ustxtxb_obs_2008_10_31_50_00012-00000_000.pdf

The Herb 13CIL ,: r “Best place to cure what ails you” Explore our Oasis of Earthly Delights! extensive array of natural health and bodycare products comprehensive collection of herbs great gift ideas and much more! 200 West Mary 444-6251 Mon. 105 -Fri. 10-6:30 Sat. www.theherbbancom Asarco. As copper prices have risen recently, the company is turning profitable once again. Last year, the company generated $1.9 billion in revenues because of international demand for copper. But Larrea has competition. Earlier this year, the independent board that controls Asarco LLC put the company up for bid in a private auction. Some of the world’s largest finance and mining conglomerates bid for Asarco’s assets in June. The winning bidder was billionaire Agarwal, India’s “Metal King.” Unlike Larrea, Anil Agarwal, 54, did not inherit his wealth. He began his rise 30 years ago as a scrap metal trader in Mumbai, India, working his way up through the trade, eventually acquiring valuable copper mines in India, Zambia, and Australia. If Agarwal buys Asarco, he will own holdings on four continents. In 2008, Forbes magazine designated Agarwal as the 164th richest man in the world, up from No. 245 in 2007. Agarwal’s $2.6-billion offer for Asarco provides no money for environmental cleanup or asbestos claims. To placate the U.S. government, Agarwal would create a $1.5 billion environmental trust to help settle Asarco’s considerable environmental debts, which total more than $7 billion. Larrea didn’t give up his pursuit of Asarco. In July, Grupo Mexico submitted a competing bid, this time offering $2.7 billion. Grupo’s plan would place the El Paso smelter and 31 other sites across the United States in an environmental custodial trust. The trust would be funded with an initial $10 million to clean up the contaminated sites. Larrea’s offer has a catch. Grupo Mexico’s plan would continue to litigate environmental claims. Bankruptcy experts say this could draw out the claims process for decades. “If Grupo Mexico fights it out on all of these claims, it could take years:’ says Jay Westbrook, a University of Texas law professor and expert in bankruptcy law. “And there is no guarantee that they will still have the money to pay in the future.” While Asarco LLC and the U.S. government applauded the Agarwal bid, environmentalists aren’t yet sold on the Indian billionaire. They’re unsure he would address the contamination wrought on dozens of communities across the country. Another thing both Larrea and Agarwal have in common, besides being on the Forbes billionaire list, is a history of allegations that their companies are responsible for environmental pollution and human rights violations. In May, the U.S.’s largest grassroots environmental group, the Sierra Club, and several other environmental organizations sent a letter to U.S. Attorney General Michael Mukasey asking that he review the environmental record of Agarwal’s company, Vedanta. \(The Justice Department must approve a deal before In a press release, the environmental groups described Vedanta Resources as a widely recognized environmental “bad actor.” They noted that its stock had been dropped by the Norwegian government’s pension fund over concerns about environmental and human rights abuses. The groups alleged Agarwal’s $2.6-billion offer for Asarco provides no money for environmental cleanup or asbestos claims. that Vedanta caused major water contamination in Zambia and India, provided subpar working conditions for its employees and falsified documents to obtain environmental clearances in an ecologically sensitive region of eastern India. The Texas chapter of Sierra Club wants to ensure whoever buys Asarco doesn’t back out of its commitment to clean up the company’s toxic legacy. “We feel the compliance history and the stewardship of Vedanta are extremely relevant:’ says Oliver Bernstein, a Sierra Club spokesperson. “We don’t want to see another instance of a company using whatever the profitable pieces are of these entities and then trying to unload the environmental cleanup burden on taxpayers.” The Indian company apparently has soured on buying Asarco. In mid-Octoberjust before the Observer went to pressAgarwal announced that he was having second thoughts. With the global credit crunch and China’s economic engine slowing down, copper prices are once again declining. At the moment, the federal government is holding Agarwal to his promise, but he said that he will consider buying the company only at a reduced price. The parties will participate in a negotiation on October 30 in Houston to see whether a deal can be salvaged to bail Asarco out of bankruptcy. El Paso Mayor John Cook said it would be a devastating blow for his city if Agarwal backs out. Cook said the city doesn’t favor Grupo Mexico’s plan because there is no guarantee the smelter will finally be demolished and cleaned up. “We’ll have no choice but to start negotiating long term with Grupo Mexico:’ Cook said. “I’ve been working on this for the 10 years I’ve been in public office, and I’d really like to see it finally resolved.” 12 THE TEXAS OBSERVER OCTOBER 31, 2008