------------
2 R-2 Eliminado: Planta de Alambron "
- --------------------------------------------------------------------------------
3 R-3 Planta Horno Asarco-Salida poza de sedimentacion "
- --------------------------------------------------------------------------------
4 101 Planta de Coque-Aguas de Desecho Fund. Pb
- --------------------------------------------------------------------------------
5 102 Patio de Taller Estructural Talleres
- --------------------------------------------------------------------------------
6 103 Eliminado: Taller Estructural y Proteccion Interna "
(SSHH)
- --------------------------------------------------------------------------------
7 104 Eliminado: Proteccion Interna-Jefatura (SSHH) Servicios
- --------------------------------------------------------------------------------
8 105 Eliminado: Planta de Acetileno Talleres
- --------------------------------------------------------------------------------
9 106 Maestranza, Bodega (Fundicion de Fierro) "
- --------------------------------------------------------------------------------
10 107 Planta Antimonio, tanques acido, Taller "
Instrumental, Of. de Talleres y Equipo Liviano
- --------------------------------------------------------------------------------
11 108 Taller de Componentes (SSHH), Cochera "
- --------------------------------------------------------------------------------
12 109 Taller de Componentes, Patio "
- --------------------------------------------------------------------------------
13 110 Taller Carpinteria Instrumental "
- --------------------------------------------------------------------------------
14 111 Capacitacion Lavadero Servicios
- --------------------------------------------------------------------------------
15 112 Equipo Pesado, Estacion Bomberos, Ex-Tareadores Talleres
- --------------------------------------------------------------------------------
16 113 Eliminado: Ingenieria Industrial Servicios
- --------------------------------------------------------------------------------
17 114 Casa de Fuerza Pruebas de Control Serv./Mantto.
- --------------------------------------------------------------------------------
18 115 Planta Ionica, Casa de Fuerza "
- --------------------------------------------------------------------------------
19 116 Planta de Oxigeno, Cable Carril (SSHH) "
- --------------------------------------------------------------------------------
20 117 Planta de Oxigeno, Antigua "
- --------------------------------------------------------------------------------
21 118 Fund. de Cobre y Plomo - Granulacion de Escoria Fund. Cu-Pb
- --------------------------------------------------------------------------------
22 119 Fundicion de Cobre y Plomo - canal Principal No 2 "
- --------------------------------------------------------------------------------
23 120 Planta Electrolitica de Zinc - Servicios Higienicos Ref. Zn
- --------------------------------------------------------------------------------
24 121 Planta de Residuos Anodicos - Descarga de las Unidades Ref. Cu-Pb
de Selenio y Teluro y Servicios Higienicos
- --------------------------------------------------------------------------------
25 122 Planta de Residuos Anodicos - Salida de la Poza de "
Sedimentacion de la Lavanderia
- --------------------------------------------------------------------------------
26 123 Planta Residuos Anodicos - Poza de Sedimentacion "
- --------------------------------------------------------------------------------
27 124 Planta Electrolitica Zn-Efluente Lavador de Anodos Ref. Zn
- --------------------------------------------------------------------------------
28 125 Planta Electrolitica de Zinc - Agua de Refrigeracion "
- --------------------------------------------------------------------------------
29 126 Planta Electrolitica de Zinc, Refrigeracion de "
Rectificadores y Derrames de Purificacion
- --------------------------------------------------------------------------------
30 127 Refrigeracion Sub-Estacion Planta de Zinc "
- --------------------------------------------------------------------------------
31 128 Fusion Moldeo y Almacenaje de Zinc "
- --------------------------------------------------------------------------------
32 129 Construccion Fundicion - Servicios Higienicos Serv./Mantto.
- --------------------------------------------------------------------------------
33 130 Oficina y Bodega Construccion "
- --------------------------------------------------------------------------------
34 131 Planta de Cadmio Piro, D.I.M. Ref. Zn
- --------------------------------------------------------------------------------
35 132 D.I.M., Planta Piloto y Taller de Mecanica "
- --------------------------------------------------------------------------------
36 133 Planta Indio-Solucion Agotada de Lavado Alcalino "
- --------------------------------------------------------------------------------
37 134 Planta de Indio - Solucion de Descarte "
- --------------------------------------------------------------------------------
38 135 Canal Principal No 1 (Paralelo al FF.CC.) "
- --------------------------------------------------------------------------------
39 136 Canal Paralelo al Canal Principal No 1 "
- --------------------------------------------------------------------------------
40 137 Efluente Poza Ferritas de Zinc "
- --------------------------------------------------------------------------------
Nota: La clasificacion por tipo de efluente se aprecia en la pagina 199.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo IV Pag 79
- --------------------------------------------------------------------------------
En la Tablas 4.1.2/2, 2A, 3 y 3A se consignan las caracteristicas de los
efluentes.
Del total de 40 efluentes se han determinado que siete de ellos (7) son los
principales contribuyentes de contaminantes. Estos 7 efluentes representan de 94
a 95% de carga total de los 40 efluentes, mientras que por elementos significan:
29-57,5% de carga de As, y mas del 90% para los elementos Cd, Cu, Fe, Mn, Pb y
Zn, tal como se indican en las Tablas 4.1.2/4. 4A, 5 y 5A.
De acuerdo a las Tablas 4.1.2/6 y 6A los rios Yauli y Mantaro llegan a La Oroya
con altos contenidos de contaminantes industriales, pero aun asi se encuentran
dentro de la calidad de agua clase III, excepto el Mn en ambos rios ademas del
Pb en el rio Yauli.
Ambos receptores son monitoreados en los siguientes puntos:
- --------------------------------------------------------------------------------
Receptores: Puntos de Muestreo en los Rios Mantaro y Yauli
- --------------------------------------------------------------------------------
PUNTOS UBICACION
- --------------------------------------------------------------------------------
M-1 Rio Mantaro, puente Chulec, a 2 m aguas abajo
- --------------------------------------------------------------------------------
M-2 Rio Mantaro, viviendas de Torres Hidro a 15 m aguas abajo
- --------------------------------------------------------------------------------
M-3 Rio Mantaro, Puente Cascabel a 10 m aguas abajo
- --------------------------------------------------------------------------------
M-4 Rio Mantaro, A 4 Km carretera Oroya - Huancayo a 100 m del deposito
Huanchan
- --------------------------------------------------------------------------------
M-5 Rio Mantaro, a 5 Km carretera Oroya-Huancayo, despues del deposito
ferritas de Zn
- --------------------------------------------------------------------------------
Y-1 Rio Yauli, puente Marcavalle a 2 m aguas abajo
- --------------------------------------------------------------------------------
Y-2 Rio Yauli, puente Huaymanta a 20 m aguas abajo
- --------------------------------------------------------------------------------
Y-3 Rio Yauli, puente Sudete a 15 m aguas arriba
- --------------------------------------------------------------------------------
En la Tabla 4.1.2/1 se presenta en forma resumida los puntos de muestreo
clasificados de acuerdo al Protocolo de monitoreo de aguas, mientras que en los
Diagramas 7.2.4/4, 5, 6 del Capitulo VII, se indica al detalle, la ubicacion de
los puntos de muestreo correspondientes a los principales efluentes de los
Circuitos de Fundicion y Refinerias de La Oroya teniendo como referencia el
informe EVAP.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo IV Pag 80
- --------------------------------------------------------------------------------
TABLA No 4.1.2/1
ESTACIONES DE MUESTREO
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
FLUJO DE
FLUJO DE FLUJO DE ENTRADA
COMPONENTE ENTRADA ESTACIONES SALIDA ESTACIONES TOTAL O SALIDA
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
Curso de aguas
naturales
<S> <C> <C> <C> <C> <C> <C>
- - Rio Yauli - Aguas Arriba Y-1 Aguas Abajo Y-2, Y-3 3 4 a 6 Registros
al mes c/u
- - Mantaro - Aguas Arriba M-1, M-2 y M-3 Aguas Abajo M-4 y M-5 5
4 a 6 Registros
al mes c/u
- ---------------------------------------------------------------------------------------------------------------------------
Descarga de agua
industrial, Ref. y
cloacales (Zona
Industrial)
- - Ref. de Cu y Pb R1, R2, R3 3 8 registros al mes
- - Fundicion 101, 102, 103, 104 37 8 registros al mes
105, 106, 107, 108
109, 110, 111, 112
113, 114, 115, 116
117, 118, 119, 120
121, 122, 123, 124
125, 126, 127, 128
129, 130, 131, 132
133, 134, 135, 136
y 137
- ---------------------------------------------------------------------------------------------------------------------------
Procesamiento
- - Rio Tishgo - Agua fresca T-1 1 4 a 6 registos al
mes
- - Rio Mantaro - Agua fresca M-3 0 En aguas natura
les
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL 49 Estaciones
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
Nota: Los efluentes R-1, R-2 y R-3, descargan al rio Yauli
Los efluentes del 101 al 137, descargan al rio Mantaro
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo IV Pag 81
- --------------------------------------------------------------------------------
4.1.3 Residuos Solidos
Los residuos solidos mas impactantes que se manejan en el Complejo
Metalurgico son las escorias de cobre y plomo, las ferritas de zinc y el
trioxido de arsenico, los que son depositados en areas alejadas de la zona
industrial.
Las escorias no tienen valor economico, en cambio las ferritas de zinc por
contener este metal en cantidades apreciables, son considerados como una
reserva de zinc para ser explotado en el futuro. Respecto al trioxido de
arsenico el mercado se encuentra deprimido.
Otros materiales de menor impacto son los residuos de talio, la basura
industrial y domestica.
a) Escorias de Cobre y Plomo
Estas escorias se generan en los hornos de manga de plomo y del
horno reverbero de cobre, luego de ser granuladas por enfriamiento
brusco mediante agua a presion y transportadas por gravedad en forma
de "slurry", separacion solido-liquido, se envia por medio de un
sistema de cable carril hasta el deposito de "Huanchan". Ver
Diagrama 4.1.3/1.
El agua que sirve para la granulacion, se descarga en forma directa
al rio Mantaro, arrastrando escoria fina en suspension y metales
disueltos.
Los analisis de las soluciones son los siguientes:
- --------------------------------------------------------------------------------
Cu Pb Fe As Sb SO(2) SO(4) NO(3) Solidos
mg/l mg/l mg/l g/l g/l g/l g/l mg/l pH % g/l
- --------------------------------------------------------------------------------
Horno Pb 1 0.6 1.0 1.5 0.18 0.03 0.38 0.08 0.68 0.24 2.30 25.2
- --------------------------------------------------------------------------------
Horno Pb 2 0.5 1.0 2.0 0.23 0.04 0.38 0.06 0.59 0.24 2.10 24.3
- --------------------------------------------------------------------------------
Reverbero 0.8 0.8 1.5 0.04 0.10 .016 0.18 5.60 1.50 28.5
- --------------------------------------------------------------------------------
En el cuadro siguiente se sumarizan las caracteristicas de los
depositos de escorias:
- --------------------------------------------------------------------------------
DIMENSIONES
- --------------------------------------------------------------------------------
Area 250 000 m^2
- --------------------------------------------------------------------------------
Altura 70 m
- --------------------------------------------------------------------------------
CARACTERISTICAS
- --------------------------------------------------------------------------------
Peso 10 millones de toneladas
- --------------------------------------------------------------------------------
Analisis Quimico Ver Tabla 4.1.3/2
- --------------------------------------------------------------------------------
Humedad 6,0 %
- --------------------------------------------------------------------------------
Estabilidad Estables
- --------------------------------------------------------------------------------
Granulometria Ver Tabla 4.1.3/2A
- --------------------------------------------------------------------------------
E Solubilidad No presenta
- --------------------------------------------------------------------------------
UBICACION Ver Plano M03-96-02, adjunto en este Capitulo.
- --------------------------------------------------------------------------------
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo IV Pag 82
- --------------------------------------------------------------------------------
Las caracteristicas de este deposito y su proximidad a la carretera
central y el rio Mantaro generan como impactos ambientales tanto
potenciales como reales su estabilidad y su interaccion con el medio
ambiente.
La accion eolica tambien se manifiesta sobre el deposito arrastrando
parte de las particulas finas que conforman las escorias.
b) Trioxido de Arsenico
Este subproducto es generado por la tostacion de polvo recuperado en
el cottrell de arsenico mezclado con pirita, el arsenico se
volatiliza y los vapores procesados pasan al cottrell caliente y de
alli a las cocinas donde el producto obtenido contiene un 96% de
As(2)O(3).
Por sus escasas ventas, ha sido depositado en dos areas, una desde
1992 en Malpaso, operativo durante aproximadamente 25 anos, y otra
en la zona de Vado, en actual uso.
En el cuadro siguiente se sumarizan las caracteristicas de estos
depositos:
- --------------------------------------------------------------------------------
DIMENSIONES MALPASO VADO
- --------------------------------------------------------------------------------
Area 18 000 m^2 45 000 m^2
- --------------------------------------------------------------------------------
Altura 2 a 3 m 2 a 5 m
- --------------------------------------------------------------------------------
Profundidad 2 a 3 m 2 a 5 m
- --------------------------------------------------------------------------------
CARACTERISTICAS
- --------------------------------------------------------------------------------
Peso 45 000 ton 115 000 ton
- --------------------------------------------------------------------------------
Analisis Quimico Ver Tabla 4.1.3/2 Ver Tabla 4.1.3/2
- --------------------------------------------------------------------------------
Humedad 2.0 % 2.0 %
- --------------------------------------------------------------------------------
Estabilidad Inestable Inestable
- --------------------------------------------------------------------------------
Granulometria Ver Tabla 4.1.3/2A Ver Tabla 4.1.3/2A
- --------------------------------------------------------------------------------
Solubilidad Soluble Soluble
- --------------------------------------------------------------------------------
UBICACION Ver Fig. 1 y Plano 1 Ver Fig. 1 y Plano 1 anexos
anexos al Capitulo 5, Proyecto al Capitulo 5,
Proyecto No 14. No 14.
Por estar los depositos en areas de material aluvional y muy
cercanas al rio Mantaro y expuestos a la accion de las lluvias las
que se intensifican en los meses de enero a marzo, percolan y
ocasionan la disolucion del arsenico y otros elementos, llegando a
discurrir y contaminar el rio Mantaro.
La evaluacion de calidad de las aguas de este rio, realizadas por
nuestra Division de Investigaciones Metalurgicas antes y despues del
stock de Vado, reportaron los siguientes resultados (mg/l):
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo IV Pag 83
- --------------------------------------------------------------------------------
Calidad de las Aguas del Rio Mantaro Antes y Despues del Stock de
Vado
Antes del Stock Vado Despues del Stock Vado
---------------------------------------------------------------------
Fecha Cu Pb Fe As Cu Pb Fe As
- --------------------------------------------------------------------------------
27-3-95 0,08 0,05 0,52 0,05 0,08 0,04 0,55 0,60
- --------------------------------------------------------------------------------
29-3-95 0,06 0,04 0,66 0,04 0,08 0,04 0,47 0,84
- --------------------------------------------------------------------------------
31-3-95 0,06 0,04 0,54 0,01 0,06 0,04 0,57 0,06
- --------------------------------------------------------------------------------
03-4-95 0,10 0,03 0,53 0,08 0,11 0,08 0,52 0,30
- --------------------------------------------------------------------------------
05-4-95 0,04 0,05 0,51 0,05 0.05 0,04 0,46 0,40
- --------------------------------------------------------------------------------
07-4-95 0,11 0,04 0,56 0,23 0,04 0,03 0,59 0,01
- --------------------------------------------------------------------------------
10-4-95 0,09 0,04 0,39 0,03 0,05 0,04 0,34 0,02
- --------------------------------------------------------------------------------
12-4-95 0,06 0,01 0,50 0,06 0,10 0,02 1,70 0,94
- --------------------------------------------------------------------------------
15-4-95 0,06 0,01 1,10 0,04 0,12 0,05, 0,68 0,45
- --------------------------------------------------------------------------------
17-4-95 0,07 0,04 0,55 0,05 0,03 0,06 0,44 0,56
- --------------------------------------------------------------------------------
19-4-95 0,05 0,03 0,44 0,01 0,06 0,04 0,26 1,10
- --------------------------------------------------------------------------------
21-4-95 0,06 0,04 0,44 0,13 0,05 0,04 0,32 0,36
- --------------------------------------------------------------------------------
24-4-95 0,52 0,80 4,40 0,13 0,52 0,28 4,20 0,16
- --------------------------------------------------------------------------------
26-4-95 0,42 0,32 4,20 0,01 0,48 0,35 4,30 0,26
- --------------------------------------------------------------------------------
28-4-95 0,52 0,35 4,30 0,04 0,55 0,40 3,90 0,44
- --------------------------------------------------------------------------------
L.M.P.(1) 1,00 0,40 2,00 1,00 1,00 0,40 2,00 1,00
- --------------------------------------------------------------------------------
L.M.P.(2) 0,30 0,20 1,00 0,50 0,30 0,20 1,00 0,50
- --------------------------------------------------------------------------------
Fuente: Memorandum Interno DIM-074-95 del 06-06-1995.
L.M.P.(1): Limites Maximos Permisibles en Cualquier Momento (mg/l).
L.M.P.(2): Limites Maximos Permisibles Valor Promedio Anual (mg/l).
Del cuadro se deduce que se incrementa la concentracion de arsenico
en el rio Mantaro despues del stock Vado.
En cuanto a los otros elementos como cobre, plomo y fierro se
observa infimos incrementos que no sobrepasan los limites maximos
permisibles.
Referente al pH, no se observa variacion al haberse registrado
valores entre 7,3 y 7,8 para ambas muestras de agua.
En las Fotos 4.1.3/2A y 2B se observa los depositos de trioxido de
arsenico.
c) Residuos Lixiviados de Zinc (Ferritas de Zinc)
Estos residuos se generan en el proceso hidrometalurgico de
lixiviacion de calcinas de zinc.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo IV Pag 84
- --------------------------------------------------------------------------------
De los residuos generados (115 t/d) el 43% (50 t/d ) se procesa en
la planta "zileret", la misma que al ser procesada y obtenerse
fierro esponja permite ser empleado en los lechos de fusion para
transformarse en escorias estables.
El remanente de ferritas se depositan en pozas conformadas por
diques perimetricos de material prestado. Para satisfacer la
creciente demanda de capacidad, las alturas de los diques son
constantemente incrementadas siguiendo la metodologia "aguas arriba"
sin compactacion ni adicion de humedad.
La solucion que trae la pulpa de ferritas es decantada en uno de los
extremos de cada poza y evacuado hacia el rio Mantaro por una
tuberia enterrada.
Las condiciones climaticas tales como vientos y lluvias originan por
un lado arrastre de las particulas finas al medio ambiente y
disolucion de las sales solubles (ZnSO(4)) que finalmente descargan
al rio Mantaro.
La seccion de pruebas de control efectua un control de los flujos y
contenidos metalicos que dicho efluente descarga al rio Mantaro, los
cuales son mostrados a continuacion y representa un promedio de
enero-agosto de 1996.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
EFLUENTE LIQUIDO DESCARGADO AL RIO
DE LOS DEPOSITOS DE HUANCHAN
- ---------------------------------------------------------------------------------------------
PROMEDIO ENERO-AGOSTO DE 1996
- ---------------------------------------------------------------------------------------------
SOLIDOS mg/l
FLUJO TEMP. EN -------------------------------------------------------
m3/min. ^oC pH SUSPENSION AS Cd Cu Fe Mn Pb Zn
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0,488 16 7,03 40 0,8 0,50 0,05 0,25 18,40 1,43 222
- ---------------------------------------------------------------------------------------------
MAXIMOS PERMISIBLES
- ---------------------------------------------------------------------------------------------
SOLIDOS mg/l
EN -------------------------------------------------------
SUSPENSION pH AS Cu Fe Pb Zn
- ---------------------------------------------------------------------------------------------
En cualquier momento 100 > 5.5- < 10.5 1,0 2,0 5,0 1,0 6,0
Promedio anual 50 > 5.5- < l0.6 1,0 1,0 2,0 0,4 3,0
- ---------------------------------------------------------------------------------------------
</TABLE>
Del cuadro se deduce que el contenido de Zn y Pb tienen
concentraciones superiores a los maximos permisibles; en cuanto a
los otros elementos como Cu, Fe y As se observa que estan dentro de
los maximos permisibles, y referente al pH, practicamente los
valores estan dentro del limite establecido.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo IV Pag 85
- --------------------------------------------------------------------------------
En el cuadro siguiente se sumarizan las caracteristicas de estos
depositos:
- --------------------------------------------------------------------------------
DIMENSIONES
- --------------------------------------------------------------------------------
Area 94 805 m^2
- --------------------------------------------------------------------------------
Altura De 6 a 12 m
- --------------------------------------------------------------------------------
Profundidad De 6 a 12 m
- --------------------------------------------------------------------------------
CARACTERISTICAS:
- --------------------------------------------------------------------------------
Peso 1 242 797 t
- --------------------------------------------------------------------------------
Analisis Quimico Ver Tabla 4.1.3/2
- --------------------------------------------------------------------------------
Humedad 20 a 30%
- --------------------------------------------------------------------------------
Estabilidad Estable
- --------------------------------------------------------------------------------
Granulometria -38 um: 92,9%
- --------------------------------------------------------------------------------
Solubilidad Insoluble
- --------------------------------------------------------------------------------
UBICACION Ver Plano M04-96-02, anexo al Capitulo 5,
Proyecto No. 15.
- --------------------------------------------------------------------------------
Los codigos para tratamiento y disposicion final de los residuos
solidos generados en Fundicion de Cobre, Plomo, y Refinerias de Zinc
(Tabla 413/2, 2A), se indican en la tabla 4.1.3/1.
En la Foto 4.1.3/2 se tiene una vista parcial de estos depositos.
d) Otros Residuos (Residuo de Talio, Basura Industrial y Domestica)
o Residuo de Talio
Este residuo solido es generado por el tratamiento de la
esponja de cadmio crudo (Planta de cadmio). El residuo es
producto de la purificacion del sulfato de cadmio con
permanganato de potasio, soda caustica y carbonato de sodio.
El material producido es transportado por medio de camiones al
deposito de Huanchan (lado sur del deposito No. 2 de ferritas
de zinc). Actualmente se tiene almacenado 2 428 t (4 % de Ti
promedio). El abandono de este deposito se realizara bajo la
misma tecnica de abandono de los depositos de ferritas.
Las caracteristicas de este residuo se presentan en la Tabla
4.1.3/2.
o Basura Industrial
La basura industrial se genera en las instalaciones del
complejo metalurgico y esta conformada por: maderas, telas,
papeles, plasticos resinas y otros.
Actualmente estan en operacion dos incineradores de basura
industrial, uno instalado en la fundicion y otro en la
Refineria de Huaymanta.
La chatarra industrial es seleccionada para su posterior
reciclaje parcial o venta, y los aceites industriales y grasas
se reciclan a los tanques de petroleo pesado (Bunker 6).
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo IV Pag 86
- --------------------------------------------------------------------------------
o Basura Domestica
Este residuo es depositado en un lugar denominado Cochabamba
11 km al sur de la Fundicion.
4.2 Evaluacion de los Impactos Ambientales
4.2.1 Impacto sobre el Ambiente Fisico
o Clima
Este componente es afectado por los gases al producirse el
efecto de inversion termica, lo que ocasiona microclimas no
propios de la region.
o Aire
El aire recibe la descarga de las emisiones gaseosas y
material particulado que se generan en los procesos
metalurgicos que son diariamente monitoreadas en cinco
estaciones (Huanchan, Sindicato, Hotel Inca, Cushurupampa y
Casaracra) distribuidas en un radio de 10 km del punto de
ubicacion del emisor principal (chimenea de 167,5 m de alto)
Como producto de la dispersion de gases (Tablas Nros. 4.1.1/2,
4.1.1/2A, 4.1.1/3, 4.1.1/3A, 4.1.1/4, 4.1.1/4A, 4.1.1/5,
4.1.1/5A, 4.l.1/5B, 4.1.1/5C, 4.1.1/6, 4.1.1/6A, 4.1.1/7,
4.1.1/7A, 4.1.1/8, 4.1.1/8A, 4.1.1/9, 4.1.1/9A), la calidad de
aire en el entorno del Complejo Metalurgico, alcanza los
niveles maximos permisibles, excepto cuando sucede la
inversion termica, como se puede apreciar en el siguiente
cuadro:
- --------------------------------------------------------------------------------
NIVELES MAXIMOS
PARAMETRO UNIDAD CALIDAD DEL AIRE PERMISIBLES RM-
315-96-EM/VMM
- --------------------------------------------------------------------------------
PPM
S0(2), Media aritmeti- De 0,06 a 0,24(*) 0,20
ca anual
- --------------------------------------------------------------------------------
ug/m^3
Pb Media aritmeti- De 0,07 a 2,94(*) 0,50
ca anual
- --------------------------------------------------------------------------------
ug/m^3
As Media aritmeti- De 0,08 a 1,72(*) 6,00
ca anual
- --------------------------------------------------------------------------------
ug/m^3
MPS Media aritmeti- De 86,0 a 294,0(*) 350
ca diaria
- --------------------------------------------------------------------------------
(*) Generalmente los valores mas altos arrojan cuando se presenta las
inversiones termicas.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo IV Pag 87
- --------------------------------------------------------------------------------
o Agua
Los 40 efluentes liquidos, producto de la actividad del
Complejo Metalurgico, vienen siendo descargados a los rios
Yauli y Mantaro con contenidos solidos en suspencion y metales
en solucion con las caracteristicas que se pueden apreciar en
las Tablas 4.1.2/1, 41.2/2 y 4.l.2/2A.
Por otro lado, la totalidad de los efluentes liquidos
domesticos se descargan, a la fecha, sin ningun tratamiento, a
los mencionados receptores.
o Suelos
Las pocas areas de suelos existentes, no son aptos para fines
productivos por su composicion y por sus caracteristicas
topograficas y geologicas y altitud de la zona. Bajo estas
condiciones, el principal impacto viene dado por las lluvias
que erosionan los suelos, facilitados por la gran pendiente de
estos y por su acidez originada por la parcial disolucion de
las emisiones de S02.
Los residuos solidos industriales, tales como las escorias de
Plomo y Cobre, la pulpa de las ferritas de zinc, impactan los
suelos en el area de los depositos de Huanchan, a 3 km. del
Complejo Metalurgico. Del mismo modo, el trioxido de arsenico
produce un impacto negativo en la zona de Vado a 9 km. del
area del mencionado Complejo.
La Oroya tienen suelos empobrecidos sin cobertura vegetal. No
hay presencia de nitrogeno por falta de vegetacion, asi mismo
carecen de calcio y son suelos ligeramente acidos debido a la
remocion del calcio por efecto de las aguas pluviales y el
efecto nocivo de los humos de la fundicion. Ver fotos 4.2.1/1
y 4.2.1/2.
Los suelos de La Oroya y circundantes han sido objeto de
estudio en los laboratorios de la Universidad Nacional Agraria
de La Molina. En las tablas 4.1.1/2, 4.1.1/2A, 4.1.1/3,
4.1.1./3A, 4.1.1/4, 4.1.1/4A, 4.1.1/5, 4.1.1/5A, 4.1.1./5B,
4.1.1./5C, 4.1.1/6, 4.1.1/6A, 4.1.1/7, 4.1.1/7A, 4.1.1/8,
4.1.1/8A, 14.1.1/9 y 4.1.1/9A se detalla la caracterizacion de
los gases emitidos al ambiente los que afectan precisamente a
los suelos en mencion.
Tambien los suelos son impactados por los residuos solidos
provenientes de la basura, que en parte es incinerada y/o
depositada en un lugar llamado Cochabamba a 9 km. del
Complejo.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo IV Pag 88
- --------------------------------------------------------------------------------
o Geomorfologia
La geomorfologia se ve afectada por la modificacion del
relieve geografico. Los residuos solidos, pese a su baja
solubilidad no estan exentos en contenidos de agentes
contaminantes, los cuales se transmiten hacia las aguas
superficiales.
Las tablas 4.l.3./l y diagrama 4.1.3/1 muestran los volumenes,
caracteristicas y ubicacion de los solidos, ademas en el
capitulo 5 se presentan en mayor detalle los proyectos de
abandono de depositos, ferritas, trioxido y de emisiones.
Por accion eolica, las particulas finas de los residuos son
desplazados hacia areas del entorno, alterando la calidad de
los suelos.
4.2.2. Impacto sobre el medio ambiente biologico
El paisaje natural, nos muestra que la atmosfera es receptora de
gases y materiales particulados que finalmente al precipitar con la
lluvia, constituyen las causas de la alteracion de los ecosistemas
existentes afectando la flora y la fauna especialmente, entonces
esta parte de la serrania se hace un tanto improductiva inclusive
con desaparicion de algunas especies silvestres, especialmente las
endemicas de distribucion restringida, hacia la destruccion del
habitat, por la perdida de la vegetacion natural.
La turbidez del agua, disponible en los rios Mantaro y Yauli
especialmente, impide la penetracion de la luz limitando la
actividad fotosintetica, reduciendo la cantidad de oxigeno disuelto
y modificando la temperatura del agua, estas condiciones
definitivamente afecta la productividad primaria de estos rios. Debe
indicarse que este impacto se manifiesta antes de la llegada de
ambos rios a la ciudad de La Oroya, incrementandose ligeramente con
parte de los residuos industriales que descargan las diferentes
plantas del Complejo Metalurgico.
A lo anteriormente senalado se adiciona la cantidad de solidos en
suspencion que traen estos rios como pueden apreciarse en la Tablas
4.1.2/6 y 4.1.2/6A.
Los residuos solidos que se observan en los depositos de Huanchan
(escorias y ferritas de zinc). Malpaso y Vado (trioxido de As), son
un tipo de contaminacion fisica que contribuye a la alteracion de
los ecosistemas terrestres (Fotos 4.1.3/1 y 2, 2A y 2B).
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo IV Pag 89
- --------------------------------------------------------------------------------
4.2.3 Impacto sobre el ambiente socio-economico
El complejo metalurgico es el generador del desarrollo
socio-economico de la zona y de la Region Central.
4.2.4 Impacto sobre el ambiente de interes humano
El ambiente de interes humano del emplazamiento, esta reducido a
constituir una ruta de acceso a ciudades y lugares donde existen
recursos arqueologicos (Tarma, Jauja, Huancayo), areas naturales
protegidas, parques y reservas nacionales (Bosque de Piedras de
Huayllay en Cerro de Pasco y lago de Chinchaycocha en Junin),
circuitos turisticos (Lima-Tarma-Valle de Chanchamayo y Valle del
Mantaro).
<PAGE>
Pas 90
CENTNOMIN PERU
DIRECCION DE ASUNTOS AMBIENTALES
MANIPULACION DE GASES Y POLVOS
Enero-Diciembre 1995
(Polvo en toneladas metricas/dia)
[FLOW CHART OMITTED]
DIAGRAMA 4.1.1/1
<PAGE>
Pag 91
COMPLEJO METALURGICO
LA OROYA
[PHOTO OMITTED]
FOTO 4.1.1/1 EN PRIMER PLANO AREA FORESTADA FRENTE A LAS OFICINAS
GENERALES, AL FONDO LA CHIMENA PRINCIPAL EMITIENDO HUMOS
[PHOTO OMITTED]
FOTO 4.1.1/2 PARTE IZQUIERDA INFERIOR EL COMPLEJO DEPORTIVO,
INMEDIATAMENTE DESPUES EN PROCESO DE REVEGETACION EL AREA
CORRESPONDIENTE AL EXCAMPAMENTO CLUB PERUANO Y COMO FONDO LA
FUNDICION
<PAGE>
Pag 91-A
COMPLEJO METALURGICO
LA OROYA
[PHOTO OMITTED]
FOTO 4.1.1/3 EN LA PARTE INFERIOR IZQUIERDA SE
APRECIA LA NUEVA PLANTA DE OXIGENO, AL FONDO
LAS CHIMENEAS PRINCIPAL Y DE FIERRO EMITIENDO
HUMOS.
<PAGE>
Pag 92
COMPLEJO METALURGICO
LA OROYA
[PHOTO OMITTED]
FOTO 4.1.3/1 DEPOSITO DE ALMACENAMIENTO DE ESCORIAS DE COBRE Y PLOMO
EN LA ZONA DE HUANCHAN
[PHOTO OMITTED]
FOTO 4.1.3/2 DEPOSITO DE ALMACENAMIENTO DE FERRITAS DE ZINC
<PAGE>
Pag 93
COMPLEJO METALURGICO
OROYA
[PHOTO OMITTED]
FOTO 4.1.3/2A DEPOSITOS DE ALMACENAMIENTO DE TRIOXIDO DE ARSENICO EN VADO,
UBICADO A 8 KM. DE LA FUNDICION.
[PHOTO OMITTED]
FOTO 4.1.3/2B MODULOS DEL PILOTAJE DE ALMACENAMIENTO DE TRIOXIDO DE AR-
SENCIO, DESARROLLADOS RECIENTEMENTE EN LA ZONA DE VADO.
<PAGE>
Pag 94
COMPLEJO METALURGICO - LA OROYA
[PHOTOS OMITTED]
FOTOS 4.2.1/1 Y
4.2.1/2
PARTE ALTA DE LAS
CARCAVAS, SE OBSERVAN
LOS ESTRATOS QUE
CONFORMAN EL TERRENO
DE LA ZONA.
<PAGE>
Pag 94-A
COMPLEJO METALURGICO
LA OROYA
[PHOTO OMITTED]
FOTO 4.2.1/1A VISTA PANORAMICA DEL LLANO UBICADO EN HUAYNACANCHA SE
APRECIA UN PROCESO DE RECUPERACION, AL FONDO SE OBSERVA LOS CERROS QUE
CIRCUNDAN LA FUNDICION
[PHOTO OMITTED]
FOTO 4.2.1/2A VISTA PANORAMICA DE LA ZONA CONTIGUA A LA CARCAVA OBSER-
<PAGE>
Pag 95
[MAP OMITTED]
-----------------------------------------
CENTROMIN PERU S.A. - LA OROYA
DIRECCION DE ASUNTOS AMBIENTALES
COMPLEJO METALURGICO - LA OROYA
DEPOSITO DE RESIDUOS SOLIDOS
PAMA : DIAGRAMA No 4.1.3/1 FECHA:NOV.96
-----------------------------------------
<PAGE>
Pag 96
TABLA 4.1.1/2
MEDIOS DE EMISION Y CARACTERISTICAS DE LAS EMISIONES GASEOSAS
Y DE MATERIAL PARTICULADO
Periodo: Ene. - Dic. 1995
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
INORGANICO FISICO
-------------------------------------------------------------------------------------------
TIEMPO DE EMISION
No. FUENTE DE EMISION ALTURA EQUIPO DE PRE O FLUJO SOLIDOS TEMP -----------------
m POST TRATAMIENTO m3/seg mg/m3 : C h/d d/a
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 CHIMENEA DE CONCRETO 168 Precipitado Electrostatico 1145,61 89,88 80 24 365
- ----------------------------------------------------------------------------------------------------------------------
2 CHIMENEA DE FIERRO 91 Ninguno 88,73 46,24 20 24 365
- ----------------------------------------------------------------------------------------------------------------------
3 CHIMENEA DE COQUE 19 Ninguno (1 Chimenea) 14,86 n.d. 278 24 365
BATERIA "A"
- ----------------------------------------------------------------------------------------------------------------------
4 CHIMENEA DE COQUE 19 Ninguno (1 Chimenea) 14,76 n.d. 287 24 365
BATERIA "B"
- ----------------------------------------------------------------------------------------------------------------------
5 SISTEMA VENTILACION 19 Lavado de gases 0,45 374,04 22 12 365
OLLAS Bi P.R.A
- ----------------------------------------------------------------------------------------------------------------------
6 SISTEMA VENTILACION 19 Filtro de bolsas (3 Chimeneas) 16,85 31,63 37 18 365
CONV. P.R.A.
- ----------------------------------------------------------------------------------------------------------------------
7 SISTEMA VENTILACION 15 Pricip. Electrostat Filtro de 11,94 46,39 44 18 365
COPELAS P.R.A. bolsas
- ----------------------------------------------------------------------------------------------------------------------
8 SISTEMA VENTILACION 30 Lavador de Gases Filtro de bolsas 46,07 921,05 59 21 365
TOST. ZINC
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
[ILLEGIBLE] Maximos Permisibles - Normas Peruansa (MEM) n.d. 100 n.d.
- ----------------------------------------------------------------------------------------------------------------------
[ILLEGIBLE] : Reportes de la Seccion Pruebas de Control, contenido metalico, mensuales de Plantas, etc.
[ILLEGIBLE] : n.d. (no determinado)
(*) : La norma establece para el caso de Centromin Peru S.A., fijar el 83% del azufre que ingresa
[ILLEGIBLE] Auditoria Ambiental de Emisiones y Vertimientos, Junio 1996
</TABLE>
- -----------------------------------------------------------------------
INORGANICO, CONTENIDO METALICO; mg/m^3
---------------------------------------------
No. FUENTE DE EMISION
As Cd Pb SO(2) CO CO(2)
- -----------------------------------------------------------------------
1 CHIMENEA DE CONCRETO 17,96 0,92 23,25 9 379 n.d n.d
- -----------------------------------------------------------------------
2 CHIMENEA DE FIERRO 5,68 0,00 2,65 0 n.d n.d
- -----------------------------------------------------------------------
3 CHIMENEA DE COQUE n.d n.d n.d 8 973 445 34 786
BATERIA "A"
- -----------------------------------------------------------------------
4 CHIMENEA DE COQUE n.d n.d n.d 6 751 667 34 687
BATERIA "B"
- -----------------------------------------------------------------------
5 SISTEMA VENTILACION n.d n.d 13.89 n.d n.d n.d
OLLAS Bi P.R.A
- -----------------------------------------------------------------------
6 SISTEMA VENTILACION n.d n.d 1,72 n.d n.d n.d
CONV. P.R.A.
- -----------------------------------------------------------------------
7 SISTEMA VENTILACION n.d n.d 1,77 n.d n.d n.d
COPELAS P.R.A.
- -----------------------------------------------------------------------
8 SISTEMA VENTILACION n.d 1,10 11,43 n.d n.d n.d
TOST. ZINC
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
[ILLEGIBLE] Maximos Permisibles
- - Normas Peruansa (MEM) 25 25 (*)
- -----------------------------------------------------------------------
<PAGE>
Pag 97
TABLA 4.1.1/2A
MEDIOS DE EMISION Y CARACTERISTICAS DE LAS EMISIONES GASEOSAS
Y DE MATERIAL PARTICULADO
Periodo: Ene. - Jun. 1996
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
INORGANICO FISICO
------------------------------------------------------------------------------
TIEMPO DE EMISION
No. FUENTE DE EMISION ALTURA EQUIPO DE PRE O FLUJO SOLIDOS TEMP -----------------
m POST TRATAMIENTO m^3/seg mg/m^3 : C h/d d/a
- -----------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C> <C> <C> <C>
1 CHIMENEA PRINCIPAL 168 Precipitado 1137,56 81,46 82 24 365
Electrostatico
- -----------------------------------------------------------------------------------------------------------------------
2 CHIMENEA DE FIERRO 91 Ninguno 97,60 50,17 19 24 365
- -----------------------------------------------------------------------------------------------------------------------
3 CHIMENEA DE COQUE BATERIA "A" 19 Ninguno (1 Chimenea) 15,08 n.d. 271 24 365
- -----------------------------------------------------------------------------------------------------------------------
4 CHIMENEA DE COQUE BATERIA "B" 19 Ninguno (1 Chimenea) 13,89 n.d. 309 24 365
- -----------------------------------------------------------------------------------------------------------------------
5 SISTEMA VENTILACION OLLAS Bi 19 Lavado de gases 0,62 1152,83 21 12 365
P.R.A
- -----------------------------------------------------------------------------------------------------------------------
6 SISTEMA VENTILACION CONV. P.R.A. 19 Filtro de bolsas (3 18,83 28,88 41 18 365
Chimeneas)
- -----------------------------------------------------------------------------------------------------------------------
7 SISTEMA VENTILACION COPELAS 15 Pricip. Electrostat 12,61 39,83 49 18 365
P.R.A. Filtro de bolsas
- -----------------------------------------------------------------------------------------------------------------------
8 SISTEMA VENTILACION TOST. ZINC 30 Lavador de Gases Filtro 30,06 926,04 58 21 365
de bolsas
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
[ILLEGIBLE] Maximos Permisibles - Normas Peruansa (MEM) n.d. 100 n.d.
- -----------------------------------------------------------------------------------------------------------------------
[ILLEGIBLE] : Reportes de la Seccion Pruebas de Control, contenido metalico, mensuales de Plantas, etc.
[ILLEGIBLE] : n.d. (no determinado)
(*) : La norma establece para el caso de Centromin Peru S.A., fijar el 83% del azufre que ingresa
[ILLEGIBLE] Auditoria Ambiental de Emisiones y Vertimientos, Junio 1996
</TABLE>
- --------------------------------------------------------------------------------
INORGANICO, CONTENIDO METALICO; mg/m^3
----------------------------------------
No. FUENTE DE EMISION
As Cd Pb SO(2) CO CO(2)
- --------------------------------------------------------------------------------
1 CHIMENEA PRINCIPAL 15,26 0,89 22,32 11 557 n.d. n.d.
- --------------------------------------------------------------------------------
2 CHIMENEA DE FIERRO 10,77 0,00 3,22 0 n.d. n.d.
- --------------------------------------------------------------------------------
3 CHIMENEA DE COQUE BATERIA "A" n.d. n.d. n.d. 3 920 0 36 533
- --------------------------------------------------------------------------------
4 CHIMENEA DE COQUE BATERIA "B" n.d. n.d. n.d. 3 775 127 43 121
- --------------------------------------------------------------------------------
5 SISTEMA VENTILACION OLLAS Bi n.d. n.d. 20,72 n.d. n.d. n.d.
P.R.A
- --------------------------------------------------------------------------------
6 SISTEMA VENTILACION CONV. P.R.A. n.d. n.d. 3,32 n.d. n.d. n.d.
- --------------------------------------------------------------------------------
7 SISTEMA VENTILACION COPELAS n.d. n.d. 1,29 n.d. n.d. n.d.
P.R.A.
- --------------------------------------------------------------------------------
8 SISTEMA VENTILACION TOST. ZINC 0,00 1,32 13,69 n.d. n.d. n.d.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[ILLEGIBLE] Maximos Permisibles -
Normas Peruansa (MEM) 25 25 (*)
- --------------------------------------------------------------------------------
<PAGE>
Pag 98
TABLA No 4.1.1. /3
EMISIONES POR LA CHIMENEA PRINCIPAL
Periodo: Ene. - Dic. 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
INORGANICO FISICO
---------------------------------------------------------------------------
TIEMPO DE EMISION
MES FUENTE DE EMISION ALTURA EQUIPO DE PRE O FLUJO SOLIDOS TEMP -----------------
m POST TRATAMIENTO m^3/seg mg/m^3 : C h/d d/a
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ene CHIMENEA PRINCIPAL 168 Precipitadores 1183,73 87,12 83 24 365
- ------------------------------------------------------------------------------------------------------------
Feb Electrostaticos 1116,87 90,58 84 24 365
- ------------------------------------------------------------------------------------------------------------
Mar 1109,00 88,37 80 24 365
- ------------------------------------------------------------------------------------------------------------
Abr 1150,80 86,05 84 24 365
- ------------------------------------------------------------------------------------------------------------
May 1167,75 93,19 82 24 365
- ------------------------------------------------------------------------------------------------------------
Jun 1167,90 88,93 79 24 365
- ------------------------------------------------------------------------------------------------------------
Jul 1198,67 88,37 82 24 365
- ------------------------------------------------------------------------------------------------------------
Ago 1149,27 79,04 76 24 365
- ------------------------------------------------------------------------------------------------------------
Set 1102,72 79,21 75 24 365
- ------------------------------------------------------------------------------------------------------------
Oct 1139,08 98,53 82 24 365
- ------------------------------------------------------------------------------------------------------------
Nov 1119,52 98,57 79 24 365
- ------------------------------------------------------------------------------------------------------------
Dic 1111,97 100,25 79 24 365
- ------------------------------------------------------------------------------------------------------------
rom: 1145,61 89,88 80 24 365
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
[ILLEGIBLE] Maximos Permisibles - normas Peruansa (MEM) n.d. 100 n.d.
- ------------------------------------------------------------------------------------------------------------
[ILLEGIBLE] : Reportes de la Seccion Pruebas de Control, contenido metalico, mensuales de Plantas, etc.
[ILLEGIBLE] : n.d. (no determinado)
(*) : La norma establece para el caso de Centromin Peru S.A., fijar el 83% del azufre que ingresa
[ILLEGIBLE] Auditoria Ambiental de Emisiones y Vertimientos, Junio 1996
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
INORGANICO, CONTENIDO METALICO; mg/m^3
---------------------------------------------------------
MES FUENTE DE EMISION
As Cd Pb SO(2) CO CO(2)
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ene CHIMENEA PRINCIPAL 11,54 1,22 24,74 9 757 n.d. n.d.
- ------------------------------------------------------------------------------------------
Feb 20,20 1,00 20,74 8 886 n.d. n.d.
- ------------------------------------------------------------------------------------------
Mar 16,97 0,97 20,85 10 279 n.d. n.d.
- ------------------------------------------------------------------------------------------
Abr 16,01 0,83 24,61 8 711 n.d. n.d.
- ------------------------------------------------------------------------------------------
May 18,54 0,83 25,72 10 454 n.d. n.d.
- ------------------------------------------------------------------------------------------
Jun 25,08 0,76 16,01 9 582 n.d. n.d.
- ------------------------------------------------------------------------------------------
Jul 18,91 0,97 21,21 9 060 n.d. n.d.
- ------------------------------------------------------------------------------------------
Ago 17,63 0,95 20,55 9 408 n.d. n.d.
- ------------------------------------------------------------------------------------------
Set 16,00 0,51 16,87 9 060 n.d. n.d.
- ------------------------------------------------------------------------------------------
Oct 17,54 0,99 29,16 8 537 n.d. n.d.
- ------------------------------------------------------------------------------------------
Nov 18,73 0,99 28,98 9 060 n.d. n.d.
- ------------------------------------------------------------------------------------------
Dic 18,34 0,97 29,57 9 757 n.d. n.d.
- ------------------------------------------------------------------------------------------
rom: 17,96 0,92 23,25 9 379 n.d. n.d.
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
[ILLEGIBLE] Maximos Permisibles - 25 25 (*)
- - Normas Peruansa (MEM)
- ------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Pag 99
TABLA No 4.1.1 /3A
EMISIONES POR LA CHIMENEA PRINCIPAL
Periodo: Ene. - Jun. 1996
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
INORGANICO FISICO
----------------------------------------------------------------------------------
TIEMPO DE EMISSION
MES FUENTE DE EMISION ALTURA EQUIPO DE PRE O FLUJO SOLIDOS TEMP -----------------
m POST TRATAMIENTO m^3/seg mg/m^3 : C h/d d/a
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ene CHIMENEA PRINCIPAL 168 Precipitadores 1151,02 97,66 83 24 365
- -------------------------------------------------------------------------------------------------------------------
Feb Electrostaticos 1148,77 91,06 82 24 365
- -------------------------------------------------------------------------------------------------------------------
Mar 1146,80 82,50 85 24 365
- -------------------------------------------------------------------------------------------------------------------
Abr 1117,63 74,08 80 24 365
- -------------------------------------------------------------------------------------------------------------------
May 1135,62 71,49 84 24 365
- -------------------------------------------------------------------------------------------------------------------
Jun 1125,50 71,99 78 24 365
- -------------------------------------------------------------------------------------------------------------------
Jul
- -------------------------------------------------------------------------------------------------------------------
Ago
- -------------------------------------------------------------------------------------------------------------------
Set
- -------------------------------------------------------------------------------------------------------------------
Oct
- -------------------------------------------------------------------------------------------------------------------
Nov
- -------------------------------------------------------------------------------------------------------------------
Dic
- -------------------------------------------------------------------------------------------------------------------
rom: 1137,56 81,46 82 24 365
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
[ILLEGIBLE] Maximos Permisibles - Normas Peruansa (MEM) n.d. 100 n.d.
- -------------------------------------------------------------------------------------------------------------------
[ILLEGIBLE] : Reportes de la Seccion Pruebas de Control, contenido metalico, mensuales de Plantas, etc.
[ILLEGIBLE] : n.d. (no determinado)
(*) : La norma establece para el caso de Centromin Peru S.A., fijar el 83% del azufre que ingresa
[ILLEGIBLE] Auditoria Ambiental de Emisiones y Vertimientos, Junio 1996
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
INORGANICO, CONTENIDO METALICO; mg/m^3
-----------------------------------------------------------
MES FUENTE DE EMISION
As Cd Pb SO(2) CO CO(2)
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ene CHIMENEA PRINCIPAL 20,70 0,69 22,46 11 151 n.d. n.d.
- -------------------------------------------------------------------------------------------
Feb 14,93 0,76 26,41 11 325 n.d. n.d.
- -------------------------------------------------------------------------------------------
Mar 15,01 1,07 26,15 12 370 n.d. n.d.
- -------------------------------------------------------------------------------------------
Abr 12,44 0,74 23,26 9 931 n.d. n.d.
- -------------------------------------------------------------------------------------------
May 12,80 1,22 19,30 12 893 n.d. n.d.
- -------------------------------------------------------------------------------------------
Jun 15,69 0,86 16,34 11 673 n.d. n.d.
- -------------------------------------------------------------------------------------------
Jul
- -------------------------------------------------------------------------------------------
Ago
- -------------------------------------------------------------------------------------------
Set
- -------------------------------------------------------------------------------------------
Oct
- -------------------------------------------------------------------------------------------
Nov
- -------------------------------------------------------------------------------------------
Dic
- -------------------------------------------------------------------------------------------
rom: 15,26 0,89 22,32 11 557 n.d. n.d.
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
[ILLEGIBLE] Maximos Permisibles 25 25 (*)
- - Normas Peruansa (MEM)
- -------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Pag 100
TABLA No 4.1.1 /3B
EMISIONES POR LA CHIMENEA PRINCIPAL
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
CONTENIDO METALICO; kg/d
Flujo: Carga de polvo SO(2): ----------------------------------------------------------
Ano Nm'/min t/d t/d Cu Pb Ag Bl Cd Au
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1975 39 717 12,12 1 039 263 2 309 4,744 114 40 0,00
- ------------------------------------------------------------------------------------------------------------
1976 41 020 13,13 1 053 563 2 152 5,605 90 46 0,01
- ------------------------------------------------------------------------------------------------------------
1977 41 171 13,25 1 043 222 2 814 5,061 112 64 0,00
- ------------------------------------------------------------------------------------------------------------
1978 41 173 13,37 1 062 259 2 790 5,023 117 86 0,00
- ------------------------------------------------------------------------------------------------------------
1979 42 595 13,53 1 127 172 3 471 5,732 158 71 0,00
- ------------------------------------------------------------------------------------------------------------
1980 39 728 13,41 999 202 3 521 6,030 147 88 0,00
- ------------------------------------------------------------------------------------------------------------
1981 39 736 13,57 1 033 158 4 204 6,775 155 91 0,00
- ------------------------------------------------------------------------------------------------------------
1982 40 685 13,88 1 132 151 4 274 6,527 195 83 0,00
- ------------------------------------------------------------------------------------------------------------
1983 40 943 13,58 1 130 123 4 251 7,034 241 81 0,00
- ------------------------------------------------------------------------------------------------------------
1984 38 651 13,59 1 028 162 4 334 8,528 263 95 0,00
- ------------------------------------------------------------------------------------------------------------
1985 38 220 13,86 1 037 201 4 255 9,322 259 107 0,00
- ------------------------------------------------------------------------------------------------------------
1986 34 395 12,09 960 198 3 222 8,503 231 83 0,00
- ------------------------------------------------------------------------------------------------------------
1987 39 193 12,66 1 098 372 2 847 7,274 213 61 0,00
- ------------------------------------------------------------------------------------------------------------
1988 35 403 9,71 906 173 2 821 5,772 157 59 0,00
- ------------------------------------------------------------------------------------------------------------
1989 38 398 13,58 1 078 234 3 770 9,555 279 93 0,00
- ------------------------------------------------------------------------------------------------------------
1990 37 625 12,87 1 012 176 3 485 9,576 272 97 0,00
- ------------------------------------------------------------------------------------------------------------
1991 37 159 10,46 919 142 3 015 6,393 191 76 0,00
- ------------------------------------------------------------------------------------------------------------
1992 38 531 10,59 845 115 3 157 6,307 225 108 0,00
- ------------------------------------------------------------------------------------------------------------
1993 40 024 9,97 908 99 2 526 4,806 204 87 0,01
- ------------------------------------------------------------------------------------------------------------
1994 35 416 8,95 813 97 2 212 4,415 158 101 0,01
- ------------------------------------------------------------------------------------------------------------
1995 34 518 8,90 899 164 2 304 4,496 175 91 0,00
- ------------------------------------------------------------------------------------------------------------
1996 28 462 7,48 959 101 2 127 3,326 188 84 0,00
- ------------------------------------------------------------------------------------------------------------
[ILLEGIBLE]: En 1996, se ha considerado hasta el mes de Octubre.
</TABLE>
- -------------------------------------------------------------------
CONTENIDO METALICO; kg/d
--------------------------------------------------------
Ano As Zn Sb Fe Ins S
- -------------------------------------------------------------------
1975 2 901 759 496 404 212 915
- -------------------------------------------------------------------
1976 2 648 821 422 802 351 1 082
- -------------------------------------------------------------------
1977 3 355 710 479 286 189 902
- -------------------------------------------------------------------
1978 3 259 812 418 393 203 1 012
- -------------------------------------------------------------------
1979 3 000 847 445 252 151 958
- -------------------------------------------------------------------
1980 2 763 777 406 305 174 907
- -------------------------------------------------------------------
1981 2 711 751 400 172 154 874
- -------------------------------------------------------------------
1982 2 601 953 420 231 152 906
- -------------------------------------------------------------------
1983 2 528 1 091 395 279 118 872
- -------------------------------------------------------------------
1984 2 364 842 335 261 121 955
- -------------------------------------------------------------------
1985 2 279 950 324 343 199 1 074
- -------------------------------------------------------------------
1986 1 667 954 340 411 223 1 008
- -------------------------------------------------------------------
1987 1 583 1 326 327 897 284 1 060
- -------------------------------------------------------------------
1988 1 237 893 276 363 163 818
- -------------------------------------------------------------------
1989 2 351 956 487 355 255 1 014
- -------------------------------------------------------------------
1990 2 118 1 039 426 251 182 945
- -------------------------------------------------------------------
1991 1 671 702 324 178 109 921
- -------------------------------------------------------------------
1992 1 620 696 344 126 119 1 112
- -------------------------------------------------------------------
1993 1 373 796 308 155 159 1 103
- -------------------------------------------------------------------
1994 1 538 633 286 117 92 951
- -------------------------------------------------------------------
1995 1 775 426 304 94 60 916
- -------------------------------------------------------------------
1996 1 345 234 361 52 32 743
- -------------------------------------------------------------------
<PAGE>
Pag 101
EMISION DE MATERIAL PARTICULADO POR LA CHIMENEA PRINCIPAL
[GRAPHIC OMITTED]
GRAFICO No. 1
<PAGE>
Pag 102
EMISION DE SO(2) POR LA CHIMENEA PRINCIPAL
[GRAPHIC OMITTED]
GRAFICO No. 2
<PAGE>
Pag 103
EMISIONES DE Pb, Cd Y As POR LA CHIMENEA PRINCIPAL
[GRAPHIC OMITTED]
GRAFICO No. 3
<PAGE>
CENTROMIN PERU S.A. Pag 104
Direccion de Asuntos Amblentales
TABLA No 4.1.1/4
EMISIONES POR CHIMENEAS SECUNDARIAS
Periodo: Ene - Dic. 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
INORGANICO FISICO INORGANICO CONTENIDO METALICO mg/m3
----------------------------------------------------------------------------------------------------------
MESES FUENTE DE EMISION ALTURA EQUIPO DE PRE O FLUJO SOLIDOS Temp TIEMPO DE EMISON
----------------
m POST TRATAMIENTO m3/seg mg/m3 C h/d d/a As Cd Pb SO(2) CO CO(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ENE CHIMENEA DE FIERRO 91 Ninguno 74,43 50,85 18 24 365 9,76 0,00 4,93 0 n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
FEB 95,60 36,32 19 24 365 11,19 0,00 4,00 0 n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
MAR 80,65 52,09 22 24 365 10,78 0,00 3,49 0 n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
ABR 96,00 39,42 21 24 365 6,15 0,00 2,60 0 n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
MAY 74,77 59,27 20 24 365 9,01 0,00 2,79 0 n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
JUN 85,97 46,72 21 24 365 4,77 0,00 2,34 0 n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
JUL 85,92 47,60 21 24 365 2,48 0,00 2,09 0 n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
AGO 90,17 52,17 20 24 365 5,89 0,00 2,14 0 n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
SEP 95,75 45,93 20 24 365 2,89 0,00 1,56 0 n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
OCT 85,85 48,13 20 24 365 1,83 0,00 2,41 0 n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
NOV 85,78 43,85 20 24 365 1,80 0,00 1,97 0 n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
DIC 113,92 32,51 21 24 365 1,66 0,00 1,50 0 n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
POM 88,73 46,24 20 24 365 5,68 0,00 2,65 0 n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Niveles Maximos Permisibles - Normas Peruanas (MEM) n.d. 100 n.d. 25 25 (*)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Rererencia : Reportes de la Soccidn Pruebas de Control, contenido metalico,
mensuales de Plantue, etc.
Nota : n.d. (No determinado)
(*) : La norma establece para el easo de Centromin Peru S.A., fijar el
83% del nzufre que ingresa.
Fuente : Auditoria Ambiental de Emisiones y Vertimientos, Junio 1996
<PAGE>
CENTROMIN PERU S.A. Pag 105
Direccion de Asuntos Amblentales
TABLA No 4.1.1/4A
EMISIONES POR CHIMENEAS SECUNDARIAS
Periodo: Ene - Jun. 1996
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
INORGANICO FISICO INORGANICO CONTENIDO METALICO mg/m3
----------------------------------------------------------------------------------------------------------
MESES FUENTE DE EMISION ALTURA EQUIPO DE PRE O FLUJO SOLIDOS Temp TIEMPO DE EMISON
----------------
m POST TRATAMIENTO m3/seg mg/m3 C h/d d/a As Cd Pb SO(2) CO CO(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ENE CHIMENEA DE FIERRO 91 Ninguno 103,25 42,37 21 24 365 3,14 0,00 1,95 0 n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
FEB 95.70 54.06 20 24 365 3,30 0,00 2,59 0 n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
MAR 91,12 49,92 19 24 365 3,49 0,00 2,50 0 n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
ABR 84,92 58,61 16 24 365 21,63 0,00 5,33 0 n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
MAY 116,45 40,75 18 24 365 1,87 0,00 4,40 0 n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
JUN 94,18 55,30 20 24 365 31,19 0,00 2,54 0 n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
JUL
- ------------------------------------------------------------------------------------------------------------------------------------
AGO
- ------------------------------------------------------------------------------------------------------------------------------------
SEP
- ------------------------------------------------------------------------------------------------------------------------------------
OCT
- ------------------------------------------------------------------------------------------------------------------------------------
NOV
- ------------------------------------------------------------------------------------------------------------------------------------
DIC
- ------------------------------------------------------------------------------------------------------------------------------------
POM 97,60 50,17 19 24 365 10,77 0,00 3,22 0 n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Niveles Maximos Permisibles - Normas Peruanas (MEM) n.d. 100 n.d. 25 25 (*)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Rererencia : Reportes de la Soccidn Pruebas de Control, contenido metalico,
mensuales de Plantue, etc.
Nota : n.d. (No determinado)
(*) : La norma establece para el easo de Centromin Peru S.A., fijar el
83% del nzufre que ingresa.
Fuente : Auditoria Ambiental de Emisiones y Vertimientos, Junio 1996
<PAGE>
CENTROMIN PERU S.A. Pag 106
Direccion de Asuntos Amblentales
TABLA No 4.1.1/5
EMISIONES POR CHIMENEAS SECUNDARIAS
Periodo: Ene - Dic. 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
INORGANICO FISICO INORGANICO CONTENIDO METALICO mg/m3
----------------------------------------------------------------------------------------------------------
MESES FUENTE DE EMISION ALTURA EQUIPO DE PRE O FLUJO SOLIDOS Temp TIEMPO DE EMISON
----------------
m POST TRATAMIENTO m3/seg mg/m3 C h/d d/a As Cd Pb SO(2) CO CO(2)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ENE CHIMENEA DE FIERRO 19 Ninguno 14,94 n.d. 290 24 365 n.d. n.d. n.d. 8 711 0 36 533
- ------------------------------------------------------------------------------------------------------------------------------------
FEB BATERIA "A" (1 chimenea) 12,66 n.d. 283 24 365 n.d. n.d. n.d. 5 227 762 33 539
- ------------------------------------------------------------------------------------------------------------------------------------
MAR 13,22 n.d. 248 24 365 n.d. n.d. n.d. 0 1 524 42 522
- ------------------------------------------------------------------------------------------------------------------------------------
ABR 15,07 n.d. 266 24 365 n.d. n.d. n.d. 14 809 381 23 956
- ------------------------------------------------------------------------------------------------------------------------------------
MAY 14,95 n.d. 284 24 365 n.d. n.d. n.d. 20 036 381 36 533
- ------------------------------------------------------------------------------------------------------------------------------------
JUN 15,80 n.d. 311 24 365 n.d. n.d. n.d. 17 423 2 287 34 736
- ------------------------------------------------------------------------------------------------------------------------------------
JUL 15,26 n.d. 298 24 365 n.d. n.d. n.d. 0 0 50 308
- ------------------------------------------------------------------------------------------------------------------------------------
AGO 15,12 n.d. 258 24 365 n.d. n.d. n.d. 12 196 0 19 764
- ------------------------------------------------------------------------------------------------------------------------------------
SEP 15,32 n.d. 271 24 365 n.d. n.d. n.d. 15 332 0 35 335
- ------------------------------------------------------------------------------------------------------------------------------------
OCT 15,89 n.d. 270 24 365 n.d. n.d. n.d. 11 325 0 22 758
- ------------------------------------------------------------------------------------------------------------------------------------
NOV 15,82 n.d. 274 24 365 n.d. n.d. n.d. 2 613 0 44 319
- ------------------------------------------------------------------------------------------------------------------------------------
DIC 14,21 n.d. 279 24 365 n.d. n.d. n.d. 0 0 37 132
- ------------------------------------------------------------------------------------------------------------------------------------
POM 14,86 n.d. 278 24 365 n.d. n.d. n.d. 8 973 445 34 786
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Niveles Maximos Permisibles - Normas Peruanas (MEM) n.d. 100 n.d. 25 25 (*)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Rererencia : Reportes de la Soccidn Pruebas de Control, contenido metalico,
mensuales de Plantue, etc.
Nota : n.d. (No determinado)
(*) : La norma establece para el easo de Centromin Peru S.A., fijar el
83% del nzufre que ingresa.
Fuente : Auditoria Ambiental de Emisiones y Vertimientos, Junio 1996
<PAGE>
CENTROMIN PERU S.A. Pag 107
Direccion de Asuntos Amblentales
TABLA No 4.1.1/5A
EMISIONES POR CHIMENEAS SECUNDARIAS
Periodo: Ene - Jun. 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
INORGANICO FISICO INORGANICO CONTENIDO METALICO mg/m3
----------------------------------------------------------------------------------------------------------
MESES FUENTE DE EMISION ALTURA EQUIPO DE PRE O FLUJO SOLIDOS Temp TIEMPO DE EMISON
----------------
m POST TRATAMIENTO m3/seg mg/m3 C h/d d/a As Cd Pb SO(2) CO CO(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ENE CHIMENEA DE COQUE 19 Ninguno 14,28 n.d. 262 24 365 n.d. n.d. n.d. 6098 0 31 143
- ------------------------------------------------------------------------------------------------------------------------------------
FEB BATERIA "A" (1 chimenea) 15,71 n.d. 277 24 365 n.d. n.d. n.d. 0 0 36 533
- ------------------------------------------------------------------------------------------------------------------------------------
MAR 16,69 n.d. 306 24 365 n.d. n.d. n.d. 0 0 40 127
- ------------------------------------------------------------------------------------------------------------------------------------
ABR 14,57 n.d. 235 24 365 n.d. n.d. n.d. 0 0 35 335
- ------------------------------------------------------------------------------------------------------------------------------------
MAY 13,81 n.d. 272 24 365 n.d. n.d. n.d. 17 423 0 40 726
- ------------------------------------------------------------------------------------------------------------------------------------
JUN 15,43 n.d. 275 24 365 n.d. n.d. n.d. 0 0 35 335
- ------------------------------------------------------------------------------------------------------------------------------------
JUL
- ------------------------------------------------------------------------------------------------------------------------------------
AGO
- ------------------------------------------------------------------------------------------------------------------------------------
SEP
- ------------------------------------------------------------------------------------------------------------------------------------
OCT
- ------------------------------------------------------------------------------------------------------------------------------------
NOV
- ------------------------------------------------------------------------------------------------------------------------------------
DIC
- ------------------------------------------------------------------------------------------------------------------------------------
POM 15,08 n.d. 271 24 365 n.d. n.d. n.d. 3 920 0 36 533
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Niveles Maximos Permisibles - Normas Peruanas (MEM) n.d. 100 n.d. 25 25 (*)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Rererencia : Reportes de la Soccidn Pruebas de Control, contenido metalico,
mensuales de Plantue, etc.
Nota : n.d. (No determinado)
(*) : La norma establece para el easo de Centromin Peru S.A., fijar el
83% del nzufre que ingresa.
Fuente : Auditoria Ambiental de Emisiones y Vertimientos, Junio 1996
<PAGE>
CENTROMIN PERU S.A. Pag 108
Direccion de Asuntos Amblentales
TABLA No 4.1.1/5B
EMISIONES POR CHIMENEAS SECUNDARIAS
Periodo: Ene - Dic. 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
INORGANICO FISICO INORGANICO CONTENIDO METALICO mg/m3
----------------------------------------------------------------------------------------------------------
MESES FUENTE DE EMISION ALTURA EQUIPO DE PRE O FLUJO SOLIDOS Temp TIEMPO DE EMISON
----------------
m POST TRATAMIENTO m3/seg mg/m3 C h/d d/a As Cd Pb SO(2) CO CO(2)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ENE CHIMENEA DE FIERRO 19 Ninguno 14,37 n.d. 324 24 365 n.d. n.d. n.d. 12 196 0 32 940
- ------------------------------------------------------------------------------------------------------------------------------------
FEB BATERIA "B" (1 chimenea) 16,71 n.d. 308 24 365 n.d. n.d. n.d. 14 809 762 31 143
- ------------------------------------------------------------------------------------------------------------------------------------
MAR 14,51 n.d. 296 24 365 n.d. n.d. n.d. 871 7241 28 149
- ------------------------------------------------------------------------------------------------------------------------------------
ABR 13,34 n.d. 269 24 365 n.d. n.d. n.d. 11 325 0 31 143
- ------------------------------------------------------------------------------------------------------------------------------------
MAY 14,97 n.d. 278 24 365 n.d. n.d. n.d. 6 098 0 38 929
- ------------------------------------------------------------------------------------------------------------------------------------
JUN 14,02 n.d. 293 24 365 n.d. n.d. n.d. 10 454 0 37 731
- ------------------------------------------------------------------------------------------------------------------------------------
JUL 13,91 n.d. 299 24 365 n.d. n.d. n.d. 0 0 50 308
- ------------------------------------------------------------------------------------------------------------------------------------
AGO 14,48 n.d. 293 24 365 n.d. n.d. n.d. 9 542 0 28 747
- ------------------------------------------------------------------------------------------------------------------------------------
SEP 14,78 n.d. 260 24 365 n.d. n.d. n.d. 6 098 0 38 330
- ------------------------------------------------------------------------------------------------------------------------------------
OCT 15,86 n.d. 290 24 365 n.d. n.d. n.d. 8 711 0 28 149
- ------------------------------------------------------------------------------------------------------------------------------------
NOV 15,84 n.d. 259 24 365 n.d. n.d. n.d. 871 0 40 127
- ------------------------------------------------------------------------------------------------------------------------------------
DIC 14,37 n.d. 276 24 365 n.d. n.d. n.d. 0 0 30 544
- ------------------------------------------------------------------------------------------------------------------------------------
POM 14,76 n.d. 287 24 365 n.d. n.d. n.d. 6 751 667 34 687
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Niveles Maximos Permisibles - Normas Peruanas (MEM) n.d. 100 n.d. 25 25 (*)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Rererencia : Reportes de la Soccidn Pruebas de Control, contenido metalico,
mensuales de Plantue, etc.
Nota : n.d. (No determinado)
(*) : La norma establece para el easo de Centromin Peru S.A., fijar el
83% del nzufre que ingresa.
Fuente : Auditoria Ambiental de Emisiones y Vertimientos, Junio 1996
<PAGE>
CENTROMIN PERU S.A. Pag 109
Direccion de Asuntos Amblentales
TABLA No 4.1.1/5C
EMISIONES POR CHIMENEAS SECUNDARIAS
Periodo: Ene - Jun. 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
INORGANICO FISICO INORGANICO CONTENIDO METALICO mg/m3
----------------------------------------------------------------------------------------------------------
MESES FUENTE DE EMISION ALTURA EQUIPO DE PRE O FLUJO SOLIDOS Temp TIEMPO DE EMISON
----------------
m POST TRATAMIENTO m3/seg mg/m3 C h/d d/a As Cd Pb SO(2) CO CO(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ENE CHIMENEA DE FIERRO 19 Ninguno 13,59 n.d. 308 24 365 n.d. n.d. n.d. 7 840 0 44 319
- ------------------------------------------------------------------------------------------------------------------------------------
FEB BATERIA "B" (1 chimenea) 15,57 n.d. 341 24 365 n.d. n.d. n.d. 0 0 49 110
- ------------------------------------------------------------------------------------------------------------------------------------
MAR 16,02 n.d. 323 24 365 n.d. n.d. n.d. 0 0 33 539
- ------------------------------------------------------------------------------------------------------------------------------------
ABR 14,49 n.d. 260 24 365 n.d. n.d. n.d. 0 0 44 319
- ------------------------------------------------------------------------------------------------------------------------------------
MAY 6,74 n.d. 315 24 365 n.d. n.d. n.d. 14 809 0 43 121
- ------------------------------------------------------------------------------------------------------------------------------------
JUN 16,92 n.d. 309 24 365 n.d. n.d. n.d. 0 0 44 319
- ------------------------------------------------------------------------------------------------------------------------------------
JUL
- ------------------------------------------------------------------------------------------------------------------------------------
AGO
- ------------------------------------------------------------------------------------------------------------------------------------
SEP
- ------------------------------------------------------------------------------------------------------------------------------------
OCT
- ------------------------------------------------------------------------------------------------------------------------------------
NOV
- ------------------------------------------------------------------------------------------------------------------------------------
DIC
- ------------------------------------------------------------------------------------------------------------------------------------
POM 13,89 n.d. 309 24 365 n.d. n.d. n.d. 3 775 0 43 121
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Niveles Maximos Permisibles - Normas Peruanas (MEM) n.d. 100 n.d. 25 25 (*)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Rererencia : Reportes de la Soccidn Pruebas de Control, contenido metalico,
mensuales de Plantue, etc.
Nota : n.d. (No determinado)
(*) : La norma establece para el easo de Centromin Peru S.A., fijar el
83% del nzufre que ingresa.
Fuente : Auditoria Ambiental de Emisiones y Vertimientos, Junio 1996
<PAGE>
CENTROMIN PERU S.A. Pag 110
Direccion de Asuntos Amblentales
TABLA No 4.1.1/6
EMISIONES POR CHIMENEAS SECUNDARIAS
Periodo: Ene - Dic. 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
INORGANICO FISICO INORGANICO CONTENIDO METALICO mg/m3
----------------------------------------------------------------------------------------------------------
MESES FUENTE DE EMISION ALTURA EQUIPO DE PRE O FLUJO SOLIDOS Temp TIEMPO DE EMISON
----------------
m POST TRATAMIENTO m3/seg mg/m3 C h/d d/a As Cd Pb SO(2) CO CO(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ENE SISTEMA DE VENTILACION 19 Lavador de gases 0,46 313,56 19 12 365 n.d. n.d. 16,18 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
FEB OLLAS DE BISMUTO 0,46 262,50 24 12 365 n.d. n.d. 1,35 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
MAR Pta. RESIDUOS ANODICOS 0,47 334,61 22 12 365 n.d. n.d. 15,86 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
ABR 0,44 553,15 26 12 365 n.d. n.d. 3,03 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
MAY 0,45 81,25 20 12 365 n.d. n.d. 12,98 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
JUN 0,51 865,47 28 12 365 n.d. n.d. 4,92 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
JUL 0,42 220,14 16 12 365 n.d. n.d. 5,79 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
AGO 0,45 483,36 24 12 365 n.d. n.d. 6,70 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
SEP 0,38 740,70 18 12 365 n.d. n.d. 37,08 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
OCT 0,38 95,98 19 12 365 n.d. n.d. 12,36 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
NOV 0,34 191,45 25 12 365 n.d. n.d. 11,19 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
DIC 0,61 346,34 19 12 365 n.d. n.d. 39,25 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
POM 0,45 374,04 22 12 365 n.d. n.d. 13,89 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Niveles Maximos Permisibles - Normas Peruanas (MEM) n.d. 100 n.d. 25 25 (*)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Rererencia : Reportes de la Soccidn Pruebas de Control, contenido metalico,
mensuales de Plantue, etc.
Nota : n.d. (No determinado)
(*) : La norma establece para el easo de Centromin Peru S.A., fijar el
83% del nzufre que ingresa.
Fuente : Auditoria Ambiental de Emisiones y Vertimientos, Junio 1996
<PAGE>
CENTROMIN PERU S.A. Pag 111
Direccion de Asuntos Amblentales
TABLA No 4.1.1/6A
EMISIONES POR CHIMENEAS SECUNDARIAS
Periodo: Ene - Dic. 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
INORGANICO FISICO INORGANICO CONTENIDO METALICO mg/m3
----------------------------------------------------------------------------------------------------------
MESES FUENTE DE EMISION ALTURA EQUIPO DE PRE O FLUJO SOLIDOS Temp TIEMPO DE EMISON
----------------
m POST TRATAMIENTO m3/seg mg/m3 C h/d d/a As Cd Pb SO(2) CO CO(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ENE SISTEMA DE VENTILACION 19 Lavador de gases 0,51 619,42 18 12 365 n.d. n.d. 3,30 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
FEB OLLAS DE BISMUTO 0,65 3068,13 20 12 365 n.d. n.d. 43,39 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
MAR Pta. RESIDUOS ANODICOS 0,68 1226,65 23 12 365 n.d. n.d. 15,47 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
ABR 0,56 566,67 23 12 365 n.d. n.d. 48,76 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
MAY 0,65 709,69 20 12 365 n.d. n.d. 6,88 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
JUN 0,70 726,39 19 12 365 n.d. n.d. 7,49 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
JUL
- ------------------------------------------------------------------------------------------------------------------------------------
AGO
- ------------------------------------------------------------------------------------------------------------------------------------
SEP
- ------------------------------------------------------------------------------------------------------------------------------------
OCT
- ------------------------------------------------------------------------------------------------------------------------------------
NOV
- ------------------------------------------------------------------------------------------------------------------------------------
DIC
- ------------------------------------------------------------------------------------------------------------------------------------
POM 0,62 1152,83 21 12 365 n.d. n.d. 20,72 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Niveles Maximos Permisibles - Normas Peruanas (MEM) n.d. 100 n.d. 25 25 (*)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Rererencia : Reportes de la Soccidn Pruebas de Control, contenido metalico,
mensuales de Plantue, etc.
Nota : n.d. (No determinado)
(*) : La norma establece para el easo de Centromin Peru S.A., fijar el
83% del nzufre que ingresa.
Fuente : Auditoria Ambiental de Emisiones y Vertimientos, Junio 1996
<PAGE>
CENTROMIN PERU S.A. Pag 112
Direccion de Asuntos Amblentales
TABLA No 4.1.1/7
EMISIONES POR CHIMENEAS SECUNDARIAS
Periodo: Ene - Dic. 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
INORGANICO FISICO INORGANICO CONTENIDO METALICO mg/m3
----------------------------------------------------------------------------------------------------------
MESES FUENTE DE EMISION ALTURA EQUIPO DE PRE O FLUJO SOLIDOS Temp TIEMPO DE EMISON
----------------
m POST TRATAMIENTO m3/seg mg/m3 C h/d d/a As Cd Pb SO(2) CO CO(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ENE SISTEMA DE VENTILACION 19 FILTROS DE BOLSAS 17,61 45,99 31 18 365 n.d. n.d. 0,48 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
FEB DE CONVERTIDORES (3 Chimenens) 15,94 50,84 35 18 365 n.d. n.d. 0,69 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
MAR Pta. RESIDUOS ANODICOS 17,39 22,91 37 18 365 n.d. n.d. 1,47 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
ABR 16,67 27,52 44 18 365 n.d. n.d. 3,49 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
MAY 15,50 21,54 40 18 365 n.d. n.d. 1,51 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
JUN 17,50 24,85 32 18 365 n.d. n.d. 1,69 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
JUL 17,31 25,45 35 18 365 n.d. n.d. 0,84 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
AGO 15,03 29,67 35 18 365 n.d. n.d. 3,39 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
SEP 17,05 31,01 41 18 365 n.d. n.d. 0,93 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
OCT 18,20 27,60 38 18 365 n.d. n.d. 2,66 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
NOV 17,67 36,18 35 18 365 n.d. n.d. 2,26 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
DIC 16,31 35,96 38 18 365 n.d. n.d. 1,23 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
POM 16,85 31,63 37 18 365 n.d. n.d. 1,72 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Niveles Maximos Permisibles - Normas Peruanas (MEM) n.d. 100 n.d. 25 25 (*)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Rererencia : Reportes de la Soccidn Pruebas de Control, contenido metalico,
mensuales de Plantue, etc.
Nota : n.d. (No determinado)
(*) : La norma establece para el easo de Centromin Peru S.A., fijar el
83% del nzufre que ingresa.
Fuente : Auditoria Ambiental de Emisiones y Vertimientos, Junio 1996
<PAGE>
CENTROMIN PERU S.A. Pag 113
Direccion de Asuntos Amblentales
TABLA No 4.1.1/7A
EMISIONES POR CHIMENEAS SECUNDARIAS
Periodo: Ene - Dic. 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
INORGANICO FISICO INORGANICO CONTENIDO METALICO mg/m3
----------------------------------------------------------------------------------------------------------
MESES FUENTE DE EMISION ALTURA EQUIPO DE PRE O FLUJO SOLIDOS Temp TIEMPO DE EMISON
----------------
m POST TRATAMIENTO m3/seg mg/m3 C h/d d/a As Cd Pb SO(2) CO CO(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ENE SISTEMA DE VENTILACION 19 FILTROS DE BOLSAS 16,51 32,81 46 18 365 n.d. n.d. 1,84 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
FEB DE CONVERTIDORES (3 Chimenens) 20,17 26,95 40 18 365 n.d. n.d. 2,51 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
MAR Pta. RESIDUOS ANODICOS 18,05 30,89 38 18 365 n.d. n.d. 2,40 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
ABR 19,18 23,23 40 18 365 n.d. n.d. 1,83 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
MAY 19,87 32,50 39 18 365 n.d. n.d. 10,42 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
JUN 19,18 26,91 40 18 365 n.d. n.d. 0,95 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
JUL
- ------------------------------------------------------------------------------------------------------------------------------------
AGO
- ------------------------------------------------------------------------------------------------------------------------------------
SEP
- ------------------------------------------------------------------------------------------------------------------------------------
OCT
- ------------------------------------------------------------------------------------------------------------------------------------
NOV
- ------------------------------------------------------------------------------------------------------------------------------------
DIC
- ------------------------------------------------------------------------------------------------------------------------------------
POM 18,83 28,88 41 18 365 n.d. n.d. 3,32 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Niveles Maximos Permisibles - Normas Peruanas (MEM) n.d. 100 n.d. 25 25 (*)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Rererencia : Reportes de la Soccidn Pruebas de Control, contenido metalico,
mensuales de Plantue, etc.
Nota : n.d. (No determinado)
(*) : La norma establece para el easo de Centromin Peru S.A., fijar el
83% del nzufre que ingresa.
Fuente : Auditoria Ambiental de Emisiones y Vertimientos, Junio 1996
<PAGE>
CENTROMIN PERU S.A. Pag 114
Direccion de Asuntos Amblentales
TABLA No 4.1.1/8
EMISIONES POR CHIMENEAS SECUNDARIAS
Periodo: Ene - Dic. 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
INORGANICO FISICO INORGANICO CONTENIDO METALICO mg/m3
----------------------------------------------------------------------------------------------------------
MESES FUENTE DE EMISION ALTURA EQUIPO DE PRE O FLUJO SOLIDOS Temp TIEMPO DE EMISON
----------------
m POST TRATAMIENTO m3/seg mg/m3 C h/d d/a As Cd Pb SO(2) CO CO(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ENE SISTEMA DE VENTILACION 15 PRECIPITADOR 10,26 39,48 49 18 365 n.d. n.d. 0,70 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
FEB DE COPELAS ELECTROSTATICO 11,85 102,59 44 18 365 n.d. n.d. 0,58 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
MAR Pta. RESIDUOS ANODICOS Y FLITROS DE 11,91 52,73 42 18 365 n.d. n.d. 0,91 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
ABR BOLSAS 12,94 35,41 43 18 365 n.d. n.d. 2,78 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
MAY 11,97 37,31 45 18 365 n.d. n.d. 3,73 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
JUN 12,24 45,45 45 18 365 n.d. n.d. 1,88 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
JUL 12,23 38,85 44 18 365 n.d. n.d. 2,78 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
AGO 12,27 35,42 46 18 365 n.d. n.d. 2,76 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
SEP 11,64 28,16 42 18 365 n.d. n.d. 1,56 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
OCT 12,20 59,44 37 18 365 n.d. n.d. 1,51 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
NOV 11,00 48,53 43 18 365 n.d. n.d. 1,33 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
DIC 12,72 33,31 43 18 365 n.d. n.d. 0,75 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
POM 11,94 46,39 44 18 365 n.d. n.d. 1,77 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Niveles Maximos Permisibles - Normas Peruanas (MEM) n.d. 100 n.d. 25 25 (*)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Rererencia : Reportes de la Soccidn Pruebas de Control, contenido metalico,
mensuales de Plantue, etc.
Nota : n.d. (No determinado)
(*) : La norma establece para el easo de Centromin Peru S.A., fijar el
83% del nzufre que ingresa.
Fuente : Auditoria Ambiental de Emisiones y Vertimientos, Junio 1996
<PAGE>
CENTROMIN PERU S.A. Pag 115
Direccion de Asuntos Amblentales
TABLA No 4.1.1/8A
EMISIONES POR CHIMENEAS SECUNDARIAS
Periodo: Ene - Dic. 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
INORGANICO FISICO INORGANICO CONTENIDO METALICO mg/m3
----------------------------------------------------------------------------------------------------------
MESES FUENTE DE EMISION ALTURA EQUIPO DE PRE O FLUJO SOLIDOS Temp TIEMPO DE EMISON
----------------
m POST TRATAMIENTO m3/seg mg/m3 C h/d d/a As Cd Pb SO(2) CO CO(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ENE SISTEMA DE VENTILACION 15 PRECIPITADOR 10,70 50,37 50 18 365 n.d. n.d. 1,43 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
FEB DE COPELAS ELECTROSTATICO 13,94 29,11 48 18 365 n.d. n.d. 1,39 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
MAR Pta. RESIDUOS ANODICOS Y FLITROS DE 12,80 35,92 46 18 365 n.d. n.d. 0,96 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
ABR BOLSAS 13,20 36,63 45 18 365 n.d. n.d. 0,91 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
MAY 11,90 51,67 50 18 365 n.d. n.d. 2,46 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
JUN 13,10 32,24 54 18 365 n.d. n.d. 0,61 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
JUL
- ------------------------------------------------------------------------------------------------------------------------------------
AGO
- ------------------------------------------------------------------------------------------------------------------------------------
SEP
- ------------------------------------------------------------------------------------------------------------------------------------
OCT
- ------------------------------------------------------------------------------------------------------------------------------------
NOV
- ------------------------------------------------------------------------------------------------------------------------------------
DIC
- ------------------------------------------------------------------------------------------------------------------------------------
POM 12,61 39,83 49 18 365 n.d. n.d. 1,29 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Niveles Maximos Permisibles - Normas Peruanas (MEM) n.d. 100 n.d. 25 25 (*)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Rererencia : Reportes de la Soccidn Pruebas de Control, contenido metalico,
mensuales de Plantue, etc.
Nota : n.d. (No determinado)
(*) : La norma establece para el easo de Centromin Peru S.A., fijar el
83% del nzufre que ingresa.
Fuente : Auditoria Ambiental de Emisiones y Vertimientos, Junio 1996
<PAGE>
CENTROMIN PERU S.A. Pag 116
Direccion de Asuntos Amblentales
TABLA No 4.1.1/9
EMISIONES POR CHIMENEAS SECUNDARIAS
Periodo: Ene - Dic. 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
INORGANICO FISICO INORGANICO CONTENIDO METALICO mg/m3
----------------------------------------------------------------------------------------------------------
MESES FUENTE DE EMISION ALTURA EQUIPO DE PRE O FLUJO SOLIDOS Temp TIEMPO DE EMISON
----------------
m POST TRATAMIENTO m3/seg mg/m3 C h/d d/a As Cd Pb SO(2) CO CO(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ENE SISTEMA DE VENTILACION 30 LAVADORES DE GASES 37,20 959,84 68 21 365 n.d. 0,96 10,56 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
FEB TOSTADORES DE ZINC FILTROS DE BOLSAS 34,58 932,06 69 21 365 n.d. 1,12 13,05 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
MAR 33,47 1103,23 63 21 365 n.d. 1,32 15,45 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
ABR 198,15 139,60 61 21 365 n.d. 0,15 1,68 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
MAY 33,07 1039,57 65 21 365 n.d. 1,56 1,77 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
JUN 20,70 499,87 37 21 365 n.d. 0,60 7,50 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
JUL 36,07 1026,26 59 21 365 n.d. 1,23 14,37 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
AGO 32,28 1303,92 58 21 365 n.d. 1,56 20,86 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
SEP 26,42 890,29 51 21 365 n.d. 1,07 13,35 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
OCT 29,33 901,59 52 21 365 n.d. 0,99 13,52 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
NOV 35,05 1240,95 60 21 365 n.d. 1,40 14,89 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
DIC 36,57 1015,40 60 21 365 n.d. 1,22 10,15 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
POM 46,07 921,05 59 21 365 n.d. 1,10 11,43 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Niveles Maximos Permisibles - Normas Peruanas (MEM) n.d. 100 n.d. 25 25 (*)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Rererencia : Reportes de la Soccidn Pruebas de Control, contenido metalico,
mensuales de Plantue, etc.
Nota : n.d. (No determinado)
(*) : La norma establece para el easo de Centromin Peru S.A., fijar el
83% del nzufre que ingresa.
Fuente : Auditoria Ambiental de Emisiones y Vertimientos, Junio 1996
<PAGE>
CENTROMIN PERU S.A. Pag 117
Direccion de Asuntos Amblentales
TABLA No 4.1.1/9A
EMISIONES POR CHIMENEAS SECUNDARIAS
Periodo: Ene - Jun. 1996
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
INORGANICO FISICO INORGANICO CONTENIDO METALICO mg/m3
----------------------------------------------------------------------------------------------------------
MESES FUENTE DE EMISION ALTURA EQUIPO DE PRE O FLUJO SOLIDOS Temp TIEMPO DE EMISON
----------------
m POST TRATAMIENTO m3/seg mg/m3 C h/d d/a As Cd Pb SO(2) CO CO(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ENE SISTEMA DE VENTILACION 30 LAVADORES DE GASES 31,87 1093,24 65 21 365 0,00 1,53 15,31 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
FEB TOSTADORES DE ZINC FILTROS DE BOLSAS 25,85 1000,70 63 21 365 0,00 1,20 14,01 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
MAR 32,00 1023,58 52 21 365 0,00 1,54 13,31 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
ABR 37,08 1003,43 66 21 365 0,00 1,51 16,05 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
MAY 24,52 491,92 44 21 365 0,00 0,74 8,36 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
JUN 29,02 943,34 55 21 365 0,00 1,42 15,09 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
JUL
- ------------------------------------------------------------------------------------------------------------------------------------
AGO
- ------------------------------------------------------------------------------------------------------------------------------------
SEP
- ------------------------------------------------------------------------------------------------------------------------------------
OCT
- ------------------------------------------------------------------------------------------------------------------------------------
NOV
- ------------------------------------------------------------------------------------------------------------------------------------
DIC
- ------------------------------------------------------------------------------------------------------------------------------------
POM 30,06 926,04 58 21 365 0,00 1,32 13,69 n.d. n.d. n.d.
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Niveles Maximos Permisibles - Normas Peruanas (MEM) n.d. 100 n.d. 25 25 (*)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Rererencia : Reportes de la Soccidn Pruebas de Control, contenido metalico,
mensuales de Plantue, etc.
Nota : n.d. (No determinado)
(*) : La norma establece para el easo de Centromin Peru S.A., fijar el
83% del nzufre que ingresa.
Fuente : Auditoria Ambiental de Emisiones y Vertimientos, Junio 1996
<PAGE>
CENTROMIN PERU S.A. Pag 118
Direccion de Asuntos Amblentales
TABLA No 4.1.1/10
EMISIONES FUGITIVAS Y DE OTRAS CHIMENEAS SECUNDARIAS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
TIEMPO ALTURA
EMISION DE
------- EMISION TIPO DE SOLIDOS TIPOS DE GASES EQUIPOS DE TRATAMIENTO
No. FUENTE DE EMISION Dias/Ano mts
- -----------------------------------------------------------------------------------------------------------------------------------
PLANTA DE PREPARACION
<S> <C> <C> <C> <C> <C>
o Emanaciones del mezclador de 365 N.D. Polvo de sulfuros inalte- Aire frio. Lavador de gases. Tiro forzado.
manipuleo de polvos. rados
o Emanaciones de la tolva 7 que 365 N.D. Polvo de sulfuros tostados Aire. Filtros bolsa. Tiro forzado.
recepciona y almacena los polvos procedentes de Cottrelles.
de Cottrelles.
o Emanaciones de la tolva 7 que 365 N.D. Polvo de sulfuros tostados. Aire. Filtros bolsa. Tiro forzado.
recepciona y almacena los polvos
de Cottrelles.
PLANTA DE REVERBEROS DE COBRE
o Emanaciones de la boca colada 365 N.D. Polvo de mata y escoria. Gases acidos Ninguno. Tiro forzade
de mata negra de escorias y de SO(2) y
canal de excorias del Reverbero H(2)S.
Oxyfuel.
HORNOS DE RETENCION DE COBRE
BLISTER
o Emisiones vapor de agua generados 365 N.D. Polvo de cobre blister. Vapor de agua. Ninguno. Tiro natural.
en el enfriamiento de anodos de
cobre, maquina No. 1 mol.
o Emisiones vapor de agua generados 365 N.D. Polvo de cobre blister. Vapor de agua. Ninguno. Tiro natural.
en el enfriamiento de anodos de
cobre, maguina No. 2 mol.
PLANTA DE AGLOMERACION
o Emanaciones en la maquina de 365 N.D. Polvo de sulfuros pre- Filtro de bolsas. Tiro forzado.
Aglomeracion y area de Chancado. tostado y sin tostar.
o Emanaciones en el sistema de 365 N.D. Polvo de sinter (sul- Gases acidos Filtro de bolsas. Tiro forzado.
transporte del producto furos tostados). diluidos SO(2).
aglomerado y tolvas de finos y
gruesos.
o Emanaciones de la descarga de 365 N.D. Polvo de sinter (sul- Aire. Filtro de bolsas. Tiro forzado.
los finos de sinter a los tanques furos tostados).
de alimentacion 3A; 4A; 5A y 6A.
</TABLE>
<PAGE>
CENTROMIN PERU
DIRECCION DE ASUNTOS AMBIENTALES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TIEMPO ALTURA
EMISION DE
No. FUENTO DE EMISION ------- EMISION TIPO DE SOLIDOS TIPOS DE GASES EQUIPOS DE TRATAMIENTO
Dias/ mts
Ano
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
o Emanaciones de la descarga de las 365 N.D. Polvo de sinter Aire. Filtro de bolsas.
bombas de polvo. (sulfuros tostados) Tiro forzado.
o Emanaciones de las fajas FX/203 365 N.D. Polvo de sinter Aire. Lavador de gases.
que recorre en derrames y del (sulfuros tostados). Tiro forzado.
transportador 2165 que conduce
sinter a las tolvas 2200 y 2230.
o Emanaciones de las fajas 103/104 365 N.D. Polvo de sinter Aire. Lavador de gases.
que transportan el sinter fino. (sulfuros tostados). Tiro forzado.
o Emanaciones de la faja de transporte 365 N.D. Polvo de sinter Aire. Lavador de gases.
(2221) y descarga (2202) de sinter (sulfuros tostados). Tiro forzado.
grueso y dea la faja de descarga
de finos de sinter (2233).
PLANTA DE HORNOS DE PLOMO
o Emanaciones de los canales de escoria 365 19 Polvo de escoria. Vapor de agua. Ninguno. Tiro forzado.
del Horno de Manga. H(2)S.
o Emisiones de gases de combustion de 365 N.D. Ninguno. Gases de Ninguno. Tiro natural.
las ollas de fusion de Pb en la combustion.
seccion Fusion y Moldeo. CO(2).
PLANTA DE ESPUMAJE DE PLOMO
o Emision de gases de combustion de la 365 N.D. Ninguno. Gases de Ninguno. Tiro natural.
olla No. 1 de espumaje del plomo de combustion.
obra. CO(2).
o Emision de gases de combustion de la 365 N.D. Ninguno. Gases de Ninguno. Tiro natural.
olla No. 2 de espumaje del plomo de combustion.
obra. CO(2).
o Emision de gases de combustion de la 365 N.D. Ninguno. Gases de Ninguno. Tiro natural.
olla No. 3 de espumaje del plomo de combustion.
obra. CO(2).
o Emision de gases de combustion de la 365 N.D. Ninguno. Gases de Ninguno. Tiro natural.
olla No. 4 de espumaje del plomo de combustion.
obra. CO(2).
o Emanaciones en las bocas de colada de 365 N.D. Polvo de plomo, speiss. Gases CO(2). Ninguno. Tiro forzado.
Pb, mata y speiss de Reverbero de
Tratamiento de Espumas de Plomo.
o Emisiones en el equipo de granulacion 365 N.D. Ninguno. Vapores de Ninguno. Tiro natural.
de speiss del Reverbero de Tratamiento agua.
de Espumas de Plomo.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Pag 119
<PAGE>
CENTROMIN PERU
DIRECCION DE ASUNTOS AMBIENTALES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TIEMPO ALTURA
EMISION DE
No. FUENTO DE EMISION ------- EMISION TIPO DE SOLIDOS TIPOS DE GASES EQUIPOS DE TRATAMIENTO
Dias/ mts
Ano
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PLANTA DE COQUE
o Emanaciones en la torre de 365 N.D. Ninguno. Vapor del agua, Ninguno. Tiro natural.
eliminacion de agua del alquitran. alquitran, fenoles.
PLANTA DE TOSTADORES DE ZN DE CAMA FLUIDA
o Emanaciones de la tolva de recepcion 365 N.D. Polvo de calcina Gases acidos. SO(2). Ninguno. Tiro natural.
de perdigones tostados. Reactor No. 1. (oxidos de Zn,
Pb, Fe, etc.)
o Emanaciones de la tolva de recepcion 365 N.D. Polvo de calcina Gases acidos. SO(2). Ninguno. Tiro natural.
de perdigones tostados. Reactor No. 2. (oxidos de Zn,
Pb, Fe, etc.)
o Emanaciones de la tolva de recepcion 365 N.D. Polvo de calcina Gases acidos. SO(2). Ninguno. Tiro natural.
de perdigones tostados. Reactor No. 3. (oxidos de Zn,
Pb, Fe, etc.)
o Emanaciones en el transporte mecanico 365 N.D. Polvo de Aire. Filtro de bolsa.
de perdigones verdes secos. concentrados de Tiro natural.
Zn.
o Emanaciones en el transporte de 365 N.D. Polvo de calcina Gases acidos Ninguno. Tiro forzado.
calcina (fajas 8B, enfriador, redler (oxidos de Zn, diluidos, SO(2).
7B1/2). Pb, Fe, etc.)
PLANTA DE TOSTADORES DE Zn DE CAMA
TURBULENTA Y DE ACIDO SULFURICO
o Emanaciones en el transporte de polvos 365 N.D. Polvo de calcina Aire. Ninguno. Tiro forzado.
recuperados de los humos del tostador. (oxidos de Zn,
Pb, Fe, etc.).
o Emanaciones en el tanque de lixiviacion 365 N.D. Ninguno. Vapores acidos. Ninguno. Tiro natural.
neutra de la calcina en el tanque No. 1. (H(2)SO(4); ZnSO(4)).
o Emanaciones en el tanque de lixiviacion 365 N.D. Ninguno. Vapores acidos. Ninguno. Tiro natural.
neutra de la calcina en el tanque No. 2. (H(2)SO(4); ZnSO(4)).
o Emanaciones en el tanque de lixiviacion 365 N.D. Ninguno. Vapores acidos. Ninguno. Tiro natural.
neutra de la calcina en el tanque No. 3. (H(2)SO(4); ZnSO(4)).
o Emanaciones en el tanque de lixiviacion 365 N.D. Ninguno. Vapores acidos. Ninguno. Tiro natural.
de la calcina en el tanque No. 4. (H(2)SO(4); ZnSO(4)).
o Emanaciones del tanque ferritas 1 y 2. 365 N.D. Ninguno. Vapores acidos. Ninguno. Tiro natural.
(H(2)SO(4); ZnSO(4)).
o Emanaciones en los molinos de perdigones 365 N.D. Polvo de calcina Vapores acidores. Filtros bolsas.
y los clasificadores de finos y gruesos. (oxidos de Zn, (H(2)SO(4); ZnSO(4)). Tiro forzado.
Sistema transporte neumatico de calcina. Pb, Fe, etc.)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Pag 120
<PAGE>
CENTROMIN PERU
DIRECCION DE ASUNTOS AMBIENTALES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TIEMPO ALTURA
EMISION DE
No. FUENTO DE EMISION ------- EMISION TIPO DE SOLIDOS TIPOS DE GASES EQUIPOS DE TRATAMIENTO
Dias/ mts
Ano
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
o Emanaciones de los tanques de 365 N.D. Ninguno. Vapores acidos. Ninguno. Tiro forzado.
lixiviacion neutra, lixiviacion
acida, precipitacion de indio y
tanques de neutralizacion.
PLANTA DE INDIO
o Emanacion de 2 crisoles de indio, 365 N.D. Ninguno. Vapores acidos. Ninguno. Tiro forzado.
celda de extraccion por solventes,
4 celdas de cementacion de indio y
2 tanques de almacenamiento (1 de
HCl y otro de organico).
o Emanaciones de tanque de lavado 365 N.D. Ninguno. Gases de combustion Ninguno. Tiro forzado.
acido, tanque de lixiviacion acida,
tanque de lixiviacion alcalina, 2
tanque auxiliares, deposito de Soln,
tanque de almacenamiento Soln,
"Pregnant", tanque de ppu, HCl,
1 de ppn, NaOH, entre otros.
PLANTA DE RESIDUOS ANODICOS
o Emisiones de humos generados durante 365 N.D. Escaso polvo Gases de combustion. Filtro de bolsas.
la oxidacion de Sb, Bi en Convertidoras (oxido metalico). Tiro forzado.
No. 1, No. 2.
o Emisiones de humos generados durante 365 N.D. Escaso polvo Gases de combustion. Filtro de bolsas.
la oxidacion de Sb, Bi en Convertidoras (oxido metalico). Tiro forzado.
No. 3, No. 4.
o Emisiones de humos generados durante 365 N.D. Escaso polvo Gases de combustion. Filtro de bolsas.
la reduc. de Bi en el Reverbero (oxido metalico). Tiro forzado.
de Reduc.
o Emisiones en el hogar de las copelas 365 N.D. Escaso polvo Gases de combustion. Trombones, lavador de
Nos. 1, 2, y 3. (oxido metalico). gases y precipit.
Electrostatico
humedo.
o Emanaciones de las bocas de colada de 365 N.D. Escaso polvo Gases de combustion. Filtro de bolsas.
las copelas Nos. 1, 2 y 3. (oxido metalico). Tiro forzado.
o Emanaciones de las ollas de Bi Nos. 365 N.D. Ecaso polvo Gases de cloro. Filtro de bolsas.
3 y 4. (oxido metalico). Tiro forzado.
o Emanaciones en la camara de combustion 365 N.D. Escaso polvo Gases de combustion. Ninguno. Tiro natural.
de la olla de refinancion de bismuto (oxido metalico).
No. 1.
o Emanaciones en la camara de combustion 365 N.D. Escaso polvo Gases de combustion. Ninguno. Tiro natural.
de la olla de refinancion de bismuto (oxido metalico).
No. 2.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Pag 121
<PAGE>
CENTROMIN PERU
DIRECCION DE ASUNTOS AMBIENTALES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TIEMPO ALTURA
EMISION DE
No. FUENTO DE EMISION ------- EMISION TIPO DE SOLIDOS TIPOS DE GASES EQUIPOS DE TRATAMIENTO
Dias/ mts
Ano
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
o Emanaciones en la camara de combustion 365 N.D. Escaso polvo Gases de combustion. Ninguno. Tiro natural.
de la olla de refinancion de bismuto (oxido metalico).
No. 3.
o Emanaciones en la camara de combustion 365 N.D. Escaso polvo Gases de combustion. Ninguno. Tiro natural.
de la olla de refinancion de bismuto (oxido metalico).
No. 4.
o Emanacion en la camara de combustion 365 N.D. Escaso polvo Gases de combustion. Ninguno. Tiro natural.
de la olla de refinancion de bismuto (oxido metalico).
No. 5.
o Emanaciones en la camara de combustion 365 N.D. Escaso polvo Gases de combustion. Ninguno. Tiro natural.
de la olla de refinancion de bismuto (oxido metalico).
No. 6.
o Emisiones en la fusion del telurio. 365 N.D. Escaso polvo Gases de combustion. Lavador de gases.
(oxido metalico). Tiro forzado.
o Emanaciones en el tanque de 365 N.D. Ninguno. Vapores acidos. Ninguno. Tiro natural.
precipitacion y purificacion de
soluci. de selenio No. 1.
o Emanaciones en el tanque de 365 N.D. Ninguno. Vapores acidos. Ninguno. Tiro natural.
precipitacion y purificacion de
soluc. de selenio No. 2.
PLANTA DE REFINERIA DE PLATA
o Emanacion de olla de particion No. 1 365 N.D. Ninguno. Vapores acidos. Ninguno. Tiro natural.
y su tanque de cementacion de plata. NO(3).
o Emanacion de olla de particion No. 2 365 N.D. Ninguno. Vapores acidos. Ninguno. Tiro natural.
y su tanque de cementacion de plata. NO(3).
o Emanacion de las camaras de combustion 365 N.D. Ninguno. Gases de combustion. Ninguno. Tiro natural.
de las 2 ollas de particion.
o Ventilacion de las oficinas y 365 N.D. Ninguno. Aire ambiental. Ninguno. Tiro forzado.
vestuarios.
o Ventilacion por 4 ventiladores de la 365 N.D. Ninguno. Aire ambiental. Ninguno. Tiro forzado.
Casa de Celdas (claraboyas).
o Ventilacion por 2 ventiladores del 365 N.D. Ninguno. Aire ambiental. Ninguno. Tiro forzado.
cuarto de ollas.
o Ventilacion por 1 ventilador del 365 N.D. Ninguno. Aire ambiental. Ninguno. Tiro forzado.
cuarto 1 de maquinas.
o Ventilacion por 1 ventilador del 365 N.D. Ninguno. Aire ambiental. Ninguno. Tiro forzado.
cuarto 1 de rectificadores.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Pag 122
<PAGE>
CENTROMIN PERU
DIRECCION DE ASUNTOS AMBIENTALES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TIEMPO ALTURA
EMISION DE
No. FUENTO DE EMISION ------- EMISION TIPO DE SOLIDOS TIPOS DE GASES EQUIPOS DE TRATAMIENTO
Dias/ mts
Ano
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
o Emisiones del hogar de combustion de 365 N.D. Ninguno. Gases de combustion. Ninguno. Tiro natural.
la retorta de volatizacion de Zn
No. 5.
o Emisiones del hogar de combustion de 365 N.D. Ninguno. Gases de combustion. Ninguno. Tiro natural.
la retorta de volatizacion de Zn
No. 6.
PLANTA DE CADMIO No. 1
o Emisiones de la camara de combustion 365 N.D. Ninguno. Gases de combustion. Ninguno. Tiro natural.
de la retorta de destilacion de
cadmio No. 2.
o Emisiones del ambiente de pesado del 365 N.D. Ninguno. Gases fugitivos de Ninguno. Tiro forzado.
cadmio. combustion.
o Emanaciones de los tanques de 365 N.D. Ninguno. Vapores acidos. Ninguno. Tiro forzado.
lixiviacion y purificacion de cadmio.
o Emanaciones de los 5 tanques de 365 N.D. Ninguno. Vapores acidos Ninguno. Tiro forzado.
cementacion y las 3 celdas de (riesgo de
recuperacion. arsenamina).
PLANTA DE CADMIO No. 2
o Emanaciones de 12 celdas de 365 N.D. Ninguno. Vapores acidos. Ninguno. Tiro forzado.
precipitacion de esponja de cadmio.
o Emanaciones de 2 tanques de 365 N.D. Ninguno. Vapores acidos. Ninguno. Tiro forzado.
lixiviacion, 1 de circulacion y 1
de pruebas.
o Emanaciones de tanque de solucion 365 N.D. Ninguno. Vapores acidos. Ninguno. Tiro natural.
ferrosa.
PLANTA DE TRATAMIENTO DE RESIDUOS DE
LIXIVIACION DE ZINC
o Emanaciones del transporte de "cake" 365 N.D. Polvos minerales Vapor de agua. Ninguno. Tiro forzado.
de residuos y del secador del mismo. (ferritas de Zn)
o Emision de gas de combustion del 365 N.D. Ninguno. Gases de combustion. Ninguno. Tiro forzado.
secador de residuos. CO(2).
o Emanaciones del transporte mecanico en 365 N.D. Polvos minerales Aire. Multiciclon de polvos.
balde residuo seco y silos de (ferritas de Zn). Tiro forzado.
antracita.
o Emanaciones de hogar del horno Kiln.. 365 N.D. Polvos minerales Gases de combustion. Filtro de bolsas.
(oxidos de Zn). Tiro forzado.
o Emanaciones en la separacion 365 N.D. Polvos minerales Gases de combustion. Ninguno. Tiro forzado.
magnetica. (Fe y oxidos).
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Pag 123
<PAGE>
CENTROMIN PERU
DIRECCION DE ASUNTOS AMBIENTALES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TIEMPO ALTURA
EMISION DE
No. FUENTO DE EMISION ------- EMISION TIPO DE SOLIDOS TIPOS DE GASES EQUIPOS DE TRATAMIENTO
Dias/ mts
Ano
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PLANTA DE PURIFICACION Y ELECTRODE-
POSICION
o Emanaciones generadas en el tanque 365 N.D. Ninguno. Vapores acidos. Ninguno. Tiro natural.
No. 1 de purificacion. (H(2)SO(4); ZnSO(4)).
o Emanaciones generadas en el tanque 365 N.D. Ninguno. Vapores acidos. Ninguno. Tiro natural.
No. 2 de purificacion. (H(2)SO(4); ZnSO(4)).
o Emanaciones generadas en el tanque 365 N.D. Ninguno. Vapores acidos. Ninguno. Tiro natural.
No. 3 de purificacion. (H(2)SO(4); ZnSO(4)).
o Emanaciones generadas en el tanque 365 N.D. Ninguno. Vapores acidos. Ninguno. Tiro natural.
No. 4 de purificacion. (H(2)SO(4); ZnSO(4)).
o Emanaciones generadas en el tanque 365 N.D. Ninguno. Vapores acidos. Ninguno. Tiro natural.
No. 5 de purificacion. (H(2)SO(4); ZnSO(4)).
o Emanaciones generadas en el tanque 365 N.D. Ninguno. Vapores acidos. Ninguno. Tiro natural.
No. 6 de purificacion. (H(2)SO(4); ZnSO(4)).
o Emanaciones generadas en el tanque 365 N.D. Ninguno. Vapores acidos. Ninguno. Tiro natural.
No. 7 de purificacion. (H(2)SO(4); ZnSO(4)).
o Emanaciones en la fusion de catodos 365 N.D. Particulas de Zn. Gases de Combustion. Ninguno. Tiro forzado.
de Zn en el Horno Ajax. CO(2).
o Emanaciones generadas en el 365 N.D. Ninguno. Vapor de agua. Ninguno. Tiro natural.
enfriamiento de las barras de Zn en
la maquina moldeadora.
o Emanaciones de la molienda y 365 N.D. Polvo y particula Aire. Ninguno. Tiro natural.
clasificacion de espumas de Zn. de Zn.
o Emisiones de la combustion del Horno 365 N.D. Ninguno. Gas de combustion. Ninguno. Tiro natural.
Morgan de Fusion de "scrap" de catodos CO(2).
de Zn.
PLANTA DE POLVO DE Zn
o Emisiones del hogar de combustion de 365 N.D. Ninguno. Gases de combustion. Ninguno. Tiro natural.
la retorta de volatizacion de Zn
No. 1.
o Emisiones del hogar de combustion de 365 N.D. Ninguno. Gases de combustion. Ninguno. Tiro natural.
la retorta de volatizacion de Zn
No. 2.
o Emisiones del hogar de combustion de 365 N.D. Ninguno. Gases de combustion. Ninguno. Tiro natural.
la retorta de volatizacion de Zn
No. 3.
o Emisiones del hogar de combustion de 365 N.D. Ninguno. Gases de combustion. Ninguno. Tiro natural.
la retorta de volatizacion de Zn
No. 4.
o Emanaciones en el tanque de 365 N.D. Ninguno. Vapores acidos Ninguno. Tiro natural.
lixiviacion de la calcina en al (H(2)SO(4); ZnSO(4))
tanque No. 4.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Pag 124
<PAGE>
Pag 125
CENTROMIN PERU S.A.
