Ministry of Energy and Mines Directorial Resolution # EM-DGAA Lima, April 17th 2000

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1 Ministry of Energy and Mines Directorial Resolution # EM-DGAA Lima, April 17th 2000 In regards to Petition # presented by the CENTROMIN PERU SA, dated March 10 th 2000, regarding the request for modification of the Environmental Adjustment and Management Program (PAMA) for CENTROMIN PERU SA's "La Oroya" Metallurgical Complex, located in the district of La Oroya, province of Yauli and department of Junin; WHEREAS: Pursuant to Supreme Decree # EM which approves the Regulations for Environmental Protection in Metallurgic Mining Activities, and Supreme Decree # EM, which partially modified it, Environmental Adjustment and Management Programs (referred to herein as PAMA) approved by the Ministry of Energy and Mines may be modified by means of Directorial Resolutions, either ex officio or at the affected parties request on the basis of technical, economic, social, ecological and environmental reasons; Section 2 of Directorial Resolution # EM-DGAA, dated October 16 th 1997, approved the division of the "La Oroya" Metallurgical Complex PAM A and a total investment by CENTROMIN PERU SA as of the year 2005 of US$24'167,000; By means of Report # DGANLS, dated March 24th 2000, the National Bureau of Environmental Affairs conducted a technical evaluation of the petition for modification of the PAM A for the "La Oroya" Metallurgical Complex, filed by CENTROMIN PERU SA, which deemed said modification appropriate; In accordance with Supreme Decree # EM, the National Bureau of Environmental Affairs is authorized to evaluate, monitor, approve or deny PAM A modifications; In accordance with Supreme Decree # EM, Supreme Decree # EM, Supreme Decree # EM, Supreme Decree # EM and other related regulations; BE IT RESOLVED: Section 1: To approve the modification of the following sections of CENTROMIN PERU SA's PAM A for the "La Oroya" Metallurgical Complex: a) Remove the "Former Huanchan Copper and Lead Slag Deposit" project from the "La Oroya" Metallurgical Complex PAM A. b) Extend the terms of the "Abandonment of the arsenic trioxide deposits at Vado and Malpaso" project by one year and increase its investment commitment from 4 to 4.34 million American Dollars. c) Modify the investment schedule for the "Zinc Ferrite deposit" project. d) Modify the "Re-vegetation of the areas affected by smoke" project. Section 2: To approve the modification of the Activity and Investment schedule in CENTROMIN SA's PAMA for the "La Oroya" Metallurgical Complex, in the amount of US$ 14'917,000 to conclude in the year 2003, as per Tables #1,2 and 3 of this resolution. Section 3: To render void by modification the section of Directorial Resolution # EM DGM, dated October 16 th 1997, which authorizes a total amount of US$ 24'167,000 for CENTROMIN PERU S.A, and maintain full effect of its remaining provisions. Let it be recorded and communicated. Signed by Fernando Gala Soldevilla, Engineer General Director of Environmental Affairs 1

2 Ministry of Energy and Mines National Bureau of Environmental Affairs San Borja, March 24th 2000 Report # DGAAlLS TO: General Director of Environmental Affairs IN REGARDS TO: Modification of La Oroya PAM A - CENTROMIN SA Ref.: Petitions # (Memo # EM- DGM!DFM) (Memo # EM! DFM) (Memo # EM-DFM) The Centro del Peru SA (CENTROMIN) mining company has requested the modification of the Environmental Adjustment and Management Program (PAMA) for its La Oroya Production Unit (environmental liabilities), located in the district of La Oroya, province of Yauli and department of Junin. The PAMA for the Production Unit La Oroya was approved by Directorial Resolution # EM/DGM, dated January 13 th 1997 and was later modified by Directorial Resolution # EM/DGM, dated October 6 th 1997 at the request of CENTROMIN, its former owner. Subsequently, in regards to its transfer, CENTROMIN requested the division of the La Oroya Production Unit PAMA, which was granted by Directorial Resolution # EM/DGM dated October 16 th 1997, resulting in one part of the PAM A under the responsibility of the Empresa Metal Oroya, presently transferred to DOE RUN PERU S.R.L. and another under CENTROMIN, with an investment commitment of US$ 24'167,000, to be executed until the year Upon reviewing the petitions filed, it is noted that CENTROMIN has carried out the projects referred to in the PAM A for La Oroya, having invested a total of US$5'666,353 in the period between 1997 and December of 1999, which represents 79.8% of the investment set for that period. The difference between the actual and foreseen investment is due to the fact CENTROMIN cannot carry out the abandonment of the copper and lead slag deposits in Huanchan, and the arsenic trioxide deposit in Vado, because the transfer agreement granted by CENTROMIN in favor of Doe Run Peru S.R. Ltda., entered into during the process of privatizing State-owned companies, grants Doe Run Peru S.R. Ltda. use of the aforementioned deposits until October of The PAM A in force for CENTROMIN contains 25 projects of which: 21 projects have been concluded as of December 1999 and 04 projects are under way. The following are the projects underway: Projects under way: # 16 Former Huanchan copper and lead slag deposit. # 18 - Former Vado and Malpaso arsenic trioxide deposits. # 22 Zinc Ferrite deposit. # 23 - Re-vegetation of the areas affected by smoke. The current PAMA's investment schedule is shown in Table #1 and the investments and the physical achievements carried out as of June of 1999 in Table #2. In its petition, CENTROMIN reports that financing for the conduction of PAMA projects in its La Oroya Unit is covered by the environmental remediation technical reserves in accordance with 2

