February 14, 2017 / 6:54 PM / a year ago

Peru to start bidding on La Oroya smelter and mine at $270 million

LIMA, Feb 14 (Reuters) - Peru will start the bidding on a nearly 100-year old polymetallic smelter and a copper mine at about $270 million in a March 10 auction, the government said on Tuesday.

The market price for the two assets, which Doe Run Peru owned before going bankrupt in 2009, is estimated at about $400 million, said Guillermo Shinno, a government representative of the group of creditors holding the auction.

The La Oroya smelter in Peru’s central Andes is seen as being worth $334 million and the Cobriza copper mine $71 million, according to the energy and mines ministry.

A 2015 auction to find a new operator for La Oroya failed to draw any bids as potential buyers fretted over liability for lingering pollution, labor contracts for some 2,200 workers, and hundreds of millions in upgrades needed for the copper smelter.

President Pedro Pablo Kuczynski, a former investment banker who took office in July, pushed back a liquidation deadline for the La Oroya smelter last year in a renewed bid to revive it.

Kuczynski wants to ramp up Peru’s smelting capacity to wring more value from the country’s minerals, which make up more than half of overall exports. (Reporting by Teresa Cespedes; Editing by Lisa Von Ahn)

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