DIRECCION DE ASUNTOS AMBIENTALES
TABLA No 4.1.2/2
EFLUENTES LIQUIDOS - COMPLEJO METALURGICO LA OROYA
Periodo: Enero - Diciembre 1995
<TABLE>
<CAPTION>
==================================================================================================
Propiedades Fisicus
======================================
Flujo: Solldos en Temp.:
CODIGO PUNTO DE MUESTREO m(3)/min susp t mg/l pII (degree) C
==================================================================================================
<S> <C> <C> <C> <C>
101 PLANTA DE COQUE 0,053 363 8,97 19
- --------------------------------------------------------------------------------------------------
102 PATIO DE TALLER ESTRUCTURAL 0,013 16 8,01 13
- --------------------------------------------------------------------------------------------------
103 T. ESTRUCT. Y P. INTERNA (SSHH) 0,041 13 8,07 13
- --------------------------------------------------------------------------------------------------
105 PLANTA ACETILENO 0,023 283 9,47 15
- --------------------------------------------------------------------------------------------------
106 MAESTRANZA, BODEGA 0,033 247 7,95 13
- --------------------------------------------------------------------------------------------------
107 MAEST., BOD.J, IO, PTAS. PREP., As, Sb 0,251 38 8,13 16
- --------------------------------------------------------------------------------------------------
108 T. COMPONENTES (SSHH), COCHERA 0,003 678 7,74 13
- --------------------------------------------------------------------------------------------------
109 TALLER COMPONENTES PATIO 0,010 100 8,02 12
- --------------------------------------------------------------------------------------------------
110 TALLERES, CARPINTERIA, INSTRUMENTAL 0,311 46 7,91 14
- --------------------------------------------------------------------------------------------------
111 CAPACITACION (LAVADERO) 0,003 7 8,38 15
- --------------------------------------------------------------------------------------------------
112 EQUIP. PESADO, BOMB, TAREADOR CAPAC. 0,043 406 7,88 14
- --------------------------------------------------------------------------------------------------
113 ING. INDUSTRIAL, OFICINA GENERAL 0,065 11 8,13 14
- --------------------------------------------------------------------------------------------------
114 CASA DE FUERZA, PRUEBAS DE CONTROL 0,473 24 7,89 15
- --------------------------------------------------------------------------------------------------
115 PLANTA IONICA, CASA FUERZA 0,054 176 10,48 16
- --------------------------------------------------------------------------------------------------
116 PTA OXIGENO, CABLE CARRIL (SSHH) 0,070 99 9,97 15
- --------------------------------------------------------------------------------------------------
117 PTA OXIGENO ANTIGUA 0,373 129 7,64 19
- --------------------------------------------------------------------------------------------------
118 GRANUL ESC Y REFRIG. FUND. Cu yPb 26,943 287 8,05 18
- --------------------------------------------------------------------------------------------------
119 CANAL PRINCIPAL #2 (FUND Cu y Pb) 2,098 258 6,62 18
- --------------------------------------------------------------------------------------------------
120 PTA ELECTROLITICA ZINC (SSHH) 0,152 31 7,85 14
- --------------------------------------------------------------------------------------------------
121 P.R.A. (Se Te) SSHH 0,120 122 6,03 13
- --------------------------------------------------------------------------------------------------
123 P.R.A. (POZA DE SEDIMENTACION) 0,131 145 2,56 15
- --------------------------------------------------------------------------------------------------
124 HORNOS Y LAVADO DE ANODOS Zn 0,187 318 4,51 12
- --------------------------------------------------------------------------------------------------
125 CASA DE CELDAS, ELECTROLITICA Zn 0,096 105 6,02 24
- --------------------------------------------------------------------------------------------------
126 PTA ELECT. Zn, DERRAMES LIX., PURIF. 2,363 31 5,94 15
- --------------------------------------------------------------------------------------------------
127 REFRIGERACION SUB-ESTACION PTA ZINC 0,142 20 7,93 21
- --------------------------------------------------------------------------------------------------
128 FUSION, MOLDEO Y ALMACENAJE DE Zn 0,189 19 8,19 25
- --------------------------------------------------------------------------------------------------
129 OFICINA Y BODEGA CONSTRUCCION 0,086 26 7,85 11
- --------------------------------------------------------------------------------------------------
131 FUSION, MOLDEO CADMIO, LAB. D.I.M. 0,078 546 8,32 14
- --------------------------------------------------------------------------------------------------
132 PTA PILOTO DPTO INV. MET. 0,015 24 8,12 11
- --------------------------------------------------------------------------------------------------
133 PTA In, SOL AGOTADA, LAV. ALCALINO 0,210 5.643 7,83 42
- --------------------------------------------------------------------------------------------------
134 PTA In, SALIDA POZA SOL AGOTADA 0,014 95 2,13 22
- --------------------------------------------------------------------------------------------------
135 CANAL PRINCIPAL #1 (PARALELO-FFCC) 6,664 71 2,84 21
- --------------------------------------------------------------------------------------------------
136 CANAL PARALBLO AL.C. PRINCIPAL #1 2,248 304 5,38 17
- --------------------------------------------------------------------------------------------------
137 EFLUENTE POZA FERRITAS ZINC 0,557 170 6,15 16
- --------------------------------------------------------------------------------------------------
R-1 EFLUENTE DE REFINERIA Pb (Ahora Ref Cu) 0,198 402 2,34 15
- --------------------------------------------------------------------------------------------------
R-2 EFLUENTE DE ALAMBRON 0,100 12 5,80 24
- --------------------------------------------------------------------------------------------------
R-3 EFLUENTE DE ASARCO 1,624 69 7,17 42
==================================================================================================
TOTAL: 46,132
=======================================================
==================================================================================================
LMP(1) Valor en cualquier momento: mg/1 (MEM) 100 5.5-10.5
- --------------------------------------------------------------------------------------------------
LMP(1) Valor en promedio anual: mg/1 (MEM) 50 5.5-10.5
- --------------------------------------------------------------------------------------------------
LMP(1) Agua clase III: mg/1 50 5.0-9.0
==================================================================================================
<CAPTION>
==================================================================================================================
Principules Componentes Quimicos: mg/l
=================================================================
CN
CODIGO PUNTO DE MUESTREO Total: mg/l As Cd Cu Fe Mn Ph Zn
==================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
101 PLANTA DE COQUE N.A. 0,48 0,26 0,14 0,81 0,37 0,11 2,05
- ------------------------------------------------------------------------------------------------------------------
102 PATIO DE TALLER ESTRUCTURAL N.A. 0,11 0,01 0,07 0,70 0,21 0,19 0,48
- ------------------------------------------------------------------------------------------------------------------
103 T. ESTRUCT. Y P. INTERNA (SSHH) N.A. 0,04 0,01 0,06 0,46 0,05 0,16 0,16
- ------------------------------------------------------------------------------------------------------------------
105 PLANTA ACETILENO N.A. 0,05 0,01 0,07 0,23 0,01 0,35 0,23
- ------------------------------------------------------------------------------------------------------------------
106 MAESTRANZA, BODEGA N.A. 0,09 0,03 0,06 0,26 1,08 0,12 1,70
- ------------------------------------------------------------------------------------------------------------------
107 MAEST., BOD.J, IO, PTAS. PREP., As, Sb N.A. 0,22 0,04 0,06 0,22 0,12 0,14 0,55
- ------------------------------------------------------------------------------------------------------------------
108 T. COMPONENTES (SSHH), COCHERA N.A. 0,13 0,03 0,04 0,37 0,08 0,30 2,48
- ------------------------------------------------------------------------------------------------------------------
109 TALLER COMPONENTES PATIO N.A. 0,11 0,02 0,05 0,17 0,18 0,07 0,95
- ------------------------------------------------------------------------------------------------------------------
110 TALLERES, CARPINTERIA, INSTRUMENTAL N.A. 1,22 0,04 0,16 0,24 0,11 0,09 1,70
- ------------------------------------------------------------------------------------------------------------------
111 CAPACITACION (LAVADERO) N.A. 0,50 0,01 0,08 0,14 0,02 0,07 0,18
- ------------------------------------------------------------------------------------------------------------------
112 EQUIP. PESADO, BOMB, TAREADOR CAPAC. N.A. 0,70 0,21 0,07 0,24 0,30 0,32 6,80
- ------------------------------------------------------------------------------------------------------------------
113 ING. INDUSTRIAL, OFICINA GENERAL N.A. 0,05 0,01 0,08 0,18 0,02 0,21 0,31
- ------------------------------------------------------------------------------------------------------------------
114 CASA DE FUERZA, PRUEBAS DE CONTROL N.A. 0,18 0,15 0,09 0,23 0,04 0,17 1,16
- ------------------------------------------------------------------------------------------------------------------
115 PLANTA IONICA, CASA FUERZA N.A. 0,27 0,01 0,06 0,27 0,01 0,24 0,28
- ------------------------------------------------------------------------------------------------------------------
116 PTA OXIGENO, CABLE CARRIL (SSHH) N.A. 22,13 0,04 0,05 0,31 0,31 0,11 2,44
- ------------------------------------------------------------------------------------------------------------------
117 PTA OXIGENO ANTIGUA N.A. 0,33 0,09 0,38 0,29 0,56 0,08 7,72
- ------------------------------------------------------------------------------------------------------------------
118 GRANUL ESC Y REFRIG. FUND. Cu yPb N.A. 1,06 0,07 0,26 0,41 2,40 0,29 4,25
- ------------------------------------------------------------------------------------------------------------------
119 CANAL PRINCIPAL #2 (FUND Cu y Pb) N.A. 4,83 8,01 3,44 24,37 1,43 1,47 421,19
- ------------------------------------------------------------------------------------------------------------------
120 PTA ELECTROLITICA ZINC (SSHH) N.A. 0,12 0,07 0,06 0,30 0,59 0,06 6,32
- ------------------------------------------------------------------------------------------------------------------
121 P.R.A. (Se Te) SSHH N.A. 1,5 0,02 0,44 1,43 0,15 0,61 3,29
- ------------------------------------------------------------------------------------------------------------------
123 P.R.A. (POZA DE SEDIMENTACION) N.A. 16,66 0,11 1,00 21,42 0,55 4,13 36,09
- ------------------------------------------------------------------------------------------------------------------
124 HORNOS Y LAVADO DE ANODOS Zn N.A. 0,17 0,10 0,64 1,63 1,27 1,98 144,27
- ------------------------------------------------------------------------------------------------------------------
125 CASA DE CELDAS, ELECTROLITICA Zn N.A. 0,27 0,15 3,29 0,46 22,01 0,87 206,39
- ------------------------------------------------------------------------------------------------------------------
126 PTA ELECT. Zn, DERRAMES LIX., PURIF. N.A. 0,11 1,13 1,39 10,04 30,98 0,79 385,98
- ------------------------------------------------------------------------------------------------------------------
127 REFRIGERACION SUB-ESTACION PTA ZINC N.A. 0,04 0,01 0,05 0,27 0,42 0,05 1,78
- ------------------------------------------------------------------------------------------------------------------
128 FUSION, MOLDEO Y ALMACENAJE DE Zn N.A. 0,04 0,03 0,05 0,24 0,02 0,06 0,60
- ------------------------------------------------------------------------------------------------------------------
129 OFICINA Y BODEGA CONSTRUCCION N.A. 0,10 0,07 0,18 1,58 0,08 0,14 5,34
- ------------------------------------------------------------------------------------------------------------------
131 FUSION, MOLDEO CADMIO, LAB. D.I.M. N.A. 0,12 8,42 0,09 0,20 19,2 0,08 908,63
- ------------------------------------------------------------------------------------------------------------------
132 PTA PILOTO DPTO INV. MET. N.A. 0,04 0,06 0,05 0,27 0,04 0,08 1,79
- ------------------------------------------------------------------------------------------------------------------
133 PTA In, SOL AGOTADA, LAV. ALCALINO N.A. 292,78 14,41 1,44 256,66 48,58 1,03 656,53
- ------------------------------------------------------------------------------------------------------------------
134 PTA In, SALIDA POZA SOL AGOTADA N.A. 35,28 25,38 12,05 410,67 111,6 1,88 916,51
- ------------------------------------------------------------------------------------------------------------------
135 CANAL PRINCIPAL #1 (PARALELO-FFCC) N.A. 2,59 1,01 0,88 7,88 6,86 2,21 333,40
- ------------------------------------------------------------------------------------------------------------------
136 CANAL PARALBLO AL.C. PRINCIPAL #1 N.A. 0,55 1,66 0,45 65,48 24,57 1,89 593,30
- ------------------------------------------------------------------------------------------------------------------
137 EFLUENTE POZA FERRITAS ZINC N.A. 0,31 1,05 0,26 0,18 27,63 0,95 541,91
- ------------------------------------------------------------------------------------------------------------------
R-1 EFLUENTE DE REFINERIA Pb (Ahora Ref Cu) N.A. 169,28 0,14 1602,13 4455,75 15,99 6,25 47,55
- ------------------------------------------------------------------------------------------------------------------
R-2 EFLUENTE DE ALAMBRON N.A. 2,50 0,01 1,00 2,30 0,12 0,03 0,20
- ------------------------------------------------------------------------------------------------------------------
R-3 EFLUENTE DE ASARCO N.A. 0,19 0,01 0,42 0,51 0,03 0,06 0,12
==================================================================================================================
TOTAL:
===============================================
==================================================================================================================
LMP(1) Valor en cualquier momento: mg/1 (MEM) 2 1,0 2 5 1,0 6
- ------------------------------------------------------------------------------------------------------------------
LMP(1) Valor en promedio anual: mg/1 (MEM) 1 0,5 1 2 0,5 3
- ------------------------------------------------------------------------------------------------------------------
LMP(1) Agua clase III: mg/1 0,20 0,05 0,50 1,00 0,50 0,10 25,00
==================================================================================================================
</TABLE>
Nuca: Los datos consigusdos corresponden a promedios aritmeticos annuales
<PAGE>
Pag 126
CENTROMIN PERU S.A.
DIRECCION DE ASUNTOS AMBIENTALES
TABLA No 4.1.2/2A
EFLUENTES LIQUIDOS COMPLEJO METALURGICO - LA OROYA
Periodo: Enero - Junio 1996
<TABLE>
<CAPTION>
===============================================================================================
Propiedades Fisicus
Flujo: Solldos en Temp.:
CODIGO PUNTO DE MUESTREO m(3)/min susp t mg/l pII (degree) C
===============================================================================================
<S> <C> <C> <C> <C>
101 PLANTA DE COQUE 0,047 142,447 9,1 18
- -----------------------------------------------------------------------------------------------
102 PATIO DE TALLER ESTRUCTURAL 0,012 15,127 8,2 12
- -----------------------------------------------------------------------------------------------
103 T. ESTRUCT. Y P. INTERNA (SSHH) 0,012 23,420 8,2 13
- -----------------------------------------------------------------------------------------------
105 PLANTA ACETILENO
- -----------------------------------------------------------------------------------------------
106 MAESTRANZA, BODEGA 0,013 36,978 8,1 15
- -----------------------------------------------------------------------------------------------
107 MAEST., BODJ, IO, PTAS. PREP., As, Sb 0,117 30,495 7,9 13
- -----------------------------------------------------------------------------------------------
108 T. COMPONENTES (SSHH), COCHERA 0,007 39,440 8,0 13
- -----------------------------------------------------------------------------------------------
109 TALLER COMPONENTES PATIO 0,007 27,697 8,1 13
- -----------------------------------------------------------------------------------------------
110 TALLERES, CARPINTERIA, INSTRUMENTAL 0,378 23,218 7,7 14
- -----------------------------------------------------------------------------------------------
111 CAPACITACION (LAVADERO) 0,000 55,000 9,0 12
- -----------------------------------------------------------------------------------------------
112 EQUIP. PESADO, BOMB, TAREADOR CAPAC. 0,058 66,078 8,2 13
- -----------------------------------------------------------------------------------------------
113 ING. INDUSTRIAL, OFICINA GENERAL 0,055 17,790 7,8 14
- -----------------------------------------------------------------------------------------------
114 CASA DE FUERZA, PRUEBAS DE CONTROL 0,542 16,552 8,1 14
- -----------------------------------------------------------------------------------------------
115 PLANTA IONICA, CASA FUERZA 0,083 26,460 8,0 14
- -----------------------------------------------------------------------------------------------
116 PTA OXIGENO, CABLE CARRIL (SSHH) 0,062 30,617 7,8 15
- -----------------------------------------------------------------------------------------------
117 PTA OXIGENO ANTIGUA 0,243 55,690 7,8 17
- -----------------------------------------------------------------------------------------------
118 GRANUL. ESC. Y REFRIG FUND. Cu yPb 28,097 3,508,208 8,0 17
- -----------------------------------------------------------------------------------------------
119 CANAL PRINCIPAL #2 (FUND. Cu y Pb) 2,268 371,345 6,2 19
- -----------------------------------------------------------------------------------------------
120 PTA ELECTROLITICA ZINC (SSHH) 0,135 92,945 7,9 15
- -----------------------------------------------------------------------------------------------
121 P.R.A. (Se, Te), SSHH 1,127 83,773 6,9 15
- -----------------------------------------------------------------------------------------------
123 P.R.A. (POZA DE SEDIMENTACION) 0,187 113,053 2,5 12
- -----------------------------------------------------------------------------------------------
124 HORNOS Y LAVADO DE ANODOS Zn 0,128 75,137 5,2 11
- -----------------------------------------------------------------------------------------------
125 CASA DE CELDAS, ELECTROLITICA Zn 0,145 27,197 5,8 23
- -----------------------------------------------------------------------------------------------
126 PTA ELECT. Zn, DERRAMES LIX., PURIF. 1,702 95,462 6,0 14
- -----------------------------------------------------------------------------------------------
127 REFRIGERACION SUB-ESTACION PTA ZINC 0,165 14,605 8,2 19
- -----------------------------------------------------------------------------------------------
128 FUSION, MOLDEO Y ALMACENAJE DE Zn 0,052 16,700 8,4 17
- -----------------------------------------------------------------------------------------------
129 OFICINA Y BODEGA CONSTRUCCION 0,118 22,263 8,2 12
- -----------------------------------------------------------------------------------------------
131 FUSION, MOLDEO CADMIO, LAB. D.I.M. 0,058 238,537 7,1 14
- -----------------------------------------------------------------------------------------------
132 PTA PILOTO DPTO INV. MET. 0,083 14,252 8,1 11
- -----------------------------------------------------------------------------------------------
133 PTA In, SOL AGOTADA, LAV. ALCALINO 0,130 210,670 11,7 29
- -----------------------------------------------------------------------------------------------
134 PTA In, SALIDA POZA SOL AGOTADA 0,018 199,747 2,2 21
- -----------------------------------------------------------------------------------------------
135 CANAL PRINCIPAL #1 (PARALELO-FFCC) 6,987 50,858 3,0 22
- -----------------------------------------------------------------------------------------------
136 CANAL PARALBLO AL.C. PRINCIPAL #1 2,187 238,512 5,9 16
- -----------------------------------------------------------------------------------------------
137 EFLUENTE POZA FERRITAS ZINC 0,488 40,435 7,0 16
- -----------------------------------------------------------------------------------------------
R-1 EFLUENTE DE REFINERIA Pb (Ahora Ref Cu) 0,298 359,082 3,0 17
- -----------------------------------------------------------------------------------------------
R-2 EFLUENTE DE ALAMBRON
- -----------------------------------------------------------------------------------------------
R-3 EFLUENTE DE ASARCO 1,938 42,338 8,0 43
===============================================================================================
TOTAL: 46,947
=======================================================
===============================================================================================
LMP(1) Valor en cualquier momento: mg/1 (MEM) 100 5,5-10,5
- -----------------------------------------------------------------------------------------------
LMP(1) Valor en promedio anual: mg/1 (MEM) 50 5,5-10,5
- -----------------------------------------------------------------------------------------------
LMP(1) Agua clase III: mg/1 50 5,0-9,0
===============================================================================================
<CAPTION>
====================================================================================================================
Principules Componentes Quimicos: mg/l
CN
CODIGO PUNTO DE MUESTREO Total: mg/l Aa Cd Cu Fe Mn Ph Zn
====================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
101 PLANTA DE COQUE 0,026 0,13 0,01 0,17 0,54 0,03 0,09 0,38
- --------------------------------------------------------------------------------------------------------------------
102 PATIO DE TALLER ESTRUCTURAL 0,002 0,06 0,02 0,06 0,31 0,10 0,09 0,34
- --------------------------------------------------------------------------------------------------------------------
103 T. ESTRUCT. Y P. INTERNA (SSHH) 0,002 0,04 0,01 0,04 0,24 0,01 0,07 0,15
- --------------------------------------------------------------------------------------------------------------------
105 PLANTA ACETILENO
- --------------------------------------------------------------------------------------------------------------------
106 MAESTRANZA, BODEGA 0,001 0,06 0,03 0,12 0,33 0,09 0,09 1,22
- --------------------------------------------------------------------------------------------------------------------
107 MAEST., BODJ, IO, PTAS. PREP., As, Sb 0,001 0,17 0,04 0,08 0,31 0,04 0,08 0,66
- --------------------------------------------------------------------------------------------------------------------
108 T. COMPONENTES (SSHH), COCHERA 0,006 0,08 0,01 0,04 0,24 0,05 0,13 0,43
- --------------------------------------------------------------------------------------------------------------------
109 TALLER COMPONENTES PATIO 0,001 0,13 0,02 0,04 0,29 0,05 0,09 0,45
- --------------------------------------------------------------------------------------------------------------------
110 TALLERES, CARPINTERIA, INSTRUMENTAL 0,001 0,33 0,06 0,11 0,36 0,14 0,17 0,73
- --------------------------------------------------------------------------------------------------------------------
111 CAPACITACION (LAVADERO) 0,003 0,25 0,37 0,05 0,06 0,35 0,01
- --------------------------------------------------------------------------------------------------------------------
112 EQUIP. PESADO, BOMB, TAREADOR CAPAC. 0,001 0,15 0,08 0,09 0,17 0,08 0,39 0,73
- --------------------------------------------------------------------------------------------------------------------
113 ING. INDUSTRIAL, OFICINA GENERAL 0,001 0,05 0,04 0,05 0,28 0,03 0,17 0,54
- --------------------------------------------------------------------------------------------------------------------
114 CASA DE FUERZA, PRUEBAS DE CONTROL 0,001 0,06 0,01 0,11 0,46 0,03 0,13 0,25
- --------------------------------------------------------------------------------------------------------------------
115 PLANTA IONICA, CASA FUERZA 0,007 0,12 0,06 0,08 0,82 0,05 0,53 0,97
- --------------------------------------------------------------------------------------------------------------------
116 PTA OXIGENO, CABLE CARRIL (SSHH) 0,001 0,13 0,04 0,09 1,18 0,06 0,48 0,51
- --------------------------------------------------------------------------------------------------------------------
117 PTA OXIGENO ANTIGUA 0,001 0,35 0,05 0,16 0,33 0,37 0,37 0,86
- --------------------------------------------------------------------------------------------------------------------
118 GRANUL. ESC. Y REFRIG FUND. Cu yPb 0,001 0,61 0,06 0,05 0,21 2,08 0,39 9,87
- --------------------------------------------------------------------------------------------------------------------
119 CANAL PRINCIPAL #2 (FUND. Cu y Pb) 0,001 9,41 35,70 1,37 6,09 1,11 0,68 1275,25
- --------------------------------------------------------------------------------------------------------------------
120 PTA ELECTROLITICA ZINC (SSHH) 0,001 0,04 0,03 0,06 0,35 0,23 0,06 2,04
- --------------------------------------------------------------------------------------------------------------------
121 P.R.A. (Se, Te), SSHH 0,001 0,68 0,03 0,30 3,59 0,24 1,08 13,67
- --------------------------------------------------------------------------------------------------------------------
123 P.R.A. (POZA DE SEDIMENTACION) 0,002 22,99 0,08 0,47 14,03 0,26 10,35 38,48
- --------------------------------------------------------------------------------------------------------------------
124 HORNOS Y LAVADO DE ANODOS Zn 0,001 0,06 0,03 0,31 1,18 0,53 1,68 68,72
- --------------------------------------------------------------------------------------------------------------------
125 CASA DE CELDAS, ELECTROLITICA Zn 0,001 0,04 0,04 1,53 0,31 30,06 0,74 216,60
- --------------------------------------------------------------------------------------------------------------------
126 PTA ELECT. Zn, DERRAMES LIX., PURIF. 0,001 0,06 0,50 0,83 2,48 82,15 0,64 405,77
- --------------------------------------------------------------------------------------------------------------------
127 REFRIGERACION SUB-ESTACION PTA ZINC 0,001 0,02 0,01 0,03 0,22 0,05 0,07 0,43
- --------------------------------------------------------------------------------------------------------------------
128 FUSION, MOLDEO Y ALMACENAJE DE Zn 0,001 0,05 0,01 0,03 0,22 0,18 0,07 0,91
- --------------------------------------------------------------------------------------------------------------------
129 OFICINA Y BODEGA CONSTRUCCION 0,001 0,03 0,01 0,04 0,19 0,03 0,14 0,31
- --------------------------------------------------------------------------------------------------------------------
131 FUSION, MOLDEO CADMIO, LAB. D.I.M. 0,002 0,10 22,59 0,05 0,14 9,99 0,16 312,69
- --------------------------------------------------------------------------------------------------------------------
132 PTA PILOTO DPTO INV. MET. 0,002 0,02 0,17 0,06 0,36 0,06 0,11 0,98
- --------------------------------------------------------------------------------------------------------------------
133 PTA In, SOL AGOTADA, LAV. ALCALINO 0,000 1065.00 0,04 0,32 0,45 0,05 4,90 1037,00
- --------------------------------------------------------------------------------------------------------------------
134 PTA In, SALIDA POZA SOL AGOTADA 0,001 166,60 32,27 73,07 675,67 310,83 3,02 1919,67
- --------------------------------------------------------------------------------------------------------------------
135 CANAL PRINCIPAL #1 (PARALELO-FFCC) 0,002 1,88 0,95 0,71 2,62 1,77 1,00 10,00
- --------------------------------------------------------------------------------------------------------------------
136 CANAL PARALBLO AL.C. PRINCIPAL #1 0,001 1,40 5,61 0,71 150,11 98,73 1,27 1284,17
- --------------------------------------------------------------------------------------------------------------------
137 EFLUENTE POZA FERRITAS ZINC 0,001 0,09 0,49 0,05 0,18 10,68 0,46 190,33
- --------------------------------------------------------------------------------------------------------------------
R-1 EFLUENTE DE REFINERIA Pb (Ahora Ref Cu) 0,001 18,07 0,04 135,42 404,83 1,05 92,45 3,35
- --------------------------------------------------------------------------------------------------------------------
R-2 EFLUENTE DE ALAMBRON
- --------------------------------------------------------------------------------------------------------------------
R-3 EFLUENTE DE ASARCO 0,001 0,36 0,01 0,35 0,27 0,02 0,22 0,34
====================================================================================================================
TOTAL:
=================================================
====================================================================================================================
LMP(1) Valor en cualquier momento: mg/1 (MEM) 2 1,0 2 5 1,0 6
- --------------------------------------------------------------------------------------------------------------------
LMP(1) Valor en promedio anual: mg/1 (MEM) 1 0,5 1 2 0,5 3
- --------------------------------------------------------------------------------------------------------------------
LMP(1) Agua clase III: mg/1 0,20 0,05 0,50 1,00 0,50 0,10 25,00
====================================================================================================================
</TABLE>
Nuca: Los datos consigusdos corresponden a promedios aritmeticos semestrales.
<PAGE>
Pag 127
CENTROMIN PERU S.A.
DIRECCION DE ASUNTOS AMBIENTALES
TABLA No 4.1.2/3
EFLUENTES LIQUIDOS - COMPLEJO METALURGICO LA OROYA
Periodo: Enero - Diciembre 1995
CONTENIDO METALICO
<TABLE>
<CAPTION>
==================================================================================================================================
Contenido Metalico: kg/d
================================================================ Carga
Flujo: CN Total
CODIGO PUNTO DE MUESTREO m(3)/min Total As Cd Cu Fe Mn Pb Zn kg/ d
==================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
101 PLANTA DE COQUE 0,053 N.A. 0,04 0,02 0,01 0,06 0,03 0,01 0,16 0,32
- ----------------------------------------------------------------------------------------------------------------------------------
102 PATIO DE TALLER ESTRUCTURAL 0,013 N.A. 0,00 0,00 0,00 0,01 0,00 0,00 0,01 0,03
- ----------------------------------------------------------------------------------------------------------------------------------
103 T. ESTRUCT. Y P. INTERNA (SSHH) 0,041 N.A. 0,00 0,00 0,00 0,03 0,00 0,01 0,01 0,05
- ----------------------------------------------------------------------------------------------------------------------------------
105 PLANTA ACETILENO 0,023 N.A. 0,00 0,00 0,00 0,01 0,00 0,01 0,08 0,03
- ----------------------------------------------------------------------------------------------------------------------------------
106 MAESTRANZA, BODEGA 0,033 N.A. 0,00 0,00 0,00 0,01 0,05 0,01 0,08 0,16
- ----------------------------------------------------------------------------------------------------------------------------------
107 MAEST., BODJ, IO, PTAS. PREP., As, Sb 0,251 N.A. 0,08 0,01 0,02 0,08 0,04 0,05 0,20 0,48
- ----------------------------------------------------------------------------------------------------------------------------------
108 T. COMPONENTES (SSHH), COCHERA 0,003 N.A. 0,00 0,00 0,00 0,00 0,00 0,00 0,01 0,01
- ----------------------------------------------------------------------------------------------------------------------------------
109 TALLER COMPONENTES PATIO 0,010 N.A. 0,00 0,00 0,00 0,00 0,00 0,00 0,01 0,02
- ----------------------------------------------------------------------------------------------------------------------------------
110 TALLERES, CARPINTERIA, INSTRUMENTAL 0,311 N.A. 0,55 0,02 0,07 0,11 0,05 0,04 0,76 1,59
- ----------------------------------------------------------------------------------------------------------------------------------
111 CAPACITACION (LAVADERO) 0,003 N.A. 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00
- ----------------------------------------------------------------------------------------------------------------------------------
112 EQUIP. PESADO, BOMB, TAREADOR CAPAC. 0,043 N.A. 0,04 0,01 0,00 0,01 0,02 0,02 0,42 0,54
- ----------------------------------------------------------------------------------------------------------------------------------
113 ING. INDUSTRIAL, OFICINA GENERAL 0,065 N.A. 0,00 0,00 0,01 0,02 0,00 0,02 0,03 0,08
- ----------------------------------------------------------------------------------------------------------------------------------
114 CASA DE FUERZA, PRUEBAS DE CONTROL 0,473 N.A. 0,12 0,10 0,06 0,16 0,03 0,12 0,79 1,38
- ----------------------------------------------------------------------------------------------------------------------------------
115 PLANTA IONICA, CASA FUERZA 0,054 N.A. 0,02 0,00 0,01 0,02 0,00 0,02 0,02 0,09
- ----------------------------------------------------------------------------------------------------------------------------------
116 PTA OXIGENO, CABLE CARRIL (SSHH) 0,070 N.A. 2,23 0,00 0,00 0,03 0,03 0,01 0,25 2,56
- ----------------------------------------------------------------------------------------------------------------------------------
117 PTA OXIGENO ANTIGUA 0,373 N.A. 0,18 0,05 0,21 0,16 0,30 0,04 4,15 5,07
- ----------------------------------------------------------------------------------------------------------------------------------
118 GRANUL ESC Y REFRIG. FUND. Cu yPb 26,943 N.A. 41,13 2,81 10,02 15,78 92,95 11,19 164,76 338,65
- ----------------------------------------------------------------------------------------------------------------------------------
119 CANAL PRINCIPAL #2 (FUND Cu y Pb) 2,098 N.A. 14,59 24,18 10,39 73,60 4,31 4,43 1272,16 1403,66
- ----------------------------------------------------------------------------------------------------------------------------------
120 PTA ELECTROLITICA ZINC (SSHH) 0,152 N.A. 0,03 0,01 0,01 0,07 0,13 0,01 1,38 1,64
- ----------------------------------------------------------------------------------------------------------------------------------
121 P.R.A. (Se Te) SSHH 0,120 N.A. 0,26 0,00 0,08 0,25 0,03 0,11 0,57 1,29
- ----------------------------------------------------------------------------------------------------------------------------------
123 P.R.A. (POZA DE SEDIMENTACION) 0,131 N.A. 3,14 0,02 0,19 4,03 0,10 0,78 6,80 15,07
- ----------------------------------------------------------------------------------------------------------------------------------
124 HORNOS Y LAVADO DE ANODOS Zn 0,187 N.A. 0,05 0,03 0,17 0,44 0,34 0,53 38,78 40,34
- ----------------------------------------------------------------------------------------------------------------------------------
125 CASA DE CELDAS, ELECTROLITICA Zn 0,096 N.A. 0,04 0,02 0,45 0,06 3,04 0,12 28,48 32,22
- ----------------------------------------------------------------------------------------------------------------------------------
126 PTA ELECT. Zn, DERRAMES LIX., PURIF. 2,363 N.A. 0,37 3,85 4,73 34,15 105,38 2,70 1313,12 1464,29
- ----------------------------------------------------------------------------------------------------------------------------------
127 REFRIGERACION SUB-ESTACION PTA ZINC 0,142 N.A. 0,01 0,00 0,01 0,06 0,09 0,01 0,36 0,53
- ----------------------------------------------------------------------------------------------------------------------------------
128 FUSION, MOLDEO Y ALMACENAJE DE Zn 0,189 N.A. 0,01 0,01 0,01 0,06 0,01 0,02 0,16 0,28
- ----------------------------------------------------------------------------------------------------------------------------------
129 OFICINA Y BODEGA CONSTRUCCION 0,086 N.A. 0,01 0,01 0,02 0,20 0,01 0,02 0,66 0,93
- ----------------------------------------------------------------------------------------------------------------------------------
131 FUSION, MOLDEO CADMIO, LAB. D.I.M. 0,078 N.A. 0,01 0,95 0,01 0,02 2,17 0,01 102,49 105,66
- ----------------------------------------------------------------------------------------------------------------------------------
132 PTA PILOTO DPTO INV. MET. 0,115 N.A. 0,01 0,01 0,01 0,05 0,01 0,01 0,30 0,39
- ----------------------------------------------------------------------------------------------------------------------------------
133 PTA In, SOL AGOTADA, LAV. ALCALINO 0,210 N.A. 88,54 1,36 0,44 77,61 14,69 0,31 198,53 384,48
- ----------------------------------------------------------------------------------------------------------------------------------
134 PTA In, SALIDA POZA SOL AGOTADA 0,014 N.A. 0,72 0,52 0,25 8,38 2,28 0,04 18,70 30,87
- ----------------------------------------------------------------------------------------------------------------------------------
135 CANAL PRINCIPAL #1 (PARALELO-FFCC) 6,664 N.A. 24,84 29,19 8,43 75,65 65,82 21,18 3199,44 3424,55
- ----------------------------------------------------------------------------------------------------------------------------------
136 CANAL PARALBLO AL.C. PRINCIPAL #1 2,248 N.A. 1,77 5,36 1,45 211,93 79,51 6,12 1926,62 2232,77
- ----------------------------------------------------------------------------------------------------------------------------------
137 EFLUENTE POZA FERRITAS ZINC 0,557 N.A. 0,25 0,84 0,20 0,14 22,15 0,76 434,39 458,74
- ----------------------------------------------------------------------------------------------------------------------------------
R-1 EFLUENTE DE REFINERIA Pb (Ahora Ref Cu) 0,198 N.A. 48,14 0,04 455,64 1267,22 4,55 1,78 13,52 1790,89
- ----------------------------------------------------------------------------------------------------------------------------------
R-2 EFLUENTE DE ALAMBRON 0,100 N.A. 0,36 0,00 0,14 0,33 0,02 0,00 0,03 0,89
- ----------------------------------------------------------------------------------------------------------------------------------
R-3 EFLUENTE DE ASARCO 1,624 N.A. 0,44 0,02 0,99 1,18 0,06 0,13 0,28 3,10
==================================================================================================================================
TOTAL: 46,130 0.000 227,97 72,46 494,06 1771,91 398,18 50,63 8728,44 11743,65
==================================================================================================================================
</TABLE>
<PAGE>
Pag 128
CENTROMIN PERU S.A.
DIRECCION DE ASUNTOS AMBIENTALES
TABLA No 4.1.2/3A
EFLUENTES LIQUIDOS COMPLEJO METALURGICO - LA OROYA
Periodo: Enero - Junio 1996
CONTENIDO METALICO
<TABLE>
<CAPTION>
==================================================================================================================================
Contenido Metalico: kg/d
================================================================ Carga
Flujo: CN Total
CODIGO PUNTO DE MUESTREO m(3)/min Total As Cd Cu Fe Mn Pb Zn kg/d
==================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
101 PLANTA DE COQUE 0,047 0,002 0,01 0.00 0,01 0,04 0,00 0,01 0,03 0,09
- ----------------------------------------------------------------------------------------------------------------------------------
102 PATIO DE TALLER ESTRUCTURAL 0,012 0,000 0,00 0,00 0,00 0,01 0,00 0,00 0,01 0,02
- ----------------------------------------------------------------------------------------------------------------------------------
103 T. ESTRUCT. Y P. INTERNA (SSHH) 0,012 0,000 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,01
- ----------------------------------------------------------------------------------------------------------------------------------
105 PLANTA ACETILENO
- ----------------------------------------------------------------------------------------------------------------------------------
106 MAESTRANZA, BODEGA 0,013 0,000 0,00 0,00 0,00 0,01 0,00 0,00 0,02 0,04
- ----------------------------------------------------------------------------------------------------------------------------------
107 MAEST., BOD.J, IO, PTAS. PREP., As, Sb 0,117 0,000 0,03 0,01 0,01 0,05 0,01 0,01 0,11 0,23
- ----------------------------------------------------------------------------------------------------------------------------------
108 T. COMPONENTES (SSHH), COCHERA 0,007 0,000 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,01
- ----------------------------------------------------------------------------------------------------------------------------------
109 TALLER COMPONENTES PATIO 0,007 0,000 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,01
- ----------------------------------------------------------------------------------------------------------------------------------
110 TALLERES, CARPINTERIA, INSTRUMENTAL 0,378 0,001 0,18 0,03 0,06 0,20 0,08 0,09 0,40 1,04
- ----------------------------------------------------------------------------------------------------------------------------------
111 CAPACITACION (LAVADERO) 0,000 0,000 0,00 0,00 0,00 0,00 0,00 0,00 0,00
- ----------------------------------------------------------------------------------------------------------------------------------
112 EQUIP. PESADO, BOMB, TAREADOR CAPAC. 0,058 0,000 0,01 0,01 0,01 0,01 0,01 0,03 0,06 0,14
- ----------------------------------------------------------------------------------------------------------------------------------
113 ING. INDUSTRIAL, OFICINA GENERAL 0,055 0,000 0,00 0,00 0,00 0,02 0,00 0,01 0,04 0,09
- ----------------------------------------------------------------------------------------------------------------------------------
114 CASA DE FUERZA, PRUEBAS DE CONTROL 0,542 0,000 0,05 0,01 0,09 0,36 0,02 0,10 0,20 0,82
- ----------------------------------------------------------------------------------------------------------------------------------
115 PLANTA IONICA, CASA FUERZA 0,083 0,001 0,01 0,01 0,01 0,10 0,01 0,06 0,12 0,32
- ----------------------------------------------------------------------------------------------------------------------------------
116 PTA OXIGENO, CABLE CARRIL (SSHH) 0,062 0,000 0,01 0,00 0,01 0,10 0,01 0,04 0,05 0,22
- ----------------------------------------------------------------------------------------------------------------------------------
117 PTA OXIGENO ANTIGUA 0,243 0,000 0,12 0,02 0,06 0,12 0,13 0,13 0,30 0,87
- ----------------------------------------------------------------------------------------------------------------------------------
118 GRANUL ESC Y REFRIG. FUND. Cu yPb 28,097 0,020 24,68 2,35 1,94 8,38 84,07 15,78 399,21 536,43
- ----------------------------------------------------------------------------------------------------------------------------------
119 CANAL PRINCIPAL #2 (FUND Cu y Pb) 2,268 0,002 30,74 116,61 4,47 19,89 3,63 2,22 4165,48 4343,04
- ----------------------------------------------------------------------------------------------------------------------------------
120 PTA ELECTROLITICA ZINC (SSHH) 0,135 0,000 0,01 0,01 0,01 0,07 0,04 0,01 0,40 0,55
- ----------------------------------------------------------------------------------------------------------------------------------
121 P.R.A. (Se Te) SSHH 0,127 0,000 0,12 0,01 0,05 0,65 0,04 0,20 2,49 3,57
- ----------------------------------------------------------------------------------------------------------------------------------
123 P.R.A. (POZA DE SEDIMENTACION) 0,187 0,000 6,18 0,02 0,13 3,77 0,07 2,78 10,34 23,29
- ----------------------------------------------------------------------------------------------------------------------------------
124 HORNOS Y LAVADO DE ANODOS Zn 0,128 0,000 0,01 0,01 0,06 0,22 0,10 0,31 12,70 13,40
- ----------------------------------------------------------------------------------------------------------------------------------
125 CASA DE CELDAS, ELECTROLITICA Zn 0,145 0,000 0,01 0,01 0,32 0,06 6,28 0,15 45,23 52,06
- ----------------------------------------------------------------------------------------------------------------------------------
126 PTA ELECT. Zn, DERRAMES LIX., PURIF. 1,702 0,002 0,15 1,22 2,03 6,08 201,3 1,57 994,3 1206,64
- ----------------------------------------------------------------------------------------------------------------------------------
127 REFRIGERACION SUB-ESTACION PTA ZINC 0,165 0,000 0,01 0,00 0,01 0,05 0,01 0,02 0,10 0,20
- ----------------------------------------------------------------------------------------------------------------------------------
128 FUSION, MOLDEO Y ALMACENAJE DE Zn 0,052 0,000 0,00 0,00 0,00 0,02 0,01 0,01 0,07 0,11
- ----------------------------------------------------------------------------------------------------------------------------------
129 OFICINA Y BODEGA CONSTRUCCION 0,118 0,000 0,01 0,00 0,01 0,03 0,00 0,02 0,05 0,13
- ----------------------------------------------------------------------------------------------------------------------------------
131 FUSION, MOLDEO CADMIO, LAB. D.I.M. 0,058 0,000 0,01 1,90 0,00 0,01 0,84 0,01 26,27 29,04
- ----------------------------------------------------------------------------------------------------------------------------------
132 PTA PILOTO DPTO INV. MET. 0,083 0,000 0,00 0,02 0,01 0,04 0,01 0,01 0,12 0,21
- ----------------------------------------------------------------------------------------------------------------------------------
133 PTA In, SOL AGOTADA, LAV. ALCALINO 0,130 0,000 199,37 0,01 0,06 0,08 0,01 0,92 194,13 394,57
- ----------------------------------------------------------------------------------------------------------------------------------
134 PTA In, SALIDA POZA SOL AGOTADA 0,018 0,000 4,40 0,85 1,93 17,84 8,21 0,08 50,68 83,98
- ----------------------------------------------------------------------------------------------------------------------------------
135 CANAL PRINCIPAL #1 (PARALELO-FFCC) 6,987 0,020 18,91 9,56 7,14 26,36 17,81 10,06 100,61 190,47
- ----------------------------------------------------------------------------------------------------------------------------------
136 CANAL PARALBLO AL.C. PRINCIPAL #1 2,187 0,003 4,41 17,66 2,24 472,67 310,88 4,00 4043,59 4855,45
- ----------------------------------------------------------------------------------------------------------------------------------
137 EFLUENTE POZA FERRITAS ZINC 0,488 0,000 0,06 0,34 0,04 0,03 7,51 0,32 133,84 142,24
- ----------------------------------------------------------------------------------------------------------------------------------
R-1 EFLUENTE DE REFINERIA Pb (Ahora Ref Cu) 0,298 0,000 7,76 0,02 58,18 173,91 0,45 39,72 1,44 281,48
- ----------------------------------------------------------------------------------------------------------------------------------
R-2 EFLUENTE DE ALAMBRON
- ----------------------------------------------------------------------------------------------------------------------------------
R-3 EFLUENTE DE ASARCO 1,938 0,001 1,00 0,01 0,99 0,75 0,05 0,61 0,94 4,36
==================================================================================================================================
TOTAL: 46,95 0,055 298,27 150,68 79,87 732,04 641,59 79,31 10183,31 12165,14
==================================================================================================================================
</TABLE>
<PAGE>
Pag 129
CENTROMIN PERU S.A.
DIRECCION DE ASUNTOS AMBIENTALES
TABLA NO 4.1.2/4
EFLUENTES LIQUIDOS DE MAYOR IMPACTO-COMPLEJO METALURGICO LA OROYA
Periodo: Enero-Diciembre 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Propiedades Fisicas Principales Componentes Quimicos: mg/l
----------------------------------------------------------------------------
CODIGO PUNTO DE MUESTREO Flujo: Solidos Temps CN
m^3/min en susp: pH C Total: As Cd Cu Fe Mn Pb
mg/l mg/l
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
R-1 EFLUENTE DE REFINERIA Pb (Ahora Ref Cu) 0,198 402 2,34 15 N.A. 169,28 0,14 1602,13 4455,75 15,99 6,25
- ------------------------------------------------------------------------------------------------------------------------------------
118 GRANUL. ESC. Y REFRIG. FUND (Cu yPb) 26,943 287 8,05 18 N.A. 1,06 0,07 0,26 0,41 2,40 0,29
- ------------------------------------------------------------------------------------------------------------------------------------
119 CANAL PRINCIPAL #2 (Fund. Cu y Pb) 2,098 258 6,62 18 N.A. 4,83 8,01 3,44 24,37 1,43 1,47
- ------------------------------------------------------------------------------------------------------------------------------------
126 PTA. ELECT. Zn, DERRAVES LIX., PURIF. 2,363 31 5,94 15 N.A. 0,11 1,13 1,39 10,04 30,98 0,79
- ------------------------------------------------------------------------------------------------------------------------------------
135 CANAL PRINCIPAL #1 (PARALELO-FFCC) 6,664 73 2,84 21 N.A. 2,59 3,04 0,88 7,88 6,86 2,21
- ------------------------------------------------------------------------------------------------------------------------------------
136 CANAL PARALBLO AL C. PRINCIPAL #1 2,248 304 5,38 17 N.A. 0,55 1,66 0,45 65,48 24,57 1,89
- ------------------------------------------------------------------------------------------------------------------------------------
137 EFLUENTE POZA FERRITAS ZINC 0,557 170 6,15 16 N.A. 0,31 1,05 0,26 0,18 27,63 0,95
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL: 41,069
- ------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Valor en cualquier momento: mg/l (MEM) 100 5,5-10,5 2 1,0 2 5 1.0
- ------------------------------------------------------------------------------------------------------------------------------------
Vulor en promedio anual : mg/l (MEM) 50 5,5-10,5 1 0,5 1 2 0,5
- ------------------------------------------------------------------------------------------------------------------------------------
Agua clase III: mg/l 50 5,5- 9,0 0,20 0,05 0,50 1,00 0,05 0,10
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Principales Compnentes Quimicos: mg/l
- ----------------------------------------------------------------------------
CODIGO PUNTO DE MUESTREO Zn
- ----------------------------------------------------------------------------
R-1 EFLUENTE DE REFINERIA Pb (Ahora Ref Cu) 47,55
- ----------------------------------------------------------------------------
118 GRANUL. ESC. Y REFRIG. FUND (Cu yPb) 4,25
- ----------------------------------------------------------------------------
119 CANAL PRINCIPAL #2 (Fund. Cu y Pb) 421,19
- ----------------------------------------------------------------------------
126 PTA. ELECT. Zn, DERRAVES LIX., PURIF 385,98
- ----------------------------------------------------------------------------
135 CANAL PRINCIPAL #1 (PARALELO-FFCC) 333,40
- ----------------------------------------------------------------------------
136 CANAL PARALBLO AL C. PRINCIPAL #1 595,30
- ----------------------------------------------------------------------------
137 EFLUENTE POZA FERRITAS ZINC 541,91
- ----------------------------------------------------------------------------
TOTAL:
- ------------------------------------------------------
Valor en cualquier momento: mg/l (MEM) 6
- ----------------------------------------------------------------------------
Vulor en promedio anual : mg/l (MEM) 3
- ----------------------------------------------------------------------------
Agua clase III: mg/l 25,00
- ----------------------------------------------------------------------------
Los datos consingados corresponden a promedios artimeticos anuales
<PAGE>
CENTROMIN PERU S.A.
DIRECCION DE ASUNTOS AMBIENTALES
Pag 130
TABLA 4.1.2/4A
EFLUENTES LIQUIDOS DE MAYOR IMPACTO IMPACTO COMPLEJO METALURGICO - LA OROYA
Periodo: Enero - Junio 1996
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Propiedodes Fisicas Principales Compnentes Quimicos: mg/I
----------------------------------------------------------------------------
CODIGO PUNTO DE MUESTREO Flujo: Solidos Temps CN
m^3/min en susp: pH C Total: As Cd Cu Fe Mn
mg/I mg/l
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
R-1 EFLUENTE DE REFINERIA Pb (Ahora Ref Cu) 0,298 359,082 3,0 17 0,001 18,07 0,04 135,42 404,83 1,05
- ------------------------------------------------------------------------------------------------------------------------------------
118 GRANUL ESC Y REFRIG FUND (CuyPb) 28,097 3508,208 8,0 17 0,001 0,61 0,06 0,05 0,21 2,08
- ------------------------------------------------------------------------------------------------------------------------------------
119 CANAL PRINCIPAL #2 (Fund Cu y Pb) 2,268 371,345 6,2 19 0,001 9,41 35,70 1,37 6,09 1,11
- ------------------------------------------------------------------------------------------------------------------------------------
126 PTA ELECT Zn DERRAVES LIX PURIF 1,702 95,462 6,0 14 0,001 0,06 0,50 0,83 2,48 82,15
- ------------------------------------------------------------------------------------------------------------------------------------
135 CANAL PRINCIPAL #1 (PARALELO-FFCC) 6,987 50,858 3,0 22 0,002 1,88 0,95 0,71 2,62 1,77
- ------------------------------------------------------------------------------------------------------------------------------------
136 CANAL PARALBLO ALC PRINCIPAL #1 2,187 238,512 5,9 16 0,001 1,40 5,61 0,71 150,11 98,73
- ------------------------------------------------------------------------------------------------------------------------------------
137 EFLUENTE POZA FERRITAS ZINC 0,488 40,435 7,0 16 0,001 0,09 0,49 0,05 0,18 10,68
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL: 42,027
- ----------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Valor en cunlquler momento: mg/1 (MEM) 100 5,5-10,5 2 1,0 2 5
- ------------------------------------------------------------------------------------------------------------------------------------
Vulor en promedio annual : mg/l (MEM) 50 5,5-10,5 1 0,5 1 2
- ------------------------------------------------------------------------------------------------------------------------------------
Agua cjase III: mg/1 50 5,5-9,0 0,20 0,50 0,50 1,00 0,50
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Principales Compnentes Quimicos: mg/I
----------------------------------------
CODIGO PUNTO DE MUESTREO
Pb Zn
- --------------------------------------------------------------------------------
R-1 EFLUENTE DE REFINERIA Pb (Ahora Ref Cu) 92,45 3,35
- ----------------------------------------------------------------------------
118 GRANUL ESC Y REFRIG FUND (CuyPb) 0,39 9,87
- ----------------------------------------------------------------------------
119 CANAL PRINCIPAL #2 (Fund Cu y Pb) 0,68 1275,25
- ----------------------------------------------------------------------------
126 PTA ELECT Zn DERRAVES LIX PURIF 0,64 405,77
- ----------------------------------------------------------------------------
135 CANAL PRINCIPAL #1 (PARALELO-FFCC) 1,00 10,00
- ----------------------------------------------------------------------------
136 CANAL PARALBLO ALC PRINCIPAL #1 1,27 1284,17
- ----------------------------------------------------------------------------
137 EFLUENTE POZA FERRITAS ZINC 0,46 190,33
- ----------------------------------------------------------------------------
TOTAL:
- ----------------------------------------------
- ----------------------------------------------------------------------------
Valor en cunlquler momento: mg/l (MEM) 1,0 6
- ----------------------------------------------------------------------------
Vulor en promedio annual : mg/l (MEM) 0,5 3
- ----------------------------------------------------------------------------
Agua cjase III: mg/l 0,10 25,00
- ----------------------------------------------------------------------------
El efluente R-I, ya esta siendo recirculado a la operacion, con la puesta en
funcionaniento del Filtro I.AROX
Los datos consingados corresponden a promedios artimeticos semestrales
<PAGE>
Pag 131
CENTROMIN PERU S.A.
DIRECCION DE ASUNTOS AMBIENTALES
TABLA No 4.1.2/5
EFLUENTES LIQUIDOS DE MAYOR IMPACTO-COMPLEJO METALURGICO LA OROYA
Periodo: Enero - Diciembre 1995
CONTENIDO METALICO
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Contenido metalico: kg/d
---------------------------------------------------------------
CODIGO PUNTO DE MUESTREO Flujo: CN As Cd Cu Fe Mn Pb Zn Curga
m^3/min Total Total
kg/d
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
R-1 EFLUENTE DE REFINERIA DE PLOMO 0,298 N.A. 48,14 0,04 455,64 1 267,22 4,55 1,78 13,52 1 790,89
- -----------------------------------------------------------------------------------------------------------------------------------
118 GRANUL. ESC. Y REFRIG. FUND (CuyPb) 28,097 N.A. 41,13 2,81 10,02 15,78 92,95 11,19 164,76 338,65
- -----------------------------------------------------------------------------------------------------------------------------------
119 CANAL PRINCIPAL #2 (Fund Cu y Pb) 2,268 N.A. 14,59 24,18 10,39 73,60 4,31 4,43 1 272,16 1 403,66
- -----------------------------------------------------------------------------------------------------------------------------------
126 PTA. ELECT. Zn DERRAVES LIX., PURIF. 1,702 N.A. 0,37 3,85 4,73 34,15 105,38 2,70 1 313,12 1 464,29
- -----------------------------------------------------------------------------------------------------------------------------------
135 CANAL PRINCIPAL #1 (PARALELO-FFCC) 6,987 N.A. 24,84 29,19 8,43 75,65 65,82 21,18 3 199,44 3 424,55
- -----------------------------------------------------------------------------------------------------------------------------------
136 CANAL PARALELO ALC. PRINCIPAL #1 2,187 N.A. 1,77 5,36 1,45 211,93 79,51 6,12 1 926,62 2 232,77
- -----------------------------------------------------------------------------------------------------------------------------------
137 EFLUENTE POZA FERRITAS ZINC 0,488 N.A. 0,25 0,84 0,20 0,14 22,15 0,76 434,39 458,74
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL: 42,027 0,000 131,08 66,28 490,88 1 678,47 374,67 48,17 8 324,01 11 113,55
- -----------------------------------------------------------------------------------------------------------------------------------
RELACION: CARGA 7 EFL., PRINC./CARGA TOTAL: 91,101 0,000 57,50 91,47 99,36 94,73 94,09 95,14 95,37 94,63
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Pag 132
CENTROMIN PERU S.A.
DIRECCION DE ASUNTOS AMBIENTALES
TABLA No 4.1.2/5A
EFLUENTES LIQUIDOS DE MAYOR IMPACTO-COMPLEJO METALURGICO LA OROYA
Periodo: Enero - Junio 1996
CONTENIDO METALICO
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Contenido metalico: kg/d
---------------------------------------------------------------
CODIGO PUNTO DE MUESTREO Flujo: CN As Cd Cu Fe Mn Pb Zn Curga
m^3/min Total Total
kg/d
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
R-1 EFLUENTE DE REFINERIA DE PLOMO 0,298 0,000 7,76 0,02 58,18 173,91 0,45 39,72 1,44 281,48
- -----------------------------------------------------------------------------------------------------------------------------------
118 GRANUL. ESC. Y REFRIG. FUND (CuyPb) 28,097 0,020 24,68 2,35 1,94 8,38 84,07 15,78 399,21 536,43
- -----------------------------------------------------------------------------------------------------------------------------------
119 CANAL PRINCIPAL #2 (Fund Cu y Pb) 2,268 0,002 30,74 116,61 4,47 19,89 3,63 2,22 4 165,48 4 343,04
- -----------------------------------------------------------------------------------------------------------------------------------
126 PTA. ELECT. Zn DERRAVES LIX., PURIF. 1,702 0,002 0,15 1,22 2,03 6,08 201,30 1,57 994,30 1 206,64
- -----------------------------------------------------------------------------------------------------------------------------------
135 CANAL PRINCIPAL #1 (PARALELO-FFCC) 6,987 0,020 18,91 9,56 7,14 26,36 17,81 10,06 100,61 190,47
- -----------------------------------------------------------------------------------------------------------------------------------
136 CANAL PARALELO ALC. PRINCIPAL #1 2,187 0,003 4,41 17,66 2,24 472,67 310,88 4,00 4 043,39 4 855,45
- -----------------------------------------------------------------------------------------------------------------------------------
137 EFLUENTE POZA FERRITAS ZINC 0,488 0,000 0,06 0,34 0,04 0,13 7,51 0,32 133,84 142,24
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL: 42,027 0,047 86,71 147,75 76,04 707,41 625,65 73,67 9 838,47 11 555,75
- -----------------------------------------------------------------------------------------------------------------------------------
RELACION: CARGA 7 EFL., PRINC./CARGA TOTAL: 89,520 86,733 29,07 98,05 95,20 96,64 97,52 92,89 96,61 94,99
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
CENTROMIN PERU S.A. Pag 133
DIRECCION DE ASUNTOS AMBIENTALES
TABLA No 4.1.2/6
RIOS RECEPTORES: MANTARO Y YAULI
Periodo: Enero - Diciembre 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Propladades Fisicne Principales Componentes Quinicos: mg/l
--------------------------------------------------------------------------------------------
Solidos CN
Flujo: en susp: Temp.: Total:
ODIGO PUNTO DE MUESTREO m(3)/min mg/l pH (degrees)C mg/l Ag Cd Cu Fe Mn Pb Zn
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
M-1 Mantaro puente chulec 1 752,966 9,850 8,0 11 N A 0,23 0,01 0,07 0,65 1,14 0,12 0,28
- ------------------------------------------------------------------------------------------------------------------------------------
M-2 Mantaro antes de la union
con el rio Yauli 1 993,801 48,880 7,6 11 N A 0,11 0,01 0,13 3,29 3,51 0,17 1,80
- ------------------------------------------------------------------------------------------------------------------------------------
M-3 Mantaro puente Cascabel 2 254,105 158,640 7,6 11 N A 0,15 0,01 0,10 1,11 1,41 0,11 0,96
- ------------------------------------------------------------------------------------------------------------------------------------
M-4 Mantaro despues de la Fundicion 2 294,580 83,360 7,6 12 N A 0,19 0,04 0,07 0,42 2,31 0,07 6,93
- ------------------------------------------------------------------------------------------------------------------------------------
M-5 Mantaro despues deposito de
Ferritas 2 295,130 96,080 7,6 12 N A 0,25 0,03 0,11 0,33 2,73 0,09 4,04
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Y-1 Yauli, puente Marcavalle 251,196 76,300 7,9 11 N A 0,06 0,01 0,07 0,23 1,01 0,07 0,76
- ------------------------------------------------------------------------------------------------------------------------------------
Y-2 Yauli, puente Huaymanta 255,999 177,150 7,7 12 N A 0,56 0,01 0,23 0,28 2,63 0,14 0,89
- ------------------------------------------------------------------------------------------------------------------------------------
Y-3 Yauli, puente Sudete 258,030 147,360 7,7 12 N A 0,49 0,01 1,11 4,22 2,39 0,34 0,74
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
P. Agua clase III : mg/l 50 5,0-9,0 0,20 0,05 0,50 1,00 0,50 0,10 25,00
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Los datos consiguados corresponden a promedios aritmeticos normales.
<PAGE>
CENTROMIN PERU S.A. Pag 134
DIRECCION DE ASUNTOS AMBIENTALES
TABLA No 4.1.2/6A
RIOS RECEPTORES: MANTARO Y YAULI
Periodo: Enero - Junlo 1996
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Propladades Fisicne Principales Componentes Quinicos: mg/l
--------------------------------------------------------------------------------------------
Solidos CN
Flujo: en susp: Temp.: Total:
ODIGO PUNTO DE MUESTREO m(3)/min mg/l pH (degrees)C mg/l Ag Cd Cu Fe Mn Pb Zn
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
M-1 Mantaro puente chulec 1 432,355 14,030 8,0 12 0,002 0,24 0,01 0,05 0,27 0,08 0,07 0,22
- ------------------------------------------------------------------------------------------------------------------------------------
M-2 Mantaro antes de la union con
el rio Yauli 1 706,480 22,190 7,5 12 0,002 0,06 0,01 0,08 0,36 5,25 0,06 2,80
- ------------------------------------------------------------------------------------------------------------------------------------
M-3 Mantaro puente Cascabel 1 944,113 15,430 7,9 13 0,002 0,15 0,01 0,07 0,37 1,35 0,06 1,00
- ------------------------------------------------------------------------------------------------------------------------------------
M-4 Mantaro despues de la Fundicion 1 981,807 18,733 7,8 12 0,002 0,08 0,04 0,06 0,31 2,66 0,08 4,09
- ------------------------------------------------------------------------------------------------------------------------------------
M-5 Mantaro despues deposito de
Ferritas 1 982,763 18,232 7,8 12 0,002 0,09 0,07 0,06 0,32 2,64 0,07 4,06
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Y-1 Yauli, puente Marcavalle 228,004 46,967 8,3 12 0,006 0,02 0,01 0,05 0,26 1,08 0,10 0,55
- ------------------------------------------------------------------------------------------------------------------------------------
Y-2 Yauli, puente Huaymanta 233,298 88,680 7,4 13 0,002 0,04 0,01 0,57 0,20 2,07 0,18 0,90
- ------------------------------------------------------------------------------------------------------------------------------------
Y-3 Yauli, puente Sudete 235,040 59,787 7,9 13 0,002 0,03 0,01 0,49 0,23 2,92 0,36 1,50
- ------------------------------------------------------------------------------------------------------------------------------------
P. Agua clase III : mg/l 50 5,0-9,0 0,20 0,05 0,50 1,00 0,50 0,10 25.00
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Los datos consiguados corresponden a promedios aritmeticos semestrales.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA CAPITULO IV Pag 135
- --------------------------------------------------------------------------------
TABLA 4.1.3/1
CODIGOS ESTABLECIDOS PARA EL TRATAMIENTO
Y DISPOSICION FINAL DEL RESIDUO
<TABLE>
<CAPTION>
CODIGO TRATAMIENTO CODIGO DISPOSICION FINAL
<S> <C> <C> <C>
A Mantenimiento preliminar A Red publica de alcantarillado
B Tratamiento biologico B Poza de percolacion
C Tratamiento Fisico-quimico C Cuerpos de agua (Mar, rios,
lagos, etc., indicar nombre)
D Tratamiento biologico y
Fisico-quimico D Relleno de mina
E Segregacion E Esparcidos en el suelo/terreno
F Otro (especificar) F Canchas de relave
G Sin tratamiento G Otro (especificar)
</TABLE>
Utilizar el Codigo de acuerdo con el tipo de tratamiento y/o disposicion final
empleado
Fuente: EVAP marzo 1995
<PAGE>
CENTROMIN PERU S.A. Pag 136
DIRECCION DE ASUNTOS AMBIENTALES
TABLA No 4.1.3/2
RESIDUOS SOLIDOS GENERADOS EN FUNDICION DE COBRE, PLOMO Y REFINERIAS
<TABLE>
<CAPTION>
FUNDICION COBRE Y PLOMO
- -----------------------------------------------------------------------------------------------------------------------
Cant.(t/d) Composicion Quimica: % (*g/t)
----------- T Dens ----------------------------------
No./Nombre Real Est. Fuente pH (degrees)C g/cc Cu Pb Zn *Ag Fe
- -----------------------------------------------------------------------------------------------------------------------
*FeO
----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Escoria de Reverberos de Cobre 602 Fund. Cu 3.79 0.64 1.30 2.90 17 *46.6
- -----------------------------------------------------------------------------------------------------------------------
2. Escoria de Hornos de Plomo 366 Fund. Cu 3.83 0.27 1.94 10.60 13 *34.6
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
3. Trioxido de Arsenico 11.7 Pta. As n.d. 0.45 0.45 0.49 54 1.5
- -----------------------------------------------------------------------------------------------------------------------
4. Residuos Lix. de Zinc 71 Ref. Zn n.d. 0.53 4.24 22.10 246 34.5
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
5. Residuos de Talio 0.23 Pta. Cd n.d. 0.15 27.00 1.5
- -----------------------------------------------------------------------------------------------------------------------
6. Basura Industrial n.d. Varios n.d.
- -----------------------------------------------------------------------------------------------------------------------
7. Bioxido de Manganeso n.d. Ref. Zn n.d. 0.05 14.00 0.50 635 0.26
- -----------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Composicion Quimica: % (*g/t) Tratam. Disp.
---------------------------- -------- Final
No./Nombre As Sb Cd Cod Cap Cod. Observacions
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Escoria de Reverberos de Cobre 0.46 0.78 G F Granulado
- ------------------------------------------------------------------------------------------------------
2. Escoria de Hornos de Plomo 0.18 0.02 G F Granulado
- ------------------------------------------------------------------------------------------------------
As(2)O(3)
- ------------------------------------------------------------------------------------------------------
3. Trioxido de Arsenico 81,51 0.88 G F Polvo
- ------------------------------------------------------------------------------------------------------
4. Residuos Lix. de Zinc 0.33 0.08 0.12 G F Pulpa
- ------------------------------------------------------------------------------------------------------
w/Cd Tl
- ------------------------------------------------------------------------------------------------------
5. Residuos de Talio 2,56 1.03 4.35 G F Solido Seco
- ------------------------------------------------------------------------------------------------------
6. Basura Industrial G E Solidos
- ------------------------------------------------------------------------------------------------------
MnO(2)
- ------------------------------------------------------------------------------------------------------
7. Bioxido de Manganeso 0.02 0.01 69,55 G C Solido Seco
- ------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
REFINERIA COBRE Y PLOMO
- -----------------------------------------------------------------------------------------------------------------------------------
Cant. t/d Composicion Quimica % Tratam. Disp.
--------- T Dens. ------------------------- -------- Final
No./Nombre Real Est. Fuente pH (degrees)C g/cc CaSo(4) H(2)SiF(6) HF Cod Cap Cod. Observacions
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Sulfato de Calcio 4.8 Planta Acido 30 2,9 85,2 9,4 0,97 G C Pulpa
H(2)SiF(6)
Fluosilicico
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Fuente: Auditoria Ambiental de Emisiones y Vertimientos - junio 1996
<PAGE>
CENTROMIN PERU S.A. Pag 137
DIRECCION DE ASUNTOS AMBIENTALES
TABLA No 4.1.3/2A
GRANULOMETRIA DE RESIDUOS SOLIDOS GENERADOS EN FUNDICION DE COBRE Y PLOMO
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Granulometria Malla Tyler, %
-----------------------------------------------------------------------------
No./Nombre +8 14 20 48 65 80 100 150 200 (250)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Escorias de Reverberos de Cobre 2,30 12,00 34,70 44,70 3,00 1,10 1,30 0,20 0,30 0,40
2. Escorias de Homos de Plomo 0,80 2,50 14,00 74,50 1,20 3,10 2,60 0,70 0,60 0,00
- -------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Abertura de Malla um
-----------------------------------------------------------------------------
No./Nombre +850 425 300 212 150 106 75 45 38 (38)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3. Trioxido de Arsenico 1,79 0,51 0,20 0,18 0,11 0,12 0,12 0,19 0,02 96,76
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Pag 137-A
[SITE PLAN OMITTED]
- ---------------------------------------------------------------------
Predicted Maximum 1-Hour SO2 Concentrations: Figure No. 10
Existing Chimney [NORTH ARROW OMITTED] ------------------
Scale: as shown RWDI
Cantromin La Oroya Smelter, Peru ------------------
Project No. 96-352F-06 Date: Aug 14, 1996
- ---------------------------------------------------------------------
DIAGRAMA 4.2.1/5: Pronostico de Concentraciones Maxima de 1-hora para SO(2):
Chimenea Principal Existente
<PAGE>
--------------
CAPITULO V
--------------
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 138.
- --------------------------------------------------------------------------------
5 PLAN DE MEDIDAS DE MITIGACION
5.1 Introduccion
El Plan de Medidas de Mitigacion tiene como proposito la
implementacion fisica de los proyectos correspondientes al control
ambiental y lograr con ello la reduccion en la concentracion de
contaminantes generados por las operaciones metalurgicas y
descargados al ambiente a niveles iguales a menores a los niveles
maximos permisibles establecidos legalmente por el Ministerio de
Energia y Minas.
El plan de medidas de mitigacion dentro del Programa de Adecuacion y
Manejo Ambiental (PAMA) para el Complejo Metalurgico La Oroya,
considera un cronograma de inversiones en obras necesarias para
adecuarnos a las regulaciones vigentes en un plazo de 10 anos para
las operaciones metalurgicas. El PAMA considera un monto total del
orden de los US$ 129,12 millones. (Tabla No. 5.1.1).
Es necesario indicar que la implementacion del plan de medidas de
mitigacion obliga realizar inversiones adicionales en cambios de
tecnologia para la adecuacion ambiental del orden de los US$ 141,04
millones. Totalizando una inversion de US$ 270,16 millones entre el
cambia de tecnologia y el PAMA para el Complejo Metalurgico La
Oroya. (Tabla 5.1.2).
El "Off Gas and Dust Collection Prefeasibility Study of the
Environmental Aspects of Copper, Zinc and Lead Smelter of La Oroya"
de La Firma Consultora Kilborn-SNC-Lavalin Europe, alcanza una
inversion de los US$ 269,00 millones, que confirma el monto
anteriormente mencionado. (Tabla 5.1.3).
5.2 Proyectos ejecutados destinados al control y reduccion del Impacto
Ambiental
Entre los mas relevantes se pueden indicar los siguientes:
1939 Se inicia las operaciones de la Planta de Acido Sulfurico que
capta los gases de los tostadores de cobre.
1941 Se instalan precipitadores electrostaticos para la
recuperacion de polvos (Sistema Cottrell Central).
1960 Se completa el sistema de ventilacion de la Planta de
Aglomeracion.
1964 Se mejora la ventilacion de los pechos de escoria de los
Hornos de Manga, canales y pozos de Plomo.
1966 La Ventilacion de la Planta de Aglomeracion es mejorada
mediante la instalacion de lavadores de gases.
1967 La Nueva Planta de Acido Sulfurico de 200 T.M.D. comienza a
operar.
1969 o El nuevo Cottrell Caliente de la Planta de Arsenico
comienza a operar.
o La fase I de la Planta de Tratamiento de Polvos se pone
en operacion.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 139.
- --------------------------------------------------------------------------------
1970 El sistema de extraccion continua de escoria es instalado en
el Horno de Plomo No 2.
1978 Se instala un nuevo precipitador electrostatico humedo en la
Planta de Acido Sulfurico.
1983 La nueva Planta de Aglomeracion entra en operacion. Cap. 810
t/d. Reemplaza a 11 maquinas (5 up draft y 6 down draft) por
una sola, tipo up draft, con una inversion de US$ 60 millones.
1990 Se inicia las pruebas metalurgicas del cambio de indices
metalurgicos en la Fundicion de Cobre. En diciembre de 1990 se
optimizan las pruebas.
1991 Se modifica el Horno de Plomo No 3. Se cambio de colada
intermitente a colada continua; el diseno antiguo correspondia
a un sifon Arents y el modificado es con cajon tipo Roy
Tapper.
1992 o Se recircula lodos del tanque espesador (provenientes
de los scrubbers de la Planta de Aglomeracion),
eliminandose el filtro Oliver, contribuyendo a la
reduccion de contaminacion del rio Mantaro.
o En el mes de marzo se inician las obras civiles de la
Nueva Planta de Oxigeno LINDE con una inversion de US$
24 millones.
o En octubre, se instala el Bag House (60 bolsas) para
mejorar el ambiente de trabajo en la unidad de cernido y
molienda.
1993 o En el mes de enero se instala el nuevo sistema de
ventilacion (SVEL) para los tostadores FBR de zinc.
o Se instala el sistema de ventilacion para el descarguio
de calcina de cobre.
1994 o El 17 de enero, se coucluye el montaje electro-mecanico
e instrumental del Proyecto Oxy-Fuel. Este proyecto fue
ejecutado por personal tecnico de Centromin con el
asesoramiento de las Empresas INCO, ENICO y SNC LAVALIN
de Canada y con una inversion de US$ 2 millones.
o Los logros alcanzados por el cambio de indices
metalurgicos y el proyecto oxy-fuel, respecto al ano
1989, fueron:
- Reduccion de 100 193 t de piritas equivalente a 82
158 t de SO(2) y a 127 757 t de H(2)SO(4)
(reduccion de indices de 1,9899 a 0,7239 t de
pirita/t de Cu entre los anos 1989 y 1995).
- Reduccion de 124 800 t de escorias (reduccion de
indices de 5,52 a
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 140.
- --------------------------------------------------------------------------------
3,13 t de escoria/t de Cu entre los anos 1989 y
1995).
- Reduccion de 30 220 t de petroleo residual No 6
(reduccion de indices de de 0,935 a 0,36 t de
petroleo/t de Cu entre los anos 1989 y 1995)
- Reduccion del volumen de gases generados de 72 600
a 50 220 Nm^3/h (19 000 Nm^3/h teorico) mejorando
la calidad de aire del entorno.
- Compactacion de la fundicion por desactivacion del
reverbero No 1, 2 calderos y 6 tostadores de Cu.
o Se desmantela el reverbero de cobre No 1 y los calderos.
o Se desmantela la Planta antigua de Aglomeracion.
1995 o Se reduce el numero de unidades de tostacion de 18 a 12
(8 para Cu, .2 para Pb, 1 para As y 1 para Sb),
optimizandose la captacion de gases y polvos.
1996 o Se inicia el desmantelamiento de 6 tostadores, este
trabajo concluira en el primer trimestre de 1997.
o El 7 de junio en la Refineria de Plomo entra en
operacion, el proyecto: Recuperacion del acido
fluorsilisico, por filtrado de los lodos anodicos de
plomo (Filtro LAROX), retornando soluciones acidas
filtradas a las celdas electroliticas cerrando el
circuito, y con ello obtuvo CERO de emision de efluentes
al rio Yauli.
o Se efectuo el tendido de tuberias para el uso de oxigeno
en las plantas de Aglomeracion y Residuos Anodicos. El
uso de oxigeno permitira: Incrementar la capacidad de
ambas plantas, menor generacion de polvos y emisiones
gaseosas, menor consumo de combustibles y eliminar el
consumo de Nitrato de Sodio generador de gases nitrosos.
o Recirculacion de algunos efluentes liquidos, coma los de
un tramo del canal principal No. 1, el de la Planta de
Alambron y otros.
o Se construyo y puso en operacion un pozo septico piloto
para tratar las aguas servidas procedentes de servicios
higienicos y lavaderos.
o La rivera del rio Mantaro ha sido forestada, tanto en el
area adyacente como la entrada de la fundicion.
o El sistema de transporte de las escorias de Cobre y
Plomo por cable carril fue mejorado, reduciendo los
derrames al rio Mantaro.
En la Tabla No. 5.2/.1 se aprecia los montos de inversion presupuestados y
aprobados por el Directorio de la Empresa, durante los ultimos anos para el
Complejo Metalurgico La Oroya, lo que indica que montos del orden US$ 8 a 15
millones por anos han sido gastados sin que se vea afectado los resultados
economicos-financieros de la gestion operativa metalurgica.
<PAGE>
TABLA 5.1.2
COMPLEJO METALURGICO LA OROYA
CRONOGRAMA DE INVERSIONES DE CAMBIO DE TECNOLOGIA
PARA ADECUACION AMBIENTAL Y P.A.M.A. 1997-2006
(Miles de US $)
<TABLE>
<CAPTION>
el de Capacidad Actual de: 70 000 t/ano de Cu refinado, 100 000 t/ano de Pb refinado y 70 000 t/ano de Zn refinado.
- ------------------------------------------------------------------------------------------------------------------------------------
CAMB.TECNOLOG. Y ADEC.AMBIENT 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 TOTAL
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CUITO DE COVRE 0 776 37 700 6 000 44 476
- ------------------------------------------------------------------------------------------------------------------------------------
CUITO DE PLOMO 0 1 464 0 0 0 0 40 000 15 000 56 464
- ------------------------------------------------------------------------------------------------------------------------------------
CUITO DE ZINC 0 20 000 20 000 0 40 000
- ------------------------------------------------------------------------------------------------------------------------------------
Sub total 0 22 240 57 700 6 000 0 0 40 000 15 000 0 0 140 940
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
NTENIMIENTO 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Sub total 0 0 0 0 0 0 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
UIPO DE CONTROL AMBIENTAL 10 50 40 0 0 0 100
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Sub total 10 50 40 0 0 0 0 0 0 0 100
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL CAMB. TECH. Y ADEC.AMBIENT 10 22 290 57 740 6 000 0 0 40 000 15 000 0 0 141 040
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
P.A.M.A.
- ------------------------------------------------------------------------------------------------------------------------------------
s de procesos:
- ------------------------------------------------------------------------------------------------------------------------------------
a de Acido-fundicion de Cu 41 200 41 200
- ------------------------------------------------------------------------------------------------------------------------------------
a de Acido-fundicion de Pb/Zn 48 800 48 800
- ------------------------------------------------------------------------------------------------------------------------------------
dos de procesos:
- ------------------------------------------------------------------------------------------------------------------------------------
ntes liquidos industriales 575 1 000 1 500 3 075
- ------------------------------------------------------------------------------------------------------------------------------------
os de procesos:
- ------------------------------------------------------------------------------------------------------------------------------------
sistema de manejo de escorias Cu/Pb 850 3 362 2 288 6 500
- ------------------------------------------------------------------------------------------------------------------------------------
deposito de escorias de Cu y Pb 2 500 2 500
- ------------------------------------------------------------------------------------------------------------------------------------
lono de deposito de escorias 750 1 000 1 250 1 250 1 000 5 250
- ------------------------------------------------------------------------------------------------------------------------------------
deposito de Trioxido de As 1 000 1 000 2 000
- ------------------------------------------------------------------------------------------------------------------------------------
lono de deposito de Trioxido de As 1 625 2 000 2 000 1 600 1 475 8 700
- ------------------------------------------------------------------------------------------------------------------------------------
lono de los depositos de ferritas 500 500 1 200 1 200 1 200 1 000 5 600
- ------------------------------------------------------------------------------------------------------------------------------------
ones Calidad de aire:
- ------------------------------------------------------------------------------------------------------------------------------------
etacion del area afectada por los humos 200 554 755 491 2 000
- ------------------------------------------------------------------------------------------------------------------------------------
Publica:
- ------------------------------------------------------------------------------------------------------------------------------------
e/Basuras 200 1 100 1 100 1 100 3 500
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL P.A.M.A. 4 500 7 862 9 438 6 150 4 775 4 600 41 200 554 49 555 491 129 125
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL 4 510 30 152 67 178 12 150 4 775 4 600 81 200 15 554 49 555 491 270 165
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
142
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 143
- ----------------------------------------------------------------------------
TABLA 5.1.3
INVERSIONES: CAMBIO DE TECNOLOGIA PARA ADECUACION
AMBIENTAL Y PROGRAMA DE ADECUACION Y MANEJO
AMBIENTAL (PAMA)
PERIODO 1 997 - 2 006
- --------------------------------------------------------------------------------
Miles US$
- --------------------------------------------------------------------------------
Inversion Cambio de tecnologia para adecuacion ambiental 141 040
- --------------------------------------------------------------------------------
Inversion Programa de Adecuacion y Manejo Ambiental 129 125
- --------------------------------------------------------------------------------
Total 270 165
- --------------------------------------------------------------------------------
Preparado: Gerencia de Operaciones Metalurgicas (GOME-CENTROMIN PERU S.A.).
Referencia Tabla 5.1.2
Nota: El monto de US$ 270,165 millones no consideran las inversiones para
continuidad operativa y mejora de procesos.
PREFEASIBILITY STUDY OF THE ENVIRONMET ASPECTS OF
COPPER, ZINC LEAD
Contract No SLCC079
- --------------------------------------------------------------------------------
CIRCUIT CASE US$ MILLION
- --------------------------------------------------------------------------------
COPPER c) 70 000 t/ano Cu using CMT for clean 125,0
concentrates with new dirty concentrate
roaster
- --------------------------------------------------------------------------------
LEAD f) 100 000 - 110 000 tpa Pb new 119,0
technology - Install with AUSMELT
System.
- --------------------------------------------------------------------------------
ZINC d) 70 000 tpa Zn old F.B.R. replaced with 51,8
new T.L.R and replace existing.
Sulphuric acid plant to give 99,5%
recovery of SO(2) to acid.
- --------------------------------------------------------------------------------
TOTAL 295,8
- --------------------------------------------------------------------------------
Preparado: Kilborn-SNC-Lavalin Europe, octubre 1 996.
NOTA: Cada caso incluye una nueva planta de acido por Circuito. Si
consideramos que las capacidades de produccion son las mismas y que
solo requiere de 2 nuevas plantas de acido sulfurico para una
produccion de 505 000 t/ano, y no de 3 plantas de acido, el monto
total por Kilborn-SNC-Lavalin Europe seria de: US$269,00 millones
(295,8 - 26,8 valor de 1 planta de acido), monto similar a lo
calculado de US$270,16 millones por la GOME-Centromin Peru S.A.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 144
- ----------------------------------------------------------------------------
TABLA No. 5.2./1
MONTOS PRESUPUESTADOS Y APROBADOS PARA LA CONTUNUIDAD OPERATIVA
MEJORAS DE PROCESOS Y PROGRAMA DE ADECUACION Y MANEJO AMBIENTAL (PAMA)
(U.S.$ MILES)
Complejo Metalurgico La oroya
- --------------------------------------------------------------------------------
DETALLE ANO
- --------------------------------------------------------------------------------
1995 1996 1997
- --------------------------------------------------------------------------------
PROYECTOS CONTINUIDAD con PECET 6 448 6 831
OPERATIA Y MEJORAS
DE PROCESOS sin PECET 355 8 279 9 010
- --------------------------------------------------------------------------------
PROGRAMA DE ADECUACION 1 141 860 4 500
Y MENEJO AMBIENTAL
PAMA
- --------------------------------------------------------------------------------
TOTAL U.S.$ (MILES) 7 944 15 970 13 510
- --------------------------------------------------------------------------------
PECET: PROYECTOS DE INVERSION CON ESTABILIDAD TRIBUTARIA
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 145
- ----------------------------------------------------------------------------
5.3 RELACION DE PROYECTOS PARA EL PLAN DE MEDIDAS DE MITIGACION - MONTOS
DE INVERSION
- --------------------------------------------------------------------------------
No. Nombre de Proyectos Miles US$
- --------------------------------------------------------------------------------
1 Nuevas plantas de Acido Sulfurico 90 000,00
- --------------------------------------------------------------------------------
2 Eliminacion de gases fugitivos de la planta de cogue *
- --------------------------------------------------------------------------------
3 Uso de oxigeno gaseoso en la Planta de Residuos *
Anodicos
- --------------------------------------------------------------------------------
4 Area afectada por los humos 2 000,00
- --------------------------------------------------------------------------------
5 Planta de tratamiento de agua madre de la Refineria de 500,00
Cobre.
- --------------------------------------------------------------------------------
6 Sistema de recirculacion del agua de refrigeracion de *
fundicion.
- --------------------------------------------------------------------------------
7 Manejo y disposicion de las soluciones acidas del *
proceso de particion - Refineria de Plata.
- --------------------------------------------------------------------------------
8 Planta de tratamiento de efluentes liquidos industriales 2 500,00
de fundicion y refineria - La Oroya
- --------------------------------------------------------------------------------
9 Muro de contencion para los lodos de plomo en la 5,00
Planta Zileret - Division de Zinc.
- --------------------------------------------------------------------------------
10 Recirculacion del agua utilizada en la granulacion de 55,00
speiss del horno de espumaje - Fundicion de Plomo.
- --------------------------------------------------------------------------------
11 Nuevo sistema de lavado de anodos - Refineria de 15,00
Zinc.
- --------------------------------------------------------------------------------
12 Manejo y disposicion de las escorias de cobre y plomo 6 500,00
- --------------------------------------------------------------------------------
13 Abandono del deposito de escorias de Cobre y Plomo. 7 750,00
- --------------------------------------------------------------------------------
14 Deposito de Trioxido de Arsenico, abandono del 10 700,00
deposito de Malpaso, cierre del deposito de Vado y
nuevo deposito en Vado.
- --------------------------------------------------------------------------------
15 Ferritas de zinc 5 600,00
- --------------------------------------------------------------------------------
16 Tratamiento de aguas servidas y disposicion de basura 3 500,00
en La Oroya.
- --------------------------------------------------------------------------------
TOTAL 129 125,00
- --------------------------------------------------------------------------------
(*) Inversiones consideradas en continuidad operativa y mejoras de proceso.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 146
- ----------------------------------------------------------------------------
5.3.1 Por emisiones gaseosas y material particulado
Proyecto No 1
- --------------------------------------------------------------------------------
PROYECTO NUEVAS PLANTAS DE ACIDO SULFURICO
- --------------------------------------------------------------------------------
Objetivo Fijar el SO(2) de las emisiones producto de las
operaciones metalurgicas y alcanzar los niveles maximos
permisibles.
- --------------------------------------------------------------------------------
Impacto Contaminacion del aire, suelo y agua que afectan los
ambientes fisico, biologico y socio economico por la
emision de 899 t/dia de SO(2) y 8,9 t/dia de material
particulado.
- --------------------------------------------------------------------------------
Mitigacion Se instalaran 2 plantas de acido sulfurico:
Planta de acido de la fundicion de Cu de 235 000 t/ano
Planta de acido de la fundicion de Pb / circuito de Zn
de 270 000 t/ano
Resultados de la mitigacion:
Se fijara como minimo el 83% del SO(2) generado
Para el ingreso de 515 t/dia (188 261 t/ano) de azufre se
emitira al medio ambiente 11O t/dia de SO(2)
Respecto a la calidad de aire la concentracion diaria de
SO(2), estara por debajo de 572 micrograma y la emision
de material particulado por debajo de l00mg/m^3
cumpliendo asi, lo dispuesto en la R.M.No 315-96-EM/VMM.
- --------------------------------------------------------------------------------
Cronograma Planta de acido de la fundicion de Cu en el ano 2 003
de Planta de acido de la fundicion de Pb / circuito de Zn en
ejecucion el ano 2 005
- --------------------------------------------------------------------------------
Monto de Planta de acido de la fundicion de Cu US$ 41,20 Millones
inversion Planta de acido de la fundicion de Pb / circuito de Zn
US$ 48,80 Millones
- --------------------------------------------------------------------------------
Fuentes Kilborn SNC Lavalin Europe, Brook Hunt, E&MJ enero
1996, Revista Mineria chilena julio 1 995.
- --------------------------------------------------------------------------------
Proyecto No 2
- --------------------------------------------------------------------------------
PROYECTO ELIMINACION DE GASES FUGITIVOS DE LA PLANTA DE
COQUE
- --------------------------------------------------------------------------------
Objetivo Eliminar las emisiones fugitivas al ambiente, durante
la carga y descarga de los hornos de coquificacion
- --------------------------------------------------------------------------------
Impacto Contaminacion del aire atmosferico.
- --------------------------------------------------------------------------------
Mitigacion Alargar el ciclo de coquificacion de 18 h a 24 h. y
comprar coque metalurgico del exterior para compensar la
menor produccion de coque.
- --------------------------------------------------------------------------------
Monto de No incluido en el PAMA, por estar considerado en la
inversion continuidad operativa y mejora de procesos, Tabla 5.2 /1
- --------------------------------------------------------------------------------
Fuente GOME - C.M.P. S.A.
- --------------------------------------------------------------------------------
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 147
- ----------------------------------------------------------------------------
Proyecto No 3
- --------------------------------------------------------------------------------
PROYECTO USO DE OXIGENO GASEOSO EN LA PLANTA DE RESIDUOS ANODICOS
- --------------------------------------------------------------------------------
Objetivo Reduccion del consumo de petroleo residual No 6 usado
para combustion y eliminacion de consumo de nitrato de
sodio (generador de gases nitrosos) en la ultima etapa
del proceso de Copelacion.
- --------------------------------------------------------------------------------
Impacto Gases nitrosos que contaminan aire del medio ambiente.
- --------------------------------------------------------------------------------
Mitigacion Uso de oxigeno gaseoso en el proceso de copelacion.
- --------------------------------------------------------------------------------
Cronograma Primer semestre 1997
de
ejecucion
- --------------------------------------------------------------------------------
Monto de US $ 391 000
inversion No incluido en el PAMA, por estar considerado en la
continuidad operativa y mejora de procesos, Tabla 5.2/1
- --------------------------------------------------------------------------------
Fuente GOME - C.M.P. S.A.
- --------------------------------------------------------------------------------
Proyecto No 4
- --------------------------------------------------------------------------------
PROYECTO AREA AFECTADA POR LOS HUMOS
- --------------------------------------------------------------------------------
Objetivo Determinar la extension aun impactada, establecer el
estado en el que se encuentra y plantear acciones a tomar
para rehabilitar las zonas que se presten a este fin.
- --------------------------------------------------------------------------------
Impacto Extension aun afectada : 3 829 ha.
- --------------------------------------------------------------------------------
Mitigacion Recuperar por practicas agricolas 1 167 ha.
- --------------------------------------------------------------------------------
Cronograma El ano 1 997 US$ 200 000
de
ejecucion De los anos 2 000 al 2 002 US$ 1,80 millones
- --------------------------------------------------------------------------------
Monto de US $ 2,00 Millones
inversion
- --------------------------------------------------------------------------------
Fuente DIR. DE ASUNTOS AMBIENTALES - C.M.P.S.A.
- --------------------------------------------------------------------------------
5.3.2 Por efluentes liquidos
Proyecto No 5
- --------------------------------------------------------------------------------
PROYECTO PLANTA DE TRATAMIENTO DELAGUA MADRE - REFINERIA
DE COBRE
- --------------------------------------------------------------------------------
Objetivo.- Tratar las soluciones acido ferrosas de la refineria de
cobre que se descargan al rio Yauli y obtener una
solucion neutralizada apta para reciclar y/o descartar
previa recuperacion del niquel y purificar la solucion
Raff para obtener un efluente final con contenidos de
impurezas por debajo de los limites maximos permisibles
establecidos por el M.E.M..
- --------------------------------------------------------------------------------
Impacto Contaminacion de las aguas del rio Yauli
- --------------------------------------------------------------------------------
Mitigacion Proceso de predilucion, intercambio ionico/electrowining
(SX - EW), neutralizacion
- --------------------------------------------------------------------------------
Cronograma Primer semestre del ano 1997
de
ejecucion
- --------------------------------------------------------------------------------
Monto de US $ 500 000
inversion
- --------------------------------------------------------------------------------
Fuente DIV.de INV. METALURGICAS - C.M.P.S.A.
- --------------------------------------------------------------------------------
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 148
- ----------------------------------------------------------------------------
Proyecto No 6
- --------------------------------------------------------------------------------
PROYECTO SISTEMA DE RECIRCULACION DE AGUAS DE
REFRIGERACION
- --------------------------------------------------------------------------------
Objetivo Independizar las aguas de refrigeracion de las fuentes de
contaminacion que existen dentro del ambiente de la
fundicion.
- --------------------------------------------------------------------------------
Impacto Incremento del volumen de aguas contaminadas
- --------------------------------------------------------------------------------
Mitigacion Canalizacion y recirculacion de las aguas a Casa de
fuerza.
- --------------------------------------------------------------------------------
Cronograma Ano 1997
de
ejecucion
- --------------------------------------------------------------------------------
Monto de US $ 41 350
inversion No incluido en el PAMA, por estar considerado en la
continuidad operativa y mejora de procesos, Tabla 5.2/1
- --------------------------------------------------------------------------------
Fuente DISENOS INGENIERIA - C.M.P.S.A.
- --------------------------------------------------------------------------------
Proyecto No 7
- --------------------------------------------------------------------------------
PROYECTO MANEJO Y DISPOSICION DE LAS SOLUCIONES ACIDAS DEL
PROCESO DE PARTICION - REFINERIA DE PLATA
- --------------------------------------------------------------------------------
Objetivo Evitar la contaminacion del rio Mantaro por vertimiento
de soluciones con alta acidez, resultantes del proceso de
particion de oro de la refineria de plata
- --------------------------------------------------------------------------------
Impacto Contaminacion del rio Mantaro por descarga de soluciones
con alta acidez
- --------------------------------------------------------------------------------
Mitigacion Reemplazo parcial del consumo de acido sulfurico fresco
en el circuito de cinc por soluciones de alta acidez de
la refineria de plata (recirculacion).
- --------------------------------------------------------------------------------
Cronograma Se concluira en segundo semestre de 1996
de
ejecucion
- --------------------------------------------------------------------------------
Monto de No incluido en el PAMA, por estar considerado en la
inversion continuidad operativa y mejora de procesos, Tabla 5.2/1
- --------------------------------------------------------------------------------
Fuente GOME - C.M.P. S.A.
- --------------------------------------------------------------------------------
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 149
- ----------------------------------------------------------------------------
Proyecto No 8
- --------------------------------------------------------------------------------
PROYECTO PLANTA DE TRATAMIENTO DE EFLUENTES LIQUIDOS
INDUSTRIALES DE FUNDICION Y REFINERIA - LA OROYA
- --------------------------------------------------------------------------------
Objetivo Obtener un efluente hacia el rio Mantaro con contenidos
de elementos contaminantes segun los niveles maximos
permisibles (R.M. No 011-96) para la actividad minero-
metalurgicos.
- --------------------------------------------------------------------------------
Impacto Contaminacion del rio Mantaro con elementos metalicos y
soluciones acidas.
- --------------------------------------------------------------------------------
Mitigacion Implementacion de una planta de tratamiento de efluentes,
con capacidad de tratamiento de 9 m^3 / min. y un proceso
de neutralizacion y precipitacion con floculante.
Los resultados de la mitigacion:
Efluerite final descargado al rio Mantaro con las siguientes
concentraciones:
Componente. conc.(mg/l) Niv. max. permisibles(mg/l) R.M.No
11-96
As < 0,01 1,00
Cd < 0,01
Fe < 0,02 2,00
Pb < 0,01 0,40
Mn 0,44
Cu < 0,01 1,00
Zn 0,06 3,00
Solid. tot.
(kg/b) 7,19 50,00
- --------------------------------------------------------------------------------
Cronograma Anos 1998 - 20000
de
ejecucion
- --------------------------------------------------------------------------------
Monto de US S 2,50 Millones
inversion
- --------------------------------------------------------------------------------
Fuente Consultora: ECOLAB S.R.L.
- --------------------------------------------------------------------------------
Proyecto No 9
- --------------------------------------------------------------------------------
PROYECTO MURO DE CONTENCION PARA LOS LODOS PLOMO
EN LA PLANTA ZILERET - DIVISION DE ZINC
- --------------------------------------------------------------------------------
Objetivo Instalar un muro de concreto para almacenar los lodos de
plomo descargados de la unidad de hidrometalurgia de la
planta Zileret.
- --------------------------------------------------------------------------------
Impacto Contaminacion del canal paralelo con soluciones acidas y
contenidos metalicos.
- --------------------------------------------------------------------------------
Mitigacion Recuperar las soluciones acidas y recircularlarlas al
circuito de lixiviacion acida de la unidad de
hidrometalurgia.
- --------------------------------------------------------------------------------
Cronograma Primer semestre 1997
de
ejecucion
- --------------------------------------------------------------------------------
Monto de US $ 5 000
inversion
- --------------------------------------------------------------------------------
Fuente GOME C.M.P.S.A.
- --------------------------------------------------------------------------------
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 150
- ----------------------------------------------------------------------------
Proyecto No 10
- --------------------------------------------------------------------------------
PROYECTO RECIRCULACION DEL AGUA UTILIZADA EN LA
GRANULACION DE SPEISS DEL HORNO DE ESPUMAJE
FUNDICION DE PLOMO
- --------------------------------------------------------------------------------
Objetivo Eliminar la contaminacion del rio Mantaro por sustancias
contaminantes y solidos en suspension en las aguas de
granulacion de speiss.
- --------------------------------------------------------------------------------
Impacto Contaminacion del rio Mantaro.
- --------------------------------------------------------------------------------
Mitigacion Utilizar las aguas de granulacion de speiss en circuito
cerrado.
- --------------------------------------------------------------------------------
Cronograma Primer semestre 1997
de
ejecucion
- --------------------------------------------------------------------------------
Monto de US $ 55 000
inversion
- --------------------------------------------------------------------------------
Fuente GOME C.M.P.S.A.
- --------------------------------------------------------------------------------
Proyecto No 11
- --------------------------------------------------------------------------------
PROYECTO NUEVO SISTEMA DE LAVADO DE ANODOS - REFINERIA DE
ZINC
- --------------------------------------------------------------------------------
Objetivo Eliminar la contaminacion del rio Mantaro.
- --------------------------------------------------------------------------------
Impacto Contaminacion del rio Mantaro con particulas solidas
y acidez.
- --------------------------------------------------------------------------------
Mitigacion Optimizar el consumo de agua mediante automatizacion
del lavado de anodos.
El volumen residual sera tratado en la planta de
tratamiento de efluentes liquidos industriales.
- --------------------------------------------------------------------------------
Cronograma Ano 1997
de
ejecucion
- --------------------------------------------------------------------------------
Monto de US $ 15 000
inversion
- --------------------------------------------------------------------------------
Fuente GOME C.M.P.S.A
- --------------------------------------------------------------------------------
5.3.3 Por residuos solidos
Proyecto No 12
- --------------------------------------------------------------------------------
PROYECTO MANEJO Y DISPOSICION DE LAS ESCORIAS DE COBRE Y
PLOMO
- --------------------------------------------------------------------------------
Objetivo Eliminar la contaminacion del rio Mantaro por sustancias
contaminantes y solidos en suspension en las aguas de
granulacion de escorias de cobre y plomo.
- --------------------------------------------------------------------------------
Impacto Contaminacion liquida y solida del rio Mantaro por la
descarga de agua contaminada con solidos en suspension
y/o iones contaminantes que se producen al momento de la
granulacion y transporte de las escorias
- --------------------------------------------------------------------------------
Mitigacion Se instalaran 2 desaguadores rotatorios tipo IBA,
sistemas nuevos de granulacion, recirculacion de agua de
granulacion y transporte.
Con esta implementacion se eliminara la evacuacion de las
aguas de granulacion y se evitaran las perdida de
escorias al rio Mantaro.
- --------------------------------------------------------------------------------
Cronograma Ano 1997 a 1999, Fabricacion de equipos separacion
de solido/liquido.
ejecucion Adquisicion de equipos adicionales e instalacion del
sistema de separacion y recirculacion, nuevo sistema
de transporte.
- --------------------------------------------------------------------------------
Monto de Ano 1997 US$ 850 000
inversion Ano 1998 US$ 3,36 Millones
Ano 1999 US$ 2,29 Millones
Total US$ 6,50 Millones
- --------------------------------------------------------------------------------
Fuentes Consultora : RESCAN PERU S.A.
- --------------------------------------------------------------------------------
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 151
- ----------------------------------------------------------------------------
Proyecto No 13
- --------------------------------------------------------------------------------
PROYECTO ABANDONO DEL DEPOSITO DE ESCORIAS DE COBRE Y PLOMO
- --------------------------------------------------------------------------------
Objetivo Evaluar la estabilidad de los depositos de Huanchan,
capacidad de almacenamiento remanente y establecer las
obras requeridas para mitigar o eliminar los impactos
ambientales
- --------------------------------------------------------------------------------
Impacto Estabilidad estatica y dinamica de los depositos
Arrastre de particulas y disoluciones quimicas por
aguas de escorrentia y de filtracion
- --------------------------------------------------------------------------------
Mitigacion Obras de infraestructura; canales de coronacion, muro
de confinamiento y obras de captacion
Implementacion de un plan de almacenamiento respetando
la altura y taludes
Restauracion del area del deposito y construccion de
nuevo deposito
- --------------------------------------------------------------------------------
Cronograma Anos 1 997 al 2 002
de
ejecucion
- --------------------------------------------------------------------------------
Monto de US$ 7,75 Millones
inversion
- --------------------------------------------------------------------------------
Fuente Consultora: RESCAN PERU S.A.
- --------------------------------------------------------------------------------
Proyecto No 14
- --------------------------------------------------------------------------------
PROYECTO DEPOSITO DE TRIOXIDO DE ARSENICO, ABANDONO
DEL DEPOSITO DE MALPASO, CIERRE DEL DEPOSITO
DE VADO Y NUEVO DEPOSITO EN VADO
- --------------------------------------------------------------------------------
Objetivo Mingar en forma integral la contaminacion ambiental
ocasionada por los depositos de trioxido de arsenico de
Malpaso y Vado, preparar para el cierre de los depositos
y la construccion de un nuevo deposito con tecnologia de
avanzada y que se ajuste a las normas de control
ambiental
- --------------------------------------------------------------------------------
Impacto Los depositos de Malpaso y Vado en actual uso, que fueron
construidos bajo los estandares de aquella epoca,
contaminan el aire atmosferico por erosion eolica y el
rio Mantaro por percolacion del agua en epoca de lluvias
- --------------------------------------------------------------------------------
Mitigacion Consiste de un sistema compuesto de forrado de fondo
de los depositos, una cubierta compuesta y un sistema de
deteccion y monitoreo de lixiviado, disenados para
controlar la liberacion de contaminantes en el medio
ambiente y control del potencial de exposicion del
publico. El area de los antiguos depositos quedara al
final de los trabajos de una apariencia natural, similar
al de su entorno.
La calidad de aire del medio ambiente como del agua que
discurre al rio Mantaro, estaran acorde a los niveles
maximos permisibles establecidos por el Ministerio de
Energia y Minas.
- --------------------------------------------------------------------------------
Cronograma Anos 1 997 al 2 001
de
ejecucion
- --------------------------------------------------------------------------------
Monto de US$ 10,70 Millones
inversion
- --------------------------------------------------------------------------------
Fuentes Consultora : A.D.I. INTERNATIONAL INC
- --------------------------------------------------------------------------------
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 152
- ----------------------------------------------------------------------------
Proyecto No 15
- --------------------------------------------------------------------------------
PROYECTO FERRITAS DE ZINC
- --------------------------------------------------------------------------------
El presente proyecto se refiere a las ferritas de zinc almacenadas en
un lugar conocido como Huanchan distante a 3 km. del complejo
metalurgico de La Oroya segun diagrama No 4.1.3/1.
El tonelage de los residuos alli almacenados es de 1 242 739 t
valorizados aproximadamente en US $ 230 millones en sus contenidos
metalicos de Zn, Ag, Cd, Cu.
El proyecto esta en marcado dentro de dos escenarios:
Escenario No 1 Ampliacion de los depositos tres y cuatro y abandono
tecnico de los cuatro depositos
Escenario No 2 Factibilidad tecnica - economica de procesamiento de
las ferritas de zinc.
Escenario No 1
- --------------------------------------------------------------------------------
Objetivo Abandono tecnico de los depositos conteniendo ferritas de
zinc
- --------------------------------------------------------------------------------
Impacto Contaminacion del rio Mantaro con descargas de soluciones
diluidas de sulfato de Zn, Cd, Fe, etc. de los depositos.
Las ferritas de zinc (Fe(2)O(3)ZnO) estan constituidas por
compuestos insolubles de hierro y sales solubles de
diferentes metales, los cuales son bombeados de la
refineria de zinc en forma de pulpas.
Contaminacion atmosferica con polvos por accion eolica.
Contaminacion del rio Mantaro por riesgo de deslizamiento
de taludes ante un fenomeno sismico.
- --------------------------------------------------------------------------------
Mitigacion Esta se hara por etapas:
1. -Reforzamiento de los taludes de los cuatro depositos
2. -Obras de infraestructura; canales de coronacion;
muro de confinamiento y obras de captacion
3. -Canalizacion del efluente descargado hacia la planta
de tratamiento de efluentes industriales
4. -Impermeabilizacion de los depositos y eliminacion de
las soluciones de la lixiviacion de sulfatos y material
particulado
Resultados de la mitigacion:
Eliminar el riesgo de contingencias ante un fenomeno
sismico, descargar efluentes liquidos al rio Mantaro con
niveles de acuerdo a loa limites maximos permisibles.
Componente. conc.(mg/l) Niv.max.permisibles(mg/l) R.S.No
11-96
As < 0,01 1,00
Cd < 0,01
Fe < 0,02 2,00
Pb < 0,01 0,40
Mn 0,44
Cu < 0,01 1,00
Zn 0,06 3,00
Solid tot.
(kg/h) 7,19 50,00
- --------------------------------------------------------------------------------
Cronograma de Ano 1997 al 2002
ejecucion
- --------------------------------------------------------------------------------
Monto de Anos 1997 y 1998 : US $ 1,00 Millones
inversion Ano 1999, 2000 y 2001: US $ 3,60 Millones
Ano 2002 : US $ 1,00 Millones
Total : US $ 5,60 Millones
- --------------------------------------------------------------------------------
Fuente Consultora: RESCAN PERU S.A.; ECOLAB S.R.L.
-----------------------------------------------------
Post-it Fax Note 7671 Date 26.9.97 # of 2
pages
-----------------------------------------------------
To Craig Galli From Dr. Jorge Geutierrez
-----------------------------------------------------
Co/Dept. Co.
-----------------------------------------------------
Phone # Phone # 4421320
-----------------------------------------------------
Fax # 80155366111 Fax # 4216481
-----------------------------------------------------
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 153.
- --------------------------------------------------------------------------------
Escenario No 2
- --------------------------------------------------------------------------------
o Factibilidad tecnico - economico de procesamiento de las
ferritas de zinc.
- --------------------------------------------------------------------------------
Objetivo Eliminar la contaminacion por efluentes liquidos, por polvos y
por riesgo sismico.
Recuperar el Zn, Cd y Ag de las ferritas de cinc que actualmente son
1 242 797 t equivalentes a US $230,00 Millones
- --------------------------------------------------------------------------------
Impacto Contaminacion del aire por polvos ocasionados durante el tratamiento
y contaminacion del rio Mantaro por efluentes liquidos.
Impacto sobro los suelos luego de finalizar el procesamiento de los
residuos
- --------------------------------------------------------------------------------
Mitigacion Alternativas tecnologicas
--------------------------------------------------------------------
Tecnologia Proceso Inversion Costo de
trat.
US $ Millones US $/t
Res.
--------------------------------------------------------------------
AUSMELT Lanza sumergida 80,00 88,00
(Proceso nuevo) Cap. Pta: 175 000 t/ano
--------------------------------------------------------------------
LURGI Waclz 54,00 100,00
Proceso conocido Cap. Pta: 60 000 t/ano
--------------------------------------------------------------------
Lixiviacion presurizada de concentrados
Esta tecnologia como alternativa consiste en reemplazar los tres
tostadores de cama fluida (FBR) y el tostador de lecho turbulento
(TLR) por una planta de lixiviacion a presion en autoclaves, para
tratar directamente los concentrados de zinc (sphalerito) a traves
de la tecnologia de lixiviacion a presion (SHERRIT). Esta planta de
lixiviacion, para una produccion de 70 000 t.p.a. de zinc refinado
tiene un costo de US $ 40 millones, comparado con el costo de un
nuevo TLR y su respectiva planta de acido sulfurico que es del orden
de los US $ 52,9 millones.
La tecnologia de lixiviacion a presion permitira en la planta
Zileret (Horno Kiln de 5O t do capacidad/ dia) pueda emplearse para
procesar exclusivamente las ferritas almacenadas en Huanchan; asi
mismo tendra otras ventajas tales como:
o Se solucionaria el problema de emisiones de gases SO(2) debido
a que el azufre se fijaria como azufre elemental, aun cuando
es conocido que su mercado es limitado.
o Permitira contrarrestar el problema del parque automotor para
el transporte de acido sulfurico, asi como tambien la
capacidad de almacenaje.
- --------------------------------------------------------------------------------
Fuente Consultoras :AUSMELT LIMITED.
:BOART LONGYEAR S.A.
:KILBORN, SNC. LAVALIN EUROPE
:A.D. ZUNKEL CONSULTANTS INC.
- --------------------------------------------------------------------------------
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 154.
- --------------------------------------------------------------------------------
5.3.4 Otros (Salud Publica)
Proyecto No 16
- --------------------------------------------------------------------------------
PROYECTO TRATAMIENTO DE AGUAS SERVIDAS Y DISPOSICION DE BASURA EN
LA OROYA
- --------------------------------------------------------------------------------
Objetivo Ejecucion de obras, adquisicion e instalacion de equipo
para el tratamiento de aguas servidas y deposicion de
basura de las zonas de vivienda dependiente de Centromin
Peru S.A.
- --------------------------------------------------------------------------------
Impacto Contaminacion del rio Mantaro al descargar en el, sin
tratamiento las aguas servidas de las areas de vivienda.
Adicionalmente este rio se contamina al efectuarse la
disposicion de basura por no disponer de un relleno
sanitario.
- --------------------------------------------------------------------------------
Mitigacion Instalacion de dos planta de tratamiento de aguas
servidas, una en Chulec y la otra en Sudete para tener
un efluente de solo 30 ppm de DBO y 40 ppm de solidos
suspendidos.
Disponer de una planta de disposicion final bajo las
tecnicas de un relleno sanitario eliminando la
contaminacion al rio Mantaro.
- --------------------------------------------------------------------------------
Coronara de Tres anos desde 1 999 al ano 2002
ejecucion
- --------------------------------------------------------------------------------
Monto de US $ 3,50 Millones
inversion
- --------------------------------------------------------------------------------
Fuente Consultora: AQUA PLAN INGENIERIA S.R.L.
- --------------------------------------------------------------------------------
5.4 Anexos
Proyecto No 1 Nuevas plantas de Acido Sulfurico
Proyecto No 2 Eliminacion de gases fugitivos de la planta de
coque
Proyecto No 3 Uso de oxigeno gaseoso en la Planta de
Residuos Anodicos
Proyecto No 4 Area afectada por los humos
Proyecto No 5 Planta de tratamiento de agua madre de la
Refineria de Cobre.
Proyecto No 6 Sistema de recirculacion del agua de
refrigeracion de fundicion.
Proyecto No 7 Manejo y disposicion de las soluciones acidas
del proceso de particion - Refineria de Plata.
Proyecto No 8 Planta de tratamiento de efluentes liquidos
industriales de fundicion y refineria
Proyecto No 9 Muro de contencion para los lodos de plomo en
la Planta Zileret - Division de Zinc
Proyecto No 10 Recirculacion del agua utilizada en la
granulacion de speiss del horno de espumaje -
Fundicion de Plomo.
Proyecto No 11 Nuevo sistema de lavado de anodos - Refineria
de Zinc.
Proyecto No 12 Manejo y disposicion de las escorias de cobre y
plomo
Proyecto No 13 Abandono del deposito de escorias de Cobre y
Plomo.
Proyecto No 14 Deposito de trioxido de arsenico, Abandono del
deposito de Malpaso, cierre del deposito de
Vado y nuevo deposito de Vado.
Proyecto No 15 Ferritas de zinc
Proyecto No 16 Tratamiento de aguas servidas y disposicion de
basura en La Oroya.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 155.
- --------------------------------------------------------------------------------
5.4.1 PROYECTO No 1
NUEVAS PLANTAS DE ACIDO SULFURICO
1. OBJETIVOS:
El proyecto tiene como objetivos fundamentales mitigar los efectos
adversos del SO(2) y material particulado contenidos en las emisiones
gaseosas generadas por las operaciones del Complejo Metalurgico La Oroya y
cumplir la norma de emisiones y de calidad de aire fijada por el M.E.M.
segun anexos 1 y 3 de la Resolucion Ministerial No. 315-96 EM/DMM.
2. EVALUACION DEL IMPACTO
2.1 Emisiones por las Chimeneas
Los gases y polvos generados en los circuitos de fundicion son
descargados a la atmosfera a traves de la chimenea principal
de 167,5 m de altura, 95 chimeneas secundarias de altura
variable y algunos puntos de emisiones fugitivas. Para 1995
los volumenes descargados y los contenidos metalicos fueron
como sigue:
- --------------------------------------------------------------------------------
Por volumen Nm(3)/seg
- --------------------------------------------------------------------------------
Chimenea principal 603,59
- --------------------------------------------------------------------------------
Chimenea de fierro 54,11
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Por solidos suspendidos mg/Nm(3)
- --------------------------------------------------------------------------------
Chimenea principal 161,05
- --------------------------------------------------------------------------------
Chimenea de fierro 67,58
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Por contenidos metalicos en mg/Nm(3)
- --------------------------------------------------------------------------------
As Cd Pb SO(2)
- --------------------------------------------------------------------------------
Chimenea principal 26,16 2,22 43,14 15 622,89
- --------------------------------------------------------------------------------
Chimenea de fierro 11,53 n.d. 5,42 n.d.