3 CENTROMIN Directors' Agreement #84-99, Session #22-99 dated December 9 th CENTROMIN requests that the Ministry of Energy and Minings' authorize the modification of the La Oroya PAMA in regards to the following projects: a. Eliminate the "Former Huanchan Copper and Lead Slag Deposit" project from CENTROMIN's PAMA. b. Extend the terms of the "Abandonment of the arsenic trioxide deposits at Vado and Malpaso" project by one year and increase its investment commitment from 4 to 4.34 million American Dollars. c. Modify the investment schedule for the "Zinc Ferrite deposit" project. d. Modify the "Re-vegetation of the areas affected by smoke" project. With the requested modification, the La Oroya PAMA will reduce its term of execution by two years, concluding in the year 2003, the investment commitment from US$ 24'167,000 to US$ 14'917,000. The justification expressed in the petition for the modification of the La Oroya PAM A is the following: a. Justification for the elimination of the "Former Huanchan Copper and Lead Slag Deposit" project from the La Oroya PAMA. On December 17th 1999 CENTROMIN and DOE RUN S.R.l. formalized the transfer of the "Reduced Huanchan Lot A" concession in favor of DOE RUN PERU S.R.l. The transfer includes the concession consisting of the copper and lead storage deposit, which spans 32 hectares, as well as the surface on which the concession is set up. With this transfer, CENTROMIN PERU SA is no longer required to continue the technical abandonment of the Huanchan copper and lead slag deposit, or its maintenance. Doe Run Peru S.R.l. has the environmental responsibility for the Huanchan deposit, which has been included in its PAMA modification as Project #13 a) "Former Huanchan Copper and Lead Slag Deposit (Huanchan)", approved by Directorial Resolution # EM/DGM. b. Justification for the extension of the terms of the "Abandonment of the arsenic trioxide deposits at Vado and Malpaso" project by one year and increase of its investment commitment from 4 to 4.34 million American Dollars. The abandonment of the arsenic trioxide deposit located in Malpaso has concluded, and the abandonment of the deposit located in Vado is pending. CENTROMIN requests the extension of the term of execution for the abandonment of the arsenic trioxide deposit at Vado by one year, which would therefore finish in 2002, for the following reasons: In the transfer agreement for the La Oroya Production Unit in favor of DOE RUN PERU S.R.l., entered into during the process of privatizing State-owned companies, the use of the Vado deposit is granted until October 24th 2000, which prevents CENTROMIN from abandoning the Vado deposit until that date. Part of the process of abandoning the Vado deposit is the need to lower the humidity of the stored arsenic trioxide from 18% to 12% by natural means. The preliminary work is underway but the task of covering the Vado deposit will not begin until October of 2000, and consists of the placement of a 2 meter deep collecting drain, equivalent to the maximum depth at which arsenic trioxide is found in the deposit. This will accelerate the process of lowering humidity and optimize the subsequent construction phases, resulting in improved water-proofing of the deposit. The abandonment activities will take at least two years, which is the reason for requesting the extension of the PAM A's term 3

