KING & SPALDING. December 14,2010 VIA OVERNIGHT MAIL

Transcription

1 KING & SPALDING King & Spalding LLP 1185 Avenue of the Americas New York, NY Tel: (212) Fax: (212) Edward G. Kehoe Direct: (212) December 14,2010 VIA OVERNIGHT MAIL Minister Pedro Sanchez Gamarra Minister of Energy and Mines Ministry of Energy and Mines Av. Las Artes Sur 260 San Botja Lima Peru Direccion General de Asuntos de Economia Intemacional Competencia e Inversion Privada Ministerio de Economia y Finanzas Jiron Lampa 277, piso 5 Lima Peru Ing. Victor Carlos Estrella General Manager's Office Activos Mineros S.A.C. Prolongacion Pedro Miotta No. 421 San Juan de Miraflores Lima 29 Peru Re: Contract of Stock Transfer, Capital Increase and Stock Subscription in the Empresa Metalurgica La Oroya S.A. dated October 23,1997, and Guaranty Agreement dated November 21,1997 Dear Sirs: I write to inform you that, on December 7,2010, Doe Run Peru S.R.LTDA ("Doe Run Peru") received a letter from counsel to The Renco Group, Inc., Renco Holdings, Inc., DR Acquisition Corp., and Ira L. Rennert (together, the "Renco Parties"), and a letter from counsel to The Doe Run Resources Corporation, Marvin K. Kaiser, Albert Bruce Neil, Jeffery L. Zelms, Theodore P. Fox III, and Daniel L. Vomberg (the "Doe Run Resources Parties"), in connection with third-party claims brought in the state court of Missouri, U.S.A., by Peruvian individuals

2 Page 2 living in and near the town of La Oroya and alleging various injuries and damages as a result of alleged lead exposure and environmental contamination from the Complex (the "Lawsuits"). In these letters, which are enclosed, counsel request that, pursuant to applicable law and Doe Run Peru's corporate documents, Doe Run Peru indemnify the Renco Parties and the Doe Run Resources Parties against any judgment that may be entered against them in the Lawsuits and for any reasonable expenses that may be incurred in this regard. Moreover, I refer to the letter dated November 26, 2010 from Activos Mineros to Mr. Juan Carlos Huyhua, Manager of Doe Run Peru. On behalf of my clients, we hereby express complete disagreement with the statements and claims in that letter, as they are inconsistent with intemationallaw, and the terms and spirit of the Stock Transfer Agreement. With respect to your request that we clarify the basis for your liability concerning the Missouri Lawsuits, please note the following. Applicable law and the Stock Transfer Agreement extend the assumption of liability by Activos Mineros and the Republic of Peru to the Renco Parties and the Doe Run Resources Parties. This was a fundamental premise for the substantial investment in Peru. Pursuant to Clause 6.2 of the Agreement, for example, Centromin (and thus Activos Mineros) assumed "liability for any damages and claims by third parties that are attributable to the activities of [Doe Run Peru], of Centromin and/or its predecessors" except in certain narrow instances not present here. These obligations are not limited to third-party claims brought against Doe Run Peru. They extend to claims brought against Doe Run Peru's owners and affiliates, including individual directors and officers of such affiliates, as is the case in the Lawsuits. Activos Mineros and the Republic of Peru also are liable under Clauses 6.5 and 8.14 and related legal principles, for example, because Doe Run Peru is liable for third-party claims against the Renco Parties and the Doe Run Resources Parties relating to their investment in Doe Run Peru. My clients had, and continue to possess, a legitimate expectation that Activos Mineros and the Republic of Peru will assume responsibility and liability for third-party claims, including such claims as are currently pending against the Renco Parties and the Doe Run Resources Parties. Activos Mineros and the Republic of Peru have no legitimate basis to deny or avoid their obligations in this regard. Sincerely, Edward G. Kehoe Enclosures cc: Doe Run Peru S.R. LTDA. The Doe Run Resources Corporation The Renco Group, Inc. DR Acquisition Corp. Doe Run Cayman Holdings, LLC Doe Run Cayman Ltd.