- --------------------------------------------------------------------------------
La mayor emision de gases (816 t de S0(2)/dia) y polvos metalicos
(8,4 t/d) al medio ambiente, es la chimenea principal. En 1995 solo
se fijo el 11,50% del azufre ingresado al proceso (7,20% como acido
sulfurico y 4,30% en escorias, efluentes liquidos, ferritas, etc.).
2.2 Calidad de Aire
La evaluacion de la calidad de aire atmosferico en el entorno al
Complejo Metalurgico La Oroya, se efectua por monitoreos continuos
de SO(2) y particulas suspendidas en las 5 estaciones, descritas
ampliamente en los Capitulos 4 y 7.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 156.
- --------------------------------------------------------------------------------
2.3 Balance de Azufre
Para 1995, el balance de azufre en el Complejo Metalurgico La Oroya,
registro las cifras y resultados siguientes:
- --------------------------------------------------------------------------------
Ingreso ton de S %
- --------------------------------------------------------------------------------
Concentrados de Cobre 78 080,1 41,08
- --------------------------------------------------------------------------------
Concentrados de Plomo 43 282,5 22,77
- --------------------------------------------------------------------------------
Concentrados de Zinc 51 011,7 26,84
- --------------------------------------------------------------------------------
Fundentes para Cobre 9 441,4 4,97
- --------------------------------------------------------------------------------
Fundentes para Plomo 6 934,0 3,65
- --------------------------------------------------------------------------------
Otros (*) 1 320,0 0,69
- --------------------------------------------------------------------------------
Total ingreso 190 069,7 100,00
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Salidas (fijado) ton de S % (respecto al
ingreso)
- --------------------------------------------------------------------------------
Acido Sulfurico 13 681,7 7,20
- --------------------------------------------------------------------------------
Escoria de Cobre 4 239,3 2,23
- --------------------------------------------------------------------------------
Escoria de Plomo 1 427,6 0,755
- --------------------------------------------------------------------------------
Concentrados Zn/Ag 652,0 0,34
- --------------------------------------------------------------------------------
Efluentes liquidos 551,1 0,20
- --------------------------------------------------------------------------------
Ferritas de Zn 786,5 0,41
- --------------------------------------------------------------------------------
Polvo de la chimenea principal 300,2 0,16
- --------------------------------------------------------------------------------
Otros (**) 224,7 0,12
- --------------------------------------------------------------------------------
Total salidas (fijado) 21 863,2 11,50
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Perdida en la chimenea y emisiones 168 206,6 88,50
fugitivas (respec. ingreso)
- --------------------------------------------------------------------------------
El Diagrama No. 1 muestra el manejo de gases, polvos y las
estaciones de muestreo dentro de la fundicion.
3. ALTERNATIVAS PARA LA MITIGACION
3.1 Seleccion del Proceso
A fin de mitigar el impacto de las emisiones de SO(2) se ha evaluado
procesos alternativos para su fijacion (produccion de yeso, de
sulfato de amonio, de SO(2) liquido y de azufre elemental)
diferentes a la produccion de acido sulfurico.
Acido Sulfurico
Se ha optado por la produccion de acido sulfurico como la
alternativa mas viable debido a las siguientes razones:
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 157.
- --------------------------------------------------------------------------------
o Ofrece una tecnologia convencional probada, conocida y muy
difundida.
o La demanda potencial de acido sulfurico en el corto y mediano
plazos, se localiza en el mercado sudamericano.
o El proyecto conlleva un cambio tecnologico importante en las
operaciones y procesos del Complejo Metalurgico La Oroya, que
apuntan a lograr una mayor competitividad de la Empresa a nivel
internacional.
o Aproximadamente el 90% de la produccion de azufre en todas sus
formas se fija como acido sulfurico o se convierte finalmente en
acido sulfurico, del cual, el 60% es usado para la industria de
fertilizantes.
o Un gran numero de productos industriales modernos utilizan acido
sulfurico en alguna etapa de su manufactura. El acido sulfurico es
un producto de usos multiples pues por su bajo precio se emplea como
agente secante, acidificante, hidrolizante, polimerizante,
neutralizante, deshidratante, oxidante, absorvente, lixiviante,
catalitico y como reactivo en la industria petro-quimico y quimica
inorganica.
o Los creditos por la venta de acido influyen positivamente en el
flujo de caja neto de las fundiciones y ocasionalmente podrian
compensar parcialmente fluctuaciones negativas en los precios del
cobre, plomo y zinc.
Otros productos alternativos al Acido Sulfurico
a) Yeso
El proceso requiere gases con baja concentracion de SO(2) (de 2 a
3%), lo que haria necesario la dilucion de los gases de alta
concentracion que se producen al aplicar nuevas tecnologias de
fundicion. Se preve ademas la produccion de una gran cantidad de
yeso con minimo o cero aporte a los ingresos de las fundiciones
debido a las limitaciones existentes en el mercado.
b) Sulfato de Amonio (Proceso Marino)
Tecnicamente es posible producir este material fertilizante
nitrogenado de gran demanda en las zonas agricolas del valle del
Mantaro, Tarma y Chanchamayo, proximas a La Oroya. Sin embargo no
existen en las cercanias plantas productoras de amoniaco en gran
escala, lo que haria necesario traerlo de lugares alejados, lo que
encareceria el precio del producto.
c) Azufre Elemental
El proceso requiere gases con concentracion de SO(2) entre 75 a 80%,
uso de oxigeno y grandes cantidades de coque o combustibles
hidrocarbonados. Ademas tiene alto costo energetico y por ser un
producto facilmente inflamable exige medidas de seguridad especiales
para evitar incendios.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 158.
- --------------------------------------------------------------------------------
d) SO(2) liquido
Igualmente requiere de concentraciones altas de SO(2) en los gases
(sobre el 60%), su transporte en tanques presurizados es costoso y
el mercado es muy restringido.
3.2. Mercado para el Acido Sulfurico:
Consumo en Centromin Peru S.A.
El consumo interno de acido sulfurico es de 16 100 t/ano.
Mercado Nacional
Centromin Peru S.A. suministra al mercado nacional 20 000 t/ano de
H(2)S0(4) de 98,5% y 6 800 t/ano de oleum con 24% de SO(3) libre.
Mercado Potencial en Chile
El mercado potencial para el acido sulfurico que produciria el
Complejo Metalurgico La Oroya, se concentra en la actividad minera
del norte de Chile tanto por su ubicacion, como por el gran volumen
de la demanda. El incremento de la demanda se origina por la futura
explotacion via lixiviacion acida de grandes yacimientos de
minerales oxidados de alta ley encadenada al proceso de SX-EW de
bajo costo operativo y simple manejo y control ambientales.
Los analisis del mercado de acido sulfurico realizados por la
Comision Chilena del Cobre (Cochilco), a partir de 1997, el mercado
chileno tendria un deficit anual de 1 200,000 t de acido y se estima
que para los anos 1 998 - 2 000 la demanda anual bordearia las 4
300,000 de t, teniendo en consideracion la entrada en operacion de
importantes proyectos de lixiviacion tales como: Zaldivar, El Abra,
Rodomiro Tomic, Collahuasi (demanda 200 000 t/a de acido), Tesoro y
Leonor (demanda 100 000 t/a de acido), Lomas y Bayas (demanda 100
000 t/a de acidos), Damiana de la Div. El Salvador (demanda 275 000
t/a de acido), Vanadio y Andacollo (demanda 140 000 t/a de acido)
entre otros. (Revista Mineria Chile No. 169 de julio de 1995).
Mercado Potencial en el Peru
La politica que impulsa el Gobierno en favor de la industria y la
privatizacion, hacen prever el desarrollo a mediano plazo de la
industria de fertilizantes luego de la privatizacion de los
yacimientos de roca fosforica en Bayovar, industria que constituira
un nuevo mercado para el acido sulfurico.
Por otra parte, en los proximos diez anos en el Peru se estima
entraran en produccion yacimientos de cobre que consumiran acido
sulfurico tales como: Toromocho, Antamina, La Granja, Cyprus, Cerro
Verde y Magma Copper Tintaya incrementara su reserva de minerales
oxidados de Cu de 14B de libras en 1 996 a 24B de lb para el ano 2
000 conviritendose en un gran consumidor de acido (E&MJ enero 1 996
"Magma puts the pedal to the metal").
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 159.
- -----------------------------------------------------------------------------
3.3 Del Proyecto
3.3.1 Introduccion
La capacidad de la plantas de acido sulfurico esta estimada
sobre la base de una produccion anual de 70 000 t/Cu, 100 000
t/Pb y 70 000 t/Zn refinados.
Este proyecto esta basado en las consideraciones emitidas por
el estudio de prefactibilidad desarrollado por Kilborn
SNC-Lavalin Europ "Offgas and dust collection prefeasibility
study of the environmental aspects of copper, zinc and lead
smelter of La Oroya".
Modernizacion con nuevas tecnologias
El proyecto exige la ejecucion de una etapa previa de
modernizacion de los tres circuitos cuyo detalle se condensa
como sigue:
a) En Fundicion de Cobre
Un nuevo tostador para concentrados sucios ubicado sobre
el reverbero oxyfuel en reemplazo de los ocho
existentes, un secador y convertidor modificado El
Teniente, seleccionado por su flexibilidad y
versatilidad para adecuarse a diferentes condiciones de
operacion y diversas caracteristicas mineralogicas de
los concentrados, bajo costo de inversion, equipo de
alta productividad, bajo costo de operacion y alto
contenido de SO(2) en los gases generados.
El ingreso de azufre y la concentracion de SO(2) en las
emisiones gaseosas obtenidas luego de la modernizacion
serian: Azufre procesado, 79 283 t/a (equivalentes a 235
000 t/a de acido sulfurico).
Concentracion de SO(2) de 4,9% (del reverbero oxy-fuel y
nuevo tostador).
Concentracion de SO(2) de 12 a 16% (de los convertidores
PS y CMT).
b) En Fundicion de Plomo
Una linea de proceso Ausmelt en reemplazo de las
actuales plantas de aglomeracion y hornos de plomo, que
permitira procesar directamente los concentrados y
materiales secundarios de plomo con ingreso de azufre de
45 693 t/a (equivalentes a 135 000 t/a de acido
sulfurico), y salida de gases con una concentracion de
SO(2) entre 10 a 15%
c) En el Circuitode Zinc
Instalacion de un nuevo tostador de lecho turbulento
(T.L.R.) en reemplazo del actual T.L.R. y los 3
tostadores de cama fluida (F.B.R.) existentes, lo que
permitiria un ingreso de azufre de 45 693 t/a
(equivalente a 135 000 t/a de acido sulfurico) y salida
de gases con una concentracion de 6% de SO(2).
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 160.
- --------------------------------------------------------------------------------
3.3.2 Descripcion del Proyecto y Ubicacion de las Instalaciones
El proyecto incluye la instalacion de dos nuevas plantas para
produccion de acido sulfurico de doble absorcion y doble
contacto para optimizar la conversion de SO(2) a SO(3). Estas
unidades deben operar con una eficiencia minima de 95% y deben
fijar como minimo el 83% del S0(2) generado en los tres
circuitos.
a) Planta de Acido Sulfurico No. 1 con capacidad de 235 000
t/ano (Circuito de Cobre)
Incluye una infraestructura industrial para producir 235
000 t/a de acido sulfurico procesando los gases
generados en la Fundicion de Cobre (convertidores PS,
convertidor modificado El Teniente, nuevo tostador para
concentrados sucios y actual reverbero oxy-fuel).
Los gases de los convertidores PS y CMT luego de ser
captados por las campanas colectoras, se conducen a las
camaras de enfriamiento evaporativo (una por cada
convertidor) desde donde mediante un ducto de alta
velocidad ingresan al precipitador electrostatico
caliente para recuperar los polvos y desde aqui pasar al
sistema de lavado de gases para remover el arsenico y
otras impurezas por medio de una torre de lavado por
acido al 50%, scrubbers, ciclones, torre de enfriamiento
y etapas de precipitacion electrostatica humeda (proceso
Boliden). Los efluentes liquidos (acido gastado con
arsenico y otras impurezas), seran neutralizados en una
planta de tratamiento y los polvos recuperados
recircularan al circuito de plomo.
Los gases originados en el nuevo tostador de
concentrados sucios y los del reverbero oxy-fuel luego
de pasar por una caldera de recuperacion de calor siguen
su tratamiento segun el proceso Boliden.
Los gases libres ya de polvo e impurezas se alimentan en
operacion normal a la planta de acido sulfurico pudiendo
desviarse la corriente gaseosa hacia la chimenea
principal en caso de mal funcionamiento de la planta de
acido y/o emergencias.
b) Planta de Acido Sulfurico No. 2 con capacidad de 270 000
t/ano (Circuito de Plomo/Circuito de Zinc)
Incluye una infraestructura industrial para producir 270
000 t/a de acido sulfurico que procesara los gases
provenientes de la fundicion de plomo (reactor Ausmelt)
y del circuito de Zinc (nuevo T.L.R.).
Los gases provenientes del reactor Ausmelt seguiran el
tratamiento descrito para los gases de cobre. Los gases
del tostador T.L.R. para concentrados de zinc luego de
pasar por una caldera de recuperacion de calor se
alimentan a los ciclones, al precipitador electrostatico
caliente, al sistema de lavado, a los precipitadores
electrostaticos humedos y torres de secado, para
finalmente ingresar a la planta de acido.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 161.
- --------------------------------------------------------------------------------
Los modulos de acido sulfurico estaran ubicados
preferentemente en areas muy proximas a las plantas
generadoras de SO(2). Asi, la planta de acido No. 1 se
construira en el area adyacente al reverbero oxy-fuel y
convertidores y la planta de acido No. 2 se construira
en el area adyacente a la planta de acido existente.
4. RESULTADOS DE LA MITIGACION
4.1 Nuevas Emisiones por la Chimenea
Como resultado de la implementacion de nuevas tecnologias y de las
nuevas plantas de acido el balance de azufre en el complejo
metalurgico de La Oroya preve una fijacion de 89,35% del azufre
ingresado a los procesos, como sigue:
- --------------------------------------------------------------------------------
Ingreso ton de S %
- --------------------------------------------------------------------------------
Concentrados de Cobre 85 937 45,65
- --------------------------------------------------------------------------------
Concentrados de Plomo 42 577 22,62
- --------------------------------------------------------------------------------
Concentrados de Zinc 48 012 25,50
- --------------------------------------------------------------------------------
Fundentes para Cobre 5 773 3,07
- --------------------------------------------------------------------------------
Fundentes para Plomo 1 050 0,56
- --------------------------------------------------------------------------------
Otros (*) 4 912 2,61
- --------------------------------------------------------------------------------
Total ingreso 188 261 100,00
(515 t/dia de SO(2))
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Salidas (fijado) ton de S % (respecto al
ingreso)
- --------------------------------------------------------------------------------
Acido sulfurico 162 988 86,58
- --------------------------------------------------------------------------------
Escoria de Cobre 2 414 1,28
- --------------------------------------------------------------------------------
Escoria de Plomo 177 0,09
- --------------------------------------------------------------------------------
Concentrados Zn/Ag 522 0,28
- --------------------------------------------------------------------------------
Efluentes liquidos 1 106 0,59
- --------------------------------------------------------------------------------
Bisulfito de Na 66 0,04
- --------------------------------------------------------------------------------
Otros (*) 946 0,50
- --------------------------------------------------------------------------------
Total salidas (fijado) 168 219 89,35
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Perdida en la chimenea 20 042 10,65
y emisiones fugitivas (110 t/dia de SO(2))
respec. ingreso)
- --------------------------------------------------------------------------------
(*) Esponjas de Fe, escorias de Sb, Polvos Cottrell Central,
Tostado, mata soda, speiss.
(**) Sulfato de Cu, catodos de Cu, limpiezas, speiss, soda mata.
4.2 Emision de S02
Al fijarse 89,3 5% del S que ingresa a procesamiento, el Complejo
Metalurgico La Oroya solo descargara a la atmosfera el 10,65% (110
t/d de S02 de 515 t/d de S que ingresa al Complejo), cumpliendo de
esta manera con lo dispuesto en el Anexo 1 del R.M. No
315-96-EM/VMM.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 162.
- --------------------------------------------------------------------------------
El Diagrama No 2 presenta el nuevo arreglo de la Fundicion con las
innovaciones tecnologicas para modernizacion y nuevas plantas para
fabricacion de acido sulfurico.
4.3 Emision de material particulado
La emision total de material particulado al medio ambiente estara
por debajo de los 100 mg/m3 (As < 25 mg/m3 y Pb < 25 mg/m3)
enmarcandose asi en los articulos 3(degrees), 4(degrees) y
5(degrees) de la R.M. No 315-96-EM/VMM.
4.4 Calidad del aire
La concentracion de anhidrido sulfuroso diaria en el medio ambiente
sera menor a 572 mg/m3.
Las particulas en suspension estaran por debajo de 350 mg/m3, la
concentracion mensual de Pb sera de 1,5 mg/m3 como maximo y la
concentracion de arsenico por dia, menor a 6 mg/m3, cumpliendo asi
las disposiciones del Anexo 3 de la R.M. No 315-96-EM/VMM.
5. INVERSIONES Y EJECUCION DEL PROYECTO
La inversion fija para las nuevas Plantas de Acido se estima como sigue:
- --------------------------------------------------------------------------------
PLANTA DE ACIDO No 1 (Circuito de Cobre) 41,2 MM US$
Capacidad: 235 000 t/ano
- --------------------------------------------------------------------------------
PLANTA DE ACIDO No 2 (Circuitos de Plomo y Zinc) 48,8 MM US$
Capacidad: 270 000 t/ano
- --------------------------------------------------------------------------------
Fuente: SC Fenco-Monsanto Acid Plant.
Las inversiones para los nuevos ductos de convertidores y reverberos y
sistemas de enfriamiento de gases y precipitadores de polvos estan
incluidos en el cronograma de inversiones de continuidad operativa, mejora
de procesos y cambio tecnologico en forma separada o dentro de la
inversion del nuevo equipo.
Estas inversiones no incluyen los costos relacionados a la instalacion de
los depositos para almacenamiento y medios de transporte del acido
sulfurico.
Se estima que se requerira 12 meses, para la construccion de cada Modulo
para la produccion de acido sulfurico proyectandose su ejecucion como
sigue:
- --------------------------------------------------------------------------------
ACTIVIDAD ANO
- --------------------------------------------------------------------------------
Planta de Acido No 1 (Circuito de Cobre) 2 003
- --------------------------------------------------------------------------------
Planta de Acido No 2 (circuito de Plomo y Zinc) 2 005
- --------------------------------------------------------------------------------
<PAGE>
Pag 163.
COMPLEJO METALURGICO LA OROYA
Diagrama No 1 MANEJO DE GASES Y MATERIAL PARTICULADO (POLVOS)
[GRAPHIC OMITTED]
<PAGE>
Pag 164.
DIAGRAMA N0 2
COMPLEJO METALURGICO LA OROYA
MODULOS PARA LA PRODUCCION DE ACIDO SULFURICO - (TM/ANO)
- --------------------------------------------------------------------------------
NIVELES DE CAPACIDADES ACTUALES DE PRODUCCION
- --------------------------------------------------------------------------------
Zinc: 70 000 t de zinc refinado/ano
Plomo:100 000 t de plomo refinado/ano
Cobre: 70 000 t de cobre refinado/ano
- --------------------------------------------------------------------------------
- ----------------------
Circuito de Cobre
- ----------------------
79 283
t de S
- ----------------------
Modulo de Acido
Sulfurico de Cobre
- ----------------------
235 000
t de H(2)S0(4)
(M$ 41 200)
- ---------------------- ----------------------
Circuito de Plomo Circuito de Zinc
- ---------------------- ----------------------
45 693 t de S 45693 t de S
(135 kt de acido) (135 kt de acido)
(M$ 22 500) (M$ 26 300)
----------------------
Modulo de Acido
Sulfurico Plomo-Zinc
----------------------
270 000
t de H(2)S0(4)
(M$ 48 800)
- --------------------------------------------------------------------------------
<PAGE>
Pag 165
DIAGRAMA No 3
COMPLEJO METALURGICO LA OROYA
ARREGLO GENERAL DE LA FUNDICION DE COBRE CON NUEVAS TECNOLOGIAS
Y NUEVA PLANTA DE ACIDO
[GRAPHIC OMITTED]
ARREGLO GENERAL DE LA FUNDICION DE PLOMO Y CIRCUITO DE ZINC
CON NUEVAS TECNOLOGIAS Y NUEVA PLANTA DE ACIDO
[GRAPHIC OMITTED]
<PAGE>
Pag 166
TABLA No 1
COMPLEJO METALURGICO LA OROYA
BALANCE DE AZUFRE CIRCUITO DE COBRE - CON PROYECTOS AL ANO 2 006
(Condicion de capacidad actual: 70 000 t de Cu refinado/ano)
(30% de Concentrados Sucios y 70% de Concentrados Limpios)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
CON PROYECTOS AL ANO 2 005
----------------------------------------------------
TRATADO CIRCUITO DE COBRE t %S t Azufre % Distribucion
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- - Minerales y Concentrados Centromin Peru S.A. 127 600 32,8 41 853 45,3%
- - Minerales y Concentrados Comprados 155 547 28,3 44 084 47,8%
- - Fundentes 71 266 8,1 5 773 6,3%
- - Miscelaneos (esponja de fierro) 3 952 4,6 182 0,2%
- - Transferencias (mata de soda, speiss, etc.) 7 100 4,6 327 0,4%
SUB-TOTAL 365 466 25,2 92 218 99,9%
- - Combustible Bunker 6 9 158 1,0 92 0,1%
- ------------------------------------------------------------------------------------------------------------
TOTAL NUEVO RECIBIDO 374 623 24,6 92 310 100,0%
- ------------------------------------------------------------------------------------------------------------
Inventario inicial 0 0,0 0
- -------------------------------------------------------------------------------------------
TOTAL NUEVO DISPONIBLE 374 623 24,6 92 310
- -------------------------------------------------------------------------------------------
Inventario final 0 0,0 0
- ------------------------------------------------------------------------------------------------------------
TRATADO 374 623 24,6 92 310 100,0%
- ------------------------------------------------------------------------------------------------------------
AZUFRE NO FIJADO (evacuado al ambiente) 13 027 14,1%
AZUFRE FIJADO (acido sulf., en escorias, etc.) 79 283 85,9%
- ------------------------------------------------------------------------------------------------------------
DETALLE DE AZUFRE NO FIJADO (EMISIONES)
Gases de tostacion, horno oxy-fuel y convertidores P.S. 9 817 10,6%
Gases del Convertidor El Teniente y Pta de Acido 3 210 3,5%
- ------------------------------------------------------------------------------------------------------------
SUB-TOTAL 13 027 14,1%
- ------------------------------------------------------------------------------------------------------------
DETALLE DE AZUFRE FIJADO
Acido sulfurico (*) 235 757 75 806 82,1%
Escorias de reverberos 221 025 1,09 2 414 2,6%
Canal central - Agua granulacion - Bled off (yeso) 6 406 965 0,009 591 0,6%
Sulfato de cobre 3 675 12,8 472 0,5%
Catodos de cobre 70 000 0,0005 0,4 0,0%
- ------------------------------------------------------------------------------------------------------------
SUB-TOTAL 79 283 85,9%
- ------------------------------------------------------------------------------------------------------------
TOTAL 92 310 100,0%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(*) El tonelaje de azufre fijado considera la eficiencia de 95% de la Pta de
Acido y el 5% restante, esta considerado en las emisiones.
70KT30-70
<PAGE>
Pag 167
TABLA No 2
COMPLEJO METALURGICO LA OROYA
BALANCE AZUFRE CIRCUITO DE PLOMO - CON PROYECTOS AL ANO 2 006
A Niveles de Capacidad Actual: 100 000 t/ano de Plomo Refinado
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
CON PROYECTOS AL ANO 2 006
---------------------------------------------------
TRATADO CIRCUITO DE PLOMO t %S t Azufre % Distribucion
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- - Minerales y Concentrados Centromin Peru S.A. 159 237 24,0 38 185 79,7%
- - Minerales y Concentrados Comprados 19 350 22,7 4 392 9,2%
- - Fundentes 61 052 1,7 1 050 2,2%
- - Miscelaneos (esponja de fierro) 3 096 2,8 87 0,2%
- - Transferencias (escoria Sb, PCCT, etc.) 30 171 14,0 4 224 8,8%
- -----------------------------------------------------------------------------------------------------
TOTAL NUEVO RECIBIDO 272 906 17,6 47 938 100,0%
- -----------------------------------------------------------------------------------------------------
Inventario inicial 0 0,0 0
- ---------------------------------------------------------------------------------
TOTAL NUEVO DISPONIBLE 272 906 17,6 47 938
- ---------------------------------------------------------------------------------
Inventario final 0 0,0 0
- -----------------------------------------------------------------------------------------------------
TRATADO 272 906 17,6 47 938 100,0%
- -----------------------------------------------------------------------------------------------------
AZUFRE NO FIJADO (evacuado al ambiente) 3 508 7,3%
AZUFRE FIJADO (acido sulf., en escorias, etc.) 44 430 92,7%
- -----------------------------------------------------------------------------------------------------
DETALLE DE AZUFRE NO FIJADO
Gases de Horno de Espumaje 85 0,2%
Gases Horno de Esfumado 1 000 2,1%
Gases de Horno de Plomo 2 423 5,1%
- -----------------------------------------------------------------------------------------------------
SUB-TOTAL 3 508 7,3%
- -----------------------------------------------------------------------------------------------------
DETALLE DE AZUFRE FIJADO
Acido sulfurico 134 552 43 264 90,3%
Escorias de Hornos de Esfumado 120 182 0,15 177 0,4%
Canal central - Agua granulacion - Bled off (yeso) 5 150 873 0,01 515 1,1%
Speiss 3 500 1,46 51 0,1%
Mata - Soda 3 700 6,15 228 0,5%
Limpiezas 9 211 2,12 195 0,4%
- -----------------------------------------------------------------------------------------------------
SUB-TOTAL 44 430 92,7%
- -----------------------------------------------------------------------------------------------------
TOTAL 47 938 100,0%
- -----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Pag 168
TABLA No 3
COMPLEJO METALURGICO LA OROYA
BALANCE AZUFRE CIRCUITO DE ZINC - CON PROYECTOS AL ANO 2 006
A Niveles de Capacidad de 70 000 t/ano de Zinc Refinado
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
CON PROYECTOS AL ANO 2 006
---------------------------------------------------
TRATADO CIRCUITO DE ZINC t %S t Azufre % Distribucion
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- - Minerales y Concentrados Centromin Peru S.A. 146 826 32,7 48 012 100,0%
- -----------------------------------------------------------------------------------------------------
TOTAL NUEVO RECIBIDO 146 826 32,7 48 012 100,0%
- -----------------------------------------------------------------------------------------------------
Inventario inicial 0 0,0 0
- -----------------------------------------------------------------------------------------------------
TOTAL NUEVO DISPONIBLE 146 826 32,7 48 012
- -----------------------------------------------------------------------------------------------------
Inventario final 0 0,0 0
- -----------------------------------------------------------------------------------------------------
TRATADO 146 826 32,7 48 012 100,0%
- -----------------------------------------------------------------------------------------------------
AZUFRE NO FIJADO (Emisiones) 4 094 8,5%
- -----------------------------------------------------------------------------------------------------
AZUFRE FIJADO (acido sulf.. en residous, etc.) 43 918 91,5%
- -----------------------------------------------------------------------------------------------------
DETALLE DE AZUFRE NO FIJADO
- -----------------------------------------------------------------------------------------------------
Residuo producido 48 916 1,5 739 1,5%
- -----------------------------------------------------------------------------------------------------
Calcina Efluentes liquidos 648 1,4%
- -----------------------------------------------------------------------------------------------------
Perdidas fugitivas 2 707 5,6%
- -----------------------------------------------------------------------------------------------------
SUB-TOTAL 4 094 8,5%
- -----------------------------------------------------------------------------------------------------
DETALLE DE AZUFRE FIJADO
- -----------------------------------------------------------------------------------------------------
Acido sulfurico 134 756 43 330 90,2%
- -----------------------------------------------------------------------------------------------------
Bisulfito de sodio 66 0,1%
- -----------------------------------------------------------------------------------------------------
Concentrado Zn/Ag 1 939 26,92 522 1,1%
- -----------------------------------------------------------------------------------------------------
SUB-TOTAL 43 918 91,5%
- -----------------------------------------------------------------------------------------------------
TOTAL 48 012 100,0%
- -----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 169.
- --------------------------------------------------------------------------------
5.4.2 PROYECTO No 2
ELIMINACION DE GASES FUGITIVOS DE LA PLANTA DE COQUE
1. EVALUACION DEL IMPACTO
1.1 Gases fugitivos de la destilacion del carbon durante las descargas
de los hornos de coque
Actualmente, cuando se abren las compuertas de los hornos para
descargar el coque producido y alimentar el carbon, se esta
evacuando al ambiente 23 800 m^3/d de gases, producto de la
destilacion incompleta del carbon. Anos atras el volumen de estos
gases era 32 700 m^3/d.
La tabla Nro. 1 condensa la informacion operativa de la Planta de
Coque:
TABLA Nro.1
<TABLE>
<CAPTION>
-------------------------
ANTES ACTUAL
------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Ciclo de Coquificacion (Horas) 14 19.8
------------------------------------------------------------------------------------------------
Numero de descargas por dia 32 24
------------------------------------------------------------------------------------------------
Rendimiento Neto de Coquificacion (%) 65 66
------------------------------------------------------------------------------------------------
INDICE: Carbon Fijo (CF) en Coque Grueso/t-Carbon Alimentado (t) 0,550 0,574
------------------------------------------------------------------------------------------------
Produccion: Carbon Fijo (CF) en Coque Grueso/dia (t) 77 78
------------------------------------------------------------------------------------------------
Produccion de Cenizas (Ash) en Coque Grueso/dia (t) 22,9 9,4
------------------------------------------------------------------------------------------------
EMISION DE GASES FUGITIVOS AL MEDIO AMBIENTE 1 022x32: 992x24:
(Metros cubicos por dia) 32 700 23 800
------------------------------------------------------------------------------------------------
</TABLE>
Las evaluaciones ambientales realizadas en el techo de los hornos de
coque, indican que los gases de la destilacion incompleta del carbon
durante el proceso de coquificacion, se diluyen rapidamente en el
ambiente. La tabla Nro. 2 registra la composicion de estos gases
fugitivos que se presentan durante la descarga de coque y carga de
carbon. De igual manera se aprecia que los contaminantes plomo y
arsenico, registran concentraciones de 0,018 y 0,012 micrograma/m^3
respectivamente, menores a los niveles maximos permisibles.
TABLA Nro. 2
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
VOLUMEN Y COMPOSICION DE LOS GASES EN EL TECHO DE LAS BATERIAS EN DESCARGAS
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Volumen (m^3/d) 23 800 O(2) (%) 16,6
----------------------------------------------------------------
GASES CH(4) (%) 12,0 H(2) (%) 10,6
----------------------------------------------------------------
DESTILADOS C(2)H(6) (%) 3,1 H(2)S (%) 0
----------------------------------------------------------------
DEL C(3)H(8) (%) 0 CO (%) 4,0
----------------------------------------------------------------
CARBON Plomo (micrograma/m^3) 0,018 N(2) (%) 53,7
----------------------------------------------------------------
Arsenico(micrograma/m^3) 0,012 CO(2) (%) 0
--------------------------------------------------------------------------------
</TABLE>
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 170.
- --------------------------------------------------------------------------------
1.2 Deshecho de gases producto de la combustion
Conocidos como "gases quemados". Se evacuan al medio ambiente por
las chimeneas de la Planta (una por cada bateria). Estos gases son
producto del proceso de la combustion de los gases de la destilacion
del carbon y el aire precalentado en las mismas baterias. Se aprecia
su composicion y analisis en la tabla Nro.3
TABLA Nro.3
--------------------------------------------------------------------------
EMISIONES DE GAS POR CHIMENEAS Analisis de los gases de deshecho (%)
-----------------------------------------
10,48 Nm^3/seg SO(2) CO(2) 0(2) CO
--------------------------------------------------------------------------
BATERIA "A" 0,8 1,3 16,9 0,0
--------------------------------------------------------------------------
BATERIA "B" 0,9 2,2 15,4 0,0
--------------------------------------------------------------------------
1.3 Reciclado de los gases de destilacion del carbon
En el proceso de coquificacion, el carbon es sometido a temperaturas
de 1350 (degrees)C aproximadamente en un ambiente libre de oxigeno,
donde los compuestos volatiles pasan a la fase gaseosa. A estas
altas temperaturas, la fase gaseosa, producto de la destilacion del
carbon esta formada por hidrocarburos. Este fluido pasa por
colectores y lavadores de gases, en donde con ayuda de agua se
separa del alquitran dejandolo limpio, lo que a una temperatura
final de 45 (degrees)C se inyecta a los quemadores de los hornos
para ser usado como combustible gaseoso mezclado con el aire
precalentado.
Los gases producidos en el proceso de coquificacion estan
constituidos principalmente de hidrogeno y metano, ademas de
nitrogeno, propany y sulfuro de hidregeno en menor cantidad. Es
necesario senalar que, el grupo de los fenoles e hidrocarburos
pesados van a formar el alquitran de hulla el cual es transportado
hasta los hornos de reverbero de la Fundicion de Cobre para ser
usado como combustible.
La composicion tipica de los gases de la destilacion del carbon que
se recicla a los mismos hornos de coque, se registra en la siguiente
tabla Nro. 4:
TABLA Nro. 4
(Porcentaje en volumen del gas reciclado)
--------------------------------------------------------------------------
H(2) CH(4) N(2) C(2)H(6) CO(2) H(2)S O(2) C(3)H(8) CO
--------------------------------------------------------------------------
55,9 19,7 13,6 3,6 1,4 0,8 0,6 1,5 2,9
--------------------------------------------------------------------------
2. ALTERNATIVAS DE MITIGACION
Los hornos Curran Knowles de coquificacion en Centromin, son hornos de
tipo convencional con recuperacion de subproductos, diseno que en los
EE.UU. de N.A. funciona desde el ano 1941. En estos hornos el carbon se
carga y acomoda sobre el piso refractario a lo largo y ancho de cada horno
para formar una carga de 2,45 mx 9,75 m con alturas hasta de 0,32 m.
La produccion de coque metalurgico en la Fundicion de Plomo data desde el
ano 1944. Existe escasez de carbon nacional de calidad bituminoso
coquificable y aglomerable para
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 171.
- --------------------------------------------------------------------------------
producir coque poroso, resistente, con buen poder calorifico y con el
menor contenido de cenizas para usarse como combustible y reductor con
sinter de plomo en las columnas de los hornos de manga de la fundicion.
Hasta fines del ano 1971, se estuvo utilizando carbon nacional (Goyllar)
con alto contenido de cenizas (20%), el cual con un ciclo de coquificacion
muy corto (14 horas/horno), producia casi 33 000 m^3/d de gases de
destilacion de carbon, cuya descarga al medio ambiente era muy procupante.
Desde 1988 se procesaron carbones de Colombia mezclados con el carbon
Goyllar hasta mayo de 1993. El carbon nacional degeneraba la calidad de
produccion de coque a la vez que no permitia mitigar la descarga de gases
destilados al medio ambiente.
Con el carbon Prodeco de Colombia; cuya composicion promedio es de 23%:MV,
69%:CF y 8% de-cenizas; se impulsa desde 1988 el aumento de la capacidad
de produccion de la Planta de Coque y la disminucion de fuga de gases
destilados al ambiente durante las descargas.
Este Proyecto tiene como objectivo principal mitigar la emanacion de gases
fugitivos y polvos que se generan en los hornos de coquificacion en los
momentos de las descargas de coque producido. Las condiciones operativas
al presente se grafica en el diagrama siguiente:
[GRAPHIC OMITTED]
Como medidas de mitigacion para la Planta de Coque, en cuanto a la
emanacion de gases fugitivos producto de la destilacion del carbon, se
plantean las siguientes alternativas:
2.1. Alternativa seleccionada
2.1.1. Operar los hornos con ciclos de coquificacion de 24 o 26
horas.
Tomando en cuenta el posicionamiento y la dependencia del
mercado de coque metalurgico en el futuro, se propone
mitigar el problema de los gases fugitivos mencionado,
operando los hornos de coquificacion con ciclos de 24 a 26
horas, supliendo la diferencia de cantidad de coque mediante
la importacion del mismo.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 172.
- --------------------------------------------------------------------------------
El carbon alimentado (actualmente 5,6 t/horno), cumple su
proceso de coquificacion empezando desde el secado,
plasticidad, hinchamiento, sigue la grafitacion a formacion
de coque y la contraccion del mismo, de aspecto poroso,
estable, duro. aglomerado y resistente para su trabajo en
las columnas de los hornos de manga conjuntamente con el
sinter.
Normalmente este proceso de coquificacion debe desarrollarse
en un tiempo minimo de 24 o 26 horas a fin de completar su
ciclo. Al tomarse menos tiempo, como se hace actualmente,
con 18 o 20 horas (antes 14), se esta permitiendo a que los
gases y volatiles del proceso que aun permanecen en el
horno, se expandan al ambiente al momento de abrir el horno
para descargar el coque.
Por ello, una de las alternativas para mitigar la evacuacion
de gases fugitivos al medio ambiente es aumentar el tiempo
de proceso entre 4 y 6 horas, es decir operar con ciclos de
24 o 26 horas. Con esto habra un deficit de coque grueso
para los hornos de plomo, por lo que de acuerdo a calculos
de consumo, el regimen de adquisicion de carbon y coque
anualmente seria:
o Compra de 41 000 t de carbon coquificable para producir
27 000 t de coque grueso.
o Compra de 8 200 t de coque grueso de coqueria de
terceros.
2.2. Otras alternativas
2.2.1. Instalacion de Sistemas de Ventilacion (SVEL).
La instalacion de Sistemas de Ventilacion para captar 23 800
m^3 de gases diariamente, implicaria la instalacion de
ducterias de fierro resistente a altas temperaturas (650
(degrees)C), valvulas especiales, scrubber, ventiladora,
pozas de sedimentacion, la instalacion de equipos
adicionales como tolvas enfriadoras selladas con chorros de
agua (quenching car), carros de transporte con
encerramientos, sistemas de ducterias con la que se
mantendria la produccion actual, con ciclos de 18 a 20 horas
y evitar la compra de coque extra. Obviamente, el gran
problema de esta alternativa es el costo permanente de
mantenimiento de equipos y el poco espacio disponible de la
Pta. de Coque.
2.2.2. Sustituir totalmente la compra de carbon por coque
metalurgico
En 1985 y 1993 se han evaluado las operaciones de los hornos
de plomo con coque de Japon (Mitsubishi) y coque de Colombia
(Carbones y Minerales). Los resultados no han sido
totalmente satisfactorios; el primero porque el coque fue de
calidad siderurgica y el segundo debido a que el valor de
compra frente al coque preparado en nuestra Planta, fue
mayor en casi US $ 45 por ton. puesto en La Oroya. Sin
embargo es posible buscar otros proveedores de coque a fin
de "cerrar" la Planta y operar la Fundicion solo con el
manejo de la compra de coque de terceros como hace la
Empresa Penoles de Mexico, sin embargo ello significaria un
costo promedio anual de 7,5 millones de U.S.$ frente al
actual de 5,5 milliones de U.S.$ aproximadamente.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 173.
- --------------------------------------------------------------------------------
2.2.3. Plantear a un proveedor de carbon, fabrique coque cerca a La
Oroya.
Plantea invitar e inducir a terceros, la produccion y
suministro de coque dentro de la region, mediante contratos
o convenios.
2.2.4. Construir Coqueria de Punta (Verticales de encerramiento
total) sin recuperacion de subproductos.
Solicitar la construccion de hornos de diseno vertical con
transmision de calor lateral, patentes OTTO HOFMAN o
KOPPERS-BECKER de los EE.UU. de N.A o KEMBLA COAL AND COKE
de Australia.
2.3. Cronograma de ejecucion de la alternativa seleccionada.
Operar la Planta de Coque con ciclos del proceso de coquificacion de
24 o 26 horas, depende de la disponibilidad de coque para los hornos
de manga. Por ello, el cornograma de ejecucion del presente
proyecto, esta dirigido principalmente a la compra de coque
metalurgico al granel, en base al siguiente programa:
TABLE Nro. 5
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
FECHA ACTIVIDAD
-------------------------------------------------------------------------------------------------
<S> <C>
1 al 15/dic/96 Contacto con empresas fabricantes y proveedoras de coque metalurgico
-------------------------------------------------------------------------------------------------
15 al 30/dic/96 Preparacion y lanzamiento de Bases de Licitacion o Adjudicacion Publica
-------------------------------------------------------------------------------------------------
1 al 19/ene/96 Recepcion de ofertas de coque y muestras para pre-estudios de calidad
-------------------------------------------------------------------------------------------------
11 al 15/ene/97 Calificacion de propuestas
-------------------------------------------------------------------------------------------------
16 al 20/ene/97 Conocimiento y detalles de Compra con el proveedor seleccionado
-------------------------------------------------------------------------------------------------
21 al 30/ene/97 Recepcion de coque en el Callao
-------------------------------------------------------------------------------------------------
1 al 28/feb/97 Despacho de coque a La Oroya
-------------------------------------------------------------------------------------------------
1ro.marzo/97 Operacion de Pta. de Coque con ciclos > 24 horas/horno y mitigacion de
gases fugitivos al medio ambiente.
-------------------------------------------------------------------------------------------------
</TABLE>
3. RESULTADO DE LA MITIGACION
3.1. Se prevee la descontaminacion ambiental conforme se grafica en el
siguiente diagrama:
[GRAPHIC OMITTED]
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 174.
- --------------------------------------------------------------------------------
Para lograr este resultado se estima que habra un costo adicional
anual de US $ 670 000 aproximadamente, lo que estaria justificado
desde el punto de vista ecologico y desarrollo sustentable. La
evacuacion de los gases fugitivos sera disminuido al minimo (80
m^3/d) puesto que se estara trabajando los hornos de coquificacion
con ciclos mayores a los actuales, permitiendo el procesamiento
completo de carbon a coque. Por lo tanto, los gases fugitivos que
actualmente se descargan al ambiente se captaran y lavaran,
reciclando a los quemadores de los hornos para quemarlos con el aire
en los ductos de llama, combustion, a fin de mantener los pisos de
los hornos con temperaturas de 1 350 (degrees)C promedio.
TABLA Nro. 6
<TABLE>
<CAPTION>
-----------------------------------------
Evaluacion del Im- Resultado de la
pacto actual Mitigacion
(922 m^3/descarga) (4 m^3/descarga)
-----------------------------------------------------------------------------------
<S> <C> <C>
EMISION DE GASES DESTILADOS AL MEDIO 23 800 80
AMBIENTE
(metros cubicos por dia)
-----------------------------------------------------------------------------------
</TABLE>
3.2 Emision de Particulas
Con la evacuacion de gases de 80 m^3/d (4m^3/descarga), se asegura
que la Emision de Particulas al medio ambiente sea menor del nivel
maximo permisible (100 mg/m^3), requerido por el Ministerio de
Energia y Minas de acuerdo a la Resolucion Ministerial Nro.
315-96-EM/VMM.
Ademas, las emisiones de As y Pb en estos gases son practicamente
nulas, adecuandose a los articulos 4to. y 5to. de la mencionada
Resolucion.
3.3 Calidad del Aire
Las concentraciones de Pb: 0,018 micrograma/m^3 y As 0,012
micrograma/m^3 en las nuevas emisiones al medio ambiente, estaran
muy por debajo de los NMP que norma la calidad de aire (anexo 3) de
la Resolucion Ministerial 315-96.-EM/VMM.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 175.
- --------------------------------------------------------------------------------
5.4.3 PROYECTO No 3
USO DE OXIGENO GASEOSO EN LA PLANTA DE RESIDOUS ANODICOS
1. OBJETIVO:
Los objectivos principales del proyecto son, reduccion del consumo de
petroleo residual No 6 en la Planta de Residous Anodicos mediante el uso
de aire enriquecido con oxigeno para la combustion y eliminacion de los
gases nitrosos generados por el nitrato de sodio, reactivo oxidante usado
en la ultima etapa del proceso de copelacion
2. EVALUACION DEL IMPACTO AMBIENTAL:
La planta de Residous Anodicos, trata los lodos anodicos de las Refinerias
de Cobre y Plomo que constituyen la materia prima para la obstencion de
dore ,bismuto ,selenio y telurio. Estos lodos anodicos son procesados por
las etapas: fusion, conversion y copelacion para obtener dore.
En el proceso de copelacion, que se realiza en batch y con una duracion
aproximada de 7 dias, se tiene una ultima etapa que es la de "lavado"
de dore con nitrato de sodio , esta etapa dura 24 horas y es donde se
generan los gases nitrosos contaminantes del medio ambiente. (Diagrama
No 1).
El consumo promedio de nitrato de sodio es de 160 - 180 t/ano, las
posibles reacciones a realizarse son:
1. NaNO(3) + (delta) -> Na(2)O + NO(2) + 1/2 O(2)
Na(2)CO(3) + (delta) -> Na(2)O + CO(2)
<TABLE>
<S> <C> <C>
2. (Se-Ag-Au-Cu-Te)(x)/Mata + 1/2 O(2) + xNa(2)CO(3) + xNaNO(3)-> xCO(2) + xNO(2) + Na(2)TeO(3)
+ Na(2)SeO(3) + TeO(2)CuO(2)
+ (Ag-Au/Dore)
</TABLE>
En las reacciones anteriores el oxidante es el oxigeno liberado al
reducirse el nitrato de sodio a NO(2), el carbonato permite una accion
mas prolongada de este oxigeno.
3. ALTERNATIVAS PARA LA MITIGACION:
3.1 Uso de oxigeno gaseoso en el Proceso de Copelacion:
El proceso consiste en reemplazar el uso de nitrato de sodio por
oxigeno gaseoso en el proceso de copelacion con lo que se estaria
eliminando la generacion de gases nitrosos que contaminan el medio
ambiente.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 176.
- --------------------------------------------------------------------------------
4. DESCRIPCION DEL PROCESO:
El proceso contempla reemplazar el nitrato de sodio por la inyeccion de
oxigeno gaseoso al seno del bano metalico a traves de una lanza y/o
quemador especial, simulando a la Tecnologia Ausmelt.
o Resultados de la mitigacion:
Eliminado el uso de nitrato de sodio en la ultima etapa del proceso de
copelacion, no existiran las emisiones de gases nitroses al ambiente.
5. MONTO DE LA INVERSION
El costo estimado para la ejecucion de este proyecto es de US$ 391 000.
6. CRONOGRAMA
Actualmente el proyecto se encuentra en ejecucion, estando por concluirse
la primers etapa, es decir la de uso de oxigena en la combustion de
petroleo residual No 6. La segunda etapa que comprende el empleo de
oxigeno en el proceso de copelacion, deberia quedar concluida el proximo
ano.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 177.
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 178.
- --------------------------------------------------------------------------------
5.4.4 PROYECTO No 4
AREA AFECTADA POR LOS HUMOS
1. OBJECTIVO:
Delimitar y rehabilitar el area afectada por los humos, considerando la
flora, fauna, suelos, agua, etc., existentes en la zona. De igual manera,
establecer puntos de control sobre la calidad de aire, suelos, que permita
tomar acciones correctivas.
La rehabilitacion del Area afectada contempla 4 etapas:
o Cultivo de Cobertura
o Control de Carcavas por diques
o Cultivo y plantacion de terrazas
o Modificacion de taludes
1.1 Estudio del Area Afectada por los Humos.
(a) Diagnostico
Este ultimo periodo, el area afectada no ha tenido una vasta
recuperacion como el que se tuvo en el periodo 1941 - 1971.
(de 14 190 Ha. a 4 170 Ha.) registrandose de esta ultima fecha
a Enero de 1996, una extension aun afectada de 3 829 Ha.
La epoca de mayor recuperacion de suelos, corresponde al de la
implementacion de precipitadores electrostaticos y mejoras de
proceso, los cuales tuvieron una respuesta rapida, dentro de
los limites de su radio de accion. Las recuperaciones
posteriores a 1971, ya no han tenido efectos muy notorios, al
sobrepasar los limites senalados.
Desde luego, no se puede ignorar, que la presencia de
vegetales en el nucleo mismo del area afectada, va mostrando
una lenta recuperacion espontanea y mucho mas notoria en las
areas donde se han hecho trabajos de revgetacion y forestacion
dirigidas; todo ello, es un testimonio de que la recuperacion
va avanzando lentamente, pero, sin detenerse.
La recuperacion en el area de Huaynacancha vieja es notoria
respecto a 1971, ya que en aquella etapa no se podia apreciar
verdor alguno en la zona; hoy, se puede ver un panaroma mas
agradable, con manchones de vegetacion tupida, y otras areas
extensas, con recuperacion muy dispersa, que posiblemente
cubre una extension similar a la cubierte por los manchones.
Por otro lado, la presencia de aves y animales silvestres,
como los jilgueros, gorriones, zorzales, patos y huachuas y
manadas de vicunas, nos inducen a pensar, que los humos
evacuados, ya no fueron tan nocivos como lo fue en el pasado.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 179.
- --------------------------------------------------------------------------------
b) Situacion ambiental del ecosistema y recursos naturales del
area afectada
En el recorrido de campo y durante el trabajo de delimitacion
se aprovecho para observar in situ los danos ocasionados sobre
la cobertura original del suelo, la formacion de las carcavas,
la vegetacion que resistio a la accion toxico de los humos de
la fundicion, asi como la vegetacion recuperada en forma
espontanea y tambien para la recoleccion de muestras de
suelos, agua y observar la fauna existente.
c) Inventario y evaluacion de la cobertura vegetal en zona
afectada.
Esta operacion comprende la identificacion de las especies
existentes en el area afectada.
Las especies vegetales encontradas en la zona de estudio
comprende especies herbaceas, arbustivas y arboreas; entre las
primeras se encontro especies silvestres desarrollandose
espontaneamente y otras cultivadas, como la flores. Entre las
arbustivas tambien se encuentran especies silvestres y
cultivadas. Las especies arboreas en su totalidad son especies
sembradas, algunas propias de la altitud y clima de la zona de
estudio y otras que son importadas de otras zonas y adaptadas
al area de estudio.
Especies herbaceas silvestres: Achicoria, llanten, kikuyo,
mullaca, yanta, menta, amor seco, etc.
Especies Herbaceas cultivadas: Flores como la calendula,
clavel, mastuerzo, pensamiento, margarita, francesita, copa de
oro.
Especies arbustivas silvestres: Chilca.
Especies arbustivas cultivadas: Retama, retama americana,
agave(maguey).
Especies arboreas silvestres: Depredadas.
Especies arboreas cultivadas: Kolle (Buddeleya coriacea),
quinual (Polyle-pis racemosa), capuli (Prunus capolinus),
cipres (Cupressus Sp.).
En lo referente a PASTOS, Se determina las especies y las
asociaciones de pastos naturales, su composicion y talvez la
soportabilidad en las areas que muestran recuperacion. En la
zona en estudio, la recuperacion de este tipo de vegetacion es
aun incipiente, de modo que no tiene capacidad para el
pastoreo de ganado, a lo mas esta albergando tres tropillas de
vicunas, que por silvetres, pastan esporadicamente en el
lugar.
Se ha podido identificar especies como el Kikuyo, Festuca sp.,
que aun no muestran una recuperacion franca.
En cuanto a FORESTALES, Comprene la identificacion de especies
en bosque naturales, si aun existen, que correspondan al piso
ecologico en el se halla el area en estudio, comprendiendo
especies nativas e importadas.
En el area afectada no se ha encontrado ningun ejemplar que
este creciendo en froma espontanea.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 180.
- --------------------------------------------------------------------------------
Se han identificado arboles cultivados, que comprenden
especies nativas de la zona como el Kolle y el Quinual, que no
solamente desaparecieron por efecto de los humos de la
fundicion, sino tambien por la depredacion de que fueron
objeto por parte de la poblacion. Ademas de los anteriores hay
especies importados de otros lugares y que han sido adaptadas
a la zona, como el Cipres, Capuli, Quishuar, etc. que soportan
bien las condiciones ecologicas reinantes en la zona de
estudio. Existiendo en la actualidad bastante interes por
parte de las entidades ediles y de Centromin Peru S.A. por la
forestacion.
En lo concerniente a FAUNA, Comprende un inventario e
identification de las especies, debiendo considerarse la fauna
silvestre y la domestica.
Dentro de la primera hemos podido encontrar tres tropillas de
vicunas que apacentan y abrevan dentro del area de afectacion
grave.
Del mismo modo se ha observado la presencia de patos
silvestres y un ejemplar de huachua, que acuden a la pequena
laguna que se halla ubicada en la parte media del valle de
Huaynacancha. No se puede dejar de mencionar la prescencia de
especies de pajaros como zorzales y jilgueros.
Con fines de seguridad destaca la crianza de perros y con
fines de adorno y compania, la de los gatos, aparte de
animales silvestres como ratas y ratones. Todas las especies
animales mencionadas parecen no ser afectadas por los humos de
la Fundicion.
d) objetivo
El proyecto de delimitacion del area afectada, considera
ademas de determinar la extension aun danada, realizar
estudios que permitan establecer el estado en que se
encuentra, en lo que se refiere a flora, fauna, suelos, agua
atc. asi como establecer puntos de control de la calidad del
aire y calidad de la tierra, que suministraran informacion
valiosa que permitira plantear las acciones a tomar para la
rehabilitacion del area en estudio, asi como rehabilitar las
zonas que se presten a este fin.
e) Alternativas de Solucion
Si la rehabilitacion se hace por medio de cultivos, solo se
puede tener efecto con el incremento de la materia organica;
pero, logrado esto, se produciran los demas efectos quimicos y
fisicos.
Ademas es necesario usar diversas tecnicas que impidan seguir
con el deterioro de los terrenos y por el contrario ayudar al
proceso de recuperacion espontanea observada en la zona de
Huaynacancha, por medio de la construccion de diques,
modificacion de carcavas y construccion de terrazas.
Hay extensas areas, casi llanuras, en algunas de las cuales se
pueden hacer trabajos con miras a establecer cobertura
vegetal, experimentalmente, y de repente ya en forma
definitiva. Hay otras areas donde se puede proceder a roturar,
a modo de facilitar la retencion y/o obsorcion de las aguas
pluviales, ademas de adecuar el suelo para el albergue o
anclaje de las semillas producidas por las plantas adultas
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 181.
- --------------------------------------------------------------------------------
de los alrededores, que son dispersadas por el viento. Esto
ultimo, basado en lo observado en diferentes zonas donde hubo
movimiento de tierras y su consecuente cobertura vegetal
espontanea. Tambien se debe proceder a arborizar, no solo los
taludes y fondo de las carcavas, sino tambien las suaves
laderas que abundan en la zona de Huaynacancha; para ello, se
deberan utilizar plantones de doble repique, que son mas
desarrollados y fuertes, que garantizan una segura
supervivencia.
Es posible evitar que continuen formandose nuevas carcavas y
crezcan las existentes por medio de trabajos adecuados ya
descritos en parrafos anteriores, poblando la cuenca de las
carcavas grandes con vegetacion herbacea, arbustiva y arborea;
sean estas, especies nativas y/o importadas, sean utiles o no,
el objeto es cubrir las areas desnudas y evitar continue la
erosion.
En las laderas existentes frente a la Fundicion es posible
recuperar su cobertura vegetal por cultivos o por plantacion
de especies arboreas, ya que el analisis de su suelo es
favorable en su caracterizacion y en su composicion.
Todo lo indicado requerira de tiempo e inversion, ver Tabla No
5.1, "Cronograma de Inversiones del proyecto de recuperacion
del Area Afectada por los Humos".
f) Analisis tecnico-economico de viabilidad Elaboracion del plan
de recuperacion
El plan estara destinado a recuperar las areas que presentan
posibilidades de logro, que estan dadas por las
caracteristicas de suelo, morfologia de la superficie y tal
vez en algunos casos por las posibilidad de riego, en base a
las fuentes de agua ubicadas en area de estudio.
La altitud y el clima, asociados a la pobreza del suelo del
area por recuperar, condicionan un medio bastante agresivo
para el desarrollo de la flora, limitando la diversidad de
epecies, que son numerosas en otras areas de igual piso
ecologico, pero, de mejores suelo.
Posiblemente las especies arbustivas asi como las herbaceas,
sean estas nativas o adaptadas, las que mejores resultados den
en el plan de recuperacion de la cobertura vegetal, dirigida a
eliminar o morigerar la erosion que sufren actualmente los
terrenos del area en estudio, por accion de las aguas
pluviales y el viento, que actuan directamente sobre el suelo
denudado, mejorando al mismo tiempo el medio ambiente.
Las condiciones climaticas y de suelos anotados no son aptas
para el establecimiento de bosques maderables, pero si, para
el establecimiento de bosques en bloques a base de especies
arboreas nativas como el kolle, quinual y de especies
importadas como el capuli, cipres, quishuar, que han dado
muestras de una buena adaptacion al medio.
Por lo observado en nuestro recorrido de campo, a nuestro
parecer, la zona que forma el valle de Huaynacancha, donde se
ubico el pueblo del mismo nombre, es el area donde se pueden
hacer trabajos conduncentes a su recuperacion, en favor de
esta idea se puede mencionar su pendiente moderada, la
ausencia de terrenos roco-
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 182.
- --------------------------------------------------------------------------------
sos, el sub suelo no muy duro y la posibilidad de mecanizar
tanto la roturacion del suelo de la llanura, como la
construccion de terrazas, con el fin de establecer cultivos
que amplien o mejoren la cobertura vegetal espontanea que se
observa en la parte baja de esta zona; asi como tambien hacer
trabajos de recuperacion de cobertura con especies arboreas
propias de la region asi como con especies adaptadas. Del
mismo modo, pensamos que es necesario y factible de hacerlo,
el evitar de que las carcavas existentes se profundicen y se
amplien mas, lo cual se alcanzara con trabajos adecuados que
comprenden el relleno o colmataje de las carcavas en sus
cabeceras. Ademas, en las partes mas amplias de las carcavas
se puede modificar el perfil de los taludes para evitar mayor
deslizamiento de tierra de los bordes y facilitar la cobertura
de los mismos con vegetacion herbacea, arbustiva y arborea.
Complementando estas acciones tambien se puede en el uso de
terrazas o terraplenes para cortar la velocidad de las aguas
de escorrentia que son las que dan origen a la erosion de los
suelos y consecuente formacion de los carcavas.
Se manifesto, que son varias las acciones a las que se puede
echar mano a fin de mejorar y/o ayudar a la recuperacion de la
cobertura vegetal en el area de estudio, entre los que
mencionamos:
Rehabilitacion y Conservacion de Suelos por Cultivos.
Los suelos involucrados dentro del area de danos graves
producidos por los humos de la fundicion, al estar denudados
desde hace anos, han sufrido la accion erosiva y lavado de los
elementos minerales por accion de las lluvias estacionales que
se precipitan todos los anos, esto obliga a pensar que la
rehabilitacion de los terrenos afectados va a ser un proceso
lento y costosos (remitirse a la Tabla No. 5.1A y los planos
Nos. 1-580-00-300 y 1-559-01-2008).
Si la rehabilitacion se hace por medio de cultivos, solo puede
tener efecto con el incremento de la materia organica; pero,
logrado esto, se produciran los demas efectos quimicos y
fisicos.
El contenido mineral del suelo no aumentara con el cultivo,
pero puede conservarse lo que aun existe, al impedir la
cobertura vegetal, que siga el desgaste por lavado y erosion
del suelo.
Es pues preciso recurrir a una cobertura permanente del suelo
o pradera para obtener una verdadera rehabilitacion del suelo.
El cesped permanente aumentara la materia organica del suelo
particularmente a causa del desarrollo de su sistema
radicular.
La hierba en buen estado vegetativo aumenta sus raices todos
los anos y la descomposicion de las raices viejas aumenta la
materia organica, la mayor parte de la cual se conserva en el
suelo que se deja de cultivar nuevamente quedando como una
pradera.
En lo que respecta a la reposicion de los elementos minerales
eliminados del suelo por lavado y erosion, estos no pueden ser
restaurados por intermedio de las plantas y cultivos, todos
los minerales que tienen, provienen del suelo. La cal, fosforo
o
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 183.
- --------------------------------------------------------------------------------
potasio adicional que la tierra requiere son elementos que
habran de ser suministrados por abonamiento con fertilizantes
comerciales.
Sin embargo, las plantas al restaurar la materia organica,
restauran con ella el nitrogeno del suelo.
Las leguminosas son las plantas que mejor acumulan el
nitrogeno, gran parte del cual extraen del aire.
En el caso del area en estudio, la cobertura vegetal que se
podria utilizar para la rehabilitacion de los terrenos
factibles de recuperar, sobre todo en la parte baja del valle
de Huaynacancha, seria mediante el cultivo asociado de
gramineas y leguminosas. las cuales deberan ser sembradas al
valeo, ya que asi contribuyen mejor a detener la erosion.
Las especies vegetales utilizadas con bastante exito en zonas
de altitud y candiciones climaticas similares a la zona en
estudio son el rye grass y el trebol blanco, especies que
ofrecen un macollaje amplio y denso dando una cobertura muy
buena al suelo.
Para la siembra del cultivo asaciado antes indicado,
previamente se deberia proceder al encalado y fertilizacion
con estiercol, para asi mejorar las condiciones del suelo que
habra de albergar vegetacion permanente, luega de muchos anos
de lavado y erosion a que estuva sometido.
Es de advertir que el encalada es una operacion onerosa por el
volumen de material por anadir y la preparacion del mismo; la
cobertura vegetal, en ultimo termino, se encargara de
solucionar esta deficiencia.
No esta demas indicar, que el establecimiento de la cobertura
vegetal con miras a la rehabilitacion, utilizando cultivos,
permite tambien a las plantas conservar el suelo hasta el
grado en que su cultivo es compatible con una minima remosion
durante las operaciones de labranza y en proporcion a su
densidad y estabilidad como cobertura vegetal. Se ha observada
que en algunas areas, ubicadas dentro de la zona de afectacion
grave, en las cuales se hizo movimiento de tierra, el suela
removido ha sido casi enteramente cubierto por vegetacion
herbacea, principalmente gramineas; creemos que esta
recuperacion se debe a que con el movimiento del sueloa,
ademas de propiciar una mejor retencion y/o absorcion de las
aguas pluviales, se ha acondicionado el terreno para el
anclaje de las semillas y la propagacion de estalones,
facilitando su germinacion y brotes, respectivamente.
Por lo expuesto, ademas de las areas en las que se siembren
especies para cobertura, en otras, simplemente se procederia a
roturar un tiempo prudencial antes de la estacion de lluvias,
para propiciar una recuperacion como la observada en muchas
zonas del area afectada.
g) Control de carcavas
De todoas los dones de ia naturaleza, ninguno es mas
indispensable para el hombre que la tierra. Esta mezcla
campleja de materia animal, vegetal y minerales, que cu-
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 184.
- --------------------------------------------------------------------------------
bre el nuceo rocoso del globo terrestre a profundidades
diversas, es una de los cuatro elementos primarios
indispensables para la vida.
Junta can la luz solar, con el aire y con el agua, la tierra
nutre la vida vegetal y sustenta a todoas los seres vivientes.
En el caso del area afectada por la accion de los humos de la
fundicion, desaparecio la vegetacion nativa, que fungia de
cobertura de los suelos, acelerandose el grado de remosion de
los suelos, trayendo como consecuencia la esterilidad de los
terrenos y luego la formacion de carcavas que cruzan el area
del valle de Huaynacancha y los terrenos ubicados frente a la
fundicion.
Como las carcavas tienden a drenar la humedad del suelo
adyacente, las campos se secan can mucha mas rapidez cerca de
ellas, y esta resulta en una disminucion del avance de la
recuperacion de la cobertura vegetal.
A medida que las carcavas aumentaron de tamano se ramificaron
sobre el campo, y si no se pone coto a su desarrolla, se
tendra que pensar en abandonar todo prayecto de recuperacion.
Ya que a medida que las carcavas se extiendan hacia atras y
crucen depresiones naturales, se produciran caidas laterales
desarrollandose otras carcavas; este praceso de ramificacion
puede continuar hasta que una red de carcavas terminen por
cubrir todo el valle y haga imposible su control, por los
trabajos que hay que hacer y los costos que ellos representan.
Por lo expuesto, es necesario echar mano a las diversas
tecnicas que impidan seguir con el deterioro de los terrenos y
por el contrario ayudar al proceso de recuperacion espantanea
observada en la zona de Huaynacancha.
h) Construccion de diques
A menos que la superficie se proteja pronto con vegetacion o
que los canaliculos, inicia de las carcavas, se hagan
desaparecer por medio de cultivo u otras acciones, estos
continuaran agrandandose con cada lluvia sucesiva. Los
canaliculos mas profundos pueden aumentar en tamano y formar
carcavas tan grandes que ya no es posible hacerlas desaparecer
por los metodos normales de labranza, como ocurre con las
carcavas que se ven frente a la fundicion y las existentes en
la zona de Huaynacancha. Habra entonces que gastar en mano de
obra para rellenar a canstruir diques en el curso de las
canaliculos.
La construccion de diques en forma escalanada, donde las
carcavas aun se manifiestan como pequenos surcos, permitiran
su relleno por colmataje de las aguas que corren por los
canaliculos, fuertemente cargadas de materias solidas, que
pueden depositarse tras el dique y levantar de esta manera el
lecho de la carcavas. Este relleno por deposicion a colmataje
es facilitado, ademas del dique, que puede hacerse con
montones bien campactos de piedras y ramas a traves del fondo
de la carcava, por la vegetacion, si hubiese, y otros
obsticulos que ayuden a regular la velocidad del agua. Ademas
del uso de diques de piedras se puede hacer tambien con mallas
y ramas; este tipo de dique se puede hacer en carcavas mas
amplias y menos profundas.
<PAGE>
PAMA COMPLEJO METALURGICO - LAOROYA Capitulo V Pag 185
- --------------------------------------------------------------------------------
i) Modificacion de carcavas
Toda carcava, no importa su tamano ni sus condiciones, volvera por lo general a
cubrirse de vegetacion con tal que tenga proteccion adecuada y este localizada
en una region donde pueda crecer vegetacion.
En terrenos afectados, como los observados en el area de graves danos hay varias
causas que retrasan la desaparicion de toda huella de erosion.
Una de estas causas es el declive de las paredes de las carcavas, mientras no se
derrumben, naturalmente, o se modifique las paredes escarpadas por trabajo, y
formen una pendiente mas moderada, les es dificil arraigar a las plantas. Por
ello, modificar el perfil de los taludes en los tramos en que las carcavas son
amplias, permitiran trabajos de recuperacion de la cobertura vegetal que
evitara, continue la erosion por accion de las aguas pluviales.
En los taludes modificados y preparados para facilitar el anclaje de las
semillas llevadas por el viento y para el cultivo y plantacion de especies
arboreas, primero apareceran las malezas.
Al principio creceran muy lentamente, como hemos podido observar en nuestro
recorrido de campo, porque le sera dificil arraigar. Mas tarde en cuanto las
primeras plantas hayan mejorado algo el suelo apareceran otras. Tal vez este
proceso natural tarde muchos anos en la zona, por la altitud y el clima
existente, por si solo muy extremo, pero sera mas rapido donde la humedad sea
mayor. Con el tiempo, este proceso natural llegara a cubrir de nuevo la carcava
con la vegetacion predominante en la zona, sean arbustos o hierbas.
En lo que respecta exclusivamente a detener la erosion en la zona afectada,
importa poco usar arboles, arbustos o pastos. Cualquier vegetacion de las clases
mencionadas proveera buena proteccion para el suelo, si se consigue establecerla
satisfactoriamente.
En la zona de estudio, la vegetacion espontanea no es suficiente para
contrarrestar la erosion existente, por lo que creemos es necesario recurrir a
medios y recursos para establecer la vegetacion artificialmente.
Al seleccionar arboles, arbustos o pastos para sembrar en el talud de las
carcavas, se dara preferencia a las plantas que sean naturales de la region y
propias de terrenos similares. Estas estan ya aclimatadas y por consiguiente
tienen mayor probabilidad de subsistir bajo las serias condiciones de
crecimiento en las carcavas y el clima reinante en el ambiente. En caso de que
no fueran satisfactorias las plantas utiles naturales de la region, se escogeran
entonces las especies traidas de otras regiones.
La plantacion de las especies nativas como el Kolle, quinual etc. se debe
extender a otras areas, plantando en bloques y utilizando plantas de doble
repique, de manera que estas ultimas ya tengan una estructura casi lenosa, que
asegura su supervivencia y empiece su accion edafica en el suelo de su
alrededor.
<PAGE>
PAMA COMPLEJO METALURGICO - LAOROYA Capitulo V Pag 186
- --------------------------------------------------------------------------------
Esta accion, en el valle de Huaynacancha debe tener exito, toda vez que en forma
espontanea y en taludes de fuerte pendiente existe vegetacion mas o menos
abundante y bien desarrollada lo que podria atribuirse a la humedad de los
taludes y al microclima que se propicia en la hendidura.
j) Construccion de terrazas
Uno de los mejores metodos que se conocen para detener la erosion en las
pendientes es el uso de terrazas. Estas son muy eficaces para corregir las
carcavas pequenas, que no sean tan hondas que impidan el trabajo can maquinaria.
Tal vez la construccion de terrazas sea dificil y algo costosa en una zona tan
afectada por la erosion, sin embargo, es la medida correctiva mas eficaz para
pendientes como las existentes en la zona de estudio, especialmente por existir
muchas carcavas paralelas en pendientes algo dificiles de cultivar.
Las terrazas, consisten en una serie de fajas ilanas o casi llanas, construidas
a traves de las pendientes en terrenos escarpados; constituye uno de los medios
artificiales mas antiguos para detener la erosion de los suelos, utilizado por
muchas centurias en el Peru Antiguo, por la escasez de terrenos de cultivo en
las zonas o pisos ecologicos de la sierra con clima favorable.
El proposito de las terrazas es recoger o interceptar el agua que corre ladera
abajo y retenerlo hasta que infiltre y parte sea absorbido por las plantas que
se cultivan en la plataforma.
Al construir las terrazas, el borde externo del plano de la terraza debe ser mas
alto, con declive hacia la base a fin del talud, el cual es casi vertical.
El agua correra a lo largo del banco a distintas velocidades dependiendo del
tipo del suelo, longitud de la terraza y desde luego la precipitacion pluvial y
la cobertura por el sembrio de especies vegetales de buen macollaje.
Sobre las terraplenes se cultivaran especies vegetales que sirvan de cobertura
al suelo.
Una combinacion muy recomendable para cubrir la plataforma con vegetacion, es el
cultivo asociado de ray grass y trebol blanco, ambas especies de frondoso
macollaje que ofrecen mayor y mejor cobertura del suelo; por lo general es
aconsejable usar mas de una especie en las combinaciones compatibles, ya que los
vastagos puros son generalmente vulnerables a influencias perjudiciales,
enfermedades y plagas.
Previo al sembrio en las plataformas, debera procederse a su encalado y
fertilizacion con estiercol de ganado , ello permitira una mejor retencion del
agua, mejor desarrollo del cultivo y una buena fructificacion, que al final del
periodo vegetativo, permite retener las valiosas semillas que repoblaran el
suelo cultivado de la terraza.
Al borde de las terrazas a plataformas se pueden plantar arboles para que por
enraizamiento no permita el arrastre de los bordes por la lluvia, sirviendo
tambien coma corta viento, mejorando el microclima de la terraza cultivada, ya
que durante el estiaje impera un clima extremadamente frio.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 187
- --------------------------------------------------------------------------------
TABLA No 5.1
CRONOGRAMA DE INVERSIONES DEL PROYECTO RECUPERACION
DEL AREA AFECTADA POR LOS HUMOS - en U.S.$
<TABLE>
<CAPTION>
ACTIDAD A DESARROLLARSE 1997 1998 1999 2000 TOTAL
<S> <C> <C> <C> <C> <C>
1. CULTIVO DE COBERTURA
- - Roturado 10 832 14 442 16 248 18 053 59 574
- - Mano de obra 10 638 10 638 10 638 10 639 42 553
- - Semilla 66 000 66 000 66 000 66 000 264 000
- - Abonamiento 116 054 154 739 174 082 193 423 638 298
- - Movilidad 425 425 425 427 1 702
2. CONTROL DE CARCAVAS POR DIQUES. 1 006 128
2.1 DIQUE DE PIEDRAS SECA
- - Acarreo de piedras. 170 0 0 0 170
- - Acomodar piedras. 426 0 0 0 426
- - Movilidad 477 0 0 0 477
2.2 DIQUE DE MALLA 0 0 0 0 1 072
- - Hacer huecos 142 0 0 0 142
- - Madera 638 0 0 0 638
- - Malla 246 0 0 0 246
- - Acarreo de materiales 85 0 0 0 85
- - Plantacion 851 0 0 0 851
- - Movilidad 340 0 0 0 340
3. CULTIVO Y PLANTACION DE TERRAZAS 2 302
- - Motoniveladora 12 325 0 0 0 12 325
- - Rotulado 7 660 7 681 0 0 15 341
- - Abono 2 849 1 425 0 0 4 273
- - Abonamiento 22 860 11 430 0 0 34 291
- - Preparacion de huecos 11 395 11 397 0 0 22 792
- - Acarreo 1 418 2 128 0 0 3 546
- - Plantas 4 272 4 275 0 0 8 547
- - Semillas 6 798 6 798 0 0 13 596
- - Sembrio ( Mano de obra) 1 095 1 097 0 0 2 192
- - Plantacion ( Mana de obra) 7 122 7 123 0 0 14 245
- - Movilidad 8 063 16 125 1 344 0 25 532
4. MODIFICACION DE TALUDES
- - Preparacion de suelos 0 15 319 20 426 0 35 745
- - Preparacion de huecos 0 0 5 576 0 5 576
- - Abono 696 350 0 0 1 046
- - Acarreo 0 170 0 0 170
- - Plantacion 0 1 494 1 494 498 3 485
- - Abonamiento 0 3 447 3 447 1 149 8 043
- - Sembrio 0 23 23 8 54
- - Semilla 1 109 1 109 1 109 0 3 326
- - Plantas 896 299 896 0 2 091
- - Movilidad 1 589 3 178 3 178 533 8 477
68 012
5. COSTOS ADMINISTRATIVOS Y OTROS 59 353 101 748 101 748 101 748 364 597
TOTAL 356 824 442 858 406 632 392 477 1 598 790
IMPREVISTOS 89 544 111 133 102 043 98 491 401 210
TOTAL + IMPREVISTOS: 446 367 553 991 508 674 490 967 2 000 000
CRONOG.XLS- LZ/96
</TABLE>
<PAGE>
[GRAPHIC OMITTED]
<PAGE>
PAMA COMPLEJO METALURGICO - LAOROYA Capitulo V Pag 188
- --------------------------------------------------------------------------------
5.4.5 PROYECTO No5
PLANTA DE TRATAMIENTO DE AGUA MADRE DE LA REFINERIA
DE COBRE
1. OBJETIVO:
El objetivo principal del proyecto es tratar las soluciones acido-ferrosas que
se descargan al rio Yauli y obtener una solucion neutralizada apta para
descartar previa recuperacion del niquel, y purificar la solucion raff para
obtener un efluente final con contenidos e impurezas por debajo de los niveles
maximos permisibles (R.M. No. 011-96-EM/VMM).
2. EVALUACION DEL IMPACTO AMBIENTAL:
Para mantener el nivel de impurezas en el electrolito de la Refineria de Cobre,
diariamente se extraen del circuito 30 a 40 mil litros, que se transfieren a los
neutralizadores, en los cuales por calentamiento con vapor, adicion de chatarra
de cobre evaporacion/oxidacion con aire se obtiene una solucion saturada apta
para la produccion de sulfato de cobre por cristalizacion al vacio.
Los cristales de CuSO(4) se separan por centrifugacion y el agua madre obtenida
es parcialmente recirculada a los neutralizadores. El exceso de agua madre se
transfiere a un tanque de precipitacion donde una vez calentada con vapor se le
adiciona chatarra de fierro para recuperar el cobre en forma de cemento que
retorna a la fundicion. La solucion acidaferrosa libre de cobre (11,000 l/dia),
es finalmente descargada al Rio Yauli. (Diag. No 1).
Los analisis promedio en g/l del agua madre y efluentes que se vierten al rio
Yauli, muestran las siguientes caracteristicas:
Agua madre:
================================================
H(2)SO(4) Cu Fe As Sb Bi Ni
------------------------------------------------
130 54 2,5 3,5 ,36 0,12 1,7
================================================
Efluente:
================================================
pH Cu Fe As Sb Bi Ni
------------------------------------------------
2 12 0,14 3,5 0,15 0,03 0,17
================================================
3. ALTERNATIVAS PARA LA MITIGACION:
3.1 Proceso de Oxidacion - Neutralizacion
El proceso consiste en neutralizar el agua madre con chatarra y oxidos de cobre
en un medio de agitacion - oxidacion para propiciar la precipitacion de
arseniatos ferricos y otras impurezas y obtener una solucion purificada para ser
retornada al circuito.
Esta alternativa fue desechada por la imposibilidad de controlar el contenido de
niquel en la solucion de retorno a la casa tanques, elevada recirculacion de
cobre y dificultad de filtracion de los precipitados (arseniatos de Fierro).
<PAGE>
PAMA COMPLEJO METALURGICO - LAOROYA Capitulo V Pag 189
- --------------------------------------------------------------------------------
3.2 Proceso de electrowining par etapas
En 1984 se desarrollaron pruebas de EW con corriente continua directa con la
finalidad de obtener catodos de cobre impuros a partir de la solucion de agua
madre. No se continuo can las pruebas par la seria limitacion que significo la
presencia y emanacion de gas toxico de arsenamina (H(3)As).
3.3 Proceso de predilucion - SX/EW - neutralizacion
Desarrallado por el Dpto. de Investigaciones Metalurgicas, que consiste en el
tratamiento del agua madre por: predilucion, extraccion por-
solventes-electrowining y neutralizacion para obtener un efluente con contenido
de impurezas par debajo de las niveles maximos permisibles y recuperar cobre en
forma de catodos. Los resultados favorables obtenidos en las pruebas a nivel
piloto confirmaron su viabilidad para el proyecto con fines de mitigacion.
4. DESCRIPCION DEL PROCESO (DIAGRAMA No. 2)
o El proyecto contempla reemplazar el metodo actual de cementacion de
cobre con virutas de fierro por un proceso de tratamiento
constituido por tres etapas bien definidas: predilucion, SX-EW y
neutralizacion. Los parametros mas importantes de cada etapa, son:
Pre-dilucion:
pH: 1,23
Cu: 3,2 g/L
SX-EW:
Reactivo : ACORGA M5615
pH : 1,23
Cu : 3,20 g/l
Neutralizacion:
Neutralizacion 1:
pH : 3,00
Cu : 0,01 mg/l
Neutralizacion 2:
pH : 7,00
Cu : 0,0l mg/l
o Pruebas de Pilotaje: (Diagrama No. 3)
Los resultados de las pruebas de pilotaje pueden apreciarse en el
diagrama indicado.
Esta alternativa fue seleccionada par presentar los mejores
resultados a nivel de planta piloto.
<PAGE>
PAMA COMPLEJO METALURGICO - LAOROYA Capitulo V Pag 190
- --------------------------------------------------------------------------------
o Resultados de la mitigacion:
El efluente final presenta niveles de impurezas por debajo de los
niveles maximos permisibles, exigidos par el M.E.M., como se puede
apreciar en el siguiente cuadro:
===========================================================================
Elemento Cu Fe As Sb Bi Ni pH
---------------------------------------------------------------------------
Efluente final 0,01 0,01 0,01 0,9 0,9 103 7,0
(mgr/l)
---------------------------------------------------------------------------
N.M.P.(mg/l) 1,00 2,00 1,00 - - - 9,0
===========================================================================
5. MONTO DE LA INVERSION:
El costo estimado para la ejecucion de este proyecto es de US$ 500,000. El
resumen del estimado de costas preparado por INEPROSA, es el siguiente:
a). Preparacion del acuoso: US$
o Cuentas generales 4 600
o Trabajos preliminares, cimientos, estructuras, 17 900
encerramientos y acabados
o Instalaciones mecanicas electricas y de control 15 000
o Equipos 57 600
o Sub-Total (1) 95 100
b). Planta SX - EW:
o Cuentas generales 6 500
o Trabajos preliminares, cimientos, estructuras 2 200
o Instalaciones rnecanicas y electricas 26 100
o Equipos 165 600
o Sub-Total (2) 200 400
c). Planta de Neutralizacion:
o Cuentas generales 4 700
o Trabajos preliminares, cimientos. etc. 54 400
o Instalaciones mecanicas. electricas y de control 21 000
o Equipos 79 000
o SUB-TOTAL(3) 159 100
SUB-TOTAL (1+2+3) 454 600
IMPREVISTOS (+/-10%) 45 400
TOTAL 500 000
6. CRONOGRAMA:
Se estima un periodo de 5 meses para su implementacion, la misma que
podria quedar concluida en el primer semestre del proximo ano.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 191.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMPLEJO METALURGICO LA OROYA
DIAGRAMA No 1 :
SECCION SULFATO DE COBRE Y DECOPERIZACION DEL AGUA MADRE POR
CEMENTACION - REFINERIA DE COBRE
(PROCESO : BLEED OFF - SITUACION ACTUAL)
[FLOW CHART OMITTED]
- --------------------------------------------------------------------------------
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 192.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMPLEJO METALURGICO LA OROYA
DIAGRAMA No 2 :
PROYECTO: PLANTA DE TRATAMIENTO DE AGUA MADRE DE LA REFINERIA DE COBRE
[FLOW CHART OMITTED]
- --------------------------------------------------------------------------------
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 193.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMPLEJO METALURGICO LA OROYA
DIAGRAMA No 3
PERFORMANCE DE LA PLANTA PILOTO PARA EL TRATAMIENTO DEL AGUA MADRE DE LA
REFINERIA DE Cu DE HUAYMANTA
[FLOW CHART OMITTED]
- --------------------------------------------------------------------------------
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 194.
- --------------------------------------------------------------------------------
5.4.6 PROYECTO No 6
SISTEMA DE RECIRCULACION DEL AGUA DE REFRIGERACION DE FUNDICION
1. INTRODUCCION:
Actualmente el agua que se usa para la refrigeracion de los procesos
industriales de la Fundicion de La Oroya, es vertida casi integramente al
rio Mantaro, a traves de canales abiertos o tuberias que recorren las
instalaciones industriales de la Fundicion.
Estas aguas de refrigeracion se mezclan en mucho casos, con efluentes
domesticos o industriales, incrementandose el volumen de aguas
contaminadas. En otros casos las aguas de refrigeracion se contaminan por
el solo hecho de pasar por las areas industriales, debido a la presencia
de polvo, solidos y gases.
Para resolver este problema se ha planteado dos alternativas:
Alternativa 1: Consiste en separar las aguas de refrigeracion de los
efluentes industriales y cloacales, y construir una red independiente y
cerrada para descargarlo al rio Mantaro.
Alternativa 2: Mas viable, consiste en construir una red para recircular a
la Fundicion estas aguas por medio de las bombas del Mantaro.
2. OBJETIVO:
o Proteger las aguas de refrigeracion, de las fuentes de contaminacion
que existen dentro del ambiente de la Fundicion.
o Recuperar aproximadamente 2253 gpm, de agua de buena calidad, a
traves de la recirculacion al sistema de suministro, por medio de
las bombas del rio Mantaro.
o Mejorar la calidad del suministro de agua proveniente de las bombas
del Mantaro a la Fundicion, comparado con la calidad del agua del
rio. Esto permitira dar mayor vida util a los equipos de bombeo
actualmente instalados, sobre todo en epocas de venida.
o Garantizar el suministro de agua a la Fundicion en epocas de
estiaje.
3. DESCRIPCION DEL PROYECTO:
Para la recirculacion, el agua de refrigeracion y enfriamiento se llevara
desde los distintos puntos de descarga de los procesos, por medio de un
sistema hidraulico POR GRAVEDAD, a traves de tuberias de distintos
diametros, cuyo recorrido atravesara las zonas industriales de mayor
descarga, y seran conducidos por un emisor hasta las bombas del Mantaro.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 195.
- --------------------------------------------------------------------------------
Los principales contribuyentes son:
- --------------------------------------------------------------------------------
CONTRIBUYENTE CAUDAL (LPS)
- --------------------------------------------------------------------------------
Planta de Antimonio 0.5
Planta de Aglomeracion 25.0
Planta de Acido Sulfurico (*) 25.2
Tostacion de zinc FBR y TLR 38.8
Planta de Cernido y Molienda 8.0
Compresora de Separacion de Solidos 1.8
Bomba de Vacio Planta de Flotacion 20.0
Rebose poza de bombas Separacion de Solidos 1.3
Rectificadores silicon A 5.1
Rectificadores silicon B 0.6
Enfriador esponja de fierro Planta Zileret 2.6
Rectificadores silicon C 1.8
Planta de oxigeno 6.8
- --------------------------------------------------------------------------------
CAUDAL TOTAL 142 LPS (2253 GPM)
- --------------------------------------------------------------------------------
Es necesario indicar que estas aguas no requieren un sistema de
enfriamiento, dado que las caracteristicas de la red proyectada y el
sistema de distribucion existente permitiran que las aguas lleguen a
temperaturas normales. Lo que no sucederia si la recirculacion se hiciera
en cada una de las plantas, necesitando para ello sistemas sofisticados de
enfriamiento y de alto costo.
4. ESPECIFICACIONES TECNICAS
4.1 Tuberias
Las tuberias seran de PVC para las zonas de poco transito y de
fierro fundido para las zonas donde circulen vehiculos, cargadores
frontales, etc.
Las tuberias de PVC seran de clase 7.5, tipo rigido, cuya maxima
presion de trabajo es de 75 m. de agua, con resistencia a la
traccion de 400 a 500 Kg/cm(2).
La tuberia de fierro fundido sera del tipo fierro negro, con rosca
standard Americana tipo ISO-1, schedule 40, en tramos de 21 pies de
largo. Estas seran instaladas segun el siguiente metrado.
- --------------------------------------------------------------------------------
TUBERIA DE PVC
- --------------------------------------------------------------------------------
DIAMETRO (") 2" 4" 6" 8" 10"
LONGITUD (m) 53 249 133 206 526
- --------------------------------------------------------------------------------
TUBERIA DE FIERRO FUNDIDO
- --------------------------------------------------------------------------------
DIAMETRO (") 10" 8" 4" 2"
LONGITUD (m) 20 40 30 10
- --------------------------------------------------------------------------------
- ----------
(*) Para evitar que el acido sulfurico se mezcle con el agua de refrigeracion
en casos de fugas, se dispondra de un sistema automatico de control de
acidez, de tal forma que cuando se detecte la presencia de acido, estas
aguas se deriven al canal principal.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 196.
- --------------------------------------------------------------------------------
4.2 Uniones y Accesorios
Las uniones de accesorios T, codos, seran de tipo roscado y fierro
fundido a PVC segun sea el caso. En los tramos C a C', segun el
isometrico se instalara 20m de una tuberia de fierro fundido con
uniones universales de tipo roscado y el resto sera de PVC.
4.3 Zanjas
Son las proyectadas debajo del terreno natural para la instalacion
de las tuberias; como inicio del trabajo se hara el trazado y
replanteo general de la red proyectada, verificando que las tuberias
tengan las gradientes y profundidades especificadas en los planos.
La excavacion de las zanjas se iniciara teniendo en obra la tuberia
necesaria. El ancho de la zanja sera de 0.40 m. como minimo y 0.70
m. como maximo. El fondo sera nivelado segun la rasante proyectada,
incluyendo el espesor del tubo y de la campana.
Los excesos de la excavacion seran rellenados con hormigon de rio.
Se revisaran los tubos antes de colocarlos en las zanjas, rechazando
los que tengan defectos o rajaduras. Las campanas iran orientadas
aguas arriba.
4.4 Nivelacion
La nivelacion de los tubos se hara colocando puntos de nivel con
instrumento topografico. Para la union se cuidara que las
superficies del tubo y la campana esten limpias.
El relleno de las zanjas se efectuara despues de las pruebas
hidraulicas de la tuberia instalada, echando primero material
seleccionado, libre de piedras, raices, maleza, etc., apisonando
uniformemente los costados. Se continua con capas de 0.10 mts.,
evitando mover los tubos y hasta una altura minima de 0.30 mts.
sobre la clave del tubo, luego se terminara con material libre de
piedras.
Para las uniones de tramos de tuberia sin campana se usaran
obligatoriamente uniones de fabrica.
4.5 Estimado del costo (US$)
- --------------------------------------------------------------------------------
Item Descripcion Costo (U.S.$)
- --------------------------------------------------------------------------------
100 Trazos preliminares 5 500
400 Instalaciones mecanicas 32 092
SUB TOTAL 37 592
IMPREVISTOS 10% 3 758
TOTAL 41 350
- --------------------------------------------------------------------------------
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 197.
- --------------------------------------------------------------------------------
5.4.7 PROYECTO No 7
MANEJO Y DISPOSICION DE LAS SOLUCIONES ACIDAS DEL
PROCESO DE PARTICION - REFINERIA DE PLATA
1. OBJETIVO:
El objetivo principal del proyecto es, evitar el vertimiento de la
solucion con alta acidez (350 g/l de H(2)SO(4)) procedente del proceso de
particion de oro en la Refineria de Plata al rio Mantaro.
2. EVALUACION DEL IMIPACTO AMBIENTAL:
La Refineria de Plata trata el dore proveniente de la planta Residuos
Anodicos, para obtener plata fina y oro bullon. La particion (separacion)
de oro y plata se efectua utilizando H(2)SO(4) concentrado. Como efluente
de este proceso se tiene una solucion con alta acidez, que despues de una
cementacion con fierro es desechada al rio Mantaro.
El consumo mensual promedio de acido sulfurico de la Refineria de Plata es
de 17 t
3. ALTERNATIVAS PARA LA MITIGACION:
3.1 Reemplazo parcial del consumo de acido fresco en el Circuito de Zinc
por solucion con alta acidez de la Refineria de Plata.
El proyecto consiste en cementar las soluciones con alta acidez
procedentes del proceso de particion de oro y plata, con planchas de
zinc en reemplazo de la utilizacion de virutas de fierro, de esta
manera se obtiene una solucion con alto contenido de sulfato de zinc
y acido sulfurico, la misma que sera usada en el Circuito de Zinc en
reemplazo de acido fresco.
4. DESCRIPCION DEL PROCESO:
El proyecto contempla, la instalacion de una bomba y el tendido de
tuberias para llevar la solucion con alta acidez, de la Refineria de Plata
al Circuito de Zinc.
o Resultados de la mitigacion:
La solucion con alta acidez de la Refineria de Plata ,dejara de
vertirse al rio Mantaro y sera utilizada como reactivo en el
circuito de Zinc con lo que se eliminara dicho efluente.
5. MONTO DE LA INVERSION:
El costo estimado para la ejecucion de este proyecto es de US$5 000.
6. CRONOGRAMA:
El proyecto debe quedar concluido en el primer trimestre del proximo ano.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 199.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CLASIFICACION DE LOS EFLUENTES
- --------------------------------------------------------------------------------
Tipo de efluente Codigo
- --------------------------------------------------------------------------------
Aguas de proceso 115, 118, 119, 121, 123 124 126 131
Metalurgico 133, 134, 135, 136, 137 y R-1
- --------------------------------------------------------------------------------
Aguas de refrigeracion 102, 125, 127 y 128
- --------------------------------------------------------------------------------
Aguas servidas 101, 106, 107, 108, 109, 110, 111, 112,
114, 116, 117, 120, 122 129 130, 132
- --------------------------------------------------------------------------------
Efluentes eliminados 103, 104, 105, 113 y R-2
- --------------------------------------------------------------------------------
Efluente sin contaminantes R-3
- --------------------------------------------------------------------------------
De los 40 efluentes liquidos que se vierten a los rios Yauli y Mantaro,
siete(7) son los principales contribuyentes de contaminacion, segun se
indica en las tablas 4.1.2/3,3 A, 4 y 4A - Cap IV.
- --------------------------------------------------------------------------------
No Codigo del Efluente Descripcion
- --------------------------------------------------------------------------------
1 118 Granulacion de escorias de Fundicion de
Cobre y Plomo
- --------------------------------------------------------------------------------
2 119 Canal Principal No. 2 Fundicion de Cu - Pb
- --------------------------------------------------------------------------------
3 126 Planta Electrolitica de Zinc
- --------------------------------------------------------------------------------
4 135 Canal Principal No. 1 (paralelo a FF.CC)
- --------------------------------------------------------------------------------
5 136 Canal paralelo al punto 135
- --------------------------------------------------------------------------------
6 137 Poza Ferritas de Zinc
- --------------------------------------------------------------------------------
7 R-1 Efluente Refineria de Cobre (Ex-plomo
- --------------------------------------------------------------------------------
3. ALTERNATIVAS PARA LA MITIGACION
Para este proposito se contrato los servicios de la empresa consultora
ECOLAB S.R.L.,-quienes elaboraron un estudio a nivel de ingenieria basica.
3.1 Plan de Manejo de efluentes.
o El plan propuesto consiste en optimizar y clasificar los
efluentes liquidos ,para luego canalizarlos en tres ramales
quedando tres tipos de agua: aguas de proceso, aguas servidas
y aguas de refrigeracion. La conexion de lineas y/o ramales
independientes evitara la mezcla de las aguas entre si.
o El canal principal ( codigo 135 ) y el canal paralelo ( codigo
136 ) seran adecuados para la canalizacion de las aguas de
lluvia evitando la inundacion de la linea ferrea.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 200.
- --------------------------------------------------------------------------------
o El plan de manejo de efluentes, permitira reducir el numero de
puntos de muestreo y con ello el mejor uso racional del
material humano, equipos y reactivos.
3.2 Descripcion del plan de manejo de efluentes liquidos
Se dispondra de cuatro canales de coleccion principales que pasaran
por el canal No 1 ( codigo 135 ), canal paralelo al FFCC. ( codigo
136), canal No 2 y canal de zinc electrolitica ( codigo 126 ), cuyos
numeros de codificacion y recorridos (ver planos Nos. F-TB-00-O01,
002, 003 y 004 -- Anexo de planos) se indican en el siguiente
cuadro:
- --------------------------------------------------------------------------------
Lineas Canales con Recorrido de Lineas
Principales nuevo No de
Codificacion
- --------------------------------------------------------------------------------
a) Canal No 1 1 El canal No 1 mantendra su actual recorrido.
(135)
- --------------------------------------------------------------------------------
b) Canal No 2 2 El canal No 2 iniciara su recorrido en el
(119) punto actual, lado noreste de la planta de
cadmio No 2. Cruzara entre las plantas de
cobre y plomo para salir por el lado este,
refineria de plata y oro, y continuara por el
perimetro. En el trayecto se unira las
salidas del canal No 126. Mantendra la
denominacion de canal No 2 hasta el Punto de
union con el canal No 1.
- --------------------------------------------------------------------------------
c) Canal 3 El recorrido del canal paralelo si iniciara
paralelo al canal en el limite de bateria hacia el noreste de
la planta de coque e ira paralelo al canal No
1 hasta la salida al rio Mantaro por el lado
sur.
- --------------------------------------------------------------------------------
d) Canal de zinc 4 Seguira su actual recorrido iniciando su
electrolitica recoleccion de efluentes a la altura de
(126) almacenamiento de catodos de zinc, pasando
por los rectificadores, purificacion y
electrolitica de zinc. Finalmente, se unira
al canal No 2 que sera el punto final de su
recorrido.
- --------------------------------------------------------------------------------
o Las aguas de proceso, aguas de refrigeracion y aguas servidas de las
plantas de la fundicion tendran cada una lineas de conexion
independientes. Las tuberias para las diferentes aguas estaran
dispuestas segun el cuadro siguiente:
- --------------------------------------------------------------------------------
Lineas Canales con Tuberias
Principales nuevo No de
Codificacion
- --------------------------------------------------------------------------------
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 201.
- --------------------------------------------------------------------------------
a) Canal No 1 1 o Tuberias de agua de proceso
(135)
o Tuberias de aguas acidas de la planta de
sulfurico.
o Canal para aguas de lluvia (a partir de la
planta de acido sulfurico)
- --------------------------------------------------------------------------------
b) Canal No 2 2 o Tuberias de agua de proceso
(119)
o Tuberias de aguas servidas
- --------------------------------------------------------------------------------
c) Canal 3 o Tuberias para aguas servidas
paralelo al canal
o Tuberias para aguas de refrigeracion
o Canal para aguas de lluvia.
o Aguas de proceso.
- --------------------------------------------------------------------------------
d) Canal de zinc 4 o Aguas servidas.
electrolitica
(126)
- --------------------------------------------------------------------------------
o Segun el estudio, las aguas de refrigeracion seran colectadas
por gravedad mediante tuberias y llevadas a la Casa de Fuerza
para su recirculacion.
o Las aguas servidas seran colectadas por el canal paralelo, con
codigo No 136, canal No 2 con codigo No 119 y el canal No 126
para finalmente unirse al canal NO 119. Estos efluentes se
uniran en el actual punto de vertido del canal paralelo al rio
Mantaro ( codigo 136).
o Las aguas de proceso del canal No 1 (codigo No 135) y las del
canal No 2 (codigo No 119) se uniran en el punto actual de
vertido del canal No 1 al rio Mantaro (codigo 135). Las
tuberias de aguas de proceso y aguas servidas que pasen por
dichos canales descansaran sobre soportes metalicos. El
diseno de la red de tuberias asegurara el flujo de los
efluentes por gravedad. La implementacion de este sistema
implica trazos, movimiento de tierras e instalaciones
mecanicas de tuberias.
o Las aguas de proceso y las aguas servidas seran transportadas
por tuberias hasta el area ubicada frente a los depositos de
ferritas de Huanchan a 3 km del complejo metalurgico (margen
derecha del rio Mantaro aguas abajo); donde estaria ubicada la
planta de tratamiento de efluentes.
o Las pozas de sedimentacion para las aguas de lluvia, estarian
ubicadas a la altura de Planta de Indio-Circuito de
Zinc. Estas pozas recibiran las aguas de lluvia provenientes
del canal No 1 y canal paralelo.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 202.
- --------------------------------------------------------------------------------
o Las aguas de lavado de pisos de las plantas de tostadores de
cobre y aglomeracion descargaran en el canal No 1 y seran
captados frente a la planta de aglomeracion para ser bombeados
al espesador.
o Las aguas de proceso provenientes de las escorias de cobre y
plomo asi como los efluentes de la Refineria de Cobre, no
estan incluidas en este estudio porque son mitigados con otros
proyectos.
3.3 Proyecto de Mitigacion
3.1.1 Seleccion de la Alternativa
El tratamiento de un solo efluente del complejo metalurgico
(mezcla de aguas de proceso + aguas servidas) en la planta de
tratamiento permitira mitigar el impacto de los contaminantes
a las aguas del rio Mantaro.
Neutralizacion a pH=7 - Precipitacion/Floculacion - Correccion
de pH=10,5 - Precipitacion/Floculacion - Correccion de pH=8/9
- Vertido al rio).
La separacion de los metales de los efluentes en la industria
metalurgica, se viene realizando desde hace tiempo, por
procesos de separacion solido/liquido. Gracias a que los
hidroxidos de los metales son insolubles a pH basicos. El
proceso de neutralizacion, subida de pH y
precipitacion/floculacion es el mas extendido y utilizado. No
solo en actividades minero-metalurgicas, sino tambien en otras
actividades que tambien vierten metales, tales como, la
siderurgica, altos hornos, galvanoplastia, laminacion, etc.
Los lodos generados en los dos clarificadores, donde se dan
procesos de floculacion/sedimentacion, seran extraidos con
bombas y depositados, adecuadamente, en un vertedero (cancha
de lodos) controlado, impermeabilizado con geomembrana. El
agua que filtre o lixivie sera reciclada a cabecera de planta.
La ayuda del floculante es necesario, porque el precipitado de
los hidroxidos es gelatinoso, y una parte tiende a flotar. Por
tanto, el polimero (floculante) ademas de acelerar la
velocidad de sedimentacion, evita que una parte del
precipitado flote y fugue por el clarificado, disminuyendo el
rendimiento de separacion de este.
En la tabla 3.1.1/1 se puede observar los datos principales de
funcionamiento de la planta (que ha sido disenada con la ayuda
de un simulador de procesos industriales aplicado al medio
ambiente, Enviromental Pro Designer) y en el Diagrama No
3.1.1/1 se muestra el flujo de la planta.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 203.
- --------------------------------------------------------------------------------
Para mejor informacion, daremos, a continuacion, una relacion
de empresas que tienen estos procesos para el tratamiento de
sus efluentes industriales
o CONSOLDATION COAL COMPANY
Pittsburgh. Pennsylvania. USA
o ASARCO'S CALIFORNIA GULCH
Colorado, USA
o MATSUMINE MINE AND MANSUMINE MILL
Japon
o KOSAKA'S MATSUO MINE
Japon
o RIOTINTO MINERA
Huelva, Espana
o SIDERUGICA SEVILLANA, SA.
Sevilla, Espana
o CENTRAL TERMICA DE LOS BARRIOS
Los Barrios, Cadiz, Espana
3.1.2 Otras alternativas
o Tambien, existen procesos que precipitan los metales como
sulfuro, anadiendo sulfuro de sodio. Por su alto costo ha sido
desechada esta alternativa.
o Otros procesos de extraccion de los metales, como son,
extraccion por solventes, intercambio ionico selectivo,
osmosis inversa, electrodeposicion, etc., las mismas que han
sido, desestimadas porque sobrepasaban el umbral de caudal
diario a tratar respecto a cuestiones tecnicas y a elevados
costes de inversion y operacion.
4. RESULTADOS DEL PROYECTO DE MITIGACION
o El proyecto contempla tratar todos los efluentes de la fundicion y
de la refineria de zinc, mas no asilos efluentes de la refineria de
cobre y plomo, debido a que el efluente con codigo R-1 tiene un
proyecto independiente (Proyecto No 5 - cap V); los efluentes con
codigos R-2, 103, 104, 105 y 113 han sido eliminados y el efluente
con codigo R-3 no registra niveles de contaminacion.
o La planta de tratamiento procesara un caudal total aproximado de 9.1
m(3)/min entre aguas de proceso (90,0%) y aguas servidas (10,0%)
o El efluente de salida de la Planta de Tratamiento hacia el rio
Mantaro mostrara las siguientes concentraciones de elementos
contaminantes las mismas que se encuentran por debajo de los limites
maximos permisibles fijados por el MEM:
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 204.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Corriente de Salida del NU-103 al rio
- --------------------------------------------------------------------------------
Componentes Flujo Masico (kg/h) Concentracion mg/l) N.M.P. (MEM)
- --------------------------------------------------------------------------------
As 0,0029 < 0,01 1,00
- --------------------------------------------------------------------------------
Cd 0,0000 < 0,01 -
- --------------------------------------------------------------------------------
Fe 0,0952 < 0,02 2,00
- --------------------------------------------------------------------------------
Pb 0,0478 < 0,01 0,40
- --------------------------------------------------------------------------------
Mn 2,3579 0,44 -
- --------------------------------------------------------------------------------
Cu 0,0000 < 0,01 1,00
- --------------------------------------------------------------------------------
Zn 0,3086 0,06 3,00
- --------------------------------------------------------------------------------
Solidos suspendidos 7,1933 13,41 50,00
- --------------------------------------------------------------------------------
pH - 7,0 > 6 < 9
- --------------------------------------------------------------------------------
5.- PRESUPUESTO DE INVERSIONES
Las inversiones para la implementacion del proyecto, tendran el siguiente
detalle:
- --------------------------------------------------------------------------------
Estimado de Costos Globales Monto (US$)
- --------------------------------------------------------------------------------
1. Costo del sistema de Segregacion y Conduccion de efluentes 282742,33
dentro de Fundicion.
- --------------------------------------------------------------------------------
2. Costo de adecuacion de los Circuitos de Fundicion al Plan de 113 000,00
Manejo de Efluentes (Circuitos de Cobre, Plomo y Zinc)
- --------------------------------------------------------------------------------
3. Costo de implementacion de sistema de recirculacion de agua 52 000,00 *
de granulacion de speiss
- --------------------------------------------------------------------------------
4. Costo de implementacion del sistema de tratamiento de 46 000,00 *
desagues domesticos en la Refineria de Huaymanta
- --------------------------------------------------------------------------------
5. Costo de implementacion del sistema de tratamiento de 55 000,00 *
desagues domesticos en Construccion Huaymanta
- --------------------------------------------------------------------------------
6. Implementacion del sistema de disposicion de sulfato de calcio 72 000,00 *
de la planta de acido fluorsilisico
- --------------------------------------------------------------------------------
7. Costo de tendido y conexion de tuberias de Fundicion a Planta 235 731,60
de Tratamiento.
- --------------------------------------------------------------------------------
8. Instalacion de Planta de Tratamiento de Efluentes frente a 2 440 422,14
Ferritas de Huanchan.
- --------------------------------------------------------------------------------
Total Estimado de Costo (+/-20%) 3 296 896,07
- --------------------------------------------------------------------------------
El proyecto comtempla un costo total de US$ 3 296 896 pero incluye otros
proyectos que tienen un presupuesto independiente; por lo tanto, el costo
de la nueva planta de tratamiento se estima en US$ 2 500 000, debido a lo
anteriormente expuesto , a la reduccion de 5 efluentes( codigos R-2 ,103,
104, 105 y 1l3) y a la reduccion del volumen de agua industrial por
recirculacion de las aguas de refrigeracion.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 205.
- --------------------------------------------------------------------------------
(*)
Implementacion de sistema de recirculacion de agua de Proyecto No 10 - Cap
V granulacion de speiss
Implementacion del sistema de tratamiento de desagues Proyecto No 16 - Cap
V domesticos en la Refineria de Huaymanta
Implementacion del sistema de tratamiento de desagues Proyecto No 16 - Cap
V domesticos en Construccion Huaymanta
Implementacion del sistema de disposicion de sulfato de calcio Proyecto en
ejecucion de la planta de acido fluorsilisico
6.- CRONOGRAMA DE EJECUCION
El cronograma de ejecucion del proyecto se estima requerira de dos (2 )
anos.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 206.
- --------------------------------------------------------------------------------
TABLA No 3.3/1
- --------------------------------------------------------------------------------
Caracteristicas de Diseno de la Planta a Diferentes condiciones de Operacion
================================================================================
Equipo Caracteristicas de Diseno A percentil Condicion
75% maxima de
operacion
================================================================================
NU-101 Neutralizador Vol Liq/Vol total 0,85 0,85
---------------------------------------------------------
Vol total(m) 161,54 161,54
---------------------------------------------------------
Vol liquido(m) 137,31 137,31
---------------------------------------------------------
Tiempo de detencion(h) 0,25 0,23
---------------------------------------------------------
Area(m) 58,85 58,35
---------------------------------------------------------
Altura(m) 3 3
================================================================================
CL-1O1 Clarificador Tiempo de detencion(h) 2,10 1,93
---------------------------------------------------------
Altura(m) 3,5 3,5
---------------------------------------------------------
Diametro(m) 20,5 20,5
---------------------------------------------------------
Volumen(m) 1 153,43 1 153,43
---------------------------------------------------------
Area superficial(m^2) 329,6 329,6
---------------------------------------------------------
Velocidad ascencional (m^3/m^2-d) 42,00 43,61
================================================================================
NU-102 Neutralizador Vol Liq/Vol total 0,85 0,85
---------------------------------------------------------
Vol total(m) 158,59 158,59
---------------------------------------------------------
Vol liquido(m) 131,80 134,80
---------------------------------------------------------
Tiempo de detencion (h) 0,25 0,23
---------------------------------------------------------
Area (m) 52,86 52,86
---------------------------------------------------------
Altura(m) 3 3
================================================================================
CL-102 Clarificador Tiempo de detencion(h) 2 1,8
---------------------------------------------------------
Altura(m) 3,5 3,5
---------------------------------------------------------
Diametro(m) 19,8 19,8
---------------------------------------------------------
Volumen(m) 1 078,38 1 078,38
---------------------------------------------------------
Area superficial(m^2) 308,1 308,1
---------------------------------------------------------
Velocidad ascencional (m^3/m^2-d) 40,00 46,65
================================================================================
NU-103 Neutralizador Vol Liq/Vol total 0,85 0,85
---------------------------------------------------------
Vol total(m) 158,47 158,47
---------------------------------------------------------
Vol liquido(m) 134,70 134,70
---------------------------------------------------------
Tiempo de detencion (h) 0,25 0,22
---------------------------------------------------------
Area (m) 52,82 52,82
---------------------------------------------------------
Altura(m) 3 3
================================================================================
Cancha de lodos Altrua(m) 4,0 4,0
---------------------------------------------------------
Volumen(m) 55 797 55 797
================================================================================
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 207.
- --------------------------------------------------------------------------------
DIAGRAMA 3.1.1/1
FLUJO DE LA PLANTA DE TRATAMIENTO DE EFLUENTES LIQUIDOS
[GRAPHIC OMITTED]
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 208.
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
Canales de coleccion de aguas de Plantas de Fundicion La Oroya
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 209.
- --------------------------------------------------------------------------------
5.4.9 PROYECTO No 9
MURO DE CONTENCION PARA LOS LODOS DE PLOMO EN LA
PLANTA ZILERET - DIVISION DE ZINC
1. OBJETIVO:
Evitar el vertimiento al rio Mantaro del drenaje de la solucion con altas
concentraciones de impurezas contenido en el lodo de plomo almacenado en
una area adyacente a la Unidad de Hidrometalurgia de la Planta Zileret.
2. EVALUACION DEL IMPACTO AMBIENTAL:
En la Unidad de Hidrometalurgia se produce un residuo de plomo (lodo) que
actualmente esta siendo almacenado en un area aledana a la Planta. Este
lodo retorna al Circuito de Fundicion de Plomo. Sin embargo, mientras se
encuentra en el area de almacenamiento, en esta se produce el drenaje de
la solucion contenida en el lodo al canal No. 136 el mismo que descarga al
rio Mantaro. Este efluente aumenta, significativamente, los valores
contaminantes del citado canal, situacion que se hace mas critica por
aporte de fugas por tuberias, asi como, el agua de lluvias.
3. ALTERNATIVAS PARA LA MITIGACION:
Se disenara un muro de contencion en el area de almacenaje del lodo con un
sistema de recoleccion del drenaje de la solucion para luego ser
recirculada a la misma planta. Con este mismo sistema, se aislara de las
aguas de lluvia que en la actualidad penetran en el lodo.
4. RESULTADOS DE LA MITIGACION
Se eliminara este efluente que contribuye a la contaminacion del rio
Mantaro.
5. MONTO DE LA INVERSION
El costo estimado para la ejecucion de este proyecto es de US $ 5 000.
6. CRONOGRAMA DE EJECUCION
El proyecto debe quedar concluido en el primer semestre del proximo ano.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 210.
