EXPERT OPINION of GINO BIANCHI MOSQUERA, D.Env., P.G., CONCERNING CERTAIN ENVIRONMENTAL ISSUES ASSOCIATED with the LA OROYA METALLURGICAL COMPLEX, JUNIN, PERU

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EXPERT OPINION of GINO BIANCHI MOSQUERA, D.Env., P.G., CONCERNING CERTAIN ENVIRONMENTAL ISSUES ASSOCIATED with the LA OROYA METALLURGICAL COMPLEX, JUNIN, PERU EXPERT OPINION OF GINO BIANCHI MOSQUERA, D.Env., P.G., CONCERNING CERTAIN ENVIRONMENTAL ISSUES ASSOCIATED WITH THE LA OROYA METALLURGICAL COMPLEX, JUNIN, PERU The Renco Group, Inc. v. The Republic of Peru, Case No. UNCT/13/1 Issued: 18 February 2014 Prepared for: King & Spalding LLP GSI Environmental Inc. 4590 MacArthur Boulevard, Suite 285, Newport Beach, CA 92660 tel. 949.679.1070 EXPERT OPINION OF GINO BIANCHI MOSQUERA, D.Env., P.G., CONCERNING CERTAIN ENVIRONMENTAL ISSUES ASSOCIATED WITH THE LA OROYA METALLURGICAL COMPLEX, JUNIN, PERU The Renco Group, Inc. v. The Republic of Peru, Case No. UNCT/13/1 International Centre for Settlement of Investment Disputes Prepared for: King & Spalding LLP Prepared by: GSI Environmental Inc. 4590 MacArthur Blvd., Suite 285 Newport Beach, California 92660 949.679.1070 GSI Job No. 3880 Issued: 18 February 2014 GSI Job No. 3880 Issued: 18 February 2014 Biographical Summary of Gino Bianchi Mosquera, D.Env., P.G.: I am a Vice President and Principal Geochemist with GSI Environmental Inc. I received a doctorate in Environmental Science and Engineering from the University of California, Los Angeles and have more than 27 years of experience directing and conducting environmental projects in the United States, Canada, and Latin America. I worked for the National Research Council’s Committee on Groundwater Cleanup Alternatives, helped develop guidelines for site closure studies for San Diego County’s Hazardous Materials Management Department, and developed and participated in several applied research projects. I have served as a reviewer for U.S. EPA technical reports and professional journals and have published numerous professional papers on environmental issues, from fate and transport of contaminants to the sustainability of groundwater resources in developing nations. I have been an invited speaker by Peru’s Ministry of Energy and Mines and have served as co-chair of the Environmental Regulations and Compliance in Latin America course offered by Government Institutes/ABS, where I addressed technical compliance with Peruvian environmental regulations. I am currently a member of the Advisory Council to RIELA, the Latin America Network of Environmental Attorneys. My project experience ranges from assessment and remediation of soil and groundwater to directing international environmental due diligence and compliance projects to evaluating environmental liabilities in the mining, manufacturing, and petroleum industries. I am fluent in Spanish and have directed and participated in environmental projects in Peru since the early 1990s. My specific project experience in Peru includes the environmental impact assessment of mineral concentrate deposits in Callao to evaluate sources of lead in surrounding areas, developing training materials for mining sector personnel on selected potential environmental impacts associated with the mining industry, site assessment and acid wastewater discharge evaluation for a large manufacturing complex, investigating the availability of water resources along the coast, and evaluation of local regulatory compliance for several U.S.-based corporations with assets in Peru. I have also directed and participated in environmental projects in Argentina, Brazil, Chile, Colombia, Ecuador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Puerto Rico, Uruguay, and Venezuela. A true and correct copy of my resume that accurately sets forth my qualifications is provided in Appendix A of this report. Certification by Author: This report reflects my objective and independent assessment of this matter. Signature: Date: 18 February 2014 Expert Report Concerning Certain Environmental Expert Opinion of Gino Bianchi Mosquera, D.Env., P.G. Issues Associated with the La Oroya Metallurgical Complex, Junin, Peru GSI Job No. 3880 Issued: 18 February 2014 TABLE OF CONTENTS 1.0 EXECUTIVE SUMMARY ........................................................................................ 1 1.1 Project Objectives ............................................................................................. 1 1.2 Scope of Investigation ....................................................................................... 1 1.3 Summary of Key Opinions ................................................................................. 1 2.0 History of Contamination at La Oroya ................................................................ 2 2.1 Contamination Associated With Historical CMLO Operations ............................ 3 3.0 The PAMA ............................................................................................................. 