3 Page 3 Renco Holdings, Inc. Ira L. Rennert Marvin K. Kaiser Albert Bruce Neil Jeffrey L. Ze!ms Theodore P. Fox III Daniel L. Vomberg Edward L. Dowd, Jr. (Dowd Bennett LLP) Michael C. Ryan (Cadwalader, Wickersham & Taft LLP)

4 Andrew Rothschild (direct) ([ax) LEWIS RICE F INGERSH Attorneys at Law December 7, 20lO 600 Washington Avenue Suite 2500 St. Louis, Missouri VIA ELECTRONIC MAIL TO: jcarlos@pe.doerun.com AND VIA EXPRESS MAIL Dr. Juan Carlos Huyhua President and General Manager Doe Run Peru S.R.L. Av. Victor Andres Belaunde 147 Centro Camino Real Torre Real 3, Piso 9 Lima 27 PERU Re: Indemnity Obligation of Doe Run Peni S.R.L. in Relation to Lawsuits Pending in the Circuit Court of the City of St. Louis, Missouri, U.S.A. Dear Dr. Huyhua: I write to provide Doe Run Peru S.R.L. ("Doe Run Peru") with information beyond that which I furnished to you in my letter of October 12, 2010, wherein I informed Doe Run Peru that my clients, The Doe Run Resources Corporation, Marvin K. Kaiser, Albert Bruce Neil, Jeffery L. Zelms, Theodore P. Fox III, and Daniel L. Vornberg (the "Doe Run Resources Parties") have been named as party defendants in a total of eleven civil actions brought on behalf of 35 plaintiffs (the "Lawsuits"). I previously furnished you with a copy of the petition filed in each of the eleven Lawsuits. While the Lawsuits were filed in 2008 in the Circuit Court of the State of Missouri, Twenty-Second Judicial Circuit, in the City of St. Louis, Missouri, U.S.A., that Court only recently ruled on September 14, 2010, that venue for the Lawsuits was proper in the City of St. Louis. The Doe Run Resources Parties disagree with that ruling of the Court and, together with all other defendants in the Lawsuits, have petitioned the Missouri Supreme Court for an extraordinary writ of prohibition that would direct the Circuit Court for the City of St. Louis to transfer venue of the Lawsuits to the Circuit Court of the State of Missouri, Twenty-First Judicial

5 LEWIS RICE FINGERSH December 7, 2010 Page 2 Circuit, St. Louis County, which is the Missouri county in which the corporate offices of The Doe Run Resources Corporation are located. That petition remains pending before the Missouri Supreme Court. In the meantime, on November 16, 2010, the Circuit Court for the City of St. Louis entered an order staying discovery in the Lawsuits pending the disposition of the petition. Therefore, at this time no proceedings are being held in the Lawsuits. All of the plaintiffs in the Lawsuits are citizens of the Republic of Peru and residents of La Oroya. As a result, the Doe Run Resources Parties have joined with the other defendants in filing motions to dismiss the Lawsuits on, among others, the grounds of forum non conveniens, the doctrine of international comity, the act of state doctrine, and plaintiffs' failure to join indispensable parties, including Empresa Minera del Centro del Peru S.A., Activos Mineros S.A.C., and the Republic of Peru. Those motions are premised on the principle that the Lawsuits should more appropriately proceed in the courts of the Republic of Peru. The Circuit Court for the City of St. Louis has yet to hear argument from counsel on those motions. The defendants still have the right to file reply papers in connection with the motions before the motions are heard by the Court. No hearing will be held on those motions until after such time as the issue of venue has been fmally adjudicated. In the interim, there remains ample opportunity for any interested party to intervene in the Lawsuits. The Lawsuits allege that plaintiffs have suffered physical and psychological injuries and various damages and losses as a result of alleged lead exposure and environmental contamination from the La Oroya metallurgical complex in Peru. In all instances, plaintiffs are seeking monetary and punitive damages against the defendants, including the Doe Run Resources Parties. In the Lawsuits, plaintiffs make claims against the Doe Run Resources Parties in their capacities as owners and! or operators of Doe Run Peru, and specifically assert that the harm plaintiffs allege to have suffered has resulted from the Doe Run Resources Parties' "ownership, operation, use, management, supervision, storage, maintenance, and/or control of the metallurgical complex and related properties in La Oroya, Peru." All of plaintiffs' various claims against the Doe Run Resources Parties relate to actions that may have been taken by the Doe Run Resources Parties