- --------------------------------------------------------------------------------
5.4.10 PROYECTO No 10
RECIRCULACION DEL AGUA UTILIZADA EN LA GRANULACION
DE SPEISS DEL HORNO DE ESPUMAJE - FUNDICION DE PLOMO
1. OBJETIVO:
Evitar que las aguas de granulacion de speiss contaminada con elementos
disueltos (principalmente con arsenico y antimonio) y particulas en
suspension sean vertidas al rio Mantaro.
2. EVALUACION DEL IMPACTO AMBIENTAL:
El horno de espumaje procesa las espumas de cobre recuperadas en las ollas
de recepcion de plomo de obra, produciendo plomo bullon, soda - mata y
speiss el que es granulado para facilitar su transporte a la fundicion de
cobre donde es procesado para recuperar el cobre y plata presentes.
El agua de granulacion de speiss, contaminada con elementos disueltos y
particulas en suspension, es enviada a unas pozas de sedimentacion para
luego ser descargadas en el canal 2 y posteriormente vertidas al rio
Mantaro.
3. ALTERNATIVAS PARA LA MITIGACION:
3.1 Utilizar el agua de granulacion de speiss en circuito cerrado
El proyecto consiste en reutilizar totalmente el agua de granulacion
de speiss con la finalidad de evitar contaminar el rio Mantaro.
4. DESCRIPCION DEL PROCESO:
El proyecto contempla instalar una bomba para captar el agua clarificada
de las pozas de sedimentacion y enviarlas a un tanque de 135 metros
cubicos de capacidad, para luego con otra bomba ser enviada a los sprays
de granulacion de speiss, cerrandose de esta manera el circuito.
5. RESULTADOS DE LA MITIGACION:
Se eliminara este efluente que contribuye a la contaminacion del rio
Mantaro, siendo el agua nuevamente utilizada en la granulacion de speiss.
6. MONTO DE LA INVERSION:
El costo estimado para la ejecucion de este proyecto es de US $ 55 000.
7. CRONOGRAMA DE EJECUCION:
El proyecto debe quedar concluido en el primer semestre del proximo ano.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 211.
- --------------------------------------------------------------------------------
5.4.11 PROYECTO No 11
NUEVO SISTEMA DE LAVADO DE ANODOS - REFINERIA DE ZINC
1. OBJETIVO:
El objetivo principal del proyecto es minimizar el vertimiento de la
solucion de lavado de anodos con contenidos residuales de acidez y altos
contenidos metalicos.
2. EVALUACION DEL IMPACTO AMBIENTAL:
En la casa de celdas de la Planta de Zinc se produce un efluente acido,
producto del lavado de los anodos Pb-Ag, el cual contiene solidos en
suspension (dioxido de manganeso) que son retenidos en un sedimentador,
donde el agua remanente es descargada al rio Mantaro sin tratamiento.
Promedio Aritmetico Enero 94 - Febrero 95 (*)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
Punto de Flujo pH Temp TSS Metales(mg/l)
- ------------------------------------------------------------------------------------------------
Muestreo m3/min (degree)C mg/1 As Cd Cu Fe Mn Pb Zn
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
124 0.12 3.51 13.38 61.672 0.24 0.08 0.73 2.54 7.66 13.0 143.16
- ------------------------------------------------------------------------------------------------
</TABLE>
Nota: (*) Fuente EVAP del Complejo Metalurgico de La Oroya.
3. ALTERNATIVAS PARA LA MITIGACION:
Se esta instalando un sistema semiautomatico de raspado de anodos,
enderezado y lavado en posicion fija, para eliminar sus incrustaciones
solidas, las cuales en forma de pulpa seran enviadas a la Planta Piloto
y/o a la unidad de lixiviacion. El efluente liquido remanente sera
procesado en la planta de tratamiento de efluentes liquidos industriales,
para luego descargar un efluente con contenidos metalicos menores a los
niveles maximo permisibles (R.M: No 011-96)
4. RESULTADO DE LA MITIGACION:
Eliminar la contaminacion del rio Mantaro por efluentes liquidos.
5. MONTO DE LA INVERSION
El costo estimado para la ejecucion de este proyecto es de US$ 15 000 y
sera con recursos propios.
6. DURACION DEL PROYECTO
Se estima un periodo de un ano para su implmentacion.
7. CRONOGRAMA:
El proyecto debe quedar concluido en el ano 1997.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 212.
- --------------------------------------------------------------------------------
5.4.12 PROYECTO No 12
MANEJO Y DISPOSICION DE ESCORIAS DE COBRE Y PLOMO
Este proyecto tiene como objetivo fundamental eliminar la contaminacion liquida
y solida del rio Mantaro por la descarga de agua contaminada con solidos en
suspension y/o iones contaminantes que se producen en el momento de la
granulacion y transporte de las escorias de cobre y plomo, para cumplir con las
disposiciones de emisiones solidas y liquidas fijado por el Ministerio segun
R.M. No 315-96-EM/VMM.
1.- EVALUACION DEL IMPACTO
En el Complejo Metalurgico La Oroya, estas escorias se descargan de los
Hornos de Manga de Plomo y del Horno Reverbero, en estado liquido a 1 l00
(degree)C y 1 200(degree)C respectivamente, para luego ser granuladas por
enfriamiento brusco mediante agua a presion y transportadas por gravedad
en forma de "slurry", a traves de canales rectangulares hasta una bateria
de tolvas, donde se realiza la separacion solido-liquido.
La escoria depositada en el fondo de las tolvas, se envia por medio de un
sistema de cable carril hasta el deposito de "Huanchan", distante a 2,2
Km. cruzando el rio Mantaro. Este sistema de transporte opera desde 1930,
resultando en la actualidad obsoleto, con serios problemas, operativos, de
mantenimiento y de capacidad de transporte.
El agua que sirve para la granulacion, se descarga en forma directa al rio
Mantaro, arrastrando escoria fina y/o en suspension y metales disueltos,
lo cual genera un serio problema de contaminacion.
Analisis de las soluciones filtradas del rebose de los tanques de escorias
de cobre y plomo
<TABLE>
<CAPTION>
======================================================================================
Cu (mg/1) Pb (mg/l) Fe (mg/l) As (g/1) Sb (g/1) SO2 SO4 NO3
(g/l) (g/l) (mg/l)
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Horno Pb 1 0,6 1,0 1,5 0,18 0,03 0,38 0,08 0,68
- --------------------------------------------------------------------------------------
Horno Pb 2 0,5 1,0 2,0 0,23 0,04 0,38 0,06 0,59
- --------------------------------------------------------------------------------------
Reverbero 0,8 0,8 1,5 0,04 0,10 ,016 0,18 --
======================================================================================
</TABLE>
Analisis de los solidos en suspension (escoria fina) en las soluciones del
rebose de los tanques de escorias de cobre y plomo
=============================================================
Cu Pb Fe As Sb Bi Ins
(%) (%) (%) (%) (%) (%) (%)
-------------------------------------------------------------
Horno Pb 1 0,24 2,30 25,20 0,22 0,13 0,02 20,70
-------------------------------------------------------------
Horno Pb 2 0,24 2,10 24,30 0,33 0,14 0,04 22,40
-------------------------------------------------------------
Reverbero 5,60 1,50 28,50 0,34 0,32 ,06 30,40
=============================================================
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 213.
- --------------------------------------------------------------------------------
Concentracion de solidos en los reboses de los tanques de escorias de
cobre y plomo
=====================================
pH SOLIDOS
-------------
(%) g/l
=====================================
Horno Pb 1 0,24 2,30 25,20
-------------------------------------
Horno Pb 2 0,24 2,10 24,30
-------------------------------------
Reverbero 5,60 1,50 28,50
=====================================
Fuente: Reporte del Departamento de Investigaciones (DIM-095-94 del
8/6/1994 "Caracterizacion de aguas de granulacion de escorias"
1.1 Sistema de Granulacion:
Tiempo de Operacion
La descarga de la escoria del Reverbero es intermitente, usualmente
se descarga durante 6,5 horas por guardia de 8 horas a un flujo de
34,77 t/h (678 t/dia).
En el caso de la escoria de plomo, la descarga es continua las 24
horas del dia a un flujo de 20,3 t/h (397 t/dia).
Cantidad de Agua
En la actualidad se usa la cantidad de agua siguiente:
Para granular escoria de cobre: 276 l/s (4 375 galones por minuto.)
Para granular escoria de plomo: 224 l/s (3 547 galones por minuto.)
Caracteristicas del Agua
Antes de la granulacion, la temperatura del agua esta en el rango de
l0 a 14(degree)C, segun la estacion climatica. Luego de esta
operacion, el agua alcanza los 28 (degree)C y los analisis quimicos
muestran la presencia de plomo, arsenico, cobre, fierro y solidos
suspendidos, en cantidades que en algunos casos superan los limites
maximos permisibles.
Vapor
El vapor de agua, producto de la granulacion, se descarga
directamente a la atmosfera.
1.2 Sistema de Transporte
Equipo
El equipo de transporte "cable carril", data de 1930 habiendo sido
disenado para una capacidad de produccion de solo 600 t/d. Su
obsolescencia origina multiples problemas de operacion y
mantenimiento, no pudiendo ser repotenciado a una capacidad de
transporte mayor por su diseno, condicion y antiguedad.
Capacidad
El sistema existente no permite transportar las 1 100 t/d de
generacion de escorias al area de deposicion en el sector denominado
"Huanchan", no solo por el equipo de transporte, sino tambien, por
la limitada capacidad de almacenamiento y retencion de las tolvas de
recepcion de escorias que alimentan a este equipo.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 214.
- --------------------------------------------------------------------------------
Las aguas de granulacion (rebose de los tanques) juntamente con la aguas de
refrigeracion de las fundiciones de cobre y plomo descargan al rio Mantaro
(Estacion 118) con los contenidos siguiente:
<TABLE>
<CAPTION>
==========================================================================================
Inorganico Fisico Inorganico-iones principales mg/1
- ------------------------------------------------------------------------------------------
Cond Eh Flujo pH Temp T.S.S. CN O.D. NO3 S04= T.D.S-
(micro) S mV m^3/min (degree)C mg/l Total
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
772 -58,3 28,23 8,0 19,3 2251,8 T.r. 10 2,50 260,0 560
==========================================================================================
</TABLE>
============================================================
Inorganico Metales mg/l
------------------------------------------------------------
As Cd Cu Fe Mn Pb Zn Kb Hg
------------------------------------------------------------
0,58 0 020 0 07 0,14 2,20 0,30 3,50 0,14 T.r.
============================================================
Resultados analiticos de efluentes liquidos minero-metalurgicos del 23-9-1996
(micro) S:Microsiemens, T.S.S.:Total solidos en suspension, O.D.:Oxigeno
disuelto, T.D.S.:Total solido disuelto
2.- ALTERNATIVA PARA LA MITIGACION
2.1. Seleccion del proceso
Para el sistema de desaguado se ha analizado diversos equipos como
alternativas para realizar este proceso, entre los cuales podemos
mencionar: Espesadores, zarandas vibratorias, tolvas de sedimentacion,
equipos rotatorios INBA y el desaguador de tornillo Denver Sala.
Se opto por el sistema de desaguadores rotatorios INBA ya que al ser un
equipo rotatorio la posibilidad de desgate de los componentes se minimiza
y la separacion (filtracion) agua/escoria es rapida.
Para el sistema de transporte que reemplazara al sistema de cable carril
se estudiaron las alternativas de: sistema faja cable de Cable Belt INC,
sistema capsule pipe line de Mitsubishi y el sistema de fajas
transportadoras hasta la margen izquierda del rio Mantaro, siendo este
ultimo el que se considero la mas adecuada por menor costo en estructuras
de soporte de las fajas y menores costos de mantenimiento.
2.2. Proyecto
2.2.1. Descripcion y ubicacion
El proyecto considera la adquisicion e instalacion de lo siguiente:
Sistema de separacion solido-liquido
Se propone instalar dos (2) desaguadores rotatorios INBA de
tecnologia de punta que giraran a una velocidad de 3 rpm
aproximadamente, con un nuevo sistema de granulacion que utiliza una
relacion de agua-escoria de 10 a 1 en peso. Con este proyecto, el
agua sera continuamente recirculada, lo que evitara la contaminacion
del rio Mantaro. Debe indicarse que el sistema existente para la
granulacion, utiliza la relacion agua-escoria de 40 a 1 en peso.
Con esta solucion, que es "tecnologia de punta", se proyecta manejar
solo 183 1/s (2 900 gpm) de agua para la granulacion de las escorias
de cobre y plomo.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 215.
- --------------------------------------------------------------------------------
La capacidad de evacuacion de escorias de cobre y plomo del nuevo
sistema sera de 1 400 t/dia, cantidad que puede cubrir facilmente
futuras ampliaciones de las plantas de Cu y Pb.
Nuevo Sistema de Transporte
El sistema se disenara para transportar 1 400 t/d lo que cubre
ampliamente la produccion actual de 1 100 t/d.
La solucion consistira en la instalacion de fajas transportadoras,
que permitiran el transporte de la totalidad de las escorias hasta
la margen izquierda del rio Mantaro, para luego ser llevadas a su
disposicion final.
Este nuevo sistema de desaguadores estara ubicado en las
inmediaciones del actual sistema de tolvas de almacenamiento de
escorias y el sistema de transporte a partir de aqui cruzara el rio
Mantaro hasta la margen izquierda.
2.2 2. Inversiones
Se estima que las inversiones para la implementacion del proyecto,
alacanzaria los 6,5 millones de US$ segun detalle:
=====================================================================
DESCRIPCION MM (US$)
=====================================================================
1.0 Sistema de separacion solido-liquido, granulacion 3,900
y recirculacion de agua
---------------------------------------------------------------------
2.0 Sistema de transporte 1,708
---------------------------------------------------------------------
SUB-TOTAL 5,608
---------------------------------------------------------------------
IMPREVISTOS +/-15% 0,892
---------------------------------------------------------------------
TOTAL 6,500
=====================================================================
Este estimado del costo de inversion cubre: Ingenieria y
administracion del proyecto, ingenieria de campo, Ingenieria
contratada, trabajos preliminares y movimiento de tierras,
estructuras y cimentaciones, instalaciones mecanicas y electricas,
sistemas de transporte de fajas, sistemas de enfriamiento y
recirculacion de agua de granulacion, desaguadores INBA y
granuladores de escorias, motores electricos, reductores e
instrumentos de control.
2.2.3. Cronograma de ejecucion
El Cronograma de ejecucion del proyecto se estima requerira de tres
(3) anos bajo el siguiente detalle:
====================================================================
ANO ACTIVIDAD MM (US$)
====================================================================
1997 Fabricacion de equipos de separacion solido-
liquido 1,494
--------------------------------------------------------------------
1998 Adquisicion de equipos adicionales e instala-
cion del sistema de separacion 3,362
--------------------------------------------------------------------
1999 Nuevo sistema de transporte 1,644
--------------------------------------------------------------------
TOTAL 6,500
====================================================================
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 216.
- --------------------------------------------------------------------------------
3.- RESULTADOS DE LA MITIGACION
Como resultado de la implementacion del nuevo sistema de manejo y
disposicion de escorias, no se evacuaran las aguas de granulacion al no
Mantaro eliminando de esta manera los solidos en suspension y los
contenidos de Pb y As descargados al rio Mantaro permitiendo cumplir con
los nivels fijados en la R.M. No 011-96-EM/VMM Anexo 1, que a continuacion
se detalla:.
===========================================================
Parametro Valor en cualquier Valor promedio
momento Anual
-----------------------------------------------------------
pH de 6 a 9 de 6 a 9
-----------------------------------------------------------
Solidos suspendidos (mg/1) 50 25
-----------------------------------------------------------
Plomo (mg/l) 0,4 0,2
-----------------------------------------------------------
Cobre (mg/l) 1,0 0,3
-----------------------------------------------------------
Zinc (mg/l) 3,0 1,0
-----------------------------------------------------------
Fierro (mg/1) 2,0 1,0
-----------------------------------------------------------
Arsenico (mg/1) 1,0 0,5
-----------------------------------------------------------
Cianuro total (mg/l) 1,0 1,0
===========================================================
<PAGE>
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 217.
- --------------------------------------------------------------------------------
COMPLEJO METALURGICO LA OROYA
MANEJO ACTUAL DE LAS ESCORIAS DE COBRE Y PLOMO
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<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 218.
- --------------------------------------------------------------------------------
COMPLEJO METALURGICO LA OROYA
NUEVO SISTEMA DE EVACUACION DE ESCORIAS
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<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 219.
- --------------------------------------------------------------------------------
COMPLEJO METALURGICO LA OROYA
NUEVO SISTEMA DE MANEJO Y DISPOSICION DE ESCORIAS DE COBRE Y PLOMO
[FLOWCHART OMITTED]
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 220.
- --------------------------------------------------------------------------------
5.4.13. PROYECTO No. 13
ABANDONO DEL DEPOSITO DE ESCORIAS DE COBRE Y PLOMO
1.- OBJETIVO
Este proyecto tiene por objetivo evaluar las condiciones de estabilidad y
sobreelevacion de los depositos de escorias, y consecuentemente establecer
las obras requeridas para mitigar o eliminar los impactos ambientales que
afectan la tierra, el agua, la atmosfera y la vida, ademas la recuperacion
y remediacion de suelos.
Se considera adicionalmente las obras correspondientes para la
habilitacion de un nuevo deposito que se adecue a las normas de control
ambiental y futuros incrementos de produccion
2.- EVALUACION DEL IMPACTO
El deposito de escorias que se encuentra en operacion desde 1930 y
contiene 10 millones de toneladas de escorias de cobre y plomo, esta
ubicado en la zona denominada Huanchan a 2,2 Km. del area de la Fundicion
en una terraza geologica sobre la margen izquierda del rio Mantaro,
adyacente a la Carretera. El transporte diario de estos residuos se hace
mediante un cablecarril en un promedio de 758 TM secas.
Las escorias se distribuyen formando apilamientos conicos de 70 metros en
algunos casos sobre una area de 25 Ha, con niveles que varian de 3 715
hasta 3 805 msnm.
Las caracteristicas de este deposito y su proximidad a la carretera
central y el rio Mantaro generan como impactos ambientales tanto
potenciales como reales su estabilidad y su interaccion con el medio
ambiente.
2.1 ESTABILIDAD
El volumen almacenado, las elevaciones de este deposito, tipo de
residuo, y su cercania a un cuerpo de agua de la importancia del rio
Mantaro, presentan un riesgo de estabilidad que debe ser corregido o
minimizado, si se tiene en cuenta que el futuro proximo aun deber
utilizado para las operaciones metalurgicas. Si bien hasta la fecha
no se han tenido deslizamientos, en el caso de que este riesgo se
materialice, la contaminacion por efectos de estos residuos solidos
podria afectar no solo al rio en la zona de La Oroya, sino tambien a
los centros poblados que se ubican aguas abajo en el valle del
Mantaro.
2.2 INTERACCION CON EL MEDIO AMBIENTE
La proximidad del rio Mantaro, hacen que este rio sea vulnerable en
lo que a contaminacion se refiere, principalmente por el agua que
fluye por el pie de sus taludes, las aguas de escorrentia por
precipitacion pluvial y las infiltraciones en el terreno natural.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 221.
- --------------------------------------------------------------------------------
La accion eolica tambien se manifiesta sobre el deposito arrastrando
parte de las particulas finas que conforman las escorias.
3.- ALTERNATIVA PARA LA MITIGACION
El proyecto de plan de cierre de estos depositos, contempla diversas
medidas y obras de ingenieria a ser ejecutadas hasta el abandono total del
deposito. Este trabajo que ha sido desarrollado con el apoyo de la
Compania Rescan Peru S.A., tiene las siguientes caracteristicas:
3.1 ESTABILIDAD FISICA
Considera las obras que deberan ejecutarse (muros de confinamiento,
canales de coronacion, cunetas, etc.) para garantizar la estabilidad
de los depositos contra colapsos, erosiones por escorrentia pluvial
y contaminacion ambiental, dentro de limites razonables de
ocurrencia sismica y lluvias extraordinarias.
Para este desarrollo se han ejecutado estudios relacionados a los
siguientes aspectos:
o Investigaciones geotecnicas: investigaciones de campo, ensayos
de laboratorio, clasificacion de suelos, descripcion del
perfil estatigrafico, determinacion de parametros de
resistencia a partir de ensayos SPT, etc.
o Evaluacion de estabilidad de los depositos existentes:
estabilidad de taludes de escorias, estabilidad de la ladera
adyacente al deposito, metodos de analisis.
o Potencial de crecimiento y capacidad remanente.
o Estabilidad contra escorrentias pluviales.
o Control contra infiltraciones.
o Estabilidad contra erosion eolica.
o Control de efluentes.
Los muros de confinamiento que se proyecta en el perimetro de los
depositos, asi como las cunetas que serviran para evacuar las aguas
de las infiltraciones deberan ser construidas empleando concreto
resistente a las heladas y al ataque de sulfatos.
Para la estabilidad contra escorrentias pluviales se construiran
canales de coronacion (inclinacion constante de 5(degrees)) en las
laderas adyacentes a los depositos para captar un caudal de
aproximadamente 45 l/seg.
Las infiltraciones hidricas de un valor de 8,1 l/seg., seran
captadas por una cuneta proyectada al pie del talud del deposito de
escorias y conducidas hasta el rio Mantaro.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 222.
- --------------------------------------------------------------------------------
3.2 MEDIDAS DE CONTROL AMBIENTAL POST-CIERRE
Corresponde a todas las medidas que deben tomarse para efectuar los
controles, tanto de estabilidad como de efluentes, una vez
abandonado el deposito, de manera de comprobar anomalias que deberan
ser corregidas oportunamente, garantizando la conservacion del medio
ambiente. Todas las acuavias deberan tener como minimo mantenimiento
anual antes y despues de la epoca de lluvia (octubre a abril), se
efectuaran analisis quimicos periodicos de todos los efluentes,
escorrentias y afloramientos provenientes del deposito, para
ejecutar las medidas correctivas pertinentes, en caso de ser
necesarias.
3.3 CAPACIDAD DE ALMACENAMIENTO Y NUEVO DEPOSITO
El nivel de sobreelevacion maximo recomendado del sistema actual de
almacenamiento es 3 762 msnm, siendo la capacidad remanente del
deposito de 2,36 millones de m^3 para una vida util de
almacenamiento de escorias de 10 a 13 anos.
El nuevo deposito estara ubicado en Cochabamba, a 9 Km. de La Oroya
camino a Huancayo y en la margen izquierda del rio Mantaro, este
deposito sera construido con todas las exigencias de seguridad y de
control de medio ambiente.
4.- RESULTADOS DE LA MITIGACION
La implementacion de este proyecto permitira cubrir los siguientes
aspectos:
4.1 CONTAMINACION
Minimizara la contaminacion del rio Mantaro. Los analisis quimicos
de las aguas provenientes de drenaje y/o escorrentias, indican que
contienen porcentajes permisibles que no afectan las aguas naturales
del entorno, por lo que se considera que las aguas captadas por las
cunetas, seran descargadas directamente al rio Mantaro previa
sedimentacion, por lo que no sera necesario la construccion de
sistemas de tratamiento de aguas.
4.2 ESTABILIDAD Y RECUPERACION DEL AREA
Garantizara una estabilidad estatica y dinamica de las pilas de
almacenamiento de escorias ante el caso de una sobrecarga o un
movimiento sismico, condicion de suma importancia por estar La Oroya
localizada en una region calificada de alta sismicidad.
La recuperacion y remediacion del deposito, se efectuara con el plan
de abandono, proyectandose al final de la vida util del mismo, el de
disponer de un area de condiciones seguras y similares a la que
existiera al comienzo de las operaciones metalurgicas.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 223.
- --------------------------------------------------------------------------------
4.3 OPERATIVIDAD
Se asegurara la continuidad operativa de las Fundiciones de Cobre y
Plomo, durante el tiempo de vida remanente del deposito actual y
luego con el uso de un nuevo deposito. Permitiendo de esta manera,
iniciar el proceso de cierre del deposito de Huanchan y en el futuro
disponer de un deposito adecuado para las escorias generadas.
5.- PRESUPUESTO DE INVERSIONES
Las inversiones para la implementacion del proyecto, tendran el
siguiente detalle:
--------------------------------------------------------------------
DESCRIPCION MONTO (US$) SUB-TOTAL (US$)
--------------------------------------------------------------------
1.0 Nuevo deposito de Cochabamba 2 200 000 2 200 000
--------------------------------------------------------------------
2.0 Deposito existente
--------------------------------------------------------------------
2.1 Obras proteccion y estabilidad 2 000 000
--------------------------------------------------------------------
2.2 Obras complementarias 550 000
--------------------------------------------------------------------
2.3 Tratamientos y restauracion 2 000 000 4 550 000
--------------------------------------------------------------------
SUB-TOTAL 6 750 000
--------------------------------------------------------------------
IMPREVISTOS +/- 15% 1 000 000
--------------------------------------------------------------------
TOTAL 7 750 000
--------------------------------------------------------------------
6.- CRONOGRAMA DE EJECUCION
El Cronograma de ejecucion del proyecto se estima requerira de cuatro (4)
anos bajo el siguiente detalle:
--------------------------------------------------------------------
ANO ACTIVIDAD MONTO (US$)
--------------------------------------------------------------------
1997 Deposito existente, obras para estabilidad 1 250 000
--------------------------------------------------------------------
1998 Nuevo deposito de Cochabamba 2 500 000
--------------------------------------------------------------------
1999 Deposito existente, proteccion, tratamiento
y otros 2 500 000
--------------------------------------------------------------------
2000 Deposito existente, recuperacion y remediacion 1 500 000
--------------------------------------------------------------------
TOTAL 7 750 000
--------------------------------------------------------------------
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 224.
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5.4.14 PROYECTO No 14
PROYECTO: DEPOSITO DE TRIOXIDO DE ARSENICO, ABANDONO DEL DEPOSITO DE
MALPASO, CIERRE DEL DEPOSITO DE VADO Y NUEVO DEPOSITO EN VADO
1. OBJETIVO
Este proyecto tiene por objetivo principal mitigar en forma integral la
contaminacion ambiental ocasionada por los depositos de trioxido de
arsenico generado en el Complejo Metalurgico de La Oroya, acorde a los
niveles maximos permisibles para efluentes liquidos fijados en la
Resolucion Ministerial No 011-96-EM/VMM del 10 de enero de 1 996 y niveles
maximos permisibles de elementos y compuestos presentes en emisiones
gaseosas provenientes de las unidades minero-metalurgicos fijados en la
Resolucion Ministerial No 315-96-EM/VMM del 16 de julio de 1 996 del
Ministerio de Energia y Minas.
2. EVALUACION DEL IMPACTO
El trioxido de arsenico es un residuo de la fundicion, producto del
procesamiento de concentrados de cobre y plomo. Por sus escasas ventas,
este material ha sido depositado en dos areas, una desde 1 992 en Malpaso,
operativo durante aproximadamente 25 anos, y otra en la zona de Vado, en
actual uso. Ambos depositos, si bien fueron construidos bajo los
estandares de aquella epoca, no ayudan a preservar las exigencias actuales
de control de calidad del agua que agua que percola en epocas de lluvia y
del aire atmosferico.
2.1 Caracteristicas de los Depositos
Deposito de Malpaso
Ubicacion: Se encuentra en la llanura aluvial del rio Mantaro,
aproximadamente un kilometro aguas abajo de la planta hidroelectrica
de Malpaso y cerca de 19 kilometros rio arriba de la fundicion de La
Oroya (Figura 1).
Volumen: Como resultado preliminar de la investigacion del sitio
realizada por ADI International Inc. de Canada, el volumen de
material de desecho se ha estimado en 38 000 m^3, equivalente a una
45 000 t de residuo.
Topografia: La mayoria del deposito esta cubierto con piedra de la
localidad y no es inmediatamente evidente a simple vista, aunque hay
muchas calicatas donde el trioxido de arsenico esta expuesto. La
topografia del lugar se muestra en la Figura 2-Area de Malpaso.
Condiciones Operativas: Este es un deposito utilizado desde el ano 1
992 por aproximadamente 25 anos y se encuentra en desuso.
Deposito de Vado
Ubicacion: Se encuentra en la llanura aluvial del rio Mantaro, cerca
de 9 kilometros rio arriba de la fundicion en direccion a Cerro de
Pasco. El acceso es por via asfaltada en buenas condiciones. Tambien
se llega por ferrocarril (Figura 1).
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 225.
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Volumen: Basados en los resultados preliminares de la investigacion
del sitio reportados por ADI International Inc. de Canada, el
volumen de trioxido de arsenico depositados se ha estimado en 97 000
m^3, equivalentes a unas 115 000 t.
Topografia: La mayor parte del area del deposito se encuentra
expuesto al medio ambiente. La topografia del lugar se muestra en la
Figura 2-area de Vado.
Condiciones Operativas: Actualmente en uso.
Composicion quimica promedio:
--------------------------------------------------------------------
%As(2)O(3) %As %Sb %Cu %Pb %Zn g/t Ag g/t Au %Ins.
--------------------------------------------------------------------
88-90 66,5 0,90 0,90 0,80 0,10 34,2 Trazas o,6
--------------------------------------------------------------------
2.2 Calidad de Agua
Por estar los depositos en areas de material aluvional y muy cercanas al
rio Mantaro y expuestos a la accion de las lluvias las que se intensifican
en las epocas de invierno, percolan y ocasionan la disolucion del arsenico
y otros elementos, llegando a discurrir y contaminar el rio Mantaro.
La evaluacion de calidad de las aguas de este rio, realizadas por nuestra
Division de Investigaciones Metalurgicas antes y despues del stock de
Vado, reportaron los siguientes resultados (mg/l):
--------------------------------------------------------------------
Antes del Stock Vado Despues del Stock Vado
--------------------------------------------------------------------
Fecha Cu Pb Fe As Cu Pb Fe As
--------------------------------------------------------------------
27-3-95 0,08 0,05 0,52 0,05 0,08 0,04 0,55 0,60
--------------------------------------------------------------------
29-3-95 0,06 0,04 0,66 0,04 0,08 0,04 0,47 0,84
--------------------------------------------------------------------
31-3-95 0,06 0,04 0,54 0,01 0,06 0,04 0,57 0,06
--------------------------------------------------------------------
03-4-95 0,10 0,03 0,53 0,08 0,11 0,08 0,52 0,30
--------------------------------------------------------------------
05-4-95 0,04 0,05 0,51 0,05 0,05 0,04 0,46 0,40
--------------------------------------------------------------------
07-4-95 0,11 0,04 0,56 0,23 0,04 0,03 0,59 0,01
--------------------------------------------------------------------
10-4-95 0,09 0,04 0,39 0,03 0,05 0,04 0,34 0,02
--------------------------------------------------------------------
12-4-95 0,06 0,01 0,50 0,06 0,10 0,02 1,70 0,94
--------------------------------------------------------------------
15-4-95 0,06 0,01 1,10 0,04 0,12 0,05 0,68 0,45
--------------------------------------------------------------------
17-4-95 0,07 0,04 0,55 0,05 0,03 0,06 0,44 0,56
--------------------------------------------------------------------
19-4-95 0,05 0,03 0 44 0,01 0,06 0,04 0,26 1,10
--------------------------------------------------------------------
21-4-95 0,06 0,04 0,44 0,13 0,05 0,04 0,32 0,36
--------------------------------------------------------------------
24-4-95 0,52 0,80 4,40 0,13 0,52 0,28 4,20 0,16
--------------------------------------------------------------------
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 226.
- --------------------------------------------------------------------------------
--------------------------------------------------------------------
26-4-95 0,42 0,32 4,20 0,01 0,48 0.35 4.30 0,26
--------------------------------------------------------------------
28-4-95 0,52 0.35 4,30 0,04 0,55 0,40 3,90 0,44
--------------------------------------------------------------------
L.M.P.(l) 1,00 0,40 2,00 1,00 1,00 0,40 2.00 1,00
--------------------------------------------------------------------
L.M.P.(2) 0,30 0.20 1,00 0,50 0,30 0,20 1,00 0,50
--------------------------------------------------------------------
Fuente: Memorandum Interno DIM-o74-95 del 06-06-1 995.
L.M.P.(1): Limites Maximos Permisibles en Cualquier Momento (mg/l).
L.M.P.(2): Limites Maximos Permisibles Valor Promedio Anual (mg/l).
Del cuadro se deduce que se incrementa la concentracion de arsenico
en el rio Mantaro despues del stock Vado, lo que explica la
existencia de contaminacion de dicho rio con arsenico.
En cuanto a los otros elementos como cobre, plomo y fierro se
observa infimos incrementos que no merecen nuestra atencion.
Referente al pH practicamente no se observa variacion al haberse
registrado valores entre 7,3 y 7,8 para ambas muestras de agua.
2.3 Calidad de Aire
Adicionalmente se tiene una contaminacion por accion eolica
principalmente sobre el material depositado en Vado.
El aire atmosferico aledano es monitoreado en forma continua en una
estacion ubicada en Casaracra (a 1 km al norte del deposito de
Vado). En esta estacion, en el periodo enero-diciembre de 1995 el
contenido de arsenico promedio fue de 0,220 (microgram)/m^3,
mientras que en el periodo correspondiente a enero-junio de 1996 fue
de solo 0,086 (microgram)/m^3. Esta disminucion se explica porque
parte de la superficie se ha cubierto con tierra de la zona y en el
extremo Oeste del area se han realizado pruebas de deposito en dos
modulos de 500 m^2 cada uno, utilizando geomembrana en uno y en el
otro arcilla y ademas cubriendo la superficie con tierra de cultivo
y pastos.
3. ALTERNATIVAS DE MITIGACION
Al respecto la firma canadiense ADI INTERNATIONAL INC. contratada por
Centromin Peru S.A., ha estudiado diferentes alternativas de abandono y
cierre de estos depositos asi como la construccion de uno nuevo para la
futura produccion de trioxido de arsenico.
Estos estudios, cuyo alcance llega al nivel de ingenieria basica y ademas
prapara los terminos de referencia para la elaboracion de la ingenieria de
detalle, se encuentran sujetas a los requerimientos y concuerda con la
guia publicada por el Consejo Canadiense de Ministros del Medio Ambiente
descrita en el "National Guidelines for The Landfilling of Hazardous
Waste", CCME-WM/TR-028E, y tambien con la publicacion de La Agencia de
Proteccion del Medio Ambiente de Estados Unidos "Lining of Waste
Contaiminent and Other Impoundment Facilities", EPA/600/2-88/052.
Los trabajos tambien incluyen la ejecucion de los estudios de las
condiciones hidrogeologicas y geotecnicas de las areas involucradas
previas al diseno, el diseno y especificaciones del sistema de monitoreo
de la post-construccion, y la praparacion de las especificaciones de
construccion para el deposito.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 227.
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Luego de analizar las diversas alternativas de cierre y abandono: sellado
del deposito en el lugar, transferir el material a un deposito disenado
para el proposito fuera del deposito, posiblemente en el aeropuerto,
transferencia del material a un deposito seguro en el sitio y
solidificacion de los desechos usando concreto, polimeros u otros metodos,
se opto por el desarrollo de un sistema de deposito seguro en el sitio,
como se describe en cada caso.
3.1 Abandono del Deposito de Malpaso
El deposito requerido consiste de un sistema compuesto de forrado de
fondo, una cubierta compuesta y un sistema de deteccion y monitoreo
de lixiviado, ambos disenados para controlar la liberacion de
contaminantes en el medio ambiente y control del potencial de
exposicion del publico a estos.
El sistema esta disenado para permitir que aproximadamente el 50% de
los desechos sean excavados del area y movidos a un deposito
provisional. La primera de las dos celdas propuestas seran
construidas en el area excavada, los desechos del area removida
seran excavados y movidos a la nueva celda, una segunda celda
entonces sera construida en el area excavada y el desecho del
deposito provisional sera depositado en esta segunda celda. El
concepto es mostrado en el Plano Numero 1-Malpaso Site.
Se estableceran las implicancias del escurrimiento de aguas
superficiales, los que seran impedidos en el diseno del deposito,
incluyendo el manejo de los eventos pico durante la construccion.
El deposito requerido consistira en un sistema compuesto de doble
Forro de Membrana Flexible (Flexible Membrane Liner) en el fondo,
una simple cobertura compuesta FML en la parte superior y un
sistema de deteccion de lixiviado entre las FML del fondo. El
concepto y todos los detalles se muestran en el Plano Numero
1-Malpaso Site, junto con las secciones de la cobertura superior y
la del fondo del sistema.
Este concepto es consistente con las especificaciones de el CCME y
el EPA, con la excepcion que los requerimientos para el sistema de
coleccion de lixiviado han sido eliminados. El sistema de coleccion
de lixiviado no es requerido ya que la celda sera inmediatamente
sellada despues de colocar los desechos y no habra produccion de
solucion dentro de la celda.
3.2 Cierre del Deposito de Vado
El trabajo de encapsulamiento sera similar al de Malpaso, pudiendo
tener como area temporal una zona del nuevo deposito. Este trabajo
puede ejecutarse tambien en forma modular.
El sistema debera ser disenado para permitir que aproximadamente un
tercio de los desechos sean excavados del area y acumulados sobre el
area restante del deposito. Este procedimiento requerira la
construccion de una berma de confeccion alrededor del area para
evitar que los desechos acumulados se escurran hacia fuera del
deposito, la zona de donde se extrajo el material sera preparada y
se construira una celda de deposito seguro en ella.
A continuacion se colocara en esta celda aproximadamente un tercio
de los desechos y se sellara. Este procedimiento sera repetido dos
veces para acomodar los dos
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 228.
- --------------------------------------------------------------------------------
tercios de desechos restantes, resultando al final en un deposito
seguro consistente de tres celdas individuales.
Este concepto y los detalles se muestran en el Plano No 1-Vado
Existing Site, e incluye una ilustracion de las etapas del manipuleo
de los desechos y de la construccion de las celdas.
El area de deposito temporal sera disenada para controlar la
migracion de los desechos contaminados o su lixiviacion durante el
periodo en el cual el deposito temporal este en uso. El deposito
temporal sera cerrado cuando se complete la construccion de las
celdas.
Como el concepto utilizado para el abandono de Malpaso, este
concepto es consistente con las especificaciones de el CCME y el
EPA, con la excepcion que los requerimientos para el sistema de
coleccion de lixiviado han sido eliminados, ya que la celda sera
inmediatamente sellada despues de colocar los desechos y no habra
produccion de solucion dentro de la ceida.
3.3 Nuevo Deposito (Vado II)
En la zona del antiguo aeropuerto, bajo la misma tecnica de
encapsulamiento, pero en forma modular, se acondicionara el area y
se iniciaran los trabajos para la fabricacion de celdas. Debido a la
produccion de solo 4 000 t por ano de trioxido de arsenico, el area
proyectada para la colocacion de la nueva produccion, sera para un
volumen final 50 000 m^3 y un tiempo de vida util de 25 anos. Debera
ser disenada con una configuracion de celdas multiples.
El uso de una configuracion de celdas multiples proporciona un grado
adicional de flexibilidad en el almacenaje del desecho de arsenico,
asimismo asegura que el periodo de exposicion del desecho a los
elementos puede ser controlado y limitado a un maximo de celda
abierta de 5 anos.
Las especificaciones y detalles del sistema propuesto se muestran en
el Plano No 1-Vado Aeroport Site.
Teniendo en cuenta que cada celda individual del nuevo deposito
estara abierta por un periodo de 5 anos, es posible que se genere un
lixiviado durante los periodos de lluvia. Por lo tanto el diseno del
deposito debera incluir el sistema de tratamiento de lixiviado. El
sistema de tratamiento debera ser disenado para manejar la
generacion de lixiviado de todas las tres celdas y debera incluir
elementos de muestreo para la caracterizacion del lixiviado y un
sistema para la descarga del agua tratada y residuos, sean estos de
arsenato de fierro o calcio que se mezclaran con el trioxido de
arsenico en las celdas.
3.4 Presupuesto de Inversiones
La inversion para la implementacion de los proyectos mencionados,
tienen el siguiente detalle:
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 229.
- --------------------------------------------------------------------------------
--------------------------------------------------------------------
DESCRIPCION MONTO US$
--------------------------------------------------------------------
1.0 Abandono del deposito de Malpaso 2 800 000
--------------------------------------------------------------------
2.0 Cierre del deposito de Vado 4 800 000
--------------------------------------------------------------------
3 0 Nuevo deposito 1 750 000
--------------------------------------------------------------------
SUB-TOTAL 9 350 000
--------------------------------------------------------------------
Imprevistos 1 350 000
--------------------------------------------------------------------
TOTAL 10 700 000
--------------------------------------------------------------------
3.5 Cronograma de ejecucion
El cronograma de ejecucion del proyecto se estima requerira de cinco
(5) anos bajo el siguiente detalle:
--------------------------------------------------------------------
ANOS ACTIVIDAD MONTO SUB-TOTAL US$
US$
--------------------------------------------------------------------
1 997 Deposito de Malpaso 1 625 000 1 625 000
--------------------------------------------------------------------
1 998 Deposito de Malpaso (fin) y 2 000 000 2 000 000
Deposito de Vado (inicio)
--------------------------------------------------------------------
1 999 Nuevo deposito 1 000 000
Deposito de Vado (cont.) 2 000 000 3 000 000
--------------------------------------------------------------------
2 000 Nuevo deposito (cont.) 1 000 000
Deposito de Vado (fin) 1 600 000 2 600 000
--------------------------------------------------------------------
2 001 Obras Complementarias 1 475 000 1 475 000
--------------------------------------------------------------------
TOTAL 10 700 000
--------------------------------------------------------------------
4. RESULTADOS DE MITIGACION
La solucion propuesta permitira solucionar en forma integral el problema
de contaminacion, abandonando los depositos existentes y construyendo un
nuevo deposito con tecnologia de avanzada y que se ajuste a las normas y
requerimientos mas exigentes a nivel mundial.
El area de los antiguos depositos quedara al final de los trabajos de una
apariencia natural, similar al de su entorno.
Los controles y muestreos tanto de la calidad de aire del medio ambiente
como del agua que discurre por el rio Mantaro, estaran acorde a los
niveles maximos permisibles establecidos en la resoluciones del Ministerio
de Energia y Minas No 011-96-EM/VMM del 10 de enero de l996 y No
315-96-EM/VMM del 16 de julio de 1996.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 230.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Niveles Maximos Permisibles para Efluentes Liquidos Minero- Efluente
Metalurgicos al
- --------------------------------------------------------------------------------
Parametro Valor en Cualquier Valor Promedio Rio Mantaro
Momento Anual
- --------------------------------------------------------------------------------
pH > 6 y < 9 > 6 y < 9 7-8
- --------------------------------------------------------------------------------
Solidos suspendidos (mg/l) 50 25 25
- --------------------------------------------------------------------------------
Plomo (mg/l) 0,4 0,2 0,2
- --------------------------------------------------------------------------------
Cobre (mg/l) 1,0 0,3 0,3
- --------------------------------------------------------------------------------
Zinc (mg/l) 3,0 1,0 1,0
- --------------------------------------------------------------------------------
Fierro (mg/l) 2,0 1,0 1,0
- --------------------------------------------------------------------------------
Arsenico (mg/l) 1,0 0,5 0,5
- --------------------------------------------------------------------------------
Cianuro total 1,0 1,0 1,0
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Niveles Maximos Permisibles de Calidad de Aire Calidad Aire
- --------------------------------------------------------------------------------
Concentracion Concentracion Alrededores
Media Aritmetica Media Aritmetica Depositos
Parametro Diaria Anual Anual
(microgram)/m^2 (ppm) (microgram)/m^2 (ppm) (microgram)/m^2 (ppm)
- --------------------------------------------------------------------------------
Arsenico 6 6
- --------------------------------------------------------------------------------
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 231.
- --------------------------------------------------------------------------------
[MAP OMITTED]
FIGURA 1
PLANO DE UBICACION
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 232.
- --------------------------------------------------------------------------------
[MAP OMITTED]
Proj.
PLAN DE CIERRE DEL
DEPOSITO DE TRIOXIDO
DE ARSENICO DE VADO
Y ABANDONO DEL DEPOSITO
DE MALPASO - LA OROYA
Dwg.
AREA DE VADO
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 233.
- --------------------------------------------------------------------------------
[SITE PLANS OMITTED]
MALPASO SITE
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 234.
- --------------------------------------------------------------------------------
[SITE PLANS OMITTED]
VADO EXISTING SITE
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 235.
- --------------------------------------------------------------------------------
[SITE PLANS OMITTED]
VADO AEROPORT SITE
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 236.
- --------------------------------------------------------------------------------
5.4.15 PROYECTO No 15
FERRITAS DE ZINC
1. OBJETIVO
Este proyecto tiene por objetivo evaluar las condiciones de estabilidad y
sobreelevacion de los depositos de ferritas de zinc, y consecuentemente
establecer las obras requeridas para mitigar o eliminar los impactos
ambientales que afectan la tierra, el agua, la atmosfera y la vida, ademas
la recuperacion y remediacion de suelos.
El proyecto contempla como medidas de mitigacion para las ferritas de zinc
dos escenarios:
o Ampliacion de los depositos No 3 y 4 y abandono tecnico de los
cuatro depositos.
o Factibilidad tecnico-economica para el procesamiento.
2. EVALUACION DEL IMPACTO
La obtencion del zinc refinado desde los concentrados sulfurados de zinc
en el complejo metalurgico de La Oroya se lleva a cabo a traves de
procesos pirometalurgicos e hidrometalurgicos (tostacion, lixiviacion,
purificacion, electrodeposicion, fusion y moldeo).
En el proceso hidrometalurgico de lixiviacion se realiza la disolucion del
zinc de las calcinas (producto de la tostacion de concentrados) en un
lixiviante acido (electrolito gastado) obteniendose una solucion de
sulfato de zinc y un residuo solido cuyo compuesto principal (75,0%) es
conocido como "Ferritas de Zinc" (Fe(2)O(3)ZnO).
Los volumenes de residuos generados (115,0 t/d) en la etapa de lixiviacion
sobrepasa la capacidad de tratamiento de la planta "Zileret" (50 t/d),
situacion que obliga a almacenar el excedente en los depositos ubicados en
Huanchan a 3 km. del complejo metalurgico. Al 31 de octubre de 1996 se
tiene almacenados 1 242 797 t.
Las pulpas de ferritas se depositan en pozas conformadas por diques
perimetricos de material prestado. Para satisfacer la creciente demanda de
capacidad, las alturas de los diques son constantemente incrementadas
siguiendo la metodologia "aguas arriba" sin compactacion ni adicion de
humedad.
El agua que trae la pulpa de ferritas es decantada en uno de los extremos
de cada poza y evacuado por una tuberia enterrada hacia el rio Mantaro por
su ladera izquierda.
Las condiciones climaticas tales como vientos y lluvias originan por un
lado arrastre de las particulas finas al medio ambiente y disolucion de
las sales solubles (SO(4)Zn) que finalmente descargan al rio Mantaro.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 237.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DIAGRAMA DE FLUJO DE LA GENERACION DE RESIDUOS
CIRCUITO DE ZINC
[GRAPHIC OMITTED]
- --------------------------------------------------------------------------------
2.1 ESTABILIDAD DE LOS TALUDES DE LOS DEPOSITOS
El estudio de estabilidad de los taludes de los depositos realizados
por la empresa "Rescan Peru S.A." determina que algunos sectores de
los depositos tienen taludes con estabilidad critica y los restantes
tienen valores de factores de seguridad cercanos al minimo
especificado, como se aprecia en el siguiente cuadro:
---------------------------------------------------------------------
SECCION POZA TALUD FACTOR DE SEGURIDAD CONDICION
----------------------
ESTATICO SISMICO
---------------------------------------------------------------------
1-1 1 IZQUIERDO 1.165 0.946 Critico
DERECHO 1.482 1.158 Estable
---------------------------------------------------------------------
2-2 2 IZQUIERDO 1.266 0.966 Estable
DERECHO 2.468 1.692 Estable
---------------------------------------------------------------------
3-3 3 IZQUIERDO 1.481 1.102 Estable
---------------------------------------------------------------------
4-4 3 IZQUIERDO 1.423 1.065 Critico
---------------------------------------------------------------------
5-5 4 IZQUIERDO 1.467 1.090 Critico
---------------------------------------------------------------------
6-6 4 IZQUIERDO 1.432 1.139 Estable
---------------------------------------------------------------------
Coeficiente sismico: 1.5; Metodo utilizado : Metodo de Bishop.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 238.
- --------------------------------------------------------------------------------
2.2 CALIDAD DE AIRE
La contaminacion del medio ambiente por accion eolica tiene lugar
debido a que el material humedo depositado en las pozas al secarse
por accion de la temperatura solar se convierte en polvo fino que es
arrastrado por el viento.
El aire atmosferico aledano es monitoreado en forma continua en una
estacion ubicada entre los depositos de escoria y de Ferritas en
Huanchan. En esa estacion, en el periodo Enero-Agosto de 1996 se
analizaron los elementos mostrados a continuacion cuyos contenidos
estan dentro de los niveles maximos permisibles a excepcion del
plomo el cual reporta un contenido promedio de 2.7 (micro)g/m^3,
superior a los niveles maximos permisibles y que probablemente esta
influenciado por las emisiones gaseosas de la chimenea principal del
complejo cuya descarga por accion del viento es orientada hacia ese
lugar.
- --------------------------------------------------------------------------------
ANALISIS DE MATERIAL PARTICULADO EN HUANCHAN
ENERO - AGOSTO DE 1996
- --------------------------------------------------------------------------------
MES (micro)g/m^3
- --------------------------------------------------------------------------------
SPM As Pb Cd
- --------------------------------------------------------------------------------
ENE 71.517 0.036 0.215 0.007
- --------------------------------------------------------------------------------
FEB 120.143 0.493 1.105 0.024
- --------------------------------------------------------------------------------
MAR 60.422 0.453 0.906 0.024
- --------------------------------------------------------------------------------
ABR 79.713 0.797 1.036 0.032
- --------------------------------------------------------------------------------
MAY 175.617 2.107 4.390 0.263
- --------------------------------------------------------------------------------
JUN 297.440 6.544 10.113 0.476
- --------------------------------------------------------------------------------
JUL 237.019 0.640 0.427 0.095
- --------------------------------------------------------------------------------
AGO 121.979 1.134 3.537 0.110
- --------------------------------------------------------------------------------
PROM 145.481 1.526 2.716 0.129
- --------------------------------------------------------------------------------
NIVELES MAXIMOS PERMISIBLES
- --------------------------------------------------------------------------------
SPM* As* Pb**
- --------------------------------------------------------------------------------
350 6.0 1.5
- --------------------------------------------------------------------------------
(*) Concentracion media aritmetica diaria
(**) Concentracion mensual
- --------------------------------------------------------------------------------
2.3 CALIDAD DE AGUA
Por estar los depositos de los residuos lixiviados ubicados en la
ribera del rio Mantaro, en un area de material aluvial y ademas
expuestos a la accion de las lluvias las que se intensifican en las
epocas de invierno, percolan y ocasionan la disolucion de las sales
solubles de Zn y otros elementos, las cuales llegan a discurrir y
contaminar el rio Mantaro.
La seccion de pruebas de control efectua un control de los flujos y
contenidos metalicos que dicho efluente descarga al rio Mantaro, los
cuales son mostrados a continuacion y representa un promedio de
enero - agosto de 1996.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 239.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EFLUENTE LIQUIDO DESCARGADO AL RIO
- --------------------------------------------------------------------------------
DE LOS DEPOSITOS DE HUANCHAN
- --------------------------------------------------------------------------------
PROMEDIO ENERO-AGOSTO DE 1996
- --------------------------------------------------------------------------------
FLUJO TEMP. SOLIDOS mg/l
m^3/min. (degrees)C EN ------------------------------------------
pH SUSPENSION AS Cd Cu Fe Mn Pb Zn
- --------------------------------------------------------------------------------
0.488 16 7.03 40 0.08 0.50 0.05 0.25 18.40 1.43 222
- --------------------------------------------------------------------------------
NIVELES MAXIMOS PERMISIBLES R.M. No 011-96 EM/VMM
- --------------------------------------------------------------------------------
SOLIDOS mg/l
EN ------------------------------------------
SUSPENSION pH AS Cu Fe Pb Zn
- --------------------------------------------------------------------------------
Anexo No 2 100 > 5.5 < 10.5 1.0 2.0 5.0 1.0 6.0
- --------------------------------------------------------------------------------
Anexo No 1 50 > 6.0 < 9.0 1.0 1.0 2.0 0.4 3.0
- --------------------------------------------------------------------------------
Del cuadro se deduce que el contenido de Zn y Pb tienen
concentraciones superiores a los maximos permisibles; en cuanto a
los otros elementos como Cu, Fe y As se observa que estan dentro de
los maximos permisibles, y referente al pH, practicamente los
valores estan dentro del limite establecido.
2.4 UBICACION DE LOS DEPOSITOS
La ubicacion exacta de los depositos de los residuos de lixiviacion
de zinc (Ferritas de zinc) se detallan en el plano No. M03-96-04.
2.5 CANTIDAD DE RESIDUO DISPONIBLE A LA FECHA (31-10-96), t-s
-------------------------------
Poza No 1 102 623,8
-------------------------------
Poza No 2 94 429,5
-------------------------------
Poza No 3 312 935,0
-------------------------------
Poza No 4 732 708,7
-------------------------------
Total 1 242 797,0
-------------------------------
2.6 DIMENSION DE LAS PILAS DE ALMACENAMIENTO:
---------------------------------------
Poza No l 11 760.0 m^2
---------------------------------------
Poza No 2 11 600.5 m^2
---------------------------------------
Poza No 3 25 868.5 m^2
---------------------------------------
Poza No 4 45 576.0 m^2
---------------------------------------
Total 94 805.0 m^2
---------------------------------------
La altura de las pozas varian de 6 a 12 metros.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 240.
- --------------------------------------------------------------------------------
2.7 ANALISIS QUIMICO DE LAS FERRITAS DE ZIYC
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
a.- ANALISIS QUIMICO DEL RESIDUO ALMACENADO EN POZAS ANTIGUAS
(ANTES DE 1980), %
- ---------------------------------------------------------------------------------------
Fe Zn Pb SiO2 S Mn Cu CaO Se Na Te e,pp
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Promedio 32.0 25.5 4.4 4.0 2.6 1.6 0.6 0.5 0.5 0.1 0.4 7.0
- ---------------------------------------------------------------------------------------
Variacion, 1.2 0.7 0.3 0.5 0.2 0.1 0.02 0.1 0.1 0.02 0.0 2.0
- ---------------------------------------------------------------------------------------
Al2O3 Cd In Sb Bi Ga Ni Co Sn TI Ag, g/t Au, g/t
- ---------------------------------------------------------------------------------------
Promedio 0.2 0.1 0.1 0.1 0.03 0.02 0.01 0.1 0.1 < 0,01 302 0.3
- ---------------------------------------------------------------------------------------
Variacion, 0.04 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 33 0.1
- ---------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
b. ANALISIS QUIMICO DE LOS REIDUOS RECIENTES, %:
- --------------------------------------------------------------------------------
Fe Zn Pb SiO S Mn Cu Al AS K Na g, pp e, pp
- --------------------------------------------------------------------------------
32.4 23.5 5.0 2.0 2 1.5 0.6 0.3 0.3 0.1 0.1 < 10 7.00
- --------------------------------------------------------------------------------
Te Cd In Sb Bi Ga Ni Co Sn Mg TI Ag, g/t Au, g/t
- --------------------------------------------------------------------------------
0.0 0.13 0.1 0.1 0.04 0 0,0 5 0.1 0.1 < 0,01 345 0.25
- --------------------------------------------------------------------------------
3. ALTERNATIVAS DE MITIGACION
El proyecto de las ferritas de zinc contempla diversas medidas y obras de
ingenieria a ser ejecutadas, hasta el cierre total de los depositos; en
ese sentido la mitigacion de los impactos ambientales, por ellos, esta
enmarcado dentro de dos escenarios
3.1 PRIMER ESCENARIO: Abandono tecnico de los depositos
3.1.1 ESTABILIDAD FISICA
Considera las obras que deberan ejecutarse (muros de
confinamiento, canales ce coronacion, cunetas, etc.) para
garantizar la estabilidad de los depositos contra colapsos,
erosiones por escorrentia pluvial y contra contaminacion
ambiental, dentro de limites razonables de ocurrencia sismica
y lluvias extraordinarias.
Para este desarrollo se han ejecutado estudios relacionados a
los siguientes aspectos:
o Investigaciones geotecnicas: investigaciones de campo,
ensayos de laboratorio, clasificacion de suelos,
descripcion del perfil estatigrafico, determinacion de
parametros de resistencia a partir de ensayos SPT, etc.
o Evaluacion de estabilidad de los depositos existentes:
estabilidad de taludes de escorias, estabilidad de la
ladera adyacente al deposito, metodos de analisis.
o Potencial de crecimiento y capacidad remanente.
o Estabilidad contra escorrentias pluviales.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 241.
- --------------------------------------------------------------------------------
o Control contra infiltraciones.
o Estabilidad contra erosion eolica.
o Control de efluentes.
Los muros de confinamiento que se provecta en el perimetro de
los depositos, asi como las cunetas que serviran para evacuar
las aguas de las infiltraciones deberan ser construidas
empleando concreto resistente a las heladas y al ataque de
sulfatos.
Para la estabilidad contra escorrentias pluviales se
construiran canales de coronacion (inclinacion constante de
50(degrees) en las laderas adyacentes a los depositos para
captar un caudal de aproximadamente 45 l/seg.
Las infiltraciones hidricas seran captadas por una cuneta
proyectada al pie de los taludes de los depositos y conducidos
al rio Mantaro.
3.1.2 CAPACIDAD DE ALMACENAMIENTO
La capacidad de almacenamiento de los depositos No 1 y 2 esta
en el limite, los cuales deben tener un reforzamiento de los
taludes y abandonarse tecnicamente. Los depositos No 3 y 4 si
tienen un potencial de crecimiento (sobreelevacion) y pueden
continuar almacenando residuos por un periodo de tiempo
relativamente corto; sin embargo deben efectuarse
reforzamiento de todos los taludes cuya estabilidad fisica lo
requiera.
3.1.3 MEDIDAS DE CONTROL AMBIENTAL
Corresponde a todas las medidas que deben tomarse para
efectuar los controles, tanto de estabilidad como de
efluentes; Con respecto a la estabilidad fisica el
reforzamiento de todos los taludes de las cuatro pozas
garantizaran la estabilidad ante cualquier contingencia
sismica, y en cuanto a los efluentes liquidos que emanan los
depositos, estos seran solucionados con la implementacion de
una planta de tratamiento de efluente liquidos industriales
para fundicion y refinerias; en tal sentido la solucion
descargada al rio Mantaro estara dentro de los limites
permisibles establescidos por M.E.M.
3.2 SEGUNDO ESCENARIO: Factibilidad tecnico - economica de procesamiento
de las ferritas de zinc
Las ferritas de zinc almacenadas en el lugar conocido como Huanchan
distante a 3 km. del complejo metalurgico de La Oroya (diagrama No
4.1.3/1 - Capitulo IV) alcanzan a 1 242 739 t valorizados
aproximadamente en US $ 230 millones en sus contenidos metalicos de
Zn, Ag. Cd, Cu. La justificacion de esta alternativa se resume a
continuacion:
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 242.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Tecnologias para el procesamiento de ferritas de zinc
- --------------------------------------------------------------------------------
Tecnologia Proceso Inversion Costo de trat.
US $ Millones US $/t Res.
- --------------------------------------------------------------------------------
AUSMELT Lanza sumergida 80,00 88,00
(Proceso nuevo) Cap. Pta: 175 000
t/ano
- --------------------------------------------------------------------------------
LURGI Waeiz 54,00 100,00
Proceso conocido Cap. Pta: 60 000
t/ano
- --------------------------------------------------------------------------------
Tecnologia de Lixiviacion presurizada con concentrados de zinc
Esta tecnologia como alternativa consiste en reemplazar los tres
tostadores de cama fluida (FBR) y el tostador de lecho turbulento
(TLR) por una planta de lixiviacion a presion en autoclaves, para
tratar directamente los cancentrados de zinc (sphalerite) a traves
de la tecnologia de lixiviacion a presion (SHERRIT). Esta planta de
lixiviacion, para una produccion de 70 000 t.p.a. de zinc refinado
tiene un costo de US $ 40 millones, comparado con el costo de un
nuevo TLR y su respectiva planta de acido sulfurico que es del orden
de los US $ 52,9 millones.
La tecnologia de lixiviacion a presion permitira en la planta
Zileret (Horno Kiln de 50 t de capacidad/ dia) pueda emplearse para
procesar exclusivamente las ferritas almacenadas en Huanchan, asi
mismo tendra otras ventajas tales como:
o Se solucianaria el problema de emisiones de gases SO(2) debido
a que el azufre se fijaria coma azufre elemental, aun cuando
es conocido que su mercado es limitado.
o Permitira contrarrestar el problema de parque automotor para
el transporte de acida sulfurico, asi como tambien la
capacidad de almacenaje.
4. RESULTADOS DE LA MITIGACION
La implementacion de este proyecto permitira cubrir los siguientes
aspectos:
4.1 CONTAMINACION
Minimizara la contaminacion del rio Mantaro. Los analisis
quimicos de las saluciones descargadas por la planta de
tratamiento de efluentes se adecuara a los limites permisibles
establecidos par el M.E.M. y las aguas provenientes de drenaje
y/o escorrentias, indican que contienen porcentajes
permisibles que no afectan las aguas naturales del entorno,
por lo que se considera que las aguas captadas par las cunetas
construidas seran descargadas directamente al rio Mantara,
previa sedimentacion por lo que no sera necesario la
construccion de sistemas de tratamiento de aguas.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 243.
- --------------------------------------------------------------------------------
4.2 ESTABILIDAD FISICA
Garantizara una estabilidad estatica y dinamica de los depositos de
almacenamiento de ferritas ante un movimiento sismico, condicion de
suma importancia por estar La Oroya localizada en una region
calificada de alta sismicidad
4.3 RECUPERACION DE VALORES MITALICOS DE LAS FERRITAS
Las tecnologias arriba mencionadas permiten recuperar los valores
metalicos contenido en las ferritas de zinc, para que en el futuro
sea posible recuperar los suelos con un cierre definitivo de los
depositos.
5. PRESUPUESTO DE INVERSIONES
Las inversiones para la implementacion del proyecto, tendran el siguiente
detalle:
- --------------------------------------------------------------------------------
DESCRIPCION MONTO US$
- --------------------------------------------------------------------------------
Ingenieria de detalle 160 000
- --------------------------------------------------------------------------------
Construccion de muros Pie de Taludes 2 570 000
- --------------------------------------------------------------------------------
Impermeabilizacion de los depositos 740 000
- --------------------------------------------------------------------------------
Muros de defensa Ladera del Rio 216 000
- --------------------------------------------------------------------------------
Restauracion de suelos 400 000
- --------------------------------------------------------------------------------
Tuberia de conduccion de efluentes y 480 0000
filtraciones
- --------------------------------------------------------------------------------
Canal hacia la planta de tratamiento y caja de 146 000
captacion
- --------------------------------------------------------------------------------
SUB TOTAL 4 712 000
- --------------------------------------------------------------------------------
Imprevistos 888 000
- --------------------------------------------------------------------------------
TOTAL 5 600 000
- --------------------------------------------------------------------------------
6. CRONOGRAMA DE EJECUCION
El Cronograma de ejecucion del proyecto se estima requerira de cuatro (6)
anos
7. FUENTES
: AUSMELT LIMITED.
: BOART LONGYEAR S.A
: KILBORN. SNC. LAVALIN EUROP
: A.D. ZUNKEL CONSULTANTS INC.
<PAGE>
[MAP OMITTED]
-------------------------------------------------
Centromin Peru
-------------------------------------------------
Rescan Peru S.A.
-------------------------------------------------
PLAN DE CIERRE DEPOSITO DE FERRITAS - LA OROYA
ESTUDIO DE FACTIBILIDAD
-------------------------------------------------
DISPOSICION GENERAL DE SOBREELEVACION
Y OBRAS CORRECTIVAS
-------------------------------------------------
[ILLEGIBLE]
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 244.
- --------------------------------------------------------------------------------
5.4.16. PROYECTO No. 16
TRATAMIENTO DE AGUAS SERVIIDAS Y DISPOSICION DE BASURA EN
LA OROYA
1.- OBJETIVO
La ejecucion de las obras de ingenieria pertinentes y la adquisicion e
instalacion de equipos, que permitan efectuar el tratamiento de aguas
servidas y disposicion de basura de las zonas de vivienda dependientes de
Centromin Peru S.A., para evitar la contaminacion por estos conceptos del
rio Mantaro, cumpliendo con los requerimientos senalados por las
entidades gubernamentales.
2.- EVALUACION DEL IMPACTO
El sistema de alcantarillado que se dispone en las areas de vivienda de
Centromin Peru a lo largo de las riberas del rio Mantaro constituye una
red que permite colectar la casi totalidad de las aguas servidas y de
escorrentia, se encuentra en buen estado de conservacion, pero sus
descargas van en forma directa al mencionado rio.
Estos vertimientos sin ningun tratamiento, se constituyen en uno de Los
contaminantes del rio Mantaro.
En relacion a la basura, su recojo se realiza con un camion compactador,
el cual no abastece la demanda existente, al tener que recorrer
adicionalmente nueve kilometros desde el punto de recoleccion.
En el area de disposicion, la basura es colocada sin seguir las tecnicas
de un relleno sanitario, situacion que se complica por estar este deposito
en la margen izquierda del rio Mantaro, muy proxima al cauce de sus aguas.
Constituyendose por lo tanto en un punto adicional de contaminacion.
3.- ALTERNATTVA PARA LA MITIGACION
Contandose con el apoyo de la firma AQUAPLAN INGENIEROS SRL, luego de
analizadas diversas alternativas de solucion desde el punto de vista
tecnicoeconomico, se definio para el caso de las aguas servidas, la
alternativa de tratamiento con dos (2) plantas de lodos activados por el
metodo de aereacion extendida. Para la disposicion de basuras, se adopto
la solucion de relleno sanitario bajo el metodo de trinchera, el cual esta
dentro de las normas emitidas por el Ministerio de Salud (DIGESA).
3.1 TRATAMIENTO DE AGIJAS SERVIDAS
Para tal efecto se ha considerado dos (2) plantas para las areas de
vivienda ubicadas a lo largo de las riberas del rio Mantaro, una en la
zona de Chulec y la otra frente al hotel Inca en la zona de Sudete.
El proyecto considera tambien las lineas de interseccion, conduccion y
coleccion de las aguas servidas hacia las plantas de tratamiento. Debido a
las caracteristicas topograficas de La zona sera necesario instalar
estaciones de bombeo.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 245.
- --------------------------------------------------------------------------------
Luego del tratamiento, el cual usa procesos biologicos, se tendra un
efluente de descarga al rio de 30 ppm. de BOD y 40 ppm. de solidos
suspendidos.
o PLANTA DE CHULEC
Instalacion con una capacidad de tratamiento de 12.5 litros/seg.,
ubicada en la margen derecha del rio Mantaro, en el area denominada
Parque Lavaropa. Su area de influencia comprende los sectores de
Mayupampa, Chupampa, Tortilla y Chulec.
El tratamiento considera los siguientes procesos:
Desarenado, en el cual las aguas servidas son impulsadas por una
estacion de bombeo y conducidas a un canal desarenador de concreto
armado, donde mediante el principio de segmentacion diferencial, se
sedimentan las arenas manteniendo en suspencion los solidos
organicos, que luego son desmenuzados en un triturador.
Aereacion, donde la materia organica es digerida por los
microorganismos aerobicos contenidos en el lodo reciclado. Este
proceso se efectuara en un tanque de concreto armado de 12.0 m. x
24.0 m. x 4.0 in., con dos (2) aereadores de 2 HP para transferir a
la masa liquida 5.80 lbs/hr. de oxigeno en conjunto.
Decantacion, con funcion de separar los solidos de La parte liquida.
El tanque a utilizarse sera de concreto armado de 16,60 in. x 3,60
in. x 3.00 in., con un periodo de retencion de 4 horas y una tasa
superficial maxima de 30 gal/p2/hr., dispondra de un sisteina
mecanico de limpieza.
Secado, proceso que se realizara en dos (2) lechos de secado de
concreto armado de 400 m. x 10.00 m. x 1.00 m, donde el
excedentes de lodos seran secados en forma acelerada por filtracion,
retornandose el liquido sobrenadante ad tanque de aereacion por
bombeo.
Control, actividad que se realizara en un laboratorio de un area de
6.00 m. x 6.00 m, donde se determinara diariamente los valores de
BDO, SS, pH, Oxigeno Disuelto, SVI (solidos volatiles) y NMP (numero
mas probable de coliformes fecales).
o PLANTA DE SUDETE
Instalacion con una capacidad de tratamiento de 18.0 litros/seg,
ubicada en un area recreacional en Sudete frente al Hotel Inca. Su
area de influencia comprende los sectores de Amachay, Hidro,
Railway, Hoteles y Sudete.
El tratamiento considera los misinos procesos a los senalados en la
Planta de Chulec, con las siguientes caracteristicas fisicas:
Desarenado, en un canal de concreto armado con una longitud total de
13,60 m., con sistema de limpieza manual, sistema de medicion de
caudal tipo Parshall y triturador de solidos
Aereacion, en un tanque de concreto armado de forma trapezoidad con
un area de 390 m2 y una profundidad de 4.60m, con dos (2) aereadores
de 3.5 HP para transferir a la masa liquida 6.80 lbs/hr. de oxigeno
en conjunto.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 246.
- --------------------------------------------------------------------------------
Decantacion, con dos tanques gemelos de concreto armado de 24,00 m.
x 3,80 m. x 400 m. cada uno, con un periodo de retencion de 4
horas y una tasa superficial maxima de 30 gal/p2/hr., dispondra cada
unidad de un sistema mecanico de limpieza de lodos. Los lodos
obtenidos seran bombeados al tanque de aereacion. Secado, proceso no
requerido en esta planta.
Control, actividad que se realizara en un laboratorio de un area de
6.00 m. x 6.00 m., donde se determinara diariamenre los valores de
BDO, SS, pH, Oxigeno Disuelto, SVI (solidos volatiles) y NMP (numero
mas probable de coliformes fecales).
ESTACIONES DE BOMBEO
Por cuestiones topograficas, el sistema dispondra de tres (3)
estaciones de bombeo, dos para Chulec y una para Sudete.
3.2 DISPOSICION DE BASURA
La solucion seleccionada corresponde al de una planta de disposicion final
de residuos, bajo las tecnicas del metodo denominado Relleno Sanitario.
La planta estara ubicada en La zona de Cochabamba, en el area actual de
deposicion, donde se dispone de un area util de 2,5 hectareas.
o CELDAS
Se tendran modulos compuesto por celdas tipo trinchera de 5,00 m. de
ancho por 3,00 m. de alto con largos variables segun la
configuracion del area. Estas celdas estaran impermeabilizadas en el
fondo con un geotextil mas una geomembrana Gundle. La colocacion de
basura se efectuara por capas de 0,20 a 0,30 m esparcidas y
compactadas con tractor, una vez concluida su altura de diseno, se
cubrira con una capa de tierra de 0,40 m tambien compactada. Se
considera tambien chimeneas de evacuacion de gases y el drenaje y
captacion de liquidos, asi como el tratamiento de estos ultimos en
pozos septicos.
o OBRAS COMPLEMENTARIAS
Se tiene proyectado ejecutar edificaciones para cochera,
almacenamiento, caseta de control, oficinas y un cerco perimetral.
o EQUIPAMIENTO
Dos (2) camiones compactadores recolectores de basura de 16 Yd3.
Tractor de orugas, D4 o D6.
Carro tanque con manguera y aspersores.
Bomba para desaguar el agua de lluvia.
4.- RESULTADOS DE LA MITIGACION
La solucion propuesta permitira por primera vez en La Oroya, iniciar un
programa de saneamiento ambiental que garantice el tratamiento de las
aguas servidas y basura, disminuyendo por estos motivos la contaminacion
del rio Mantaro. De esta manera se
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo V Pag 247.
- --------------------------------------------------------------------------------
iniciara la materializacion del desarrollo sustentable que sefialan los
conceptos fundamentales del control del medio ambiente.
Este proyecto si bien se encuentra a nivel de ingenieria de detalle, ha
merecido la atencion de organismos como el Ministerio de la Presidencia,
pues la solucion adoptada esta siendo considerada dentro de los planes del
saneamiento integral de la ciudad de La Oroya.
5.- PRESUPUESTO DE INVERSIONES
El proyecto de tratamiento de aguas servidas y disposicion de basura,
requerira la ejecucion de las siguientes items y montos de ejecucion que
incluyen, en cuanto a equipos, solo se considera la adquisicion de dos (2)
camiones compactadores recolectores:
DESCRIPCION MONTO (US$) SUB-TOTAL (US$)
----------- ----------- ---------------
1.1 Obras de intercepcion y 425 000 425 000
conduccion.
1.2 Plantas de tratamiento
Chulec 1 100 000
Sudete 1 100 000
1.3 Disposicion de Basura 425 000 2 625 000
SUB-TOTAL 3 050 000
IMPREVISTOS +/-15% 450 000
TOTAL 3 500 000
6.- CRONOGRAMA DE EJECUCION
El Cronograma de ejecucion del proyecto se estima requerira de tres (3)
anos bajo el siguiente detalle:
ANO ACTVIDAD MONTO (US$) SUB-TOTAL CUSS)
--- -------- ----------- ---------------
1998 Obras de intercepcion y 500 000
conduccion Mayupampa,
Chulec, Amachay, Hidro
Disposicion de Basura 500 000 1 000 000
1999 Planta de tratamiento en 1 250 000 1 250 000
Chulec
2000 Planta de tratamiento en 1 250 000 1 250 000
Sudete
TOTAL 3 500 000
<PAGE>
--------------------------
CAPITULO VI
--------------------------
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo VI Pag 248.
- --------------------------------------------------------------------------------
6. PLAN DE CIERRE
6.1. Escenario
Debido a la importancia que el complejo metalurgico tiene dentro del
desarrollo socioeconomico de la region, por ser el centro industrial
de mayor generador de empleo y divisas, al producir metales que en
gran volumen se exportan a diferentes paises del mundo, la
probabilidad de un cierre de sus operaciones no es predecible en el
corto y mediano plazo.
Si se considera adicionalmente su magnitud, diversidad y complejidad
de sus operaciones metalurgicas, al ser una de las cuatro
fundiciones del mundo capaces de tratar concentrados polimetalicos
con un porcentaje alto de impurezas, el plan de cierre respectivo,
debera considerar innumerables acciones de planeamiento y ejecucion
que estaran sujetas durante su implementacion, no solo a cuestiones
netamente tecnicas sino tambien a decisiones economicas o politicas.
6.2. Alcance
Segun se estipula en los dispositivos legales relacionados al medio
ambiente, es necesario desarrollar un Plan de Cierre de toda unidad
industrial en operacion, con el proposito de disponer al cese de sus
operaciones, de un programa de actividades que permitan garantizar
la restauracion y recuperacion del area del emplazamiento, hasta
niveles aceptables para usos futuros.
Bajo este esquema el Complejo Metalurgico de La Oroya, ha
desarrollado un plan de cierre hasta el nivel de ingenieria basica
con el apoyo de la firma canadiense ADI INTERNATIONAL INC.
Por las consideraciones indicadas, se estima que el Plan de Cierre
se llevara acabo en el largo plazo, razon por la cual en el
desarrollo del presente PAMA, tal como puede apreciarse en los
capitulos precedentes, se ha proyectado diversos trabajos de
mitigacion y de modernizacion de procesos, que estan orientados a
solucionar los problemas ambientales existentes, hasta alcanzar o
mejorar los niveles permisibles exigidos.
El alcanzar estos niveles, circunscribe el Plan de Cierre, al
estudio de los emplazamientos de sus areas industriales tanto de la
Fundicion como el de las Refinerias de Cobre y Plomo, en una
extension total de 55 hectareas.
6.3. Situacion Actual
La antiguedad del Complejo Metalurgico La Oroya, la gran cantidad
de edificaciones, equipos de proceso tanto mecinicos, electricos y
de control, y la diversidad de procesos metalurgicos para la
fundicion y refinacion de los 20 metales entre productos y
subproductos, ha dado como origen que parte de la extension de su
emplazamiento haya sido afectadas por la contaminacion originada por
la actividad industrial.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo VI Pag 249.
- --------------------------------------------------------------------------------
Se tiene por lo tanto un escenario propio de una zona industrial de
alta congestion, que tendria que ser revertido a una condicion
similar a la que tuvo antes del inicio de su actividad industrial.
6.4. Objetivo
Desarrollo de los estudios de ingenieria hasta el nivel basico, que
permitan ejecutar el plan de cierre del Complejo Metalurgico de
acuerdo con los alcances senalados para el PAMA. Dentro de estos
lineamientos se considera la remocion de las instalaciones
existentes, eliminacion de fuentes de contaminacion,
recuperacion de suelos y las respectivas obras de remediacion, hasta
devolver al area sus caracteristicas iniciales antes de las
operaciones metalurgicas.
6.5 Plan de cierre
El cierre de los procesos operacionales en los complejos de la
Fundicion y Refinerias resultara en un decrecimiento dramatico del
volumen y cantidad de los contaminantes emitidos, pero su ejecucion
requerira de un planeamiento detallado de actividades que se inician
con la decision de cierre y terminan con la implementacion de
medidas de recuperacion del area y los controles de post-cierre.
Este Plan de Cierre, si bien no parece ser de ejecucion inmediata,
constituira el elemento de planeamiento mas importante, no solo al
final de las operaciones, sino ante la eventualidad de cierres
parciales. Por otra parte, el planeamiento detallado de las varias
fases del cierre como los trabajos de demolicion y desmantelamiento,
restauracion a niveles aceptables de calidad ambiental y otros
inherentes al caso, permitiran un uso racional de recursos, al tener
que requerirse cantidades considerables de tiempo y dinero.
6.5.1 Fases de Cierre
Para implementar el cierre debera ejecutarse un plan maestro
que considere todos los aspectos del cierre, desde el
agotamiento de las existencias en proceso hasta las
investigaciones en el area despues de la demolicion de las
instalaciones.
Para la confeccion e implementacion de este plan maestro
detallado se ha considerado llevar a cabo las siguientes
cuatro fases principales:
o Planeamiento de detalle
o Establecimiento de controles de medio ambiente
o Desmantelamiento y demolicion
o Investigacion y recuperacion del area.
El planeamiento de detalle, proveera toda la documentacion
pertinente al plan maestro para el desmantelamiento,
demolicion y recuperacion de las areas de la Fundicion y
Refinerias, asi como el de asegurar la salud, seguridad y los
estandares ambientales a lo largo de un proceso de varios
anos. Un detalle de las actividades que comprende esta fase
puede apreciarse en la figura 6.5.1/1.
Los controles de medio ambiente deberan establecerse antes del
trabajo de desmantelamiento y demolicion y su objetivo sera
el de minimizar el potencial de descar-
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo VI Pag 250.
- --------------------------------------------------------------------------------
ga de desechos no tratados al medio ambiente y asegurar que se
realice un plan de salud y seguridad antes del inicio de la
demolicion. Sus actividades principales se indican en la
figura 6.5.1/2. Debe senalarse que los controles de medio
ambiente continuaran durante la etapa de post-cierre, con el
proposito de garantizar el exito del cierre y de ser necesario
se efectuaran correcciones o trabajos de mantenimiento.
La fase de desmantelamiento y demolicion, cuyas actividades
principales se indican en la figura 6.5.1/3, debera ser
ejecutada de acuerdo con el plan maestro, teniendo en cuenta
la posible reutilizacion de algunas edificaciones en
actividades futuras.
Para la fase de investigacion y recuperacion del area, solo
quedaran algunos edificios, vias y algunas lineas ferreas, lo
cual facilitara llevar a cabo las actividades mostradas en la
figura 6.51/4, donde la contaminacion del suelo podra ser el
aspecto mas serio para la recuperacion de las areas y el uso
futuro del suelo. Uso que podria estar entre el industrial o
el residencial-recreacional.
6.6 Presupuesto de inversiones
El presupuesto de inversiones estimado, para la ejecucion del cierre
total del complejo es el siguiente:
- --------------------------------------------------------------------------------
DESCRIPCION MONTO (US$)
- --------------------------------------------------------------------------------
1.0 Desmontaje de Equipos 15 000 000
- --------------------------------------------------------------------------------
1.0 Desmontaje de Estructuras Metalicas 19 000 000
- --------------------------------------------------------------------------------
3.0 Demolicion de Obras Civiles 5 000 000
- --------------------------------------------------------------------------------
4.0 Investigaciones y correccion del area 5 500 000
- --------------------------------------------------------------------------------
5.0 Venta de eguipos y material de edificaciones
recuperados (22 500 000)
- --------------------------------------------------------------------------------
SUB-TOTAL 22 000 000
- --------------------------------------------------------------------------------
IMPREVISTOS 2 000 000
- --------------------------------------------------------------------------------
TOTAL 24 000 000
- --------------------------------------------------------------------------------
6.7 Cronograma de ejecucion
El cronogramna de ejecucion del proyecto se estima requerira de 70
meses, bajo el siguiente detalle:
- --------------------------------------------------------------------------------
ACTIVIDAD TIEMPO (MESES)
- --------------------------------------------------------------------------------
1.0 Terminacion de los inventarios 1
- --------------------------------------------------------------------------------
2.0 Establecimiento de controles ambientales 3
- --------------------------------------------------------------------------------
3.0 Desmantelamiento y remocion de eguipos salvables 9
- --------------------------------------------------------------------------------
4.0 Demolicion 9
- --------------------------------------------------------------------------------
5.0 Investigaciones de sitio 12
- --------------------------------------------------------------------------------
6.0 Recuperacion del sitlo 36
- --------------------------------------------------------------------------------
TOTAL 70
- --------------------------------------------------------------------------------
6.8 Mitigacion propuesta
De implementarse el cierre del Complejo, se producira una reduccion
inmediata y de alta proporcion en cuanto a la cantidad de
contaminantes que se descargan al ambiente.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo VI Pag 251.
- --------------------------------------------------------------------------------
Conforme se aplique el plan maestro de actividades para este cierre,
la contaminacion ira alcanzando niveles inferiores que estaran muy
por debajo de los limites permisibles establecidos.
Otro aspecto importante de mitigacion sera la recuperacion del area
para permitir el uso aceptable de la tierra a futuro.
La remediacion del medio ambiente contribuira a mejorar las
condiciones de vida desde el punto de vista ambiental, no solo de La
Oroya sino tambien en el cauce y valles del rio Mantaro aguas abajo.
6.9 Analisis economico
Las caracteristicas propias de un Plan de Cierre, las cuales no
estan involucradas directamente en el proceso productivo, no
permiten definir para el Complejo Metalurgico de La Oroya un tipo
de rentabilidad cuantificable en indices economicos.
<PAGE>
PAMA COMPLEJO MEALURGICO - LA OROYA Capitulo VI Pag 252.
- --------------------------------------------------------------------------------
FIGURA 6.5.1/1
FASE DE PLANEAMIENTO DE DETALLE
[FLOWCHART OMITTED]
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo VI Pag 253.
- --------------------------------------------------------------------------------
FIGURA 6.5.1/2
ESTABLECIMIENTO DE CONTROLES AMBIENTALES
-------------------------------------------
INICIAR PLAN
MAESTRO DE
CIERRE
-------------------------------------------
-------------------------------------------
DISPONER RESIDUOS EN
EQUIPO DEL SISTEMA DE
TRATAMIENTO
-------------------------------------------
-------------------------------------------
ESTABLECHER SISTEMAS
DE CAL HIDRATADA/REACTIVO
-------------------------------------------
-------------------------------------------
ESTABLECHER BOMBEO
TUBERIA PARA TRANF. DE
DESPERD. A PTA. TRATAM.
-------------------------------------------
-------------------------------------------
ESTABLECER SUMIDERO
Y BOMBEO RECOLECCION
DEL DRENAJE DEL SITIO
-------------------------------------------
-------------------------------------------
CONTRATO PARA DISPOSI
CION DE DESECHO
FUERA DEL SITIO
-------------------------------------------
-------------------------------------------
IMPLEMENTAR PROCEDIM.
DE SALUD/SEGURIDAD
-------------------------------------------
-------------------------------------------
MODIFICAR SISTEMAS
BOMBEO/TUBERIA PARA
TRATAMIENTO
-------------------------------------------
-------------------------------------------
PROBAR EL SISTEMA
-------------------------------------------
-------------------------------------------
REVISAR/FINALIZAR
PROCEDIMIENTOS
OPERATIVOS
-------------------------------------------
-------------------------------------------
SISTEMAS DISPONIBLES
-------------------------------------------
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo VI Pag 254.
- --------------------------------------------------------------------------------
FIGURA 6.5.1/3
FASE DE DESMANTELAMIENTO/DEMOLICION
-------------------------------------------
CONITNUAR PLAN
MAESTRO
-------------------------------------------
-------------------------------------------
LIMPIAR EQUIPOS
DEL PROCESO
-------------------------------------------
-------------------------------------------
PREPARAR ALMA-
CENES Y TALLER
-------------------------------------------
-------------------------------------------
PUBLICAR PROPU.
VENTA PTA OXIG.
-------------------------------------------
-------------------------------------------
VENDER EQUIPOS
MOVILES
-------------------------------------------
-------------------------------------------
PUBLICAR OFERTA
VENTA EQUIPOS
-------------------------------------------
-------------------------------------------
PUBLICAR OFERTA
VENTA SIST. INTEG.
-------------------------------------------
-------------------------------------------
DISPONER DE PRO-
DUCTOS PETROL.
-------------------------------------------
DISPONER DE PRO-
DUCT. QUIMICOS
-------------------------------------------
-------------------------------------------
DISPONER DESE-
CHOS PELIGROSOS
-------------------------------------------
-------------------------------------------
DESCONECT EQUIP
ALTO VOLTAJE
-------------------------------------------
-------------------------------------------
DESMAN. Y LIMP
SIST. INTEGRADOS
-------------------------------------------
-------------------------------------------
REMOVER Y LIMP
EQUIP PARA VENTA
-------------------------------------------
-------------------------------------------
DEMOLIC ESTRUCTUR
AS Y CONSTRUCC.
-------------------------------------------
-------------------------------------------
DEMOLICION DE
CIMIENTOS
-------------------------------------------
-------------------------------------------
REMOCION DE
RIELES DE TREN
-------------------------------------------
-------------------------------------------
LIMP. OBSTRUIR LINEAS
SUBSTERRANEAS
-------------------------------------------
-------------------------------------------
DEMOLICION
ACABADA
-------------------------------------------
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo VI Pag 255.
- --------------------------------------------------------------------------------
FIGURA 6.5.1/4
FASE DE INVESTIGACION/RECUPERACION DEL AREA
-------------------------------------------
CONTINUAR PLAN
MAESTRO
-------------------------------------------
-------------------------------------------
TOPOGRAFIA PRELI-
MINAR DE SUELO
-------------------------------------------
-------------------------------------------
PROGRAMA
HIDROGEOLOGICO
-------------------------------------------
-------------------------------------------
CONTINUAR PRUEBA
DE SUELOS
-------------------------------------------
-------------------------------------------
DEFINIR EXTENSION
DE CONTAMINACION
-------------------------------------------
-------------------------------------------
DEFINIR PROGRAMAS Y
OPCIONES DE RECUPER.
-------------------------------------------
-------------------------------------------
RECUPERACION DE
SITIO
-------------------------------------------
-------------------------------------------
LIBERAR TERRENO
PARA USO FINAL
-------------------------------------------
<PAGE>
--------------------------------------------
CAPITULO VII
--------------------------------------------
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo VII Pag 256.
- --------------------------------------------------------------------------------
7. PLAN DE MONITOREO DE EMISIONES Y EFLUENTES
7.1 Objetivo
El plan de monitoreo de emisiones y efluentes tiene como objetivo
cuantificar los resultados del Programa de Mitigacion, el mismo que
tiene como proposito alcanzar las exigencias de ley.
-- Para Emisiones: Resolucion Ministerial No. 315-96-EM/VMM
(Niveles Maximos Permisibles de Elementos y Compuestos
presentes en emisiones gaseosas provenientes de las
actividades minero-metalurgicas - Anexo No. 1 y 3).
-- Para Efluentes: Resolucion Ministerial No. 011-96-EM/VMM
(Niveles Maximos Permisibles para Efluentes Liquidos
minero-metalurgicos - Anexo No. 1 y 2).
El plan de monitoreo considera reduccion de puntos de monitoreo
debido a los proyectos de mitigacion, asi como sistemas de
muestreos adecuados y analisis: mecanicos, fisicos y quimicos,
residuos solidos y otros elementos, que puedan ser generados por las
operaciones del Complejo Metalurgico. Asimismo, considera
recopilacion de la informacion correspondiente para ser reportada a
la Direccion General de Asuntos Ambientales (D.G.A.A.) del
Ministerio de Energia y Minas.
7.2 Plan de Monitoreo
El plan de monitoreo para emisiones y efluentes debera llevarse a
cabo con los recursos disponibles y otros a incrementarse:
- Recursos Humanos
- Infraestructura y/o Equipos
- Protocolos
- Estaciones y/o Puntos de Monitoreo
- Capacitacion
7.2.1 Recursos Humanos
La ejecucion del Plan de Monitoreo a nivel de campo, estara a
cargo de la Seccion de Pruebas de Control de la Direccion de
Control de Procesos Metalurgicos de la Gerencia Central de
Operaciones Metalurgicas. Esta ejecucion estara bajo la
supervision directa de Ingenieros Metalurgistas.
7.2.2 Infraestructura y/o equipos. -
Equipos con que cuenta Centromin Peru S.A.:
7.2.2.1 Para Emisiones
Para determinar las emisiones gaseosas de la
Fundicion se dispone de muestreadores neumaticos
Sprague para el muestreo manual y bombas de vacio
para el muestreo automatico, asimismo los flujos
de gases se determinan con tubos pitot y medidores
de tiraje Dwyer y los analisis de gas con un
analizador electronico COSA y los analizadores
quimicos Orsat y Orsat Universal.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo VII Pag 257.
- --------------------------------------------------------------------------------
7.2.2.2 Para Calidad del Aire
Para monitorear la calidad del aire se dispone de
dos monitores de gases (S0(2)), marca Kimoto de
fabricacion Japonesa, tipo 331 B, para evaluar
concentraciones en escalas de ppb.
El principio de funcionamiento del detector es el
fenomeno de conductividad. Al oxidarse el SO(2)
en el medio receptor, genera microcorrientes de
energia electrica que son registrados por sistemas
electronicos y entregados directamente en cifras,
para lectura o impresora.
Tambien detecta el material particulado en
micrograma/m(3), con registro automatico, para lo
cual tiene una cinta de papel en movimiento
controlado, en este captor, el aire ambiental es
forzado a traves de la cinta-filtro y deja en ella
materiales que manchan el papel. Estas manchas
cuyas densidades (y color) son variables segun los
contenidos del aire muestreados; son "leidas" por
un dispositivo de rayos (beta), las distintas
lecturas dan los "indices de la suciedad del
aire", ademas de la masa de particulas. En estas
muestras tambien pueden hacerse determinaciones
por elementos quimicos especificos (ejemplo As),
previo tratamiento analitico en Laboratorio.
Se dispone tambien de dos monitores de gases
(SO(2)), marca Kimoto de fabricacion Japonesa,
tipo 332 TW. capaces de evaluar concentraciones en
ppb, direccion y velocidad de viento con registro
automatico y un monitor de gases (SO(2)), marca
Kimoto de fabricacion Japonesa, tipo DKK, capaz
de evaluar concentraciones en ppb.
Para el monitoreo de calidad de aire se dispone de
cuatro muestreadores de alto volumen (High-Vol)
KIMOTO portatiles que se usan en forma rotativa en
todas las estaciones, para medir la concentracion
de materiales particulados flotantes o polvo
ambiental acumulado en un papel filtro para sus
respectivas determinaciones ponderadas de la
muestra total, con sus analisis de contenido de
metales pesados (Pb, Cd) y Arsenico (As).
7.2.2.3 Para Efluentes
Pan realizar el monitoreo de emisiones de
efluentes liquidos y calidad de aguas, se dispone
de un equipo Orion para determinar la temperatura
(degree C), pH, Eh en mV (milivoltios), un TOA
para la conductividad en microS/cm. de un filtro
de aire presion Denver para la separacion de
solidos TSS (total de solidos en suspension) , 7
muestreadores automaticos IS-CO para las
estaciones de monitoreo con mayor efecto
contaminante, un medidor de flujo electronico
Kay-Ray, un conservador de muestras APIN, pan
evitar los cambios fisicos y quimcos, durante el
periodo de composito, asimismo depositos de
plasticos graduados (baldes) para la medicion de
flujos, an cronometro CASIO y depositos oscuros de
un galon para almacenar las muestras.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo VII Pag 258.
- --------------------------------------------------------------------------------
7.2.2.4 Equipos Nuevos a ser Adquiridos
Con la adquisicion de una nueva estacion
meteorologica se obtendra la informacion requerida
que sera usada en el modelo matematico ISC-3
(Industrial Source Complex Model, Version-3) de la
Agencia de Proteccion Ambiental de los E.E.
U.U.(EPA) y con lo cual se podra obtener
informacion de la simulacion de la dispersion de
emisiones.
Con la modernizacion de los equipos de monitoreo,
para la calidad de aire y emisiones gaseosos, se
obtendra la informacion a tiempo real de las
concentraciones de los contaminantes que permita
tomar medidas correctivas en las operaciones.
7.2.3 Protocolos Existentes
7.2.3.1 Para Emisiones v Calidad de Aire
El monitoreo de la calidad de aire y de emisiones
se realiza de acuerdo al Protocolo de Monitoreo de
Calidad de Aire y Emisiones de la Direccion
General de Asuntos Ambientales del Ministerio de
Energia y Minas.
Segun este protocolo se han determinado las
estaciones de monitoreo de calidad de aire y de
emisiones, para lo cual se ha considerado un
monitoreo meteorologico, ya que los fenomenos
atmosfericos cumplen un papel importante y
complejo en la determinacion de la dispersion de
los agentes contaminantes y la calidad de aire
resultante, asi como: la estabilidad atmosferica,
la velocidad y direccion de viento y la
temperatura del aire, para lo cual se cuenta con
una estacion meteorologica.
Se dispone de medidores de velocidad y direccion
de viento en las estaciones de monitoreo y
analizadores de SO(2) y material particulado en
suspension de bajo y alto volumen. Estos equipos
se calibran de acuerdo a un programa establecido;
las muestras de SO(2), de material particulado en
suspension, la velocidad y direccion de viento se
toma en cada hora.
Para las estaciones de monitoreo de emisiones se
hace uso de los siguientes equipos para captacion
de polvo: tubos de muestreo, camara de captacion
de polvo en filtro de celulosa (tipo cartucho)
eliminador de humedad y condensador, contador de
gas (gasometro), bomba de aspiracion y balanza
analitica electronica; para las mediciones de
flujo de gas se tiene: tubos de pitot, tipo S.,
manometros y termometros, para la determinacion de
la composicion de los gases se cuenta con
analizadores electronico y quimicos, luego se
colecta los datos y se hace los calculos
respectivos y se prepara los informes. Para que
los datos sean confiables, se tiene un programa de
calibracion de estos equipos. Los compositos de
estas muestras bien rotuladas son enviadas al
Laboratorio para sus respectivos analisis.
Por ultimo, se prepara los respectivos reportes y
se hace las evaluaciones pertinentes para su
presentacion al Ministerio de Energia y Minas.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo VII Pag 259.
- --------------------------------------------------------------------------------
7.2.3.2 Para Calidad de Agua
Los muestreos se realizan segun el Protocolo de
Monitoreo de Calidad de Agua de la Direccion
General de Asuntos Ambientales del Ministerio de
Energia y Minas.
De acuerdo a este Protocolo, se han establecido
las Estaciones de Monitoreo en donde se
identifican todas las fuentes contaminantes hacia
el cuerpo receptor.
Se ha considerado al complejo metalurgico como
instalacion de procesamiento, que evacuan
subproductos metalurgicos y residuos, asi como la
descarga de aguas de desecho (incluyendo aguas
servidas), donde se mide la calidad y cantidad de
cada corriente.
Estos efluentes liquidos se muestrean dos veces
por semana para la evaluacion metalurgica, de
igual manera se debera muestrear aguas arriba y
aguas abajo del cuerpo receptor, con respecto a
las instalaciones del procesamiento, en los
analisis de agua se tiene parametros inorganicos:
fisicos (solidos totales en suspension,
temperatura, flujo, pH, Eh, conductividad;
inorganicos-iones principales: solidos totales
disueltos, cianuro, oxigeno disuelto, nitratos y
sulfatos); inorganico-metales: As, Cu, Fe, Pb, y
Zn y parametros organicos: coliformes fetales y
totales.
El muestreo que se realiza en los efluentes y rios
es de muestras repetidas temporales por un periodo
de un mes, por recoleccion a intervalos de tiempo
(2 veces por semana), en frascos adecuados y bien
limpios, determinando parametros inorganicos
fisicos que son anotados debidamente. En el
muestreo de rios se hace tomando una muestra
repetida espacial en las 2 orillas del rio y en
donde hay puentes se toma una muestra mas,
compositandola en una sola muestra.
Para obtener los resultados optimos, se realizan
los analisis de muestras en blanco y duplicadas
para tener garantia de calidad (QA) y se guarda un
respaldo de las muestras para el control de
calidad (QC).
El composito de las muestras debidamente rotuladas
se va guardando en una conservadora a una
temperatura de 4\degree\C, en frascos frescos y
oscuros para evitar cambios quimicos de la
muestra.
Por ultimo, se envian las muestras al Laboratorio
y al obtener los resultados se hacen las
respectivas evaluaciones comparando con datos
anteriores y de otras estaciones.
7.2.3.3 Otros monitoreos
Se implementara otros monitoreos para evaluar los
resultados de los proyectos de mitigacion.
7.2.4 Estaciones y/o Puntos de Monitoreo
Los puntos de monitoreo para efluentes liquidos podran sufrir
cambios segun los proyectos de mitigacion segun el Capitulo 5.
Por ejemplo, el caso de los efluentes liquidos. industriales,
la descarga seria en un solo punto, segun el diagrama
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo VII Pag 260.
- --------------------------------------------------------------------------------
3.1.1/1, en el titulo 5.4.8. Estos cambios de puntos de
muestreo se hara de conocimiento de las autoridades
competentes.
Actualmente las estaciones y/o puntos de monitoreo que
controlan las emisiones gaseosas internamente y externamente,
es como sigue:
7.2.4.1 Emisiones
o Dentro de la Fundicion: (Ver Foto 4.1.1/1 -
Cap. IV, Tabla 7.14/1, Diagrama 7.2.4/2).
Chimenea de Concreto: Es de una altura de
167,5 m de altura y constituye el principal
emisor de gases (Diagrama 7.2.4/1).
Chimenea de Fierro: Que es de una altura de 91
m y descarga al ambiente los gases de
ventilacion del canal de la mata del Hornos
Reverbero (Diagrama 7.2.4/1).
Chimenea de Coque Bateria "A": Una chimenea de
una altura de 19 m para descarga de los gases
de combustion del horno.
Chimenea de Coque Bateria "B": Una chimenea de
una altura de 19 m para descarga de los gases
de combustion del horno.
Sistema de Ventilacion de las Ollas de Bismuto
de Residuos Anodicos: Existen dos chimeneas en
este sistema.
Sistema de Ventilacion de convertidoras de la
Planta de Residuos Anodicos: Hay 3 chimeneas
que emanan los gases al medio ambiente
Sistema de Ventilacion de Copelas de la Planta
de Residuos Anodicos: Aqui existen dos
chimeneas de evacuacion de gases y polvo.
Sistema de Ventilacion de Tostadores de Zinc:
Existen ocho chimeneas en este sistema.
o Fuera de La Fundicion: (Ver Tabla 21.4/1,
Diagrama 7.2.4/3, Tabla 7.2.4/1).
Estacion Huanchan
Ubicada cerca de los depositos de escorias de
Cu y Pb, a 30 m. de la toma de escorias, torre
16, a 2 Km. de la chimenea central, en el
tramo "Y", carretera a Huancayo.
Esta equipado con un monitor de gases (SO(2)),
marca Kimoto de fabricacion Japonesa, tipo 332
TW, capaz de evaluar concentraciones en ppb,
con registro automatico, esta misma unidad
tambien registra mediciones meteorologicas,
basicamente la velocidad y direccion de
vientos.
<PAGE>
PAMA COMPLEJO METALURGICO - LA OROYA Capitulo VII Pag 261.
- --------------------------------------------------------------------------------
Completa la estacion un muestreador de alto
volumen (Hi-Vol) portatil que permite captar
materiales particulados flotantes o polvo
ambiental.
Estacion Sindicato de Obreros
Situada en plena zona urbana (La Oroya Antigua);
en la segunda planta del local sindical, es la mas
cercana a la fuente principal de referencia, a
solo 0,8 Km. de la Chimenea Principal.
Esta tambien equipada con una unidad de registro
de SO(2), marca Kimoto, pero del tipo 331 B, que a
diferencia del anterior no asume registros
meteorologicos y un (High - Vol).
Estacion Hotel Inca
Dista 2 Km. del punto de referencia y esta ubicada
en el tramo "Y" de La carretera a Cerro de Pasco.
El equipo que dispone (un monitor Kimoto 331 B),
esta emplazado en la azotea del hotel. Los
muestreos se completan tambien con un equipo de
alto volumen (Hi-Vol), muestreador de materiales
particulados no sedimentados.
Estacion Cushurupampa
Esta ubicada a 3 Km. de la Chimenea Principal en
el tramo "Y" de la carretera hacia Lima, dispone
del monitor Kimoto tipo 332 TW y de un (High-Vol).
Estacion de Casaracra
Es la mas distante. Se ubica en la piscigranja del
mismo nombre, a 10 Km. de la referencia central,
en el tramo "Y" de la via ferrea y carretera a
Cerro de Pasco. Dispone de un monitor DKK para
determinaciones exclusivas de SO(2). Este monitor
aunque basado en el mismo principio de muestreo de
los Kimoto, no entrega resultados numericos, sino
graficos que requieren procesarlos para ilegar a
los datos numericos. Se completa esta estacion
con un Hi-Vol.
7.2.4.2 Efluentes
Los eflentes que actualmente se monitorean se
encuentran detallados en el Capitulo 4, en el
Titulo 4.1.2, Diagramas 7.2.4/4, 7.2.4/5 y 7.2.4/6
y Tabla 7.2.4/2.
7.2.5 Capacitacion
-- La Capacitacion sera integral para el personal que lleve cabo
los muestreos y los analisis. De igual manera, sobre la
operacion de nuevos equipos y el manejo de nuevos softwares.
-- Tender a la formacion de recursos humanos especializados en
Asuntos Ambientales, tecnicos, legales y de relaciones
institucionales.
<PAGE>
Pag 263.
CENTROMIN PERU S.A.
IRECCION DE ASUNTOS AMBIENTALES
TABLA NO 7.2.4/2
PROGRAMA DE MONITOREO DE EFLUENTES LIQUIDOS
COMPLEJO METALURGICO
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
FREC. DE FREC. DE ANALISIS
ESTACION UBICACION PARAMETROS A ANALIZAR MUESTREO QUIMICOS Y OTROS OBSERVACIONES
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
R-1 Rio Yauli Flujo, pH, TSS, Pb, Cu, Zn, Fe, As 8 registros/mes Uno Mensual Emisor
- ------------------------------------------------------------------------------------------------------------------------------------
R-3 Rio Yauli Flujo, pH, TSS, Pb, Cu, Zn, Fe, As 8 registros/mes Uno Mensual Emisor
- ------------------------------------------------------------------------------------------------------------------------------------
115 Casa de fuerza Flujo, pH, TSS, Pb, Cu, Zn, Fe, As 8 registros/mes Uno Mensual Emisor
- ------------------------------------------------------------------------------------------------------------------------------------
118 Fundicion Cu y Pb Flujo, pH, TSS, Pb, Cu, Zn, Fe, As 8 registros/mes Uno Mensual Emisor
- ------------------------------------------------------------------------------------------------------------------------------------
119 Fundicion Cu y Pb Flujo, pH, TSS, Pb, Cu, Zn, Fe, As 8 registros/mes Uno Mensual Emisor
- ------------------------------------------------------------------------------------------------------------------------------------
123 Residuos Anodicos Flujo, pH, TSS, Pb, Cu, Zn, Fe, As 8 registros/mes Uno Mensual Emisor
- ------------------------------------------------------------------------------------------------------------------------------------
126 Pla. Elect. de zinc Flujo, pH, TSS, Pb, Cu, Zn, Fe, As 8 registros/mes Uno Mensual Emisor
- ------------------------------------------------------------------------------------------------------------------------------------
131 Planta de Cadmio Flujo, pH, TSS, Pb, Cu, Zn, Fe, As 8 registros/mes Uno Mensual Emisor
- ------------------------------------------------------------------------------------------------------------------------------------
134 Planta Indio Flujo, pH, TSS, Pb, Cu, Zn, Fe, As 8 registros/mes Uno Mensual Emisor
- ------------------------------------------------------------------------------------------------------------------------------------
135 Canal 1 (paralelo FFCC) Flujo, pH, TSS, Pb, Cu, Zn, Fe, As 8 registros/mes Uno Mensual Emisor
- ------------------------------------------------------------------------------------------------------------------------------------
135 Canal paralelo al Canal 1 Flujo, pH, TSS, Pb, Cu, Zn, Fe, As 8 registros/mes Uno Mensual Emisor
- ------------------------------------------------------------------------------------------------------------------------------------
137 Poza ferritas de zinc Flujo, pH, TSS, Pb, Cu, Zn, Fe, As 8 registros/mes Uno Mensual Emisor
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
CALIDAD DE AGUA
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
T-1 Rio Tishgo MS, Eb, Flujo, pH, Tdegree, TSS, OD, 4 registros/mes Uno mensual Toma de agua
NO3, S04 TDS, As, Cd, Cu, Fe, Mn, Pb,
Zn, DBO, col.lec.
- ------------------------------------------------------------------------------------------------------------------------------------
M-1 Rio Mantaro US, Eb, Flujo, pH, Tdegree, TSS, OD, 4 registros/mes Uno mensual Puente Chulec
NO3, S04 TDS, As, Cd, Cu, Fe, Mn, Pb, Zn
- ------------------------------------------------------------------------------------------------------------------------------------
M-2 Rio Mantaro US, Eb, Flujo, pH, Tdegree, TSS, OD, 4 registros/mes Uno mensual Antes de union
NO3, S04 TDS, As, Cd, Cu, Fe, Mn, Pb, Zn con el Rio Yauli
- ------------------------------------------------------------------------------------------------------------------------------------
M-3 Rio Mantaro US, Eb, Flujo, pH, Tdegree, TSS, OD, 4 registros/mes Uno mensual Puente
NO3, S04 TDS, As, Cd, Cu, Fe, Mn, Pb, Zn Cascabel
- ------------------------------------------------------------------------------------------------------------------------------------
M-4 Rio Mantaro US, Eb, Flujo, pH, Tdegree, TSS, OD, 4 registros/mes Uno mensual Despues de La
NO3, S04 TDS, As, Cd, Cu, Fe, Mn, Pb, Zn Fundicion
- ------------------------------------------------------------------------------------------------------------------------------------
M-5 Rio Mantaro US, Eb, Flujo, pH, Tdegree, TSS, OD, 4 registros/mes Uno mensual Despues del Dep.
NO3, S04 TDS, As, Cd, Cu, Fe, Mn, Pb, Zn ferritas de zinc
- ------------------------------------------------------------------------------------------------------------------------------------
Y-1 Rio Yauli US, Eb, Flujo, pH, Tdegree, TSS, OD, 4 registros/mes Uno mensual Antes de refineia
NO3, S04 TDS, As, Cd, Cu, Fe, Mn, Pb, Zn de cobre y plomo
- ------------------------------------------------------------------------------------------------------------------------------------
Y-2 Rio Yauli US, Eb, Flujo, pH, Tdegree, TSS, OD, 4 registros/mes Uno mensual Despues de ref.
NO3, S04 TDS, As, Cd, Cu, Fe, Mn, Pb, Zn cobre y plomo
- ------------------------------------------------------------------------------------------------------------------------------------
Y-3 Rio Yauli US, Eb, Flujo, pH, Tdegree, TSS, OD, 4 registros/mes Uno mensual Antes de union con
NO3, S04 TDS, As, Cd, Cu, Fe, Mn, Pb, Zn el rio Mantaro
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
[MAP OMITTED]
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CENTROMIN PERU S.A. - LA OROYA
DIRECCION DE ASUNTOS AMBIENTALES
COMPLEJO METALURGICO - LA OROYA
PUNTOS DE MUESTREO DE EMISIONES GASEOSAS
PAMA: DIAGRAMA No 7.2.4/2 FECHA:NOV.96
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<PAGE>
- --------------------------------------------------------------------------------
[MAP OMITTED]
------------------------------------------
CENTROMIN PERU S.A. - LA OROYA
DIRECCION DE ASUNTOS AMBIENTALES
COMPLEJO METALURGICO - LA OROYA
ESTACIONES DE MONITOREO DE CALIDAD DE AIRE
PAMA: DIAGRAMA No 7.2.4/3 FECHA:NOV.-96
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
[MAP OMITTED]
------------------------------------------
CENTROMIN PERU S.A. - LA OROYA
DIRECCION DE ASUNTOS AMBIENTALES
COMPLEJO METALURGICO - LA OROYA
PUNTOS DE MUESTREO DE DESAGUE.
PAMA: DIAGRAMA No 7.2.4/4 FECHA:NOV.96
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
[MAP OMITTED]
-----------------------------------------
CENTROMIN PERU S.A. - LA OROYA
DIRECCION DE ASUNTOS AMBIENTALES
COMPLEJO METALURGICO - LA OROYA
PUNTOS DE MUESTREO DE DESAGUES
PAMA: DIAGRAMA No 7.2.4/5 FECHA:NOV.96
- --------------------------------------------------------------------------------
<PAGE>
EMPRESA MINERA DEL CENTRO DEL PERU SA
PERUVIAN CENTER MINING ENTERPRISE INC
CENTRAL OPERATIONS MANAGEMENT
LA OROYA UNIT
PROGRAMA DE ADECUACION Y MANEJO AMBIENTAL
ENVIRONMENTAL REMEDY AND MANAGEMENT PROGRAM
PAMA
LIMA - AUGUST 1996
<PAGE>
GEGE-565-96
San Borja August 29, 1996.
Mister Engineer
Jorge Diaz A.
General Mining Director
Energy and Mining Ministry
Subject : ENVIRONMENTAL REMEDY AND MANAGEMENT PROGRAM
PRESENTATION.
Ref to : Report No. 632-95 EM-DGM- DFM/DFT
For our consideration:
In reference to the report and in accordance with the Supreme Decree No.
059-93-EM, attached please find two samples of the Environmental Remedy and
Management Program - PAMA- concerning the following Production Units.
1. Metallurgic Complex of La Oroya.
2. Cerro the Pasco
3. Casapalca
4. Morococha
5. San Cristobal / Mahr Tunnel
6. Adaychagua
7. Yauricocha
8. Cobriza.
The reports were duly subscribed by SGS of Peru Auditing Firm Inc.
With no other matters pending, we would like to take this opportunity to
reiterate our special thanks.
Sincerely,
Jorge Merino Tafur
General Manager
c.c. General Environmental Affairs Office.
<PAGE>
PERUVIAN CENTER MINING ENTERPRISE INC.
EMPRESA MINERA DEL CENTRO DEL PERU S.A.
CENTROMIN PERU
PROGRAMA DE MANEJO Y ADECUACION AMBIENTAL
ENVIRONMENTAL REMEDY AND MANAGEMENT PROGRAM
PAMA
METALLURGIC COMPLEX LA OROYA
ENVIRONMENTAL AUDITING REPORT
AUGUST 1996
LIMA - PERU
SGS OF PERU INC.
