EPA Orders Cleanup of Washington Smelter

The federal Environmental Protection Agency ordered Asarco to finish cleaning up its Ruston, Wash., smelter site regardless of the company's precarious financial condition.

Under the 40-page order, Asarco will be required to dredge 15 acres of sediments contaminated with arsenic, lead and other heavy metals from the Yacht Basin adjacent to Point Defiance and to cap 18 acres of sediment in Commencement Bay off the smelter site.

The EPA estimated the cost of cleaning up the sediments at $60 million, though other estimates have ranged up to $90 million.

The order means Asarco has until February 2004 to dredge out the sediments in the Yacht Basin and until August 2005 to cap the sediments in the bay under 3 feet of soil.

Those deadlines were several years beyond the deadlines initially envisioned, but the EPA was trying to work with Asarco to ensure that the work was eventually completed, said Lee Marshall, who oversees the Ruston site from the agency's office in Seattle.

Asarco could face substantial fines if it doesn't meet the latest deadlines. The company could be fined $100,000 for each deadline it misses and $27,500 a day for violating the order. If the EPA is forced to take over the cleanup, the agency could turn around and charge Asarco three times the cost of the cleanup work.

Asarco officials said the EPA's order wasn't a complete surprise.

"It's unfortunate," said Tom Martin, who manages the Ruston site for Asarco. "We know we have to do it, we know how to do it. The sticking point was the schedule."

The order was issued after the EPA and Asarco failed to reach an agreement after a year and a half of negotiations. The company warned during the negotiations that it would be unable to meet the original schedule proposed by the EPA because of its financial problems.

The EPA has become increasingly concerned that Asarco may not be able to pay for the cleanup at Ruston or come up with the estimated $1 billion to clean up its two dozen or so other Superfund sites across the nation.

Before issuing the order, the EPA looked at whether the cleanup costs could tip Asarco into bankruptcy, Marshall said.

"This action itself won't put them in bankruptcy," Marshall said. "There are forces far greater than us at work."

Asarco is trying to renegotiate $450 million worth of loans from a consortium of international banks that come due in November. Late last year the company technically defaulted on the loans after its assets fell $84 million short of what was required.

The EPA and Asarco had previously reached agreement on cleaning up the smelter site and surrounding neighborhoods that had been contaminated, but they had never entered into a formal consent agreement covering the sediments, Marshall said.

"This is the final piece of the puzzle," said Marshall, adding that after the negotiations dragged on with no end in sight, the EPA had no choice but to act. "What we are looking for is to get the work done."

Asarco closed the Ruston smelter in 1985 after operating it since the early 1900s. Bought in 1999 by Grupo Mexico, a Mexican mining and railroad company, Asarco already has spent more than $180 million to clean up the smelter and the surrounding area where copper, arsenic and cadmium had polluted the air, soil and water.

The EPA listed the smelter as a Superfund priority cleanup site in 1983.

In 1999, as the price of copper collapsed, Asarco asked the EPA to extend the cleanup deadlines for the smelter and nearby neighborhoods because of its financial condition. The EPA agreed. But the EPA and Asarco never reached an agreement, including a schedule, for the sediments in the bay and the Yacht Basin.

The EPA may not have the money to do the cleanup itself. The Superfund runs out of money in the next year or so unless Congress reauthorizes a special tax on chemical, oil and other businesses.

Marshall said the EPA expects Asarco to meet the schedule, but Martin said he wasn't so sure, given the company's financial situation.

The new order also requires that Asarco, within 30 days, offer assurances to the EPA that it has the money to clean up the sediments by posting a performance bond, securing a letter of credit or a guarantee by a third party, or providing inside financial information showing the company can cover the costs.

Marshall said the requirement for financial assurance was a standard part of such an order. It could, however, cause problems for Asarco. Martin said the company was still studying the order. Seattle Post Intelligencer