Farallon Resources (TSE:FAN)

[the cork]

Doe Run Peru’s Zinc Smelter May File for Bankruptcy (Update1)

[insert my comment] - Reduction in supply of zinc from Peru (or any source) should have a positive impact for us!

By Alex Emery

Aug. 3 (Bloomberg) -- Doe Run Peru may file for bankruptcy to restructure debt at its shuttered zinc and lead smelter, Energy & Mines Minister Pedro Sanchez Gamarra said.

Peru’s antitrust office Indecopi will study the situation at the company, a unit of Renco Group Inc., Sanchez told reporters in Lima today. The unit owes suppliers $156 million and has been closed since June.

“Once it becomes a reality, we’ll see what’s to be done,” Sanchez said. “We need a global solution as we’ve been going over and over the same issue.”

Banks halted lending to Doe Run in February after metal prices collapsed. On June 2, the smelter shut all operations after suppliers refused to sell it raw materials. Copper, zinc and lead prices declined at least 49 percent in London last year, leading to $124 million in company losses.

Doe Run Vice President Jose Mogrovejo declined to confirm if the company will file for bankruptcy. Company and government officials will meet for talks on Aug. 5, he said in an interview.

“A bankruptcy process would protect the company’s assets and workers’ jobs,” Mogrovejo said. “But it’s a technical process we can’t comment on beforehand.”

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ah.moBIo4Afw

GLTA QQ