AV. Arequipa No. 3445 - San Isidro
Phone 2211159 , Fax 4425868
Member of SGS Group (Societe Generale de Surveillance)
<PAGE>
S.G.S. OF PERU INC.
ENVIRONMENTAL REMEDY AND MANAGEMENT PROGRAM
(PAMA)
PERUVIAN CENTER MINING ENTERPRISE INC
AUDITING REPORT FOR ENDORSEMENT
1. LEGAL BASIS
SUPREME DECREE 016-93 EM and its modification SUPREME DECREE 059-93-EM, RULES
FOR MINING - METALLURGIC ENVIRONMENTAL PROTECTION.
SUPREM DECREE 029-94 and SUPREM DECREE 046-93 EM Rules for the Environment
Protection for Electric and hydrocarbons activities.
MINISTERIAL RESOLUTION 011-96-EM/VMM and MINISTERIAL RESOLUTION 315-96-EM-/VMM,
Maximum permissible levels for effluents and Miner-Metallurgic emissions. -
technical effusions-
(M.P.L.) From know on Maximum Permissible Levels
2. GENERAL DATA
2.1 ENVIRONMENTAL AUDITOR
NAME : SGS OF PERU INC.
REGISTRY : DIRECTORATE RESOLUTION No. 28-93-EM// DGAA
ADDRESS : Av. Arequipa No. 3445 San Isidro
PHONE : 221-1159, 2211161
FAX : 442-5868
<PAGE>
2.2. PAMA PERFORMING ENTERPRISE
CORPORATE NAME : PERUVIAN CENTER MINING ENTERPRISE INC
MINER METALLURGIC UNIT : LA OROYA SMELTER
NATURE : METALLIC
LOCATION : YAULI PROVINCE, JUNIN Department
3. OBJECTIVE
The environmental remedy and management program (PAMA) revision and
endorsement.
4. PAMA INFORMATION AND REQUIREMENTS VERIFICATION.
4.1. LA OROYA SMELTER undertakes the following industrial activities:
o The concentrates benefit process is done by toasting, smelting, Zinc
Leaching and , electrolytic refinery by casting. The final products
and sub-products are commercialized in national markets and
international markets.
o The Metallurgical Complex takes energy from four hydroelectric
centers of 183,4 Mw. using 53.8% of each that is 98,7 Mw
o Hydrocarbons Storage and Use: It has fuel storage tanks: Residual
Oil No. 5, Diesel, Gas, and
4.2 Effluent Monitoring
4.2.1. Contaminant Liquid Effluents
According to The Air Quality and Effusions Protocol and The Complex
Treatment Tonnage, it is necessary to take into consideration the
implementation of at least one more Monitoring Station for Air
Quality and Effusions to be able to complete the data that already
exists. There are measurements for Dust and Gases at the complex
interior.
4.2.2 Liquid Contaminant Effluents.
To evaluate the water quality 40 station have been evaluated for the
years 1994, 1995 and 1996. Seven of these results are relevant. It
will be necessary to identify them through UTM coordinates. It will
be also necessary to present a table that will summarize the
location, parameters, frequency and analysis and measurement
methods.
<PAGE>
4.3. Evaluation and Analysis of the Environmental Impacts
To mitigate the impacts PAMA introduces the following projects:
o Construction of Sulfide Modules.
o Management of the "Slag New System" ( Granulation Water ).
o Treatment of the Arsenic Trioxide Deposits.
o Treatment of the Ferrites de Zinc Dposits.
o Re - forest for smoke affected area.
o Treatment for Swage and garbage.
5. THE MITIGATION PAMA PROGRAMS
It is not possible to give a good judgment related to the technology applied,
execution time and investment needed due to the lack of projects.
The estimated investment is $ 129 125 000 ( one hundred and twenty nine million
one hundred twenty five thousand American Dollars). The mining - metallurgical
mitigation projects established by PAMA should be executed in 10 years.
It is necessary to complete with some other projects aiming to mitigate
contamination.
6. PAMA COMMENTS
o PAMA does not indicate the incidence of work sickness
o The Contingency Plan is very generic.
o PAMA visuals are not organized in adequate manner meaning the Tables and
the photos as well as the Maps.
7. PAMA OPINION
From the evaluation of The PAMA Report related to mining-metallurgical
activities we have the following opinions are valid:
o The identified Impacts as well as PAMA mitigation projects assure in part
the environmental management at The Production Unit . Thus these
observations must be complemented.
This is what we inform for the pertinent objectives and we subscribe the PAMA.
- ----------------------
Marcos Malaga Cruz
<PAGE>
Legal Representative
<PAGE>
TABLE OF CONTENTS
EXECUTIVE SUMMARY
I. INTRODUCTION
1.1 Antecedents
1.2 PAMA Objectives
1.3 Legal Basis - Administrative Applicable Legal Rules
1.4 The Deposit Legal Condition
1.5 Mining Claims, Benefit Concessions, and Permits Situation
1.6 Complex Implementation Historic Review
II. ENVIRONMENT COMPONENTS DESCRIPTION
2.1 Location of Unit
2.1.1. The Industry
2.1.2. Water Sources
2.1.3. Water Effluents, Treatment and Final Situation
2.1.4. Sources of Solid Residues, Treatment and Final Situation.
2.1.4.1. Copper Slag Reverber
2.1.5. Gas Sources, Treatment and Final Situation.
2.1.6. Contaminant Receptors
2.2 Physic Environment
2.2.1. The Unit Topography
2.2.2. Weather and Meteorology
2.2.2.1. Weather
2.2.2.2. Meteorology
2.2.3. Environment Air Quality
2.2.4. Geology and Seismic activity
2.2.4.1. La Oroya Geology
2.2.4.2. Seismic Activity
2.2.5. Soil
2.2.6. Biological Environment
2.2.3. Biological Environment
<PAGE>
2.3 Biologic Environment
2.3.1. Ecological Characterization
2.3.1.1. Terrestrial Ecosystem
2.3.1.2. Aquatic Ecosystem
2.3.2. Unit Ecosystem
2.3.2.1. Terrestrial Ecosystem
2.3.2.2. Aquatic Ecosystem
2.3.3. Endangered and Protected Species
2.4 Socioeconomic Environment
2.4.1 Description of the Socioeconomic Environment
2.4.1.1 Location and Description of the UDP and a
Mining Settlement and the Surrounding Human
Settlements.
2.4.1.2 Relation Between The Economic Activity and the
Surrounding Human Settlements.
2.4.1.3 Housing Conditions, Facilities and UDP Basic
Services and
surrounding centers.
2.4.1.3.1. General Work Conditions
2.4.1.3.2. Education and Health
2.4.1.3.3. Housing Facilities
2.5 Points of Human Interest in the Area
2.5.1. Archeology Resources
2.5.2. Protected Natural Areas
2.5.3. Places of Scientific and Tourist Interest
III LA OROYA PRODUCTION UNIT
3.1 Plant Design Characteristics
3.2 Industrial Capacity, Historic Production and Projected Increase
3.3 Material Treated at the Smelter Circuits
3.3.1 Copper Concentrates
3.3.1.1. CENTROMIN PERU Copper Concentrates
3.3.1.2. Privates Peruvians Copper Concentrates
3.3.1.3. International Privates Copper Concentrates
<PAGE>
3.3.2 Lead Concentrates
3.3.2.1. CENTROMIN PERU Lead Concentrates
3.3.2.2 Private Lead Concentrates
3.3.3. Zinc Concentrates
3.3.3.1. CENTROMIN PERU Zinc Concentrates
3.4. Production and Extraction Process Description
3.4.1 Copper Circuit Picture 3.1 and 3.2
3.4.2. Lead Circuit Picture 3.3 and 3.4
3.4.3. Zinc Circuit Picture 3.5
3.4.4. Associated Processes
3.4.4.1. Sulfide Acid Plant
3.4.4.2. Coke Plant
3.4.4.4. Fluorsilicic Acid Plant
3.5. Effluents and Operations Control
3.6. Activities and Aid Facilities
3.6.1. Supplies
3.6.2. Energy Generation Plant
3.6.3. Analytic Laboratory
3.6.4. Shops
3.6.5. Swage water supply and distribution
3.6.6. Smelter swage water Treatment and Situation.
3.6.7. Dust Control and Recovery
3.6.8. Installation of Environment Monitors
3.6.9. Solutions Management
IV EVALUATION SUMMARY AND ENVIRONMENTAL IMPACT
ANALYSIS
4.1. Evaluation
4.2. Environmental Impact Sources
4.2.1. Gases and Dust
4.2.1.1. Physical Environment Impact
4.2.1.2. Biological Impact
4.2.1.3. Social Environment Impact
4.2.2. Liquid Effluents
<PAGE>
4.2.2.1. Physical Environment Impact
4.2.2.2. Biological Environment Impact
4.2.2.3. Social Economic Environment Impact
4.2.4. Compliance with the Safety and Hygiene Regulations
V. MITIGATION PLAN, CONTINGENCIES PLAN AND
IMPLEMENTATION.
5.1 Introduction.
5.2 Gas Emissions Control
5.2.1. Gas Emissions
5.2.2. Global Emissions through the Main Stack
5.2.2.1. Gasses
5.2.2.2. Grained Material
5.2.3. Iron Stack Emissions
5.2.4. Coke Plant Stack Emissions
5.2.5. Other Sources of Emissions
5.2.6. Copper and Lead Refineries Emissions
5.2.7. Sample Stations
5.2.8. Evaluations and Results
5.2.9. Identifications of Atmospheric Pollution and the effects
on the environment
5.2.10. Solution alternatives to Mitigate Dust and Gas effects.
5.2.11. Projects to undertake
5.3. Control on the water quality impact
5.3.1. Smelter and Refinery Project for the treatment of liquid
effluents.
PROJECT : Management and situation of the "Partition
Solution" coming from the silver refinery
PROJECT: Management and situation of the refrigerating
water coming form the Reverber Furnace and the Speiss
Grinning.
PROJECT: Neutralization Plant and Selective precipitation
of the "Final Effluent"
PROJECT: Anode Automatic Wash System
PROJECT: Concrete Wall for Contention and By Gravity
Re-circulation System.
PROJECT: Copper Refinery Mother Water Treatment
PROJECT: Smelter Refrigerating Water Re-circulating
System
5.4 Soil Impact Control
<PAGE>
5.4.1. Projects to Undertake
PROJECT: Copper and Lead Slag Management
PROJECT: Copper and Lead Slag Deposits Abandonment Study
PROJECT: Arsenic Trioxide Deposits Abandonment Study and
Location of the New Deposit
PROJECT: Temporary Closing Plan of the Residual Leached
Zinc
5.5. Air Quality and Smoke Affected Area
5.5.1. Smoke Affected Area Study
5.5.2. Environmental Impact Complementary Study
5.6. Public Health (Swage and Garbage)
PROJECT: Swage Water Treatment and Garbage Location in LA OROYA.
5.7. Impact Control over the Social-Economic Resources
5.7.1. Mitigation Measurements Plan and Contingencies
Implementation Plan.
5.8. Contingencies Plan
5.8.1. General Issues
5.8.2. Objectives
5.8.3. Organization
5.8.4. Training
5.8.5. Information and Communications Management
5.8.6. Resources
5.8.7. Emergencies Specific Cases
VI. CLOSING PLAN
LA OROYA Metallurgical Complex Closing Plan Study
VII. MONITORING PLAN FOR EMMISSION AND EFFLUENTS
7.1 Metallurgical Complex liquid effluents emissions
7.2 Metallurgical Complex Gas emissions
<PAGE>
LA OROYA PRODUCTION UNIT
I. INTRODUCTION
1.1. Antecedents
In accordance with the environmental regulations for the mining -
metallurgical activity Supreme Decree No. 016-93 EM and its
modification Supreme Decree D.S. No. 059-93-EM. Centromin Peru Inc.
submitted the Preliminary Environmental Evaluation (EVAP) in March
1995.
After all EVAP observations were acquitted; with documents presented
to the Ministry of Energy, Environmental Affairs General Office on
the 31 of July 1995. A date for the submission of PAMA was set.
August 30 1996.
1.2. PAMA Objectives
PAMA Principal Objectives
o The evaluation of actual natural components that might have
being affected by the mining - metallurgical and other
complementary activities.
o Identification of sources and causes of damages to the
environment, present and potential.
o Establish mitigation actions and prevent environmental
degradation of the Unit caused by Metallurgical and Mining
Operations of the Unit, programmed for the ten years
established by Law and the long range closing plan.
o Establish actions and plans to prevent extreme situations of
environmental damages (Contingencies Plan).
o Establish investment chronograms for the mitigation and
prevention of the environmental damages.
1.3. Legal Basis and Administrative Applicable Regulations.
Centromin Peru Inc. is regulated by Centromin By Laws, Decree No.
21117; Centromin's Corporate Laws, Supreme Decree No. 019-82-EM /
VM; State Enterprise Rules, Law No. 24948 and the Supreme Decree No.
027-90-MIPRE that modifies the first, as well as other legal,
complementary , accessory and modifying regulations among which we
can highlight by importance: The State Budget and the Operative and
Austerity Norms for each calendar year and the regulations for the
Promotion for Private Investment in State Enterprises; Legislative
Decree No. 674 and its own rules Supreme
<PAGE>
Decree No. 070-92 PCM.
1.4 Legal Condition of the Property Title Holder
Centromin Peru Inc. is a private state enterprise organized as a
Corporation filed at The Corporations and Businesses Registry Folio
10180 in The Lima Public Registry. It is also filed at the
Corporations Book in The Public Mining Registry, entry 4, folio 424,
volume 14.
1.5 Mining Claims Condition, Treatment Concessions, Permit for Effluents,
and Water Use.
a) Plant Operation Authorization Resolution (MEM) No. 155-93-EM-DGM
b) Water Use Authorization (Agriculture Ministry)
1. La Oroya - Rio Mataro - R.S. 853
2. La Oroya - Riachuelo Huaynacancha - R.S. 08
3. Sacco - Riachuelo Sacco R.S. 460
4. La Oroya- Rio Mantaro R.A. 028-94
5. Paccha - Rio Tischgo R.A. 028-94
6. Santa Rosa de Sacco - Rio Yauli RM 01420-77
7. La Oroya - Riachuelo Tinco Cancha R.A. 086-93
a) Industrial Residues Effluents Authorization (Health Ministry)
1. Lead Refinery 023-V-93
2. Alambron 024-v-93
3. Copper Casting and Smelting
4. Copper Sulfate Crystallization
5. Hydrofluorsilicic Acid 027-V 93
6. Cadmium Pilot 028-V-93
7. Zinc Electrolytic 029-V 93
8. Agglomeration 030-V- 93
9. Anodizes 031-V93
10. Indium 032-V93
11. Copper Smelter 033-V93
1.6 Complex Implementation Historic Review
In 1992 the metallurgical complex was established with the Copper
Smelter, years later in 1928 "The Lead Smelter " was built and in
1952 "The zinc refinery". In those dates the company knowing the
environment impacts promoted the mitigation measures for example the
Cottrelles implementation in 1941 to recover metallic dust. As the
plant grew recovery plants were built to recover sub products
diminishing the environmental contamination.
The following is a chronological development of LA OROYA, it
mentions the
<PAGE>
most important events:
1902 Cerro de Pasco Copper Corporation Incorporation
1904 La Oroya - Cerro de Pasco Railroad Opening
1906 First Copper Blister Bar in Tinyahuarco - Cerro de Pasco
La Oroya:
1922 First Copper Blister Bar at LA OROYA COPPER Smelter
1928 Lead Vertical Furnace Started
1929 Metallurgical Research Department Installation
1937 Lead electrolytic industrial smelting scale was initiated and
the Anode Residual Plant starts operations.
1939 Sulfuric Acid Plant stars operations
1941 Cottrelles System installed. Antimony Plant starts operations.
1944 Coke Plant starts operations
1948 Conclusion of the construction of the Industrial Plant for
Copper electrolytic smelting.
1950 Silver Refinery Completed.
1951 Lead Refinery move to Huaymanta increasing to double its
capacity. Oxygen Plant starts operations with liquid air. Zinc
smelting electrolytic Industrial Plant was completed.
1952 Zinc electrolytic Plant starts operations
1954 Selenium was produced for the first time at commercial scale.
1955 Tellurium was produced for the first time at commercial scale.
1957 Oxygen Plant starting from liquid air was built. Lead foaming
Plant starts operations.
1958 The first ventilation system was installed in the Lead Furnace
area.
1960 The Agglomeration Plant vent system was completed. Copper Refinery
increases capacity through the installation of a generator.
1962 The Zinc Plant is enlarged to 150 T.C. / day (136,4 t/d)
1964 Improvement of the slag channels of the vertical furnaces channels
y lead ventilation ducts.
1965 Asarco Installed Furnaces for the Cathodes smelter
1966 New boiler and air pre heater are installed in the Copper
Reverber No. 2 The Ventilation at the Agglomeration Plant is
improved through the installation of additional gas washer. In
the Coke Plant 10 Furnaces are installed. The Zinc roaster
turbulent bed is installed.
1967 The Sulfuric Acid New Plant of 2000 T.M.D. starts to operate.
The Alambron Plant CIDECSA is inaugurated. Starts the
modernization of the Cottrell Central.
1968 The extraction system continues Type ROY Tapper is installed in
the Lead Furnace No. 1. The Construction of The Lead Plant of
Residues is completed. The Zinc Electrolytic Plant is enlarged
to 150 to 200 T.C. / day (181,82 t/d)
1969 The new Cottrell Hot Arsenic Plant starts operations. The First
Phase of the dust treatment plant starts operations. A new
Silicon rectifier ITE is installed at The Copper Refinery. The
modernization program for the
<PAGE>
Cottrell Central is concluded.
1970 The slag continuos extracting system is installed at The Lead
Furnace No.2
1971 The suspension brick roof is installed at Reverber No. 1
1974 January First the Peruvian Government takes over Cerro de
Pasco Copper Corporation and incorporates "Empresa Minera del
Centro del Peru" S.A. CENTROMIN PERU SA
1976 Copper Refinery up to 20 blocks 1978 The Ajax new Furnace of 408
TMD zinc cathode entered into operations at the Zinc Division.
The Flotation de sulfurous de zinc and silver start operations
The new humid electrolytic precipitator at the Sulfuric Acid Plant
was installed.
1979 The solid separation unit if 3 380 cubic meters per day of impure
solution of zinc sulfate entered into operation. A new copela at
the Residues Anode Plant was installed.
1980 The new water pipes system of Tishgo was connected.
The new plant of oxygen type GO 800 made by a firm named LINDE
entered into operations
1981 The construction of the New Agglomeration Plant started.
1983 The new agglomeration Plant started operations with a capacity
of 810 t/day. Replacing 11 machines (5 up draft and 6 down draft)
for one type Up draft.
1987 Pre feasibility Study for the Oxygen Burners Oxy-Fuel done by SNC
Plant Project.
1990 Metallurgical Samples of the metallurgical index rates at the
Copper Circuit. In December 1990 the samples were optimized and in
1991 industrial evaluation adjustment samples were taken. It was
completed starting 1992.
1991 Lead Furnace No.3 was modified. It was changed from intermittent
tap to a continuos tap, the old designed was a sifon arents and
the modified one is Roy Tapper Box type.
1992 The Mud tank skimmer are modified eliminating the filter OLIVER
at the Agglomeration Plant.
A ventilation system is installed at the floor of the lead furnace
load (SVEL No.6) Vent capacity is 140 000 CFM.
In march the construction work started at the New Oxygen Plant.
In June the works started at the Ferrite Treatment Plant
Project.
In October a Bag House was installed (60 bags) to improve the work
atmosphere at the unit of purification and crushing. In the months
of December an automatic continuos leaching operation started The
converters where re-built and modified increasing the converter
capacity. 2 and 4 + - in a 15%.
1993 In march the electric load mechanic of the Oxygen Plant started.
A tank was installed of 20 000 GI to re- circulate the
refrigerated water of jackets of the Lead Furnaces
The reverber No. 2 stopped operations for maintenance and the Oxy
Fuel system modifications works. December first Centromin receives
the
<PAGE>
certificate of approval for the Oxygen Plant reaching an installed
capacity of 312 cubic meters a day.
A ventilation system was installed for the copper calcine
discharge. In October a Treatment Plant Lead Ferrite started
operations. In November the continuous purification operation
started.
1994 January 17 the OXY-Fuel electric mechanic and instrumental
system was installed. This project was executed by CENTROMIN
technical personnel with the advise of the INCO, ENICI and SNC
LAVALIN Canadian companies.
In January 18 opening of the Vertical Burner Oxy- Fuel No.8
progressively turning off the Horizontal Conventional Burners.
February 6 at the Reverber No 2 eleven Vertical Burners were
industrially tested. Operation up to these days is undertaken with
6 Oxy Fuel vertical burners and 2 horizontal burners achieving the
project objective.
The concrete base for the new ventilator SVEL 4 got started with
the objective of improving the Lead Furnace gas catching
1995 The Copper Refinery increased its installed capacity to 66 500
t/ year (Block No. 22 enters into operation)
General Repair Work at the Reverbero No.2 (Oxi Fuel)
1996 June 7 the new fluorsilicic acid recovery system by anode mud
filtration starts to operate.
II . ENVIRONMENT COMPONENTS DESCRIPTION
2.1. Production Unit Location
2.1.1. The Industry
La Oroya smelter is located 175 Km NE from Lima Capital City
in the Andean are oriental flank at the West Andes at 3 700
msnm in the Caceres Region. The installations occupy an
extension if 2 404 hectares. UTM coordinates are
Metallurgical Complex I 8126087 .1 North
402255.3 East
Metallurgical Complex II 8725007.5 North
399573.6 East
Maps (annex 6 and 7) show LA OROYA metallurgic complex
location and the surrounding in a ratio of 10 KM having as a
center the Smelter Main Stack . The maps show curves of the
topography level in the area. It also can be observed that the
area is shaped by mountains that get 4 400 m.a.s.l.
<PAGE>
In the maps can be appreciate "Yauli" and "Mantaro" rivers
basins forming a "Y" with the joint being near to the Smelter.
The population centers and the farm area are near to the
Yauli, Mantaro and Tishgo basins.
Furthermore, in The General Map for the smoke affected areas
(Comparative Map AGI D/S 071.95) in it can be appreciated the
effect produced by the metallurgical industry in the
surroundings. It can be observed chronologically, the smelter
impact over nature its initial advance and its control
throughout the years. A recovery study exists for the
surroundings areas to be achieved in a timely manner and an
estimated cost.
2.1.2. Sources of Water Supply
The industrial water supply and human consumption for
CENTROMIN S.A. LA OROYA is specified in Picture 2.1 Diagram.
It can be pointed out:
Tishgo System.- Has as supply source Tishgo river. The capture
point is located 14 Kim North from La Oroya.
Cuchimachay System.- Has its supply source in the Cuchimachay
spring water. The captured water is to supply water to Old La
Oroya City and the smelter for the vapor heaters.
Pishjapuquio System.- Has as supply source the Pishjapuquio
Spring Water. The volume caught is to supply potable water for
Old La Oroya population.
Mataro Pumps.- The water captured from Mataro River is used in
its totality to slag of the copper and lead smelter.
Emergencies System.- This system enters to operate where the
Tishgo system fails. The system is the following:
o Hydro Pumps. The system catches the underground water of
the Hydric area and takes it to the Railway Tank.
o Mayupampa Pumps. The system is similar to the mentioned
above. The water caught is sent to the Chulec Tank.
The Table 2.1. shows the water physic - chemical analysis for
the four above mentioned systems.
<PAGE>
TABLE 2.1 - PHYSIC CHEMICAL ANALYSIS FOR THE WATER
COUGTHED AT THE THREE WATER SYSTEMS
- ------------------------------------------------------------------------------
Elements Tishgo River Chuchimachay Pishja Puquio Class III water
mg/l Spring mg/l mg/l LMP mg/l
- ------------------------------------------------------------------------------
Pb 0.12 0.09 0.05 0.10
- ------------------------------------------------------------------------------
Cr 0.01 0.01 0.01 0.05
- ------------------------------------------------------------------------------
Ag 0.01 0.01 0.01 0.05
- ------------------------------------------------------------------------------
NO3 0.39 0.08 Tr 0.10
- ------------------------------------------------------------------------------
Fe 0.43 0.13 0.28 1.00
- ------------------------------------------------------------------------------
Mn 0.26 0.01 0.01 0.50
- ------------------------------------------------------------------------------
Cu 0.05 0.06 0.02 0.50
- ------------------------------------------------------------------------------
Zn 2.22 0.07 0.04 25.00
- ------------------------------------------------------------------------------
SO4 130.78 629.00 197.00 400.00
- ------------------------------------------------------------------------------
Mg 106.00 91.00 56.00 150.00
- ------------------------------------------------------------------------------
Ca CO3 163.00 618.00 302.00
- ------------------------------------------------------------------------------
OD 9.50 5.00 5.60 3.00
- ------------------------------------------------------------------------------
JTU (Pt) 3.02 0.32 0.316
- ------------------------------------------------------------------------------
pH 8.23 7.80 7.70 5 - 9
- ------------------------------------------------------------------------------
2.1.3. Liquid effluents, treatment and final situation.
The location of the monitoring points correspond to the principal
effluents of LA OROYA Smelter and Refinery Circuits (annex 1,2,and
3) having as a reference the EVAP report.
Point T-1 Tisgho - Casaracra
This monitoring point is located at the Tishgo River, around
de Casaracra Hacienda, before the Mantaro river confluence.
Point M 1 Mataro River - Puente Chulec
This sampling point is located at the Mataro River around the
Chulec location, approximately 2 m. from the bridge.
Point M 2 Mataro River - Before the Yauli river joining.
This sampling point is also located in the Mataro River around
the Torres de Hydro housing, approximately 15 m from the
houses.
Point Y -1 Yauli River - Before the Copper and Lead Refinery
This sampling point is located at the Ria Yauli at the
Marcavalle Bridge, approximately 2m from that bridge.
Point R - 1 Lead Refinery and Exit for the Settling Tank.
The effluent that was originated by the overflow of the
settling tank of Lead Sulfate produced in the Lead Refinery
has been eliminated the one left is the mother water coming
from the Copper Refinery. The sampling point is located at la
settling tank at the Plant of
<PAGE>
Alambron, approximately 5 m from the Yauli River.
Point R- 2 Alambron Plant
This effluent has been eliminated by re circulation in the
same plant process.
The sampling point is located approximately at 15 m in front
of the plant and 20 m from Yauli river it discharges at Yauli
river.
Point R -3 Asarco Furnace Plant - Exit of settling tank
This effluent originates at settling plant ( water
refrigeration) coming from the copper bars and the Asarco
furnace.
The sampling point is located approximately at 15m from the
propane gas tanks and 80 m from the Yauli river, it discharges
at the Yauli River.
Point Y -2 Yauli River After the Copper and Lead Refineries -
Huaymanta Bridge.
This sampling point is located at Yauli river at the Huaymanta
Bridge approximately 20 m down from that bridge. This point is
sampled after receiving the Huaymanta Refinery effluents.
Point Y -3 before the Yauli river and Mataro River - Sudete
Bridge union. This sampling point is located in Yauli river
around the Sudete Bridge, approximately 15 meters up this
bridge. The sampling is taken after the union with the feeding
channel that goes to LA OROYA Power House water source.
101 Point Coke Plant and Discharged Water
Collects water from the hygiene services, refrigeration water
and condensed water coming from the Coke Plant heater
interchanger.
The sampling point is located in front of the Coke Plant
distillation unit (today empty).
Point M-3 Mantaro - Cascabel Bridge
This sampling point is located at the Mataro river around the
Cascabel Bridge, approximately 10 meters from this bridge. The
sampling is taken after the union with Yauli river water.
102 Point Patio de structural shop
This effluent is composed of the refrigeration water of the
Storehouse Section (Welding Section), the channel passes
through these section patio, in freshet times it is used as
sewer. The sampling point is located at 50 meters West of
CENTROMIN gas station and 10 meters over the Mataro river
level.
<PAGE>
103 Point Structural Shop and Interior Protection
This effluent is composed of the water washers and the hygiene
services coming from the structural shop and the Interior
Protection. The sampling point is located 50 West form the
CENTROMIN gas station and 10 meters over the Mantaro river
level.
104 Point Interior Protection and Superintendent Office
This effluent is composed of the Principal Office of Internal
Protection hygiene services. (Demolished) The sampling point
is located 50 meters West from The CENTROMIN gas station and
10 meters over the Mantaro river level.
It is not sampled, there is no discharge.
105 Point Acetylene Plant
This effluent is conformed by the industrial waste waters
coming form the Acetylene Plant. On this point action has been
taken, eliminating this discharge in August.
106 Point Storehouse
This effluent is composed of the Hygiene services waters
coming from the storehouse and equipment washers and the Iron
Smelter. The sampling point is located at the marker watches 9
over the Mantaro river level.
107 Point Antimony Plant, Acid Tanks, Instruments Shop, Shop office
and Light Equipment.
This effluent is sewage water from bathrooms and The
mechanical shops washers, warehouse J -10, Preparation Plant,
Antimony Plant and Arsenic Plant.
This sampling point is located at the Main Entrance Door -
Internal Protection, approximately 50 meters from the Door and
7 meters for the Mantaro river.
Point 108 Components Shop and Garage
This effluent collects the water from the components shop
hygiene services and the automatic vehicles washer.
The sampling point is located a side from the pedestrian way 9
meters over the Mantaro river level.
Point 109 Components Workshop Pit
This effluent collects waters from washing, waste and hygiene
services coming from the light garage equipment shops.
The sampling point is located in the Smelter mark watches back
part and 7 meters over the Mantaro river level.
110 Point Instrumental Carpenter Workshop
This effluent collects the waters from the hygiene services
from the
<PAGE>
industrial shops, carpenter and water waste from the parts
washing. This sampling point is located in the Gas tanks back
8 meters over the Mantaro river level.
Point 111 Washer Training
This effluent collects the hygiene services water from the
Training Center.
The sampling point is located a side of the Training Center 10
meters from the Mantaro river level.
Point 112 Heavy Equipment, Fireman Station
This effluent is composed of the heavy equipment shop fireman
station and laborers offices hygiene services . This sampling
point is located a side from the Training Center 9 meters over
the Mantaro river level.
Point 113 Industrial Engineer
This effluent is composed of the hygiene services water coming
from the Industrial Engineering and paper warehouse
(demolished). The sampling point is located in front of the
General Laboratory 11 meters over the Mantaro river level.
Point 114 Power House and Control Samples
This effluent is composed of bathrooms swage water, Control
Section washers and the sub - stations Power House
refrigerating water. The sampling point is located at the
Control Section approximately 12 meters over the Mantaro river
level.
115 Point Ionic Plant and Power House
This effluent collects the discharge water de la regeneration
of resin regeneration of ion interchange and the Power House
compressors refrigerating water. The sample is located in
front of the Power House 15 meters over the Mantaro river
level.
116 Oxygen Plant, cable Car
This effluent collects the discharge water front the Old
Oxygen Plant. The sampling point is located in front of the
Oxygen Plant 13 meters over the Mantaro river level.
117 Old Oxygen Plant
This effluent is composed of the General Offices, General
Laboratory, Safety Shop, cable carrel hygiene services water
and the Oxygen Plant water. The sampling point is located in
front of the Laminator sector at the Zinc Electrolytic Plant,
15 meters over the Mantaro river level.
118 Copper and Lead Smelter Slag Granulation
This effluent is compound of the copper and lead slag
granulation
<PAGE>
process water.
The sampling point is located at the Laminating Plant
discharging the flow at the Mantaro river.
119 Copper and Lead Smelter Main Channel No. 2
The channel is constituted by a number of effluents taking
into its flow the No. 5 Warehouse, No. 2 Cadmium Plant,
Preparation Plant sewage water, copper slag refrigerating
water, copper anodes casting refrigerating water, bushings of
the Cottrell Fans, lead furnace cooling gas system, silver
refinery industrial effluent. Sampling point is located a
Vehicles unleveled with the cable car .
120 Zinc Electrolytic Plant - Hygiene Services.
The effluent collects the Zinc Electrolytic Plant hygiene
services water and the rain water in freshet season.
The sampling point is located at the end of the unleveled way
around the main stack 20 meters before its discharge point on
the Mantaro river.
121 Anode Residues Plant Selenium Tellurium discharge units and
Hygiene services.
This effluent collects the selenium precipitation discharge,
selenium tellurium discharges unit and the plant sewage.
The sampling point is located in front of the main principal
door to the Anode Residues Plant 20 meters from the Mantaro
river discharge.
122 Point Sedimentation Residues Tank Plant Anode Exit
This effluent collects the water coming from the Washer rooms
sedimentation tank exit.
The sampling point is located back from the guard control
booth 20 meters from the discharge to the Mantaro river.
123 Point Anode Residues Plant - Sedimentation Tank .
The effluent originates with the sedimentation overflow tank
and the refrigerating water from the trombones of the anode
residue plant.
The sampling point is located approximately 7 meters from the
anode residues sedimentation plant at the Mantaro river.
124 Point Zinc Electrolytic Plant - Anode Washer Effluent.
This effluent comes out from the zinc anode washer
electrolytic Plant sedimentation tank.
The sampling point is located in front of the sedimentation
tank 20 meters from its discharge to the Mantaro river.
<PAGE>
125 Zinc electrolytic plant - Cell Cleaning Mud
The effluent is product of the cells washing at the Zinc
refinery. The sampling point is locates 20 meters before its
discharge to the Mantaro river.
126 Zinc Electrolytic Plant - Refining
This effluent is composed of the sewage water and the leaching
of residues unit and the Zinc electrolytic purification plant.
Also is composed of the water coming out from the electric
rectifiers refrigerating water.
127 Refrigeration Zinc Sub-station Plant.
This effluent is composed of the refrigeration waters from the
Zinc electrolytic sub station plant.
The sampling point is located in front of the Zinc
Electrolytic Plant 12 meters over the Mantaro river level.
128 Casting Fusion and Zinc Storage
This effluent is composed of the Zinc Fusion Furnace
refrigerating water and casting refrigerating system from the
zinc bars casting machine.
The sampling point is locates at the weight and storage for
zinc bars 15 meters over the Mantaro river level.
129 Smelter Building and Hygiene services
This effluent collects the office sewage water and the storage
smelter construction.
The sampling point is located behind the construction
materials deposit 12 meters over the Mantaro river level.
130 Office and Construction Warehouse.
This effluent collects the hygiene services from the offices
and the smelter's construction warehouse.
The sampling point is located behind the construction smelter
carpenter shop 12 meters over the Manatro river level.
131 Pyro Cadmium Plant, DIM
This effluent collects the rain, smelter cleaning water and
the Cadmium Casting.
This sampling point is located at the back of the smelter
building carpenter shop 20 meters before its discharge to
Mantaro river.
132 DIM Pilot Plant and Mechanic Shop.
This effluent collects the Pilot Plant Metallurgic Research
Department. (D.I.M.) as well as the sewage waters from the
workers bathrooms.
<PAGE>
133 Indium Plant - Drained solution of alkaline washing.
This effluent collects the overflow waters, the floor washing
at the Cadmium Plant and the plant swage.
134 Point Indium Plant and Discharge e Solution.
This effluent is the discharge solution coming from the Indium
Plant to the cementation tank.
The sampling point is located at the cementation tank
discharge before discharging to Mantaro river.
135 Main Channel No. 1 (Parallel with the F.F. C.C:)
The main channel is constituted by a number of effluents that
get together in its Smelter tour, also effluents coming form
the Coke, Conglomeration, Zinc Toasters, and Electrolytic
Plants.
The sampling point is located at the safety control boot
soundings going to Huancayo 10 meters approximately from the
FF CC line discharging the flow at the Mantaro river.
136 Main Channel Parallel Channel No. 1
The channel collects the refrigerating waters from the
agglomeration machine, condensed water from the oil tanks,
slag water, refrigerating waters coming from the "Kiln"
Furnace cooling system, cleaning water form the Hydrometric
Plant and swage.
The sampling point is located 20 meters from the Mataro river
discharge.
Point M 4 Mantaro River - After the Smelter
This sample point is located at the Mantaro river at 4 km.
from LA OROYA - Huancayo road approximately 100 meters from
the Huanchan slag deposits.
Point 137 Zinc tank Ferrites Effluent
This effluent is originated from the overflow coming from the
zinc ferrite settling tank and the sampling point is located
at 4Km from the road LA OROYA HUANCAYO 10 meters over the
Mantaro river.
Point M 5 Mantaro River After the Zinc Ferrites deposit.
This sampling point is also located at the Mantaro river after
the ferrite de zinc deposit (Huanchan) at 5 km from the LA
OROYA HUANCAYO road.
In table No. 2.2 is a summary for the sampling points classified
according to the water monitoring protocol
Also, table 2.3 shows the liquid effluents that the complex
generates with some physical and chemical characteristics. Table 2.3
A, 2.3B, 2,3 C and
<PAGE>
2.3 D are the same effluents, but classified by production circuits.
According to the treatment code or final disposition. See table No.
26, all the effluents discharge in natural water bodies. (C; Yauli
and Mataro) the majority of the with previous treatment.
It has been determined that from the 40 forty exit flows generated
at the Metallurgical complex, 7 seven are characterized as effluents
that cause a high negative impact to the Mantaro River. In order of
importance the contaminant parameters are classified in the
following manner:
1) R -1 Lead Effluent Refinery
2) 118 Granulation Slag water from the copper and lead Smelter.
3) 119 Main Channel No. 2 Copper and Lead Smelter.
4) 126 Zinc Electrolytic Solution Plant.
5) 136 Main Channel No. 1 ( FF.CC parallel)
6) 136 Parallel Channel Point 135
7) 137 Zinc Ferrites Tank Effluent
Table 2.4 shows the chemical - physical characteristics average rate
containing high TSS and an important amount of impurities, over the
MPL maximum permissible levels at these points in the last 6 months.
TABLE 2.2
SAMPLING STATIONS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
COMPONENT INPUT STATIONS OUTPUT STATIONS TOTAL INPUT/
FLOW FLOW OUTPUT
FLOW
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Natural water
flows
- - Yauli river - Water up Y-1 - Water down Y-2, Y-3 3 4 to 6 regs.
Monthly each
- - Mantaro river - Water up M-1, M-2 and - Water down M-4 and M-5 5 4 to 6 regs.
M-3 Monthly each
- --------------------------------------------------------------------------------------------------------------
Industrial water
discharge, Ref.
And sewer
(Industrial area)
- - Cu - Pb refin. R-1, R-2 and R-3 3 8 registers
monthly each
- - Smelter 37 8 registers
monthly each
101,102,103,104,
105,106,107,108,
109,110,112,113,
114,115,116,117,
118,119,120,121,
122,123,124,125,
126,127,128,129,
130,131,132,133,
134,135,136,and
137
- --------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Processing
<S> <C> <C> <C> <C> <C> <C>
- - Tishgo river Fresh water T-1 1 4 to 6 regs.
Monthly
- - Mantaro river River water M-3 0 In natural
waters
- --------------------------------------------------------------------------------------------------------------
TOTAL 49 Stations
- --------------------------------------------------------------------------------------------------------------
</TABLE>
2.1.4. Residues Generating Sources, Treatment and Final Disposition.
The following are the solid residues generators that are
managed at at the metallurgical complex. The location of each
of the sources is in Annex 4, treatment and final disposition
see Table No.25
2.1.4.1. Copper Slag Reverber
This solid residue is produced when mortar coming from
the copper roasters melts. Two phases take place:
First a very dense phase that is compound by sulfurous
metals forming the matte and second a less dense phase
containing the gangue or slag and the smelters. The slag
is discharged at the opposite side from the burners,
grained with high pressure water and sent to the slag
deposit trough a cable car.
Today, copper slag is deposited in Huanchan (a complex
near by area) . It is estimated that it is possible to
keep depositing in this area for a period of 5 to 10
years more. In Table 2.5 important residues
characteristics can be appreciated. It is necessary to
take into consideration table 2.6 to identify treatment
codes and final state. See Picture 2.1.1
2.1.4.2 Lead Furnace Slag
This solid residue is generated after the oxide melting
and reduction process takes place, specially from lead
and lead sulfate to metallic lead.
The melted material is discharged to the settling tank
to separate the slag from the lead matte.
The slag exits to a granulation channel with high
pressure water streams where it is dragged to the
settling tanks and slag discharge to be sent to this
material deposit by cable car.
The slag is also deposited in Huanchan (near by area).
It is estimated that it is possible to keep depositing
in this area for a period of 5 to 10 years more. Table
2.5 presents important
<PAGE>
residues characteristics.
Furthermore it is necessary to point out the quantity of
copper and lead slag stored in Huanchan, approximately
10 000 00 t. See Picture 2.1.1
2.1.4.3 Arsenic Trioxide
This residue is generated from roasting the powder
recovered at the arsenic mixed with pyrite Cottrell.
The arsenic vaporize and condense, the processed vapors
pass to the warm arsenic Cottrell from there to the
furnaces where the obtained product contains 81,5% of
As2O3.
Due to scarce sales the arsenic trioxide is a copper
smelter marginal product. It is stored in a deposit
named "Vado" located 10 km from La Oroya. Another old
deposit is located near the "Malpaso" power-electric.
Both deposits constitute sources of dust emissions to
the environment, for this reason a number of treatment
alternatives are been contemplated.
The amount stored at the "Vado" Stock is 164 575 t, the
table No. 2.5 presents some important residue
characteristics, See Picture 2.1.1., a and b.
2.1.4.4 Zinc Leached Residues ( Zinc Ferrites)
It is generated after the Zinc calcine leaching; the
process is undertaken in agitators tanks where the used
electrolytic, concentrated sulfuric acid ( if required)
and the fine calcine are loaded. The iron is
precipitated with manganese dioxide along with arsenic
and antimony, etc. and the zinc ferrites remaining
insoluble.
The zinc ferrites with an 8% content of solids are
pumped in a pulp form to the settling tank located in
Huanchan. Leaving the solid part in the tanks and the
liquid part discharged in the Mantaro River. Today the
Zinc Ferrites deposit has 1 234 300 t, constituting a
pollution source, specially in winter. (During the
months of May through September). See Picture 2.1.3
2.1.4.5 Thallium Residues
This solid residue is generated from the crude cadmium
sponge at the cafdmium plant.
<PAGE>
The sponge is re-dissolved in sulfuric acid and the
concentrated cadmium solution is purified by adding
potassium permanganate , caustic soda and sodium
carbonate with these elements iron and thallium
precipitate.
The produced material is transported by trucks to
Huanchan deposit (Side No. 4 of the Zinc Ferrites
deposit).
2.1.4.6 Industrial Waste
The industrial waste generated at the Metallurgical
Complex are classified. This project involves the solid
combustible residues separation: wood, fabric, paper,
oils, and grease which are not recommended to be flamed
because it generates dangerous flammable products such
as: plastics and resins.
A burner is installed at the smelter and an other one is
installed at the Huaymanta refinery They carry on a
complete combustion operation. The industrial scrap iron
is also picked out for recycle.
2.1.4.7 Manganese Dioxide
This residue is generated in the zinc electrolytic cells
in the following manner:
o Through mud settling at the bottom of the cells
which is produced during the zinc sulfate solution
electrolysis process. The mud with manganese
contents is extracted during the cell cleaning
stage to be stored afterwards.
o Through lead anodes washing. At the cell cleaning
stage the lead anodes are washed with pressure
water, the product is sent to the settling tank
and the solids are subsequently stored.
The residues obtained in both operations are stored in
the Mantaro river basin.
TABLE 2.6
ESTABLISHED CODES FOR THE RESIDUE
TREATMENT AND FINAL RESIDUE LOCATION
------------------------------------------------------------------------------
CODE PROCESSING CODE FINAL DISPOSAL
------------------------------------------------------------------------------
A Preliminary A Public drainage system
maintenance
------------------------------------------------------------------------------
<PAGE>
- -------------------------------------------------------------------------------
B Biologic Treatment B Straining pool
------------------------------------------------------------------------------
C Physic-Chemical C Water bodies (Sea, river,
Treatment lakes, etc. Specify name)
------------------------------------------------------------------------------
D Biologic and Physic- D Mine filling
Chemical Treatment
- -------------------------------------------------------------------------------
E Segregation E Scattered on the floor /
land
------------------------------------------------------------------------------
F Other (specify) F Tailing ground
------------------------------------------------------------------------------
G Without treatment G Other (specify)
------------------------------------------------------------------------------
Use the Code in accordance with the type of treatment and / or final location
Source : EVAP March 1995
2.1.5 Gas Emissions Generating Sources, Treatment and Final Location.
The principal gas emissions contaminant is the SO2 , as a
consequence of concentrates and fluxes treatment with high sulfur
contents; also, the gas emissions bear lead, arsenic and cadmium
particles among others.
In general, the contaminants variety originated at the different
operations and processes (annex 5) are discharged into the
environment by three well defined sources.
o The Principal Stack: which height is 167,5 meters, it is the
major gas emitting source.
o The Secondary Stacks: In a total of 95 units of a variety of
dimensions (from 4 to 91 meters) and distributed in different
circuits of the plant.
o Undefined Sources that in accordance to the DGMAMEM are known
as "Fugitive Emissions".
The principal stack as it was already pointed out is a significant
gas emitter. The so called "gas emission" is the mixture of gases,
vapors, metallic fumes and grained material or dust that due to
their components dimension are not affected by gravity and are
integrate into the environment.
Among the secondary stacks, the iron stack has been studied (91
meters height) and the coke plant (19 meters height). Some others
have been characterized that are referred to in this study. The
emissions by these stacks require a better definition. However, it
has been observed that the majority of these stacks are not very
harmful because they are combustion gases, water vapors and inert
dust.
In relation to the fugitive emissions, they escape directly to the
environment. Its origin is diverse and, in higher and lower grades
due to lack of good control in the process, lack of ventilation
systems and / or micro-meteorology changes ( gust of wind,
temperature, humidity); fugitive emissions are difficult to quantify
because they are irregular and of quick dispersion. (Picture 2.1.5)
<PAGE>
Some of these emissions have an important negative action , since
they could revert over the soil and liquid effluents making worse
the contamination of these other two environment factors.
The gas emissions generated by the smelter are detailed as follows:
(Table 2.7)
a) Copper Circuit
Grained Material or Smelter Dust
They are produced by solid mechanical haulage in the gases
roasters, reverbers, and copper converter circuits. Around 97%
of the grained material is recovered successively in the
arsenic Cottrelles and central; the remaining 3% is evacuated
through the main stack along with the main stack and other
circuits gas emissions . The portions recovered at the
Cottrelles return to the production circuit.
Gas Residues
The gas coming from the Roasters, Reverbers and Converters are
directed to the main stack after passing through the
Cottrelles. These gasses contain basically S02 and combustion
gases. The quantity of SO2 originated in this circuit is
approximately 508 t per day representing 53% of the total SO2
poured into the environment by the main stack.
Emissions that Escape Directly to the Environment
These emissions are produced at the preparation plant by solid
material haulage outside the bells, this occurs basically
because of the extractors insufficient capacity.
At the Roaster Plant acid and solid emanations are reproduced
discharging directly to the environment from the loading floor
because of lack of room in the main evacuation duct.
In a similar manner it has been observed that gas leaks and
dust are generated in the calcine discharge operations in to
the wagons; they are not captured by the control system bells.
At the Reverber Furnace there is no longer a fugitive gas
production because the ventilation system of the discharge
opening, the slag, and the slag channel are connected to the
iron stack. Acid Gases and Dust are also produced at the
reverber loading floor because they lack ventilation hoods.
The inadequate ventilation system of the Converters allows
dust and acid emission to escape to the work environment
during the cold re - circulating material loading.
<PAGE>
The combustion gases and the SO2 freely spread at the blister
copper casting retention furnaces due to the lack of an
entrapment system. Likewise, at the Arsenic Plant grain
material containing trioxides escapes, covering the work
environment due to the lack of a dust catching system during
the unloading and shipping operations.
b) Lead Circuit
Grained Material or Smelter Dust
They come from mechanic hauling of the solid fractions
contained at the Blast Furnaces, the Skim Reverber, and the
huge gas proportion of the Agglomeration Plant. The grain
materials are retained at the Central Cottrell in a proportion
that reaches 97% to be re-circulated at the Copper Circuit.
The other 3% is evacuated by the main stack.
Gases that come out from the Main Stack
The most important ones are originated at the Agglomeration
Plant, Blast Furnace, and the Skim Treatments. In the first
case, the gas emissions are generated in the synthesizer
machine conducted to the Central Cottrell where the metallic
grain precipitate and the residual, along with the gases,
continue through the main stack. Also, the gases and the
particles formed in the Blast Furnace fusion process are
directed to the Cottrell and from there to the main stack. The
same process appears with the contaminants that come out from
the skim treatment at the reverber furnace.
The general balance neutral sulfur (S(Degree)) reveals that
30% of the SO2 formed and evacuated by the stack, comes from
this circuit and that the 84% of the SO2 comes from the
Agglomeration Plant.
Gasses Generated in the Coke Plant
The most important source of contamination in this unit is
constituted by the coke retorts were the combustion gases are
produced that are discharged in the environment through two
stacks of 19 meters. (Picture 2.1.6.)
Gases Emitted by the Secondary Stacks
This gases have lower flows than the ones before as a
consequence of the metallurgical discontinuous processes,
incremented by flows coming from the dust catching system,
combustion gases and cooling vapors.
Gases that are Discharged Directly to the Environment
The emissions in this case, are basically constituted by
particles and fine dust originated in the hauling and transfer
of synthesized material (thick and thin). The route also
produces weak emissions of SO2 from gases that exit the still
warm sinter where they were trapped. It has been observed that
due to the lack of fans and due to the false air
<PAGE>
catching, a considerable part of lead part is not conducted by
the stack gasses.
Another contamination source in this circuit is the retorts
discharge operation. This operation is small, but emits gases,
dust and vapors in significant quantities which end up around
the work areas.
c) Zinc Circuit
Gases Channeled through The Principal Stack
It has two flows: A group of gas emissions that are originated
in the roaster process of the fluid bed system (FBR) and the
other group originated in the turbulent bed (TLR). In the
first case, the emissions pass to the boiler to pass
afterwards to the Central Cottrell from where the gases with
SO2 are discharged into the atmosphere through the Principal
Stack. From the TLR the gasses pass first to the heat
recovering system (La Mont boiler). and from there to the
particle recovering system. The clean gases are raw material
for the Sulfuric Acid Plant. The residual gasses are
discharged via the main stack.
The sulfur general balance (S(Degree)) reveals that the 7.4%
of the SO2 evacuated by the main stack comes from this circuit
and 9% of the SO2 coming from the TLR changes into H2SO4.
Gasses Channeled through Secondary Stacks
In this aspect it is important to consider that the limited
altitude of the Cadmium Plant Stacks can originate solid
metallic residues precipitation in nearby areas.
Gasses Directly Discharged into the Environment
In the neutral leaching and purification stages acid vapors
are generated due to the temperature conditions and the
treatment tank contents. These contaminants also are produced
in the house tank during electrodeposition in a higher
magnitude than in other areas. The acid vapors also are
present during the pellets drying at the Roaster Plant fluid
bed.
The measurements taken by the Ventilation Department reveal
that at the TLR Plant environment there are not recommendable
Zinc and Lead Concentrations in form of "flying dust". The
precipitation of these materials to the Zinc Circuit Floor is
visible originating alterations in the liquid effluents that
flow by the open channels.
Finally, at the Zinc Circuit gases and particles formed during
the discharge of the iron slag to the Kiln Furnace exit to the
environment, affecting as in other areas the liquid effluents.
d) Anode Residual Plant and Silver Refinery
<PAGE>
A peculiar characteristic of this plant is the variety of the
processes and reactors employed, as well as the discontinuous
sequence of the production processes. Consequently, the
identification and monitoring of the various characteristics
and complex emissions make it difficult to evaluate.
Gaseous Emissions of the Main Stack
The gas material originated in the reverber fusion processes
are taken through the electrostatic processes where the solids
are recovered . The gasses are taken to the environment though
the main stack. The gasses and dust coming from the discharge
opening of the fusion reverber and reduction follow the same
path.
The particles and acid gasses (nitric) produced during the
refined silver crystals fusion are cachet to be derived to the
Copper Reverber duct and from there to the to the central
units of electrostatic precipitation units following the
residual flow towards the open environment.
From the Silver Refinery partition processes acid vapors are
generated. Acid vapors from the kettles and the silver
cementation tanks that are caught by the exhaust hoods and
conducted to the Central Cottrell.
The S(Degree) general balance in this area reveals that the
9,5% of the SO2 emitted by the main stack is product of the
circuit in reference.
Emissions by the Secondary Stack
They are emitted through local stacks in minor flows.
Direct Leaking to the Environment
In the reverber area there are two important gas exits that
increase during the smelted materials decanting into the
converters.
At the Anode Residues Plant the ventilation systems show a
visible deficiency, facilitating abundant diffuse emissions at
different operation stages.
e) Copper and Lead Refinery
Atmospheric Emissions
The electrolitic refining processes used in this unit require
many operations with temperature changes, in such a way that
the principal gas emissions are water vapors loaded with
higher and lower grades of specific contaminants. At the anode
mud leaching and washing and at the Cu and Pb cementation a
water vapors loaded with acids and sulfate (H2SO4, HF, H2SiF6,
CuSO4) drag along in mist or mechanically.
At the cooling operations ( of the copper bars, wires, etc.) a
high quantity of water vapors with no or very little
extraneous materials are
<PAGE>
produced.
During the Lead fusion, metallic vapors break off to the
environment, although their course (diffusion) normally should
be of a short distance because when cooling they will
precipitate in form of particles. Certainly, there are
combustion gasses with a typical composition which are
evacuated independently from the gas processes.
In general the are no treatment systems for any of the gas
emissions referred to. There is no detailed information about
flows and components.
At the work place interior it is easy to perceive the typical
odors of the refining electrolytes, probably due to the little
efficiency of the ventilation systems.
These gas emissions are potential contaminants of the Yauli
river because during rainy season they are inevitably dragged
into the soil.
To have a qualitative idea about the contaminants apportion by
each refinery, a reference to there processes and most of
their characteristic operations has been made, including the
control systems at 19 ventilation stacks.
Table 2.7 J, shows in detail the Copper and Lead Smelter and
Zinc Refinery (annex 5) secondary emissions sources with some
of their physical and chemical characteristics.
In drawing 2.2 it can be observed schematically gas and dust
handling at the copper and lead smelter.
2.1.6 Contaminants Receptors
The liquid effluents are discharged to the Yauli and the
Mantaro Rivers. The gas emissions have an influence in the
areas near the smelter (annex 10) Solid residues are stored in
the river basin nearby areas.
2.2 Physical Environment
2.2.1 Topography
It is a very uneven topography formed by huge depressions. The Yauli
river is a Mantaro tributary. In its course it passes through a flat
topography belt , where a number of towns have been built.
The Mataro River crosses La Oroya City from North to South forming a
very narrow valley.
<PAGE>
Down river passing La Oroya toward the Huancayo route, the valley
becomes more and more narrow and huge rocks predominate.
In the smelters high part by the Mataro left margin the topography
becomes flat and with signs of heavy rain, at the very high part the
topography is again very uneven.
The topography map (annex No.7) presents a description of the
topography at the Metallurgic Complex La Oroya influenced area.
(annex No.7)
2.2.2 Weather and Meteorology
2.2.2.1. Weather
The weather at La Oroya and surroundings is cold and
with two well defined seasons: The humid season is
between the moths of November to April with liquid
precipitation and some times solid precipitation ( snow
and hail). The dry season runs during the rest of the
year.
The precipitation is channeled through small fractures
as small tributary creeks and or to the Mantaro River
which happens to be the regional collector.
It is important to point out that the morning wind
(between 7 and 10 am) flows from North to South of the
Mantaro Valley , after 10 a.m. it turns around South to
North.
2.2.2.2. Meteorology
The meteorology characteristics are of great importance
in the atmospheric contamination phenomenon and for its
effects.
The information gathering in relation to the
meteorological parameters at La Oroya is given to three
stations. The first one is located in the smelter zone
and the other two at the Cushurupampa area ( Not at the
smelter) and Hanchan ( South East from the smelter),
coinciding with the air quality monitoring stations.
The Smelter Meteorological Station is the most complete
in terms of the number of parameters evaluated.
Precipitation (rain), environment temperature, humidity
and barometric pressure are measured since 1925.
The results obtained are not of exclusive use of
Centromin . The pre-established continuous information
is shared with the official meteorological office of the
country. In other words it is part of the National
Meteorological and Hydrology Service, called
<PAGE>
SENAMHI, operating under these offices rules.
o Wind Speed and Direction
The respective data is shown in Table 2.8. The analysis
of this data presents characteristics that are easy to
appreciate such as the wind direction. The wind roses
(Drawing 2.3, 2.4 and 2.4 A) for the two urban stations
show clearly the lack of winds. The evaluated directions
form practically the complete wind roses, meaning that
the generation of the winds and its course occurs in all
possible direction. Relating this phenomenon with the
contaminant distribution in a first approach, it results
easy to understand that there are not zones that are
continuously exposed, but that that the diffusion moves
"from here to there", according to the dominant
circumstances, tending to be stable over the narrow part
of the Mantaro - Yauli Basin in contribution with other
contaminant phenomena such as the atmospheric stability.
Analyzing the Tables and the Drawings that show the
speed average rate, it can be appreciated winds below
the 2 m/ second that in the contamination area are
considered less favorable since they do not allow
"Barriadas" of desirable air.
The Huanchan wind rose (Drawing 2.3) has a difference
since there it can be understood that the winds go to
the South West zones. ( river down from the Mantaro
River waters), which results favorable respect to the
ones going to the areas less populated.
A very important aspect that deserves attention in the
micro-meteorological phenomenon and much more directly
related to the winds is the orographic influence in the
area. The winds behavior in La Oroya atmosphere seems to
be conditioned in a great part by the abrupt orography
that limits the work and urban zones.
o Precipitation
There is a Smelter station and a sub-station at
Mayupampa for the pluvial measurements. The average
values show 568.10 mm of H2O for the Smelter Station, in
a period of 72 years and 563.70 at Mayupampa in 39
years.(Table 2.9)
Normally, the precipitation (liquids such as the rain
and solids such as snow) at the atmospheric
contamination zones are considered benign because they
clean the environment air. However, in La Oroya it is
related to a negative effect because they could
constitute an additional source of contamination for the
Mataro River. This due to the "Washing" = "Lavado"
action
<PAGE>
which occurs over surfaces that have accumulated
contaminants throughout time and are dissolved and
dragged to the river.
o Relative Humidity and Temperatures
The parameters values obtained at the La Oroya Station
(Smelter) show that humidity and temperatures are not
strictly the same neither adjust to the common
understanding that the Andes region is a cold and dry
area. Table No. 2.10 and Drawing 2.5 illustrates these
values showing that temperatures over the 20 (Degree)
(typical of warm areas) are not rare and that the
environment has a humidity that is over the 70%. In any
case, there are additional data regarding the
meteorological conditions of the area that are
complicated. In group they are singular circumstances
that generate contradictory conditions prone or not to
environment contamination.
o Barometric Pressure
At the Main Station (Smelter) the barometric pressures
are measured expressing them in Kpa (pascal kilos).
Their average monthly values are reported in table 2.11.
These values in the atmospheric contamination area have
multiple applications in gas calculus, that necessarily
involve pressures, volumes and temperatures.
2.2.3. Environmental Air Quality
It has been designed and put into operation an extensive Monitoring
Program regarding The Environment Air Quality that comprises:
Field Works
a) Measurements and Sampling of : Sulfurous gasses, total grained
material (TGM) and heavy metals in five stations located at
the representative areas, comprising about 10 kilometers of
the Production Unit, La Oroya Smelter.
b) Meteorological Parameters Monitoring Stations coinciding with
the ones above and others.
c) Field Observations. Surveillance.
Laboratory Works
a) Analysis (micro-analysis), chemical physical, through classic
and instrumental methods.
b) Equipment Calibration and Reagents Preparation.
c) Data collected
Cabinet Works
a) Information Gathering
b) Collecting and Treatment of data obtained at the field and
laboratory.
c) Reports Structure
<PAGE>
Monitoring Stations
The monitoring stations have been located considering factors such
as the electric energy facilities, access, surveillance and the
Yauli - Mantaro river basins situation, among others. ( Table 2.12
and Annex 8).
The following describes each of the stations with the most important
characteristics as well as their equipment.
a) Huanchan Station
Located near the Cu and Pb slag deposits, 30 meters form the
slag inlet. Tower 16 at 2 kilometers from the main stack in
the "Y" strip of the Huancayo road.
It is located with an (SO2) gas monitor, Kimoto Japanese
brand, type 332 - TW, capable of evaluating ppb scale
concentrations, counting with an automatic registry. The
detector functioning principle is the conductive phenomenon.
When SO 2 oxidizes at the reception area, it generates
electric energy micro-currents that are registered by
electronic system and taken directly in figures to be read and
printed.
This same unit is capable of register meteorological
measurements basically in the wind direction.
The station is completed by a high volume portable monitor
(Hi-Vol) that is able to attract floating grained materials or
environment dust in a fine paper thus being able to make high
praise conclusions regarding the total mass captured or
specific elements evaluations such as the bio-accumulated
heavy metal contents.
b) Workers Union Station
Located at the urban zone (Old La Oroya). At the second plant
of the companies workers union. Is the nearest to the
principal source in reference, only 8 kilometers from the
principal stack.
This station is also equipped with an SO2 registry unit,
"Kimoto" brand, but the type is 331-B, different than that one
mentioned above does not assume meteorological registries, on
the other hand it has a paper tape of controlled movement. At
this catching point the environment air is forced through a
filter type and leaves in it materials that stain the paper.
These stains densities and color are variable according to the
monitored air . They are read by a rays artifact ### (beta)
The different readings give air dirt indexes and the mass
particles. From these sample conclusions can be made about
specific chemical elements (example As), previous laboratory
analysis.
c) Inca Hotel Station
<PAGE>
Is located 2 kilometers from the point of reference, located
in the "Y" strip of the Cerro de Pasco road. The equipment has
a Kimoto 331 Monitor and it is located at the Hotel's roof.
The samples are also completed with a high volume equipment
(Hi - Vol), and a sampler for grained materials that are not
settled.
d) Cushurupampa Station
It is located 3 kilometers from the main stack in the "Y"
strip of the Lima road. It has a Kimoto Monitor type 332 - TW
and the Hi Vol.
e) Casaracra Station
It is distant. Located in the fish farm with the same name. At
10 kilometers from the central reference, in the "Y" strip of
the rail road way and Cerro de Pasco road. As a DKK monitor to
exclusively determine SO2. This monitor is based on the same
sampling principle of the Kimoto. It does not give figure
results, but graphic ones that require processes to get to the
number results.
Evaluations and Results
The "environment air quality" evaluated contaminants at the
monitors described above comprise the sulfurous gasses, which
are expressed in SO2, the grain materials in suspension (MPS),
the MPS metallic contents (As, Pb and Cd) and the wind speed.
The results of these evaluations done at the above described
stations are shown in Table 2.13.
Grained Materials in Suspension (MPS)
The grained contaminants evaluation is undertaken by two
independent methods, but at the same sampling stations, this
makes it interesting to look at them comparatively.
The Kimoto 331 - TW as described above is capable of
evaluating the MPS like the Hi Vol equipment. However, the
difference is that the Hi - Vol manages high volumes of air,
filtering the totality of the MPS in a 24 hour or more
continuous period. While the tape samplings make a sequence
sampling every 3 minutes, obtaining as consequence maximum and
minimum averages. More importantly is that in the tape or
stain paper method the evaluated particles are only a fraction
of a smaller dimension than 10 microns, known as PM10. Meaning
that from the totality of floating particles in the air the
equipment is capable of discriminating (through a Cyclone
system) the PM10 portions, known as "breading particles", for
this reason it is valuable for the general public health. The
Hi - Vol as it was said before collects all non settling
material among which particles bigger than 10 microns are
abundant.
MPS Metallic Contents
From the MPS samplings done by the paper tape method or by the
Hi
<PAGE>
Vol method determinations can be made to detect the 3 risky
elements (As, Pb and Cd) that are always present in the mining
operations like the Centromin mining operation. These
determinations are done through analytical laboratory
procedures in monthly representative arrangements.
2.2.4 Geology and Seismic Conditions
2.2.4.1 La Oroya Geology
The older rocks at the La Oroya surroundings are the
ones that belong to the Pucara Group from the Jurassic
Triassic age, principally composed of clear gray or
white calcite, that must be overlaying the Mitu Group
rocks from the Permian age.
Goyllarisquizga Group of rocks are also present composed
of red lutite and sandy, calcite, inter-stratified with
basaltic layers and diabases
Over these rocks it is found the Machay Group composed
of gray bluish calcite and bituminous coming from the
Pariatambo formation and the clear calcite, shales,
limes, and phosphatic from the Chulec formation.
South from La Oroya there are flourishing Red Coats from
the Tertiary age, covering this flourishing there are a
series of quaternary deposits distinguishing the
following:
a) Alluvial Deposits
These irregular deposits are found at the Mantaro
River and Yauli River forming terraces of different
ages and dimensions in the quaternary. La Oroya
Smelter and the Huaymanta refinery are sitting on
this type of deposits. The fragments dimensions vary
among blocks, gravels, and some sand. The
composition of these materials is variable, sandy,
etc.
b) Pluvial - Glacial Deposits
This type of deposits are located in the high parts
of the old glaciers, in most of the cases there are
only remains of the old big deposits.
c) Colluvial Deposits
These deposits are formed by steep slope rock banks
that have been formed by rock erosion. They are
small and irregular deposits.
d) Elluvial Deposits
In some parts it is possible to encounter rocks that
are
<PAGE>
transforming the soil and some small deposits that
originate the soils.
Fractures and Folding
The Mantaro river course adjacent rocks are strongly
folded with a near to vertical dipping and in some cases
they have been dislocated forming regional fractures.
South to North East form the river the folding eases,
forming ample anticlynals and sinclynals.
Geomorphology
At the La Oroya Metallurgical Complex some
geomorphologic characteristics can be distinguished such
as: The Mantaro river with some tributaries like the
Yauli river, Shinchamachay, Huashango (Paccha),
Pacchapata, ( Old La Oroya) , rio Seco, and some other
small ravines that have formed its course on calcareous
rocks, sandy rocks, shales, etc.
At the Mantaro river and Yauli river old courses,
pluvial terraces and some chemical precipitation
deposits can be observed; such as Sacco - Tambo
deposits, Shincamachay, Tishgo and Mantaro river joining
point and some others much smaller like Old Oroya
(covered with population)
The altitude varies around La Oroya between 3, 600 to 4,
600 m. a. s. l.. The Smelter and Refinery are located at
an average altitude of 3, 700 m. a. s. l.
The Fractures (erosion fractures) produced by acid rain
at La Oroya surroundings are very much visible.
Especially , at the soil surface that has no natural
vegetation. (so called Ichu). This erosive effect is
intense at the Smelter surroundings and diminishes as it
gets farther from the center.
2.24.2. Seismic Activity
From the Tectonic point of view, La Oroya metallurgical
complex is located in Zone 1 (National Construction
Rules), corresponding to a high seismic area . It
indicates that to build it is necessary to take into
consideration the seismic parameters that the rules
established, the buildings must be 2 floors or lower.
2.2.5. Soils
Evaluation and Analysis of Soils and Water
The study and evaluation of this natural resource is very important.
They are studied in their physical, chemical and biological aspects.
This studies have been performed on samples that have been taken at
the affected zones as well as at the nearby areas.
<PAGE>
The analysis results are shown in Table 2.14, indicating that the
soils have been impoverished by the washing that has been taking
place during the years, having no vegetal coverings. There is no
nitrogenous presence.
The discharge solution is being re-circulated at the lead refinery
operations.
After the cathode disposition period required passes, the cathodes
are removed from the dispositions cells to the washing to recover
the electrolytic and then to be smelted at the three pans of 160
tons capacity, which are heated with oil. The smelted lead is heated
up to 450 (Degree) centigrade and vigorously shaken with sodium
hydroxide (NaOH) to skim the remaining arsenic, antimony and tin.
The refined lead is cast into 46 kg bars to be commercialized.
The hydrofluorsilicic acid required for the electrolysis process is
fabricated by making the calcium fluoride (Ca F2)) and the sulfuric
acid (H2SO4) react, to obtain hydrous fluoride acid (HF), which
subsequently will react with the fine silica (Si O2) in a reactor.
The solid (Ca SO4) is discharged directly to Yauli river. The option
of building fields for this product is being considered.
2.3 Biological Habitat
2.3.1 Characterization
Serrania Esteparia's bioregion covers from the La Libertad
department to the north of Chile, in the Occidental Andes, around
1000 to 3800 a.s.l. with an interesting ecological formation
characterized by its own climatic, edaphic, flora, and fauna
factors. It takes the name of "Serrania" because of its most
outstanding vegetal formations. It presents a very different climate
to that of the coastal desert and to that of the Puna with which it
limits to the west and east respectively. (Fig 2.6)
2.3.1.1 Terrestrial Ecosystem
Characterized by the presence of a vegetation that forms
a steppe of gramineous, Lupinus communities, some
herbaceous plants of the Genera Baccharis, Polylepis,
Buddelia, Alnus which are associated with gramineus such
as (Stipa ichu, Stipa bhrachyphylla, Calamagrostis
vicunarum, Calamagrostis antoniana, and Festuca
heterophylla which constitute natural grass.
The fauna is represented by the "Vizcacha" (Lagidium
puna). The fauna in this zone is highly influenced by
the elements of the
<PAGE>
Puna allowing the species of the serrania esteparia to
reach its maximum distribution. In the Avifauna we can
point out the presence of the "tortolita peruana"
(Euphelia cruziana), the humming birds (Myrtis fanny)
and (Thaumastura cora), the "negro" (Dives warszewiezi),
the "tordo negro" (Molothrus bonariensis), the "Chisco"
(Mimus longicaudatus), etc.
2.3.1.2 Aquatic Ecosystem
The rivers in the occidental part are of rapids, and
torrential waters, diminishing their temperature with
the height that brings them brings as a consequence
interesting zones of habitats among which we can mention
rivers, Andean rivulets, earth and stone cliffs, stone
beaches, rocky coasts, river borders with low
vegetation.
Of the most characteristic plants of this ecosystem, we
will mention the "Pato de los torrentes" (Merganetta
armata), and the "Mirlo acuatico" (Cinclus
lencocephalus) which prefer rivers and rapid crystal
clear ribulets.
Among the amphibians, the most frequent are the "Sapo
comun" (Bufo spinolusus), as well as the Telematobius
jelskii and Telematobius runac.
Little has been studied about the native fishes, but we
can mention the "Chalwa" (Oretias spp.) and introduced
as Salmo spp.
2.3.2 Ecosystems in the UDP
The metallurgical complex is located in a rift formed by the
Mantaro and Yauli rivers basins at 3800 a.s.l.
The populated centers and farming zones are located near the
basins of the Yauli and Tishgo rivers.
A description of the terrestrial ecosystems in a 10 km. radius
with the principal stack as its locus was made.
2.3.2.1 Terrestrial Ecosystem
The Oroya factory is located inside of the andean
valleys, with a surface area of 420 km(2), and
geographically it occupies the occidental parts of the
Andes with its center's height between 3700 and 3800
m.s.n.m.
The topographical relief is shaped by strong slopes and
acidic soils with reddish or brownish tones. There is
very few fertile (combisoles districos) and eutric
(fertile).
<PAGE>
Flora and fauna are very reduced or almost non-present
because of the toxic action of the smoke of the plant;
in table 2.15 we can observe the chemical analysis of
the plants. (Picture 2.3.0)
10 Km. north of La Oroya is found the climate station of
Casaracra. The circumvent area presents different
characteristics to those described above. The scenery is
constituted by gramineas y herbaceous of perennial
habits that are dominant, such as Festuca heterophylla
and Stipa ichu, because of prolific grazing the "Choca"
(Chuquiragua huamanpinta), "Caqui Caqui" (Adesmia
spinosisima) and some cactuses. (Picture 2.3.1) The
grazing fauna there is sheep and cows.
The birds are very scarce and can point out the "gaviota
de la puna" (Larus serranus) Puna seagull
In all the covered terrain, it was observed bushy
species planted by reforesting such as the "colle"
(Buddleia coriacea), the "Polylepis racemora." Also have
been identified the "retama" and the "maguey" (Agave
americana).
From La Oroya to the south and bordering the mantaro
river and in a 7 km. radius cannot be observed typical
vegetation of the region except for Stipa ichu in very
scarce amounts because of the smoke of the factory. From
that region on, one can observe more populated
vegetation as well as the high parts and the river,
gramineas such as Festuca sp. and Stupa ichu. Also some
species such as Quishuar and some cactuses. (Picture
2.3.2) No fauna representatives have been found.
In the high parts, to the west of La Oroya
(Approximately at 4000 a.s.l. ) can be seen the effects
of the smoke of the factory on the ecosystem. It's been
calculated an area of 3829 hectares where no flora nor
fauna exists and can be seen the direct effects on the
soil (Picture 2.3.3). On the middle part of the
Huaynacancha valley exists a small lake formed by the
thaw and rain where some vicunas drink water and where
some birds like the "Huallata" or "Washwa" rest and it
forms very scarse vegetation species like the
almohadillas and gramineas.
In the city one can appreciate the reforestation, in
front of the Inca hotel, to the Centromin offices and in
the villages with species like the Kolle, Quinual,
Cypress, Quishuar, etc.
2.3.2.2 Aquatic Ecosystem
a) Lotic Environment : Tishgo, Mantaro, and Yauli
rivers The Tishgo river joins the Mantaro around
the Casaracra
<PAGE>
Hacienda and their waters are used, after domestic
use treatment, in the agriculture of the "trucha
arco iris," - Trout - though for a while no fish
species nor any other organism hasn't been
reported. The river vegetation is formed mainly by
gramineous.
The Mantaro river runs from north to south, and
brings in its flow high concentrations of
pollutants and when passes through La Oroya it
receives effluents from the lead refinery, from
the water effluence of foul dirt granulation of
copper and lead, from the principal channel No. 2
of the copper and lead smelting, from the
solutions of the electrolytic plants of zinc, from
the principal channel No. 1, from the parallel
channel at point 135 and from the zinc ferrites
effluent , as well as from the Yauli river that in
its path also brings tailings and other
contaminants.
In both water bodies, no representative organisms
from the flora and fauna have been observed except
for the "gaviota de la puna" (Lorus serranus) and
the "Huallata.
The following are the values of the monitoring of
the Tishgo, Yauli and Mantaro rivers. Table 2.16
It can be appreciated, that the Yauli and Mantaro
rivers are contaminated with lead concentrations
far over the Maximum Permissible Limits, cadmium,
considered as one of the most dangerous elements
is also reported in the Mantaro. Iron
concentrations increase in the Mantaro on its path
along the smelting plant, manganese is increasing
five times its concentration in its path along the
smelting plant, and arsenic is also present.
Also, both rivers receive domestic emissions from
all the population.
2.3.3 Endangered Species or on the brink of extinction
In the Esteparia serrania, the intense and disordered grazing
practice destroy the wild vegetation impeding natural
regeneration and causing soil erosion. For the lack of vegetal
cover, this zone is very prone to slides and floods "huaycos"
in rainy seasons.
The main cause for the disappearance of the species of this
zone, flora as well as fauna, specially the endemic that
present restricted distribution, is the destruction of the
habitat, because of the loss of natural vegetation, as well as
the contamination caused by the mine discharges in the water
and atmospheric bodies.
<PAGE>
2.4 Socio-Economic Environment
2.4.1 Socio-economic environment component description
2.4.1.1 Location and description of the UDP as a Mining
Settlement and the Human Settlements of its
surroundings
o The UDP installations at La Oroya are located in
the City of La Oroya
The main populated centers are located in the immediate
vicinity are:
In the road that connects to Huancayo: The Huari
Community, Hacienda Quiulla.
In the road to Lima: the Huaynacancha Community.
In the road to the Tarma exit are: The Antahuaro
Hacienda and after Paccha, the Casaracra zone.
In the Oroya - Cerro de Pasco route are eight more
villages. It can be observed in a comparative way the
demographic coefficients:
Main Demographic Indicators - La Oroya
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
Districts
Indicators Junin Yauli La Sta.
Dpt. Prov. Oroya Paccha Rosa
Sacco
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total population (thousand 1093.0 67.7 30.9 2.2 12.5
habs.) 1993
----------------------------------------------------------------------------------------
Growing rate 81-93 1.7 -1.4 -1.4 -0.8 3.2
----------------------------------------------------------------------------------------
Rural population % 36.0 9.0 2.0 32.7 0.5
----------------------------------------------------------------------------------------
Illiteracy rate (% >= 15 years ) 13.4 9.1 9.1 5.2 6.1
----------------------------------------------------------------------------------------
Infant mortality rate (x1000) 63.0 56.8
----------------------------------------------------------------------------------------
Econ. Active Popul. >= 15 years 50.5 48.7 49.3 45.9 43.1
----------------------------------------------------------------------------------------
Economic dependency rate 242.6 266.5 251.8 302.9 304.6
-----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Source INEI
As shown, the districts of La Oroya and Sta. Rosa de
Sacco compose the 64.10% of the total population of the
Yauli province. These are highly urbanized districts.
With respect to the workers of the company, we find that
92% are married and proceed in their majority from the
central zones of the country: Junin (79%), Cerro de
Pasco (5%), Huancavelica (5%), other (11%).
33% of the workers have between 1 and 3 children and a
40% between 4 and 5 children. Also, 90,4% of the wives
of the workers live in La Oroya. Of the 3215 workers
depend economically 13728 people. 43% of the workers are
between 31 and 45 years of age, and 32% more than 46.
63% of the workers possess high school education.
On the other hand we must point out that the demographic
growth in La Oroya continues to show a negative rate
with respect to 1981.
The diminishing of the population of La Oroya in the
81-93 period (-1.4) is due essentially to the
rationalization of personnel policies that Centromin
implemented in the mining crisis times and the
privatization process.
It exists, on the other hand, a floating population of
2444 people that travel frequently to La Oroya for
commercial resons.
La Oroya is divided into 2 big sectors:
1) La Oroya Antigua, in the exit to Huancayo zone in
front of the smelting plant in the left margin of
the Mantaro river.
It's part of the areas that surround the highway,
which are plains, and circumventing streets that
extend to the mountains of pronounced cliffs; with
streets, with no planning, it's shape is irregular
and disordered. The constructions are very old and
in a state of advanced decay. The occupation of
the urban soil is saturated and prone to the slum
process and tugurizacion by means of numerous
streets. The area is essentially made of huts but
also small establishments, two shopping marts, a
church, a state high school, three schools, and a
private high school.
In the zone there is also neighborhood junctions, the
main ones being: Mayta Capac, San Luis, Tayaupata and
Plaza Libertad.
They are inhabited essentially by particular
inhabitants.
2) La Oroya Nueva, in the right margin of the Mantaro
river and
<PAGE>
the zone where the company installations are
located, in front of La Oroya Antigua, it extends
towards the exit zone towards Tarma, and the one
that leads to Lima.
o The zone with the route to Lima extends towards
the Paccha District and the outskirts towards
Casaracra. In this sector are located the "Junin"
hotel, the Club, and the Hotel Inca. The
Hydroelectric plant of La Oroya and the Chulec
sector, (picture 2.4.1.) privileged zone for its
urban planning, streets, asphalted with
unipersonal houses (chalet style) dedicated to the
Centromin staff possess a sport center and a golf
club. Here is located the Chulec Hospital that
also belongs to the company and beyond the
Mayupampa high school for the Staff's children and
Centromin functionaries.
o In front of Chulec on the other side of the river
is located the Asentamiento Humano: Juan Pablo II
that has a population coming from Tarma and Jauja
and company workers. They possess 2-story houses
of noble material but the streets are not useful
for driving vehicles. We also find the Shica
Machay settling. All through the road few huts are
found, some businesses (grocery stores,
restaurants, etc.), until one reaches Paccha 1 Km
from La Oroya, District inhabited by farmers and
ranchers of the communities of the zone.
o The route goes on until Casaracra with virtually
empty households.
o In the Lima route zone, one finds the majority of
the Centromin's worker's living areas.
Transcribimos the following sectorization given by
Centromin. (Figure 2.9)
<TABLE>
<CAPTION>
--------------------------------------------------------------
Centromin sectors Individual sectors
--------------------------------------------------------------
<S> <C>
Marcavalle PP.JJ. 9 de Octubre
AA.HH. Alto Marcavalle
PP.JJ. Tupac Amaru
PP.JJ. Santa Anita
PP.JJ. Las Brisas
--------------------------------------------------------------
Buenos Aires AA.HH. San Pablo II
AA.HH. San Vicente de Paul
AA.HH. Micaela Bastidas
AA.HH. Santa Rosa
--------------------------------------------------------------
Huaymanta Asoc. de vivienda "Victoria Peru"
--------------------------------------------------------------
Los Plomos AA.HH. Tayapuquio
AA.HH. Leoncio Prado
AA.HH. Enafer
AA.HH. Ramiro Priale
AA.HH. Victor R. Haya de la Torre
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------
Calle Lima Barrio San Juan
--------------------------------------------------------------
<S> <C>
Alto Peru AA.HH. Las Mercedes
AA.HH. Norman King
--------------------------------------------------------------
</TABLE>
The Calle Lima, that's the main street of this sector
groups the Centromin's worker's and employee's
households, great quantities of establishments, most of
them stands and ambulant ones. The zone has a market.
In the Alto Marcavalle zone (Picture 2.4.2) in the
Yantacancha mountain that belongs to the Santa Rosa de
Sacci district is produced a phenomenon that typicalizes
the urbanization process of the population belts that
surround La Oroya city and is constituted by the AA.HH.
Tambo del Sol (Villa Sol), or Muruguay, Maria
Concepcion, and Tacarpana.
The four zones present similar characteristics and are
near to one another having common services such as a
satellite dish, a radio station (Super A.M.) and a
stadium.
The biggest is "Tambo del Sol;" 90% of the inhabitants
are Centromin workers, they are here proprietors of 200
m2 lots with two-story adobe houses, with house small
farm and animal rising. It possess 130 families and all
the land is occupied. The settlers, to be able to obtain
land, it was constituted in integrated Nuevos Comuneros
to the Sana Rosa de Sacco community and began this
process in 1981. (Picture 2.4.3)
11 Km from La Oroya route towards Lima are found the
Curipata Household project, sponsored by Centromin for
its workers. It is located besides the highway in a
plain zone, and well planned (Postal, Stadium, High
School, Church, Market projects, etc ). Even though the
facilities that were given by the company, the majority
of the people has left the land, because of its long
distance from La Oroya (20 minutes) or for their lot
being too close to the mountain that limits the amount
of expansion (between 500 and 600 lots). (Picture 2.4.4)
With respect to the Operaciones de Cetromin UDP la Oroya
sector, it is located scattered in a more or less ample
zone. (Figures 2.9 and 2.10), this way:
o In the route to Lima, along the Carretera Central,
and the Yauli River, in the Huaymanta sector are
located the storehouse, the Alambron copper
factory, the copper and lead refinery.
o In the route to Tarma as we said earlier is the
Club, the Hotel "Inca" the la Oroya Hydroelectric
power plant, the Chulec sector with the hospital,
and the Mayupampa high school.
<PAGE>
o Along the Horacio Zevallos Ave. are:
TV, RR.PP., the Junin Hotel, and the Sierra and
Industrial Relations Human Resources offices.
o At the end of the Horacio Zevallos Ave. in front
of La Oroya Antigua (at the other shore of the
Mantaro river) is: Copper smelting plant, Lead
smelting plant, Zinc refineries, the Training
area, Security, Occupational Medicine, as well as
the Operation General Offices.
2.4.1.2 Economical Activity with the surrounding Human
Settlements Relationship
o The economical function of the zone is
characterized for being a catering intermediary
between Lima and the coastal cities of:
o Food products
o Junin zone meat
o Tarma and Valle del Mantaro zone
vegetables, potatoes, and legumes.
o Chanchamayo region fruits and coffee.
o Industrial sopplies of cattle origin
(wool).
o Raw mineral material (specially copper,
lead, zinc, and silver) for the National
Market and external, coming from Centromin
(Morococha, Casapalca, San Cristobal,
Yauricocha, Cobriza, and Andaychagua).
It is also a return point for catering of food
(groceries) and final products such as dresses,
furniture, etc. to the whole zone of La Sierra and
Central Jungle.
La Oroya City is surrounded by rich farming zones of
Sierra Central characterized for its medium farming
exploitation, oriented towards the production for the
market as well as the Huancayo, Tarma, and Chanchamayo
zones. In another direction (towards Lima) zones
corresponding to the Puna region that cannot allow
themselves agriculture nor intensive cattle production.
Towards the Tarma zone, Huancayo and Junin we find a
series of small villages (generally Estancias or
villages corresponding to farming communities) located
in the vicinity of the Central Road the ones that owe
their existence principally to the ranching activities
and farming at a small scale (self-consumption, selling
what little is left) and the small services oriented to
transport (restaurants, repair shops, etc.).
Nevertheless, though they are close to la Oroya, their
relationship is reduced to commerce of their products in
the two weekly fairs in this city, for the majority of
the final food
<PAGE>
products (groceries) proceed from Lima. (Picture 2.4.6)
La Oroya performs an Industrial-Metallurgic of Smelting
and Refineries function for the treatment of complex
concentrates and the post-commercialization of the
refined Cu, Pb, Zn, and by-products like Bi, Se, Te, In,
Cd, and other chemical products and constitutes the main
reason of its existence as an important urban zone of
the Central Region of the country (between Cerro de
Pasco and La Oroya are 40% of the urban population of
the zone) which reverts when there is unemployment of
miners for reasons previously discussed, for they return
to their places of origin to dedicate to farming and
ranching activities or transport and commerce, or go to
Lima.
Local artwork activities are practically non-existing,
as we said earlier the percentage of the population
dedicated to metallurgic activities and dependent
families ascend to 34.08% of the city PEA, there is a
51.85% of the stable PEA divided between commerce and
services of different sources among which are found
employees of public and private institutions. All of
which though directly or indirectly dependent of the
company's activity constitute different areas.
One fact that remarks this dependency is for example
that the weekly fair and biweekly done in La Oroya and
Santa Rosa de Sacco coincide with the paydays of
Centromin Peru.
What refers to the commercial sector it has been found
987 establishments between formal and informal of which
59.87% belong to food area (groceries, vegetables,
etc.), 6.89% to clothing and footwear and in lesser
quantity to household cleaning utilities and electrical
gadgets.
74.82% of the commercial companies are family-type which
involves more than one member of the family.
In the services sector it has been registered 228
establishments of which 31.14% are formal restaurants
and 8.33% are informal food sellers, and there are 29
mechanical and factories dedicated to transport
services.
The Industrial sector of the city of La Oroya is formed
by 83 establishments of which 36.26% are distilleries of
alcoholic beverages, followed in importance the textiles
sector and bakeries with 15.63%, the fabrication of
furniture with 21.65%. Also, there is an bottle and cal
and plaster factories.
15.86% of the workers of Centromin perform complementary
economic activities: 5.88% dedicate to commerce, 9.20%
to services (masonry) , plumbing, mechanics) and 0.78%
to other
<PAGE>
activities. 13.62% of the wives of the workers dedicate
to other economic activities apart from their household
duties (mainly to commerce 8.53%, and they do it in La
Oroya).
Given the importance that La Oroya City has acquired in
the last years different government institutions,
municipalities and privates and various ONG have come.
There are 35 institutions between public and private
ones.
With respect to private companies of public services
are: La Telefonica del Peru, postal services, local
transport and radio services
There are 4 cooperatives among which is "Cooperative of
Save and Credit CENTROMIN Coop 299"
Apart of this Oroya has eight popular dinner mess
organizations of integrated Base by women of low
economical resources , 18 mother clubs play a role in:
Glass of Mil Program, PANFAR.
2.4.1.3 Hosing Conditions, The Infrastructure And Basic
Services Of The UDP And Of The Populated Centers
From Around
2.4.1.3.1 Work General Conditions
On May 1996, the working population of the company
in the UDP La Oroya was constituted by 248 members
(Superior Administration), 209 (Professional), 611
employees and 2419 workers that when added to
third made a total of 4536 workers.
Though there workers in more or lesser measures
according to their work specialty work in risky
conditions: trauma, professional illnesses, the
company attends to all the refers to health,
households (free light and water), education for
their children and recreational places, transport
and scholarship systems.
2.4.1.3.2 Education and Health
With respect to education, there are two education
systems in La Oroya, one of which is the USE
(Pulbic Units of Educational Services) which has
on its power 11 Public high schools (3 of basic
education, 6 of elementary, and 2 of higher
education) of Centromin Peru S.A., the rest count
on a good infrastructure, equipment and a roster
of excellent quality integrated by the 296
workers. These units enjoy of academic prestige
and has a total of 4448 students (on may 1996)
which represents 33.71% of the scholar population.
<PAGE>
(Picture 2.4.7)
The other 66.29% is formed by the 8744 students
that study in the 45 Education centers,
elementary, high school, Occupational Technical,
and Superior of the public and private sector that
constitutes the other sector of the educational
system of La Oroya: The ADE (Educational Area of
Development) which counts with 450 workers, there
are also computer institutes, nursery, and
Education.
With relation to the Health area, the city of La
Oroya, including Paccha and Santa Rosa de Sacco
counts with three systems of health attention.
o The IPSS (Social Security Peruvian
Institute) which counts with a polyclinic
oriented primarily to the senior citizens
and with the Regional General Hospital which
counts with 25 doctors in all specialties,
35 nurses, 72 beds, x-ray services,
Analysis, and attends minor and major
surgeries. It offers prevention services and
assistance to insured and their dependents
(in their majority CMP workers).
o The Health Ministry which counts with three
health centers of precarious infrastructure
and equipment, the services it offers
(consults, minor surgeries, Analysis,
Birthing) are directed to the population
that lacks Social Security, the health cases
that require higher attention are directed
to Tarma, Huancayo and Lima.
o Finally, Centromin counts with the Chulec
Hospital which has 14 doctors of different
specialties, 13 nurses, 50 beds, and attends
to major (a monthly average of 16) and minor
surgeries, x-rays and analysis, Ecografias,
Laborascopias, etc. It offers their services
to family members of workers of the company
that do not have attention rights in the
IPSS, see Table 2.17.
Among the illnesses most commonly attended in the
different health centers of La Oroya figure in
first place gastrointestinal, diarrhea, and
infections with 50%, following respiratory and
bronchial in which the cold and polluted climate
influences, followed with a minor proportion of
quisticas, endemic (hepatitis), parasitic, and
rheumatic.
<PAGE>
Among labor-related illnesses, most frequent are
traumas for work accidents, dermatitis, arsenical
and saturnism (caused by lead contamination) which
are frequently controlled, as well as
Neumoconosis, and Silicosis not so frequent for
being surface workers, see table 2.18.
2.4.1.3.3 Habitational Infrastructure
The housing constitutes a fundamental social
problem.
Centromin La Oroya counts with a total of 3395
houses appointed to its workers of which 1064
(31%) are in adequate living conditions and 2331
(69%) are in inadequate conditions. In these
houses live approximately 15376 persons with a
median of 5 to 6 persons per family.
These houses are located on the following sectors:
o Behind the market, Calle Lima, Railway,
Cantagallo, La Florida, Calle Lima, Alto
Peru, 1 floor Plomo, 2 floor Plomo,
Huaymanta, Buenos Aires "A", Esmeralda,
Santa Rosa, Buenos Aires "B", Huampani,
Marcavalle, Behind the Station.
83% of the workers live in houses appointed by
the company (742 in special zones) of which the
majority counts with two rooms. (Picture 2.4.8)
The houses located in blocks and departments, have
hygienic services, laundry rooms, and internal
showers; on the other hand, in the sectors where
the constructions where rooms have collective
services: toilets, laundry rooms, wells, and
showers. We observe that 38% of the workers, 9.74%
have their own house in La Oroya; 27% have
terrain's, 7.28% in La Oroya. (Picture 2.4.9)
The average of the houses in la Oroya are 2 story
and with 60m2 area of terrain with 50m2 of
construction per floor, of noble materials in
their majority, with cement floors, wooden windows
and zinc and wood roofs. Also there are adobe
houses especially in the particular part of La
Oroya Antigua.
All La Oroya has 11256 houses. The living
conditions of these particular sectors: Club
peruano, Behind the market, Av. Wilson, Alto Peru,
Behind the Station, Railways y the Plomos, are or
high degrees of decay
<PAGE>
and slum process ; and should be programmed for
demolition.
As we have seen, many houses have collective
hygienic services, showers, laundry rooms, most of
them kept in bad maintenance and hygiene.
Water and electricity is freely provided by
Centromin to its workers. The light has a
rationalization program with restriction from 4:30
to 10 a.m. and 1:30 p.m. to 4 p.m.
Water presents a problem of its own caused by
pressure/fluidity accentuated by the deficient
estate of the drainage system.
The sewage, in the case of the inadequate houses
and the case of La Oroya Antigua, can be seen that
it is a canalization system of residual waters
through open channels characterized by their
constant obstructions that are nexus of
accumulation of trash and rat nests. (Picture
2.4.10)
Today the served waters do not receive any
treatment and are discharged into the Mantaro and
Yauli Rivers respectively, only 41.60% of the
houses have adequate public services connected,
4682 houses have public network services
connected, 2758 houses have a blind well, the
populadores of 742 houses use as services the
irrigating channels and 3074 houses use empty
areas and mountain slopes for their basic needs.
(Picture 2.4.11)
o With respect to water catering the sources
are:
o Tishgo river: domestic use water, industrial
and for EMSAPA (Municipal company of water
services and drainage of la Oroya)
o Cuchimachay: Industrial and for EMSAPA
o Mantaro river: industrial water.
o Marcavalle well: EMSAPA water.
o Pichjapuquio spring: EMSAPA water.
The amount of catered water for EMSAPA is subject
to charge from August 1994 when the total control
of the Marcavalle well and Pichjapuquio springs
were transferred to EMSAPA on the same date
Centromin started to cater domestic water for
EMSAPA to distribute to these sectors: Calle Lima
and Av. Horacio
<PAGE>
Zevallos, actually 5909 house possess connections
to the public network, 4302 houses are catered by
public pilones, 164 houses from well water, 54
acquire from cistern tanks, and 514 pick it up
from channels or springs.
The supply of light in La Oroya in the particular
sector is given by Electro Centro; Centromin, with
its interconnected network, it provides
electricity for industrial use and for domestic
use for the company workers.
As we have seen for the treatment of industrial
waste CENTROMIN has two crematory furnaces: One at
the Smelter and the at Huaymanta.
At the Huanachan zone in the Huancayo High way
there is a Zinc Ferrites deposit. In the Mantaro
river sector near Malpaso, there is an abandoned
arsenic trioxide deposit and another near that
same sector at the Hacienda Antahuaro zone.
With respect to domestic solid residues (garbage)
there is no sanitary treatment and trash is
accumulated by the County and Centromin's
Collecting trucks at the Cochabamba sector in the
route towards Huancayo, 8 kilometers form LA OROYA
100 M from the high way.
At the zones were the collecting trucks can not
go, the county collects the trash on manual cart
wheel and with shovels, but the population does
not cooperate with the cleaning and throws the
garbage into the streets, channels and the Mantaro
and Yauli rivers (Picture 2,4,12) respectively.
There are no containers to deposit the garbage.
(Picture 2.4.13) Dumps have been created at the
Mantaro river shore and in front of La Oroya
Antigua.
With respect to the deteriorated houses a
demolition program, up to June 30 of 1996 results
are that 303 houses have been demolished at the
Club Peruano sector. At present, there are 14
houses in demolition process. At the Smelter zone
almost all the houses have been demolished, and
the demolition material has been conveniently
disposed of.
With respect to communication and recreation the
<PAGE>
people at La Oroya city posses TV channels and two
broadcasting station. Some sectors as Tambo de Sol
have a parabolic antennas.
There are five radio stations two of which reach
Junin.
The Peruvian Phone Company is devising a expansion
plant an improvement of there direct dial service.
The Phone company has private communication
central and fax that interconnects all
dependencies and mining camps including Lima and
Callao.
In the city there are a total of 25 sporting
centers most of which are in an average
maintenance conditions, also there are 9 children
playgrounds.
La Oroya lacks green areas for passive
recreations, them being as parks or plazas. The
old golf club of La Oroya is the only open
recreational area.
o The company has 9 mess halls most of which
are regularly attended.
o Also the company by means of its social
security promotes recreational programs for
its workers and their families on holidays.
On the other hand training courses are given to
the workers in different levels and specialties :
administration, security, environment, human
relations, technical specialties ( metallurgic,
mechanic, etc. )
The social service office offers courses for :
Family Budget Planning, Preventive Health, Food
Manipulation and Hygiene, Proper use of house
holds and animal raising, Family Relation, Mother
and Children Help, Health Test for Sicknesses
campaigns, Organizations and Leadership)
With respect to social projection in La Oroya The
Public Relation Department maintains good and
adequate relations with the different public and
private institutions of the area. Also to motivate
campaigns through the national police for the
cleaning and other community actions.
2.5 Human Interest Environment
<PAGE>
2.5.1 Archeological Resources
The region does not count with own archeological resources and
only works as an access way to the central zone of the country
which is rich is such resources such as Tarma, Jauja and the
Huancayo zones.
2.5.2 Protected National Areas
There are not protected national areas an only works as an
access way to the national park where the Stone Woods of
Huayllay, Cerro de Pasco and the National Reserve of Junin
around the Chinchaycocha Lake ( Lake Junin) are located. The
lake is the second largest of the country in the Junin table
land. Next to the zone are the Thermal Baths of Yauli.
2.5.3 Scientific and Tourist Sites
The zone is an access way to the tourist circuit Costa Sierra
Selva which goes from Lima to Tarma and the Chanchamayo
valley. On the other side ther is the Mantaro valley Tourist
route, with guided tours to the Ocopa Convent which dates back
to the colonial times.
Specialized tourism could be promoted for groups of people
interested in knowing the industrial areas with guided tours.
III PRODUCTIVE UNIT PROFILE
(Mining and or Metallurgic Operation Descriptions)
3.1 Plan Design Characteristics
This complex has three integrated circuits of copper, lead and zinc.
In 1995 2 55 109 tons of concentrated copper, 191 575 tons of
concentrated Lead and 154 710 tons of concentrated zinc were
processed. These concentrates specially the copper one are
polymetallic, with high concentrations of precious metals and
impurities, they are subject to different pyro, hydro and electro
metallurgic processes for the abstraction of refine metals having
also a plant for the sub products recovery.
Eleven metals are obtained ( Cu, Zn, Pb, Au, Ag, Bi, Se, Te, Cd, In,
Sb) and nine chemical sub - products copper sulfate and zinc sulfate
sulfuric acid, oleum, arsenic trioxide, zinc powder, sodium
bisulfate, zinc oxide and zinc silver concentrate) .
As it was seen in chapter I, part 1 point 7 these metallurgic
complex had to suffer modifications and additions of new processes
to achieve treatment levels mentioned above.
3.2 Industrial Capacity, Historical Production and Increase Projection.
<PAGE>
On table 3.1 it can be appreciated the installed capacity and the
short range production increase potential through operation and
short range investment optimization. Also on table 3.2 summarizes
the refine metals production and sub products achieved form 1965 to
1995.
3.3 Raw Material Treated at the Smelter Circuits
The following details the name, origin and concentrates
mineralogical characteristic form the enterprise and the particulars
(national and international) using by the smelter as row material
for the operations.
3.3.1. Copper Concentrates
3.3.1.1. Centromin S.A. Copper Concentrates
At microscopes study of the Copper concentrates samples
coming form the of Toromocho, Morococha, Mahr Tunnel,
Yauricocha, Cerro de Pasco Pilot Plant, Cobriza has
determined:
<TABLE>
<S> <C> <C>
Calcopyrite CuFeS2 Covelite Cu S Pyrotite Fe 1 - x S
Cuprita Cu2 O Native Copper Cu Calcosite Cu 2 S
Tetrehedrita Cu 3 SbS3 Esfalerita ZnS Limonita Fe2O3nH2o
Ganga Si O2 + rock Bornite Cu S Fe S4 Pyrite Fe S2
Galena Magnetita Fe3O4
</TABLE>
3.3.1.2 Copper Concentrates National and Particulars
The Copper concentrate samples microscopy coming from
national privates Chungar, Cormin, Cemento de Plant de
Cormin, Perla, Minera Hill, Atacocha, Austria Duvaz,
Santa Rita, Nor Peru, Cerro Verde, Sayapullo,
Algamarca, Huaron, Raura, Cemento de Cobre, Sogem, CIA
Minera Casapalca, Cajanmarquilla Conc Copper, BHL Peru,
Tintaya have determine:
<TABLE>
<S> <C> <C>
Calcopyrite Cu Fe S2 Covelite Cu S Enargita Cu3 As S4
Esfalerite Zn S Cuprita Limenita Fe2O3nH2o
Native Copper Cu Calcosita Tetrahadrita Cu3SbS3
Pyrite Fe s2 Galena Pb S Malaquita Cu2 CO3CH2
Magnetita Fe3 O4 Ganga SiO2+rock Bornita Cu S Fe S4
Tenantita Cu 3 As S3 Pirrotita Fe1-X S Molibdenita Mo S2
Crisocola Cu Si O3n H20 Hematita Fe2O3
</TABLE>
3.3.1.3. Copper Concentrates of International Privates
The Copper Concentrate microscopy study from the
international privates : El Indium, Polvo de Cobre, RST
Australia, Lepanto, Samsung, MC II M/N Y KAMTIN, Gerald
Chileno Chuquicamata, Calderon, AYSSA have determine
the following
<PAGE>
minerals:
<TABLE>
<S> <C> <C>
Calcopyrite Cu Fe S2 Covelite Cu S Deginita Cu - X S
Pirrotita Fe1-X S Molibdentia Mo S2 Crisocola CuSiO3nH2O
Hematita Fe 2 O3 Calcosite Cu2 S Tetrahedrita Cu Sb S 3
Arsenopyrite Fe As S Esfarelite Zn S Cuprita Cu2 O
Limonita Fe O3 H2O Native Copper Cu Bornita Cu S Fe S4
Enargita Cu 3 As Su Pyrite Fe S2 Galena PB S
Malaquite U2 CO3 (OH) 2 Magnetite Fe3 O4 Ganga Si O2 + rock
</TABLE>
3.3.2. Lead Concentrates
3.3.2.1. Centromin Lead Concentrates
The microscopy study of the Lead concentrate samples
coming from the Andaychagua, Paragsha, Casapalca,
Morococha, San Expedito Yauricocha, Mahr Tunnel was
determine as follows :
Galena Esfalerite Calcopyrite Tetraedrite
Pyrite Ganga Arsenopyrite Hematite
3.3.2.2. Lead Concentrates from Privates
The microscopy study form the lead concentrates coming
from : Serminco, Ayssa, B.H.L. Transmine, Yauli, Huaron,
Uchucchacua, Buenaventura etc, have determine the
following minerals:
Galena Bornita Gangas Esfalerita
Alabandita Arcasita Tetradrita Pyrite
Pyrrotite Proustita Arsenopyrite
3.3.3. Zinc Concentrates
3.3.3.1. Centromin Peru Zinc Concentrates
The microscopy study of the zinc concentrates coming
form Mahr Tunnel and Paragsha has determine the
following minerals:
Pyrite Calcopyrite Esfalerite Galena
Marcasita Magnetita Hematita Goethita
Calcita Covelita Tetrehedrita Arsenopyrite
Gangas
The predominant mineral in the samples is the esfalerite
and the pyrite that is in a high percentage as free
particles interwoven with minerals.
3.4 1. Copper Circuit (Figure 3.1.and 3.2)
<PAGE>
The smelter copper is initiated at the preparation plant,
where the material is re circulating, the reagents and the
concentrates form beds of copper. The mixture goes through a
roasting process to eliminate the high quantity of arsenic As
and sulfur S and some antimony Sb and Lead Pb. The solids of
the process fumes are recovered by the electrostatic
precipitators (Cotrell). At this plant arsenic trioxide is
obtained As2O3 draining the arsenic from coming form the
metallurgic process to the storage fields.
The calcine product of the roasting, passes to be smelted at a
reverber furnace ( with oxiful burners) were the metallic
sulfurs at the calcine Fe S and Cu2 S, and the slag are
separated. A matte is charged to the converters. The slag is
discharged by a little hole located at the opposite from the
horizontal burners and then it is granulated with pressure
water to be stored at the Huanchan deposit.
The water used reaches the 11 000 gpm that is discharged into
the river. This situation will be eliminated when the water
recirculating system is implemented.
Once the matte is charged air is throw in to generate ferrous
oxides which will react with the silica that is fed, producing
the slag which will return to the reverber.
Finally, part of the copper bars are rolled until converted in
5/16" or 9/16" diameter copper wire.
3.4.2 Lead Circuit (Fig. 3.3 and 3.4)
Begins its process in the Preparation plant, where the
re-circulating material, the meltings, and the concentrates
are given in doses forming the lead beds. The bed is treated
at the Lead Agglomeration Plant where amount of sulfur is
reduced by means of a toasting process producing an
agglomerated material with the proper physical characteristic
properties to be treated in the vertical furnaces.
The fine material originated by the process is recuperated in
by filters and the central electrostatic smoke precipitator.
The thick lead agglomerate is melted in the vertical furnaces
using as a reducer and fuel coke, in the load a percentage of
iron debris is conditioned with the function to form magnetite
and avoid loss of metals (Pb, Ag) in the waste.
By separating the waste from the work lead, this waste is then
granulated at pressured water and then stored at the waste
deposit of Huanchan. The water is then poured towards the
Mantaro river.
<PAGE>
The lead, produced in the vertical furnaces denominated work
lead, is transported to receptive pans where it is skimmed.
The skims are then loaded in one reverberating furnace where
the copper matte, the speiss (Cu-As, Sb), and the bullon lead
are separated. The bullon lead returns to the receptive olla
mixing with the clean work lead. This mixture is decopperized
to eliminate impurities (Cu, As, and Sb).
The bullon lead produced at the smelter, with an Antimony
(Sb), Bismuth (Bi), and Silver (Ag), is electrolytic refined
by a modified Betts process.
The corroded anodes are left with insoluble impurities adhered
to its walls, and with occluded electrolyte between them thus
it is necessary to clean them for immersion to recover the
electrolyte; then, the mud is gotten rid by pressurized water
(35 000 l/d). The pulp is sent to the "Larox" automatic
filter, obtaining an anodic mud with approximately 27%
humidity, ready for the posterior treatment
<PAGE>
3.4.3. Zinc Circuit (Drawing 3.5)
The zinc concentrates coming form the Paragsha and Mar Tunel
are treated in two roasters, one of fliud bed (FBR) and other
one of turbulent bed (TLR).
Part of the zinc concentrates is mixed with zinc oxide dust
that was recovered at the central electrostatic precipitator
to be buck shot with sulfuric acid. The concentrates are after
these treated at the 3 roasters of fluid bed, obtaining
calcinated pellets, which are sent to the crushing and sifting
unit. This product is stored at the leaching unit tanks.
The turbulent bed at the roaster produces calcine that is also
transported to the storage tanks at the leaching unit.
With the SO(2) obtained at the roaster's turbulent bed a
commercial grade sulfuric acid is produced (45 000 tons
average)
The zinc oxide recovered at the cyclones and electrostatic
precipitators are also stored at the leaching unit tanks.
The principal objective of the leaching stage is to dissolve
the zinc oxide and the zinc sulfate that are present at the
calcine
The leaching process is undertaken in shaking tanks where the
loads of spent electrolyte, fine calcine and concentrated
sulfuric acid ( this last one only when the process requires
it) are loaded.
The iron oxides with manganese dioxide and precipitates along
with the arsenic, antimony , etc. the zinc ferrites remains
insoluble. The pulp obtained is separated in fine particles
(passing to the solids separation unit) and heavy particles
(sandy) that will be re-treated in a new leaching process.
At the solid separation plant the impure solution is separated
(overflow) from the residue (underflow); this last is washed
and filtered to assure maximum zinc sulfate extraction.
The residue (zinc ferrites) is sent to the floatation plant,
where zinc and silver are recovered in the form of
concentrates. Part of the remaining tail (zinc ferrites) is
treated at the zinc residues leaching plant (Zileret) and the
other part is sent in a pulp form to the Huanchan deposit
where it is stored for its subsequent treatment.
The impure zinc sulfate solution is derived to the
purification unit where copper, cadmium, small amounts of
arsenic and antimony are precipitated using zinc dust. This
solution is filtered and the residues are sent to the Cadmium
Plant for treatment. The pure solution is sent to the zinc
<PAGE>
leaching unit. The zinc sulfate solution electrolysis occurs
between the aluminum cathodes and the silver and lead anodes.
After the 16 hours deposition stage, the cathodes are taken
out from the zinc cells. The zinc is de laminated and sent to
be smelted at the induction furnace. Zinc is cast in 24 kg.
bars for its commercialization.
3.4.4. Associated Processes
3.4.4.1. Sulfuric Acid Plant
The process is composed of three main stages:
a) SO(2) Gas Purification
The gasses coming out from the zinc circuit
turbulent bed at the roaster enters to a dry
electrostatic precipitator to eliminate the
remaining dust. Then it goes to a washing tower
where it cools down. The discharge water from the
SO(2) saturated tower goes to a gas purifier where
an air current extracts most part of the SO(2)
gas. The gas recovered is fed again to the tower.
The resulting gas passes by a fog precipitator.
After purification, it passes through a drying
tower against the current. At this point most of
the water vapor is extracted from the gas.
b) SO(2) to SO(3) Conversion
The converter contains multiple catalyser coats to
accelerate the reaction between the SO2 and the
oxygen to form the SO3.
When leaving the converter , the gas passes
through the cooler exchanger, which cools down the
SO(3) gas before passing to the absorption system.
c) Gas S0(3) Absorption
The already cool SO(3) gas is not combined
directly with the water, but by 98.5% to 98.8%
H(2)SO(4) dissolution in this conditions, the
SO(3) is united with the acid water at the
absorption tower.
3.4.4.2. Coke Plant
This plant has two independent batteries that operate
parallel to each of the coke furnaces, using its own
coke gas for the combustion and the furnace warming.
The coal is discharged at the mill hoppers towards the
hammer mill to be elevated by the buckets to the feeding
chute, creating a uniform grain size.
<PAGE>
At that moment, the material is loaded in each of the
horizontal coke furnaces.
During the discharge, after the coke cycle, the coke
that is produced is transferred to each furnace by a
tuyere to a chain haulage that takes it to the "coke
shaft" and finally it is cooled down by a water stream.
The heated gases that come out of the furnace cool down
by water sprinkles condensing the coal tar, which is
taken to the settling tank.
The coal tar free of water is sent to the copper
reverber to be used as fuel and the coke is sent to the
lead circuit.
3.4.4.3. Oxygen Plant
This process consists in breaking up the liquid air in
its components, taking advantage of the different
boiling temperatures.
To undertake this process the air fractionating plant
has the following partial processes:
a) Air Compression
b) Humidity and a Carbon Air Dioxide Evaporation.
c) Air Cooling to the melting temperature.
d) Cold Production
e) Air Liquefaction
f) Air Fractionating (rectification)
g) Dangerous Impurities Separation
3.4.4.4. Fluosilicic Acid Plant
The first stage of the reaction is done at a rotating
cylindrical furnace. This furnace receives slowly the
Calcium Fluoride in form of dust and the sulfuric acid.
The temperature control is important since the reaction
at the beginning is very violent.
