EPA v. MAGMA COPPER COMPANY

Case summary

MAGMA COPPER COMPANY, A WHOLLY OWNED SUBSIDIARY OF NEWMONT MINING CORPORATION OWNS AND OPERATES THE SAN MANUEL SMELTER WHICH IS LOCATED NEXT TO THE TOWN OF SAN MANUEL, ARIZONA, LESS THAN FIFTY MILLS NORTHEAST OF TUCSON. THE SMELTER EMITS 188,340 TONS PER YEAR OF SULFUR DIOXIDE AND 2,000 TO 3,000 LBS/HR. OF PARTICULATE MATTER. ALTHOUGH PARTIALLY CONTROLLED THE EMISSIONS EXCEED APPLICABLE PM(100 LBS./HR) AND SO2 (80,045 TPY) EMISSIONS LIMITS.MAGMA HAS ALSO BEEN IN VIOLATIONS OF THE OPACITY SIP LIMITS, AND IS LISTED IN THE CDS AS A SIGNIFICANT VIOLATOR. MAGMA WANTS TO RECONSTRUCT THE SAN MANUEL SMELTER TO INCREASE CAPACITY AND TO COMPLY WITH ALL AIR POLLUTION LAWS. IT INTENDS TO BE IN COMPLIANCE BY NOVEMBER, 1988. HOWEVER MAGMA IS FINANCIALLY WEAK. IT HAS BEEN LOSING ABOUT $40 MILLION PER YEAR FOR THE LAST FIVE YEARS. IN ORDER TO FINANCE THE RECONSTRUCTION, WHICH WILL COST ABOUT $250 MILLION, MAGMA'S PARENT COMPANY, NEWMONT, WILL SPIN-OFF MAGMA AND RESTRUCTURE ITS INTERCORPORATE DEBT. MAGMA WILL THEN RAISE THE $250 MILLION NEEDED FOR RECONSTRUCTION OF THE SMELTER. IN ORDER TO GET THE LOANS NECESSARY FOR REFINANCING, MAGMA IS FORCED TO GUARANTEE TO LENDERS THAT IT CAN AND WILL COMPLY WITH ALL ENVIRONMENTAL LAWS. MAGMA HAS APPLIED TO THE STATE OF ARIZONA FOR A CLEAN AIR ACT SECTION 119, A SECOND ROUND NONFERROUS SMELTER ORDER TO SUSPEND THE SO2 SIP, AND THE STATE HAS PROPOSED TO GRANT IT IN SPITE OF EPA'S ADVICE THAT THE APPLICATION IS DEFICIENT. HOWEVER, MAGMA NOW REALIZES THAT AT BEST AN NSO COULD PROTECT IT FROM SO2 SIP VIOLATION LIABILITY UNTIL JANUARY 1, 1988, AT WHICH TIME SHUTDOWN WOULD BE THE ONLY OPTION TO COMPLY. AS A RESULT, MAGMA IS EAGER TO NEGOTIATE A CONSENT DECREE WITH EPA AND STATE OF ARIZONA THAT WILL RESOLVE ALL COMPLIANCE PROBLEMS. MAGMA IS ALSO BEING SUED BY EDF. MAGMA, THE STATE AND EPA ARE NOW NEGOTIATING A CONSENT DECREE TO RESOLVE ALL AIR POLLUTION COMPLIANCE PROBLEMS AT THE SAN MANUEL SMELTER. REGION 9, OECM, DOJ, THE ARIZONA DEPARTMENT OF HEALTH SERVICES AND THE ARIZONA ATTORNEY GENERAL HAVE BEEN CLOSELY INVOLVED. SEVERAL MAJOR ISSUES HAVE ALREADY BEEN AGREED UPON: CIVIL PENALTY; PERFORMANCE BOND; FINAL COMPLIANCE DATE; INTERIM EMISSION LIMITS; AND SHORT TERM SO2 LEVELS. THE PARTIES WILL MEET IN SAN FRANCISCO DURING THE FIRST WEEK OF JANUARY, 1987, WITH THE INTENT OF RESOLVING ALL OUTSTANDING ISSUES. IF THE NEGOTIA- TIONS ARE SUCCESSFUL, NO FURTHER LITIGATION WOULD BE NECESSARY. WE RECOMMEND THAT THIS CASE BE REFERRED TO THE DEPARTMENT OF JUSTICE FOR FILING, PREFERABLY CONTEMPORANEOUSLY WITH THE FILING OF A CONSENT DECREE. IF THE CONSENT DECREE NEGOTIA- TIONS FAIL, THEN THE LITIGATION TEAM SHOULD PREPARE IMMEDIATELY A LITIGATION STRATEGY THAT WOULD INCLUDE PROMPT FILING OF A COMPLAINT AND AGGRESSIVE DISCOVERY IN SUPPORT OF MOTIONS FOR INJUNCTIVE RELIEF INCLUDING SMELTER CLOSURE. WE FURTHER RECOMMEND THAT IF NEGOTIATIONS FAIL, EPA TAKE FINAL ACTION QUICKLY ON MAGMA'S 1975 PETITION FOR RECONSID- ERATION AND REVIEW THE PM EMISSION LIMIT. EPA TOLD MAGMA IN 1975, THAT IT WOULD NOT ENFORCE THE PM EMISSIONS LIMITS AGAINST THE SAN MANUEL SMELTER UNTIL EPA ACTED ON THE PETITION. ADDITIONALLY, EPA SHOULD TAKE FINAL ACTION ON THE STATE OF ARIZONA'S PM STATE IMPLEMENTATION PLAN SUBMITTAL. WE ALSO NOTE THAT THE STATE HAS PROPOSED TO GRANT MAGMA'S NSO APPLICATION AND WILL LIKELY GRANT THE APPLICATION AND SEND IT TO EPA FOR REVIEW. WE RECOMMEND THAT THE EPA ENFORCE MENT TEAM REMAIN INSULATED FROM OGC'S REVIEW OF THAT APPLICATION.

Defendants (1)

• MAGMA COPPER COMPANYNamed in complaintNamed in settlement

Facilities (1)

• BHP COPPER NA SAN MANUEL OPERATIONS

  200 SOUTH REDINGTON ROAD, SAN MANUEL, AZ, 85631

  Registry ID: 110038613818

Statutes cited

• CAA 110 — Implementation Plan for National Primary and Secondary Ambient Air Quality Standards

Enforcement conclusions (1)

• MAGMA COPPER COMPANYentered 1987-09-28

  Primary law: CAA

  Federal penalty: $600,000

Timeline (8 milestones)

• 1983-03-18Enforcement Action Data Entered
• 1986-12-31Referred To Headquarters
• 1987-02-02Referred To Dept Of Justice
• 1987-02-23Complaint Filed With Court
• 1987-09-28Final Order Lodged
• 1987-09-28Final Order Entered
• 1987-09-28Concluded
• 1991-08-19Enforcement Action Closed