6 4.0 DRP’s Standards and Practices Were Significantly More Protective of the Environment and Public Health than Those of Centromin ................................ 6 4.1 Relevant Standards and Practices .................................................................... 6 4.2 DRP used standards and practices that were significantly more protective of the environment or of public health than those that were used by Centromin .... 7 5.0 Centromin Failed to Remediate Areas Contaminated by CMLO Operations in a Timely Manner ............................................................................................. 21 5.1 Centromin Was Obligated to Remediate ......................................................... 21 5.2 Postponing Remediation Was Not Reasonable ............................................... 22 5.3 Centromin’s Failure to Characterize the Extent of CMLO Impacts and to Undertake a Remedial Program Has Increased the Potential Exposure to Lead and Other Heavy Metals ......................................................................... 24 6.0 CONCLUSIONS ................................................................................................... 25 7.0 CITED REFERENCES ......................................................................................... 25 Tables Table 1: Estimated Impacted Area per Magnitude of Damage Figures Figure 1: Decrease in Volume of Effluent Discharged to the Mantaro River Figure 2: Decrease in Lead Emissions from the CMLO Main Stack (1975-2008) Figure 3: Decrease in Arsenic Emissions from the CMLO Main Stack (1975-2008) Figure 4: Decrease in Particulate Emissions from the CMLO Main Stack (1975-2008) Figure 5: Decrease in SO2 Emissions from the CMLO Main Stack (1975-2008) Exhibits Exhibit 1: Site Location Exhibit 2: La Oroya and Surrounding Communities Exhibit 3: Estimated Extent of Damages Due to CMLO Emissions in the 1920s Exhibit 4: La Oroya Complex and Waste Disposal Areas Appendices Appendix A: Professional Qualifications of Author Appendix B: Effluent Discharge and Air Emissions Data Expert Report Concerning Certain Environmental i Expert Opinion of Gino Bianchi Mosquera, D.Env., P.G. Issues Associated with the La Oroya Metallurgical Complex, Junin, Peru GSI Job No. 3880 Issued: 18 February 2014 EXPERT OPINION OF GINO BIANCHI MOSQUERA, D.Env., P.G., CONCERNING CERTAIN ENVIRONMENTAL ISSUES ASSOCIATED WITH THE LA OROYA METALLURGICAL COMPLEX, JUNIN, PERU The Renco Group, Inc. v. The Republic of Peru, Case No. UNCT/13/1 1.0 EXECUTIVE SUMMARY 1.1 Project Objectives On behalf of The Renco Group, Inc. (Renco), King & Spalding LLP has requested GSI Environmental Inc. (GSI) to evaluate certain environmental conditions, standards, and practices relating to operation of the Complejo Metalúrgico La Oroya (La Oroya Metallurgical Complex, or CMLO for its acronym in Spanish) both prior to and during Doe Run Peru’s (DRP’s) ownership. 1.2 Scope of Investigation We designed our evaluation to provide an objective analysis of the information obtained from Peruvian government agencies, Renco, and published scientific literature and books. Specifically, we reviewed: a) Data and reports submitted by DRP to Peruvian government agencies such as the Ministerio de Energía y Minas (Ministry of Energy and Mines, or MEM) and the Organismo Supervisor de la Inversión en Energía y Minería (Oversight Office for Energy and Mining Investment, or OSINERGMIN). b) Data and reports prepared by the Organismo de Evaluación y Fiscalización Ambiental (Office of Environmental Evaluation and Oversight, or OEFA), the Dirección General de Salud (General Directorate of Health, or DIGESA), Activos Mineros S.A.C. (AMSAC), MEM, OSINERGMIN, and their associated entities and consultants. c) Certain government resolutions and other relevant communications issued by OSINERGMIN, OEFA, DIGESA, MEM, and other relevant government entities. d) Applicable and relevant Peruvian regulations. e) Relevant reports, scientific articles, and books. 1.3 Summary of Key Opinions Pursuant to the project objectives defined above, our principal findings and opinions, which we hold to a reasonable degree of scientific certainty, are as follows: 1) In all respects, the standards and practices of DRP were significantly more protective of the environment and public health than those of Centromin. 2) Centromin failed to meaningfully investigate and remediate the historical contamination caused by CMLO operations in a timely manner. Expert Report Concerning Certain Environmental 1 Expert Opinion of Gino Bianchi Mosquera, D.Env., P.G. Issues Associated with the La Oroya Metallurgical Complex, Junin, Peru GSI Job No. 3880 Issued: 18 February 2014 3) Centromin’s failure to characterize the extent of contamination in the areas impacted by CMLO emissions and to remediate that contamination has increased the potential for exposure to elevated concentrations of heavy metals by
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