The Fluorhydric gaseous acid formed at the furnace is
conducted to two condensers that are cooled externally
with water. The gas is absorbed by the water that moves
against the current towards the gas direction. The gas
that could not be absorbed by the water at the first
condenser goes to the second condenser through a lead
tube.
<PAGE>
The fluorhydric acid obtained at the condensers is sent
to a mixing tank where it reacts with silica finally
grained maintaining the mixture in constant movement
along with air, producing in this way the acid solution
that will be decanted.
3.5 Operations and Emissions Control
At La Oroya Metallurgical Complex there is a Process Control
department that is in charge of the following duties :
o Gas Analysis Tests at the: Concrete Stack, Lead skimming
Reverber, Copper Reverber, Kiln Furnace at the Zileret Plant,
Coke Furnace.
o Temperature Control, Dust Volume and Losses at different
Smelter ducts: Converters, Agglomeration, Copper Reverber,
skim, zinc roasters, and copper roasters heated Cottrell
efficiency - Sulfuric Acid Plant, Arsenic Cottrell efficiency
and anodes, ventilation system reverber losses, anodes,
concrete stack, copper reverber stack.
o Dust Automatic sampling operations and control at the copper
reverber smelter ducts, converters, agglomeration, concrete
stack, and copper roasters.
o Measurements of the tiraje, copper reverber system temperature
and arsenic furnaces.
o Coke Furnace gas volume measurements.
o Smelter and Refinery monthly inventory of heavy oil and
diesel.
o Rain measurements at the La Oroya and Mayupampa meteorological
stations.
o Barometric Pressure measurements, environment temperature and
relative humidity at La Oroya.
o Flow Measurements and Sampling of liquid elements at
monitoring 49 points.
o Control and data taking of the gas analyzers equipment and
data taking of the grained material at the following sampling
points:
o Huanchan: SO(2) percentage, wind direction and speed as
well as grain material of high volume.
o Workers Union: SO(2) and grained material of low and
high volume.
o Casaracra: SO(2) percentage and grained material of high
volume.
o Inca Hotel: SO(2) percentage and grained material of low
and high volume.
o Cushuropampa Sub Station: SO(2) percentage, wind
direction and speed and grained material of volume.
3.6 Activities and Support Installations
3.6.1. Supplies
Tables 3.3, 3,4 and 3.5 detail important materials and
supplies used by the smelter circuits.
3.6.2 Energy Plant
Centromin Peru has four Hydroelectric Centrals with 183, 4 Mw
of
<PAGE>
installed power that generates electric energy.
o Yaupi Hydroelectric 108,0 Mw
o La Oroya Hydroelectric 9,0 Mw
o Malpaso Hydroelectric 54,4 Mw
o Pachachaca Hydroelectric 12,0 Mw
La Oroya unit consumes the highest energy volume (53,8%) .
Basically, because the electrolytic process at the copper,
lead and zinc refineries.
3.6.3. Analytical Laboratory
The chemical analysis are executed by the La Oroya Analytical
Laboratory, counting with modern instrumental analysis
techniques and classic methods. The instrumentation laboratory
is well equipped with X ray machines, atomic absorption
espectrophotometry , espectroscopy of optical emission,
espectrometry of X rays, UV- VIS, Colorimetry and
espectrography of emission. Actually, it is working a atomic
absorption espectrophotometer 20 BQ PLUS with graffito furnace
GTA -96 and a hydrure generator VGS -76 that are used for the
analysis of environment samples.
Centromin's Analytic Laboratory was registered as a
participant of the Analytical Training Program of the
Monitoring Program established by D.S.No.016-93-EM and its
Modification Rule D.S. No. 059- 93-EM. Centromin has also
registered to complete the Laboratory diagnosis of performance
involving the Monitoring Program of Water Quality, Air and
Emissions corresponding to the 01 Study of "Fulfillment
Evaluation" required by the General Office of Environmental
Issues at The Mining Ministry.
3.6.4. Workshops
It includes the following services:
o Storehouse, Structural Shop, Garage, Instrumental Shops,
Mechanical Shops, Electrical Shops, Security Shops and
Electronic Divisions.
3.6.5 Supply and Swage Water Distribuition
La Oroya location has sewage service. The service discharges
sewage with no treatment to the Mantaro River and to the Yauli
river.
The volume of sewage water coming from Centromin's residential
areas and the different production and services is estimated
in 227 liter per second.
The waste and garbage are collected daily by trucks and
transported to the
<PAGE>
Cochabamba zone at 8 kilometers from La Oroya . They do not
receive any treatment, they are poured in Yauli and Mantaro
rivers.
3.6.6. Smelter Swage Water Treatment and Disposition
At this time a pilot septic tank has been built at the smelter
and to study and manage the waters coming form the hygiene
services at the Storehouse, Structural Shop, Intrumental Shop,
Garage, etc.
3.6.7. Control and Dust Recovery
The smelter operation has three units for recovering the dust
coming form the gasses at the Copper Circuits, Lead Circuits,
Zinc Roasters and Anode Residues through the precipitators
system.
o Central Cottrell Precipitators System
o Precipitators Arsenic Cottrell Sytem
o Anode Residues System
3.6.8. Environment Monitoring Stations Installation and Location
To execute the Monitoring Program Centromin has the support of
a Testing Control Section for water monitoring and air quality
control and with the Ventilation Section for measuring the
noise levels at the smelter surrounding areas.
o Water: There are 8 water Monitoring points (Y1, Y2, Y3,
M1, M2, M3, M4, M5) which can be observed in Table 2.2.
The exact location of this points is described in number
2,1,3.
o Air : For the air quality 5 continuos monitoring points
have been installed (Inca Hotel, Cushuropampa, Workers
Union, Huanchan, Casaracra) in a ratio of 2, 4, 6, 8, 10
Kilometers from the Main Stack. As it can be observed in
table 2.12. The exact location of this points are
descirbed in number 2,4,2.
o Noise: There are 31 monitoring points that measure the
level of noise. It has the objective of determining the
possible influence of the Metallurgical Operations and
Services. The measurements are accomplished between 4:00
am and 6:00 pm.
As it can be observed in Table 3.6 from 4:00 am to 7:00 am
when there is very slow traffic the noise level varies between
50 and 60 decibels. In normal conditions between 10:00 am and
5:30 pm the higher levels reached 72,5 decibels due to
vehicles transit and trains.
3.6.9. Management of Solutions
<PAGE>
The monitoring that is being developed takes samples and
registers flows 2 times a week. Additionally, when a new and
extraordinary event takes place additional sampling is taken.
IV ENVIRONMENTAL IMPACT EVALUATION AND ANALYSIS SUMMARY
4.1 Evaluation
The environmental impact evaluation reported in this document named
PAMA has been executed taking as base : The EVAP reports that
consideres data from 1994 , also takes into consideration the
"Monitoring, of the emissions and discharges declaration" that holds
information from the year 1995. In addition to "The environment
emission and discharge auditing" done up to June 1996 and "The
environment components and metallurgical activity" described in
Chapters II and III as well as other analogue documents.
4.2 Impacts Sources
From the analysis of the data contained in The EVAP and the present
document. Three impact sources have being identified:
1. Gasses and Dust
2. Liquid Effluents
3. Solid Residues.
4.2.1 Gasses and Dust
o Origin
The gas emissions are originated as a consequence of
smelting concentrates that contain high contents of
sulfur . They are discharged into the environment in
three ways: Main Stack, Secondary Stack and Fugitive
emissions.
The dust is generated by mechanic hauling to the
furnaces, handling of crude concentrates, wind action,
as well as by contaminant loads of SO(2) and other
gasses.
According to the 1995 analysis, the principal gas
emission contaminant is SO(2)( (91.6% of this gas is
evacuated through the main stack and the 8.4% is used
for the H(2)SO(4)). The discharge by the Main Stack is
899.8 Tons per day with a test result of 15 380, 18
mg/m3. N, 59 154 times higher than the Permissible
Limits for industrialized zones.
Other contaminants of medium importance are CO(2) and CO
with 46.7 and 0.74 t/d respectively.
<PAGE>
In reference to dust and suspension particles there have
been quantified only the ones emitted by the main stack
which gives a load of 8.9 t/day.
4.2.1.1 Physical Impact on the Environment
o Water
The surface water is directly affected by the
gasses, damaging its quality. The underground
water is affected by filtration coming from the
surface water.
o Weather
This component is affected by the gasses when the
"green house effect" is produced, creating micro
climates that do not belong to the region.
o Soil
The soils are affected by the rain, that by
washing the environment air generates acid
precipitation contaminating large portions of
soil.
4.2.1.2. Biological Impact
The natural landscapes show us that the atmosphere
has received and is still receiving high
quantities of gasses and particles that finally
precipitate in form of acid that constitutes the
cause of the ecosystem destruction.
The native Flora and Fauna has diminished damaging
the cattle raising.
The dust produced by the mechanical haulage at the
furnaces and the crude concentrates handling
contribute to contamination and its effects over
the ecosystem.
4.2.1.3 Social Environment Impact
The toxic fumes affect the population, especially
the ones that are near to the Unit, causing
respiratory and allergy problems.
The water and soil are contaminated and can not be
used either for domestic activities or
agriculture.
4.2.2. Liquid Effluents
All the liquid effluents are generated by the process
conditions and industrial operations that the complex carries
on.
From the information reviewed it is concluded that the
effluents that have 90% of the contaminant load are:
o R -1 Copper Refinery Effluent (Ex-Lead)
o 118 Effluent - Slag Sinter
o 119 Effluent - Main Channel No. 2
<PAGE>
o 126 Zinc Electrolytic Plant
o 135 Main Channel No. 1
o 136 Parallel Channel to the Main Channel No.1
o 137 Zinc Ferrites Tank
Contaminant Load
The following table shows contents that are over the Maximum
Permissible Limits MPL of the above stated effluents. Calculus
Sources are the Table Data 2.3 and the EVAP.
4.2.2.1. Impact over the physical environment
As Table 4.1 shows the liquids poured directly to the
Yauli and Mantaro Rivers have a high content of
contaminants, affecting the water quality. Furthermore,
these waters filter, contaminating the underground
water.
4.2.2.2. Impact over the Biological Setting.
Having contaminants that are over the MPL, the Mantaro
river habitat conditions are altered.
The water muddiness precludes the light from penetrating
limiting the photosynthetic activity and reducing the
dissolved oxygen quantity. Consequently, the primary
productivity also modifies the water temperature.
The NO(3) excess could produce water eutrophication and
reduces oxygen.
4.2.2.3 Social Economic Impact
The superficial waters that have been contaminated by
the unit's effluents have affected the agronomy
development of the area. This has decrease the areas
population survival means and economy.
Furthermore the sewage waters constituting an infections
focus, when transported throughout open channels all
through the city to the rivers highly contributes to
contamination.
4.2.3. Solid Residues
Origin
The solid residues are generated at the Smelter and Refinery
operations and processes as a consequence of the treatment of
diverse concentrates in
<PAGE>
solid forms (Slag, Trioxide, As, etc.) and Pulp (Ferrites)
deposited at land near by the industrial zone. Some volumes of
small magnitude are poured into the river (Calcium Sulphate)
Contaminant Load
The large volume of zinc leaching slag and residues generated
by the industry (See Table 2.5) cover a good area of land.
Moreover, the arsenic trioxide fields being openly exposed
constitute some potential sources of dangerous contamination.
Despite the light solubility of this material the high
toxicity of the product is considered lethal.
4.2.3.1 Physical Impact
The geomorphology is affected by the embossement
modification.
Even though the solid residues are of low solubility
they are not exempt from containing contaminants agents,
which are transferred to surface waters and then to
underground water.
Due to Eolic action the fine particles coming form the
residues are taken to the surrounding areas damaging the
soil quality.
The relative stability of the deposits is considered
potentially dangerous in case of contingencies such as
seismic occurrences and huge pluvial precipitation.
4.2.3.2 Impact over the Biological Environment
The solid residues at Huanchan, Malpaso and Vado
(Arsenic Trioxide, slags and zinc ferrites) are a
physical type of contamination that have altered the
terrestrial and aquatic ecosystem, stopping flora
growing and affecting the fauna. Moreover, they
contaminate the Mantaro River.
4.2.3.3 Impact over the Social and Economic Environment
The residues are dangerous sources of contamination for
the population that live in the surroundings areas,
specially near the arsenic trioxide fields.
In relation to the urban solids, which are located at
the Yauli and Mantaro ravines due to the County and
Centromins lack of pick up services, they have been
constituting infectious centers that are worsen by the
presence of pigs and other animals.
4.2.3.3. Complying with the Safety and Industrial Hygiene
Rules.
<PAGE>
It has been noticed that some of the Safety and Hygiene
Rules D.S. 023-90 EM are not being complied with.
The rules that are not being complied with are:
o The workers use of safety equipment ( breathing
masks).
o Opportune discharge of iron scrap and industrial
waste.
o Animal raising at the mining towns.
V MITIGATION MEASURES PLAN
5.1 Introduction
This seciton presents Centromin mitigation measures, that will be
implemented by diverse projects to eliminate or diminish the already
caused impacts.
The environment control and the mitigation measures were implemented
by the metallurgical complex from 1922. In accordance with the
demands that existed at that time, some improvements were made
during time, but in many cases have not reached the levels required
today.
The metallurgical activity has affected the quality of the physical,
biological, social-economic and environment resources. The aim is to
correct this actions with the control measurements and mitigation
actions presented in this chapter. Some of the measures are
implemented already and others are executed in established terms by
PAMA with the objective of diminishing or eliminating the following
impacts:
o The air quality
o The water quality
o The soil quality
o The erosion and soil sedimentation
o The biological resources
o The social - economic resources.
The specific methods used to diminish each one of the detailed
impacts are described in the following paragraphs. Due to the
dynamic character of the environmental problematic, CENTROMIN PERU
SA will continue to review the actual mitigation measures or
implementing new ways if it is necessary.
In Table No. 5.1 a Investment Program chronogram for PAMA is shown :
5.2. Gas Emissions Control
5.2.1 Gaseous Emissions
<PAGE>
In general it is necessary to point out that the variety of
contaminants originated at the distinct operations and processes are
emitted to the atmosphere by three well defined means.
a) The main stack (167,5 meters of height) constituting the most
important emitter.
b) The secondary stacks in a number of 95 units of different
dimensions (from 4 to 12 meters) and distributed at the
different plant circuits.
c) Defined sources in accordance with the DGMA of the Mining
Ministry Terminology so called "Fugitive Emissions.
The main stack as it was pointed out before is the most important
"gaseous emissions" emitter. Gas emissions are mixture of gases,
vapors, combustion fumes, metallic fumes and grained material or
dust that due to their components dimension are not pulled by
gravity and are being incorporated into the environment.
Among the secondary stacks, it has been studied the contribution of
the Iron Stack (91 meters height) as well as the coke plant, and
some others that we will mention above. The emissions through these
stacks need to be defined with much more detail, however it has been
observed that the majority of them are not extremely harmful because
they are combustion gases, water vapors and inert dust.
In relation to the fugitive emissions these escape directly to the
environment. Its origin is diverse. They are produced in a higher or
lower grade by lack of control at the processes, lack or problems at
the ventilation systems, micro-meteorological changes ( wind gusts,
temperatures and humidity). It is very difficult to quantify because
of its irregularity and fast dispersion.
TABLE No. 5.2
EMISSIONS SOURCES AND CHARACTERISTICS
- --------------------------------------------------------------------------------
Emission
Cod. Emission source height Treatment equipment
m
- --------------------------------------------------------------------------------
1 Main stack 168 Electrostatic precipitator
- --------------------------------------------------------------------------------
2 Fe stack 91 None
- --------------------------------------------------------------------------------
3 Coke stack - Battery "A" 19 None
- --------------------------------------------------------------------------------
4 Coke stack - Battery "B" 19 None
- --------------------------------------------------------------------------------
5 Vent. system. Bismuth stew - P.R.A. 15 Gas washer
- --------------------------------------------------------------------------------
6 Vent. system. Converter - P.R.A. 19 Bag filters
- --------------------------------------------------------------------------------
7 Vent. system. Cupels 15 Electrostatic precipitator
- --------------------------------------------------------------------------------
8 Vent. system Zinc roasters 30 Gas washer, bag filters
- --------------------------------------------------------------------------------
<PAGE>
5.2.2 Global Emissions through the Main Stack
5.2.2.1. Gasses
The gasses that are emitted through this main stack come
from the electrostatic precipitators (Central
Cotterell), the arsenic recovery and the anode residual
plant (Cottrell PRA). It is characterized by a huge flow
(34518 Nm3 / minute, average) and its contents of SO(2)
(899.8 metric tons daily).
The SO(2) tributaries in percentage are the following
plants:
Copper Roaster 4.10%
Copper Reverber 18.31%
Copper Converter 24.37%
Lead Sintering 21.83%
Lead Furnace 4.35%
Zinc Roasters (FBR) 19.32%
Anode Residues 7.72%
The 7.3% total sulfur that enters is transformed in
H(2)O(4) and the 10.9% is set at the slag, copper
sulfate, etc. and the remaining 80.8% is poured into
the atmosphere as Sulfurous Anhydride.
5.2.2.2 Grained Material
The grained material reaches an approximate total of
8.896 metric tons per day and from them it is being
determined a contribution of principal heavy elements.
They are as follows:
Lead 1.79 t/d
Arsenic 1.37 t/d
Zinc 0.33 t/d
Antimony 0.24 t/d
Cadmium 0.07 t/d
5.2.3. Iron Stack Emissions
These emissions reach no more than 9% of the flow emitted by
the main stack. The solid content constitutes 3% of the same
flow. However, they are very much significant due to their
quality and concentrations of Copper, Iron, Lead and Arsenic.
5.2.5. Other Emissions Sources
<PAGE>
It is worth mentioning among other emissions sources,
characterized during the EVAP the following:
o The coking chamber gasses are evacuated with no
treatment.
o The ventilation system of the Bismuth Vessels numbers 4,
5 and 6 at the Residues Anode Plant. The system
dismisses the remaining gasses after the fumes are
captured by the exhaust hoods and the grained materials
is retained by gas washer.
o The Three Stacks located at the Plant of Anode Residues
that route the fumes generated during the Antimony and
Bismuth selective oxidation of the Converters 1,2,3 and
4 and the Bismuth Reduction at the reducing reverber.
Grain material has previously recovered in three filter
bags.
o The ventilation system of copelas at the Anode Residual
Plant that allows to capture metallic fumes of the
copelas 1, 2 and 3 which are recovered at the gas
washing and at the electrostatic precipitators ( humid
one). The remaining gasses are evacuated through the
stack.
o A group of 9 multiple stacks belonging to the fluid bed
(FBR) of the Zinc Roasters Plant - pellets unit,
ventilate a number of equipment such as: The pellet
reception bin of the reactors No. 1,2, and 3. The zinc
dust reception system. (recovered at the 1,2,3 units and
the central electrostatic precipitator). The vapors and
gasses generated at the mixers 6P1 and 6P2, the crude
pellet dryers 8P1 and 8P2. The humid pellet dryers.
Washers 1 and 2. Mechanical Transportation System of
crude and dry pellets (which grain material is recovered
in a bag filter 2PDB) , and the calcine transportation
(bands, coolers and readlers 7B1 and 7B2, band 8B)
To complete the origin of the global emissions the following
is an analysis of each principal circuit emissions,
5.2.6 Copper and Lead Refineries Emissions
This production unit has two defined circuits, but for this
report they have been grouped because some of the
installations are shared or interconnected, specially in
relation to the effluents course.
The circuits are composed of the Copper and Lead Refineries
diagrams of the flows and emissions are shown at the process
description graphics.
Atmospheric Emissions
The electrolytic refining process used by this unit requires
many operations with temperature changes, in such manner that
the main gaseous emissions are water vapors containing higher
or lower grades of specific contaminants. The leaching and
anode slime washing and Copper and Lead cementation generate
water vapor loaded with sulfates and acids (H(2)SO(4), HF,
H(2)SiF(6), Cu - SO(4)) haulage in a mist manner of
mechanically.
<PAGE>
At the refrigeration operations in general (the copper bars,
copper wire, etc) huge volumes of water vapors with very
little or no strange materials are produced.
During Lead Fusion metallic vapors break off to the
environment, normally of a short diffusion distance, due to
precipitation after the particles cooling. Certainly, there
are combustion gasses which are evacuated in an independent
manner from the process gasses.
In general there are not treatment systems for the gaseous
emissions, Additionally, there is no flow and detailed
components information. At the interior work environment it is
easy to perceive electrolytic refining characteristic odors
probably due to the lack of efficiency of the ventilation
vent.
To have a less qualitative idea of each refinery contaminant
contribution Tables 5.3 and 5.4 show processes and
characterized operations, including control systems that are
connected in 19 ventilation stacks.
Table 5.3
SULPHUR BALANCE THROUGH THE THREE CIRCUITS
- --------------------------------------------------------------------------------
INPUT FIXED SULPHUR NOT FIXED SULPHUR
CIRCUIT t/y t/y t/y
- --------------------------------------------------------------------------------
COPPER 88 655 Slag 2 399 Gases roast.+rev. 40 810
Water gran 675 Gases Conv. 44 289
CuSO4 482
- --------------------------------------------------------------------------------
LEAD 50 712 Slag roas. 1 023 Gases to C.Cent. 47 440
Water gran 508 Dust to C.Cent. 1 305
Others 436
- --------------------------------------------------------------------------------
ZINC 51 012 Sulph. Acid 13 682 Gases to C.Cent 35 125
Na Bisulph. 66 Others 135
Fe residues 788
Zn/Ag conc. 665
Liq. Efluents 551
- --------------------------------------------------------------------------------
TOTAL 190 379 20 839 169 540
- --------------------------------------------------------------------------------
Table 5.4
DUST LOAD BALANCE TO COTTRELL CENTRAL, ARSENIC
AND P.R.A. - INPUT THROUGH THE THREE CIRCUITS
DUST LOAD : t/d
- --------------------------------------------------------------------------------
COTT.CENTRAL COTT.ARSENIC COTT:P.R.A.
- --------------------------------------------------------------------------------
CIRCUIT CONDUIT INPUT OUTPUT INPUT OUTPUT INPUT OUTPUT
- --------------------------------------------------------------------------------
COPPER Roasters 32.704 1.676
Reverberos 25.255
Converters 62.139
- --------------------------------------------------------------------------------
LEAD Agglomerate 1.582
Pb roasters 15.029
Froth 2.549
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
ZINC Toast.(FBR) 90.982
- --------------------------------------------------------------------------------
REF.(ARP) Rever. Fus 3.615 0.470
Ventilat. 0.046
- --------------------------------------------------------------------------------
TOTAL 214.536 6.704 32.704 1.676 0.516
- --------------------------------------------------------------------------------
EFICIENCY 96.9 % 94.9 % 87.0 %
- --------------------------------------------------------------------------------
5.2.7 Air Quality
This aspect of the La Oroya Metallurgical Complex
Environmental Program has also been adjusted to the General
Direction of Environmental Issues of the Mining and Energy
Ministry Rules that have been detailed by the "Air Quality and
Emissions Protocol of the Mining Sub Sector"
5.2.7.1. Monitoring Stations
The monitoring stations have been located taking into
consideration meteorological and orographic factors,
electric energy facilities, access, surveillance and
location based on the Yauli and Mantaro basins
proximity.
Table No. 55
Monitoring Stations Characteristics
- --------------------------------------------------------------------------------
Station Height above Place Sampled Frequency Equipment,
floor level clasification parameters type
1. Hotel Inca 22 m Urban SO2, MPS Daily Automatic
2. Cushurupam 19 m Semi-urban SO2, MPS, Daily Automatic
wind veloc.
and direct.
3. Sind. Obreros 11 m Urban SO2, MPS Daily Automatic
4. Huanchan 21 m Rural SO2, MPS, Daily Automatic
wind veloc.
and direct.
5. Casaracra 72 m Rural SO2, MPS Daily Automatic
- --------------------------------------------------------------------------------
5.2.8 Evaluations and Results
The contaminants that have been evaluated taking into
consideration the environment air quality at the monitoring
points described above comprise sulfurous gasses (expressed in
SO(2)), the grained materials in suspension (GMS), (GMS)
metallic contents (As, Pb and Cu), speed and wind direction.
The evaluation results are accomplished at the stations
previously described, shown in Tables 14, 15, 16 and 17. In
the diagrams, the S0(2) concentration variations are shown as
well as the grained material with respect to time hours.
<PAGE>
5.2.9. Atmospheric Contamination Problems and environmental effects
The Centromin environmental problem management has an
extensive and aged data, studies have been executed with some
continuity at different stages of its long existence ( before
and after the company belonged to the Peruvian State).
However, it must be recognized that the Ministry of Energy
legal rules regarding environmental issues have had the virtue
that this problem is now assumed in a systematic way having
very clear objectives.
CENTROMIN Office of Environmental Issues to comply with the
EVAP document has accomplished an number of actions such as
gathering and unification of the existent data, operation of
the monitoring stations and atmospheric emissions
measurements; including all the intermediate programs that
were necessary for these objectives. In this way and following
the parameters that were established by the respective
protocols, the activities and actions have been divided in two
big work areas. One at La Oroya the metallurgic complex
installations ( Smelter and Refinery) and the other one at the
external environment at the surrounding the city atmosphere
embracing a 10 kilometer ratio. In the first case, the
objective still is the IDENTIFICATION and PREPARATION OF AN
INVENTORY of the contamination sources and the second one is a
Systematic Monitoring of the environment air quality as well
as the meteorological aspects.
In relation to the effects, the verifications deriving from
the identification and sources inventory activities show that
the emissions discharged through the stacks especially by the
principal stack, are the actual virtual and potential cause of
air changes. The contrary occurs with the so called "fugitive
emissions" which have a higher influence at the work
environment, they could have an effect in the liquid effluents
quality and soils due to the sedimentation phenomena.
5.2.10 Solutions that have been considered to Mitigate the Gas and
Dust Effects
The number of activities developed relating to how the
atmospheric contaminants are generated and the air quality
allows one to conclude that the long term solutions must be
linked to the operations and processes, machinery and
equipment as well as to the human attitude at the different
production stages.
"The solutions are at the plant" is the phrase that summarizes
the most important approaches concerning the environmental
policies at the company. It is well known the English
principle that affirms that the contamination must be
controlled through "the best practical resources available".
The above coincides with what it seems the most convenient
thing to do. At the smelter some operations and plants are
utilizing
<PAGE>
environmental care actions achieve miner - metallurgical
process efficiency. This is the case of the air fractionating
plant that provides pure oxygen to the copper reverber
circuit. Instead of using air, an active and clean fraction
(O(2)) is used, as a consequence of this a lesser volume of
gasses with fewer particles contents and gaseous contaminants
is handled.
The metallurgical index changes at the copper beds have
permitted a lower demand of pyrite (60 000 tons/a) and fluxes
(100 000 /a). Moreover the operations have improved. Thus, a
higher capacity is available at the copper roaster plants,
reverber and converters. In this way 50 000 tons/a of SO(2),
80 000 t/a of slag and 1 400 t/a of dust are not longer being
generated. There is lower demand for material transportation
(railroad, transportation bands, etc.), energy (oil). Among
the advantages achieved the following are found:
The reduced generation of solid residue, liquids and gasses
and the work environment improvement. The implementation of a
new agglomeration plant has allowed the use of only one
automatic reactor instead of eleven, one gas generation point,
one compact system for the recovery of dust (by bag filters)
and a better quality product has been achieved. Among the
environmental advantages achieved it is noted the lesser
production of fugitive gasses and its consequential work
environment improvement (compact equipment)
The continuation of this type of improvements, including the
double objective of improving performance and contaminant
control will allow the steady management of the present
persistent problems. Today it is becoming a reality the
correlation of productive processes with its contamination
characteristics, since that knowledge sets the foundation for
practical and effective solutions.
5.2.11. Projects to Implement
Centromin has projected to implement two sulfuric acid plants:
- Cu - Zn Sulfuric Acid Plant
Location : Actual Sulfuric Acid Plant Adjacent area
Investment : US $ 40 000 (the amount covered by the Copper
Smelter reaches US $ 13 700 and by the Zinc
Refinery US $ 26 300)
Study : The study will be administered by the
Metallurgical Process Control Division, the
Copper Smelter and the CENTROMIN PERU S A
Zinc Refinery.
Description : Consists in installing a module for the
sulfuric acid
<PAGE>
production with a 205 000 t/a capacity.
This module will process 45 693 t of sulfur
(135 k t of acid) coming form the zinc
circuit and 23 693 of sulfur (70 kt of acid)
coming form the copper circuit.
This plant must operate with 95% minimal efficiency. Must set
as a minimum 83% of SO(2) generated in both circuits and must
comply with the Ministry of Mining and Energy rules stated in
Ministerial Resolution No. 135-96 EM / VMM.
- Cu - Pb Sulphuric Acid Plant
Location : Old agglomeration plant area
Investment : US$ 50 000 (the amount covered by the Copper
smelter is US$ 27 500 and by the Lead smelter
is US$ 22 500).
Study : The study will be managed by the
Metallurgical Process Control division, the
Copper Smelter and the Lead Smelter of
Centromin Peru S.A.
Description : It consists of the installation of one module
for Sulphuric Acid production with a capacity
of 300 000 t/y.
This module will process 45 693 t of sulphur
(195 kt acid) coming from the modified
converter.
The flux diagram shows the gas management and distribution at
the Sulfuric Acid two modules.
Naturally, that this needed operations modernization
implementing advanced technology this include:
For the Copper Circuit: The implementation of a casting wheel,
a converter of a higher capacity (13' multiplied by 30'), a
roaster for dirty concentrates, a dryer for clean
concentrates, a converter type "El Teniente" replacing the
actual cathodes by Titanium (Copper Refinery), oxygen use at
the anode residues, etc.
For The Lead Circuit: Replacement of the present sulfuric acid
pre - heater, changing the turbulent bed chamber (TLR), a new
Purification Plant and a effluents treatment plant,
replacement of the three fluid beds for a turbulent bed, etc.
5.3 Control over the impact on Water Quality
<PAGE>
5.3.1 Smelter and Refinery Liquid Effluents Treatment Control
La Oroya metallurgical complex has two principal areas were
the installations are located for the smelter and refining.
For the smelter there are three main circuits:
- The Copper Circuit
- The Lead Circuit
- The Zinc Circuit
For the Refining there are:
- The Copper Refinery
- The Lead Refinery
The effects of the environmental improvements that CENTROMIN
LA OROYA has been accomplishing starting from the EVAP
conclusion are reflected on the receptor bodies contamination
mitigation (Yauli and Mantaro River). The following is the
brief description of the different effluents that existed in
EVAP the work that has been implemented or are being
implemented to reduce the contamination and at last some
special projects that will need to be implemented to complete
the purification of all effluents.
The present chapter goes along with an Annex that shows a
summary of the Investment Cost Table of the works that are
done or will be done.
Copper Circuit
a) General Description of the Process
The copper smelter process starts at the preparation
plant where the re circulating, fluxes and concentrates
material are distributed forming the copper beds. This
mixture is put through a roasting process to eliminate
the bigger quantity of arsenic (As), sulfur (S) some
antimony (Sb) and Lead (Pb). The process solid fumes are
recovered by electrostatic precipitators (Cottrell). In
this plant Arsenic Trioxide is obtained (As2 O3)
extracting the arsenic from the metallurgical process.
The calcine, product of the process of roasting goes to
be smelted in a reverber furnace ( with burners
oxi-fuel) where the metallic sulfurs are separated (FeS
and Cu2S) from the slag and an adequate matte is
produced to be loaded at the converters. The slag is
discharged through a hole located at wall opposite from
the furnace. It is then granulated with pressure water,
afterwards it is stored in the Huanchan slag deposit.
Subsequently, the matte is loaded into the converters
where air is injected to generate the ferrous oxides,
the same that react with the silica producing slag. The
slag returns to the reverber. In a second stage the
copper sulfur is oxidized by air, which reacts with the
same sulfur producing blister copper. This copper is
transferred to the retention
<PAGE>
furnace to be cast as anode.
The fumes solid contents at the fusion and conversion
stages are recovered by the electrostatic precipitators.
The SO2 gases are evacuated to the atmosphere by the
main stack.
b) Effluents Management.
o The Gold and Silver Refinery Plant partition
solution. Tributary of the Main Channel No 2 Code
119
The gold and silver partition solution is done
using H(2)SO(4). As a process effluent there is a
solution that after a zinc cementation is
collected in cylinders and sent to the cadmium
plant leaching tank 1. This operations is done
once a week.
The following profile has been done to eliminate
this effluent.
PROJECT: Management and Disposal of the Solution
coming from the Silver Refinery
Antecedents:
The high acidity solution resulting from the zinc
cementation as an effluent that comes form the
gold and silver partition was being evacuated in
the river. But because of its high content of
zinc today it is being sent to the cadmium
leaching plant.
Studies:
Today the solution is being collected in
cylinders. The cylinders are sent to the cadmium
plant where they are treated with no problems.
Objective:
Stop the high acidity (350 g/l of H(2)SO(4))
solution discharge into the river.
Project Description:
A pipe transportation mechanical system will be
installed. The solution will be pumped in such
manner that will preclude leaking and accident
risks that its high acidity could cause.
Project Duration:
It is estimated that the implementation period
will be 6months.
Costs:
The cost of this project execution is estimated in
$ 5 000. 00 and it will be accomplished with the
complex own money.
o Residue Anode Effluent Plant - Code 123
This effluent collects the waters coming from the
Selenium
<PAGE>
Precipitator, Selenium Unit Overflows, Cooling
Gasses Reverber and the Bismuth oxide chloride gas
washer.
Arithmetical Average March 94 - February 95
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Sampling Flow pH Temp TSS Metals (mg/l)
- ----------------------------------------------------------------------------------------------------
Point m3/min (degree)C mg/l As Cd Cu Fe Mn Pb Zn
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 23 0.12 3.08 15.62 151.14 36.54 0.20 1.06 18.79 0.61 18.00 41.28
- ----------------------------------------------------------------------------------------------------
</TABLE>
Source: EVAP - La Oroya Metallurgical Complex
Tasks to be Implemented
It will follow the same treatment given to the
acid water at the Neutralization and Selective
Precipitation Plant that is described for the Zinc
Circuit.
o The Bleed of Solution from the Electrolytic Cells
The bleed off solution that contains AgNO3 is put
through the copper cementation to recover Silver.
After this the solution is neutralized with lime
until the pH is neutral to recover the copper.
Finally, The solution is treated with NaCI to
precipitate the remaining plant and the final
solution is sent to the main channel number 2
(after it is settled).
Implementation Tasks
The settling tank enlargement to recover silver in
the form of silver chloride.
Lead Circuit
a) Process General Description
Starts its process at the preparation plant where the re
- circulating material, fluxes and concentrates are
distributed, forming a Lead bed. The bed is treated at
the sintering plant where the amount of sulfur contained
is reduced through a roaster process, producing a
sintered material with appropriate physical
characteristics to be treated at the Lead Vertical
Furnaces.
The grained material originated at the process is
recovered in bag filters and the fumes at the central
electrostatic precipitator.
The heavy lead agglomerated is smelted at the Lead
Vertical Furnaces adding a percentage of iron scrap with
the objective of preventing magnetite formation and
precluding metal lost (Pb and Ag) at the slag.
When separating lead matte this is grained with pressure
water to be stored at the Huanchan Slag Deposit.
<PAGE>
The Lead produced at the Vertical Furnaces named Lead
Matte is transported to the receptor pans where it is
skimmed. The skims are loaded in a reverber furnace
where the matte is separated from the copper. The speiss
(Cu-As, Sb) and the lead bullon. The Lead bullon returns
to the receptor pan mixing with the clean Lead Matt.
This mixture is de-copperized to eliminate impurities
(Cu, As and Sb).
The Lead after being de-copperized is heated up and
pumped to the casting section pans. They are maintained
at 350 to 380 (Degree)C of temperature. This is
performed to accomplish the anode casting at the
horizontal wheel.
b) Effluents Management
o Furnace Reverber water and Speiss Granulation.
Tributary Code 118.
PROJECT: Refrigerating Water of the Reverber
Furnace and Speiss Granulation.
Management and Disposal.
Antecedents:
Approximately, 630 liters/min if Tishgo (river)
waters are used to cool the Furnace Reverber
jackets that finally will be discharged into the
Mantaro river. This operation is continuous.
Furthermore, the Mantaro River waters are used for
the speiss granulation in an approximate flow of
1500 liters per minute. They are discharged after
the operation into the Mantaro River. This
operation is intermittent.
Studies:
The studies have been done by the Engineering
department and are supported by Ecolab SRL
consulting firm.
Objective:
Preclude discharges into the Mantaro River.
Project Description:
The waters of each line will be re-circulated. In
the reverber furnace case a reception tank will be
installed with a re-circulating pump directed
toward the furnace.
The SPEISS granulation case (which is not
continuous) will be executed after a retention of
solid particles treatment is performed. The need
for a storage tank of 135 m3 with a pump and
re-circulating lines has been calculated.
Project Duration:
<PAGE>
A period of a year has been estimated for its
installation.
Cost:
The estimated cost to execute this project is
50 000 .00 and it will be with the company's own
resources.
o Main Channel Mud in front of the Agglomeration
Plant. Code No. 135
The water washing bands take the dust that is
deposited in this area. This occurs when the water
falls in the form of mud along with other
elements.
To this channel some Copper and Lead Circuits
effluents arrive. The mud contains metals that
must be re used.
Implemented Tasks
To prevent the metals contained in this effluent
from ending at the Mantaro river through the main
channel No. 1 a mud retention system has been
implemented at the Agglomeration plant. It
consists of one floodgate, one retention tank that
through a pump is sent to a thickener where the
solids are separated in water suspension.
The underflow that contains the mud is sent by
gravity to the 81 band for humidification of
particles transported they then return to the
Agglomeration Machine.
The clarified water that is stored in a tank is
reused at the Agglomeration Plant gas washers.
The implemented work has been done using the
company's own materials, such as tubes,
accessories and pumps in such a way that the cost
will be minimal.
Zinc Circuit
a) General Process Description
The Zinc concentrates coming from the Paragsha and Mahr
Tunel Production Units are treated at the two roasters
circuits: One Fluid Bed and the other a Turbulent Bed.
The calcine is obtained as the product of this stage,
subsequently the calcine is leached to make soluble the
oxide and the zinc sulfate.
During roasting the SO2 gasses are produced previously
having passed through a dust precipitation stage. At the
roaster turbulent bed, Sulfuric Acid is produced having
a commercial grade.
The calcine leaching process is accomplished at
agitators tanks using as a leaching solution the used
electrolytic and the sulfuric concentrate acid. After
solid liquid separation a "solid residue" (zinc
ferrites) is
<PAGE>
obtained which is subject to flotation to obtain Zn-Ag
concentrate. 26% of this process tails are treated at
the Zinc Residues Leaching Plant and the rest of the
residues are sent to the Huanchan deposit.
The impure solution, the other solid - liquid separation
product, is taken to a purifying system where by zinc
dust addition precipitates in form of copper, cadmium
impurities and lower quantities of antimony and arsenic.
This solution is filtered and the solid residue is sent
to the "Cadmium Plant" for treatment. The purified
solution is sent to electrolytic cells, those cells use
aluminum cathodes and silver-lead anodes. After a
deposition period of 16 hours the cathodes are extracted
form the cells and the zinc de-laminated to finally be
subject to an Induction Furnace obtaining refined zinc
of 24 kg to be commercialized.
The precipitation obtained at the purification stage is
treated at the "Cadmium Plant" where "metallic cadmium"
is obtained after series of leaching, precipitation,
briquette and fusion processes.
At the Zinc Residues Leaching Treatment Plant (Zileret)
through reduction and oxidation processes iron is
separated as iron sponge and copper, zinc cadmium and
indium as oxides (fumes).
At the Zileret Hydro - metallurgic Unit the oxides are
subjected to hydro metallurgical processes with the aim
of recovering the heavy metals, obtaining as a final
product a torta de zinc sulfate, a zinc sulfate solution
and a indium cement which are sent respectively to lead
beds, zinc electrolytic plant (leaching plant) and the
indium plant. The Indium Plant treats the cement coming
from the Hidro- metallurgical Unit, where through the
hydro metallurgical processes (acid and basic
dissolution by solvents extraction, precipitation, etc.)
and pyro metallurgical processes metallic indium is
obtained.
b) Effluents Management
o Overflow Leaching Solution and Zinc Purification
Solution; Code 126
This effluent collects the solutions of the house
cells, purification overflow section, rectifiers
water and hygiene services. It contains
approximately 36% of the Total Manganese and 30%
if the total zinc.
Arithmetic Average March 94 February 95
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Sampling Flow pH Temp TSS Metals (mg/l)
- -------------------------------------------------------------------------------------------------------
Point m3/min (degree)C mg/l As Cd Cu Fe Mn Pb Zn
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
126 3.05 5.18 15.53 67.01 0.37 1.03 2.84 4.42 75.00 1.18 1,182.57
- -------------------------------------------------------------------------------------------------------
</TABLE>
Source EVAP La Oroya Metallurgic Complex
Implemented Tasks
<PAGE>
Today the purification overflows are being re -
circulated and the house cells neutral leaching
system are using the existing pumps.
Arithmetic Average April to June 96
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Sampling Flow pH TSS Metals (mg/l)
- -------------------------------------------------------------------------------------------------
Point m3/min mg/l As Cd Cu Fe Mn Pb Zn
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
126 1.70 5.60 116.06 0.10 0.52 0.95 3.40 1,216.00 0.68 556.33
- -------------------------------------------------------------------------------------------------
</TABLE>
Tasks to be Implemented
This effluent is treated at the Treatment Final
Effluent Plant by Neutralization and Selective
Precipitation.
PROJECT: Final Effluent Neutralization and
Selective Precipitation
Antecedents:
With the present monitoring data the flow and the
concentration of each of the contaminant effluents
are being estimated, taking out the cooling
effluents that are being poured to those
effluents. With the data obtained a material
balance has been applied to get to know the final
pouring that would result if all the contaminant
discharges are united.
Due to the lack of space at the smelter and due to
treatment improving reasons all the contaminant
effluents are collected to be treated out side.
This effluents are the following 112 - 115 - 117 -
119 - 121 - 123 - 124 - 126 - 135 - 137. (EVAP
Codes) The selected area is Cochabamba, where the
company has planned transferring the ferrites and
slags. Tubes will be installed from the beginning.
Studies:
The study has been done by the consulting firm
Ecolab S.R.L.
Objective:
Preclude the discharge of contaminated waters to
the Mantaro River.
Project Description:
a) Effluent Transportation to the Treatment Area
The smelter contaminant effluents would be
collected at one point to be taken to the
Cochabamaba Deposit through 2 PVC tubes of 8"
diameter. The transportation system will be a
railroad parallel line at 11 kilometers of
distance. It will not be necessary to use pumps
because the natural slope facilitates
transportation by gravity.
<PAGE>
b) Neutralization Stage by Lime
The neutralization system at this stage will
consist of the following sections:
o Storage of solid lime. With the objective of
stopping dust emission into the atmosphere a
reception tank will be installed with lime
storage of 10 t. capacity.
o Lime Lechada Preparation. From the storage
tank and with help of a transportation band
"Lime" will be distributed conveniently to
the lechada preparation tank, (1 m3
capacity). Where part of the already treated
final effluent will be added, registering a
pH = 10 with the objective of reducing lime
consumption. To maintain the lechada in
suspension and homogenous an agitator will
be installed.
o Lechada Distribution. The Lime lechada will
be fed with an automatic distributor to the
neutralizer tank. This operation will be
controlled by a pH meter, that will be
installed at the tank's exit in a way that
the addition will be done in relation to the
pH required.
It has been calculated that the lime
consumption will be 375 Kg. Per day
c) Neutralizer Tanks
With the objective of achieving a efficient
contact between the lechada and the effluent,
it has been considered to install 2 tanks with
agitators to homogenize the contaminant
effluent and the lime quality until reaching a
7 pH. The solution under this conditions will
be discharged in the settling tank.
d) Settling Tank and Mud Storage
At this stage the separation of the
solid-liquid by settling will be produced. The
solids will accumulate at the bottom of the
tank and the purified solution will be sent to
the following value recovering stage.
The solids that accumulate at the tank will
remain there in definitively. Due to the mud
characteristics at this stage, this stage will
make the tank bottom water proof which will
preclude the solutions filtration.
The objective of elevating the pH up to 7 is to
achieve the effluent acid neutralization,
precipitating some elements as Mn, Fe, Cu Al,
etc. reducing the reagents consumption and
recovering at the following stage the Cd and Zn
that could re circulate in the Zinc Circuit.
e) pH Regulation Stage
The effluent that comes from the settling tank
still has some significant concentrations of Cd
and Zn to be recovered. The pH
<PAGE>
will be increased up to 10 with caustic soda
with the objective of precipitating them as
hydroxides. At the same time the pH will
precipitate the residual Mn, Fe, Cu.
The solid soda will dissolve in a 500 liters
capacity tank. From the tank it will be
distributed with a pump up to the mixer
channels (two units) where they will be
homogenized with the effluent passing to the
settling tank. A pH meter at the end of the
channels will control the soda distribution.
Part of this effluent will be re circulated to
prepare the lime lechada solutions and the
sodium hydroxide.
Project Duration:
The implementation of this project is estimated in
one year.
Cost:
The execution cost for this project is US $ 2 500
000.00 and it will be with the company's own
resources.
o Washing Anode Effluent Code 124
PROJECT: Automatic Washing Anode System
Antecedents:
In the cells house at the Zinc Electrolytic Plant
an acid effluent is produced from the anodes wash.
The washing effluent contains solids in suspension
(manganese dioxide) which are retained in a
settling device, the remaining water is discharged
with no other treatment into the Mantaro River.
Arithmetic Average Juanuary 94 February 95
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Sampling Flow pH Temp TSS Metals (mg/l)
- -------------------------------------------------------------------------------------------------------
Point m3/min (degree)C mg/l As Cd Cu Fe Mn Pb Zn
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
124 0.12 3.51 13.38 61.672 0.24 0.08 0.73 2.54 7.66 13.0 143.16
- -------------------------------------------------------------------------------------------------------
</TABLE>
Source La Oroya EVAP
Studies:
The system design studies have been given to a
specialized company. The company's report and the
cost wil be submitted in September to the unit in
charge.
Objective:
The objective is to reduce by 50% the washing
water consumption
Project Description:
A semiautomatic system of anode solids backup,
straightening and
<PAGE>
washing at a fixed position. The mud is sent to
the Pilot Plant or Leaching Plant and the liquid
effluents free from no hevy metals is discharged
in the Mantaro River.
Arithmetic Average April to June 96
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
Sampling Flow pH TSS Metals (mg/l)
- --------------------------------------------------------------------------------------------
Point m3/min mg/l As Cd Cu Fe Mn Pb Zn
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
124 0.08 5.03 103.38 0.54 0.03 0.36 1.20 0.44 1.86 67.21
- --------------------------------------------------------------------------------------------
</TABLE>
Project Duration:
One year is estimated for its implementation
Cost:
The estimated cost for the project execution is US
$ 15 000.00 with own resources.
o Lead Mud - Tributary Code 136
PROJECT: Contention Concrete Wall and Re
circulating System by Gravity.
Antecedents:
At the hydro metallurgic plant a lead mud solid
residue is produced, today it is stored at a Plant
nearby. This mud returns to the lead smelter
circuit, however while at the storage the solution
contained at the parallel principal channel No. 1
(136) is drained. Because this effluent is
extremely concentrated increases it significantly
the contaminant values at the channel. This
situation becomes critical with the addition of
tube leaking and rain water.
Studies:
This project has been proposed by a Consulting
Firm ECOLB SRL
Objective:
Preclude the discharge of this solution in the
Main Channel No. 1
Project Description:
A retention wall will be design with a
recollection system for this solution as well as
its re circulation by gravity to the same plant.
With this same system the rain water will be
isolated, at present it gets into the mud.
Project Duration:
The implementation period for this project is
estimated in 6 months.
Cost:
The estimated cost for the project execution is US
$ 5 000. 00 it will
<PAGE>
be accomplished with company`s own resources.
o Cell House Effluent - Code 125
The effluent is a very thick and acid mud that is
obtained as a consequence of the cleaning done in
the 18 cell blocks in this Plant.
Arithmetic Average January 94 February 95
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Sampling Flow pH Temp TSS Metals (mg/l)
- -------------------------------------------------------------------------------------------------------
Point m3/min (degree)C mg/l As Cd Cu Fe Mn Pb Zn
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
125 0.01 6.58 23.86 108.52 0.25 0.10 2.47 2.38 10.62 2.58 156.56
- -------------------------------------------------------------------------------------------------------
</TABLE>
Source La Oroya EVAP
Implemented Works
A system for the solids return to the Cadmium I
Plant has been implemented and for the liquid
effluent to leaching. This effluent has been
eliminated.
o Preparation Unit - Water Pump Oliver Filter - Code
136 Tributary
The Zileret effluent was derived to the parallel
channel 136 carrying overflow solutions containing
considerable amounts of solids in suspension.
Implemented works
Detour of the solution to the discharge of the gas
washer (scrubber) and detour to the thickener of
the Solid Separation Unit.
o Barren Solution - Code 132
This effluent is generated at the indium
precipitation with zinc dust, at the hydro
metallurgic plant. It contained principally 31%
manganese, 13% cadmium, 19% zinc.
Implemented works
This solution re circulates to the leaching
process recovering zinc.
The Barren solution is mixed with the zinc sulfate
coming from the Hydro-metallurgic unit
accomplishing the precipitation of impurities
especially iron.
o Final Alkaline Washing Solution - Code 133
This effluent collects the overflow waters and the
floor washing water coming from the indium Plant.
Arithmetic Average March 94 - February 95
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Sampling Flow pH Temp TSS Metals (mg/l)
- -------------------------------------------------------------------------------------------------------
Point m3/min (degree)C mg/l As Cd Cu Fe Mn Pb Zn
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
133 0.05 11.7 37.41 3030.25 17.2 64.6 5.94 1073 76.2 2.01 2266.9
- -------------------------------------------------------------------------------------------------------
</TABLE>
On Going Implementation Work
Re circulation toward the Hydro metallurgical
Plant to be used at the indium sulfate acid
solution neutralization processes. With this
operation the zinc dust consumption is reduced and
the sodium carbonate is not longer used for indium
recovery.
To this date re circulation is being done manually
using cylinders. However, part of the
recirculating system is mechanical consisting of a
tank and transportation pumps.
o Acid Solution Code 134
This effluent comes form the indium concentrate
acid leaching. It is discharged at the Mantaro
River.
Arithmetic Average March 94 February 95
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Sampling Flow pH Temp TSS Metals (mg/l)
- --------------------------------------------------------------------------------------------------------
Point m3/min (degree)C mg/l As Cd Cu Fe Mn Pb Zn
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
134 0.02 2.1 25.81 1183.56 38.9 35.4 5.9 430 150.5 3.26 1170.17
- --------------------------------------------------------------------------------------------------------
</TABLE>
Source EVAP La Oroya Metallurgical Complex
On Going Implementations
Effluent re circulation towards the hot acid
leaching of the hydro metallurgical plant, this
operation has achieved a reduction of the sulfuric
acid consumption.
Concerning the alkaline washing solution case it
is, still pending the mechanical re-circulation
installations.
o Floor Cleaning Water - Code 131
This effluent was discharged at the Mantaro River.
It was collected from the floor cleaning water for
the smelter unit and the cadmium casting.
Arithmetic Average March 94 February 95
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Sampling Flow pH Temp TSS Metals (mg/l)
- --------------------------------------------------------------------------------------------------------
Point m3/min (degree)C mg/l As Cd Cu Fe Mn Pb Zn
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
131 0.07 7.3 16.13 1609.78 2.26 49.8 9.05 10.8 27.17 3.43 2112.77
- --------------------------------------------------------------------------------------------------------
</TABLE>
Source EVAP La Oroya
Implemented Work
A container has been set to maintain the cadmium
briquettes submerged in water and in this way
stops oxidation. Before, the
<PAGE>
water used to preclude oxidation was discharged
into the river. This effluent no longer exists.
o Acid Waters - Code 135 Tributary
Principally, it is generated at the cleaning and
gas purification stages coming from the zinc
concentrates roasting (turbulent bed). They take
the grained material and other contaminant metals
trapped at the scrubber, generating an acid
effluent. Also the discharging tank waters and the
Cottrell mist waters were evacuated through this
same channel towards the Main Channel No. 1.
Acid Effluent Quality (*)
- --------------------------------------------------------------------------
Flow pH Temp Metals (mg/l)
------------------------------------------------
m3/min (degree)C As Cd Cu Fe Pb Zn
- --------------------------------------------------------------------------
10.34 2.16 33.88 0.70 0.06 0.38 5.20 2.60 21.60
- --------------------------------------------------------------------------
Source: Sulphuric acid project. March 95
Implemented Work
As a mitigation measure, an acid water connection
has been done form the discharging tank to the
stripper, trough the Karabate pump. A second
stripper has been installed to work in parallel
and reduce the SO2 trapped in the water.
Work to be Implemented
It will be left as a main channel No. 1 discharge,
since the effluent of this channel will be treated
with the rest of the Selective Neutralization and
Precipitation Treatment Plant effluents.
o Zinc Ferrites de Zinc Effluents Code 137
These effluents are originated at the Zinc
Ferrites settling tank overflow (Huanchan Deposit)
that is discharged at the Mantaro River.
Arithmetic Average March 94 - February 95
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Sampling Flow pH Temp TSS Metals (mg/l)
- -------------------------------------------------------------------------------------------------------
Point m3/min (degree)C mg/l As Cd Cu Fe Mn Pb Zn
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
137 0.77 5.40 14.67 87.56 0.11 3.30 0.90 1.08 86.59 1.71 2560.89
- -------------------------------------------------------------------------------------------------------
</TABLE>
Form the EVAP preparation up to today some
improvements have been achieved at the different
circuit stages that are contamination sources for
this effluent. The quality has varied as indicated
below:
June Quality 96 (*)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Sampling Flow pH Temp TSS Metals (mg/l)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Point m3/min (degree)C mg/l As Cd Cu Fe Mn Pb Zn
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
137 0.73 6.60 16.00 24.18 0.01 0.38 0.08 0.39 11.00 0.74 165.00
- -------------------------------------------------------------------------------------------------------
</TABLE>
Work to be Implemented
The same as the X effluent or the Lime lechada
neutralization proposed by the Metallurgical
Research Office.
Copper Refinery
a) Process Description
At the Copper Refinery the blister copper anodes coming
from the Copper Smelter are subject to electrolysis
process, obtaining refined copper cathodes. This copper
is sold as smelted cathodes or as wire bar.
The electrolytic is bled of daily separating 30 000
liters/day approximately to maintain the range of
impurities required by the process.
This solution is saturated by neutralization with iron
scarp at the refinery and evaporation to produce copper
sulfate with a commercial grade. 75% of the solution
returns as electrolyte and the remaining 25% is subject
to cementation to recover the copper with iron scarp.
The final solution for now is being discharged at Yauli
river.
The anode mud obtained at the electrolysis stage is
treated at the Anode Residues Plant; gold, silver,
selenium, tellurium, and bismuth are obtained.
Refined copper cathodes obtained at the electrolytic
cells after being washed are sent to the Copper Fusion
and Casting Section where they are smelted in an ASARCO
vertical column furnace and cast in different forms:
Wire Bars, Copper Pechos, 5" Ingots, Channels, Casts
for Copper turntables.
Finally some copper bars are converted to copper wire of
5/16" or 9/16" of diameter.
b) Effluents Management
o Mother Water - Code R 4
PROJECT: Copper Refinery Mother Water Treatment
Antecedents:
The Copper Refinery mother water is a product of
bleeding of the electrolyte 30 000 l/d, the house
cells, and commercial tanks. It is subject to
neutralization, to vapor heat and saturation with
copper waste, copper cement, copper oxide and
oxidation with air.
<PAGE>
The product is discharged into the reception tanks
and from there to the crystallizer, the
crystallizer discharge is subject to a centrifugal
to separate the copper sulfate crystals and the
mother water solutions. Part of it is re-
circulated to the neutralizer and the other is
stored at a 22 000 liters tank, which is heated
before passing by the copper precipitation tanks,
where iron virtua is added to obtain copper
cement. The precipitator tank barren solution
(7 000 l/d) is finally taken to the Lead Refinery
settling tank. Before was used to recover the Lead
from the Refinery Discharge Lead Solution. A Lead
Refinery electrolytic recovering system has been
implemented. (From June 7 1996) It has re
circulation inside the operations, the Copper
Refinery mother water remains to be treated.
The analysis shows the following characteristics:
TABLE No. 32
Copper Sulfate Mother Water
Chemical Analysis Expressed in g/l
- -------------------------------------------------------------------------------
H(2)SO(4) Cu Fe/T Fe(+2) Fe(+3) As Sb Bi Ni
- -------------------------------------------------------------------------------
120 53 4.4 2.82 1.58 9.5 0.29 0.079 3.7
- -------------------------------------------------------------------------------
Reference: Liquid effluents monitoring, Jan-Dec 95 period
Source: EVAP, La Oroya
Studies:
Developed by the CENTROMIN Metallurgic Research
Department per dilution treatment, solvents
extraction, electrodeposition, and neutralization
to recover copper. Probed at the pilot plant.
Objectives:
Recover high grade copper (Grade A), preclude the
recycling of copper cement to the smelter (399
t/month), obtain a neutralized solution suitable
for recycling and discharge. After recovering the
Nickel purify the Raff solution to obtain the
final effluent with no impurities. ( After
executing precipitation by lime neutralization in
two stages)
Project Description:
It will be re placed by the Copper cementation
method using iron virutas, using a treatment
constituted by pre dilution /SX-EW /
Neutralization.
Project Duration
One year is estimated for its implementation.
Cost:
The estimated cost is 500 000. 00 with own
resources.
<PAGE>
o Alambron Plant - Code R3
This effluent originates at the copper wire
rolling bars cooling water settling tank overflow.
Arithmetic average March 94 - February 95(*)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Flow pH Temp TSS Metals (mg/l)
- -------------------------------------------------------------------------------------------
m3/min (degree)C mg/l As Cd Cu Fe Mn Pb Zn
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2.23 7.86 17.56 24.82 0.27 0.01 8.17 0.95 0.06 0.23 0.39
- -------------------------------------------------------------------------------------------
</TABLE>
Source: EVAP, La Oroya
Implemented Work
The yute tabiques installation for the retention
of solid at the settling tank and the total re
circulation of the rolling water. With this the
effluent that was going form the Alambron Plant to
the Yauli river was eliminated. This action also
allowed to recover the copper that was lost in a
oxide appearance.
Lead Refinery
a) Process Description
The Bullion Lead produced at the smelter with antimony
content (Sb), Bismuth (Bi) and Silver (Ag) is refined by
an electrolytic process using a modification of the
Betts Method.
The corroded anodes are left with not soluble impurities
which are attached to its walls Having the electrolyte
on them it is necessary to wash them by immersion to
recover the electrolyte. The mud is detached with
pressure water (130 000 l/d). The pulp is settled and
filtered obtaining humid anode mud (12%) which is
derived to be treated at the Anode Residue Plant. The
discharge solution is re - used in the preparation of
reagents for the immersion washing and the pressure
washing. The emission of this effluent to the Yauli
river has been controlled.
After the cathode deposition required period, the
cathodes are removed from the deposition washing cells
to recover the electrolyte and to be smelted at one of
the three 160 tons pans that are heated with oil. The
smelted lead is heated up to 450 (degree) C and
vigorously shaken with sodium hydroxide (Na OH) to skim
the arsenic, antimony, and remaining tin. The refined
lead is cast in bars of 46 Kg to be commercialized.
The fluorsilicic acid required by the electrolysis
process is fabricated making the flour calcium (CaF2)
react with the sulfuric acid (H2SO4) to obtain the
Fluorhydric acid (HF), which will react with the silica
(Si O2) in one reactor.
<PAGE>
b) Effluents Management
o Lead Refinery Electrolytic Cells Effluents - Code
R1
Starting from June 7 of 1996 the Fluorsilicic acid
recovering conventional system has been replaced
by one that includes a automatic filter "Lerox".
The mud anodes that are sent to the Anode Residue
Plant to recover valuable metals humidity has
diminished. The discharge solution is being used
in the preparation of reagents, for the immersion
washing and for the pressure washing of corroded
anodes. There is no longer an emission of this
effluent to the Yauli river.
Services and Shops
a) Process Description
The metallurgical complex is various plants require
workshop participation to develop complementary
specialized works such as installations, maintenance,
and electric motor repairs, instrument repair, carpenter
work, masonry, motorized vehicles, etc.
For this purpose there are Instrumental Shops,
Structural Shops, Storehouse, Buildings and Land
(carpenter and masonry), etc. The effluents that are
generated at these shops are coming principally form the
hygiene services.
b) Effluents Management
o The effluents coming from the storehouse,
structural shops and carpentry shop, hygiene
services.
This effluent is discharged directly to the
Mantaro River.
o Implemented Projects
These effluents are collected and treated at a
two cameras pilot septic tank before it gets
evacuated into the Mantro river.
The analysis results are shown in the following
charter:
Arithmetic Average April 96 and June 96 (*)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Sampling Flow pH Temp TSS Metals (mg/l)
- -------------------------------------------------------------------------------------------------------
Point m3/min (degree)C mg/l As Cd Cu Fe Mn Pb Zn
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
110 0.31 7.33 15.47 26.54 0.29 0.07 0.13 0.36 0.18 0.17 1.02
- -------------------------------------------------------------------------------------------------------
</TABLE>
* Source EVAP La Oroya Metallurgical Complex
PROJECT: Smelter Cooling Water Re circulating System
<PAGE>
1. Introduction
Today the water used for cooling the industrial processes at La Oroya
smelter is totally discharged at the Mantaro River, through open channels
or tubes that flow throughout the smelter industrial installations
This cooling waters mix in some cases with domestic and industrial
effluents, increasing the volume of the polluted water. In other cases the
cooling waters are contaminated only by passing through industrial areas
due to the presence of dust, solids and gasses.
To resolve this problem two alternatives have been proposed. The first
consists of separating the cooling waters from the industrial effluents
and from the sewage waters, constituting an independent system that will
discharge into the Mantaro river. The second alternative that we consider
much more achievable consists of building a new web to re circulate the
water to the Smelter through the Mantaro Pumps.
2. Objective
o Protect the refrigeration from the contamination sources that exist
at the Smelter environment.
o Recover approximately 2253 gpm, of good quality water, through the
re-circulating supplying system using the Mantaro river Pumps.
o Improve the quality of the water supply coming from the Mantaro
pumps to the Smelter comparing them with the river water quality.
o Guaranty the water supply to the Smelter in times of freshet.
3. Project Description
For re circulation, the cooling water will be taken from the different
discharge points throughout a hydraulic system by gravity in tubes of
different diameters. The water will pass through different industrial
zones of bigger discharges and will be conducted to the Mantaro pipes.
Main Contributors :
- -------------------------------------------------------------------------------
CONTRIBUTORS FLOW (LPS)
- -------------------------------------------------------------------------------
Antimony Plant 0.5
Agglomeration Plant 25.0
Sulfuric Acid Plant(*) 25.2
Zinc Roasting FBR and TLR 38.8
Crushing and Bolting 8.0
Solid Separation Compressor 1.8
In Vacuo Flotation Plant 20.0
Solid Separation overflow tank pump 1.3
Rectifiers Silicon A 5.1
Rectifiers Silicon B 0.6
Zileret Plant iron sponge cooler 2.6
Rectifiers Silicon C 1.8
Oxygen Plant 6.8
- -------------------------------------------------------------------------------
<PAGE>
TOTAL FLOW 142 LPS (2253 GPM)
- -------------------------------------------------------------------------------
* To preclude the sulfuric acid from mixing with the cooling water in case
of leaking, it has automatic acidity control system in such way that when
acid is detected the water will be derived to the main channel.
It is necessary to indicate that the waters do not require a cooling
system due to the web characteristics and to the distribution system that
allows the water to reach normal temperatures. This will not be possible
in the case that re circulation would be at each plant requiring
complicated and costly systems.
4. Technical Specifications
4.1 Tubes
The tubes will be made of PVC tubes for the slow traffic zones and
of smelted iron for the zones where vehicles, front end loaders,
etc. transit.
The PVC tubes will be class 7.5 rigid type, with 75 meters of
maximum water work pressure and traction resistance of 400 to 500
Kg/cm2
The iron tube will be black type, with an American standard rosca
Type ISO-1, schedule 40 and 21 feet long lengths. They will be
installed as follows:
- -------------------------------------------------------------------------------
PVC TUBES
- -------------------------------------------------------------------------------
Diameter (") 2" 4" 6" 8" 10"
- -------------------------------------------------------------------------------
Length (m) 53 249 133 206 526
- -------------------------------------------------------------------------------
IRON TUBES
- -------------------------------------------------------------------------------
Diameter (") 10" 8" 4" 2"
- -------------------------------------------------------------------------------
Length (m) 20 40 30 10
- -------------------------------------------------------------------------------
4.2 Union and Accessories
The accessory unions Te, elbow unions will be twist type of iron and
PVC depending upon the case. At the C and C' stretches following the
isometric a 20 meter iron tube will be installed with universal
unions twisting type. The rest will be PVC tubes.
4.3 Ditches
They are projected on natural land. To install the tubes a drawing
and a general re planing of the web will be undertaken, verifying
that the tubes have the deepness and grades stated in the maps. The
excavation will start when the tubes are at the project. The ditch
will be minimum 0.40 meters and maximum 0.70 meters wide. The bottom
will be leveled following the tube and hood thickness.
<PAGE>
The excavation excess will be refilled with river cement. The tubes
will be covered before setting them in the ditches, removing the
ones that have cracks or defects. The hoods will be oriented
upwards.
4.4 Leveling
The tube leveling will be performed with a topography instrument. At
the union it will be checked that the tube surface and the hoods are
clean.
The filling of ditches will be executed after the hydraulic tests
are made at the installed tubes, first with selected material (No
stones, roots, grass, etc.) continuing with 0.10 meters layers
trying not to move the tubes until an altitude of 0.30 over the tube
edge, finishing it with material free of stones.
For tube union stretches that have no hood pre - fabricated unions
will be used.
4.5 Estimated Cost
Description Cost US $
- --------------------------------------------------------------------------------
Item Description Cost US$
- --------------------------------------------------------------------------------
100 Preliminary traces 5 500
400 Mechanic Installations 32 092
Sub Total 37 592
Contingencies 10% 3 758
Total 41 350
- --------------------------------------------------------------------------------
<PAGE>
-------------------------------
ANNEXES
-------------------------------
<PAGE>
5.4 Soil Impact Control
The solid residues exposed to the open environment suffer
degradation by oxidation and leaching, originated by the rain water.
This action dissolves by filtration and infiltration some elements
that discharge to the Mantaro River through the underground water.
To control this effect these projects have been proposed:
o Slag deposit Abandonment Study
o Zinc Ferrites Deposit Temporary Shut Down
o Arsenic Deposit Abandonment Study
Each of the studies have periodical samples and analysis to verify
project quality and guaranty its construction.
5.4.1. Projects to be Implemented
PROJECT: Copper and Lead Slag Management and Disposal
1. Introduction
In all the copper and lead smelting processes slag is
produced. They have a low commercial value due to their
very low valuable contents and or the high fusion point
required - 1250 (degree) C.
At La Oroya metallurgical Complex slag is obtained from
the lead vertical furnaces and the reverber furnace.
They are in a liquid state at 1 100 (degree)C and 1 200
(degree) C respectively. Slag is rapidly cooled down
through water pressure and transported by gravity in
"slurry" form, rectangular channels up to a "tolva"
battery where liquid - solid separation is
undertaken.
Slag is deposited at the bottom of the "Tolvas" and sent
by cable cars to the "Huanchan" deposit which is 2,2
kilometers away crossing the Mantaro river. This
transportation system operated from 1930. Today it is
obsolete, having serious operational, maintenance and
transferring problems.
The water used in granulation is discharged directly to
the Mantaro River taking with it fine slag and / or
suspended or diluted metals generating a very serious
contamination problem.
PAMA - La Oroya has considered a study developed by the
CENTROMIN S.A. Project Section at a basic engineer
level. The study gives a solution to the water
generation, recirculation problem and also to the slag
transportation problems. In this way the Mantaro river
contamination produced by these solids will be stopped.
<PAGE>
2. Present Situation Analysis
Actually the system shows the following situation:
2.1 Granulation system:
o Operation Time
The reverber slag discharge is not continuous, the
normal cycle is usually 4 hours of discharge and
then one hour stoppage until it starts again.
For the Lead Slag the discharge runs continuously
24 hours.
o Water Quantity
At present the water is used in the following
quantities:
To granulate copper slag: 5 000 gallons per
minute.
To granulate lead slag: 3 000 gallons per minute.
o Water Characteristics
Before granulation the water temperature is in the
10 to 14 (degree) C range depending on the season,
after these processes the water reaches 28
(degree) C. The chemical analysis shows lead
presence, arsenic, copper, iron and some suspended
contents that in some cases are over the Maximum
Permissible Levels.
o Vapor
The water vapor is product of granulation, it
discharges directly to the atmosphere. It must be
taken into consideration that the environmental
rules do not register emissions, but a stronger
control should be expected in the future.
2.2 Transportation System
o Equipment
The transportation equipment "cable car" dates
form 1930. It has been design for 500 t/d
production capacity. Its obsolescence creates
multiple operational and maintenance problems.
Increasing its transportation capacity is not
possible due to its design, age and condition.
o Capacity
The present system does not allow transportation
of 1 100 t/d of slag to the area of "Huanchan".
This is not only true because the equipment but
also because its limited storage capacity and slag
reception tolva retention, that feeds this
equipment.
The above allows to conclude:
- It is necessary to modify the slag management
system: generation, transportation and storage.
- It must be contemplated in addition to the
modifications, a closing
<PAGE>
plant or stock abandonment as one of the
alternatives for the solution of the
environmental problems.
3. Project Objectives
The project pursues the following objectives:
o At the Slag Generation
- Stop more slag waste at the granulation stage.
- Re circulate the process water in a closed
circuit
o Mantaro River Discharge
- Eliminate the discharge to the Mantaro river by
having an adequate solid liquid separation.
- Eliminate the discharge of contaminated water
into the Mantaro river by making possible its
re-circulation after achieving its objective at
the granulation stage and slag haulage.
o Transportation and Storage
Allow transportation of the totality of slag
generated and achieving an adequate storage, at
Huanchan or some other sector.
4. Project Justification
The project is justified because it will solve the
following problems:
o Liquid Contamination
Avoid discharge of contaminated water produced by
granulation to the Mantaro river. The water
contains solids in suspension and or contaminant
ions that are produced when slag is granulated.
o Solid Contamination
Avoid the part of the solid slag deposited in the
Mantro River by transporting the totality of the
quantity produced to a suitable storage site.
o Populated Areas Impact
The Mantro river is the main vital sign of the
central region as it, supports many valleys.
Avoiding its contamination is urgent.
o Lack of Technology
The implementation of a modern system will permit:
- Evacuating all the solid slag.
- Re-circulation of granulation water
- Diminished the water consumption.
5. Project Description
5.1 Characteristics
The project considers the acquisition and installation
of the following:
o Solid Liquid Separation System
The installation of 2 rotator discharged INBA of
high technology with a new granulation system that
uses one portion of slag water from 10 to 1 in
weight. With this project the water will be
continuously re circulated avoiding Mantaro river
contamination.
<PAGE>
o New Transportation System
The system will be design to transport 1 400 t/d
exceeding significantly covering the present
production of 1 100 t/d The solution will consist
of the installation of transportation bands, that
will allow the transportation of the totality of
slag up to the left margin of the Mantaro river to
be finally disposed
5.2 Investment Budget
The work involved for the project implementation has the
following details:
-----------------------------------------------------------------------
DESCRIPTION AMOUNT US$
-----------------------------------------------------------------------
1.0 Solid - Liquid System Water granulation 3 900 000
and re circulation
-----------------------------------------------------------------------
2.0 Transportation System 1 708 000
-----------------------------------------------------------------------
SUB TOTAL 5 608 000
-----------------------------------------------------------------------
Contingencies +/- 15 % 892 000
-----------------------------------------------------------------------
TOTAL 6 500 000
-----------------------------------------------------------------------
5.3 Execution Chronogram
The project execution schedule estimates that it will
require 3 years as follows:
- --------------------------------------------------------------------------------
YEAR ACTIVITY AMOUNT US $
- --------------------------------------------------------------------------------
1997 Solid Liquid Separation Fabrication 1 494 000
- --------------------------------------------------------------------------------
1998 Additional Equipment Acquisition Separation 3 362 000
System Installation
- --------------------------------------------------------------------------------
1999 New Transportation System 1 644 000
- --------------------------------------------------------------------------------
TOTAL 6 500 000
- --------------------------------------------------------------------------------
6. Mitigation Proposed
This project answers the urgent need to reduce
substantially the Mantaro River contamination, which at
present is created by the slag handling.
7. Economic Analysis
The project execution does not foresee an immediate
economic return, but it is considered it will highly
contribute to diminish the environmental impact today
present not only at the Mantaro river but also for the
central region flora, fauna and human habitat.
8. Conclusions
The implementation of the present project makes it
urgent especially having the following objectives:
<PAGE>
- Eliminate the Mantaro river contamination created
by the solid discharges and contaminated water.
- Guaranty the operational continuity of the Copper
and Lead Smelter having a modern system of slag
management.
PROJECT: Copper and Lead Deposits Abandonment Study
1. Introduction
Slag consists of disposable residues obtained at the La
Oroya copper and lead smelter processes, which are sent
to the Hanchan deposit located 2,2 kilometers from the
smelter at the left margin of the Mantaro River.
This residues are black and with the texture and size of
sand. They are transported to the deposit at an average
of 600 tons a day, with the help of the cable cars. Its
final disposal is done through bands discharging them
"free downfall" forming cones of approximately 70 meters
in height.
The deposit which has been used from 1930 presently
stores 10 million tons of copper and lead slag. It has a
remaining a useful life of 7 years.
Due to its age, design and type of operation, the
deposit does not comply with the environmental control
government demands. It does not have the stability
safety conditions. This situation originates the Mantaro
river contamination, the possible deposit collapse, and
the need of having a new storage area due to its limited
life time for future abandonment of the deposit.
PAMA La Oroya has considered a study that is being
developed by RESCAN PERU S.A. at a basic engineer level
that will allow to have a solution to the above
mentioned problems.
2. Present Situation Analysis
The deposit presents the following situation:
o Age
o The operation has been running for a significant
period of time and the big volumes deposited in
piles of high altitude present an unsafe situation
in respect to stability. There are not
geo-technical studies relating to the soil where
the deposits are located.
o Storage System
o It is very limited due to the "cable car" which is
from 1930. It is not capable of transporting all
the slag produced. The slag disposal at the place
is done through transporting bands, they do not
have
<PAGE>
determined heights.
o Contamination
o The nearness of the deposit to the Mantaro Rivier
makes the river vulnerable to contamination
especially for the following:
o The slag water which carries fine slag particles
drains naturally gets to the Mantaro river.
The escorrenteria water have the same effect as the one
mentioned above.
Infiltration exists naturally and it is probable that
part of this water contributes to the liquid flourishes
that show at the river lateral sides.
Winds give rise to slag sand migration.
3. Project Objective
The project will accomplish a slag Huanchan deposit
analysis, that will permit design of a closing plan up
to the basic engineering level, considering the
stability aspects, remaining capacity, liquid and solid
contamination, soil recovering and remedy. The site of
the new deposit will be also analyzed .
4. Project Justification
The project must be implemented because the following
reasons require immediate attention and constitute the
elements that affect the environment. There is also no
guaranty of Hanchan deposit stability.
o Contamination
It is necessary to minimize the Mantaro River
contamination due to the characteristics and
magnitude of the deposit. The deposit is the solid
and effluent contributors that flow toward the
river, especially in rainy season.
o Stability
Due to the height reached by the storage piles
(more than 70 meters in some cases) it is not
possible to guaranty stability and dynamics of the
piles in case of overweight or earthquakes.
Additionally, there are no geo technical, hydride
and or seismic studies. Moreover, it must be
considered that La Oroya is considered a high
intensity seismic zone.
o Operativity
The deposit life time is lower that 10 years. This
situation compels the start of studies as soon as
possible as well as the work needed in order to
close the deposit and build the new one.
<PAGE>
5. Projected Characteristics
5.1 Characteristics
The projected closing plan has a variety of measures and
engineering work to be executed, so that the total
abandonment of the deposit will have the following
characteristics:
o Physical Stability
Considers the work to be done to and guaranty the
deposits stability in case of collapse, pluvial
erosion, and environmental erosion in case of
reasonable seismic occurrences and extraordinary
rain.
For this development it has been executed and it
is being executed studies related to the following
aspects:
- Hydrology and Seismic Activities
- Embankments Stability
- Growing Potential and Remaining Capacity
- Stability against pluvial escorrenteria
- Infiltration Control
- Eolic Erosion Stability
o Effluent Control
If it is confirmed that the drainage water
escorrentias and the solids pass over the
contamination permissible limits, those waters
will be conducted to a corresponding treatment
tank.
o Environmental Control Measures After Closing
This measures correspond to all steps that must be
taken to accomplish the effluents stability and
control, after closing. This will verify anomalies
that must be corrected in time to guaranty the
environment conservation.
o New Slag Deposit
Define all the implementation works needed for the
Cochabamba new deposit. The deposit will be
located 9 kilometers from La Oroya on the road to
Huancayo. The new deposit will have all the safety
and environmental controls required for a safe
environment.
5.2 Investment Budget
The work involved for the project implementation will
have the following details:
- -------------------------------------------------------------------------------
DESCRIPTION AMOUNT US$ SUB-TOTAL (US$)
- -------------------------------------------------------------------------------
<PAGE>
- -------------------------------------------------------------------------------
1.0 New Deposit at Cochabamba 2 200 000 2 200 000
- -------------------------------------------------------------------------------
2.0 Existent Deposit
- -------------------------------------------------------------------------------
2.1 Protection and Stability Work 2 000 000
- -------------------------------------------------------------------------------
2.2 Complementary Work 550 000
- -------------------------------------------------------------------------------
2.3 Treatment and Restoration 2 000 000 4 550 000
- -------------------------------------------------------------------------------
Sub total 6 750 000
- -------------------------------------------------------------------------------
Contingencies +/- 15% 1 000 000
- -------------------------------------------------------------------------------
TOTAL 7 750 000
- -------------------------------------------------------------------------------
5.3 Execution Schedule
The execution time table estimated to be 3 years.
- -------------------------------------------------------------------------------
YEAR ACTIVITY AMOUNT US$
- -------------------------------------------------------------------------------
1997 Existing Deposit, work stability 1 250 000
- -------------------------------------------------------------------------------
1998 New Deposit 2 500 000
- -------------------------------------------------------------------------------
New Deposit Protection and Treatment and 2 500 000
others
- -------------------------------------------------------------------------------
1999 Recuperation and Remediation 1 5000 000
- -------------------------------------------------------------------------------
TOTAL 7 750 000
- -------------------------------------------------------------------------------
6. Mitigation Proposal
The project is the answer to the urgent need to reduce
contamination at the Mantaro River and guaranty the
deposit stability before any collapses occurs. It will
start the closing of the deposit, its restoration and
the remediation of the area.
7. Economical Analysis
The project execution does not foresee an immediate
economic return, but it will greatly contribute to
reduce the environmental impact presently affecting the
area, not only the Mantaro River but also the flora,
fauna and human habitat of the Peruvian central region.
8. Conclusions
The execution of the present project is urgent taking
into consideration that it will:
- Eliminate the Mantaro River contamination produced
by solid discharges and contaminated water.
- Guaranty the deposit stability and will assure the
continuance of the Copper and Lead Smelter.
- Guaranty the deposits stability and the Lead &
Copper Smelter continuance of operations, during
the its remaining life time.
- Initiate the "Huanchan" deposit closing plan.
<PAGE>
PROJECT: Arsenic Trioxide Abandonment Study and New Deposit Location
1. Introduction
The copper smelter -La Oroya- operations generate solid
residues. Arsenic trioxide is one of the most important
solid residues due to its high toxicity for human
beings. This residue is a white fine dust (malla - 400)
with a high solubility. It was started to be deposited
in 1922 at a deposit located 19 kilometers from La Oroya
City near the Malpaso hydroelectric. After 25 years of
operation the deposit was closed, starting operations
the present "Vado" deposit 9 kilometers from La Oroya
near to the old airport.
This deposit were built under the standards of the time,
they do not comply with today's environmental
requirements, especially because they are located in
alluvial areas very near the Mantaro river. The
contamination created is represented by an arsenic
concentration increase in the river water. The increase
is produced by dissolution, percolation and residual
hauling by eolic action over the trioxide present in the
Vado area, because the deposit is not covered.
PAMA considers a study that is being developed by ADI
INTERNATIONAL INC at a basic engineering level. The
study will give solutions to the contamination and
location problems related to this toxic residue.
2. Present Situation Analysis
As a result of significant quantities of arsenic in the
concentrates that are treated at La Oroya smelter
"arsenic trioxide" is produced. This product due to
market restrictions regarding its quality and volume is
practically impossible to commercialize. Situation that
creates an need for storage space, the residue is being
stored at the old Malpaso deposit. This deposit is not
operating these days, it contains 40 000 tons of residue
covered with material that is found at the surroundings
areas such as stones and clay. The present operative
deposit is Vado deposit which contains 150 000 tons, it
is an open deposit exposed to rain and wind action.
The environment is being affected by these deposits. The
Mantaro river and the areas around it are being polluted
with consequences that could be highly dangerous not
only for the flora and fauna but also for the human
beings. Arsenic trioxide is considered a "poison solid".
This situation makes the engineering studies imperative
in order to have solutions at an international level
that will allow us to solve the abandonment problems and
the build the new deposits.
3. Project Objectives
Developing the engineering studies, for the Malpaso and
Vado deposits
<PAGE>
abandonment as well as for the construction of a new
deposit at the old airport area, allowing the
implementation of solutions at an international level.
These studies will consider hydro geological geo
technical conditions at the areas of interest. This
project will observe PAMA requirements .
4. Project Justification
The development of this project is highly urgent given
the environmental contamination characteristics in areas
around the Mantaro River. Due to the river contamination
the health and life of the population is at risk, as is
the case of Pacha town.
5. Project Description
After the analyzing different solution alternatives
available from a technical economic point of view, it
was determined to use solutions that will be in
accordance to The Environmental Protection Agency of the
United States (EPA) and the Environmental Ministry
Canadian Counsel. (CCME).
5.1 Characteristics
Malpaso Deposit
The system consists in covering all the stored
residues with a double water proof covering, a
geo-textile coat for the upper part and a membrane
for the lower part. It will have some additional
clay coats and sand for protection as well as a
drainage system.
First the site and platform will be pre
conditioned. An open cell will be built at the
upper part where the residues will be placed for a
final seal. To start the solution implementation a
transitory zone must be arranged where part of the
residues that will be placed in the cell will be
removed. The cell after it is sealed and covered
with the material we have already specified will
be under ground, the area esthetics will be
intact.
Vado Deposit
The capsulate work will be similar to the one at
the Malpaso deposit. It could have as a temporary
zone at the new deposit. This work can also be
executed in modules.
New Deposit
At the old airport and with the same capsulate
modules technique as in the cases detailed above
an area will be determined and the work will start
for the cells production. The production of
arsenic trioxide is 4 000 tons a year ,the
projected area for the new production will be for
a final volume of 50 000 m3 having a life time of
25 years.
Remedial Action
<PAGE>
The old deposits area after the work is completed
will have a natural appearance, similar to the
surroundings. The project considers the total
remediation of the affected areas.
5.2 Investment Budget
The works involved for the project implementation
will have the following details:
- ------------------------------------------------------------------------------
DESCRIPTION AMOUNT US$
- ------------------------------------------------------------------------------
1.0 Malpaso deposit Shut Off 2 800 000
- ------------------------------------------------------------------------------
2.0 Vado Deposit Shut Off 4 800 000
- ------------------------------------------------------------------------------
*3.0 New Deposit 1 750 000
- ------------------------------------------------------------------------------
SUB TOTAL 9 350 000
- ------------------------------------------------------------------------------
CONTINGENCIES +/- 15% 1 350 000
- ------------------------------------------------------------------------------
TOTAL 10 700 000
- ------------------------------------------------------------------------------
* Amount to be invested in a 10 year operation period.
5.3 Execution Schedule
The project execution schedule will require five 5
years under the following details:
- --------------------------------------------------------------------------------
YEAR ACTIVITY AMOUNT US$ SUB TOTAL US$
- --------------------------------------------------------------------------------
1997 Malpaso Deposit 2 600 000 2 600 000
- --------------------------------------------------------------------------------
1998 New Deposit 2 000 000
- --------------------------------------------------------------------------------
Malpaso and Vado deposits 2 600 000 4 600 000
(cont)
- --------------------------------------------------------------------------------
1999 Vado (cont.) 2 000 000 2 000 000
- --------------------------------------------------------------------------------
2000 Vado (cont.) 1 000 000 1 000 000
- --------------------------------------------------------------------------------
2001 Complementary Works 500 000 500 000
- --------------------------------------------------------------------------------
TOTAL 10 700 000
- --------------------------------------------------------------------------------
6. Proposed Mitigation
The proposed solution will solve the contamination
problem, abandoning the existing deposits using the
latest technology and building the new deposit that will
meet the required guaranties.
7. Economic Analysis
The project characteristics with which the old
contamination problems will be solved are not directly
related to the present production process, not allowing
an economic quantification for its profitability. But an
ecology contribution can be stated, meaning a positive
contribution to La Oroya city and its surroundings.
8. Conclusions and Recommendations
The project will solve the arsenic trioxide
contamination problems completely and with modern
technology, liberating the Malpaso and
<PAGE>
Vado storage deposits.
The project has been designed to be executed in stages
which could start working independently.
It will be essential before starting the pertinent work
to make arrangements with the local authorities and
government with the objective of taking the necessary
safety steps preventing in this way problems with the
people and the on going capsulate individual works.
PROJECT : Leaching Zinc Residues Temporary Closing Plan
1. Introduction
The refined zinc is obtained from the sulphurated
concentrates at La Oroya Metallurgical Complex. It is
obtained by using the Electrolytic Method which uses
only one leaching stage named "Neutral". This is
different form all other plants in the world where two
or three additional and much more energetic stages are
used. Under this condition the zinc dissolution starting
from the calcines are limited to the zinc oxide, leaving
the zinc ferrites as the big residue component evacuated
at this stage. The presence of the zinc ferrites is due
to iron contents in the concentrates that are processed
in Paragsha and Mahr Tunnel and naturally inherent to
the mineral deposits mineralogy where they come from.
The lack of technology that will allow an economic
benefit of the zinc residues neutral leaching (RLNZ)
have required storing them in fields at the Huanchan
area. Starting from the 50 `s the totality of the
generated residues were sent to the deposit. Although
from 1968 with the implementation of the pilot plant for
the treatment of 50 th/d of RLNZ only 70% of the RLNZ
produced were sent to Hanchan. At present Huanchan has 1
240 000 tons of RLNZ stored using for transportation a
pulp pumping system because it is the most practical and
economic.
Due to the years of operation, the type of residues
(containing high value metallic elements), the Mantaro
river contamination and the deposition tanks stability
it is compelling to make a study that will consider the
most important factors such as: First, the one related
to the zinc ferrites treatment feasibility; and Second,
the deposit temporary closing and final shut off, with
the objective of guaranteeing its stability and
minimizing contamination that might be generated.
Under this project two studies are been executed:
The deposit's temporary closing plan given to Rescan Peu
S.A will be developed to a basic level of engineering.
<PAGE>
2. Present Situation Analysis
The source of contamination is the zinc sulfate presence
at the pulp water phase that is sent to Huanchan (at
present it has 1 g/l zinc level but in the past they
reached 5 g/l). It is drained to the Mantaro river after
a natural settling of residues. The solution registers
solids in suspension. Part of the zinc sulfate remains
at this place while the RLNZ humidity crystallizes. It
dries with the residues and re-dissolves by rain action.
It is then carried by eolic effect into the Mantaro
river.
This operation has compelled to elevate the dike
contention walls at the storage tanks which has created
a collapse risk in case of a seismic event or other
disaster. Up to this date, tanks 1 and 2 have reached 6
meters and tanks 3- 4 reached 11 meters over the natural
landscape. At the deposit at the Mantaro left lateral
side numerous eroded carcavas by pipe discharges coming
from the decanting tanks and filtration of undetermined
origin.
At present, there are no stability studies. It has not
been defined the origin of the filtration phenomena, to
see if they come exclusively from the Ferrites tanks or
they are a combination with the ones coming from the
adjacent slag deposit. In light of this situation, while
the studies are made and the economic reprocessing of
the RLNZ technology is implemented a temporary closing
for these deposits is considered.
3. Project Objective
The objective is to have a feasibility study that will
permit an estimate of the RLNZ reprocess pre selected
technology applicability and its profitability. If the
project is viable, after its implementations at an
industrial level, contamination will be eliminated by
making zinc ferrites part of the new process; with a
much lower residue generation in a stable phase.
The ferrites deposit temporary closing plan study
research is at present in execution and will allow a
static stability and a tank dynamic analysis, the
determination of the Mantaro river contamination and the
definition of work, installations and equipment
necessary to conclude successfully the temporary
deposits closing, besides having the possibility of
treating in the future the stored ferrites.
4. Project Justification
The liquid and solid contamination that the soluble
salts and RLNZ generate is worsened by the deposits
location at the Mantaro river shores. The dike
connecting system and the eolic wind action make it
necessary to guarantee the deposits stability in case of
climatic factors that could affect them.
On the other hand, the value of the high metallic
contents such as Zn, Ag, and Cu make it necessary to
study the possibility of reprocessing.
<PAGE>
5. Project Description
5.1 Characteristics
o RLNZ Reprocess
As a possible additional investment the project
considers RLNZ benefit using the "Lanza Sumergida"
technology. This technology has an Australian
patent, property of AUSMELT LIMITED enterprise,
same company that is elaborating the feasibility
study.
The reprocessing plant is being projected for 480
tons/day of treatment capacity and it must be
capable of processing the residue generated by the
current operation and part of the residue already
deposited at Huanchan. In such a way that in 10
years the residues would be totally consumed and
this source of contamination will be eliminated.
This technology is in a commercial implementation
process, its possible investment has not been
considered in this PAMA.
o Temporary Closing Plan
The second part is planned as a deposit temporary
closing. It is constituted actually by 6 tanks (1,
1A, 2, 2A, 3, and 4) comprising a group of
measures and engineering works that must be
executed in brevity with the aim of mitigating the
environment impact and guaranteeing the tanks's
stability. The plan's most relevant characteristic
is that failing the technical and economical
feasibility of the Zn ferrites treatment the
closing solution will be final, having the future
possibility of recovering the valuable contents,
especially zinc.
5.2 Investment Budget
According to the estimated investment amounts given by
the consulting firms that are making the studies. The
following figures are presented
o RLNZ Reprocessing
For the Implementation of this system the
following investment is estimated:
- --------------------------------------------------------------------------------
Description Amount US $
- --------------------------------------------------------------------------------
1.0 Facilities Construction for the AUSMELT Equipment 15 000 000
installation.
- --------------------------------------------------------------------------------
2.0 Mechanical, Electric and control installations. 15 000 000
- --------------------------------------------------------------------------------
3.0 AUSMELT Equipment 48 500 000
- --------------------------------------------------------------------------------
4.0 Complementary works 500 000
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
SUBTOTAL 52 000 000
- --------------------------------------------------------------------------------
CONTINGENCIES 15% 8 000 000
- --------------------------------------------------------------------------------
TOTAL 60 000 000
- --------------------------------------------------------------------------------
o Temporary Closing Plan
This plan corresponds to the following activities:
- -------------------------------------------------------------------------------
Description Amount US $
- -------------------------------------------------------------------------------
1.0 Detailed Engineering 160 000
- -------------------------------------------------------------------------------
2.0 Embankment Foot Wall Construction 2 570 000
- -------------------------------------------------------------------------------
3.0 Geo membrane Water proof
- -------------------------------------------------------------------------------
3.1 Tank No. 1 and No. 2 40 000
- -------------------------------------------------------------------------------
3.2 Tank No. 3 and No. 4 (the 4th year) 140 000
- -------------------------------------------------------------------------------
4.0 Gravel Coating for Drainage
- -------------------------------------------------------------------------------
4.1 Tank No. 1 and No. 2 160 000
- -------------------------------------------------------------------------------
4.2 Tank No. 3 and No. 4 400 000
- -------------------------------------------------------------------------------
5.0 Conduction Channel towards the Settling and 116 000
Treatment Tank
- -------------------------------------------------------------------------------
6.0 Settling Tank and/or Treatment Escorrentia1 12 500
Water
- -------------------------------------------------------------------------------
7.0 Defense Walls for the River Margins 216 000
- -------------------------------------------------------------------------------
8.0 Effluents and Filtration Capturing Boxes 5 000
- -------------------------------------------------------------------------------
9.0 Effluents and Filtration Conducting Pipes 480 000
- -------------------------------------------------------------------------------
10 Effluents and Filtration Treatment Tank 12 500
- -------------------------------------------------------------------------------
11 Soil Restoration 400 000
- -------------------------------------------------------------------------------
SUBTOTAL 4 712 000
- -------------------------------------------------------------------------------
CONTINGENCIES 888 000
- -------------------------------------------------------------------------------
TOTAL 5 600 000
- -------------------------------------------------------------------------------
5.3 Execution Schedule
o 2 years are estimated for the RLNZ reprocessing,
most of the time will be for the AUSMELT system
which will take approximately one year.
o For the temporary closing plan 7 months are
estimated, except for the soil recovery that could
take one to two years.
6. Mitigation Proposal
It is fundamentally oriented to prevent contamination
problems from the residues at the Mantaro river and to
guarantee the storage tanks's stability in case of
possible collapses, assuring by this the future use of
the Ferrites.
<PAGE>
7. Economic Analysis
o Temporary closing is not profitable, but its costs
can be covered if the resutls show that the
AUSMELT or other reprocessing technology offers
economic advantage.
o The reprocessing alternative is based on the fact
that the value contained in the RLNZ at market
price reaches US$ 350/Ton of dry residue, having a
processing cost of US$ 65/Ton of RLNZ +-30% and
the capital costs of US$ 60 MM +/- 30%.
Additionally, for a 10 year project lifetime
period no longer than 4 years for capital recovery
is expected.
8. Conclusion and Recommendation
In conclusion, based upon the above, the Closing Plan
will be executed in conformity with basic Engineering
studies done by Rascan Peru S.A. consulting firm having
a timing and definitive character depending upon the
AUSMELT LIMITED feasibility study for the zinc residues
neutral leaching reprocessing as a part of the present
La Oroya Zinc Refinery.
Finally, it is recommended that the execution of the
pertinent studies and economic resources achievement
should be expedited, in order to accomplish the
temporary or definite closing according to the
reprocessing feasibility of the huanchan zinc ferrites.
5.5 Air Quality - Area Affected by the Fumes
(Erosion control - Sedimentation)
The soils around the smelter's fume damaged area have suffered
erosion action and the mineral elements have been washed by the
rain.
If rehabilitation is done through reforestation, it only can be
accomplished by increasing the organic material.
Additionally, it is necessary to use diverse techniques that will
stop soil deterioration and help the spontaneous recovery as at it
has been observed in the Huaynacancha area by the use of :
Dike construction, carcavas modification and terraces construction.
5.5.1 Fume Affected Areas Study
The affected area has not had a spectacular recovery compared
with the one that it had between 1941 and 1971 (from 14 190 Ha
to 4 170 Ha.) registering from that date to January 1996 an
improvement of 3 829 Ha.
<PAGE>
The higher soil recovery time corresponds to the time that
electrostatic precipitator implementations and improvements in
the process was done, which had a rapid response on the limits
of its actions. The recoveries up to 1971 have not had notable
effects, passing the stated limits.
It is not possible to ignore that the presence of vegetation
at the nucleus of contamination is showing a slow spontaneous
recovery which is much more observable in areas where
reforestation has been accomplished. This is to show that
recovery is going slowly, but going.
The current recovery of the Vieja Huaynacancha area is good in
respect to its condition in 1971, At that time no plant life
was showing. Today a nice landscape with abundant plant life
can be appreciated. Some other extended areas have a more
limited recovery. On the had , bird are present and wild
animals such as "jilgueros," "gorriones," "zorzales," ducks,
and "huachuas" as well as vicuna herds induce us to think that
the evacuated fumes are not as damaging as the ones in the
past.
There are extended, areas, where some work to recover
vegetation can be experimented with. In some other areas soil
can be broken to facilitate the absorption and retention of
the pluvial waters and to prepare the soil for the natural
dispersion of seeds. This is based on what has been observed
at the differential zones where soil movement took place and
where spontaneous covering was produced. Also reforestation
must be not only at the embankments and at the bottom of the
carcavas but also at the slopes that are abundant at the
Hauynacancha zone. Plants of "doble repique" that are much
more developed and strong should be used so survival is
assured.
It is possible to stop the formation of new carcavas and that
the ones that already exist to stop growing by using adequate
work described at the above paragraphs and populating the big
cuenca de las carcavas with native or imported herbaceous
vegetation, trees, and bushes with the objective of covering
the nude areas and to stop erosion.
At the slopes in front of the smelter it is possible to
recover the natural cover with crops or some trees, since the
soil analysis is favorable in its characterization and
composition. All this will take time and investment that is
shown in Table No. 5.
5.5.2. Environmental Impact Study
Introduction
The present study was given by CENTROMIN PERU S.A. to the
Empresa de Servicios Ecologicos S.A. with the aim of
developing a model for the dispersion of gases emitted by la
Oroya smelter stack. The most important objective of the study
is to analyze the different alternatives that will modify the
main stack and reduce its high SO2 emissions.
<PAGE>
The visit to the metallurgical complex allowed us to observe
the significant impact in the nearby areas coming from the
pluma de gases emitted by the tack. At the same time the
gases's impact at the smelter and adjacent areas was not
higher. However, it also was observed that not only the
smelter but also la Oroya city are seriously affected by
gaseous emission coming from other sources inside the smelter
(fugitive emissions and the ones coming from the secondary
stacks).
The advantage given by the stack height has been transporting
the pluma of gases outside the smelter and city, which receive
the impact coming out of the other sources of contamination.
Gaseous Emissions Monitoring Data and Applicable Norms
The monitoring data obtained related to gaseous emissions and
the metallurgical complex air quality indicate clearly that
the quality air norms and contaminant emission rules have been
exceeded. It is required to implement measures and strategies
to resolve this problem. The modifications at the stack will
serve to approach the problems related to the air quality
standards.
Dispersion Model
A dispersion model was used to compare the dispersion of the
emissions coming from the main stack with the dispersion of
various alternatives such as: a higher stack, a new stack
located higher, a higher speed for the gasses' exit, a higher
volume of gases emitted. A numerical model known as the ISC-3
(Industrial Source Complex Model version 3) was used. This
model was developed by the Environmental Protection Agency of
the United States of America (EPA) it is commonly used to
model the dispersions at industrial complexes.
Among the aspects incorporated to the model the stack
dimensions and operational parameters, topographic information
and meteorological data
The model shows contaminants concentration predictions for the
specific reception points adjacent to the source of
contamination under model. In this case the model was prepared
to give results for a soil level reception instruments web,
based on what concentration level charts will be elaborated.
The model is capable of showing information about the
contamination concentration based in average time series
(1 hour, 8 hours, 25 hours and 1 year). It has only being
predicted maximum concentrations for 1 hour. The model ISC-3
takes into consideration some topographic effects, but in a
limited manner. It wont be useful to use sophisticated models
that take in consideration this effects if their is not also
additional meteorological information.
With the aim of predicting the maximum concentration in 1 hour
a
<PAGE>
meteorological special file needed to be created which also
had to be able to create a highly unstable atmosphere (ISC -3
first stability category), slow winds speed (2m/s) and wind
direction from 1 (degree) to 360 (degree) North with 1
(degree) increasing. As was mentioned above it was estimated
that this conditions would produced a worse scenario for the
main stack emissions impact on the land receptors.
The mix layer deepness was different for the preliminary
models, this was to be able to determine the value for the
worse of the cases. The mix layer is that atmospheric layer
over the soil surface were the turbulent contaminant mix took
place. Over the layer the atmosphere is stratified in a stable
state and the turbulence is taken. In clear days, at sun rise
the mix layer is shallow becoming deep as the day passes by.
In the afternoon it is replaced by a inversion stable layer.
The layer deepness is normally determine by information given
by balloons or by using meteorological information of a higher
altitude. This information was available during the execution
of this project. It was found that the mix layer deepness for
the main stack in unstable conditions, in the worse case
scenario is in a range of 1 000 to 1300 m.
The ISC - 3 automatically calculated the pluma de gasses raise
under bad atmospheric conditions taking as a base the stack
operative parameters. The pluma de gases raise was consistent
with the visual information done at the smelter. The final
pluma de gases raise was calculated approximately 1 200 m over
the ground under bad meteorological conditions ( moderate wind
and unstable atmosphere) The distance from the stack to the
pluma de gases reaches a height of 1 700 meters.
Under inversion stable conditions the ICS - 3 calculates a
final pluma de gases of approximately 350 m to 400 m above
soil level, this is obtained almost directly above the stack.
Results and Discussion
a) Main Stack
In general, the dispersion model produces reasonable
results in comparison with the environment monitoring
data. This is shown in Table No. 5.3. The only exemption
is the one at the Labor Union where the model
underestimated in a significant manner the impacts. This
location, however, is very close to the smelter
operations and it is strongly impacted by the SO2
fugitive emissions coming from sources that were not
addressed in this study.
TABLE NO. 5.3
Maximum Concentration of 1 hour for SO2
- --------------------------------------------------------------------------------
Model Monitoring Data
<PAGE>
Monitoring Station Result 1995 1996
- --------------------------------------------------------------------------------
Hotel Inca 3 249 2 230 1 241
- --------------------------------------------------------------------------------
Cushurupampa 2 447 1 848 2 000
- --------------------------------------------------------------------------------
Labor Union 266 2 477 2 000
- --------------------------------------------------------------------------------
Casaracra 928 1 780 1 520
- --------------------------------------------------------------------------------
High levels of SO2 can be presented at points far away
from the smelter. Graphic 5 shows the main stack impact
ample magnitude. In some areas the short term
SO2 concentrations that are superior to 1 000 mg/m3 are
considered excessive. In Canada for example the maximum
acceptable average level for one hour is 900 mg/m3 and
in The United States the standard maximum concentration
for 3 hours is 1 300 mg/m3 . The estimates that are
indicated in Graphic 5 indicate that concentrations
superior to 1000 mg/m3 could be present in a 9
kilometers radius at the smelter surroundings and under
the worse meteorological conditions.
The significant modifications to the main stack will
produce a very small improvement in reducing the
contaminants concentration at the ground level. This
result points out the need to implement emission
reduction strategies in addition to the changes to the
main stack. The following modifications to the main
stack were considered:
o Double the flow that comes out of the stack by
inducing dilution air at the base.
o Reduce in a 30% the extreme diameter to double in
this way the exit speed.
o Increase the stack altitude from 167 meters from
the ground level to 284 meters and 400 meters over
the ground level.
o Maintaining the actual stack altitude transporting
it to 875 meters west from the present location
were the soil has a higher elevation approximately
3 meters ( for example 4 050 meters above see
level in contrast with 3 700 meters)
The results of these simulations are summarized in Table
No. 5.4 The less effective measure is transporting of
the stack to the higher elevation place. The increase of
the pluma de gasses will be too short. The estimated gas
concentration in the worse case will only decrease by
20% at the Hotel Inca and Cushurupamapa Stations. These
stations are approximately 5% higher than the Huanchan
Station. This concentration level significantly
increases at the Labor Union Station which is located at
Mayupampa. This place receives a direct impact from the
emitted gasses, it is not passed by the pluma de gases.
TABLE No. 5.4
RESULTS OF THE SIMULATION FOR THE STACK MODIFICATION ALTERNATIVES
Maximum Concentration of SO2 per hour
<PAGE>
- --------------------------------------------------------------------------------
Diameter
Monitoring Station Actual Mass flow reduction at 284 m 400 m Moved
Stack duplication Stack end Stack Stack Stack
- --------------------------------------------------------------------------------
Hotel Inca 3 249 2 522 2 599 2 529 2 482 2 553
- --------------------------------------------------------------------------------
Cushurupampa 2 447 1 924 1 958 1 896 1 858 2 033
- --------------------------------------------------------------------------------
Sindicato de Obreros 266 97 215 83 28 4 113
- --------------------------------------------------------------------------------
Huanchan 3 249 2 522 2 599 2 529 2 483 3 405
- --------------------------------------------------------------------------------
Casaracra 928 741 743 717 700 885
- --------------------------------------------------------------------------------
The other proposed modifications produce a 20%
concentration reduction for 1 hour maximum. Considering
all the changes to the Stack this reduction is not
significant. Furthermore, the concentration level
prognosticated continues maintaining a level much higher
than the one established (1 000 mg/m3).
The Graphics 6 and 7 show SO2 concentration levels for
one hour maximum for when the main stack is moved and
for its extreme reduction in 30%. These levels can be
compared with the ones in Graphic 5 to gain a general
idea of the effects that the modifications at the main
stack will produce.
The main stack transportation to a higher place (Graphic
6) produces some reduction around the smelter, but still
the concentrations are higher than 1000 mg /m3 in a
ration of 9 kilometers. The stack's diameter reduction
by 30% produces a general reduction of the
concentration at ground levels as a result that 1000
mg/m3 concentration extends only to 7 kilometers.
b) Fugitive Emissions
Even though this study had the objective of examining
the main stack gas emissions, at the beginning of the
study it was evident that the fugitive emissions were an
important source of contamination and of the low quality
of the La Oroya smelters air. The mathematical model E.
regarding air dispersion indicates that the main stack
emissions do not affect in a significant manner the
monitoring station located at the Labor Union, which is
located 800 meters from the smelter. However from the
results at the 5 monitoring stations this one presents
the second highest SO2 concentration in one hour for the
1995 year, having a range of 2 477 mg/m3.
The results suggest that the contamination source in
this case comes from the fugitive gases. Clearly, it can
be observed that the Copper Converters and the Coke
Plant are the principal sources of contamination,
although these are only two of the number of emission
sources that are at the smelter. The corresponding stack
heights for the most part are producing very little
fumigation effect over the nearby
<PAGE>
buildings. The local meteorological information
indicates that clam winds are present 40% of the time,
which means that the fugitive emissions tend to remain
at the surrounding areas. An additional study of the
emissions sources is required to be able to evaluate the
contamination local impact.
A detailed analysis of the fugitive emissions is
necessary to identify the sources, take measures and
develop contamination control appropriate strategies.
Conclusions and Recommendations
o It requires a significant reduction of the gas emission
as well as the SO2 concentration levels in all the
monitoring points located inside the smelter with the
objective of complying with the maximum permissible
limits that the Peruvian law and the World Bank
establishes. It will be necessary to implement
strategies that are directed to reduce the emission
volumes to be able to reach the established standards.
The modification that can be done at the main stack will
only have an impact on the air quality standards, but
not on the contaminants emission standards.
o Due to the complex topography and to the limited
meteorological information only approximate predictions
for the hourly contamination emitted by the main stack
are possible. The simulations accomplished related to
the main stack modifications indicate that a small
improvement of the contamination levels will be
obtained. This result re-enforces the need to put into
practice emission reduction strategies probably in
combination with the main stack modification.
o The implementation of a Supplementary Control System
will allow the smelter to use in line meteorological
information, as well as some diverse models that will
allow prediction of local atmospheric conditions that
could result in excessive contamination levels. It will
also be possible to predict potential sources of
significant levels of contaminants (if they come from
the main stack or from fugitive emissions) which will
depend on the climate conditions. Appropriate measures
could be taken to reduce some emissions until more
favorable climate conditions occur.
o A detailed evaluation of the smelter contamination
sources must be done and the use of adequate control
technology such as filters ( Bag House) and scrubers
must be adopted. Many of the emission sources could be
connected through the main stack ducts. A dispersion
model and the use of a scale model of the Metallurgical
Complex in the wind tunnel will be extremely useful to
identify the emission sources, prioritize intervention
activities and adequate control. The wind tunnel allows
simulation of the complex and the wind behavior
topography as well as the gaseous emissions.
<PAGE>
5.6 Public Heath (Sewage and Garbage)
PROJECT : Sewage Water and La Oroya Garabage Disposal
1. Introduction
The sewage water treatment and the garbage disposal at the
CENTROMIN housing areas in La Oroya is a service that is
assumed by the Company.
This service is for a population of 18 000 people that are
located around the Yauli and Mantaro rivers. It is made in a
similar manner as the rest of the region, which is not in
accordance with the health norms and requirements, and does
not take in consideration environmental issues to be
considered by these services.
For this reason the Environmental Program for La Oroya
considered this study. The project was developed by the firm
AQUA PLAN INGENIEROS SCRL up to the engineering level, the
same that was finished in May 1995.
The work exceeds what will be CENTROMIN SA investment
responsibility. The privatization plan only considers housing
installations at the Mantaro river shore. In such situation
this report only refers to a future responsibility.
2. Present Situation Analysis
The Centromin Housing sewage system along the Mantaro river
constitutes a web that allows to connect the totality of the
sewage waters and escorrentia. It is in a good condition, but
it discharges directly to the Mantaro river.
This discharge with no treatment is one of the river's
contaminants.
In relation to the garbage pick up it is accomplished by a
compactor truck, which does not have the necessary capacity to
pick up 9 additional kilometers up to the pouring point.
At the garbage disposal area, the garbage is set with no
sanitary filling technique, this situation gets complicated
because the deposit is located at the left margin of the river
close to the water. It constitutes an additional point of
contamination.
It is necessary to correct the systems technical deficiencies,
installing sewage water treatment plants and the construction
of a sanitary fill that will guaranty an environmental
cleaning.
3. Project Objective
The development of engineering studies up to the detail level,
that will allow treatment of the sewage waters and the
Centromin housing garbage disposal to prevent contamination of
the Mantaro river and comply with the requirements established
by the government.
<PAGE>
4. Project Justification
This project of environmental cleaning is urgent due to the
impoverishment of the basic services for the population in
general and in particular due to the sewage and garbage
problems of this production unit. The solution of this problem
is framed by the environmental problem with the objective of
obtaining a sustainable development having an ecological
equilibrium among men, nature and production.
5. Project Description
After the solution alternatives been analyzed, from a
technical - economical point of view for the sewage water
case, a treatment alternative will be 2 mud plants activated
using the aereacion extended method. For the garbage disposal
the sanitary fill solution will be adopted using the trinchera
method, which will be in accordance to the Health Ministry
(DIGESA)
- Characteristics
a) Sewage Water Treatment
For this treatment 2 plants have been considered. They
will be located along the Mantaro river, one at the
Chulec zone and the other one in front of the Hotel Inca
zone (Sudete zone)
The project considers also intersection lines,
conduction line and the collection of the sewage waters
towards the treatment plant. Due to the topographic
characteristics of the area it will be necessary to
install pumping station.
After the treatment, which uses biological processes, a
discharge flow of 30 ppm of BOD and 40 ppm of suspended
solids will be obtained.
o Chulec Plant
The installation will have a treatment capacity of 12.5
liters / seg. Located at the right margin of the Mantaro
river at the area named Parque Lavaropa. Its area of
influnce are the sectors of: Mayupampa, Chupamapa,
Tortilla and Chulec.
The treatment considers the following processes:
Taking the Sand Out:
In this treatment the sewage waters are pushed by a
pumping station and conducted to a sand remover channel
which is made of concrete. At this point using the
differential segmentation principle, sedimentation of
the sand will be produced and the organic solids will be
in suspension which will be crushed.