6 LEWIS RICE FINGERSH December 7,2010 Page 3 through their respective management, direction, and/or direct or indirect involvement in the business of Doe Run Peru. The claims against the Doe Run Resources Parties include ones made under conspiracy and corporate veil piercing theories, but all relate to the business of Doe Run Peru. Accordingly, The Doe Run Resources Corporation, Marvin K. Kaiser, Albert Bruce Neil, Jeffery L. Zelms, Theodore P. Fox III, and Daniel L. Vomberg are named as defendants in the Lawsuits by or in the right of Doe Run Peru. Pursuant to applicable law and the corporate documents of Doe Run Peru, Doe Run Peru is therefore obligated to indemnify The Doe Run Resources Corporation, Marvin K. Kaiser, Albert Bruce Neil, Jeffery L. Ze1ms, Theodore P. Fox III, and Daniel L. Vornberg (the "Indemnified Parties") against any judgment that may be entered against them in the Lawsuits. The Indemnified Parties are hereby formally notifying Doe Run Peru of their intention to seek such indemnification with respect to any such judgment. The indemnification obligation on the part of Doe Run Peru also includes the payment of reasonable expenses, including attorneys' fees, incurred by the Indemnified Parties in connection with or in the defense of the Lawsuits and in any appeal of the Lawsuits. As I informed you in my letter of October 12,2010, the Indemnified Parties have already incurred expenses in connection with the Lawsuits, including attorneys' fees. In order to defend their interests in the Lawsuits and to advance the arguments in their motions to dismiss, the Indemnified Parties will continue to incur substantial expenses and attorneys' fees going forward. Doe Run Peru can be required to pay such expenses and attorneys' fees in advance of the final disposition of any of the Lawsuits, and the Indemnified Parties reserve the right to request such advance payment from Doe Run Peru at any time. [ will continue to provide you periodic updates on the status of the Lawsuits once the current stay of the proceedings has been lifted. Very truly yours, ~~ Andrew Rothschild

7 DOWD BENNETT LLP Edward L. Dowd,Jr. Direct Dial: (314) December 7, 2010 VIA ELECTRONIC MAIL TO: AND VIA EXPRESS MAIL Dr. Juan Carlos Huyhua President and General Manager Doe Run Peru S.R.L. Av. Victor Andres Belaunde 147 Centro Camino Real Torre Real 3, Piso 9 Lima 27 PERU Re: Indemnity Obligation of Doe Run Peru S.R.L. in Relation to Lawsuits Pending in the Circuit Court of the City of St. Louis, Missouri, U.S.A. Dear Dr. Huyhua: I write to provide Doe Run Peru S.R.L. ("Doe Run Peru") with information beyond that which I furnished to you in my letter of October 12, 2010, wherein I informed Doe Run Peru that my clients, The Renco Group, Inc., Renco Holdings, Inc., DR Acquisition Corp., and Ira L. Rennert (the "Renco Parties") have been named as party defendants in a total of eleven civil actions brought on behalf of 35 plaintiffs (the "Lawsuits"). I previously furnished you with a copy of the petition filed in each of the eleven Lawsuits. While the Lawsuits were filed in 2008 in the Circuit Court of the State of Missouri, Twenty-Second Judicial Circuit, in the City of St. Louis, Missouri, U.S.A., that Court only recently ruled on September 14,2010, that venue for the Lawsuits was proper in the City of St. Louis. The Renco Parties disagree with that ruling of the Court and, together with all other defendants in the Lawsuits, have petitioned the Missouri Supreme Court for an extraordinary writ of prohibition that would direct the Circuit Court for the City of St. Louis to transfer venue of the Lawsuits to the Circuit Court of the State of Missouri, Twenty-First Judicial Circuit, St. Louis County, which is the Missouri county in which the corporate offices of The Doe Run Resources Corporation are located. That petition remains pending before the Missouri Supreme Court. In the meantime, on November 16, 2010, the Circuit Court for the City of St. Louis entered an order staying discovery in the Lawsuits pending the disposition of the petition. Therefore, at this time no proceedings are being held in the Lawsuits. All of the plaintiffs in the Lawsuits are citizens of the Republic of Peru and residents of La Oroya. As a result, the Renco Parties have joined with the other defendants in filing motions to dismiss the Lawsuits on, among others, the grounds of forum non conveniens, the doctrine of international comity, the act of state doctrine, and plaintiffs' failure to join indispensable parties, including Empresa Minera del Centro del Peru S.A., Activos Mineros SAC., and the Republic 7733 FORSYTH BOULEVARD, SUITE FAX ST. LOUIS, M,SSOUR,

