Reuters reported that trouble miner Doe Run Peru reached a financial deal with Swiss commodities trader Glencore International AG that will allow the company to restart its La Oroya smelter, which has been shut down since June 2009.

As per report, the company has not been able to resume production at the smelter for months because it could not get loans from potential creditors after banks cut its credits.

The company said in a statement that with this letter of intention Glencore will give Doe Run Peru a credit line that can be used as working capital, which would allow us to restart operations at La Oroya's metallurgical complex.

Doe Run did not specify when it plans to resume operations at La Oroya, which employs some 20,000 people. Last year, a clash between protesters demanding the reopening of the plant and police left one policeman killed. The agreement with Glencore will allow Doe Run Peru a unit of US based Renco Group to complete a cleanup plan in the town of La Oroya, in the central Andes. The company was supposed to finish the cleanup program in October, but last year the Peruvian Congress gave the company 30 month extension.

Doe Run, which halted work after banks cut its credit had said that it could not regain access to loans and restart production at the world's most diversified smelter unless the deadline were extended. The company said that with this letter of intention, Doe Run will fulfill its obligations with the PAMA.

Doe Run Peru said that it has spent USD 307 million scrubbing the smelter and may need up to USD 150 million more to complete the cleanup. It owes some USD 110 million to its suppliers.

(Sourced from Reuters)