Aeration:
In this treatment the organic material is directed by
aerobic microorganisms that are contained at the re
circulated mud. This process is done in a concrete tank
of 12.0m x 24.0m x 4.0 m with two
<PAGE>
aerators (2HP) to transfer to the liquid mass 5.80
lbs/hr of oxygen.
Decant Process:
It has the aim of separating the solids from the
liquids. The tank to be used will be of concrete 16.60m
by 3.00 m with retention period of 4 hours and a maximum
surface rate of 30 gal/p2/hr. It will have a mechanical
cleaning system.
Drying:
This process will be done in 2 concrete drying beds of
4.00m by 1.00 meters were the mud excess will be dried
in a accelerated manner by filters, the excess of liquid
will be returned by pumping.
Control:
This activity is done in a laboratory that has an area
of 6.00 m by 6.00 where the BDO, SS, pH, Dissolve
Oxygen, SVI (volatile solids) and NMP ( number of fecal
colliforms) are determined on daily basis.
o Sudete Plant
This installation has a treatment capacity of 18.0
liters / seg. Located at the recreational area of Sudete
in front Inca Hotel. Its area of influence is: Amachay,
Hidro, Railway, hotels and Sudete.
The treatment considers the same processes as the one
indicated for the Chulec Plant with the following
Physical Characteristics:
Sand Taking:
In a concrete channel of 13.60 meters long with a manual
cleaning system, its measuring system is Parshall type
and it has a solid crusher.
Aeration:
In a concrete tank that has a trapezoid shape with an
area of 390 m2 and a deepness of 4.60 m, with 2 aerators
(3.5 HP) to transfer to the liquid mass of 6.80 pounds
and hour of oxygen.
Decant Process:
Having two concrete twin tanks of 24,00 m by 3,80 m by
400 meters each one, with a retention period of 4 hours
and a surface cup of 30 gallons / p2 / hour maximum.
Each one will have a mechanical mud cleaning system. The
mud obtained will be pumped to the aereacion tank.
Drying:
This process does not take place at this plant.
Control:
Activity that is done at a laboratory that has an area
of 6:00 meters by
<PAGE>
6.00 meters, where values for BDO, SS, pH, Dissolved
Oxygen, SVI (volatile solids) and NMO ( probable number
of fecal collifroms) are determine daily.
o Pumping Stations:
Due to topographic stations, the system will have
3 pumping stations; two for Chulec and one for
Sudete.
b) Garbage Disposal
The solution selected corresponds to one of a residues
final disposal plant, that uses the Sanitary Filling
method. The plant is located at the Cochabamba zone at
the area that the disposal is made today, having a
useful area of 2.5 hectares.
o Cells
It will have modules conformed by cells Trichera
type of 5.00 meters wide and 3.00 meters height
with variable lengths according to the area
conformation. This cells will be waterproof at the
bottom with a geo textile and a geo membrane
Gundle. The garbage setting will be done in layers
of 0.20 to 0.30 meters spread and compacted by a
tractor; when this is accomplished it will be
covered by a soil layer of 0.40 meters that will
be also compacted. It has been also considered a
stack ventilation for the gasses, drainage and
liquid entrapment as well as septic tanks.
o Complementary Work
It is been projected to build garages, control
booth, offices and a fence.
o Equipment
Two compacting trucks that will collect the
garbage (16 cubic yards)
Two Caterpillar D4 and D6
Tank car with a hose and aspersion device.
Pump for the rain water.
- Investment Budget
The treatment project for the sewage water and the
garbage disposal will require the execution of the
following items and the amount required is also
included. Regarding equipment the acquisition of two
trucks is required.
- --------------------------------------------------------------------------------
DESCRIPTION AMOUNT US$ SUB TOTAL US$
- --------------------------------------------------------------------------------
1.1 Interception and conduction work 425 000 425 000
- --------------------------------------------------------------------------------
1.2 Treatment Plants
- --------------------------------------------------------------------------------
- Chulec 1 100 000
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- Sudete 1 100 000
- --------------------------------------------------------------------------------
1.3 Garbage Disposal 425 000 2 625 000
- --------------------------------------------------------------------------------
SUB TOTAL 3 050 000
- --------------------------------------------------------------------------------
CONTINGENCIES +/- 15 % 450 000
- --------------------------------------------------------------------------------
TOTAL 3 500 000
- --------------------------------------------------------------------------------
- Execution Schedule
The execution schedule project requires 3 years under
the following details:
- --------------------------------------------------------------------------------
YEAR ACTIVITY AMOUNT US$ SUB TOTAL US$
- --------------------------------------------------------------------------------
1998 Interception and Conducting Mayupampa 500 000
Chulec, Amanchay, Hydro
- --------------------------------------------------------------------------------
Garbage Disposition 500 000 1 000 000
- --------------------------------------------------------------------------------
1999 Chulec Treatment Plant 1 250 000 1 250 000
- --------------------------------------------------------------------------------
2000 Treatment Plant Sudete 1 250 000 1 250 000
- --------------------------------------------------------------------------------
TOTAL 3 500 000
- --------------------------------------------------------------------------------
- Mitigation Proposed
The solution will allow for the first time in La Oroya
the initiation of a environmental cleaning in La Oroya
that will assure the sewage water treatment and diminish
the Mantaro contamination. In this way developing the
basis for environmental control. This action even though
is at an engineering level has deserved the attention of
government offices such as the President Ministry. The
solution is being taken into consideration for cleaning
projects for the entire City of La Oroya.
- Economic Analysis
The project characteristics do not allow to define its
profitability, but it can be pointed out its indirect
retribution which is a better living for the City of La
Oroya., diminution of contamination at the river basin
and diminution of the epidemics.
- Conclusions and Recommendations
The project developed allows to solve the problems of
treating the sewage waters and garbage generated at the
housing area that belong to the company.
The project has been modeled to be executed in stages,
which can start independently.
It has also been considered, the situation of a future
privatization, in which case the housing at the Mantaro
river will probably remain under the company's
administration. It will be also necessary to initiate
the pertinent
<PAGE>
works, arrangements with the local authorities and
government offices
5.7 Social - Economic Resources Impact Control
5.7.1 Mitigation Measures Plan, Contingencies Implementation Plan
Social - Economic Mitigation Measures
a) Stopping other uses for land and adjacent areas.
o Give an adequate treatment to the Fumes and the
Populated Adjacent Areas and to the Abandon Waste
Deposits.
o Improve the use of space and assure the well being
of the population and accelerate the demolition of
the obsolete houses that are very much
deteriorated as the ones that are at the: Club
Peruano, Tras Estacion, Railway, Calaminas,
Plomos. A total of 1393 slum houses. The cost is
estimated by an study done by INADUR in US
$ 844 488
o The eradication of the demolition waste.
o Foment the green areas, parks, and the
reforestation of the rivers shores.
b) Improvement of the Social Services and the housing
conditions of the mining population
o Systematic eradication and cleaning in
coordination with the County of the Solid Residues
that are dumped in the shores of the Mantaro river
and the Yauli river. They are the focus of high
contamination. Help with the garbage pick up with
company's trucks.
o Accelerate the process of Garbage Treatment at the
Company Sanitary Filling project at Cochabamba 8
kilometers from La Oroya between the Mantaro River
and the Central Road in route to the Huancayo
exit.
o Accelerate the construction project by Centromin
of the Three Sewage Treatment Plants.
- One in front of Chulec
- One at the Amanchay zone behind the Junin Hotel
- One at the Club Peruano area nearby the Cascabel
Bridge.
o Renew and Build new Sewage Services were they do
not exist in coordination with the competent
authorities.
o Give priority to CENTROMIN workers that do not
have water services and or sewage services at
their houses, propitiating the construction of
latrine and showers to improve hygiene and stop
contagious sicknesses.
o Give more economic support to the Company `s
Maintenance Unit to improve the habitation
conditions of the houses that are assigned to the
workers totalling 664 houses. Prohibiting the
people to raise animals in the houses or near to
the houses ( especially pigs)
<PAGE>
o The estimate cost for the Remodeling, Conservation
and Expansion of the Houses is US $ 1 819 254
(data from INADUR study)
c) Social Promotion Actions
o Have an environmental specialist company implement a
program of Environmental Education for the mining
population having the support of the Social Service and
the Mothers Clubes.
o Promote the campaigns for the eradication of pigsties
and farm yards inside the houses.
o Make a vaccination campaign to prevent the spread of
contagious sicknesses.
o Make a vaccination campaign to prevent rabies.
5.8 Contingencies Plan
5.8.1 Generalities
The Contingency Plan that is developed as follows establishes
actions that the LA OROYA Production Unit must follow in case
of environmental emergencies, in such a way that the personnel
will be able to respond in extreme situations. In this sense
PAMA looks to define the basic criteria to be considered for
the adequate and opportune treatment in case of accidents,
leaks, explosions, fires, etc.
The programmed activities must consider the company's
personnel training for using the emergency equipment. This
type of program must be addressed not only to workers but also
to people at the nearby communities in La Oroya ratio of
action.
5.8.2. Objectives and Scopes
The principal purpose of a contingency plan is to protect
human life, material goods and the natural ecosystem life in
case of an emergency caused by an extreme situation, being the
fundamental requisite to be prepared for an immediate response
and solve the incident. The contingency plan must include the
following:
o A list of people and offices that must be alerted and
informed immediately in case of an emergency.
o The procedures to evaluate people risks when located in
the emergency area neighborhood .
o A list of actions, with a priority order that must be
accomplished in case of an emergency
o The authority designation, the identification of the
line of command and the designation of the qualified
personnel for those specific endeavors.
o Communications webs that will assure the coordination of
efforts and the efficient responses.
o A reference material (maps, indicting the sensible areas
or the ones that
<PAGE>
have high probability of fracture, technical equipment
to use in emergency cases) and other technical
information that could be of help for the people
responsible of the actions, and.
o An inventory of the equipment type and material
available to respond to an emergency, including a
location map.
5.8.3 Organization
The organization designed in the present contingency plan will
be in charge of coordinating the human and physical resources
to be activated in time of environmental emergencies.
A Security Environmental Committee will be established, which
will coordinate the principal actions and take the basic
decisions to follow during and after the emergency. To comply
with this objective the committee must be provided with all
the communications systems and facilities to control the
emergency.
The personnel that must be on this committee are the
following:
o General Manager
o General Superintendent
o Safety Superintendent
o Chief of the environmental area
o Doctor in charge of occupational health
o A workers representative
Brigades are established to confront environmental
emergencies, formed by groups of people in charge of going to
the incident place. Timely intervention could save many lives,
equipment and infrastructure. It is the implementation of
permanent rescue crews composed at least of 10 duly trained
people.
It is necessary to take into consideration that these brigades
must have medical personnel support as well as the safety
personnel to give the facilities to the people that help
mitigate the incidents.
5.8.4 Training
There must be an annual training plan "The safety brigades"
will be trained, they must renew the instruction in periods
not longer than three months (article 42 of the Supreme
Decree No 023-92-EM) This program must include the following
stages:
o The personnel training in maintaining, operating,
transporting, using and managing the emergency use
equipment.
o The simulation of different type of emergencies, taking
in consideration the places were they could occur, the
actions and the physical resources to use. Manuals for
information should be prepared about the sequence
<PAGE>
in the actions to take during the simulations and the
practice evaluations methodology
o The classification categories of the material spillage,
tailings, fuel, etc., determining the frequency and the
risks involved; and,
o The knowledge of how to use the first aid equipment,
alarms and procedures for the safety equipment use.
Having well trained personnel and surveillance personnel is
highly important in case of emergency.
5.8.5 Information Management and Communications
The necessary actions must be establish to cover the following
aspects:
o n Appoint the responsible area for communicating the
situation to the General Office of Environmental Affairs
at the Mining and Energy Ministry. (DGAA.MEM) . The
communication must be made 48 hours after the incident
occurs.
o Define the area that will prepare the preliminary report
that will be sent to the DGAA - MEM. Also a format will
be prepared that will include the type of incident,
place, date and time, the apparent cause, human and
material losses, the actions taken to mitigate the
emergency as well as the mitigation plan and
rehabilitation of the affected area.
o Guaranty that the required information about the
climatic conditions ( wind direction and speed,
temperature and flows) will be handled in an adequate
and timely way.
o Implement the alarm system against fire, independently
from the communication system.
5.8.6 Resources
a) Transportation
La Oroya must have vehicles available capable of
entering the most difficult terrain were a mining
operation exists. The number of vehicles will be related
with the extension and distribution of the operations.
b) Communications Web
The different installations must have permanent
communication system connected with the General
Superintendent and the Safety Chief, either by radio or
by telephone. This should by time extended to the public
and private entities of the locality.
c) Alarm System
The alarm system at the principal production unit
installations consists of a siren. It must be
appropriately located to alert the personnel and the
local population that could be affected with the
incident.
<PAGE>
d) First Aid Equipment
Beds, stretchers, and first aid supplies.
e) Emergency Material and Equipment
PQS Extinguishers, safety hamlets, safety belts, leather
gloves, tools and flour protein foam to extinguish fire
in liquids.
5.8.7 Emergency Specific Cases
The following are some of the incidents that can occur and the
contingency plan for such cases.
a) Process Leaks and Spills (reagents, fluids and tailings)
This type of incidents can occur at any moment, having a
negative impact on the environment. It is necessary to
take action on time to reduce occurrences and the
consequence of this type of emergencies. Inspection must
be done regularly at the different conduction and
supplying devices.
The following actions must be included in a contingency
plan in case of reagents and or fluid spill :
o A map of the place, indicating were the chemical
products are stored. As well as the fluids
conduction and distribution lines ( the flow
diagram should be available at different
locations)
o Make sure that the chemical products are
adequately stored, with fences to preclude
contamination of the area.
o All the products must have toxicological
information and cleaning procedures in case of
spillage.
o Availability of secondary containers for reagents
and process fluids.
b) Fuel, Oil, Solvents and liquid hydrocarbons Spillage.
When this type of emergency occurs, the operator must
try to isolate the damaged tank with the objective of
reducing the spill affected areas. Then proceed to
remove the contaminated soil in accordance to the
management and residue disposal program prepared by the
company.
In addition to the steps mentioned above, the following
steps must be included in a contingency plan for oil
spillage.
o Information that will identify the spillage
migration scheme under different climate
conditions.
o Contention Systems for all the fuel tanks, and
Have secondary containers for hydrocarbon
spillages.
c) Fires
This type of emergency could happen due to a mechanical
break down of the equipment ( spakles, fuel leaks)
handling, or unsure acts that will
<PAGE>
produce the conjunction of these three elements :
flammable fluids, (combustion vapors) oxygen and heat.
This contingency can generate equipment deterioration
and the mining operations interruption as well as human
life and environment risk. In this same manner a fast
action is required from the emergency brigade.
The emergency will be controlled in the following
manner:
o The personnel that will fin out the emergency
situation will close the fuel supplying valves.
The fire will be fought immediately with the
available resources ( dry dust extinguishers or
CO2) which will be at the places indicated in the
evacuation map. This action will be done until the
fire is controlled. Finally the incident will be
reported to the Environmental Safety Committee.
o If the fire con not be controlled the machines
will be turn off.
o The plugs that isolate the electric installations
will be set on.
o Give immediate notice to the fire brigade. If the
brigade is too far away, the personnel that is in
the site will take the corresponding action until
the brigade arrival.
o The personnel that is not participating in the
fire control because was not trained for this must
evacuate the area.
o Notice should be given to the city fire men and
the civil defense chief. The notice should
indicate the type, magnitude and time that the
fire start.
o To evacuate injured people to an area were they
can get medical attention.
e) Seismic Occurrences
The personnel must stop their work and evacuate the area
immediately to prevent accidents. If it is necessary
depending upon the intensity of the earthquake the fuel
supply will be closed and the equipment shut off,
evacuating the installations towards an empty area. The
injured personnel must receive attention, after the
disaster the material damages will be evaluated. The
committee of environmental safety will give
instructions.
VI CLOSING PLAN
STUDY FOR THE CLOSING PLAN FOR LA OROYA METALLURGICAL COMPLEX
1. Introduction
In the future La Oroya Metallurgical Complex must close its operations.
This future situation must be contemplated, analyzed and studied with
solution programs that will guaranty at the ending of the operations a
control of the contaminant bodies, the recovery of the affected areas and
the restoration of the areas to an acceptable level for future use.
<PAGE>
For these reasons the closing plan program was considered in this study.
The project is being developed by the Canadian Firm ADI INTERNATIONAL INC
up to a basic engineering level.
2. Present Situation Analysis
The age of the installations, the quantity of the buildings and process,
mechanical, electric and control equipment, the diversity of the
metallurgical processes for smelting and refining the 17 metals there are
among product and sub products gives origin to a 55 hectares operation.
Area that for its most part have been affected by the contamination
produced in the processes.
This environmental contamination with the generation of liquids, solids
and gasses that over pass the permissible limits has damage the
environmental conditions, specially with respect to the soils
deterioration, the partial disappearance of the biotic environment and the
water corps damage.
It is a industrial zone scenario of high congestion that needs to be
revert the condition that it had before the operation started.
3. Project Objective
Develop the engineering studies to a basic level that will allow to
accomplish the closing plan in accordance with the parameters set out by
PAMA. This parameters consider the removal of the existent installations,
the elimination of the contamination sources, recovery of the soil and the
remediation works until the area has its initial characteristics.
4. Project Justification
Although this project does not seem one of immediate execution, it one
that can not be delayed, since it constitutes the most important element
to consider, not only at the operations ending but also in the eventuality
of partial closings. In the other hand the stages closing plan such as the
demolition , dismantle and restoration works to acceptable environmental
levels and other inherent to the case will permit a rational use of the
resources, since a considerable amount of time and money is required for
all these.
5. Project Description
The project at this basic engineering level develops a basic stage of
planning, setting diverse activities that must be executed until a master
plan is done for all the closing aspects.
- Characteristics
Basic Plan Stage
This stage has considered diverse activities that must be developed
on blocks:
o Closing Decision
o Inventory Culmination
o Establishment of Environmental Control
<PAGE>
o Dismantling and removal of useful equipment
o Demolition
o Site investigations
o Site Recoveries
Each of this blocks diversifies in series of activities that will
constitute at the end the Closing Master Plan.
Preliminary Experiments
There have been executed some surface experiment covering the total
LA OROYA CENTROMIN installations area with the aim of gathering
information on the S, Cd and Pb contents in the soil and the
existent plants. Additionally inspections will be made to have basic
hydric and geo technical information.
With the sample results the research work to be developed in the
detail engineering will be defined.
- Investment Budget
The investment budget for a total closing of the complex is a
follows:
- ------------------------------------------------------------------------------
DESCRIPTION AMOUNT US $
- ------------------------------------------------------------------------------
1.0 Equipment dismantle 15 000 000
- ------------------------------------------------------------------------------
2.0 Metallic Structures dismantle 19 000 000
- ------------------------------------------------------------------------------
3.0 Buildings Demolition 5 000 000
- ------------------------------------------------------------------------------
4.0 Investigation and area fixing 5 500 000
- ------------------------------------------------------------------------------
5.0 Equipment and building recoverings (22 000 000)
- ------------------------------------------------------------------------------
SUB TOTAL 22 000 000
- ------------------------------------------------------------------------------
CONTINGENCIES 2 000 000
- ------------------------------------------------------------------------------
TOTAL 24 000 000
- ------------------------------------------------------------------------------
- Execution Schedule
The execution schedule requires 70 months following this
details:
- --------------------------------------------------------------------------------
ACTIVITY TIME (MONTHS)
- --------------------------------------------------------------------------------
1.0 Inventory 1
- --------------------------------------------------------------------------------
2.0 Environmental Control Establishment 3
- --------------------------------------------------------------------------------
3.0 Dismantling of equipment and removal of useful equipment 9
- --------------------------------------------------------------------------------
4.0 Demolition 9
- --------------------------------------------------------------------------------
5.0 Site Investigations 12
- --------------------------------------------------------------------------------
6.0 Site Recovery 36
- --------------------------------------------------------------------------------
TOTAL 70
- --------------------------------------------------------------------------------
6. Mitigation Proposal
If the complex closing is implemented, an immediate contaminant reduction
will be produced and a high proportion of the contaminants discharged into
the atmosphere.
<PAGE>
As the closing activities master plan enters into application the
contamination will be reaching inferior levels that will reach the
permissible limits when the process is concluded.
7. Economic Analysis
The project characteristics which is not involved on the production
process does not allow to define the type of profitability that can be
quantified in economical indexes, but it can be pointed out that the
environment remediation will contribute to improve the life conditions not
only at La Oroya but also the Mantaro river and the Mantaro valley.
8. Conclusions and Recommendations
The developed project will allow to cover PAMA requirements
The project will allow to have a basic planning that can be used for a
total or a partial closing.
Contingency plans are considered in case of natural catastrophes that can
happen in the future such as floods and earthquakes.
Before initiating the pertinent works in case of closing, it will be
necessary to make the respective coordination with the local authorities
and the government entities.
VII EMISSION AND EFFLUENTS MONITORING PLAN
7.1 Liquid Effluents emissions if the Metallurgic Complex
Regarding the policies defined by Centromin Peru S.A. with respect
to the Environmental Contamination Control diverse mitigation
measures undertaken with important investments must be pointed.
With respect with the liquid effluents it has been planned to
continue with the sampling at the collectors discharge that were
qualified has contaminants after they were processed and the results
analyzed by the statistics results from the EVAP (tabla 7.1)
Due to the water quality, the monitoring will be done at 9
monitoring stations (five in the Mantaro River, three at the Yauli
river and one at the Tishgo river).
7.2 Gaseous Emissions at the Metallurgical Complex
Concerning the gaseous emissions monitoring and the air quality, it
has been clearly defined and put into action. The environmental
problems have been characterized as a consequence of the gases, it
is necessary to implement mitigation measures.
The monitoring data obtained at the metallurgic complex indicates
that the air
<PAGE>
quality as well as the gaseous emissions have been exceeding the
permissible limits.
The company has planned to continue with the monitoring program
related to the emission sources at the strategic points indicated in
table 7.2.
To determine the air quality CENTROMIN will continue the monitoring
5 stations (Table 7.2) and will improve the sampling system with new
equipment when necessary.
CENTROMIN treats more than a thousand tons a day of concentrate,
hence it's considering the installation of a meteorological station
at the place stated in the Gaseous Emission Protocol and Quality
Air, where the wind parameters (speed and direction), temperature,
precipitation, evaporation, relative humidity are considered with
frequency and ideal equipment.
<PAGE>
Exhibit 10.8.1
CONVENIO DE ESTABILIDAD JURIDICA ENTRE EL ESTADO Y LA
EMPRESA METALURGICA LA OROYA S.A. - METALOROYA S.A.
Consta por el presente documento el Convenio de Estabilidad Juridica que
celebran, de una parte, el ESTADO PERUANO, debidamente representada por el Vice
Ministro de Minas del Ministerio de Energia y Minas Ing. Juan Mendoza Marsano,
autorizado para el efecto por Decreto Supremo No 046-97-PCM, con domicilio en
Av. Las Artes No 260, San Borja - Lima, a quien en adelante se le denominara "EL
ESTADO"; y, de la otra parte, la EMPRESA METALURGICA LA OROYA S.A., METALOROYA
S.A., una compania constituida en la ciudad de Lima - Peru, con RUC No 33526610,
inscrita en el Asiento 1 de la Ficha 010367 del Libro de Sociedades
Contractuales y Otras Personas Juridicas del Registro Publico de Mineria,
Oficina Registral Regional de Lima, cuya copia simple se encuentra en Anexo,
debidamente representada por el Sr Jorge Merino Tafur, identificado con L.E. No
07341351, segun poder inscrito en el Asiento 1 de la ficha 040367 del Libro de
Sociedades Contractuales y Otras Personas Juridicas del Registro Publico de
Mineria, Oficina Registral Regional de Lima, a quien en adelante se le
denominara METALOROYA; en los terminos y condiciones que constan en las
siguientes clausulas:
PRIMERA. - METALOROYA ha presentado ante el Ministerio de Energia y Minas, en
adelante "MINISTERIO", una solicitud para la suscripcion de un Convenio de
Estabilidad Juridica al amparo de lo dispuesto en el Decreto Legislativo No 662,
en el Titulo II y el Capitulo Primero del Titulo V del Decreto Legislativo No
757, en el Reglamento de los mismos aprobado por el Decreto Supremo No
162-92-EF, de fecha 12 de octubre de 1992, el que en adelante se denominara
"REGLAMENTO", en lo dispuesto en la Resolucion de CONITE No 001-96-EF/35, en el
Decreto Supremo No 046-97-PCM, y de conformidad con lo pactado en el Contrato de
Transferencia de Acciones, Aumento de Capital y Suscripcion de Acciones, que
celebraran DOE RUN PERU S.R.Ltda., en adelante DOE RUN, la Empresa Minera del
Centro del Peru S.A. y METALOROYA, en lo sucesivo "EL CONTRATO", como
consecuencia del Concurso Publico Internacional PRI-16-97.
SEGUNDA. - METALOROYA en virtud del presente Convenio, y al amparo de las normas
senaladas en la CLAUSULA PRIMERA, se obliga a lo siguiente:
1) Emitir acciones representativas de su capital en favor de DOE RUN, por un
monto de S/. 167'170,160.00 (Ciento Sesenta y Siete Millones Ciento
Setenta Mil Ciento Sesenta y 00/100 Nuevos Soles), contra la recepcion de
los aportes que por un monto total de US$ 126'481,383.24 (Ciento Ventiseis
Milliones Cuatrocientos Ochenta y Un Mil Trescientos Ochenta y Tres y
24/100 Dolares de los Estados Unidos de America) debera efectuar DOE RUN
en un plazo que no excedera del 23 de octubre de 1997.
2) Capitalizer en el plazo de dos (02) anos contado a partir de la
suscripcion del presente convenio, el monto que resulte de la diferencia
entre el valor en Nuevos Soles de US$ 126'481,383.24 (Ciento Ventiseis
Millones Cuatrocientos Ochenta y Un Mil Trescientos Ochenta y Tres y
24/100 Dolares de los
<PAGE>
Estados Unidos de America) y de S/. 167'l70,160.00 (Ciento Sesenta y Siete
Millones Ciento Setenta Mil Ciento Sesenta 00/100 Nuevos Soles); monto que
inicialmente sera consignado en la cuenta capital adicional en calidad de
prima, por las acciones referidas en el numeral anterior.
3) Registrar 160507,779 acciones equivalentes al 48.9674517% de su capital
social, en favor de DOE RUN, las que seran adquiridas por esta por un
monto total de US$ 121'440,608.00 (Ciento Veintiun Millones Cuatrocientos
Cuarenta Mil Seiscientos Ocho y 00/100 Dolares de los Estados Unidos de
America) en un plazo que no excedera del 23 de octubre de 1997.
4) Asegurar que las inversiones a que se refieron los numerals anteriores,
sean canalizadas a traves del Sistema Financiero Nacional, conforme debera
constar en la certificacion que emita el banco interviniente en la
operacion.
TERCERA.- EL ESTADO, en virtud del presente Convenio y mientras este se
encuentre vigente, se obliga a garantizer la estabilidad juridica para
METALOROYA en los siguientes terminos:
1) Estabilidad de los regimenes de contratacion de los trabajadores de
METALOROYA, mientras se encuentre vigente el presente Convenio, al amparo
de lo dispuesto en el inciso a) del articulo 12o del Decreto Legislativo
No 662, en las distintas modalidades contempladas en el Texto Unico
Ordenado del Decreto Legislativo No 728, Ley de Productividad y
Competitividad Laboral, aprobado mediante Decreto Supremo No 003-97-TR,
vigente a la fecha de celebracion del presente Convenio.
2) Estabilidad de los regimenes de promocion de exportaciones que utilice
METALOROYA, al amparo de lo dispuesto en el inciso b) del articulo 12o del
Decreto Legislativo No 662, que se encuentran contenidos en el Capitulo IX
del Titulo I del Decreto Legislativo No 821 y normas modificatorias; en el
Capitulo VI, del Titulo V del Decreto Legislativo No 809; y en aquellas
disposiciones que a la fecha de celebracion del presente convenio se
vienen aplicando.
CUARTA. - METALOROYA assume adicionalmente, de conformidad con lo pactado en la
CLAUSULA SEGUNDA, las siguientes obligaciones:
1) Acreditar que ha complido con recibir de DOE RUN el aporte dinerario de
capital por un monto de US$ 126'481,383.24 (Ciento Ventiseis Millones
Cuatrocientos Ochenta y Un Mil Trescientos Ochenta y Tres y 24/100 Dolares
de los Estados Unidos de America) mediante la presentacion de:
a) Copia de la certificacion que emita el banco interviniente en la
operacion por la canalizacion de los US$ 126'481,383.24 (Ciento
Ventiseis Millones Cuatrocientos Ochenta y Un Mil Trescientos
Ochenta y Tres y 24/100 Dolares de los Estados Unidos de America);
<PAGE>
b) Copia del Testimonio de la Escritura Publica de Aumento de Capital y
Modification Estatutos de la empresa donde conste la inscripcion en
el registro correspondiente, por la capitalizacion de S/.
167'170,160.00 (Ciento Sesenta y Siete Millones Ciento Setenta Mil
Ciento Sesenta y 00/100 Nuevos Soles).
c) Copia del Testimonio de la Escritura Publica de Aumento de Capital y
Modificacion de Estatutos de la empresa donde conste la inscripcion
en el registro correspondiente, por la capitalizacion de la prima de
emision equivalente al monto resultante de la diferencia entre el
valor de la conversion a Nuevos Soles de US$ 126'481,383.24 (Ciento
Ventiseis Millones, Cuatrocientos Ochenta y Un Mil Trescientos
Ochenta y Tres y 24/100 Dolares de los Estados Unidos de America) y
S/. 167'170,160.00 (Ciento Sesenta y Siete Millones Ciento Setenta
Mil Ciento Sesenta y 00/100 Nuevos Soles).
Las obligaciones referidas en los literales a) y b) deberan ser
acreditadas ante el MINISTERIO, en el plazo de sesenta (60) dias
calendario contado a partir del 23 de octubre de 1997.
La obligacion referida en el literal c) debera sor acreditada ante el
MINISTERIO en un plazo maximo e treinta (30) dias calendario, contado a
partir de la fecha limite para su cumplimento, conforme a lo establecido
en el numeral 2 de la CLAUSULA SEGUNDA del presente Convenio.
2) Acreditar haber registrado en favor de DOE RUN el 48.9674517% de acciones
representativas de su capital social, como resultado de la transferencia
realizada por la Empresa Minera del Centro del Peru S.A., contra la
recepcion del pago de US$ 121'440,608.00 (Ciento Veintiun Millones
Cuatrocientos Cuarenta Mil Seiscientos Ocho y 00/100 Dolares de los
Estados Unidos de America), inediante la presentacion de copia legalizada
del correspondiente asiento en el Libro de Registro y Transferencia de
Acciones de la empresa.
La obligacion a que se refiere el parrafo anterior debera acreditarse ante
el MINESTERIO en un plazo maximo de sesenta (60) dias calendario, contado
a partir de la fecha limite para su cumplimiento, conforme a lo
establecido en el numeral 3 de la CLAUSULA SEGUNDA.
El incumplimiento de las obligaciones establecidas en los numerales anteriores
constituye causal de resolucion del Convenio.
QUINTA. - El presente Convenio de Estabilidad Juridica tendra una vigencia de
diez (10) anos, contados a partir de la fecha de su suscripcion. En
consecuencia, no podra ser modificado unilateralmento por ninguna de las partes
durante dicho periodo, ni aunque la legislacion nacional sea modificada, asi se
trate de modificaciones mas beneficiosas o perjudiciales para alguna de las
partes que las pactadas en este Convenio.
<PAGE>
SEXTA-. METALOROYA tendra derecho a renunciar por una unica vez al regimen de
estabilidad juridica que se le otorga al amparo del presente Convenio, debiendo
formalizar dicha renuncia mediante una comunicacion por escrita dirigida al
MINISTERIO, la que se hara efectiva desde la fecha de recepcion de la
comunicacion por este ultimo.
Si METALOROYA opta por ejercer el derecho de renuncia el Convenio de
Estabilidad, que se reconoce al amparo de la presente Clausula, automaticamente
pasara a regirse por la legislacion comun.
SEPTIMA. - El presente Convenio de Estabilidad Juridica, podra ser modificado de
comun acuerdo por las partes, salvo en lo referente a su plaza de vigencia
establecido en la CLAUSULA QUINTA. Tampoco podra modificarse el monto de los
aportes por debajo de los limites establecidos en el inciso a) del articulo 16o
e inciso a) del articulo 17o del REGLAMENTO.
Para tal efecto, METALOROYA presentara una solicitud ante el MINISTERIO, que se
tramitara conforme al mismo procedimiento utlizado para la suscripcion del
presente Convenio.
OCTAVA. - Siendo la intencion de las partes que los problemas que se presenten
en relacion con el cumplimiento del presente Convenio se resuelvan de la manera
mas expeditiva posible se conviene desde ahora que cualquier litigio,
controversia o reclamacion entre ellos, relativa a la interpretacion, ejecucion
o validez del presente Convenio, sera resuelta mediante arbitraje de derecho.
El arbitraje se llevara a cabo en la ciudad de Lima, mediante la constitucion de
un Tribunal Arbitral conformado por tres miembros, de los cuales cada una de las
partes numbrara a uno y los dos arbitros asi designados nombraran al tercer
arbitro. Los arbitros quedan expresamente facultados para determinar la
controversia materia del arbitraje.
Si una parte nombra arbitro dentro do los diez (10) dias de recibido el
requerimiento de la parte o partes que soliciten el arbitraje o si dentro de un
plazo igualmento de diez (10) dias, contado a partir del nombramiento del ultimo
arbitro por las partes, los dos arbitros no consiguen ponerse de acuerdo sobre
el tercer arbitro, la designacion del arbitro faltante sera hecha a peticion de
cualquiera de las partes por la Camara de Comercio de Lima.
El plazo de duracion del proceso arbitral no debera exceder de sesenta (60) dias
habiles, contado desde la fecha de designacion del ultimo arbitro y se regira
por lo dispuesto en la Ley General de Arbitraje, aprobada por la Ley No 26572
y/o las normas que la sustituyan o modifiquen.
Los gastos que se generen por la aplicacion de lo pactado en la presente
clausula seran sufragados por las partes contratantes en igual medida.
<PAGE>
NOVENA.- Constituyen causales de resolucion de pleno derecho del presente
Convenio de Estabilidad Juridica, sin mediar requisito de comunicacion previa,
las siguientes:
1) El incumplimiento por parte de METALOROYA de las obligaciones establecidas
en la CLAUSULA SEGUNDA y CLAUSULA CUARTA.
2) La cesion de posicion contractual del presente Convenio que realice
METALOROYA, salvo que esta se efectue al amparo de normas vigentes en ese
momento que asi lo permitan, y previa autorizacion del MINISTERIO.
3) La resolucion de EL CONTRATO.
En caso de que METALOROYA incurra en una de las mencionadas causales de
resolucion del presente Convenio, si por efecto de la estabilidad juridica
concedida al amparo del mismo hubiera gozado de una carga fiscal menor a la que
le hubiera correspondido de no estar amparada por dicho Convenio, estara
obligada a reembolsar al ESTADO el monto actualizado de los tributos que le
hubieran afectado de no haber suscrito el Convenio, mas los recargos
correspondientes a que se refiere el Codigo Tributario.
Queda entendido que en el caso a que se refiere el parrafo anterior, si
METALOROYA hubiera soportado una carga fiscal mayor por efectos del presente
Convenio, no existira obligacion de reembolso de suma alguna por parte del
Estado.
Estando Las partes de acuerdo en todos los terminos del presente Convenio, lo
suscriben en dos copias de igual contenido, en Lima, a los veintiun dias del mes
de octubre de 1997.
/s/ Juan Mendoza Marsano /s/ Jorge Merino Tafur
- ------------------------- ----------------------------
Ing. JUAN MENDOZA JORGE MERINO TAFUR
[ILLEGIBLE] GERENTE GENERAL
<PAGE>
LEGAL STABILITY AGREEMENT BETWEEN THE STATE AND EMPRESA
METALURGICA LA OROYA S.A. - METALOROYA S.A.
Witnesseth hereby the Legal Stability Agreement entered into by and between the
STATE OF PERU, duly represented by the Vice Minister of Mines of the Ministry of
Energy and Mines, Engineer Juan Mendoza Marsano, authorized for such purposes by
Supreme Decree No. 046-97-PCM, domiciled for purposes hereof at Av. Las Artes
No. 260 - San Borja - Lima, hereinafter referred to as the STATE, as party of
the first part; and Empresa Metalurgica La Oroya S.A., METALOROYA S.A., a
company incorporated in the city of Lima, Peru, with Single Taxpayer
Registration No. 33526610, registered on Entry l of Card No. 040367 of the Book
of Contractual Companies and Other Corporate Bodies of the Public Mining
Registry, Regional Registry Office of Lima, which copy is attached as an Annex
hereto, duly represented by Mr. Jorge Merino Tafur, identified with Voter's
Registration Card, No. 07341351, as per power of attorney registered in Entry 1
of card No. 040367, of the Book of Contractual Companies and Other Corporate
Bodies of the Public Mining Registry, Regional Registry Office of Lima,
hereinafter referred to as METALOROYA, as party of the second part; under the
terms and conditions set forth in the following clauses:
FIRST.- METALOROYA has presented to the Ministry of Energy and Mines,
hereinafter referred to as the MINISTRY, a request for the signing of a Legal
Stability Agreement as authorized by the provisions set forth in Legislative
Decree No. 662, in Title II, and in the First Chapter of Title V of Legislative
Decree No. 757, and in the Regulations of said Decrees approved by Supreme
Decree No. 162-92-EF, dated October 12, 1992, hereinafter referred to as the
REGULATIONS, and pursuant to the provisions set forth in CONITE Resolution No.
001-96-EF/35, in Supreme Decree No. 046-97-PCM, and in that which is agreed upon
in the Contract for the Transfer of Shares, Capital Increase and Subscription of
Shares, to be entered into by and DOE RUN PERU S.R.Ltda., hereinafter DOE RUN,
Empresa Minera del Centro del Peru S.A. and METALOROYA, hereinafter THE
CONTRACT; as a result of the International Public Bidding PRI-16-97.
SECOND.- By virtue of the present Agreement and pursuant to the provisions set
forth in the FIRST CLAUSE, METALOROYA binds itself to the following:
To issue shares representing its capital in favor of DOE RUN for
S/. 167,170,160.00 (ONE HUNDRED SIXTY-SEVEN MILLION, ONE HUNDRED
SEVENTY THOUSAND, ONE HUNDRED SIXTY AND 00/100 NUEVOS SOLES)
against the receipt of the contributions in the amount of US$
126,481,383.24 (ONE HUNDRED TWENTY-SIX MILLION, FOUR HUNDRED
EIGHTY-ONE THOUSAND, THREE HUNDRED EIGHTY-THREE AND 24/100 US
DOLLARS), that DOE RUN must make no later than October 23, 1997.
To capitalize, in a term of two (02) years as of the date of the
signing of this Agreement, the amount resulting from the
difference between the value in Nuevos Soles of US$
126,481,383.24 (ONE HUNDRED TWENTY-SIX MILLION, FOUR
<PAGE>
HUNDRED EIGHTY-ONE THOUSAND, THREE HUNDRED EIGHTY-THREE AND
24/100 US DOLLARS), and S/. 167,170,160.00 (ONE HUNDRED
SIXTY-SEVEN MILLION, ONE HUNDRED SEVENTY THOUSAND, ONE HUNDRED
SIXTY AND 00/100 NUEVOS SOLES), an amount that will be consigned
initially in the additional capital account as a premium for the
shares referred to in the preceding numeral.
To register 160,507,779 shares equivalent to 48.9674517% of its
stock capital, in favor of DOE RUN, which shall be acquired by
the latter for a total amount of US$ 121,440,608.00 (ONE HUNDRED
TWENTY-ONE MILLION, FOUR HUNDRED FORTY THOUSAND, SIX HUNDRED AND
EIGHT AND 00/100 US DOLLARS), no later than October 23, 1997.
To assure that the contributions referred to in the preceding
numerals, are channeled through the National Financial System as
per the certification that shall be issued by the bank
participating in the operation.
THIRD.- By virtue of the present Agreement and while it is in force, the STATE
is bound to guarantee the legal stability for METALOROYA, under the following
terms:
The stability of the regimes for the hiring of the workers of
METALOROYA while this Agreement is in force, under the provisions
set forth in clause a) of Article 12 of Legislative Decree No.
662, under the different modalities included in the Single
Revised Text of Legislative Decree No. 728, Law of Labor
Productivity and Competitiveness, approved by Supreme Decree No.
003-97-TR in force as of the date of the signing of this
Agreement.
The stability of the regimes for the promotion of exports that
METALOROYA may use pursuant to the provisions set forth in clause
b) of Article 12 of Legislative Decree No. 662 contained in
Chapter IX of Title I of Legislative Decree No. 821 and amending
standards thereof; in Chapter VI of Title V of Legislative Decree
No. 809; and in those provisions that are applicable to this
agreement on the date of its signing.
FOURTH.- In addition, METALOROYA assumes the following obligations pursuant to
the provisions set forth in the SECOND CLAUSE:
To accredit that it has received from DOE RUN the capital
monetary contribution in the amount of US$ 126,481,383.24 (ONE
HUNDRED TWENTY-SIX MILLION, FOUR HUNDRED EIGHTY-ONE THOUSAND,
THREE HUNDRED EIGHTY-THREE AND 24/100 US DOLLARS), by presenting:
A copy of the certification issued by the bank participating in
the operation for the channeling of the US$ 126,481,383.24 (ONE
HUNDRED TWENTY-SIX
2
<PAGE>
MILLION, FOUR HUNDRED EIGHTY-ONE THOUSAND, THREE HUNDRED
EIGHTY-THREE AND 24/100 US DOLLARS).
A copy of the Testimony of the Public Deed of the Capital
Increase and Amendment of the Articles of Incorporation of the
company, with proof of the registration in the corresponding
registry, for the capitalization of S/. 167,170,160.00 (ONE
HUNDRED SIXTY-SEVEN MILLION, ONE HUNDRED SEVENTY THOUSAND, ONE
HUNDRED SIXTY AND 00/100 NUEVOS SOLES).
A copy of the Testimony of the Public Deed of the Capital
Increase and Amendment of the Articles of Incorporation of the
company, with proof of the registration in the corresponding
registry, for the capitalization of the issue premium equivalent
to the amount resulting from the difference between the
conversion value to Nuevos Soles of US$ 126,481,383.24 (ONE
HUNDRED TWENTY-SIX MILLION, FOUR HUNDRED EIGHTY-ONE THOUSAND,
THREE HUNDRED EIGHTY-THREE AND 24/100 US DOLLARS) and S/.
167,170,160.00 (ONE HUNDRED SIXTY-SEVEN MILLION, ONE HUNDRED
SEVENTY THOUSAND, ONE HUNDRED SIXTY AND 00/100 NUEVOS SOLES).
The obligations referred to in items a) and b) hereof, must be
accredited before the MINISTRY within a maximum term of sixty
(60) calendar days, counted as of October 23, 1997.
The obligation referred to in item c) above, must be accredited
before the MINISTRY within a maximum term of thirty (30) calendar
days, counted as of the deadline for its compliance pursuant to
the provisions set forth in numeral 2 of the SECOND CLAUSE
hereof.
To accredit having registered in favor of DOE RUN, 48.9674517% of
the shares representing its stock capital, as a result of the
transfer made by Empresa Minera del Centro del Peru S.A. against
the receipt of payment of US$ 121,440,608.00 (ONE HUNDRED
TWENTY-ONE MILLION, FOUR HUNDRED FORTY THOUSAND, SIX HUNDRED AND
EIGHT AND 00/100 US DOLLARS), by means of a legalized copy of the
entry in the Book named Registry and Transfer of Shares of the
company.
The obligation referred to in the preceding paragraph must be
accredited before THE MINISTRY within sixty (60) calendar days,
counted as of the deadline for its compliance, pursuant to what
is provided in numeral 3 of the SECOND CLAUSE hereof.
Non-compliance with the obligations provided in the preceding numerals shall
constitute a cause for termination of this Agreement.
FIFTH.- The present Legal Stability Agreement shall have a term of force of ten
(10) years as of the date of its signing. Consequently, it may not be amended
unilaterally by either of the parties during said period, even in the event of
modification of national legislation, whether
3
<PAGE>
said amendments are more beneficial or prejudicial to either of the parties than
what is convened in this Agreement.
SIXTH.- METALOROYA shall have the right to waive, one time only, the legal
stability regime granted to it by the authority of this Agreement, and to this
end it must formalize said waiver by means of a written communication to THE
MINISTRY; said waiver shall become effective as of the date of reception of the
communication by THE MINISTRY.
If METALOROYA opts to exercise the right of waiver of the Stability Agreement
granted to it pursuant to this Clause, it shall automatically become subject to
ordinary legislation.
SEVENTH.- This Legal Stability Agreement may be amended by common agreement
between the parties, except in what regards its term of effect as established in
the FIFTH CLAUSE. The amounts of the contributions may not be modified either
under the limit established in clause a) of Article 16 and clause a) of Article
17 of the REGULATIONS.
To this end, METALOROYA shall present a request to THE MINISTRY, which shall be
processed in line with the procedure followed for the signing of this Agreement.
EIGHTH.- It being the intention of the parties that problems arising in relation
to the fulfillment of this Agreement be resolved in the most expeditious manner
possible, it is hereby agreed from this moment that any litigation, controversy,
claim or complaint between the parties, related to the interpretation, execution
or validity of this Agreement, shall be resolved through legal arbitration.
The arbitration will be carried out in the city of Lima, through the
establishment of an Arbitration Court comprised of three members of whom each of
the parties will name one and the two so designated members will in turn name
the third. The arbitrators are expressly empowered to resolve the controversy
subject to the arbitration.
If one party fails to name an arbitrator within ten (10) days of receipt of the
request of the party or parties for an arbitration, or if within an equal period
of ten (10) days, counted as of the naming of the last arbitrator by the
parties, the two arbitrators do not reach an agreement regarding the third
arbitrator, the designation of the missing arbitrator shall be carried out upon
the request of either party, by the Chamber of Commerce of Lima.
The duration of the arbitration process shall not exceed sixty (60) working
days, counted as of the date of the designation of the last arbitrator, and
shall be ruled by what is provided in the General Arbitration Law, approved by
Law No. 26572 and/or the standards that substitute or amend it.
The expenses generated by the exercises of what is agreed to in the present
Clause shall be borne in equal parts by the contracting parties.
4
<PAGE>
NINTH.- The following constitute causes for termination as a matter of law of
this Legal Stability Agreement, without needing prior notice:
Non-compliance on the part of METALOROYA with the obligations established in the
SECOND and FOURTH CLAUSES.
Assignment of the contractual position of this Agreement that may be made by
METALOROYA, unless such assignment is carried out in keeping with legal
provisions in force at that time authorizing it, and subject to authorization
from the MINISTRY.
The termination of THE CONTRACT.
In the event that METALOROYA incurs in one of the previously mentioned causes of
termination of the present Agreement, and if as a result of the legal stability
conferred by the authority of the same agreement METALOROYA enjoyed a lighter
tax burden that would have corresponded to it if it had not been under the
authority of said Agreement, it shall be obliged to reimburse the STATE for the
actual amount of the taxes that would have affected it if such Agreement had not
been signed, plus the corresponding surcharges referred to in the Tax Code.
It is understood that in the case referred to in the foregoing paragraph, if
METALOROYA had borne a greater tax burden as a result of this Agreement, the
STATE will have no obligation to refund any sum whatsoever.
Whereas the parties agree to all of the terms hereof, they sign it in two
copies of equal content, in Lima, on October 21, 1997.
for METALOROYA for the STATE
Jorge Merino Tafur Eng. Juan Mendoza M.
Vice Minister of Mines
5
<PAGE>
Exhibit 10.8.2
[LETTERHEAD OF SECTOR ECONOMIA Y FINANZAS]
CONVENIO DE ESTABILIDAD JURIDICA CON DOE RUN MINING S.R. Ltda.
Conste por el presente documento el Convenio de Estabilidad Juridica que
celebran, de una parte, el ESTADO PERUANO, debidamente representado por el Sr.
Carlos Herrera Perret, Secretario General de la Comision Nacional de Inversiones
y Tecnologias Extranjeras - CONITE, autorizado para tal efecto por Resolucion
del Directorio de CONITE No 001-93-EF/35 de fecha 01 de febrero de 1993, con
domicilio en Jr. Antonio Miro Quesada No. 320 - 4to. piso, Lima, a quien en
adelante se le denominara el ESTADO; y, de la otra parte, DOE RUN MINING
S.R.Ltda., una compania constituida en la ciudad de Lima - Peru, inscrita en la
Ficha No 143928 del Registro de Personas Juridicas de la Oficina Registral de
Lima y Callao, con domicilio en Av. Victor Andres Belaunde No. 395, San Isidro,
Lima, Peru, debidamente representada por su Apoderado senor Julio Guadalupe
Bascones, de nacionalidad peruana, identificado con Libreta Electoral No
09388911, segun poder que se encuentra en Anexo, a quien en adelante se le
denominara DOE RUN MINING; en los terminos y condiciones que constan en las
siguientes clausulas:
PRIMERA. - DOE RUN MINING ha presentado ante la Comision Nacional de Inversiones
y Tecnologias Extranjeras, en adelante CONITE, una solicitud para la suscripcion
de un Convenio de Estabilidad Juridica al amparo de lo dispuesto en el Decreto
Legislativo No 662, en el Titulo II y en el Capitulo Primero del Titulo V del
Decreto Legislativo No 757, y en el Reglamento de los mismos aprobado por el
Decreto Supremo No 162-92-EF del 12 de octubre de 1992, el que en adelante se
denominara el REGLAMENTO.
SEGUNDA.- DOE RUN MINING, en virtud del presente Convenio, se compromete a
asignar participaciones sociales en favor de DOE RUN CAYMAN LTD. de Islas
Caiman, a quien en adelante se denominara DOE RUN, cumpliendo asi con la
modalidad de inversion prescrita en el inciso a) del articulo 17 del REGLAMENTO.
En consecuencia, se obliga a lo siguiente:
1. Asignar participaciones sociales representativas de su capital en favor de
DOE RUN, por un monto de US$ 2 000 000 (Dos Millones y 00/100 Dolares de
Estados Unidos de America), contra la recepcion de los aportes que DOE RUN
debera efectuar en un plazo que no excedera del 23 de octubre de 1997.
2. Asegurar que los aportes referidos en el numeral 1, provenientes del
exterior sean canalizados a traves del Sistema Financiero Nacional,
conforme debera constar en la certificacion que emita el banco
interviniente en la operacion.
3. Registrar los aportes provenientes del exterior a que se refiere el
numeral 1, valorizados en moneda de libre convertibilidad, en CONITE.
4. Destinar los aportes a que se refiere el numeral 1, a la ampliacion de la
capacidad productiva.
<PAGE>
TERCERA. - El ESTADO, en virtud del presente Convenio y mientras este se
encuentre vigente, se obliga a garantizar la estabilidad juridica para DOE RUN
MINING en los siguientes terminos:
1. Estabilidad del regimen tributario referido al Impuesto a la Renta,
conforme a lo prescrito en el articulo 40 del Decreto Legislativo No 757,
que implica que el Impuesto a la Renta que le corresponda abonar a DOE RUN
MINING no sera modificado mientras se encuentre en vigencia el presente
Convenio de Estabilidad Juridica, aplicandose en los mismos terminos y con
las mismas alicuotas, deducciones, escala para el calculo de la renta
imponible y demas caracteristicas conforme a lo dispuesto en la Ley del
Impuesto a la Renta, aprobada por el Decreto Legislativo No 774 y normas
modificatorias vigentes a la fecha de suscripcion del presente Convenio.
El regimen de estabilidad que se garantiza a DOE RUN MINING, al amparo del
presente Convenio, implica que, en caso que el Impuesto a la Renta
referido en el parrafo anterior se modificara durante la vigencia del
Convenio, dichas modificaciones no afectaran a DOE RUN MINING, aunque se
trate del aumento o disminucion de las alicuotas, de la ampliacion o
reduccion de la base imponible, o de cualquier otra causa de efectos
equivalentes.
2. Estabilidad de los regimenes de contratacion de los trabajadores de DOE
RUN MINING mientras se encuentre vigente el presente Convenio, al amparo
de lo dispuesto en el inciso a) del articulo 12 del Decreto Legislativo No
662, en las distintas modalidades contempladas en el Texto Unico Ordenado
del Decreto Legislativo No 728, Ley de Productividad y Competitividad
Laboral, aprobado mediante Decreto Supremo No 003-97-TR, vigente a la
fecha de celebracion del presente Convenio.
3. Estabilidad de los regimenes de promocion de exportaciones, que utilice
DOE RUN MINING, al amparo de lo dispuesto en el inciso b) del articulo 12
de Decreto Legislativo No 662, que se encuentran contenidos en el Capitulo
IX del Titulo I del Decreto Legislativo No 821 y normas modificatorias; en
el Capitulo VI del Titulo V del Decreto Legislativo No 809; y en aquellas
disposiciones que a la fecha de celebracion del presente convenio se
vienen aplicando.
CUARTA - DOE RUN MINING garantiza que la nueva inversion referida en la CLAUSULA
SEGUNDA, supera en la fecha de suscripcion del presente Convenio el 50% de su
Capital y Reservas.
Para tal efecto, DOE RUN MINING debera presentar ante CONITE, en un plazo de
sesenta (60) dias, contado a partir de la fecha de suscripcion del presente
convenio, un informe que con caracter de Declaracion Jurada y sujeto a
fiscalizacion posterior, emita una sociedad de auditoria, debidamente registrada
en la entidad competente, sobre el movimiento de las cuentas de capital y
reservas desde el 24 de setiembre de 1997 hasta la fecha de suscripcion del
presente Convenio.
<PAGE>
[LETTERHEAD OF SECTOR ECONOMIA Y FINANZAS]
Para estos efectos, se entiende como capital y reservas, los correspondientes
saldos contables ajustados por inflacion, determinados a la fecha de celebracion
del presente Convenio.
DOE RUN MINING asume adicionalmente, de conformidad con lo pactado en la
CLAUSULA SEGUNDA, las siguientes obligaciones:
1) Acreditar que ha cumplido con recibir de DOE RUN, el aporte dinerario de
capital proveniente del exterior por un monto de US$ 2 000 000 (Dos
Millones y 00/100 Dolares de Estados Unidos de America), mediante la
presentacion de copia del Testimonio de la Escritura Publica de Aumento de
Capital y Modificacion de Estatutos de la empresa donde conste la
inscripcion en el registro correspondiente asi como la certificacion que
emita el banco interviniente en la operacion.
2) Acreditar que la nueva inversion ha sido efectivamente destinada a la
ampliacion de su capacidad productiva, mediante la presentacion del
correspondiente Informe que emita una sociedad de auditoria debidamente
registrada en la entidad competente, el cual quedara sujeto a
fiscalizacion posterior.
Las obligaciones a que se refieren los numerales anteriores deberan acreditarse
ante CONITE en un plazo maximo de treinta (30) dias calendario, contado a partir
de la fecha limite para su cumplimiento, conforme a lo establecido en la
CLAUSULA SEGUNDA. El incumplimiento de las mismas constituye causal de
resolucion del Convenio.
QUINTA. - El presente Convenio de Estabilidad Juridica tendra una vigencia de
diez (10) anos contados a partir de la fecha de su suscripcion. En consecuencia,
no podra ser modificado unilateralmente por ninguna de las partes durante dicho
periodo, ni aunque la legislacion nacional sea modificada, asi se trate de
modificaciones mas beneficiosas o perjudiciales para alguna de las partes que
las pactadas en este Convenio.
SEXTA-DOE RUN MINING tendra derecho a renunciar por unica vez al regimen de
estabilidad juridica que se le otorga al amparo del presente Convenio, debiendo
formalizar dicha renuncia mediante una comunicacion por escrito dirigida a
CONITE, la que se hara efectiva desde la fecha de recepcion de la comunicacion
por este ultimo.
Si DOE RUN MINING opta por ejercer el derecho de renuncia al Convenio de
Estabilidad, que se le reconoce al amparo de la presente Clausula,
automaticamente pasara a regirse por la legislacion comun.
SEPTIMA.- El presente Convenio de Estabilidad Juridica podra ser de comun
acuerdo por las partes, salvo en lo referente a su plazo vigencia establecido en
la CLAUSULA QUINTA. Tampoco podra modificarse el monto de los aportes por debajo
de los limites establecidos en el inciso a) del articulo 16 e inciso a) del
articulo 17 del REGLAMENTO.
<PAGE>
Para tal efecto, DOE RUN MINING presentara una solicitud a CONITE, que se
tramitara conforme al mismo procedimiento utilizado para la suscripcion del
presente Convenio.
OCTAVA.- Siendo la intencion de las partes que los problemas que se presenten en
relacion con el cumplimiento del presente Convenio se resuelvan de la manera mas
expeditiva posible, se conviene desde ahora que cualquier litigio, controversia
o reclamacion entre ellos, relativa a la interpretacion, ejecucion o validez del
presente Convenio, sera resuelta mediante arbitraje de derecho.
El arbitraje se llevara a cabo en la ciudad de Lima, mediante la constitucion de
un Tribunal Arbitral conformado por tres miembros, de los cuales cada una de las
partes nombrara a uno y los dos arbitros asi designados nombraran al tercer
arbitro. Los arbitros quedan expresamente facultados para determinar la
controversia materia del arbitraje.
Si una parte no nombra arbitro dentro de los diez (10) dias de recibido el
requerimiento de la parte o partes que soliciten el arbitraje o si dentro de un
plazo igualmente de diez (10) dias, contado a partir del nombramiento del ultimo
arbitro por las partes, los dos arbitros no consiguen ponerse de acuerdo sobre
el tercer arbitro, la designacion del arbitro faltante sera hecha, a peticion de
cualquiera de las partes por la Camara de Comercio de Lima.
El plazo de duracion del proceso arbitral no debera exceder de sesenta (60) dias
habiles, contado desde la fecha de designacion del ultimo arbitro y se regira
por lo dispuesto en la Ley General de Arbitraje, aprobada por la Ley No. 26572
y/o las normas que la sustituyan o modifiquen.
Los gastos que se generen por la aplicacion de lo pactado en la presente
Clausula seran sufragados por las partes contratantes en igual medida.
NOVENA. - Constituyen causales de resolucion de pleno derecho del presente
Convenio de Estabilidad Juridica, sin mediar requisito de comunicacion previa,
las siguientes:
1. El incumplimiento por parte de DOE RUN MINING de las obligaciones
establecidas en la CLAUSULA SEGUNDA y CLAUSULA CUARTA.
2. La cesion de posicion contractual del presente Convenio que realice DOE
RUN MINING.
En caso de que DOE RUN MINING incurra en una de las mencionadas causales de
resolucion del presente Convenio, si por efecto de la estabilidad juridica
concedida al amparo del mismo hubiera gozado de una carga fiscal menor a la que
le hubiera correspondido de no estar amparada por dicho Convenio, estara
obligada a reembolsar al ESTADO el monto actualizado de los tributos que le
hubieran afectado de no haber suscrito el Convenio, mas los recargos
correspondientes a que se refiere el Codigo Tributario.
Queda entendido que en el caso a que se refiere el parrafo anterior, si DOE RUN
MINING hubiera soportado una carga fiscal mayor por efectos del
<PAGE>
[LETTERHEAD OF SECTOR ECONOMIA Y FINANZAS]
presente Convenio no existira obligacion de reembolso de suma alguna por parte
del ESTADO.
Estando las partes de acuerdo en todos los terminos del presente Convenio, lo
suscriben en dos copias de igual contenido, en Lima, a los veintiun dias del mes
de octubre de 1997.
POR DOE RUN MINING S.R.Ltda.
/s/ Julio Guadalupe Bascones
-----------------------------
Julio Guadalupe Bascones
POR EL ESTADO:
[SEAL] /s/ [ILLEGIBLE] [SEAL] /s/ Carlos Herrera Perret
[ILLEGIBLE] -------------------------
ABOGADA CARLOS HERRERA PERRET
Reg. [ILLEGIBLE] 20682 Secretario General
CONITE
<PAGE>
LEGAL STABILITY AGREEMENT WITH DOE RUN MINING S. R. LTDA.
Witnesseth hereby the Legal Stability Agreement entered into by and between the
STATE OF PERU, duly represented by Mr. Carlos Herrera Perret, Secretary General
of the National Commission for Foreign Investments and Technologies-CONITE,
authorized for such purposes by CONITE Board of Directors Resolution No.
001-93-EF/35, dated February 1, 1993, domiciled for purposes hereof at Jr.
Antonio Miro Quesada No. 320, 4th Floor, Lima, hereinafter referred to as the
STATE, as party of the first part; and DOE RUN MINING Supreme Resolution No.
LTDA., registered on card No. 14398 of the Registry of Companies of the Registry
of Lima and Callao, domiciled for purposes hereof at Av. Victor Andres Belaunde
No. 395 - San Isidro, duly represented by Julio Guadalupe Bascones, identified
with Voter's Registration Card, No. 09388911, as per power of attorney included
in an Annex, hereinafter referred to as DOE RUN MINING, as party of the second
part; under the terms and conditions set forth in the following clauses:
FIRST.- DOE RUN MINING has presented to the National Commission for Foreign
Investments and Technologies-CONITE hereinafter referred to as CONITE, a request
for the signing of a Legal Stability Agreement as authorized by the provisions
set forth in Legislative Decree No. 662, in Title II, and in the First Chapter
of Title V of Legislative Decree No. 757, and in the Regulations of said Decrees
approved by Supreme Decree No. 162-92-EF, dated October 12, 1992, hereinafter
referred to as the REGULATIONS.
SECOND.- By virtue of the present Agreement, DOE RUN MINING agrees to issue
participations in favor of DOE RUN CAYMAN of the Cayman Islands, hereinafter DOE
RUN, thus complying with the investment modality set forth in Clause a) of
Article 17 of the REGULATIONS. Therefore, DOE RUN MINING is obligated as
follows:
To issue participations representing its capital in favor of DOE RUN for US$
2,000,000 (TWO MILLION and 00/100 US DOLLARS) against the receipt of the
contributions that DOE RUN must make no later than October 23, 1997.
To assure that the contributions referred to in numeral 1 coming from abroad,
are channeled through the National Financial System as per the certification
that shall be issued by the bank participating in the operation.
To register the contributions coming from abroad, referred to in numeral 1,
valued in freely convertible currency, with CONITE.
To destine the contributions referred to in numeral 1, to the expansion of the
productive capacity.
THIRD.- By virtue of the present agreement and while it is in force, the STATE
is bound to guarantee the legal stability for DOE RUN MINING, under the
following terms:
<PAGE>
The stability of the tax regime regarding the Income Tax, in keeping what is
provided in Article 40 of Legislative Decree No. 757, signifying that the Income
Tax that must be paid by DOE RUN MINING will not be modified while the present
Legal Stability Agreement is in force, and it shall be applied under the same
terms and with the same aliquots, deductions, scale for the calculation of the
taxable income, and any other characteristics pursuant to the provisions set
forth in the Income Tax Law approved by Legislative Decree No. 774 and amending
standards thereof in force as of the date of signing of this agreement.
The stability regime guaranteed for DOE RUN MINING under this Agreement,
signifies that in the case that the Income Tax referred to in the foregoing
paragraph is amended during the term of effect of the Agreement, said amendments
will not affect DOE RUN MINING even though they may be an increase or reduction
of the aliquots, an extension or reduction of the taxable income, or any other
cause of equivalent effects.
The stability of the regimes for the hiring of the workers of DOE RUN MINING
while this Agreement is in force, under the provisions set forth in clause a) of
Article 12 of Legislative Decree No. 662, under the different modalities
included in the Single Revised Text of Legislative Decree No. 728, Law of Labor
Productivity and Competitiveness, approved by Supreme Decree No. 003-97-TR in
force as of the date of the signing of this Agreement.
The stability of the regimes for the promotion of exports that DOE RUN MINING
may use pursuant to the provisions set forth in clause b) of Article 12 of
Legislative Decree No. 662 contained in Chapter IX of Title I of Legislative
Decree No. 821 and amending standards thereof; in Chapter VI of Title V of
Legislative Decree No. 809; and in those provisions that are applicable to this
agreement on the date of its signing.
FOURTH.- DOE RUN MINING guarantees that the new investment referred to in the
SECOND CLAUSE, as at the date of the signing of this Agreement, exceeds the 50%
of its capital and reserves.
To this end, DOE RUN MINING will file with CONITE within a term of sixty (60)
days, counted as of the date of signing of this Agreement, a report that will
have the nature of a sworn statement and will be subject to a later audit by an
auditing company duly registered in the Competent Entity, on the movement of the
capital and reserves accounts from September 24, 1997 until the date of the
signing of this Agreement.
To this end, the corresponding accounting balances, adjusted for inflation,
determined at the date of signing of this Agreement, are hereby understood as
capital and reserves.
DOE RUN MINING additionally assumes, pursuant to the provisions set forth in the
SECOND CLAUSE, the following obligations:
To accredit that it has received from DOE RUN the capital monetary
contribution from abroad in the amount of US$2,000,000 (TWO MILLION AND
00/100 US DOLLARS), by presenting a copy of the Testimony of the Public
Deed of the Capital Increase and
2
<PAGE>
Amendment of the Articles of Incorporation of the company, with proof of
the registration in the corresponding registry, as well as a
certification issued by the bank that participates in the operation.
To accredit that the new investment has been destined to the expansion of
its productive capacity by presenting a report issued by an auditing
company, duly registered in the Competent Entity, which shall be subject
to a later audit.
The obligations referred to in the foregoing numerals, must be accredited before
CONITE within a maximum term of thirty (30) calendar days, counted as of the
deadline for its compliance, pursuant to the provisions set forth in the SECOND
CLAUSE. Non-compliance with the aforesaid constitutes cause for the termination
of the Agreement.
FIFTH.- The present Legal Stability Agreement shall have a term of force of ten
(10) years as of the date of its signing. Consequently, it may not be amended
unilaterally by either of the parties during said period, even in the event of
modification of national legislation, whether said amendments are more
beneficial or prejudicial to either of the parties than what is convened in this
Agreement.
SIXTH.- DOE RUN MINING shall have the right to waive, one time only, the legal
stability regime granted to it by the authority of this Agreement, and to this
end it must formalize said waiver by means of a written communication to CONITE;
said waiver shall become effective as of the date of reception of the
communication by CONITE.
If DOE RUN MINING opts to exercise the right of waiver of the Stability
Agreement granted to it pursuant to this Clause, it shall automatically become
subject to ordinary legislation.
SEVENTH.- This Legal Stability Agreement may be amended by common agreement
between the parties, except in what regards its term of effect as established in
the FIFTH CLAUSE. The amounts of the contributions may not be modified either
under the limit established in clause a) of Article 16 and clause a) of Article
17 of the REGULATIONS.
To this end, DOE RUN MINING shall present a request to CONITE, which shall be
processed in line with the procedure followed for the signing of this Agreement.
EIGHTH.- It being the intention of the parties that problems arising in relation
to the fulfillment of this Agreement be resolved in the most expeditious manner
possible, it is hereby agreed from this moment that any litigation, controversy,
claim or complaint between the parties, related to the interpretation, execution
or validity of this Agreement, shall be resolved through legal arbitration.
The arbitration will be carried out in the city of Lima, through the
establishment of an Arbitration Court comprised of three members of whom each of
the parties will name one and the two so designated members will in turn name
the third. The arbitrators are expressly empowered to resolve the controversy
subject to the arbitration.
3
<PAGE>
If one party fails to name an arbitrator within ten (10) days of receipt of the
request of the party or parties for an arbitration, or if within an equal period
of ten (10) days, counted as of the naming of the last arbitrator by the
parties, the two arbitrators do not reach an agreement regarding the third
arbitrator, the designation of the missing arbitrator shall be carried out upon
the request of either party, by the Chamber of Commerce of Lima.
The duration of the arbitration process shall not exceed sixty (60) working
days, counted as of the date of the designation of the last arbitrator, and
shall be ruled by what is provided in the General Arbitration Law, approved by
Law No. 26572 and/or the standards that substitute or amend it.
The expenses generated by the exercises of what is agreed to in the present
Clause shall be borne in equal parts by the contracting parties.
NINTH.- The following constitute causes for termination as a matter of law of
this Legal Stability Agreement, without needing prior notice:
Non-compliance on the part of DOE RUN MINING with the obligations established in
the SECOND, and FOURTH CLAUSES.
Assignment of the contractual position of this Agreement, that may be made by
DOE RUN MINING.
In the event that DOE RUN MINING incurs in one of the previously mentioned
causes of termination of the present Agreement, and if as a result of the legal
stability conferred by the authority of the same agreement DOE RUN MINING
enjoyed a lighter tax burden that would have corresponded to it if it had not
been under the authority of said Agreement, it shall be obliged to reimburse the
STATE for the actual amount of the taxes that would have affected it if such
Agreement had not been signed, plus the corresponding surcharges referred to in
the Tax Code.
It is understood that in the case referred to in the foregoing paragraph, if DOE
RUN MINING had borne a greater tax burden as a result of this Agreement, the
STATE will have no obligation to refund any sum whatsoever.
Whereas the parties agree to all of the terms hereof, they sign it in two copies
of equal content, in Lima, on October 21, 1997.
for DOE RUN MINING S. R. LTDA. for the STATE
Julio Guadalupe Bascones Carlos Herrera Perret
Secretary General of
CONITE
4
<PAGE>
Iris A. Rios Barzola
CONITE Lawyer
5
<PAGE>
<PAGE>
Exhibit 10.8.3
CONVENIO DE ESTABILIDAD JURIDICA CON DOE RUN MINING S.R.LTDA.
Conste por el presente documento el Convenio de Estabilidad Juridica que
celebran, de una parte, el ESTADO PERUANO, debidamente representado por el
Ministro de Energia y Minas, Ingeniero Alberto Pandolfi Arbulu, autorizado para
tal efecto por Resolucion Suprema No 331-96-PCM, con domicilio en Av. Las Artes
NO 260 - San Borja - Lima, a quien en adelante se le denominara "ESTADO"; y, de
la otra parte la empresa DOE RUN MINING S.R.Ltda., constituida y existente bajo
las leyes del Peru, con RUC No 37708267, inscrita en el Asiento 1-A de la Ficha
143928 del Libro de Sociedades del Registro de Personas Juridicas, con domicilio
en Av. Victor Andres Belaunde No 395 - San Isidro, representada por el senor
Julio Guadalupe Bascones, identificado con Libreta Electoral No 09388911, segun
poder inscrito en la Ficha 143928 del Libro de Sociedades del Registro de
Personas Juridicas, a quien en adelante se le denominara DOE RUN; en los
terminos y condiciones que constan en las siguientes clausulas:
PRIMERA.- DOE RUN ha presentado ante el Ministerio de Energia y Minas, en
adelante MINISTERIO, una solicitud para la suscripcion de un Convenio de
Estabilidad Juridica al amparo de lo dispuesto en el Decreto Legislativo No 662,
en el Titulo II y en el Capitulo Primero del Titulo V del Decreto Legislativo No
757, y en el Reglamento de los mismos aprobado por el Decreto Supremo No
162-92-EF del 12 de octubre de 1992, el que en adelante se denominara el
REGLAMENTO.
SEGUNDA.- DOE RUN , en virtud del presente Convenio, se acoge a la modalidad de
inversion prescrita en el inciso a) del articulo 16o del REGLAMENTO. En
consecuencia, se obliga a lo siguiente:
1. Efectuar aportes dinerarios al capital de la empresa DOE RUN PERU
S.R.Ltda, una compania constituida en la ciudad de Lima, Peru, inscrita en
el Asiento 1-A de la Ficha No 143658 del Libro de Sociedades del Registro
de Personas Juridicas de la Oficina Registral de Lima y Callao, por un
monto de US$ 247'921,991.24 (Doscientos Cuarenta y Siete Millones
Novecientos Veintiun Mil Novecientos Noventa y Uno y 24/100 Dolares de
Estados Unidos de America) en un plazo que no excedera del 23 de octubre
de 1997.
2. Canalizar el aporte a que se refiere el numeral 1, a traves del Sistema
Financiero Nacional, conforme debera constar en la certificacion que emita
el banco interviniente en la operacion.
TERCERA.- EL ESTADO, en virtud del presente Convenio y mientras este se
encuentre vigente, se obliga, en relacion con la inversion a que se refiere la
CLAUSULA SEGUNDA, a garantizar la estabilidad juridica para DOE RUN, en los
siguientes terminos
1. Estabilidad del regimen tributario referido al Impuesto a la Renta,
conforme a lo prescrito en el articulo 38o del Decreto Legislativo No 757
y en el inciso a) del articulo 10o del Decreto Legislativo No 662, vigente
al momento de la suscripcion del presente convenio, segun el cual los
dividendos y cualquier otra forma de distribucion de utilidades, no se
encuentran gravadas, de conformidad con lo prescrito en el inciso a) del
articulo 25o de la Ley del Impuesto a la Renta, aprobada por el Decreto
Legislativo No. 774 y normas modificatorias vigentes a la fecha de
suscripcion del presente Convenio.
2. Estabilidad del derecho de utilizar el tipo de cambio mas favorable
conforme a lo prescrito en el articulo 38o del Decreto Legislativo No 757
y en el inciso b) del articulo 10o del Decreto Legislativo No 662, que
implica que DOE RUN podra
<PAGE>
acceder a la moneda extranjera en el mercado cambiario al tipo de cambio
mas favorable que pueda conseguir, sin que el ESTADO pueda obligarla a
realizar sus operaciones cambiarias bajo un regimen o mecanismo que
otorgue un tratamiento menos favorable que el que se aplique a cualquier
persona natural o juridica por la realizacion de cualquier operacion
cambiaria, de acuerdo a lo siguiente:
a) cuando se trate de conversion de la moneda extranjera a nacional:
DOE RUN podra venderla a cualquier persona natural o juridica al
tipo de cambio compra mas favorable que encuentre en el mercado
cambiario al momento de efectuar la operacion cambiaria; y,
b) cuando se trate de conversion de la moneda nacional a extranjera:
DOE RUN podra comprarla a cualquier persona natural o juridica al
tipo de cambio venta mas favorable que encuentre en el mercado
cambiario al momento de efectuar la operacion cambiaria.
3. Estabilidad del derecho a la no discriminacion conforme a lo prescrito en
el articulo 38o del Decreto Legislativo No 757 y en el inciso c) del
articulo 10o del Decreto Legislativo No 662, que implica que el ESTADO en
ninguno de sus niveles, ya se trate de entidades o empresas del Gobierno
Central, Gobiernos Regionales o Locales, podra aplicar a DOE RUN un
tratamiento diferenciado atendiendo a su nacionalidad, los sectores o
tipos de actividad economica que desarrolle o la ubicacion geografica de
la empresa en que invierta, ni en las siguientes materias:
a) precios, tarifas o derechos no arancelarios, de tal modo que el
ESTADO no podra aplicar por estos conceptos a DOE RUN, en lo
relativo a la inversion a que se refiere la CLAUSULA SEGUNDA, montos
o tasas diferenciados;
b) forma de constitucion empresarial, de tal modo que el ESTADO no
podra exigir a DOE RUN que la empresa DOE RUN PERU S.R.Ltda., en la
que va a invertir, adopte una determinada modalidad empresarial;
c) su condicion de persona natural o juridica, de tal modo que el
ESTADO no podra aplicar a DOE RUN un tratamiento diferenciado por
este concepto; y,
d) ninguna otra causa de efectos equivalentes, como es el caso de la
aplicacion de tratamientos discriminatorios para DOE RUN resultantes
de cualquier combinacion de los diversos acapites del presente
numeral.
El presente numeral se aplica sin perjuicio de las limitaciones
establecidas en el articulo 30 del REGLAMENTO.
CUARTA.- DOE RUN asume adicionalmente, de conformidad con lo pactado en la
CLAUSULA SEGUNDA, la obligacion de acreditar que ha cumplido con efectuar el
aporte dinerario por un monto de US$ 247'921,991.24 (Doscientos Cuarenta y Siete
Millones Novecientos Veintiun Mil Novecientos Noventa y Uno y 24/1 00 Dolares de
Estados Unidos de America) al capital de la empresa DOE RUN PERU S.R.Ltda.,
mediante la presentacion ante el MINISTERIO de copia del Testimonio de la
Escritura Publica de Aumento de Capital y Modificacion de Estatutos de la
empresa, debidamente inscrita en el registro correspondiente, asi como la
certificacion que emita el banco interviniente en la operacion.
La obligacion a que se refiere el parrafo anterior debera acreditarse en un
plazo maximo de sesenta (60) dias calendario, contado a partir de la fecha
limite para su
<PAGE>
cumplimiento conforme a lo establecido en la CLAUSULA SEGUNDA. El incumplimiento
de la misma constituye causal de resolucion del Convenio.
QUINTA.- El presente Convenio de Estabilidad Juridica tendra una vigencia de
diez (10) anos contados a partir de la fecha de su suscripcion. En consecuencia,
no podra ser modificado unilateralmente por ninguna de las partes durante dicho
periodo, ni aunque la legislacion nacional sea modificada, asi se trate de
modificaciones mas beneficiosas o perjudiciales para alguna de las partes que
las pactadas en este Convenio.
SEXTA.- DOE RUN tendra derecho a renunciar por unica vez al regimen de
estabilidad juridica que se le otorga al amparo del presente Convenio, debiendo
formalizar dicha renuncia mediante una comunicacion por escrito dirigida al
MINISTERIO, la que se hara efectiva desde la fecha de recepcion de la
comunicacion por este ultimo.
Si DOE RUN opta por ejercer el derecho de renuncia al Convenio de Estabilidad,
que se le reconoce al amparo de la presente Clausula, automaticamente pasara a
regirse por la legislacion comun.
SEPTIMA.- DOE RUN tendra derecho a ceder su posicion contractual en el presente
Convenio. Para que sea valida dicha cesion de posicion contractual, DOE RUN
debera obtener previamente la autorizacion correspondiente del MINISTERIO, la
misma que se formalizara mediante un Addendum al presente Convenio.
Queda entendido que la cesion de posicion contractual que realice DOE RUN a otro
inversionista no extiende el plazo de duracion del Convenio a que se refiere la
CLAUSULA QUINTA.
OCTAVA.- El presente Convenio de Estabilidad Juridica podra ser modificado de
comun acuerdo por las partes, salvo en lo referente a su plazo de vigencia
establecido en la CLAUSULA QUINTA. Tampoco podra modificarse el monto de los
aportes por debajo del limite establecido en el inciso a) del articulo 160 del
REGLAMENTO.
Para tal efecto, DOE RUN presentara una solicitud al MINISTERIO, que se
tramitara conforme al mismo procedimiento utilizado para la suscripcion del
presente Convenio.
NOVENA.- Siendo la intencion de las partes que los problemas que se presenten en
relacion con el cumplimiento del presente Convenio se resuelvan de la manera mas
expeditiva posible, se conviene desde ahora que cualquier litigio, controversia
o reclamacion entre ellos, relativa a la interpretacion, ejecucion o validez del
presente Convenio, sera resuelta mediante arbitraje de derecho.
El arbitraje se llevara a cabo en la ciudad de Lima, mediante la constitucion de
un Tribunal Arbitral conformado por tres miembros, de los cuales cada una de las
partes nombrara a uno y los dos arbitros asi designados nombraran al tercer
arbitro. Los arbitros quedan expresamente facultados para determinar la
controversia materia del arbitraje.
Si una parte no nombra arbitro dentro de los diez (10) dias de recibido el
requerimiento de la parte o partes que soliciten el arbitraje o si dentro de un
plazo de diez (10) dias, contado a partir del nombramiento del ultimo arbitro
por las partes, los dos arbitros no consiguen ponerse de acuerdo sobre el tercer
igualmente arbitro, la designacion del arbitro faltante sera hecha, a peticion
de cualquiera de las partes, por la Camara de Comercio de Lima.
<PAGE>
El plazo de duracion del proceso arbitral no debera exceder de sesenta (60) dias
habiles, contado desde la fecha de designacion del ultimo arbitro y se regira
por lo dispuesto en la Ley General de Arbitraje, aprobada por la Ley No. 26572
y/o las normas que la sustituyan o modifiquen.
Los gastos que se generen por la aplicacion de lo pactado en la presente
Clausula seran sufragados por las partes contratantes en igual medida.
DECIMA.- Constituyen causales de resolucion de pleno derecho del presente
Convenio de Estabilidad Juridica, sin mediar requisito de comunicacion previa,
las siguientes:
1. El incumplimiento por parte de DOE RUN de las obligaciones establecidas en
la CLAUSULA SEGUNDA y CLAUSULA CUARTA.
2. La cesion de posicion contractual del presente Convenio que realice DOE
RUN a otro inversionista sin obtener la correspondiente autorizacion
previa del MINISTERIO, conforme a lo pactado en la CLAUSULA SEPTIMA.
En el caso que DOE RUN incurra en una de las mencionadas causales de resolucion
del presente Convenio, si por efecto de la estabilidad juridica concedida al
amparo del mismo, hubiera gozado de una carga fiscal menor a la que le hubiera
correspondido de no estar amparada por dicho Convenio, estara obligada a
reembolsar al ESTADO el monto actualizado de los tributos que le hubieran
afectado de no haber suscrito el Convenio, mas los recargos correspondientes a
que se refiere el Codigo Tributario.
Queda entendido que en el caso a que se refiere el parrafo anterior, si DOE RUN
hubiera soportado una carga fiscal mayor por efectos del presente Convenio, no
existira obligacion de reembolso de suma alguna por parte del Estado.
Estando las partes de acuerdo en todos los terminos del presente Convenio, lo
suscriben en dos copias de igual contenido, en Lima, a los veintiun dias del mes
de octubre de 1997.
/s/ ALBERTO PANDOLFI ARBULU
----------------------------
ALBERTO PANDOLFI ARBULU
MINISTRO DE ENERGIA Y MINAS
<PAGE>
LEGAL STABILITY AGREEMENT WITH DOE RUN MINING S. R. LTDA.
Witnesseth hereby the Legal Stability Agreement entered into by and between the
STATE OF PERU, duly represented by the Minister of Energy and Mines, Engineer
Alberto Pandolfi Arbulu, authorized for such purposes by Supreme Resolution No.
331-96-PCM, domiciled for purposes hereof at Av. Las Artes No. 260 - San Borja -
Lima, hereinafter referred to as the STATE, as party of the first part; and DOE
RUN MINING S. R. LTDA., a company incorporated and existing under the laws of
Peru, with Single Taxpayer's Registration (RUC) No. 37708267, registered on
Entry 1-A of Card 143938 of the Book of Corporations of the Registry of
Companies, domiciled for purposes hereof at Av. Victor Andres Belaunde No. 395 -
San Isidro, duly represented by Julio Guadalupe Bascones, identified with
Voter's Registration Card, No. 09388911, as per power of attorney registered on
Card 143928 of the Book of Corporations of the Registry of Companies,
hereinafter referred to as DOE RUN, as party of the second part; under the terms
and conditions set forth in the following clauses:
FIRST.- DOE RUN has presented to the Ministry of Energy and Mines, hereinafter
referred to as the MINISTRY, a request for the signing of a Legal Stability
Agreement as authorized by the provisions set forth in Legislative Decree No.
662, in Title II, and in the First Chapter of Title V of Legislative Decree No.
757, and in the Regulations of said Decrees approved by Supreme Decree No.
162-92-EF, dated October 12, 1992, hereinafter referred to as the REGULATIONS.
SECOND.- By virtue of the present Agreement, DOE RUN agrees to the form of
investment prescribed in Clause a) of Article 16 of the REGULATIONS. As such DOE
RUN is obligated as follows:
To execute monetary contributions to the Capital of the company DOE RUN PERU
S. R. Ltda., a company incorporated in the city of Lima, Peru, registered on
Entry l-A of Card No. 143658 of the Book of Corporations of the Registry of
Companies of Registry Office of Lima and Callao, for an amount of
US$247,921,991.24 (TWO HUNDRED FORTY SEVEN MILLION NINE HUNDRED TWENTY ONE
THOUSAND NINE HUNDRED NINETY ONE AND 24/100 US DOLLARS) in a term not to
exceed October 23, 1997.
To channel the contribution referred to in numeral 1, through the National
Financial System, as per the certification that shall be issued by the bank
participating in the operation.
THIRD.- By virtue of the present agreement and while it is in force, the STATE
is bound to guarantee the legal stability for DOE RUN, regarding the investment
referred to in the SECOND CLAUSE hereof, under the following terms:
The stability of the tax regime regarding the Income Tax, in keeping what is
provided in Article 38 of Legislative Decree No. 757 and in clause a) of
Article 10 of Legislative Decree No. 662, in force at the time of the signing
of the present agreement, according to which the dividends and any other form
of profit distribution are not subject to taxation, pursuant to the
provisions set forth in clause a) of Article 25 of the Income Tax Law,
approved by means of
<PAGE>
Legislative Decree No. 774 and amending standards in force at the time of
signing the present agreement.
The stability of the right to use the most favorable exchange rate pursuant to
the provisions set forth in Article 38 of Legislative Decree No. 757 and in
clause b) of Article 10 of Legislative Decree No. 662, signifying that DOE
RUN will have access to foreign exchange on the foreign exchange market at
the most favorable rate of exchange that it may obtain, and the State may
not obligate it carry out its exchange operations under a regime or
mechanism granting a less favorable treatment than what is applied to any
individual or corporate body to carry out any exchange operation, in
accordance with the following:
When it is a matter of conversion of foreign to national currency: DOE
RUN may sell the foreign currency to any individual or corporate
body at the most favorable "buy" exchange rate available on the
foreign exchange market, at the time of execution of the foreign
exchange operation; and,
When it is a matter of conversion of national to foreign currency: DOE
RUN may buy the national currency from any individual or corporate
body at the most favorable "sale" exchange rate available on the
foreign exchange market, at the time of execution of the foreign
exchange operation.
The stability of the right of non-discrimination in accordance with the
stipulations set forth in Article 38 of Legislative Decree No. 757 and in
clause c) of Article 10 of Legislative Decree No. 662, which provide that
the STATE, at any level, whether entities or companies of the Central
Government, Regional or Local Governments, may not apply to DOE RUN any
differential treatment due to its nationality, the sector or types of
economic activity it carries out, or the geographical location of the
company in which it invests, nor in the following matters:
Prices, tariffs or non-Customs duties, in such a way that the STATE may
not apply differential amounts or rates to DOE RUN , as regards
the investment referred to in the SECOND CLAUSE hereof;
manner of business incorporation, in such a way the STATE may not
demand of DOE RUN that the company DOE RUN PERU S.R.Ltda., in
which it is going to invest, adopt a given manner of
incorporation;
its condition as an individual or corporate body, in such a way that
the STATE may not apply a differential treatment to DOE RUN; and,
no other cause of equivalent effects, as is the case of the
application of discriminatory treatment against DOE RUN resulting
from any combination of the various paragraphs of this numeral.
This numeral is applicable without prejudice to the limitations established in
Article 3 of the REGULATIONS.
FOURTH.- In addition, and pursuant to the provisions set forth in the SECOND
CLAUSE, DOE RUN assumes the obligation to accredit that it has complied with
carrying out the monetary
2
<PAGE>
contribution of US$247,921,991.24 (TWO HUNDRED FORTY SEVEN MILLION NINE HUNDRED
TWENTY ONE THOUSAND NINE HUNDRED NINETY ONE AND 24/100 US DOLLARS) to the
capital of the company DOE RUN PERU S.R.Ltda. by presenting to the MINISTRY a
copy of the Testimony of the Public Deed of the Capital Increase and Amendment
of the Articles of Incorporation of the company, duly registered in the
corresponding registry, as well as a certification issued by the bank that
participates in the operation.
The obligation referred to in the foregoing paragraph must be accredited within
a maximum period of sixty (60) calendar days counted as of the deadline for
compliance, in line with what is established in the SECOND CLAUSE.
Non-compliance of the same constitutes a cause for the termination of the
Agreement.
FIFTH.- The present Legal Stability Agreement shall have a term of force of ten
(10) years as of the date of its signing. Consequently, it may not be amended
unilaterally by either of the parties during said period, even in the event of
modification of national legislation, whether said amendments are more
beneficial or prejudicial to either of the parties than what is convened in this
Agreement.
SIXTH.- DOE RUN shall have the right to waive, one time only, the legal
stability regime granted to it by the authority of this Agreement, and to this
end it must formalize said waiver by means of a written communication to the
Ministry; said waiver shall become effective as of the date of reception of the
communication by the Ministry.
If DOE RUN opts to exercise the right of waiver of the Stability Agreement
granted to it pursuant to this Clause, it shall automatically become subject to
ordinary legislation.
SEVENTH.- DOE RUN shall have the right to assign its contractual position in
this Agreement. For said contractual position assignment to be valid, DOE RUN
must obtain the corresponding prior authorization from the MINISTRY, which must
be formalized by an Addendum to this Agreement.
It is understood that the contractual position assignment that DOE RUN may make
to another investor, does not extend the term of the Agreement referred to in
the FIFTH CLAUSE hereof.
EIGHTH.- This Legal Stability Agreement may be amended by common agreement
between the parties, except in what regards its term of effect as established in
the FIFTH CLAUSE. The amounts of the contributions may not be modified either
under the limit established in clause a) of Article 16 of the REGULATIONS.
To this end, DOE RUN. shall present a request to the MINISTRY, which shall be
processed in line with the procedure followed for the signing of this Agreement.
NINTH.- It being the intention of the parties that problems arising in relation
to the fulfillment of this Agreement be resolved in the most expeditious manner
possible, it is hereby agreed from this moment that any litigation, controversy,
claim or complaint between the parties, related to
3
<PAGE>
the interpretation, execution or validity of this Agreement, shall be resolved
through legal arbitration.
The arbitration will be carried out in the city of Lima, through the
establishment of an Arbitration Court comprised of three members of whom each of
the parties will name one and the two so designated members will in turn name
the third. The arbitrators are expressly empowered to resolve the controversy
subject to the arbitration.
If one party fails to name an arbitrator within ten (10) days of receipt of the
request of the party or parties for an arbitration, or if within an equal period
of ten (10) days, counted as of the naming of the last arbitrator by the
parties, the two arbitrators do not reach an agreement regarding the third
arbitrator, the designation of the missing arbitrator shall be carried out upon
the request of either party, by the Chamber of Commerce of Lima.
The duration of the arbitration process shall not exceed sixty (60) working
days, counted as of the date of the designation of the last arbitrator, and
shall be ruled by what is provided in the General Arbitration Law, approved by
Law No. 26572 and/or the standards that substitute or amend it.
The expenses generated by the exercises of what is agreed to in the present
Clause shall be borne in equal parts by the contracting parties.
TENTH.- The following constitute causes for termination as a matter of law of
this Legal Stability Agreement, without needing prior notice:
Non-compliance on the part of DOE RUN with the obligations established in the
SECOND and FOURTH CLAUSES.
Assignment of the contractual position of this Agreement, that may be made by
DOE RUN to another investor without obtaining the corresponding prior
authorization from the MINISTRY, pursuant to the provisions set forth in the
SEVENTH CLAUSE.
In the event that DOE RUN incurs in one of the previously mentioned causes of
termination of the present Agreement, and if as a result of the legal stability
conferred by the authority of the same agreement DOE RUN enjoyed a lighter tax
burden that would have corresponded to it if it had not been under the authority
of said Agreement, it shall be obliged to reimburse the STATE for the actual
amount of the taxes that would have affected it if such Agreement had not been
signed, plus the corresponding surcharges referred to in the Tax Code.
It is understood that in the case referred to in the foregoing paragraph, if DOE
RUN had borne a greater tax burden as a result of this Agreement, the STATE will
have no obligation to refund any sum whatsoever.
Whereas the parties agree to all of the terms hereof, they sign it in two copies
of equal content, in Lima, on October 21, 1997.
4
<PAGE>
ALBERTO PANDOLFI ARBULU
MINISTER OF ENERGY OF MINES
JULIO GUADALUPE BASCONES
DOE RUN PERU S.R.Ltda.
5
<PAGE>
Exhibit 10.8.4
CONVENIO DE ESTABILIDAD JURIDICA CON DOE RUN PERU S.R.LTDA.
Conste por el presente documento el Convenio de Estabilidad Juridica que
celebran, de una parte, el ESTADO PERUANO, debidamente representada por el Senor
Vice Ministro de Minas del Ministerio de Energia y Minas Ing. Juan Mendoza
Marsano, autorizado para el efecto por Decreto Supremo No 046-97-PCM, con
domicilio en Av. Las Artes No 260 San Borja -Lima, a quien en adelante se le
denominara "EL ESTADO"; y, de la otra parte. la empresa DOE RUN PERU S.R.Ltda.,
constituida en la ciudad de Lima - Peru, con RUC No 37630381, inscrita en el
Asiento 1-A de la Ficha 143658 del Libro de Sociedades del Registro de Personas
Juridicas, con direccion en Av. Victor Andres Belaunde No 395, San Isidro,
debidamente representada por su Gerente General Sr. Julio Guadalupe Bascones,
identificado con L.E. No 09388911 segun poder que se encuentra en Anexo, a quien
en adelante se le denominara DOE RUN, en los terminos y condiciones que constan
en las siguientes clausulas:
PRIMERA.- DOE RUN ha presentado ante el Ministerio de Energia y Minas, en
adelante "MINISTERIO" una solicitud para la suscripcion de un Convenio de
Estabilidad Juridica al amparo de lo dispuesto en el Decreto Legislativo No 662,
en el Titulo II y el Capitulo Primero del Titulo V del Decreto Legislativo No
757, en el Reglamento de los mismos aprobado por el Decreto Supremo No
162-92-EF, de fecha 12 de octubre de 1992, el que en adelante se denominara
"REGLAMENTO", en lo dispuesto en la Resolucion del Directorio de CONITE No
001-96-EF/35, en el Decreto Supremo No 046-97-PCM, y en lo pactado en el
Contrato de Transferencia de Acciones, Aumento de Capital y Suscripcion de
Acciones, que celebraran con la Empresa Minera del Centro del Peru S.A. y la
EMPRESA METALURGICA LA OROYA S.A. -en adelante denominada METALOROYA, en lo
sucesivo "EL CONTRATO"; como consecuencia del Concurso Publico Internacional
PRI-16-97.
SEGUNDA.- DOE RUN, en virtud del presente Convenio, y al amparo de las normas
senaladas en la CLAUSULA PRIMERA, se obliga a lo siguiente:
1) Cumplir en el plazo que no excedera del 23 de octubre de 1997 con efectuar
un aporte de US$ 126'481,383.24 (Ciento Veintiseis Millones Cuatrocientos
Ochenta y Un Mil Trescientos Ochenta y Tres y 24/100 Dolares de los
Estados Unidos de America) al capital de METALOROYA-, una compania
constituida en la ciudad de Lima, Peru, inscrita en la Ficha No 040367 del
Libro de Sociedades Contractuales y Otras Personas Juridicas del Registro
Publico de Mineria, en proceso de privatizacion.
El monto referido en el parrafo anterior sera contablemente destinado de
la siguiente manera:
a) S/. 167'170,160.00 (Ciento Sesenta y Siete Millones Ciento Setenta
Mil Ciento Sesenta y 00/100 Nuevos Soles) a la cuenta capital
social;
b) La diferencia entre la suma resultante de la conversion a Nuevos
Soles de los US$126'481,383.24 (Ciento Veintiseis Millones
Cuatrocientos Ochenta y Un Mil Trescientos Ochenta y Tres y 24/100
Dolares de los Estados
<PAGE>
Unidos de America) y el monto referido en el literal anterior, sera
destinado a la cuenta capital adicional, en calidad de prima la cual
sera capitalizada en el plazo de dos (02) anos, contado a partir de
la fecha de suscripcion del presente Convenio.
2) Cumplir en un plazo que no excedera del 23 de octubre de 1997, con
efectuar el pago en dinero en efectivo de US$ 121'440,608.00 (Ciento
Veintiun Millones Cuatrocientos Cuarenta Mil Seiscientos Ocho y 00/100
Dolares de los Estados Unidos de America) por la adquisicion a la Empresa
Minera del Centro del Peru S.A. del 48.9674517% de las acciones
representativas del capital social de METALOROYA, con lo cual DOE RUN
habra adquirido, dentro del proceso de privatizacion, el 99.9674518% de
las acciones representativas del capital social de dicha empresa.
3) Canalizar el aporte a que se refieren los numerales 1 y 2, a traves del
Sistema Financiero Nacional, conforme debera constar en la certificacion
que emita el banco interviniente en la operacion.
TERCERA. - EL ESTADO, en virtud del presente Convenio y mientras este se
encuentre vigente, se obliga en relacion con la inversion a que se refiere la
CLAUSULA SEGUNDA, a garantizar la estabilidad juridica para DOE RUN en los
siguientes terminos:
1) Estabilidad del regimen tributario referido al Impuesto a la Renta,
conforme a lo prescrito en el articulo 38o del Decreto Legislativo No 757
y en el inciso a) del articulo 10o del Decreto Legislativo No 662, vigente
al momento de la suscripcion del presente Convenio, segun el cual los
dividendos y cualquier otra forma de distribucion de utilidades, no se
encuentran gravadas, de conformidad con lo prescrito en el inciso a) del
articulo 250 de la Ley de Impuesto a la Renta, aprobada por el Decreto
Legislativo No 774 y modificatorias vigentes al momento de suscripcion del
presente convenio.
2) Estabilidad del derecho de utilizar el tipo de cambio mas favorable
conforme a lo prescrito en el articulo 38o del Decreto Legislativo No 757
y en el inciso b) del articulo 10o del Decreto Legislativo No 662, que
implica que DOE RUN podra acceder a la moneda extranjera en el mercado
cambiario al tipo de cambio mas favorable que pueda conseguir, sin que EL
ESTADO pueda obligarla a realizar sus operaciones cambiarias bajo un
regimen o mecanismo que otorgue un tratamiento menos favorable que el que
se aplique a cualquier persona natural o juridica por la realizacion de
cualquier operacion cambiaria, de acuerdo a lo siguiente:
a) Cuando se trate de conversion de la moneda extranjera a nacional:
DOE RUN podra venderla a cualquier persona natural o juridica al
tipo de cambio compra mas favorable que encuentre en el mercado
cambiario al momento de efectuar la operacion cambiaria, y,
b) Cuando se trate de conversion de la moneda nacional a extranjera DOE
RUN podra comprarla a cualquier persona natural o juridica al tipo
de
<PAGE>
cambio venta mas favorable que encuentre en el mercado cambiario al
momento de efectuar la operacion cambiaria.
3) Estabilidad del derecho a la no discriminacion conforme a lo prescrito en
el articulo 38o del Decreto Legislativo No 757 y en el inciso c) del
articulo 10o del Decreto Legislativo No 662, que implica que EL ESTADO en
ninguno de sus niveles, ya se trate de entidades o empresas del Gobierno
Central, Gobiernos Regionales o Locales, podra aplicar a DOE RUN un
tratamiento diferenciado atendiendo a su nacionalidad, los sectores o
tipos de actividad economica que desarrolle o la ubicacion geografica de
la empresa en que invierta, ni en las siguientes materias:
a) Precios, tarifas o derechos no arancelarios, de tal modo que EL
ESTADO no podra aplicar por estos conceptos a DOE RUN, en lo
relativo a la inversion a que se refiere la CLAUSULA SEGUNDA, montos
o tasas diferenciados;
b) Forma de constitucion empresarial, de tal modo que EL ESTADO no
podra exigir a DOE RUN que la empresa METALOROYA, en la que va a
invertir, adopte una determinada modalidad empresarial;
c) Su condicion de persona natural o juridica, de tal modo que EL
ESTADO no podra aplicar a DOE RUN un tratamiento diferenciado por
este concepto; y,
d) Ninguna otra causa de efectos equivalentes, como es el caso de la
aplicacion de tratamientos discriminatorios para DOE RUN resultantes
de cualquier combinacion de los diversos acapites del presente
numeral.
El presente numeral se aplica sin perjuicio de las limitaciones establecidas en
el articulo 30 del REGLAMENTO.
CUARTA.- DOE RUN asume de conformidad con lo pactado en la CLAUSULA SEGUNDA, las
siguientes obligaciones.
1) Acreditar que ha cumplido con efectuar, el aporte dinerario por un monto
de US$ 126'481,383.24 (Ciento Veintiseis Millones Cuatrocientos Ochenta y
Un Mil Trescientos Ochenta y Tres y 24/100 Dolares de los Estados Unidos
de America), mediante la presentacion de:
a) Copia de la certificacion que emita el banco interviniente en la
operacion por la canalizacion de los US$ 126'481,383.24 (Ciento
Veintiseis Millones Cuatrocientos Ochenta y Un Mil Trescientos
Ochenta y Tres y 24/100 Dolares de los Estados Unidos de America);
b) Copia del Testimonio de la Escritura Publica de Aumento de Capital y
Modificacion de Estatutos de la empresa donde conste la inscripcion
en el registro correspondiente, por la capitalizacion de S/.
167'170,160.00 (Ciento Sesenta y Siete Millones Ciento Setenta Mil
Ciento Sesenta y 00/100 Nuevos Soles);
c) Copia del Testimonio de la Escritura Publica de Aumento de Capital
Social y Modificacion de Estatutos de METALOROYA debidamente
inscrita en el registro correspondiente donde conste la
capitalizacion de la prima de
<PAGE>
emision, equivalente al monto resultante de la diferencia entre el
valor de la conversion a Nuevos Soles de US$ 126'481,383.24 (Ciento
Veintiseis Millones Cuatrocientos Ochenta y Un Mil Trescientos
Ochenta y Tres y 24/100 Dolares de los Estados Unidos de America) y
S/. 167'170,160.00 (Ciento Sesenta y Siete Millones Ciento Setenta
Mil Ciento Sesenta y 00/100 Nuevos Soles).
Las obligaciones referidas en los literales a) y b) deberan ser
acreditadas ante el MINISTERIO, en el plazo de sesenta (60) dias
calendario contado a partir del 23 de octubre de 1997.
La obligacion referida en el literal c) debera ser acreditada ante el
MINISTERIO en un plazo maximo de treinta (30) dias calendario, contado a
partir de la fecha limite para su cumplimiento, conforme a lo establecido
en el literal b) del numeral 1 de la CLAUSULA SEGUNDA.
2) Acreditar haber adquirido 160'507,779 acciones representativas del capital
social de METALOROYA, equivalentes al 48.9674517% del mismo, mediante el
pago de US$ 121'440,608.00 (Ciento Veintiun Millones Cuatrocientos
Cuarenta Mil Seiscientos Ocho y 00/100 Dolares de los Estados Unidos de
America), como resultado de la transferencia efectuada por la Empresa
Minera del Centro del Peru S.A.; para lo cual debera presentar copia
legalizada del correspondiente asiento en el Libro de Registro y
Transferencia de Acciones, asi como la respectiva certificacion emitida
por el banco interviniente en la operacion.
La obligacion a que se refiere el parrafo anterior debera acreditarse ante
el MINISTERIO en un plazo maximo de sesenta (60) dias calendario, contado
a partir de la fecha limite para su cumplimiento, conforme a lo
establecido en el numeral 2 de la CLAUSULA SEGUNDA.
El incumplimiento de las obligaciones establecidas en los numerales anteriores
constituye causal de resolucion del Convenio.
QUINTA.- El presente Convenio de Estabilidad Juridica tendra una vigencia de
diez (10) anos contados a partir de la fecha de su suscripcion. En consecuencia,
no podra ser modificado unilateralmente por ninguna de las partes durante dicho
periodo, ni aunque la legislacion nacional sea modificada, asi se trate de
modificaciones mas beneficiosas o perjudiciales para alguna de las partes que
las pactadas en este Convenio.
SEXTA.- DOE RUN tendra derecho a renunciar por unica vez al regimen de
estabilidad juridica que se le otorga al amparo del presente Convenio, debiendo
formalizar dicha renuncia mediante una comunicacion por escrito dirigida al
MINISTERIO, la que se hara efectiva desde la fecha de recepcion de la
comunicacion por este ultimo.
Si DOE RUN opta por ejercer el derecho de renuncia al Convenio de Estabilidad,
que se le reconoce al amparo de la presente Clausula. automaticamente pasara a
regirse por la legislacion comun.
<PAGE>
SEPTIMA. - DOE RUN tendra derecho a ceder su posicion contractual en el presente
Convenio. Para que sea valida dicha cesion de posicion contractual, DOE RUN
debera obtener previamente la autorizacion correspondiente del MINISTERIO, la
misma que se formalizara mediante un Addendum al presente Convenio.
Queda entendido que la cesion de posicion contractual que realice DOE RUN a otro
inversionista no extiende el plazo de duracion del Convenio a que se refiere la
CLAUSULA QUINTA.
OCTAVA.- El presente Convenio de Estabilidad Juridica podra ser modificado de
comun acuerdo por las partes, salvo en lo referente a su plazo de vigencia
establecido en la CLAUSULA QUINTA. Tampoco podra modificarse el monto de la
inversion por debajo del limite establecido en el inciso a) del articulo 16o del
REGLAMENTO.
Para tal efecto, DOE RUN presentara una solicitud al MINISTERIO, que se
tramitara conforme al mismo procedimiento utilizado para la suscripcion del
presente Convenio.
NOVENA.- Siendo la intencion de las partes que los problemas que se presenten en
relacion con el cumplimiento del presente Convenio se resuelvan de la manera mas
expeditiva posible, se conviene desde ahora que cualquier litigio, controversia
o reclamacion entre ellos, relativa a la interpretacion, ejecucion o validez del
presente Convenio, sera resuelta mediante arbitraje de derecho.
El arbitraje se llevara a cabo en la ciudad de Lima, mediante la constitucion de
un Tribunal Arbitral conformado por tres miembros, de los cuales cada una de las
partes nombrara a uno y los dos arbitros asi designados nombraran al tercer
arbitro. Los arbitros quedan expresamente facultados para determinar la
controversia materia del arbitraje.
Si una parte no nombra arbitro dentro de los diez (10) dias de recibido el
requerimiento de la parte o partes que soliciten el arbitraje o si dentro de un
plazo igualmente de diez (10) dias, contado a partir del nombramiento del ultimo
arbitro por las partes, los dos arbitros no consiguen ponerse de acuerdo sobre
el tercer arbitro, la designacion del arbitro faltante sera hecha a peticion de
cualquiera de las partes por la Camara de Comercio de Lima.
El plazo de duracion del proceso arbitral no debera exceder de sesenta (60) dias
habiles, contado desde la fecha de designacion del ultimo arbitro y se regira
por lo dispuesto en la Ley General de Arbitraje, aprobada por la Ley No 26572
y/o las normas que la sustituyan o modifiquen.
Los gastos que se generen por la aplicacion de lo pactado en la presente
clausula seran sufragados por las partes contratantes en igual medida.
DECIMA - Constituyen causales de resolucion de pleno derecho del presente
Convenio de Estabilidad Juridica, sin mediar requisito de comunicacion previa,
las siguientes:
1) El incumplimiento por parte de DOE RUN de las obligaciones establecidas en
la CLAUSULA SEGUNDA y CLAUSULA CUARTA.
<PAGE>
2) La cesion de posicion contractual que realice DOE RUN a otro inversionista
sin obtener la correspondiente autorizacion previa del MINISTERIO,
conforme a lo pactado en la CLAUSULA SEPTIMA.
3) La resolucion de EL CONTRATO.
En el caso que DOE RUN incurra en una de las mencionadas causales de resolucion
del presente Convenio, si por efecto de la estabilidad juridica concedida al
amparo del mismo hubiera gozado de una carga fiscal menor a la que le hubiera
correspondido de no estar amparada por dicho Convenio, estara obligada a
reembolsar al ESTADO el monto actualizado de los tributos que le hubieran
afectado de no haber suscrito el Convenio, mas los recargos correspondientes a
que se refiere el Codigo Tributario.
Queda entendido que en el caso a que se refiere el parrafo anterior, si DOE RUN
hubiera soportado una carga fiscal mayor por efectos del presente Convenio, no
existira obligacion de reembolso de suma alguna por parte del Estado.
Estando las partes de acuerdo en todos los terminos del presente Convenio, lo
suscriben en dos copias de igual contenido, en Lima, a los veintiun dias del mes
octubre de 1997.
/s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
------------------ ------------------
Ing. JUAN MENDOZA M.
Vice Ministro de Minas
<PAGE>
LEGAL STABILITY AGREEMENT WITH DOE RUN PERU S. R. LTDA.
Witnesseth hereby the Legal Stability Agreement entered into by and between the
STATE OF PERU, duly represented by the Vice Minister of Mines of the Ministry of
Energy and Mines, Engineer Juan Mendoza Marsano, authorized for such purposes by
Supreme Decree No. 046-97-PCM, domiciled for purposes hereof at Av. Las Artes
No. 260 - San Borja - Lima, hereinafter referred to as the STATE, as party of
the first part; and DOE RUN PERU S. R. LTDA., a company incorporated in the city
of Lima, Peru, with Single Taxpayer Registration No. 37630381, registered on
Entry l-A of Card No. 143658 of the Book of Corporations of the Registry of
Companies, domiciled for purposes hereof at Av. Victor Andres Belaunde No. 395 -
San Isidro, duly represented by its General Manager, Mr. Julio Guadalupe
Bascones, identified with Voter's Registration Card, No. 09388911, as per power
of attorney included in an Annex, hereinafter referred to as DOE RUN, as party
of the second part; under the terms and conditions set forth in the following
clauses:
FIRST.- DOE RUN has presented to the Ministry of Energy and Mines, hereinafter
referred to as MINISTRY, a request for the signing of a Legal Stability
Agreement as authorized by the provisions set forth in Legislative Decree No.
662, in Title II, and in the First Chapter of Title V of Legislative Decree No.
757, and in the Regulations of said Decrees approved by Supreme Decree No.
162-92-EF, dated October 12, 1992, hereinafter referred to as the REGULATIONS,
and pursuant to the provisions set forth in CONITE Board of Directors Resolution
No. 001-96-EF/35, in Supreme Decree No. 046-97-PCM, and in that which is agreed
upon in the Contract for the Transfer of Shares, Capital Increase and
Subscription of Shares, entered into by and between Empresa Minera del Centro
del Peru S.A. and Empresa Metalurgica La Oroya S.A., hereinafter METALOROYA, and
hereinafter THE CONTRACT; as a result of the International Public Bidding
PRI-16-97.
SECOND.- By virtue of the present Agreement and pursuant to the provisions set
forth in the FIRST CLAUSE, DOE RUN binds itself to the following:
To comply, by October 23, 1997, with making the contribution of
US$ 126,481,383.24 (ONE HUNDRED TWENTY-SIX MILLION, FOUR HUNDRED
EIGHTY-ONE THOUSAND, THREE HUNDRED EIGHTY-THREE AND 24/100 US
DOLLARS), to the capital of METALOROYA, a company incorporated in
the city of Lima, Peru, registered on card No. 040367 of the Book
of Contractual Corporations and Other Bodies Corporate of the
Public Mining Registry, which is in the process of its
privatization.
The amount referred to in the foregoing paragraph will be
distributed, for accounting purposes, as follows:
S/. 167,170,160.00 (ONE HUNDRED SIXTY-SEVEN MILLION, ONE HUNDRED
SEVENTY THOUSAND, ONE HUNDRED SIXTY AND 00/100 NUEVOS SOLES) to
the stock capital account;
<PAGE>
The difference between the sum resulting from the conversion to
S/. 167,170,160.00 (ONE HUNDRED SIXTY-SEVEN MILLION, ONE HUNDRED
SEVENTY THOUSAND, ONE HUNDRED SIXTY AND 00/100 NUEVOS SOLES), and
the amount referred to in the preceding paragraph, shall be
destined to an additional stock capital account as a premium
which will be capitalized within a term of two (02) years counted
as of the date of signing of this Agreement.