4 of execution for this project. In the event that the deposit should present leaks to the exterior, these shall be treated with lime and the moist solid waste shall be confined within the deposit that will later be covered. CENTROMIN agrees to control any filtration from the deposit to the Mantaro River. CENTROMIN claims to already have carried out activities that have eliminated and controlled leakage during the rainy seasons from the deposit toward the Mantaro River. Water-proofing has been done using compacted clay in the deposit's excavations. c. Justification for the modification of the investment schedule for the "Zinc Ferrite deposit" project. CENTROMIN requests the modification of the investment schedule for the "Zinc Ferrite deposit" project, for the following reason: the transfer agreement for La Oroya Production Unit in favor of DOE RUN PERU S.R.L., entered into during the process of privatizing State-owned companies, which grants the use of the zinc ferrite deposit until October 24th 2000 prevents CENTROMIN from abandoning that deposit until after that date. CENTROMIN also reports that it has performed works to ensure the physical stability of the deposit from 1997 to 1999, with an investment of US$ 246,000, which is more than the amount committed to for that period. d. Justification for the modification of the investment commitment for the "Revegetation of the areas affected by smoke" project. In accordance with the approved PAMA, this project seeks to re-vegetate the areas around the La Oroya smelter that have been affected by its smoke, in order to stabilize the soil and control erosion. It is a futile investment to re-vegetate the areas around the La Oroya Metallurgical Complex when the S02 emissions in the smelter have yet to be controlled. Therefore, CENTROMIN requests that the PAMA investments be re-programmed in a way that basic physical stabilization activities would be carried out between 2000 and 2003 and the maintenance and monitoring of those activities would be conducted between 2004 and The investment on this project during the span of the PAM A would be US$ 0.99 million. Re-vegetation of the areas affected by smoke from the La Oroya smelter would be carried out as part of the Plan for closing the affected areas and would commence in 2007, after the La Oroya smelter controls S02 emissions, and would conclude in The re-vegetation will basically aim to recuperate soil affected by the smoke by means of intensive use of native and cultivated species that have already proven to give satisfactory results in the pilot re-vegetation project stage. The investment for this period totals US$ 5.76 million. CONCLUSIONS 1. The elimination of the "Abandonment of the copper and lead slag solid waste deposit" project from the CENTROMIN's La Oroya PAMA is acceptable considering that DOE RUN PERU S.R.L. is responsible for the management of the copper and lead slag deposit located at Huanchan by contract, and that it is already included in the PAMA for Doe Run Peru S.R. Ltda:s La Oroya Production Unit, as approved by R.D. # EM/DGM. 2. The request for extension of the term of execution by one year and increase of the investment commitment from 4 to 4,34 US$ for the "Abandonment of the arsenic trioxide deposits at Vado and Malpasd' project is acceptable 4

5 considering the conditions of the transfer agreement for the La Oroya Production Unit in the context of the process of privatizing State-owned companies, and the technical requirements for the abandonment of the Vado deposit. 3. Modification of the investment schedule for the "Zinc ferrite deposit" project is acceptable considering the conditions of the transfer agreement for the La Oroya Production Unit in the context of the process of privatizing State-owned companies. 4. Modification of the investment commitment for the "Re-vegetation of the areas affected by smoke" project is acceptable considering that it is a futile investment to re-vegetate the areas around the La Oroya Production Unit when the S02 emissions in the smelter have yet to be controlled, and that it is more convenient to carry out the project after the smelter controls its gas and particle emissions. In addition, CENTROMIN has foreseen funds to comply with the La Oroya PAMA. 5. With the requested modification, the La Oroya PAM A will reduce its term of execution by two years, concluding in the year 2003, and the investment commitment from US$ 24'167,000 to US$ 14'917,000. RECOMMENDATIONS In view of the foregoing, the undersigned recommends that modification of CENTROMIN's PAM A for La Oroya be approved in the following sections: 1. Removal of the ""Former Huanchan Copper and Lead Slag Deposit" project from the "La Oroya" PAM A. 2. Extension of the terms of the "Abandonment of the arsenic trioxide deposits at Vado and Malpaso" project by one year and increase of its investment commitment from 4 to 4.34 million American Dollars. 3. Modification of the investment schedule for the "Zinc ferrite deposit" project. 4. Modification of the "Re-vegetation of the areas affected by smoke" project. 5. Modification of the Activities and Investments schedule in CENTROMIN SA's PAMA for the "La Oroya". The PAM A would conclude in 2003 with a total investment of US$ 14'917,000, and would follow the schedule presented in Table #3. This is all I have to report. L. Sanchez Table 1 - Environmental Adjustment and Management Program (US $) Name of the company: CENTROMIN-EMPRESA MINERA DEL CENTRO DEL PERU SA Name of the Operative Unit: La Oroya PAMA approved by: R.D. # EM/DGM Text column on Table 1 (Action or Activity) 1 A- Capture of gases in fusion and conversion 18- Capture of powders Traylor crusher 1 C- Dismantling 6 copper roasters 10- Automatic Cottrell Central electrodes cleaning system 1 E- Use of oxygen enriched air in agglomerate machine processing area 1 F- New ventilation system for lead oven 1 G- Design and purchase of pump for agglomerates plant spraying system 2 - Improvement of ventilation of gases in coker plant 3- Use of gaseous oxygen in anodic waste plant 1 H- Closing of one fluid bed roaster 5A- Elimination of lead effluents 58- Re-circulation of refrigeration water, Asarco and Alambron plants SA- Acquisition of oil treatment machine and storage bag 5