8 DOWD BENNETT LLP Juan Carlos Huyhua Doe Run Peru S.R.1. December 7, 2010 Page 2 of Peru. Those motions are premised on the principle that the Lawsuits should more appropriately proceed in the courts of the Republic of Peru. The Circuit Court for the City of St. Louis has yet to hear argument from counsel on those motions. The defendants still have the right to file reply papers in connection with the motions before the motions are heard by the Court. No hearing will be held on those motions until after such time as the issue of venue has been finally adjudicated. In the interim, there remains ample opportunity for any interested party to intervene in the Lawsuits. The Lawsuits allege that plaintiffs have suffered physical and psychological injuries and various damages and losses as a result of alleged lead exposure and environmental contamination from the La Oroya metallurgical complex in Peru. In all instances, plaintiffs are seeking monetary and punitive damages against the defendants, including the Reneo Parties. In the Lawsuits, plaintiffs make claims against the Renco Parties in their capacities as owners of Doe Run Peru, and specifically assert that the harm plaintiffs allege to have suffered has resulted from the Renco Parties' "ownership, operation, use, management, supervision, storage, maintenance, and/or control of the metallurgical complex and related properties in La Oroya, Peru." All of plaintiffs' various claims against the Renco Parties relate to actions that may have been taken by the Renco Parties (with the noted exception of Renco Holdings, Inc.) through their respective management, direction, and/or direct or indirect involvement in the business of Doe Run Peru. The claims against the Renco Parties include ones made under conspiracy and corporate veil piercing theories, but all relate to the business of Doe Run Peru. Accordingly, The Renco Group, Inc., DR Acquisition Corp., and Ira 1. Reunert are named as defendants in the Lawsuits by or in the right of Doe Run Peru. Pursuant to applicable law and the corporate documents of Doe Run Peru, Doe Run Peru is therefore obligated to indemnity The Renco Group, Inc., DR Acquisition Corp., and Ira L. Rennert (the "Indemnified Parties") against any judgment that may be entered against them in the Lawsuits. The Indemnified Parties are hereby formally notifying Doe Run Peru of their intention to seek such indemnification with respect to any such judgment. The indemnification obligation on the part of Doe Run Peru also includes the payment of reasonable expenses, including attorneys' fees, incurred by the Indemnified Parties in connection with or in the defense of the Lawsuits and in any appeal of the Lawsuits. As I informed you in my letter of October 12, 2010, the Indemnified Parties have already incurred expenses in connection with the Lawsuits, including attorneys' fees. In order to defend their interests in the Lawsuits and to advance the arguments in their motions to dismiss, the Indemnified Parties will I Renco Holdings, Inc. has never held any direct or indirect interest in Doe Run Peru, but has nevertheless been named as a defendant in the Lawsuits. Plaintiffs have been informed of this fact, but Reneo Holdings remains a defendant in the Lawsuits.

9 DOWD BENNETT LLP Juan Carlos Huyhua Doe Run Peru S.R.L. December 7, 2010 Page 3 continue to incur substantial expenses and attorneys' fees going forward. Doe Run Peru can be required to pay such expenses and attorneys' fees in advance of the final disposition of any of the Lawsuits, and the Indemnified Parties reserve the right to request such advance payment from Doe Run Peru at any time. I will continue to provide you periodic updates on the status of the Lawsuits once the current stay of the proceedings has been lifted. Very truly yours, /J rf <:::;- :/,,/ '-7 (-) ~'fjj;7!!"'-<f -<. /l/ 6Av--z:-~.h(, Edward L. Dowd, Jr.. cc: Ira L. Rennert The Renco Group, Inc. DR Acquisition Corp. Renco Holdings, Inc.