To comply, by October 23, 1997, with making the payment in cash
of US$ 121,440,608.00 (ONE HUNDRED TWENTY-ONE MILLION, FOUR
HUNDRED FORTY THOUSAND, SIX HUNDRED AND EIGHT AND 00/100 US
DOLLARS), for the purchase from Empresa Minera del Centro del
Peru S.A. of 48.9674517% of the shares representing the stock
capital of METALOROYA, by means of which DOE RUN will have
acquired within the privatization process, 99.9674518% of the
shares representing the stock capital of said company.
To channel the contribution referred to in numerals 1 and 2
hereof, through the National Financial System, as per the
certification that shall be issued by the bank participating in
the operation.
THIRD.- By virtue of the present agreement and while it is in force, the STATE
is bound to guarantee the legal stability for DOE RUN, regarding the investment
referred to in the SECOND CLAUSE hereof, under the following terms:
The stability of the tax regime regarding the Income Tax, in keeping what is
provided in Article 38 of Legislative Decree No. 757 and in clause a) of Article
10 of Legislative Decree No. 662, in force at the time of the signing of the
present agreement, according to which the dividends and any other form of profit
distribution are not subject to taxation, pursuant to the provisions set forth
in clause a) of Article 25 of the Income Tax Law, approved by means of
Legislative Decree No. 774 and amending standards in force at the time of
signing the present agreement.
The stability of the right to use the most favorable exchange rate pursuant to
the provisions set forth in Article 38 of Legislative Decree No. 757 and in
clause b) of Article 10 of Legislative Decree No. 662, signifying that DOE RUN
will have access to foreign exchange on the foreign exchange market at the most
favorable rate of exchange that it may obtain, and the State may not obligate it
carry out its exchange operations under a regime or mechanism granting a less
favorable treatment than what is applied to any individual or corporate body to
carry out any exchange operation, in accordance with the following:
When it is a matter of conversion of foreign to national
currency: DOE RUN may sell the foreign currency to any
individual or corporate body at the most favorable "buy"
exchange rate available on the foreign exchange market, at the
time of execution of the foreign exchange operation; and,
When it is a matter of conversion of national to foreign
currency: DOE RUN may buy the national currency from any
individual or corporate body at the most favorable
2
<PAGE>
"sale" exchange rate available on the foreign exchange market,
at the time of execution of the foreign exchange operation.
The stability of the right of non-discrimination in accordance with the
stipulations set forth in Article 38 of Legislative Decree No. 757 and in clause
c) of Article 10 of Legislative Decree No. 662, which provide that the STATE, at
any level, whether entities or companies of the Central Government, Regional or
Local Governments, may not apply to DOE RUN any differential treatment due to
its nationality, the sector or types of economic activity it carries out, or the
geographical location of the company in which it invests, nor in the following
matters:
Prices, tariffs or non-Customs duties, in such a way that the
STATE may not apply differential amounts or rates to DOE RUN , as
regards the investment referred to in the SECOND CLAUSE hereof;
manner of business incorporation, in such a way the STATE may not
demand of DOE RUN that the company METALOROYA, in which it is
going to invest, adopt a given manner of incorporation;
its condition as an individual or corporate
body, in such a way that the STATE may not
apply a differential treatment to DOE RUN; and,
no other cause of equivalent effects, as is the case of the
application of discriminatory treatment against DOE RUN resulting
from any combination of the various paragraphs of this numeral.
This numeral is applicable without prejudice to the limitations established in
Article 3 of the REGULATIONS
FOURTH.- As agreed in the SECOND CLAUSE hereof, DOE RUN assumes the following
obligations:
To accredit that it has complied with making the monetary
contribution of US$ 126,481,383.24 (ONE HUNDRED TWENTY-SIX
MILLION, FOUR HUNDRED EIGHTY-ONE THOUSAND, THREE HUNDRED
EIGHTY-THREE AND 24/100 US DOLLARS), by presenting:
A copy of the certificate issued by the bank that participates in
the operation for the channeling of the US$ 126,481,383.24 (ONE
HUNDRED TWENTY-SIX MILLION, FOUR HUNDRED EIGHTY-ONE THOUSAND,
THREE HUNDRED EIGHTY-THREE AND 24/100 US DOLLARS);
A copy of the Testimony of the Public Deed of the Capital
Increase and Amendment of the Articles of Incorporation of the
company, with proof of the registration in the corresponding
registry, for the capitalization of S/. 167,170,160.00 (ONE
HUNDRED SIXTY-SEVEN MILLION, ONE HUNDRED SEVENTY THOUSAND, ONE
HUNDRED SIXTY AND 00/100 NUEVOS SOLES);
A copy of the Testimony of the Public Deed of the Capital
Increase and Amendment of the Articles of Incorporation of
METALOROYA, duly registered in the corresponding registry with
proof of the capitalization of the issue premium,
3
<PAGE>
equivalent to the amount resulting from the difference between
the value of the conversion to Nuevos Soles of US$ 126,481,383.24
(ONE HUNDRED TWENTY-SIX MILLION, FOUR HUNDRED EIGHTY-ONE
THOUSAND, THREE HUNDRED EIGHTY-THREE AND 24/100 US DOLLARS), and
S/. 167,170,160.00 (ONE HUNDRED SIXTY-SEVEN MILLION, ONE HUNDRED
SEVENTY THOUSAND, ONE HUNDRED SIXTY AND 00/100 NUEVOS SOLES).
The obligations referred to in points a) and b) must be
accredited before THE MINISTRY within sixty (60) calendar days,
counted as of October 23,1997.
The obligations referred to in point c) must be accredited before
THE MINISTRY within thirty (30) calendar days, counted as of the
deadline for its compliance, pursuant to what is provided in
point b) of numeral 1 of the SECOND CLAUSE hereof.
To accredit the acquisition of 160,507,779 shares representing
the stock capital of METALOROYA, equivalent to 48.9674517% of the
same, by means of the payment of US$ 121,440,608.00 (ONE HUNDRED
TWENTY-ONE MILLION, FOUR HUNDRED FORTY THOUSAND, SIX HUNDRED AND
EIGHT AND 00/100 US DOLLARS), as a result of the transfer made by
Empresa Minera del Centro del Peru S.A.; and to this end, it must
present a legalized copy of the corresponding entry in the Book
named Registry and Transfer of Shares, as well as the respective
certificate issued by the bank participating in the operation.
The obligations referred to in the foregoing paragraph, must be
accredited before THE MINISTRY within a term of sixty (60)
calendar days, counted as of the deadline for its compliance,
pursuant to the provisions set forth in numeral 2 of the SECOND
CLAUSE hereof.
Non-compliance with the obligations provided in the foregoing numerals is cause
of termination of the Agreement.
FIFTH.- The present Legal Stability Agreement shall have a term of force of ten
(10) years as of the date of its signing. Consequently, it may not be amended
unilaterally by either of the parties during said period, even in the event of
modification of national legislation, whether said amendments are more
beneficial or prejudicial to either of the parties than what is convened in this
Agreement.
SIXTH.- DOE RUN shall have the right to waive, one time only, the legal
stability regime granted to it by the authority of this Agreement, and to this
end it must formalize said waiver by means of a written communication to THE
MINISTRY; said waiver shall become effective as of the date of reception of the
communication by THE MINISTRY.
4
<PAGE>
Exhibit 10.8.5
CONVENIO DE ESTABILIDAD JURIDICA CON
DOE RUN PERU S.R. LTDA.
Conste por el presente documento el Convenio de Estabilidad Juridica que
celebran, de una parte, el ESTADO PERUANO, debidamente representado por el
Ministro de Energia y Minas, Ingeniero Alberto Pandolfi Arbulu, autorizado para
tal efecto por Resolucion Suprema No 331-96-PCM, con domicilio en Av. Las Artes
No 260 - San Borja - Lima, a quien en adelante se le denominara "ESTADO"; y, de
la otra parte la empresa DOE RUN PERU S.R.Ltda., constituida y existente bajo
las leyes del Peru, con RUC No 37630381, inscrita en el Asiento 1-A de la Ficha
143658 del Libro de Sociedades del Registro de Personas Juridicas, con domicilio
en Av. Victor Andres Belaunde No 395 - San Isidro, representada por el senor
Julio Guadalupe Bascones, identificado con Libreta Electoral No 09388911, segun
poder inscrito en la Ficha 143658 del Libro de Sociedades del Registro de
Personas Juridicas, a quien en adelante se le denominara DOE RUN PERU; en los
terminos y condiciones que constan en las siguientes clausulas:
PRIMERA.- DOE RUN PERU ha presentado ante el Ministerio de Energia y Minas, en
adelante "MINISTERIO", una solicitud para la suscripcion de un Convenio de
Estabilidad Juridica al amparo de lo dispuesto en el Decreto Legislativo No 662,
en el Titulo II y en el Capitulo Primero del Titulo V del Decreto Legislativo No
757, y en el Reglamento de los mismos aprobado por el Decreto Supremo No
162-92-EF de fecha 12 de octubre de 1992, el que en adelante se denominara
REGLAMENTO, sustentandose para ello en la inversion que recibira de DOE RUN
MINING S.R.Ltda., a quien en adelante se le denominara DOE RUN.
SEGUNDA.- DOE RUN PERU, en virtud del presente Convenio, se compromete a asignar
participaciones en favor de DOE RUN, cumpliendo asi con la modalidad de
inversion prescrita en el inciso a) del articulo 17 del REGLAMENTO. En
consecuencia, se obliga a lo siguiente:
1. Asignar participaciones sociales representativas de su capital en favor de
DOE RUN por un monto de US$ 247'921 991.24 (Doscientos Cuarenta y Siete
Millones Novecientos Veintiun Mil Novecientos Noventa y Uno y 24/100
Dolares de Estados Unidos de America), contra la recepcion de los aportes
que DOE RUN debera efectuar, en un plazo que no excedera del 23 de octubre
de 1997.
2. Asegurar que los aportes referidos en el numeral 1, sean canalizado a
traves del Sistema Financiero Nacional, conforme debera constar en la
certificacion que emita el banco interviniente en la operacion.
3. Destinar los aportes a que se refiere el numeral 1 a la ampliacion de su
capacidad productiva.
TERCERA.- El ESTADO, en virtud del presente Convenio y mientras este se
encuentre vigente, se obliga a garantizar la estabilidad juridica para DOE RUN
PERU en los siguientes terminos:
1. Estabilidad del regimen tributario referido al Impuesto a la Renta,
conforme a lo prescrito en el articulo 40 del Decreto Legislativo No 757,
que implica que el Impuesto a la Renta que le corresponda abonar a DOE RUN
PERU no sera modificado mientras se encuentre en vigencia el presente
Convenio de Estabilidad Juridica, aplicandose en los mismos terminos y con
las mismas alicuotas, deducciones, escala para el calculo de la renta
imponible y demas caracteristicas conforme a o dispuesto en la Ley del
Impuesto a la Renta,
<PAGE>
aprobada por el Decreto Legislativo No 774 y normas modificatorias,
vigentes a la fecha de suscripcion del presente Convenio.
El regimen de estabilidad que se garantiza a DOE RUN PERU, al amparo del
presente Convenio, implica que, en caso que el Impuesto a la Renta
referido en el parrafo anterior se modificara durante la vigencia del
Convenio, dichas modificaciones no afectaran a DOE RUN PERU, aunque se
trate del aumento o disminucion de las alicuotas, de la ampliacion o
reduccion de la base imponible, o de cualquier otra causa de efectos
equivalentes.
2. Estabilidad de los regimenes de contratacion de los trabajadores de DOE
RUN PERU mientras se encuentre vigente el presente Convenio, al amparo de
lo dispuesto en el inciso a) del articulo 12 del Decreto Legislativo No
662, en las distintas modalidades contempladas en el Texto Unico Ordenado
del Decreto Legislativo No 728, Ley de Productividad y Competitividad
Laboral, aprobado mediante Decreto Supremo No 003-97-TR, vigente a la
fecha de celebracion del presente Convenio.
3. Estabilidad de los regimenes de promocion de exportaciones, que utilice
DOE RUN PERU, al amparo de lo dispuesto en el inciso b) del articulo 12
del Decreto Legislativo No 662, que se encuentran contenidos en el
Capitulo IX del Titulo 1 del Decreto Legislativo No 821 y normas
modificatorias; en el Capitulo VI del Titulo V del Decreto Legislativo No
809; y en aquellas disposiciones que a la fecha de celebracion del
presente convenio se vienen aplicando.
CUARTA.- DOE RUN PERU garantiza que la nueva inversion referida en la CLAUSULA
SEGUNDA supera en la fecha de suscripcion del presente Convenio el 50% de su
Capital y Reservas.
Para tal efecto, DOE RUN PERU debera presentar ante el MINISTERIO, en un plazo
de sesenta (60) dias, contado a partir de la fecha de suscripcion del presente
Convenio un informe que con caracter de Declaracion Jurada, sujeto a
fiscalizacion posterior, emita una sociedad de auditoria, debidamente registrada
en la entidad competente sobre el movimiento de las cuentas de capital y
reservas desde el 8 de setiembre de 1997 hasta la fecha de suscripcion del
presente Convenio.
Para estos efectos, se entiende como capital y reservas, los correspondientes
saldos contables ajustados por inflacion, determinados a la fecha de celebracion
del presente Convenio.
DOE RUN PERU asume adicionalmente de conformidad con lo pactado en la CLAUSULA
SEGUNDA, la obligacion de:
1 Acreditar que ha cumplido con recibir de DOE RUN el aporte dinerario al
capital por un monto de US$ 247'921,991.24 (Doscientos Cuarenta y Siete
Millones Novecientos Veintiun Mil Novecientos Noventa y Uno y 24/100
Dolares de Estados Unidos de America), mediante la presentacion de copia
del Testimonio de la Escritura Publica de Aumento de Capital y
Modificacion de Estatutos de la empresa donde conste la inscripcion en el
registro correspondiente; asi como la certificacion que emita el banco
interviniente en la operacion.
2. Acreditar que la nueva inversion ha sido efectivamente destinada a la
ampliacion de su capacidad productiva mediante la presentacion del
correspondiente informe que emita una sociedad de auditoria debidamente
registrada en la entidad competente, el cual quedara sujeto a
fiscalizacion posterior.
<PAGE>
Las obligaciones a que se refieren los numerales anteriores deberan acreditarse
ante el MINISTERIO, en un plazo maximo de sesenta (60) dias calendario, contado
a partir del 23 de octubre de 1997. El incumplimiento de las mismas constituye
causal de resolucion del presente Convenio.
QUINTA. - El presente Convenio de Estabilidad Juridica tendra una vigencia de
diez (10) anos contados a partir de la fecha de su suscripcion. En consecuencia,
no podra ser modificado unilateralmente por ninguna de las partes durante dicho
periodo, ni aunque la legislacion nacional sea modificada, asi se trate de
modificaciones mas beneficiosas o perjudiciales para alguna de las partes que
las pactadas en este Convenio.
SEXTA.- DOE RUN PERU tendra derecho a renunciar por unica vez al regimen de
estabilidad juridica que se le otorga al amparo del presente Convenio, debiendo
formalizar dicha renuncia mediante una comunicacion por escrito dirigida al
MINISTERIO, la que se hara efectiva desde la fecha de recepcion de la
comunicacion por este ultimo.
Si DOE RUN PERU opta por ejercer el derecho de renuncia al Convenio de
Estabilidad, que se le reconoce al amparo de la presente Clausula,
automaticamente pasara a regirse por la legislacion comun.
SEPTIMA .- El presente Convenio de Estabilidad Juridica podra ser modificado de
comun acuerdo por las partes, salvo en lo referente a su plazo de vigencia
establecido en la CLAUSULA QUINTA. Tampoco podra modificarse el monto de los
aportes por debajo de los limites establecidos en los articulos 16o y 17o del
REGLAMENTO.
Para tal efecto, DOE RUN PERU presentara una solicitud al MINISTERIO, que se
tramitara conforme al mismo procedimiento utilizado para la suscripcion del
presente Convenio.
OCTAVA.- Siendo la intencion de las partes que los problemas que se presenten en
relacion con el cumplimiento del presente Convenio se resuelvan de la manera mas
expeditiva posible, se conviene desde ahora que cualquier litigio, controversia
o reclamacion entre ellos, relativa a la interpretacion, ejecucion o validez del
presente Convenio, sera resuelta mediante arbitraje de derecho.
El arbitraje se llevara a cabo en la ciudad de Lima, mediante la constitucion de
un Tribunal Arbitral conformado por tres miembros, de los cuales cada una de las
partes nombrara a uno y los dos arbitros asi designados nombraran al tercer
arbitro. Los arbitros quedan expresamente facultados para determinar la
controversia materia del arbitraje.
Si una parte no nombra arbitro dentro de los diez (10) dias de recibido el
requerimiento de la parte o partes que soliciten el arbitraje o si dentro de un
plazo igualmente de diez (10) dias, contado a partir del nombramiento del ultimo
arbitro por las partes, los dos arbitros no consiguen ponerse de acuerdo sobre
el tercer arbitro, la designacion del arbitro faltante sera hecha, a peticion de
cualquiera de las partes, por la Camara de Comercio de Lima.
El plazo de duracion del proceso arbitral no debera exceder de sesenta (60) dias
habiles, contado desde la fecha de designacion del ultimo arbitro y se regira
por lo dispuesto en la Ley General de Arbitraje, aprobada por la Ley No 26572
y/o las normas que la sustituyan o modifiquen.
<PAGE>
Los gastos que se generen por la aplicacion de lo pactado en la presente
Clausula seran sufragados por las partes contratantes en igual medida.
NOVENA.- Constituyen causales de resolucion de pleno derecho del presente
Convenio de Estabilidad Juridica, sin mediar requisito de comunicacion previa,
las siguientes:
1. El incumplimiento por parte de DOE RUN PERU de las obligaciones
establecidas en la CLAUSULA SEGUNDA y CLAUSULA CUARTA.
2. La cesion de posicion contractual del presente Convenio que realice DOE
RUN PERU, salvo que esta se efectue al amparo de normas vigentes en ese
momento que asi lo permitan, y previa autorizacion del MINISTERIO.
En el caso que DOE RUN PERU incurra en una de las mencionadas causales de
resolucion del presente Convenio, si por efecto de la estabilidad juridica
concedida al amparo del mismo, hubiera gozado de una carga fiscal menor a la que
le hubiera correspondido de no estar amparada por dicho Convenio, estara
obligada a reembolsar al ESTADO el monto actualizado de los tributos que le
hubieran afectado de no haber suscrito el Convenio, mas los recargos
correspondientes a que se refiere el Codigo Tributario.
Queda entendido que en el caso a que se refiere el parrafo anterior, si DOE RUN
PERU hubiera soportado una carga fiscal mayor por efectos del presente Convenio,
no existira obligacion de reembolso de suma alguna por parte del Estado.
Estando las partes de acuerdo en todos los terminos del presente Convenio, lo
suscriben en dos copias de igual contenido, en Lima, a los veintiun dias del mes
de octubre de 1997.
/s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
------------------------- ------------------
ALBERTO PANDOLFI ARBULU
MINISTRO DE ENERGIA Y MINAS
<PAGE>
LEGAL STABILITY AGREEMENT WITH DOE RUN PERU S. R. LTDA.
Witnesseth hereby the Legal Stability Agreement entered into by and between the
STATE OF PERU, duly represented by the Minister of Energy and Mines, Engineer
Alberto Pandolfi Arbulu, authorized for such purposes by Supreme Resolution No.
331-96-PCM, domiciled for purposes hereof at Av. Las Artes No. 260 - San Borja -
Lima, hereinafter referred to as the STATE, as party of the first part; and DOE
RUN PERU S. R. LTDA., a company incorporated and existing under the laws of
Peru, registered on Entry 1-A of Card 143658 of the Book of Corporations of the
Registry of Companies, domiciled for purposes hereof at Av. Victor Andres
Belaunde No. 395 - San Isidro, duly represented by Mr. Julio Guadalupe Bascones,
identified with Voter's Registration Card, No. 09388911, as per power of
attorney registered on Card 143658 of the Book of Corporations of the Registry
of Companies, hereinafter referred to as DOE RUN PERU, as party of the second
part; under the terms and conditions set forth in the following clauses:
FIRST.- DOE RUN PERU has presented to the Ministry of Energy and Mines,
hereinafter referred to as the MINISTRY, a request for the signing of a Legal
Stability Agreement as authorized by the provisions set forth in Legislative
Decree No. 662, in Title II, and in the First Chapter of Title V of Legislative
Decree No. 757, and in the Regulations of said Decrees approved by Supreme
Decree No. 162-92-EF, dated October 12, 1992, hereinafter referred to as the
REGULATIONS, based on the investment it shall receive from DOE RUN MINING S. R.
Ltda., hereinafter referred to as DOE RUN.
SECOND.- By virtue of the present Agreement, DOE RUN PERU agrees to issue
participations in favor of DOE RUN, thus complying with the investment modality
set forth in Clause a) of Article 17 of the REGULATIONS. Therefore, DOE RUN PERU
is obligated as follows:
To issue participations representing its capital in favor of DOE RUN for US$
247,921,991.24 (TWO FORTY-SEVEN MILLION, NINE HUNDRED TWENTY-ONE THOUSAND, NINE
HUNDRED NINETY-ONE and 00/100 US DOLLARS) against the receipt of the
contributions that DOE RUN must make no later than October 23, 1997.
To assure that the contributions referred to in numeral 1 are channeled through
the National Financial System as per the certification that shall be issued by
the bank participating in the operation.
To destine the contributions referred to in numeral 1, to the expansion of the
productive capacity.
THIRD.- By virtue of the present Agreement and while it is in force, the STATE
is bound to guarantee the legal stability for DOE RUN PERU, under the following
terms:
The stability of the tax regime regarding the Income Tax, in keeping what is
provided in Article 40 of Legislative Decree No. 757, signifying that the
Income Tax that must be paid by DOE RUN PERU will not be modified while the
present Legal Stability Agreement is in force, and it shall be applied under
the same terms and with the same aliquots, deductions, scale for the
<PAGE>
calculation of the taxable income, and any other characteristics pursuant to
the provisions set forth in the Income Tax Law approved by Legislative Decree
No. 774 and amending standards thereof in force as of the date of signing of
this agreement.
DOE RUN PERU under this Agreement, signifies that in the case that the Income
Tax referred to in the foregoing paragraph is amended during the term of effect
of the Agreement, said amendments will not affect DOE RUN PERU even though they
may be an increase or reduction of the aliquots, an extension or reduction of
the taxable income, or any other cause of equivalent effects.
The stability of the regimes for the hiring of the workers of DOE RUN PERU while
this Agreement is in force, under the provisions set forth in clause a) of
Article 12 of Legislative Decree No. 662, under the different modalities
included in the Single Revised Text of Legislative Decree No. 728, Law of Labor
Productivity and Competitiveness, approved by Supreme Decree No. 003-97-TR in
force as of the date of the signing of this Agreement.
3. The stability of the regimes for the promotion of exports that DOE RUN PERU
may use pursuant to the provisions set forth in clause b) of Article 12 of
Legislative Decree No. 662 contained in Chapter IX of Title I of Legislative
Decree No. 821 and amending standards thereof; in Chapter VI of Title V of
Legislative Decree No. 809; and in those provisions that are applicable to this
Agreement on the date of its signing.
FOURTH.- DOE RUN PERU guarantees that the new investment referred to in the
SECOND CLAUSE, as at the date of the signing of this Agreement, exceeds the 50%
of its capital and reserves.
To this end, DOE RUN PERU will file with the MINISTRY within a term of sixty
(60) days, counted as of the date of signing of this Agreement, a report that
will have the nature of a sworn statement and will be subject to a later audit
by an auditing company duly registered in the Competent Entity, on the movement
of the capital and reserves accounts from September 8, 1997, until the date of
the signing of this Agreement.
To this end, the corresponding accounting balances, adjusted for inflation,
determined at the date of signing of this Agreement, are hereby understood as
capital and reserves.
DOE RUN PERU additionally assumes, pursuant to the provisions set forth in the
SECOND CLAUSE hereof, the following obligations:
To accredit that it has received from DOE RUN the capital monetary contribution
in the amount of US$ 247,921,991.24 (TWO FORTY-SEVEN MILLION, NINE HUNDRED
TWENTY-ONE THOUSAND, NINE HUNDRED NINETY-ONE and 00/100 US DOLLARS), by
presenting a copy of the Testimony of the Public Deed of the Capital Increase
and Amendment of the Articles of Incorporation of the company, with proof of the
registration in the corresponding registry, as well as a certification issued by
the bank that participates in the operation.
2
<PAGE>
To accredit that the new investment has been destined to the expansion of its
productive capacity by presenting a report issued by an auditing company, duly
registered in the Competent Entity, which shall be subject to a later audit.
The obligations referred to in the foregoing numerals, must be accredited before
the MINISTRY within a maximum term of sixty (60) calendar days, counted as of
October 23, 1997. Non-compliance with the aforesaid constitutes cause for the
termination of the Agreement.
FIFTH.- The present Legal Stability Agreement shall have a term of force of ten
(10) years as of the date of its signing. Consequently, it may not be amended
unilaterally by either of the parties during said period, even in the event of
modification of national legislation, whether said amendments are more
beneficial or prejudicial to either of the parties than what is convened in this
Agreement.
SIXTH.- DOE RUN PERU shall have the right to waive, one time only, the legal
stability regime granted to it by the authority of this Agreement, and to this
end it must formalize said waiver by means of a written communication to the
Ministry; said waiver shall become effective as of the date of reception of the
communication by the Ministry.
If DOE RUN PERU opts to exercise the right of waiver of the Stability Agreement
granted to it pursuant to this Clause, it shall automatically become subject to
ordinary legislation.
SEVENTH.- This Legal Stability Agreement may be amended by common agreement
between the parties, except in what regards its term of effect as established in
the FIFTH CLAUSE. The amounts of the contributions may not be modified either
under the limit established in clause a) of Article 16 and clause a) of Article
17 of the REGULATIONS.
To this end, DOE RUN PERU shall present a request to the MINISTRY, which shall
be processed in line with the procedure followed for the signing of this
Agreement.
EIGHTH.- It being the intention of the parties that problems arising in relation
to the fulfillment of this Agreement be resolved in the most expeditious manner
possible, it is hereby agreed from this moment that any litigation, controversy,
claim or complaint between the parties, related to the interpretation, execution
or validity of this Agreement, shall be resolved through legal arbitration.
The arbitration will be carried out in the city of Lima, through the
establishment of an Arbitration Court comprised of three members of whom each of
the parties will name one and the two so designated members will in turn name
the third. The arbitrators are expressly empowered to resolve the controversy
subject to the arbitration.
If one party fails to name an arbitrator within ten (10) days of receipt of the
request of the party or parties for an arbitration, or if within an equal period
of ten (10) days, counted as of the naming of the last arbitrator by the
parties, the two arbitrators do not reach an agreement
3
<PAGE>
regarding the third arbitrator, the designation of the missing arbitrator shall
be carried out upon the request of either party, by the Chamber of Commerce of
Lima.
The duration of the arbitration process shall not exceed sixty (60) working
days, counted as of the date of the designation of the last arbitrator, and
shall be ruled by what is provided in the General Arbitration Law, approved by
Law No. 26572 and/or the standards that substitute or amend it.
The expenses generated by the exercises of what is agreed to in the present
Clause shall be borne in equal parts by the contracting parties.
NINTH.- The following constitute causes for termination as a matter of law of
this Legal Stability Agreement, without needing prior notice:
Non-compliance on the part of DOE RUN PERU with the obligations established in
the SECOND and FOURTH CLAUSES.
Assignment of the contractual position of this Agreement made by DOE RUN PERU,
unless this is done pursuant to legal provisions in force at that time that
authorize it, prior authorization from the MINISTRY.
In the event that DOE RUN PERU incurs in one of the previously mentioned causes
of termination of the present Agreement, and if as a result of the legal
stability conferred by the authority of the same agreement DOE RUN PERU enjoyed
a lighter tax burden that would have corresponded to it if it had not been under
the authority of said Agreement, it shall be obliged to reimburse the STATE for
the actual amount of the taxes that would have affected it if such Agreement had
not been signed, plus the corresponding surcharges referred to in the Tax Code.
It is understood that in the case referred to in the foregoing paragraph, if DOE
RUN PERU had borne a greater tax burden as a result of this Agreement, the STATE
will have no obligation to refund any sum whatsoever.
Whereas the parties agree to all of the terms hereof, they sign it in two copies
of equal content, in Lima, on October 21, 1997.
ALBERTO PANDOLFI ARBULU
MINISTER OF ENERGY OF MINES
JULIO GUADALUPE BASCONES
DOE RUN PERU S.R.Ltda.
4
<PAGE>
If DOE RUN opts to exercise the right of waiver of the Stability Agreement
granted to it pursuant to this Clause, it shall automatically become subject to
ordinary legislation.
SEVENTH.- DOE RUN shall have the right to assign its contractual position in
this Agreement. For said contractual position assignment to be valid, DOE RUN
must obtain the corresponding prior authorization from THE MINISTRY, which must
be formalized by an Addendum to this Agreement.
It is understood that the contractual position assignment that DOE RUN may make
to another investor, does not extend the term of the Agreement referred to in
the FIFTH CLAUSE hereof.
EIGHTH.- This Legal Stability Agreement may be amended by common agreement
between the parties, except in what regards its term of effect as established in
the FIFTH CLAUSE. The amounts of the contributions may not be modified either
under the limit established in clause a) of Article 16 and clause a) of Article
17 of the REGULATIONS.
To this end, DOE RUN shall present a request to THE MINISTRY, which shall be
processed in line with the procedure followed for the signing of this Agreement.
NINTH.- It being the intention of the parties that problems arising in relation
to the fulfillment of this Agreement be resolved in the most expeditious manner
possible, it is hereby agreed from this moment that any litigation, controversy,
claim or complaint between the parties, related to the interpretation, execution
or validity of this Agreement, shall be resolved through legal arbitration.
The arbitration will be carried out in the city of Lima, through the
establishment of an Arbitration Court comprised of three members of whom each of
the parties will name one and the two so designated members will in turn name
the third. The arbitrators are expressly empowered to resolve the controversy
subject to the arbitration.
If one party fails to name an arbitrator within ten (10) days of receipt of the
request of the party or parties for an arbitration, or if within an equal period
of ten (10) days, counted as of the naming of the last arbitrator by the
parties, the two arbitrators do not reach an agreement regarding the third
arbitrator, the designation of the missing arbitrator shall be carried out upon
the request of either party, by the Chamber of Commerce of Lima.
The duration of the arbitration process shall not exceed sixty (60) working
days, counted as of the date of the designation of the last arbitrator, and
shall be ruled by what is provided in the General Arbitration Law, approved by
Law No. 26572 and/or the standards that substitute or amend it.
The expenses generated by the exercises of what is agreed to in the present
Clause shall be borne in equal parts by the contracting parties.
5
<PAGE>
TENTH.- The following constitute causes for termination as a matter of law of
this Legal Stability Agreement, without needing prior notice:
Non-compliance on the part of DOE RUN with the obligations established in the
SECOND and FOURTH CLAUSES.
Assignment of the contractual position of this Agreement, that may be made by
DOE RUN to another investor without obtaining the corresponding prior
authorization from the MINISTRY, pursuant to the provisions set forth in the
SEVENTH CLAUSE.
The termination of THE CONTRACT.
In the event that DOE RUN incurs in one of the previously mentioned causes of
termination of the present Agreement, and if as a result of the legal stability
conferred by the authority of the same agreement DOE RUN enjoyed a lighter tax
burden that would have corresponded to it if it had not been under the authority
of said Agreement, it shall be obliged to reimburse the STATE for the actual
amount of the taxes that would have affected it if such Agreement had not been
signed, plus the corresponding surcharges referred to in the Tax Code.
It is understood that in the case referred to in the foregoing paragraph, if DOE
RUN had borne a greater tax burden as a result of this Agreement, the STATE will
have no obligation to refund any sum whatsoever.
Whereas the parties agree to all of the terms hereof, they sign it in two copies
of equal content, in Lima, on October 21, 1997.
for DOE RUN PERU S. R. LTDA. for the STATE
Julio Guadalupe Bascones Eng. Juan Mendoza M.
Vice Minister of Mines
6
<PAGE>
Exhibit 10.8.6
SECTOR ECONOMIA Y FINANZAS
CONVENIO DE ESTABILIDAD JURIDICA CON DOE RUN CAYMAN LTD.
Conste por el presente documento el Convenio de Estabilidad Juridica que
celebran, de una parte, el ESTADO PERUANO, debidamente representado por el Sr.
Carlos Herrera Perret, Secretario General de la Comision Nacional de Inversiones
y Tecnologias Extranjeras CONTE, autorizado para tal efecto por Resolucion del
Directorio de CONTE No.001-93-EF/35 de fecha 01 de febrero de 1993 con domicilio
en Jr. Antonio Miro Quesada No. 320 - 4to. piso, Lima, a quien en adelante se le
denominara el ESTADO; y, de la otra parte, DOE RUN CAYMAN LTD una empresa
constituida y existente bajo las leyes de Islas Caiman, con domicilio en Post
Office Box No 309, Ugland House, South Church Street, Grand Cayman, Cayman
Islands, British West Indies, Gran Bretana, representada por su Apoderado senor
Victor Raul Eyzaguirre Parra, de nacionalidad peruana, identificado con Libreta
Electoral No 01794578, domiciliado en Av. General Santa Cruz No 481, Jesus
Maria, Lima, Peru, segun poder que se encuentra en tramite; a quien en adelante
se le denominara DOE RUN ; en los terminos y condiciones que constan en las
siguientes clausulas:
PRIMERA.-DOE RUN ha presentado ante la Comision Nacional de Inversiones y
Tecnologias Extranjeras, en adelante CONITE, una solicitud para la suscripcion
de un Convenio de Estabilidad Juridica al amparo de lo dispuesto en el Decreto
Legislativo No 662, en el Titulo II y en el Capitulo Primero del Titulo V del
Decreto Legislativo No 757, y en el Reglamento de los mismos aprobado por el
Decreto Supremo No 162-92-EF del 12 de octubre de 1992, el que en adelante se
denominara el REGLAMENTO.
SEGUNDA.- DOE RUN en virtud del presente Convenio, se acoge a la modalidad de
inversion prescrita en el inciso a) del articulo 16o del REGLAMENTO. En
consecuencia, se obliga a lo siguiente:
1. Efectuar aportes dinerarios al capital de la empresa DOE RUN MINING
S.R.Ltda., una compania constituida en la ciudad de Lima, Peru, inscrita
en la Ficha No 143928 del Registro de Personas Juridicas de la Oficina
Registral de Lima y Callao, por un monto de US$ 2 000 000 (Dos Millones y
00/100 Dolares de Estados Unidos de America) en un plazo que no excedera
del 23 de octubre de 1997.
2. Canalizar el aporte proveniente del exterior a que se refiere el numeral
1, a traves del Sistema Financiero Nacional, conforme debera constar en la
certificacion que emita el banco interviniente en la operacion.
3. Registrar su inversion, valorizada en moneda de libre convertibilidad, en
CONITE.
TERCERA. - El ESTADO, en virtud del presente Convenio y mientras este se
encuentre vigente, se obliga, en relacion con la inversion a que se refiere la
CLAUSULA SEGUNDA, a garantizar la estabilidad juridica para DOE RUN en los
siguientes terminos:
1. Estabilidad del regimen tributario referido al Impuesto a la Renta.
conforme a lo prescrito en el inciso a) del articulo 10o del Decreto
<PAGE>
Legislativo No 662, vigente al momento de la suscripcion del presente convenio,
segun el cual los dividendos y cualquier otra forma de distribucion de
utilidades, no se encuentran gravadas, de conformidad con lo prescrito en el
inciso a) del articulo 25o de la Ley del Impuesto a la Renta, aprobada por el
Decreto Legislativo No. 774 y normas modificatorias vigentes a la fecha de
suscripcion del presente Convenio. La mencionada ley y sus modificatorias
tampoco gravan las remesas al exterior de los montos que correspondan a DOE RUN
por cualquiera de los conceptos CONITEmplados en este inciso.
2. Estabilidad del regimen de libre disponibilidad de divisas conforme a lo
prescrito en el inciso b) del articulo 10o del Decreto Legislativo No 662,
que implica que DOE RUN podra acceder libremente a la moneda extranjera en
el mercado cambiario al tipo de cambio mas favorable que pueda conseguir,
sin que el ESTADO pueda aplicarle con relacion a la inversion a que se
refiere la CLAUSULA SEGUNDA, cualquier regimen o mecanismo de regulacion
del mercado cambiario que limite o restrinja este derecho o que impiique
un tratamiento menos favorable para DOE RUN que el que se apiique a
cualquier persona natural o juridica por la realizacion de cualquier clase
de operacion cambiaria.
3. Estabilidad del derecho de libre remesa de sus utilidades y capitales
conforme a lo prescrito en el inciso b) del articulo 10o del Decreto
Legislativo No 662, que implica que DOE RUN podra transferir al exterior
en divisas libremente convertibles, sin requerir autorizacion previa de
ninguna entidad del Gobierno Central, Gobiernos Regionales o Locales,
siempre que la inversion correspondiente haya sido registrada ante el
Organismo Nacional Competente y se haya cumplido con las obligaciones
tributarias correspondientes, y sin que el ESTADO pueda establecer
restriccion o limitacion alguna a este derecho, lo siguiente:
a) el integro de sus capitales provenientes del exterior, incluyendo el
capital proveniente de la venta de sus acciones, participaciones o
derechos sobre empresas, de la reduccion del capital y de la
liquidacion parcial o total de empresas, provenientes de la
inversion a que se refiere la CLAUSULA SEGUNDA;
b) el integro de los dividendos o las utilidades netas comprobadas
provenientes de la inversion a que se refiere la CLAUSULA SEGUNDA,
asi como las utilidades obtenidas por concepto de contraprestaciones
por el uso o disfrute de bienes ubicados fisicamente en el pais
destinados a dicha inversion; y,
c) el integro de las regalias y contraprestaciones por el uso y
transferencia de tecnologia, marcas y patentes y cualquier otro
elemento de la propiedad industrial que autorice el Organismo
Nacional Competente.
Estabilidad del derecho de utilizar el tipo de cambio mas favorable
conforme a lo prescrito en el inciso b) del articulo 10o del Decreto
Legislativo No 662, que implica que DOE RUN podra acceder a la moneda
extranjera en el mercado cambiario al tipo de cambio mas favorable que
pueda conseguir sin que el ESTADO pueda obligarla a
<PAGE>
[LOGO]
SECTOR ECONOMIA Y FINANZAS
realizar sus operaciones cambiarias bajo un regimen o mecanismo que
otorgue un tratamiento menos favorable que el que se aplique a cualquier
persona natural o juridica por la realizacion de cualquier operacion
cambiaria, de acuerdo a lo siguiente
a) cuando se trate de conversion de la moneda extranjera a nacional:
DOE RUN podra venderla a cualquier persona natural o juridica al
tipo de cambio compra mas favorable que encuentre en el mercado
cambiario al momento de efectuar la operacion cambiaria; y,
b) cuando se trate de conversion de la moneda nacional a extranjera:
DOE RUN podra comprarla a cualquier persona natural o juridica al
tipo de cambio venta mas favorable que encuentre en el mercado
cambiario al momento de efectuar la operacion cambiaria.
5. Estabilidad del derecho a la no discriminacion conforme a lo prescrito en
el inciso c) del articulo 10o del Decreto Legislativo No 662, que implica
que el ESTADO en ninguno de sus niveles, ya se trate de entidades o
empresas del Gobierno Central, Gobiernos Regionales o Locales, podra
aplicar a DOE RUN un tratamiento diferenciado atendiendo a su
nacionalidad, los sectores o tipos de actividad economica que desarrolle o
la ubicacion geografica de la empresa en que invierta, ni en las
siguientes materias:
a) cambiaria, de tal modo que el ESTADO no podra aplicar a DOE RUN, en
lo relativo a la inversion a que se refiere la CLAUSULA SEGUNDA, un
regimen cambiario que implique un tratamiento menos favorable que el
que se aplique a cualquier persona natural o juridica por la
realizacion de cualquier clase de operacion cambiaria;
b) precios, tarifas o derechos no arancelarios, de tal modo que el
ESTADO no podra aplicar por estos conceptos a DOE RUN, en lo
relativo a la inversion a que se refiere la CLAUSULA SEGUNDA, montos
o tasas diferenciados;
c) forma de constitucion empresarial, de tal modo que el ESTADO no
podra exigir a DOE RUN que la empresa DOE RUN MINING S.R.Ltda., en
la que va a invertir, adopte una determinada modalidad empresarial;
d) su condicion de persona natural o juridica, de tal modo que el
ESTADO no podra aplicar a DOE RUN un tratamiento diferenciado por
este concepto; y,
e) ninguna otra causa de efectos equivalentes, como es el caso de la
aplicacion de tratamientos discriminatorios para DOE RUN resultantes
de cualquier combinacion de los diversos acapites del presente
numeral.
El presente numeral se aplica sin perjuicio de las limitaciones
establecidas en el articulo 30 del REGLAMENTO.
<PAGE>
CUARTA. - DOE RUN se compromete a presentar en el plazo de cuarenta y cinco (45)
dias calendario el poder formalizado e inscrito ante el registro
correspondiente, que faculte debidamente al senor Victor Raul Eyzaguirre Parra a
suscribir el presente Convenio de Estabilidad Juridica.
QUINTA. - DOE RUN asume adicionalmente de conformidad con lo pactado en la
CLAUSULA SEGUNDA, la obligacion de acreditar que ha cumplido con la realizacion
del aporte dinerario por US$ 2 000 000 (Dos Millones y 00/100 Dolares de Estados
Unidos de America) al capital de la empresa DOE RUN MINING S.R.Ltda., mediante
la presentacion ante CONITE, de copia del Testimonio de la Escritura Publica de
Aumento de Capital y Modificacion de Estatutos de la empresa, debidamente
inscrita en el registro correspondiente, asi como la certificacion que emita el
banco interviniente en la operacion
La obligacion a que se refiere el parrafo anterior debera acreditarse en un
plazo maximo de treinta (30) dias calendario, contado a partir de la fecha
limite para su cumplimiento, conforme a lo establecido en la CLAUSULA SEGUNDA.
El incumplimiento de la misma constituye causal de resolucion del Convenio.
SEXTA. - El presente Convenio de Estabilidad Juridica tendra una vigencia de
diez (10) anos contados a partir de la fecha de su suscripcion. En consecuencia,
no podra ser modificado unilateralmente por ninguna de las partes durante dicho
periodo, ni aunque la legislacion nacional sea modificada, asi se trate de
modificaciones mas beneficiosas o perjudiciales para alguna de las partes que
las pactadas en este Convenio.
SEPTIMA. - DOE RUN tendra derecho a renunciar por unica vez al regimen de
estabilidad juridica que se le otorga al amparo del presente Convenio, debiendo
formalizar dicha renuncia mediante una comunicacion por escrito dirigida a
CONITE, la que se hara efectiva desde la fecha de recepcion de la comunicacion
por este ultimo.
Si DOE RUN opta por ejercer el derecho de renuncia al Convenio de Estabilidad,
que se le reconoce al amparo de la presente Clausula, automaticamente pasara a
regirse por la legislacion comun.
OCTAVA. - DOE RUN tendra derecho a ceder su posicion contractual en el presente
Convenio. Para que sea valida dicha cesion de posicion contractual, DOE RUN
debera obtener previamente la autorizacion correspondiente de CONITE, la misma
que se formalizara mediante un Addendum al presente Convenio.
Queda entendido que la cesion de posicion contractual que realice DOE RUN a otro
inversionista no extiende el plazo de duracion del Convenio a ie se refiere la
CLAUSULA SEXTA.
NOVENA. - El presente Convenio de Estabilidad Juridica podra sermodicado de
comun acuerdo por las partes, salvo en lo referente a su plazo de vigencia
establecido en la CLAUSULA SEXTA. Tampoco podra dificarse el monto de la
inversion por debajo del limite establecido en el inciso a) del articulo 16o del
REGLAMENTO.
<PAGE>
[LOGO]
SECTOR ECONOMIA Y FINANZAS
Para tal efecto, DOE RUN presentara una solicitud a CONITE, que se tramitara
conforme al mismo procedimiento utilizado para la suscripcion del presente
Convenio.
DECIMA. - Siendo la intencion de las partes que los problemas que se presenten
en relacion con el cumplimiento del presente Convenio se resuelvan de la manera
mas expeditiva posible, se conviene desde ahora que cualquier litigio,
controversia o reclamacion entre ellos, relativa a la interpretacion, ejecucion
o validez del presente Convenio, sera resuelta mediante arbitraje de derecho.
El arbitraje se llevara a cabo en la ciudad de Lima, mediante la constitucion de
un Tribunal Arbitral conformado por tres miembros, de los cuales cada una de las
partes nombrara a uno y los dos arbitros asi designados nombraran al tercer
arbitro. Los arbitros quedan expresamente facultados para determinar la
controversia materia del arbitraje.
Si una parte no nombra arbitro dentro de los diez (10) dias de recibido el
requerimiento de la parte o partes que soliciten el arbitraje o si dentro de un
plazo igualmente de diez (10) dias, contado a partir del nombramiento del ultimo
arbitro por las partes, los dos arbitros no consiguen ponerse de acuerdo sobre
el tercer arbitro, la designacion del arbitro faltante sera hecha, a peticion de
cualquiera de las partes, por la Camara de Comercio de Lima.
El plazo de duracion del proceso arbitral no debera exceder de sesenta (60) dias
habiles, contado desde la fecha de designacion del ultimo arbitro y se regira
por lo dispuesto en la Ley General de Arbitraje, aprobada por la Ley No. 26572
y/o las normas que la sustituyan o modifiquen.
Los gastos que se generen por la aplicacion de lo pactado en la presente
Clausula seran sufragados por las partes contratantes en igual medida.
DECIMO PRIMERA.- Constituyen causales de resolucion de pleno derecho del
presente Convenio de Estabilidad Juridica, sin mediar requisito de comunicacion
previa, las siguientes:
1. EL incumplimiento por parte de DOE RUN de las obligaciones establecidas en
la CLAUSULA SEGUNDA, CLAUSULA CUARTA y CLAUSULA QUINTA.
2. La cesion de posicion contractual que realice DOE RUN a otro inversionista
sin obtener la correspondiente autorizacion previa de CONITE, conforme a
lo pactado en la CLAUSULA OCTAVA.
En el caso que DOE RUN incurra en una de las mencionadas causales de solucion
del presente Convenio, si por efecto de la estabilidad juridica concedida al
amparo del mismo, hubiera gozado de una carga fiscal menor a la que le hubiera
correspondido de no estar amparada por dicho Convenio, estara obligada a
reembolsar al ESTADO el monto actualizado de los tributos que le hubieran
afectado de no haber suscrito el Convenio, mas los recargos correspondientes a
que se refiere el Codigo Tributario.
<PAGE>
Queda entendido que en el caso a que se refiere el parrafo anterior, si DOE RUN
hubiera soportado una carga fiscal mayor por efectos del presente Convenio, no
existira obligacion de reembolso de suma alguna por parte del Estado.
Estando las partes de acuerdo en todos los terminos del presente Convenio, lo
suscriben en dos copias de igual CONITE nido, en Lima, a los veintiun dias del
mes de octubre de 1997.
POR DOE RUN CAYMAN LTD.
/s/ Victor Raul Eyzaguirre Parra
--------------------------------
Victor Raul Eyzaguirre Parra
POR EL ESTADO
[SEAL] /s/ CARLOS HERRERA PERRET
-------------------------
/s/ [ILLEGIBLE] [SEAL] CARLOS HERRERA PERRET
- ------------------ Secretario General
[ILLEGIBLE] CONITE
ABOGADA
Reg. [ILLEGIBLE] 20682
<PAGE>
LEGAL STABILITY AGREEMENT WITH DOE RUN CAYMAN LTD. Witnesseth
hereby the Legal Stability Agreement entered into by and between the STATE OF
PERU, duly represented by Mr. Carlos Herrera Perret, Secretary General of the
National Commission for Foreign Investments and Technologies-CONITE, authorized
for such purposes by CONITE Board of Directors Resolution No. 001-93-EF/35,
dated February 1, 1993, domiciled for purposes hereof at Jr. Antonio Miro
Quesada No. 320, 4th Floor, Lima, hereinafter referred to as the STATE, as party
of the first part; and DOE RUN CAYMAN LTD., a company incorporated and existing
under the laws of Cayman Islands, domiciled for purposes hereof at Post Office
Box No. 309, Ugland House, South Church Street, Grand Cayman, Cayman Islands,
British West Indies, Great Britain, duly represented by Mr. Victor Raul
Eyzaguirre Parra, a Peruvian citizen, identified with Voter's Registration Card,
No. 01794578, domiciled at Avda. General Santa Cruz, No. 481, Jesus Maria, Lima,
Peru, as per power of attorney in process, hereinafter referred to as DOE RUN,
as party of the second part; under the terms and conditions set forth in the
following clauses: FIRST.- DOE RUN has presented to the National Commission for
Foreign Investments and Technologies-CONITE hereinafter referred to as CONITE, a
request for the signing of a Legal Stability Agreement as authorized by the
provisions set forth in Legislative Decree No. 662, in Title II, and in the
First Chapter of Title V of Legislative Decree No. 757, and in the Regulations
of said Decrees approved by Supreme Decree No. 162-92-EF, dated October 12,
1992, hereinafter referred to as the REGULATIONS. SECOND.- By virtue of the
present Agreement, DOE RUN agrees to the form of investment prescribed in Clause
a) of Article 16 of the REGULATIONS. As such DOE RUN is obligated as follows:
To execute monetary contributions to the Capital of the company
DOE RUN MINING S. R. Ltda., a company incorporated in the city of Lima, Peru,
registered on Filing Card No. 143928 of the Book of Corporations of the Registry
of Companies of Registry Office of Lima and Callao, for an amount of
US$2,000,000 (TWO MILLION and 00/100 US DOLLARS) in a term not to exceed October
23, 1997.
To channel the contribution from abroad referred to in numeral 1,
through the National Financial System, as per the certification that shall be
issued by the bank participating in the operation.
3.To register its investment, valued in freely convertible
currency, with CONITE. THIRD.- By virtue of the present agreement and while it
is in force, the STATE is bound to guarantee the legal stability for DOE RUN,
regarding the investment referred to in the SECOND CLAUSE hereof, under the
following terms:
<PAGE>
The stability of the tax regime regarding the Income Tax, in
keeping what is provided in clause a) of Article 10 of Legislative Decree No.
662, in force at the time of the signing of the present agreement, according to
which the dividends and any other form of profit distribution are not subject to
taxation, pursuant to the provisions set forth in clause a) of Article 25 of the
Income Tax Law, approved by means of Legislative Decree No. 774 and amending
standards in force at the time of signing the present agreement. Said Law and
amendments thereof do not levy a tax on remittances abroad of the amounts that
correspond to DOE RUN for any of the matters included in this numeral.
The stability of the regime of free availability of foreign
exchange pursuant to clause b) of Article 10 of Legislative Decree No. 662,
signifying that DOE RUN will have free access to foreign exchange on the foreign
exchange market at the most favorable rate of exchange that it may obtain, and
the State may not apply to it, with regard to the investment referred to in the
SECOND CLAUSE hereof, any regime or mechanism to regulate the foreign exchange
market, that may limit or restrict these rights or that may imply a less
favorable treatment for DOE RUN than that which is applied to any individual or
corporate body to carry out any kind of exchange operation.
The stability of the rights to freely remit profits and capitals
pursuant to what is established in clause b) of Article 10 of Legislative Decree
No. 662, signifying that DOE RUN may transfer abroad in freely convertible
currency, without requiring prior authorization from any entity of the Central,
Regional or Local Governments, as long as the corresponding investment has been
registered with the Governing National Organism, and all the corresponding tax
obligations have been fulfilled, and the STATE may not establish any restriction
or limitation whatsoever to this right, the following:
The entirety of its capitals originating abroad, including the
capital originating from the sale of its shares, participations or rights on
companies, the reduction of capital and the partial or total liquidation of
companies originating from the investment to which the SECOND CLAUSE hereof
refers;
The entirety of the dividends or confirmed net profits
originating from the investment referred to in the SECOND CLAUSE hereof, as well
as profits obtained in exchange for the use or usufruct of properties physically
located in the country and destined to said investment; and,
The entirety of the royalties and retributions for the use and
transfer of technology, trademarks and patents, and any other industrial
property element authorized by the Governing National Organism.
4. The stability of the right to use the most favorable exchange
rate pursuant to the provisions set forth in clause b) of Article 10 of
Legislative Decree No. 662, signifying that DOE
2
<PAGE>
RUN will have access to foreign exchange on the foreign exchange
market at the most favorable rate of exchange that it may obtain, and the STATE
may not obligate it carry out its exchange operations under a regime or
mechanism granting a less favorable treatment than what is applied to any
individual or corporate body to carry out any exchange operation, in accordance
with the following:
When it is a matter of conversion of foreign to national
currency: DOE RUN may sell the foreign currency to any individual or
corporate body at the most favorable "buy" exchange rate available on the
foreign exchange market, at the time of execution of the foreign exchange
operation; and,
When it is a matter of conversion of national to foreign
currency: DOE RUN may buy the national currency from any individual or
corporate body at the most favorable "sale" exchange rate available on the
foreign exchange market, at the time of execution of the foreign exchange
operation.
5. The stability of the right to non-discrimination in accordance
with the stipulations set forth in clause c) of Article 10 of Legislative Decree
No. 662, which provide that the STATE, at any level, whether entities or
companies of the Central Government, Regional or Local Governments, may not
apply to DOE RUN any differential treatment due to its nationality, the sector
or types of economic activity it carries out, or the geographical location of
the company in which it invests, nor in the following matters:
foreign exchange, in such a way that the STATE may not apply to
DOE RUN, as regards the investment referred to in the SECOND CLAUSE hereof, a
foreign exchange regime that implies a less favorable treatment than what is
applied to any individual or corporate body to carry out any kind of foreign
exchange operation;
prices, tariffs or non-Customs duties, in such a way that the
STATE may not apply differential amounts or rates to DOE RUN , as regards the
investment referred to in the SECOND CLAUSE hereof;
manner of business incorporation, in such a way the STATE may
not demand of DOE RUN that the company DOE RUN MINING S.R.Ltda., in which it
is going to invest, adopt a given manner of incorporation;
its condition as an individual or corporate body, in such a
way that the STATE may not apply a differential treatment to DOE RUN on this
regard; and,
no other cause of equivalent effects, as is the case of the
application of discriminatory treatment against DOE RUN resulting from any
combination of the various paragraphs of this numeral.
3
<PAGE>
This numeral is applicable without prejudice to the limitations
established in Article 3 of the REGULATIONS.
FOURTH.- DOE RUN commits itself to present within forty-five (45)
calendar days, the power of attorney, formalized and registered in the
corresponding registry, which duly empowers Mr. Victor Raul Eyzaguirre Parra, to
sign this Legal Stability Agreement.
FIFTH.-In addition, and pursuant to the provisions set forth in
the SECOND CLAUSE hereof, DOE RUN assumes the obligation to accredit that it has
complied with carrying out the monetary contribution of US$2,000,000 (TWO
MILLION AND 00/100 US DOLLARS) to the capital of the company DOE RUN MINING
S.R.Ltda. by presenting to CONITE a copy of the Testimony of the Public Deed of
the Capital Increase and Amendment of the Articles of Incorporation of the
company, duly registered in the corresponding registry, as well as a
certification issued by the bank that participates in the operation. The
obligation referred to in the foregoing paragraph must be accredited within a
maximum period of thirty (30) calendar days counted as of the deadline for
compliance, in line with what is established in the SECOND CLAUSE hereof.
Non-compliance with the same constitutes a cause for the termination of the
Agreement.
SIXTH.- The present Legal Stability Agreement shall have a term
of force of ten (10) years as of the date of its signing. Consequently, it may
not be amended unilaterally by either of the parties during said period, even in
the event of modification of national legislation, whether said amendments are
more beneficial or prejudicial to either of the parties than what is convened in
this Agreement.
SEVENTH.- DOE RUN shall have the right to waive, one time only,
the legal stability regime granted to it by the authority of this Agreement, and
to this end it must formalize said waiver by means of a written communication to
CONITE; said waiver shall become effective as of the date of reception of the
communication by CONITE. If DOE RUN opts to exercise the right of waiver of the
Stability Agreement granted to it pursuant to this Clause, it shall
automatically become subject to ordinary legislation.
EIGHTH.- DOE RUN shall have the right to assign its contractual
position in this Agreement. For said contractual position assignment to be
valid, DOE RUN must obtain the corresponding prior authorization from the
CONITE, which must be formalized by an Addendum to this Agreement. It is
understood that the contractual position assignment that DOE RUN may make to
another investor, does not extend the term of the Agreement referred to in the
SIXTH CLAUSE hereof.
NINTH.- This Legal Stability Agreement may be amended by common
agreement between the parties, except in what regards its term of effect as
established in the SIXTH CLAUSE hereof.
4
<PAGE>
The amounts of the contributions may not be modified either under
the limit established in clause a) of Article 16 of the REGULATIONS.
To this end, DOE RUN. shall present a request to CONITE, which
shall be processed in line with the procedure followed for the signing of this
Agreement.
TENTH.- It being the intention of the parties that problems
arising in relation to the fulfillment of this Agreement be resolved in the most
expeditious manner possible, it is hereby agreed that any litigation,
controversy, claim or complaint between the parties, related to the
interpretation, execution or validity of this Agreement, shall be resolved
through legal arbitration.
The arbitration will be carried out in the city of Lima, through
the establishment of an Arbitration Court comprised of three members of whom
each of the parties will name one and the two so designated members will in turn
name the third. The arbitrators are expressly empowered to resolve the
controversy subject to the arbitration. If one party fails to name an arbitrator
within ten (10) days of receipt of the request of the party or parties for an
arbitration, or if within an equal period of ten (10) days, counted as of the
naming of the last arbitrator by the parties, the two arbitrators do not reach
an agreement regarding the third arbitrator, the designation of the missing
arbitrator shall be carried out upon the request of either party, by the Chamber
of Commerce of Lima. The duration of the arbitration process shall not exceed
sixty (60) working days, counted as of the date of the designation of the last
arbitrator, and shall be ruled by what is provided in the General Arbitration
Law, approved by Law No. 26572 and/or the standards that substitute or amend it.
The expenses generated by the exercises of what is agreed to in
the present Clause shall be borne in equal parts by the contracting parties.
ELEVENTH.- The following constitute causes for termination as a
matter of law of this Legal Stability Agreement, without needing prior notice:
Non-compliance on the part of DOE RUN with the obligations
established in the SECOND, FOURTH and FIFTH CLAUSES hereof.
Assignment of the contractual position of this Agreement, that
may be made by DOE RUN to another investor without obtaining the
corresponding prior authorization from the CONITE, pursuant to the provisions
set forth in the EIGHTH CLAUSE hereof.
In the event that DOE RUN incurs in one of the previously
mentioned causes of termination of the present Agreement, and if as a result
of the legal stability conferred by the authority of the same agreement DOE
RUN enjoyed a lighter tax burden that would have corresponded to it if it had
not been under the authority of said Agreement, it shall be obliged to
reimburse the
5
<PAGE>
STATE for the actual amount of the taxes that would have affected it if such
Agreement had not been signed, plus the corresponding surcharges referred to
in the Tax Code. It is understood that in the case referred to in the
foregoing paragraph, if DOE RUN had borne a greater tax burden as a result of
this Agreement, the STATE will have no obligation to refund any sum
whatsoever.
Whereas the parties agree to all of the terms hereof, they
sign it in two copies of equal content, in Lima, on October 21, 1997.
for DOE RUN CAYMAN LTD. for the STATE
Victor Raul Eyzaguirre Parra Carlos Herrera Perret
Secretary General of CONITE
Iris A. Rios Barzola
CONITE Lawyer
6
<PAGE>
Exhibit 10.8.7
MINISTERIO DE ENERGIA Y MINAS
Lima, 21 OCT. 1997
OFICIO N0 12.23-97-EM/DGM
Senor
Ing. JORGE MERINO TAFUR
Gerente General
EMPRESA METALURGICA LA OROYA S.A.. (METALOROYA S.A.)
Asunto Remite Contrato de Estabilidad
Administrativa Ambiental
Referencia Recurso No 1152487 del 19-09-97
Tengo el agrado de dirigirme a usted, para remitirle adjunto
al presente el Contrato de Estabilidad Administrativa Ambiental suscrito entre
el Estado Peruano y la Empresa Metalurgica La Oroya S.A., de acuerdo al Articulo
18o del Reglamento del Titulo Decimo Quinto del Texto Unico Ordenado de la Ley
General de Mineria, aprobado por Decreto Supremo No 016-93-EM.
Hago propicia la ocasion, para expresarle las seguridades de
mi especial consideracion y estima personal.
Atentamente,
[ILLEGIBLE]
-----------
[ILLEGIBLE]
Director General de Mineria
<PAGE>
Senor Notario:
Sirvase Usted extender en su Registro de Escrituras Publicas,
El Contrato de Estabilidad Administrativa Ambiental que celebran de una parte
el Ministerio de Energia y Minas en representacion del Estado Peruano,
debidamente representado por el Senor Vice Ministro de Minas Ing. Juan MENDOZA
MARSANO, identificado con Libreta Electoral N0 09179432, autorizado por
Resolucion Ministerial No 292-97-EMI/VMM de fecha 7 de Julio de 1997, y de
la otra parte, la Empresa METALURGICA LA OROYA S.A., titular de actividad
minera, con Registro Unico de Contribuyente numero 33526610, sociedad existente
y constituida de acuerdo con las leyes de la Republica del Peru, inscrita en el
Asiento 1 de la Ficha No 040367, del Libro de Sociedades del Registro Publico de
Mineria, domiciliada en Av. Javier Prado Este No 2175, San Borja, a quien en
adelante se le denominara "E1 Titular", debidamente representada por su Gerente
General Ing. Jorge MERINO TAFUR, identificado con Libreta Electoral N0 07341351
segun poder que Usted Senor Notario se servira insertar, en los terminos y
condiciones siguientes:
CLAUSULA PRIMERA - ANTECEDENTES
1.1. Las Normas de Proteccion del Ambiente establecidas en el Codigo
del Medio Ambiente, y los Recursos Naturales, asi como las relacionadas con la
Actividad Minero - Metalurgica contenidas en la Ley General de Mineria y sus
reglamentos aprobados por los Decretos Supremos Nos 016-93-EM y 059-93-EM,
Resoluciones Ministeriales Nos 011-96-EM/VMM y 315-96-EM/VMM, concordantes
con el Decreto Ley No 25763, su Reglamento Decreto Supremo No 012-93-EM y
sus modificatorias Decretos Supremos Nos 036-93-EM y 058-93-EM, establecen
que el Ministerio de Energia y Minas es el encargado de fijar la politica de
proteccion del ambiente en la actividad minero-metalurgica.
1.2 Por Decreto Legislativo No 674 del 25 de Setiembre de 1991,
se declaro de interes nacional la Promocion de la Inversion Privada en las
empresas que conforman la Actividad Empresarial del Estado.
1.3 Mediante Resolucion Suprema No 102-92-PCM se ratifica el
acuerdo adoptado por la Comision de Promocion de la Inversion Privada (COPRl)
conforme al cual se aprueba el nuevo Plan de Promocion de la inversion privada a
que se refiere el Decreto Legislativo No 674.
1.4 Por Resolucion Suprema No 016-96-PCM se ratifica el acuerdo
adoptado por COPRI conforme al cual se aprueba el nuevo Plan de promocion de la
Inversion Privada en relacion a CENTROMIN PERU S.A.
1.5 Por acuerdo de COPRI tomado en sesion del 17 de Abril de 1996,
se autorizo la constitucion de empresas en base a las unidades operativas de
CENTROMIN, de conformidad con el articulo 10o del Decreto Legislativo Numero
674.
<PAGE>
1.6 Dentro del contexto expresado se constituyo la Empresa
Metalurgica La Oroya S.A.- denominada tambien METALOROYA S.A., sobre la base de
la Unidad de Produccion de La Oroya, cuyas acciones son integramente de
propiedad de CENTROMIN y cuyo objeto social consiste principalmente, en el
ejercicio de todas las actividades propias de la industria minero metalurgica.
1.7 CENTROMIN PERU S.A. transferira a la Empresa Metalurgica La Oroya
S.A.-METALOROYA S.A., a la suscripcion del contrato de transferencia de acciones
entre CENTROMIN PERU S.A. y DOE RUN PERU S.R.Ltda, ganador de la Buena - Pro en
el Concurso PRI - 16 - 97, las operaciones de la ex-Unidad de Produccion La
Oroya. METALOROYA S.A., asumira la responsabilidad sobre asuntos ambientales
derivados de estas operaciones, por las concesiones mineras y de beneficio que
le sean cedidas.
1.8 Mediante Resolucion Directoral No 017-97-EM-DGM, de fecha 13
de Enero de 1997 la Direccion General de Mineria aprobo el Programa de
Adecuacion y Manejo Ambiental de la Unidad Operativa de La Oroya, cuya
reprogramacion ha sido aprobada por Resolucion Directoral No 325-97-EM/DGM
del 06 de Octubre de 1997.
1.9 CENTROMIN PERU S.A. con recurso No 1152485 del 19 de
Setiembre de 1997, solicito a la Direccion General de Mineria la division del
PAMA de la Unidad de Produccion LA OROYA, la que se aprobo mediante Resolucion
Directoral No 334-97-EM/DGM, del 16 de Octubre de 1997, correspondiendole a
"El Titular" ejecutar el Plan y Cronograma de Inversiones incluidos en el Anexo
No 2 que se circunscribe a las concesiones mineras y de beneficio
senaladas en el Anexo No 1. Los Anexos mencionados, en adelante "EL RAMA",
forman parte integrante del presente contrato.
1.10 Por Recurso No 1 152487 de fecha 19 de Setiembre de 1997
"El Titular" de acuerdo con lo dispuesto por los Articulos 4o y 18o del Decreto
Supremo No 016-93-EM, solicito ante el Ministerio de Energia y Minas se le
otorgue la Garantia de Estabilidad Administrativa Ambiental, en relacion a "EL
PAMA".
1.11 El PAMA elaborado, entre sus objetivos establece acciones para
mitigar y prevenir el deterioro ambiental causado por las operaciones minero
metalurgicas de la Unidad Metalurgica LA OROYA, e incluye el cronograma de
ejecucion de las inversiones sobre las medidas a ejecutar para la mitigacion de
los impactos ambientales identificados.
CLAUSULA SEGUNDA - OBJETO DEL CONTRATO
El objeto del presente contrato es garantizar a "El Titular"
estabilidad administrativa ambiental para los trabajos de solucion de problemas
ambientales comprendidos en "EL PAMA" de tal forma que los posibles cambios en
las normas y niveles maximos permisibles, no los afecten negativamente durante
la vigencia del presente contrato.
<PAGE>
CLAUSULA TERCERA.- VIGENCIA DEL CONTRATO
El presente Contrato entrara en vigencia en la fecha de su
suscripcion por las partes, debiendo culminar en el plazo de diez anos desde la
aprobacion del PAMA.
CLAUSULA CUARTA.- DE LAS GARANTIAS CONTRACTUALES.
4.1 Los niveles maximos permisibles son los determinados en el Anexo
No 2 de a Resolucion Ministerial No 011-96-EM/VMM y Resolucion
Ministerial No 315-96-EM/VMM los que se encuentran vigentes a la suscripcion
del presente contrato. Estos niveles no estaran sujetos a modificacion durante
el plazo de vigencia del contrato.
4.2 Quedara entendido que las referencias a leyes, decretos
legislativos, decretos leyes, decretos supremos y otras disposiciones legales en
el presente instrumento, han sido cumplidos de acuerdo con los textos existentes
a la fecha de la aprobacion de "EL PAMA"; y no interferiran, limitaran ni
reduciran los derechos de "El Titular" de gozar de todos los beneficios
dispuestos por la legislacion vigente en la fecha de aprobacion de "EL PAMA",
para cuyo efecto el presente contrato constituye una garantia; ni queda exento
de cumplir con las obligaciones establecidas en la legislacion vigente aplicable
en la fecha de aprobacion de "EL PAMA" o en otras disposiciones aprobadas
posteriormente siempre que las mismas no se opongan a las garantias otorgadas
por el presente.
CLAUSULA QUINTA.- OBLIGACIONES DEL TITULAR
"El Titular" esta obligado a realizar durante la vigencia de "EL
PAMA", el programa de monitoreo operacional, cuyos resultados debera reportar
al Ministerio de Energia y Minas en concordancia con las Resoluciones
Ministeriales Nos 0l1-96-EMIVMM y 315-96-EM/VMM.
CLAUSULA SEXTA.- DEL PAMA Y SU PLAZO DE EJECUCION
6.1 El plazo de ejecucion de "EL PAMA' es de diez anos, que vencera
el 13 de Enero del 2006.
6.2 El Plan de Inversiones incluido en EL RAMA' referido en el
Articulo 18o del Decreto Supremo No 016-93-EM. comprende en detalle las
obras y adquisiciones necesarias para la puesta en marcha de los proyectos.
6.3 Las metas, los principales controles ambientales, obras de
mitigacion ambiental y labores contenidas en el Plan de Inversiones de "EL PAMA"
figuran en el Anexo 2, que forma parte integrante del presente contrato.
<PAGE>
CLAUSULA SEPTIMA.- DE LA MODIFICACION DEL PAMA
"EL PAMA", podra ser modificado en concordancia con lo especificado
en el Articulo 17o del Decreto Supremo No 016-93-EM
CLAUSULA OCTAVA.- DE LA TRANSFERENCIA O CESION
Este contrato podra ser objeto de cesion, adjudicacion, aporte u
otro modo de transferencia o adjudicacion, con consentimiento previo y expreso
del Estado. Para el consentimiento que otorgue el Estado, bastara la suscripcion
de la correspondiente minuta y escritura publica.
CLAUSULA NOVENA.- DEL CASO FORTUITO O FUERZA MAYOR.
En concordancia con el Articulo 1315o del Codigo Civil, si por
causas de caso fortuito o fuerza mayor, se impidiera cumplir o se demorase el
cumplimiento de las obligaciones previstas en la ejecucion de "EL PAMA", dicho
impedimento o demora no constituira incumplimiento del contrato y el plazo para
cualquier obligacion prevista en "EL PAMA" o en el presente instrumento, sera
extendido por el tiempo correspondiente al periodo o periodos durante los cuales
"El Titular" haya estado impedido de cumplir o haya demorado sus obligaciones
contractuales como consecuencia de las razones especificadas en la presente
clausula.
"El Titular" dara aviso en el dia que empezo el acontecimiento a la
Direccion General de Mineria, acreditando los hechos acompanado de un informe de
su auditor ambiental, dentro de los cinco dias siguientes al acontecimiento.
CLAUSULA DECIMA .- GASTOS
Todos los gastos relacionados con el perfeccionamiento e inscripcion
en el Registro Publico de Mineria de este contrato seran de cargo exclusivo de
"El Titular", incluyendo un juego del testimonio para la Direccion General de
Mineria y una copia simple para la Direccion General de Asuntos Ambientales.
CLAUSULA DECIMO PRIMERA.- RESOLUCION DEL CONTRATO
Es causal de resolucion del presente contrato, la omision de cumplir
con "EL PAMA" dentro del plazo senalado en el numeral 6.1 de la Clausula Sexta,
salvo por causas de fuerza mayor o caso fortuito.
<PAGE>
CLAUSULA DECIMO SEGUNDA.- DOMICILIO
Para los efectos de este contrato y de toda notificacion judicial o
extrajudicial que se le dirija, el titular senala como su domicilio el que
figura en la introduccion de este instrumento. Todo cambio debera ser comunicado
a la Direccion General de Mineria a traves de Carta Notarial.
Agregue Usted Senor Notario las clausulas de Ley y pase los partes
respectivos al Registro Publico de Mineria para su inscripcion.
Firman las partes, en senal de expresa aceptacion del contenido de
los terminos y condiciones del presente contrato, por triplicado a los .17 dias
del mes de Octubre de 1997.
[ILLEGIBLE] [ILLEGIBLE]
----------- -----------
EL ESTADO EL TITULAR
Ing. JUAN MENDOZA M
Vice Ministro de Minas
<PAGE>
ANEXO No 1
METALOROYA S.A.
CONCESIONES MINERAS
================================================================================
NOMBRE INSCRIPCION EN REGISTRO PUBLICO DE MINERIA
====================================================
FICHA ASIENTO
================================================================================
La Oroya - 1 11030 01
- --------------------------------------------------------------------------------
La Oroya - 2 11031 01
- --------------------------------------------------------------------------------
La Oroya - 3 11032 01
- --------------------------------------------------------------------------------
La Oroya - 4 11033 01
- --------------------------------------------------------------------------------
La Oroya - 5 11034 01
- --------------------------------------------------------------------------------
La Oroya - 7 12333 01
- --------------------------------------------------------------------------------
Cerro de Pasco Seis 11090 01
================================================================================
CONCESSIONES DE BENEFICIO
================================================================================
NOMBRE INSCRIPCION EN REGISTRO PUBLICO DE MINERIA
====================================================
FICHA ASIENTO
================================================================================
Complejo Metalurgico La Oroya
- --------------------------------------------------------------------------------
Refineria 1 (Fundicion) 011135 001
- --------------------------------------------------------------------------------
Refineria 2 (Refineria de
Cu y Pb)
================================================================================
<PAGE>
ANEXO No 2
CUADRO No 1
PLAN DE INVERSIONES
COMPLEJO METALURGICO DE LA OROYA (METALOROYA)
<TABLE>
<CAPTION>
====================================================================================================================================
PROYECTO METAS PRINCIPALES CONTROLES AMBIENTALES/OBRAS
DE MITIGACION
====================================================================================================================================
<S> <C> <C>
Nuevas Plantas de Acido Sulfurico Fijar el SO(2) de las emisiones producto de Se instalaran 2 plantas de plantas de
las operaciones metalurgicas y alcanzar los acido sulfurico: Planta de acido de
niveles maximos permisibles la fundicion de Cu de 235,000 T/ano
Planta de acido de la fundicion de Pb
/ circuito de Zn de 270,000 T/ano
Resultados de la mitigacion:
Se fijara como minimo el 83% del SO(2)
generado Para el ingreso de 515 T/dia
(188,261 T/ano) de azufre se emitira
al medio ambiente 110 T/dia de So(2)
Respecto a la calidad de aire la
concentracion diaria de SO(2) estara
por debajo de 572 ug/m3 y la emision
de material particulado por debajo
de 100 mg/m(3) cumpliendo asi, lo
dispuesto en la R.M. No
315-96-EM//VMM.
====================================================================================================================================
Planta de tratamiento de agua Tratar las soluciones acido ferrosas de la Proceso de predilucion, intercambio
madre de la Refineria de Cobre refineria de cobre que se descargan al rio ionico/electrowining (SX-EW),
Yauli y obener una solucion neutralizada neutralizacion
apta para reciclar y/o descartar previa
recuperacion del niquel y purificar la
solucion Raff para obtener un efluente
final con contenidos de impurezas por
debajo de los limites maximos permisibles
establecidos por el M.E.M.
====================================================================================================================================
Muro de contencion para los lodos Instalar un muro de concreto para almacenar Recuperar las soluciones acidas y
de plomo en la Planta Zileret - los lodos de plomo descargados de la unidad recircularlas al circuito de
Division de zinc(*) de hidrometalurgia de la planta Zileret. lixiviacion acida de la unidad
hidrometalurgia.
====================================================================================================================================
</TABLE>
<PAGE>
Viene...
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
PROYECTO METAS PRINCIPALES CONTROLES
AMBIENTALES/ OBRAS DE MITIGACION
==================================================================================================================
<S> <C> <C>
Planta de tratamiento de Obtener un efluente hacia el rio Implementacion de una planta de
efluentes liquidos Industriales Mantaro con contenidos de tratamiento de efluentes, con
de fundicion y refineria - La elementos contaminantes segun capacidad de tratamiento de
Oroya los niveles maximos permisibles 9m^3/min. y un proceso de
(R.M. No 011-96-EM/VMM) para la neutralizacion y precipitacion
actividad minero - metalurgicos. con floculante. R.M. No
011-96-EM/VMM.
- ------------------------------------------------------------------------------------------------------------------
Recirculacion del agua utilizada Eiminar la contaminacion del rio Utilizar las aguas de
en la Iranulacion de speiss del Mantaro por sustancias granulacion de speiss en
horno de Espumaje-Fundicion de contaminantes y solidos en circuito cerrado.
Plomo. suspension en las aguas de
granulacion de speiss.
- ------------------------------------------------------------------------------------------------------------------
Nuevo sistema de lavado de anodos Eliminar la contaminacion del Optimizar el consumo de agua
- - Refineria de Zinc rio Mantaro. mediante automatizacion del
lavado de anodos.
El volumen residual sera
tratado en la planta de
tratamiento de efluentes
liquidos industriales.
- ------------------------------------------------------------------------------------------------------------------
Manejo y disposicion de las Eliminar la contaminacion del Se instalaran 2 desaguadores
escorias de cobre y plomo rio Mantaro por sustancias rotatorios tipo IBA, sistemas
contaminantes y solidos en nuevos de granulacion,
suspension en las aguas de recirculacion de agua de
granulacion de escorias de cobre granulacion y transporte.
y plomo Con esta implementacion se
elimina la evacuacion de las
aguas de granulacion y se
evitaran las perdidas de
escorias al rio Mantaro.
- ------------------------------------------------------------------------------------------------------------------
Nuevo deposito de escorias de Preparar un nuevo deposito a 9 Minimizar la contaminacion
Cobre y Plomo (Cochabamba) Km. de La Oroya camino a hacia el rio Mantaro de acuerdo
Huancayo en la margen izquierda a las normas ambientales
del rio Mantaro. vigentes
- ------------------------------------------------------------------------------------------------------------------
Nuevo Deposito de Trioxido de Construccion de un nuevo Consiste de un sistema
Arsenico deposito con tecnologia de compuesto de forrado de fondo
avanzada y que se ajuste a las de los depositos, una cubierta
normas de control ambiental. compuesta y un sistema de
deteccion y monitoreo de lixiviado,
disenados para controlar la
liberacion de contaminantes en el
medio ambiente y control del
potencial de exposicion del
publico.
La calidad de aire del medio
ambiente como del agua que
discurre al rio Mantaro, estaran
acorde a los niveles maximos
permisibles establecidos por el
Ministerio de Energia y Minas.
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
[Illegible stamps] Van...
<PAGE>
Viene...
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
PROYECTO METAS PRINCIPALES CONTROLES
AMBIENTALES/ OBRAS DE MITIGACION
=================================================================================================================
<S> <C> <C>
Tratamiento de aguas servidas y Ejecucion de obras, adquisicion Instalacion de dos plantas de
disposicion de basura en La Oroya. e instalacion de equipo para el tratamiento de aguas servidas,
tratamiento de aguas servidas y una en Chulec y la otra en
deposicion de basura de las Sudete para tener un efluente
zonas de vivienda dependiente de de solo 30ppm de DBO y 40 ppm
CENTROMIN PERU S.A. de solidos suspendidos.
Disponer de una planta de
disposicion final bajo las tecnicas
de un relleno sanitario eliminando
la contaminacion al rio Mantaro.
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
[Illegible]
Nota:
(*) Inversiones consideradas en continuidad operativa y mejoras de proceso,
iniciadas por CENTROMIN PERU S.A., y seran continuadas por METALOROYA S.A.
[Illegible stamps]
<PAGE>
ANEXO No 2
CUADRO No 2
CRONOGRAMA DE INVERSIONES DEL PROGRAMA DE ADECUACION Y MANEJO AMBIENTAL (PAMA)
COMPLEJO METALURGICO DE LA OROYA - METALOROYA S.A.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
No TOTAL
PROYECTOS Proy. 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Miles US$
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CIRCUITO DE COBRE:
Nueva Planta de Acido
Sulfurico 1 3,800 2,775 16,200 18,425 41,200
CIRCUITO DE PLOMO:
Nueva Planta de Acido
Sulfurico 1 22,500 22,500
CIRCUITO DE ZINC:
Nueva Planta de Acido
Sulfurico 1 26,300 26,300
EFLUENTES LIQ.
INDUSTRIALES:
Planta de tratamiento
de agua madre de la
Ref. De Cobre 5 500 500
Planta de tratamiento
de efluentes liquidos 8 1,000 500 1,000 2,500
Muro de contencion
para lodos de Pb. En
Planta Zilerel 9 5 5
Solucion Barren, Cadmio.
Recirculacion del agua
utiliazada en
granulacion de speiss
del 10 55 55
Horno de espumaje -
Fundicion de Plomo
Nuevo Sistema de lavado
de anodos - Refineria
de Zinc. 11 15 15
Manejo de Escorias -
Nuevo Sistema (Agua
Granul.) Escorias de
Cu/Pb. 12 650 2,362 2,288 1,200 6,500
Depositos
Nuevos (Cochabamba) 13 200 2,300 2,500
Trioxido de Arsenico
(As(2)O(3))-Depositos
Nuevos 14 450 550 1,000 2,000
Dosague/Basura 16 400 200 1,100 1,100 700 3,500
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL 2,700 3,612 4,963 3,300 3,000 3,800 2,775 38,700 44,725 107,675
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
LSC/mpa
[Illegible]
NOTA:
En caso de que METALOROYA devuelva dentro de dos anlos, abonara a CENTROMIN PERU
S.A. US $ 7,2 Millones para su abandono lecnico.
El Gasta de 1997, en el Proyecto de ferritas estara a cargo de CENTROMIN;
consistira en obras de Estabilidad Geotecnica y obras de defensa Riberena
<PAGE>
MINISTRY OF ENERGY AND MINES
Lima, October 21, 1997
Official Letter No. 1113-97-EM/DGM
Mr. Jorge Merino Tafur
General Manager
EMPRESA METALURGICA LA OROYA S. A.
(METALOROYA S. A.)
SUBJECT: Remittance of Environmental Administrative Stability Contract
Reference: Request No. 1152487, dated September 19, 1997
Attached please find the Environmental Administrative Stability Contract entered
into by and between the Peruvian State and Empresa Metal rgica La Oroya S. A.,
pursuant to Article 18 of the Regulations of Title Fifteen of the Single Revised
Text of the General Mining Law, approved by Supreme Decree No. 016-93-EM.
Sincerely yours,
Jorge Diaz
Director General
Mr. Notary:
Kindly enter in your Register of Public Deeds, the Environmental Administrative
Stability Contract entered into by and between the MINISTRY OF ENERGY AND MINES,
ON BEHALF OF THE PERUVIAN STATE, duly represented by the Vice Minister of Mines,
Mr. Juan Mendoza Marsano, identified by Voter's Registration Card No. 09179432,
authorized by Ministerial Resolution No.
<PAGE>
292-97-EM/VMM, dated July 7, 1997; as party of the first part; and EMPRESA
METALURGICA LA OROYA S.A., THE TITLE-HOLDER OF THE MINING ACTIVITY, with Single
Taxpayer Registration No. 33526610, a company incorporated and existing in
keeping with the laws of the Republic of Peru, registered on Entry l of Filing
Card No. 040367 of the Book of Corporations of the Public Mining Registry,
domiciled at Av. Javier Prado Este No. 2175, San Borja, hereinafter referred to
as "The Title-holder", duly represented by Mr. Jorge Merino Tafur, identified
with Voter's Registration Card, No. 07341351, as per power of attorney that you
Mr. Notary will kindly insert herein, as party of the second part; under the
following terms and conditions:
CLAUSE ONE - BACKGROUND
1.1. The Standards for Environmental Protection established in the Code for
the Environment and Natural Resources, as well as those related to the
Mining-Metallurgic Activity contained in the General Mining Law and
Regulations thereunder approved by Supreme Decrees No. 016-93-EM, and
No. 059-93-EM, Ministerial Resolutions No. 011-96-EM/VMM and No.
315-96-EM/VMM, concordant with Decree Law No. 25763, its Regulations,
Supreme Decree No. 012-93-EM and amending provisions, Supreme Decrees
No. 036-93-EM and No. 058-93-EM, provide that the Ministry of Energy
and Mines is in charge of the establishment of the environmental
protection policy for the mining-metallurgic activity.
1.2. By means of Legislative Decree No. 674, dated September 25, 1991, the
Promotion of Private Investment in companies that make up the
Entrepreneurial Activity of the State, was declared to be of national
concern.
1.3. By means of Supreme Resolution No. 102-92-PCM, the agreement reached by
the Private Investment Promotion Commission (COPRI) approving the new
Private Investment Promotion Plan referred to in Legislative Decree No.
674, was ratified.
1.4. By means of Supreme Resolution No. 016-96-PC the agreement adopted by
COPRI approving the new Private Investment Promotion Plan as regards
CENTROMIN PERU S.A., was ratified.
1.5. By means of COPRI's agreement made at the meeting held on April 17,
1996, the incorporation of companies based on the operating units of
CENTROMIN pursuant to Article 10 of Legislative Decree No. 674, was
authorized.
1.6. Within the aforementioned context, Empresa Metalurgica La Oroya S. A.,
also METALOROYA S.A., was incorporated based on the La Oroya Production
Unit, whose shares are entirely a property of CENTROMIN and whose
business purpose is the exercise of all activities that pertain to the
mining-metallurgy industry.
-2-
<PAGE>
1.7. CENTROMIN PERU S. A. will transfer to EMPRESA METALURGICA LA OROYA
S.A.-METALOROYA S.A., upon the signing of a stock transfer contract
between CENTROMIN PERU S. A. and DOE RUN PERU S. R. LTDA.--the Awardee
of the Contract of Bidding PRI-16-97-- the operations of the ex La
Oroya Production Unit. METALOROYA S. A. will assume the responsibility
for the environmental matters deriving from these operations, for the
mining and processing concessions that will be assigned to it.
1.8. By means of Directorial Resolution No. 017-97-EM/DGM, dated January 13,
1997, the General Mining Bureau approved the Environmental Adjustment
and Management Program (PAMA) of the La Oroya Operating Unit, whose
rescheduling was approved by Directorial Resolution No. 325-97-EM/DGM,
dated October 6, 1997.
1.9. CENTROMIN PERU S.A. by means of Request No. 1152485, dated September
19, 1997, requested the General Mining Bureau the division of the PAMA
of the La Oroya Production Unit, which was approved by means of
Directorial Resolution No. 334-97-EM/DGM, dated October 16, 1997. Due
to the aforesaid, The Title-holder will execute the Investment Plan and
Schedule included in Annex No. 2 which comprises the mining and
processing concessions indicated in Annex No. 1. The aforementioned
Annexes, hereinafter THE PAMA, form an integral part of this contract.
1.10. By means of Request No. 1152487, dated September 19, 1997, The
Title-holder, pursuant to the provisions set forth in Articles 4 and 18
of Supreme Decree No. 016-93-EM, requested the Ministry of Energy and
Mines the granting of Environmental Administrative Stability with
respect to THE PAMA.
1.11. THE PAMA, establishes among its objectives, actions to mitigate and
prevent the environmental damage caused by the mining-metallurgic
operations of the LA OROYA Metallurgic Unit, and includes a schedule
for the execution of the investments regarding the measures to be
carried out to mitigate the identified environmental impacts.
CLAUSE TWO - OBJECT
The object of this contract is to guarantee The Title-holder environmental
administrative stability as regards the works to solve the environmental
problems included in THE PAMA, so that any possible change in the standards or
in the permissible maximum levels will not affect them negatively during the
term of effect of this contract.
CLAUSE THREE - TERM OF EFFECT
-3-
<PAGE>
This contract will go into effect on the date it is signed by the parties, and
it must terminate within the ten-year term counted as of the approval of THE
PAMA.
CLAUSE FOUR - CONTRACTUAL GUARANTIES
4.1 The maximum permissible levels are determined in Annex No. 2 of
Ministerial Resolution No. 011-96-EM/VMM and Ministerial Resolution No.
315-96-EM/VMM, which are in effect at the date of the signing of this
contract. These levels will not be subject to amendments during the
term of effect of the contract.
4.2 It is hereby understood that the laws, legislative decrees, decree
laws, supreme decrees and other legal provision referred to in this
document, have been complied with in accordance with the texts existing
as of the date of the approval of THE PAMA; and they will not interfere
with, limit or diminish the rigths of The Title-holder to enjoy the
benefits provided by prevailing legislation on the date of the approval
of THE PAMA, and the contract constitutes a guarantee to this end; nor
is it exempted from complying with the obligations established in the
applicable legislation in effect on the date of the approval of THE
PAMA on in other provisions approved afterwards provided they are not
contrary to the guaranties granted by means of this contract.
CLAUSE FIVE - OBLIGATIONS OF THE TITLE-HOLDER
The Title-holder is obliged to carry out, during the term of effect of THE PAMA,
an operational monitoring program, whose results must be reported to the
Ministry of Energy and Mines in keeping with the Ministerial Resolutions Nos.
011-96-EM/VMM and 315-96-EM/VMM.
CLAUSE SIX- THE PAMA AND ITS TERM OF EXECUTION
6.1 The term of execution of THE PAMA is ten years, and it will end on
January 13, 2006.
6.2 The Investment Plan included in THE PAMA referred to in Article 18 of
Supreme Decree No. 016-93-EM, comprises in detail the works and
acquisitions required for the start up of the projects.
6.3 The goals, main environmental controls, environmental mitigation works
and other tasks contained in the Investment Plan of THE PAMA appear on
Annex 2, which forms an integral part of this contract.
-4-
<PAGE>
CLAUSE SEVEN - AMENDMENT OF THE PAMA
THE PAMA may be amended pursuant to the provisions set forth in Article 17 of
Supreme Decree No. 016-93-EM.
CLAUSE EIGHT - TRANSFER OR ASSIGNMENT
This contract may be assigned, awarded, contributed o transferred with prior and
express consent of the State. For the granting of the consent by the State, the
signing of a contract and of its corresponding public deed will suffice.
CLAUSE NINE - ACTS OF GOD OR FORCE MAJEURE
Pursuant to the provisions set forth in Article 1315 of the Civil Code, if an
Act of God or an event of Force Majeure would prevent compliance or would delay
compliance with the obligations established in THE PAMA, such impediment or
delay will not constitute non-compliance with the contract and the term of any
obligation established in THE PAMA or in this document, will be extended for the
time corresponding to the period or periods during which The Title-holder has
been prevented from, or delayed in fulfilling its contractual obligations as a
consequence of the reasons specified in this clause.
The Title-holder will give notice to the General Mining Bureau of the date the
event started, supporting the facts with a report made by its environmental
auditor, within five days following the event.
CLAUSE TEN - EXPENSES
All expenses related to perfecting this contract and registering it with the
Public Mining Registry will be borne exclusively by The Title-holder, including
a Testimony for the General Mining Bureau and a Copy for the General Bureau of
Environmental Affairs.
CLAUSE ELEVEN - RESCISSION
Non-compliance with THE PAMA within the term established in numeral 6.1 of
Clause Six hereof, except due to an Act of Gold or an event of Force Majeure,
shall cause the rescission of this contract.
-5-
<PAGE>
CLAUSE TWELVE - DOMICILE
For the purposes of this contract and for any judicial or extra-judicial notices
addressed to him, the Title-holder hereby establishes as its domicile that which
appears in the introduction of this document. Any change will be informed to
the General Mining Bureau by means of a Notarial Letter.
Mr. Notary, kindly add the clauses required by Law and send the corresponding
reports to the Public Mining Registry for their registration.
Both parties sign three copies of this contract, to signal their express
acceptance of its content and of the terms and conditions of this document, on
October 17, 1997.
THE STATE
Mr. Juan Mendoza M.
Vice Minister of Mines
THE TITLE-HOLDER
ANNEX 1
METALOROYA S. A.
MINING CONCESSIONS
- ---------------------------------------------------------------------
Registration with the Public Mining Registry
- ---------------------------------------------------------------------
Name Filing Card No. Entry No.
- --------------------------------- --------------------- -----------
La Oroya - 1 11030 01
- --------------------------------- --------------------- -----------
La Oroya - 2 11031 01
- --------------------------------- --------------------- -----------
La Oroya - 3 11032 01
- --------------------------------- --------------------- -----------
La Oroya - 4 11033 01
- --------------------------------- --------------------- -----------
La Oroya - 5 11034 01
- --------------------------------- --------------------- -----------
La Oroya - 12333 01
- --------------------------------- --------------------- -----------
Cerro de Pasco Seis 11090 01
- --------------------------------- --------------------- -----------
-6-
<PAGE>
PROCESSING CONCESSIONS
- ---------------------------------------------------------------------
Registration with the Public Mining Registry
- ---------------------------------------------------------------------
Name Filing Card No. Entry No.
- --------------------------------- --------------------- -----------
Complejo Metalurgico La Oroya
- --------------------------------- --------------------- -----------
Refinery 1 (Smelter) 011135 001
- --------------------------------- --------------------- -----------
Refinery 2
(Cu and Pb Refinery)
- --------------------------------- --------------------- -----------
<TABLE>
<CAPTION>
ANNEX 2
SCHEDULE NO. 1
INVESTMENT PLAN
COMPLEJO METALURGICO DE LA OROYA (METALOROYA)
- ------------------------ ----------------------------------------- ------------------------------------------------------------
PROJECT GOALS MAIN ENVIRONMENTAL CONTROLS/MITIGATION WORK
- ------------------------ ----------------------------------------- ------------------------------------------------------------
<S> <C> <C>
New Sulfuric Acid Plants To set the level of the So2 for emissions 2 Sulfuric Acid Plants will be installed.
resulting from metallurgic operations and 1 Acid Plant at the Cu smelter: 235,000 T/year.
reach the maximum permissible levels 1 Acid Plant at the Pb smelter/Zn circuit: 270,000 T/year.
Mitigation results:
To set, as a minimum, 83% of the generated SO2.
For the entry of 515 T/day (188,261 T/year) of sulfur,
110 T/day of SO2 will be emitted into the environment.
As regards the quality of air, daily SO2 concentration
shall be below 572 ug/m3 and the emission of particles
below 100 mg/m3, in compliance with Ministerial
Resolution No. 315-96-EM/VMM
- ------------------------ ----------------------------------------- ------------------------------------------------------------
Bittern Water Treatment To treat acid ferrous solutions Predilution Process, ionic exchange/electrowinning
Plant of the Copper discharged into the Yauli river and obtain (SX-EW), neutralization.
Refinery a neutralized solution than can be recycled
and/or discard, prior the recovery of
nickel, and, purify the Raff solution to
obtain a final effluent with impurity
content below the maximum permissible
limits established by the Ministry Energy
and Mines.
- ------------------------ ----------------------------------------- ------------------------------------------------------------
-7-
<PAGE>
- ------------------------ ----------------------------------------- ------------------------------------------------------------
Containment Wall for To install a concrete wall to store To recover acid solutions and recirculate them to the acid
lead sludges at the the lead sludges discharged from leaching circuit of the hydro-metallurgy unit.
Zileret Plant, Zinc the hydro-metallurgy unit of the
Division (*) Zileret Plant.
- ------------------------ ----------------------------------------- ------------------------------------------------------------
Treatment Plant of To obtain an effluent to the Mantaro To implement an effluent treatment plant, with a treatment
industrial liquid river with polluting contents as per capacity of 9 m3/min., and a neutralization process and
effluents from the La the maximum permissible levels precipitation with flocculant. Ministerial Resolution
Oroya smelter and the (Ministerial Resolution No. No.011-96-EM/VMM.
refinery. 011-96-EM/VMM) for the mining-metallurgy
activity.
- ------------------------ ----------------------------------------- ------------------------------------------------------------
Recirculation of water To eliminate the contamination of the To use the speiss granulation water in a short circuit.
used in the granulation Mantaro river, by contaminating
of speiss in the furnace- elements and solids in suspension in
Lead Smelter the water used for the granulation of
speiss.
- ------------------------ ----------------------------------------- ------------------------------------------------------------
New system for the To eliminate the contamination of the To optimize the consumption of water by the automation
washing of anodes - Mantaro River. of the anode washing. The residual volume will be
Zinc Refinery treated at the treatment plant for industrial liquid
effluents.
- ------------------------ ----------------------------------------- ------------------------------------------------------------
Handling and disposal of To eliminate the contamination of the 2 rotary dewatering IBA type systems will be installed,
copper and lead slag. Mantaro river by pollutants and solids new granulation systems, and the recirculation of
in suspension in the water used for the granulation water and transport. With the aforesaid the
granulation of copper and lead slag. discharge of the granulation water will be eliminated
and the loss of slag into the Mantaro river will be
avoided.
- ------------------------ ----------------------------------------- ------------------------------------------------------------
New Copper and Lead slag To prepare a new deposit, 9 Km. from To minimize the contamination of the Mantaro River, as per
deposit (Cochabamba) La Oroya towards Huancayo, on the left prevailing environmental standards.
margin of the Mantaro River
- ------------------------ ----------------------------------------- ------------------------------------------------------------
New Arsenic Trioxide To construct a new deposit with The lining of the bottom of the deposits, a composed
Deposit advanced technology adjusted to cover and a detection and monitoring system for the
environmental control standards. leaching, designed to control the emission of pollutants
into the environment and the potential exposure for the
people. The quality of environmental air and of the water
that runs into the Mantaro river will be in keeping with
the maximum permissible levels established by the Ministry
of Energy and Mines
- ------------------------ ----------------------------------------- ------------------------------------------------------------
Treatment of Sewage Execution of works, acquisition and Installation of two sewage water treatment plant, one in
Water and Garbage installation of equipment for the Chulec and the other one in Sudete, to obtain an effluent
Disposal in La Oroya. treatment of sewage water and disposal with only 30 ppm of DBO and 40 ppm of suspended solids.
of garbage originated from the housing To have a final disposal plant using sanitary filling
areas of CENTROMIN PERU S.A. techniques, eliminating the contamination to the
Mantaro River.
- ------------------------ ----------------------------------------- ------------------------------------------------------------
Note
</TABLE>
-8-
<PAGE>
(*) Investments considered for operating continuity and process improvement,
started by CENTROMIN PERU S.A. will be continued by METALOROYA S. A.
<TABLE>
<CAPTION>
ANNEX 2
SCHEDULE NO. 2
SCHEDULE FOR THE ENVIRONMENTAL ADJUSTMENT AND MANAGEMENT PROGRAM (PAMA)
COMPLEJO METALURGICO DE LA OROYA - METALOROYA S. A.
Projects Project
No. 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Total
- ----------------------------------------- ------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
COPPER CIRCUIT:
- ----------------------------------------- ------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ --------
New Sulfuric Acid Plant 1 3,800 2,775 16,200 18,425 41,200
- ----------------------------------------- ------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ --------
LEAD CIRCUIT
- ----------------------------------------- ------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ --------
New Sulfuric Acid Plant 1 22,500 22,500
- ----------------------------------------- ------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ --------
ZINC CIRCUIT:
- ----------------------------------------- ------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ --------
New Sulfuric Acid Plant 1 26,300 26,300
- ----------------------------------------- ------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ --------
INDUSTRIAL LIQUID EFFLUENTS
- ----------------------------------------- ------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ --------
Bittern Water Treatment Plant-Cu Refinery 5 500 500
- ----------------------------------------- ------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ --------
Liquid Effluent Treatment Plant 8 1,000 500 1,000 2,500
- ----------------------------------------- ------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ --------
Containment Wall for Pb Sludges-
Zileret Plant (*) 9 5 5
- ----------------------------------------- ------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ --------
Barren Solution, Cadmium
- ----------------------------------------- ------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ --------
Recirculation of water used in the
granulation of speiss of the Furnace-
Lead Refinery 10 55 55
- ----------------------------------------- ------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ --------
New Anode Washing System-Zinc Refinery 11 15 15
- ----------------------------------------- ------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ --------
Slag Handling-New Cu/Pb Slag System
(Granulation water) 12 650 2,362 2,288 1,200 6,500
- ----------------------------------------- ------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ --------
New deposits (Cochabamba) 13 200 2,300 2,500
- ----------------------------------------- ------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ --------
Arsenic Trioxide (As2O3)- New Deposits 14 450 550 1,000 2,000
- ----------------------------------------- ------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ --------
Sewage water/Garbage 16 400 200 1,100 1,100 700 3,500
- ----------------------------------------- ------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ --------
Total 2,700 3,612 4,963 3,300 3,000 3,800 2,775 38,700 44,725 107,575
- ----------------------------------------- ------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ --------
(*) NOTE:
</TABLE>
In the event that METALOROYA S. A. returns it within two years, it shall pay
CENTROMIN PERU S.A., US$7.2 million for its technical abandonment.
1997 Expense, in the Ferrite Project will be on the account of CENTROMIN,
comprising Geotechnical Stability works and Riverbank Defense works.
-9-
<PAGE>
Exhibit 12
RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in Thousands)
<TABLE>
<CAPTION>
The Doe Run Resources Corporation
---------------------------------------------------------------
Seven Months
Ended Year Ended October 31, Three Months Ended
October 31, -------------------------- January 31,
1994 1995 1996 1997 1997 1998
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Income before taxes 1,018 7,575 18,916 3,978 1,375 6,501
Fixed charges 8,902 15,655 15,825 15,598 4,985 6,537
Less: capitalized interest (12) (8) (253) (461) (75) (38)
------- ------- ------- ------- ------- -------
Earnings 9,908 23,222 34,488 19,115 6,285 13,000
Interest Expense, excluding
capitalization of interest 8,387 14,369 14,601 14,201 4,355 5,907
Amortization of financing costs 460 1,140 898 636 492 463
Rental/lease interest 55 146 326 761 138 167
------- ------- ------- ------- ------- -------
Fixed Charges 8,902 15,655 15,825 15,598 4,985 6,537
Ratio of earnings to fixed charges 1.11 x 1.48 x 2.18 x 1.23 x 1.26 x 1.99 x
======= ======= ======= ======= ======= =======
</TABLE>
<PAGE>
EXHIBIT 21
SUBSIDIARIES
OF
THE DOE RUN RESOURCES CORPORATION
JURISDICTION OF
SUBSIDIARY ORGANIZATION
Fabricated Products, Inc. Delaware
Doe Run Exploration SA (Proprietary) Limited South Africa
Doe Run Cayman Ltd. Cayman Islands
Doe Run Mining S.R. Ltda. Peru
Doe Run Peru S.R. Ltda. Peru
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
The Doe Run Resources Corporation
and Subsidiaries
We consent to the use of our report, which was based on our audits and the
audits of other auditors, dated December 19, 1997, except for note 15 as to
which the date is March 12, 1998, included herein and to the reference to our
firm under the heading "Experts" in the prospectus.
KPMG Peat Marwick LLP
St. Louis, Missouri
May 8, 1998
<PAGE>
Exhibit 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
May 8, 1998
Dear Sirs:
As independent public accountants, we hereby consent to the use of our
auditors' report dated December 5, 1997, on the financial statements of La
Oroya Division of Empresa Minera del Centro del Peru S.A. as of October 23,
1997 and December 31, 1996 and 1995 and for the period from January 1 to
October 23, 1997 and the three-year period ended December 31, 1996, and our
auditors' report dated December 5, 1997 on the financial statements of Doe
Run Cayman Ltd. as of October 31, 1997 and the period from October 23, 1997
to October 31, 1997 (included in the audited financial statements of The Doe
Run Resources Corporation as of October 31, 1997 and for the year then ended)
which were prepared in accordance with U.S. generally accepted accounting
principles, and to all references to our firm, in connection with the
Registration Statement on Form S-4 to be filed by The Doe Run Resources
Corporation.
MEDINA, ZALDIVAR Y ASOCIADOS
Marco Antonio Zaldivar
Partner
<PAGE>
EXHIBIT 23.4
CONSENT OF INDEPENDENT MINING CONSULTANTS
May 8, 1998
Mr. Marvin Kaiser
Chief Financial Officer
The Doe Run Resources Corporation
1801 Park 270 Drive
Suite 300
St. Louis, Missouri 63146
Dear Sirs:
Pincock, Allen & Holt, a mining consulting firm based in Lakewood, Colorado,
hereby consents to the incorporation by reference the reserve statement entitled
"The Doe Run Resources Corporation--Reserve Audit--Mineable Reserves as of March
31, 1998" and all references to our firm included in or made part of The Doe Run
Resources Corporation's Registration Statement on Form S-4.
Sincerely,
PINCOCK, ALLEN & HOLT
/s/ John W. Rozelle
John W. Rozelle, P.G.
Principal Geologist
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF l939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
/ / CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(B)(2)
STATE STREET BANK AND TRUST COMPANY
----------------------------------------------------------------
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
- --------------------------- -------------------------
(State of incorporation if (I.R.S. Employer
not a national bank Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
----------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
John R. Towers, Executive Vice President and General Counsel,
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
----------------------------------------------------------------
(Name, address and telephone number of agent for service)
THE DOE RUN RESOURCES CORPORATION
FABRICATED PRODUCTS, INC.
DOE RUN CAYMAN LTD.
DOE RUN MINING S.R. LTDA.
DOE RUN PERU S.R. LTDA.
----------------------------------------------------------------
(Exact name of obligor as specified in its charter)
New York 13-1255630
Delaware 43-1755268
Cayman Islands 98-0177422
Peru 98-0180347
Peru 98-0180348
- ----------------------------- --------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1801 Park 270 Drive, St. Louis, Missouri 63146
----------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
11 1/4% Senior Notes due 2005, Series B
Floating Interest Rate Senior Notes due 2003, Series B
----------------------------------------------------------------
(Title of the indenture securities)
<PAGE>
Item l. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject:
Department of Banking and Insurance of
The Commonwealth of Massachusetts
100 Cambridge Street
Boston, Massachusetts
Board of Governors of the Federal Reserve System
Washington, D.C.
Federal Deposit Insurance Corporation
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers:
The trustee is so authorized.
Item 2. Affiliations with obligor. If the obligor is an affiliate of
the trustee, describe each such affiliation.
None with respect to the trustee or its parent, State Street
Corporation.
Item l6. List of exhibits. List below all exhibits filed as a part of
this statement of eligibility and qualification.
l. A copy of the Articles of Association of the trustee as now
in effect.
A copy of the Articles of Association of the trustee, as
now in effect, is on file with the Securities and Exchange
Commission as Exhibit 1 to Amendment No. 1 to the
Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with Registration Statement of Morse
Shoe, Inc. (File No. 22-17940) and is incorporated herein
by reference thereto.
2. A copy of the Certificate of Authority of the trustee to do
Business.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the
trustee to commence business was necessary or issued is on
file with the Securities
2
<PAGE>
and Exchange Commission as Exhibit 2 to Amendment No. 1 to
the Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with Registration Statement of Morse Shoe,
Inc. (File No. 22-17940) and is incorporated herein by
reference thereto.
3. A copy of the Certification of Fiduciary Powers of the
Trustee.
A copy of the authorization of the trustee to exercise
corporate trust powers is on file with the Securities and
Exchange Commission as Exhibit 3 to Amendment No. 1 to the
Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with Registration Statement of Morse
Shoe, Inc. (File No. 22-17940) and is incorporated herein
by reference thereto.
4. A copy of the By-laws of the trustee as now in effect.
A copy of the By-Laws of the trustee, as now in effect, is
on file with the Securities and Exchange Commission as
Exhibit 4 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with
Registration Statement of Eastern Edison Company (File No.
33-37823) and is incorporated herein by reference thereto.
5. A consent of the trustee required by Section 32l(b) of the
Act is annexed hereto as Exhibit 5 and made a part hereof.
6. A copy of the latest Consolidated Reports of Condition of
the trustee, published pursuant to law or the requirements
of its supervising or examining authority.
A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority is annexed hereto as
Exhibit 6 and made a part hereof.
3
<PAGE>
NOTES
Inasmuch as this Form T-l is filed prior to the ascertainment
by the trustee of all facts on which to base its answer to Item 2, the answer to
said Item is based upon incomplete information. Said Item may, however, be
considered correct unless amended by an amendment to this Form T-l.
4
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of
l939, the trustee, State Street Bank and Trust Company, a Massachusetts trust
company, has duly caused this statement of eligibility and qualification to be
signed on its behalf by the undersigned, thereunto duly authorized, all in the
City of Hartford, and State of Connecticut, on the ____ day of May, 1998.
STATE STREET BANK AND TRUST
COMPANY,
Trustee
By /s/ Robert L. Reynolds
------------------------
Name: Robert L. Reynolds
Title: Vice President
5
<PAGE>
EXHIBIT 5
CONSENT OF THE TRUSTEE
REQUIRED BY SECTION 321(b)
OF THE TRUST INDENTURE ACT OF 1939
The undersigned, as Trustee under an Indenture entered into among The
Doe Run Resources Corporation, Fabricated Products, Inc., Doe Run Cayman Ltd.,
Doe Run Mining S.R. Ltda., Doe Run Peru S.R. Ltda. and State Street Bank and
Trust Company, Trustee, does hereby consent that, pursuant to Section 321(b) of
the Trust Indenture Act of 1939, reports of examinations with respect to the
undersigned by Federal, State, Territorial or District authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
STATE STREET BANK AND TRUST
COMPANY,
Trustee
By /s/ Robert L. Reynolds
-------------------------
Name: Robert L. Reynolds
Title: Vice President
Dated: May , 1998
<PAGE>
EXHIBIT 6
Consolidated Report of Condition of State Street Bank and Trust Company,
Massachusetts and foreign and domestic subsidiaries, a state banking institution
organized and operating under the banking laws of this commonwealth and a member
of the Federal Reserve System, at the close of business December 31, 1997,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act and in accordance
with a call made by the Commissioner of Banks under General Laws, Chapter 172,
Section 22(a).
<TABLE>
<CAPTION>
Thousands of
Dollars
<S> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ............................2,220,829
Interest-bearing balances ....................................................10,076,045
Securities ............................................................................10,373,821
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary ...........................................5,124,310
Loans and lease financing receivables:
Loans and leases, net of unearned income ...6,270,348
Allowance for loan and lease losses ...........82,820
Allocated transfer risk reserve ....................0
Loans and leases, net of unearned income and allowances .......................6,187,528
Assets held in trading accounts ........................................................1,241,555
Premises and fixed assets ................................................................410,029
Other real estate owned ......................................................................100
Investments in unconsolidated subsidiaries ................................................38,831
Customers' liability to this bank on acceptances outstanding ..............................44,962
Intangible assets ........................................................................224,049
Other assets ...........................................................................1,507,650
----------
Total assets ..........................................................................37,449,709
-----------
-----------
LIABILITIES
Deposits:
In domestic offices ..........................................................10,115,205
Noninterest-bearing ...............7,739,136
Interest-bearing ..................2,376,069
In foreign offices and Edge subsidiary .......................................14,791,134
Noninterest-bearing ..................71,889
Interest-bearing .................14,719,245
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary ...........................................7,603,920
Demand notes issued to the U.S. Treasury and Trading Liabilities .........................194,059
Trading liabilities ....................................................................1,036,905
Other borrowed money .....................................................................459,252
Subordinated notes and debentures ..............................................................0
Bank's liability on acceptances executed and outstanding ..................................44,962
Other liabilities ........................................................................972,782
Total liabilities .....................................................................35,218,219
-----------
EQUITY CAPITAL
Perpetual preferred stock and related surplus ..................................................0
Common stock ..............................................................................29,931
Surplus ..................................................................................444,620
Undivided profits and capital reserves/Net unrealized holding gains (losses) ...........1,763,076
Cumulative foreign currency translation adjustments ......................................(6,137)
Total equity capital ...................................................................2,231,490
----------
Total liabilities and equity capital ..................................................37,449,709
-----------
</TABLE>
I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
David A. Spina
Marshall N. Carter
Truman S. Casnern