6 9A- Re-circulation of effluents from barren cadmium solution scrubbers 11 A- Re-circulation of acid effluents, cell house and solid separation unit 13A- Former Huanchan copper and lead slag deposit 138- Calcium sulphate, Fluorosilicic acid plant (AS203) 14A- Former arsenic trioxide deposits (Vado and Malpaso) 148- Water-proofing and controlling AS203 Vado 14C- Experimental AS203 coverage 1 L- Solid waste re-circulation, Zileret plant and pelleting unit baghouse 15-Zinc ferrite deposit 4- Re-vegetation of areas affected by smoke 4A- Re-forestation and green areas 16A- Pilot septic tank Total Table 2 - Environmental Adjustment and Management Program (US $) Name of the company: CENTROMIN-EMPRESA MINERA DEL CENTRO DEL PERU S.A. Name of the Operative Unit: La Oroya PAMA approved by: R.D. # EM/DGM Activities executed as of December 1999 Text column on Table 2 (Action or Activity) 1 A- Capture of gases in fusion and conversion 18- Capture of powders Traylor crusher 1 C- Dismantling 6 copper roasters 1 D- Automatic Cottrell Central electrodes cleaning system 1 E- Use of oxygen enriched air in agglomerate machine processing area 1 F- New ventilation system for lead oven 1 G- Design and purchase of pump for agglomerates plant spraying system 2 - Improvement of ventilation of gases in coker plant 3- Use of gaseous oxygen in anodic waste plant 1 H- Closing of one fluid bed roaster 5A- Elimination of lead effluents 58- Re-circulation of refrigeration water, Asarco and Alambron plants 8A- Acquisition of oil treatment machine and storage bag 9A- Re-circulation of effluents from barren cadmium solution scrubbers 11 A- Re-circulation of acid effluents, cell house and solid separation unit 13A- Former Huanchan copper and lead slag deposit 138- Calcium sulphate, Fluorosilicic acid plant (AS203) 14A- Former arsenic trioxide deposits (Vado and Malpaso) 148- Water-proofing and controlling AS203 Vado 14C- Experimental AS203 coverage 1 L- Solid waste re-circulation, Zileret plant and pelleting unit baghouse 15-Zinc ferrite deposit 4- Re-vegetation of areas affected by smoke 4A- Re-forestation and green areas 16A- Pilot septic tank Total Table 3 - Environmental Adjustment and Management Program (US $) Name of the company: CENTROMIN-EMPRESA MINERA DEL CENTRO DEL PERU S.A. Name of the Operative Unit: La Oroya Modified - March 2000 Text column on Table 3 (Action or Activity) 1 A- Capture of gases in fusion and conversion 18- Capture of powders Traylor crusher 1 C- Dismantling 6 copper roasters 1 D- Automatic Cottrell Central electrodes cleaning system 1 E- Use of oxygen enriched air in agglomerate machine processing area 6

7 1 F- New ventilation system for lead oven 1 G- Design and purchase of pump for agglomerates plant spraying system 2 - Improvement of ventilation of gases in coker plant 3- Use of gaseous oxygen in anodic waste plant 1 H- Closing of one fluid bed roaster 5A- Elimination of lead effluents 58- Re-circulation of refrigeration water, Asarco and Alambron plants 8A- Acquisition of oil treatment machine and storage bag 9A- Re-circulation of effluents from barren cadmium solution scrubbers 11 A- Re-circulation of acid effluents, cell house and solid separation unit 13A- Former Huanchan copper and lead slag deposit 138- Calcium sulphate, Fluorosilicic acid plant (AS203) 14A- Former arsenic trioxide deposits (Vado and Malpaso) 148- Water-proofing and controlling AS203 Vado 14C- Experimental AS203 coverage 1 L- Solid waste re-circulation, Zileret plant and pe/leting unit baghouse 15-Zinc ferrite deposit 4- Re-vegetation of areas affected by smoke 4A- Re-forestation and green areas 16A- Pilot septic tank Total 7

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