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                                                                  EXHIBIT 10.4.5
                                                                  ==============

                                 LOAN GUARANTY


     THIS LOAN GUARANTY is dated (for reference purposes only) as of May 1, 2000
and is made and entered into in connection with the provision by Bank of the
credit facility referred to in paragraph 1 below, pursuant to which each
Guarantor (as defined below) expects to derive direct and/or indirect benefit.

     NOW, THEREFORE, the parties agree as follows:

1.   Obligations Guarantied. For consideration, the adequacy, sufficiency and
receipt of which is hereby acknowledged, the undersigned (collectively,
"Guarantors" and individually each or any "Guarantor") unconditionally, jointly
and severally guarantee and promise to pay to UNION BANK OF CALIFORNIA, N.A.
("Bank") on demand, in lawful United States money, subject to the limitations
set forth in Section 19, below, all principal, interest, reasonable attorneys'
fees, expenses and other sums due or which become due pursuant to any or all of
the following: (a) that certain Loan Agreement of even date herewith (as from
time to time amended the "Loan Agreement") by and between West Valley MRF, LLC,
a California limited liability company, ("Borrower") and Bank, pursuant to which
Bank has agreed to make revolving loans in the aggregate principal amount not to
exceed $2,000,000 to assist the Borrower in financing a part of the cost of
equipment acquisition; (b) any Borrower Agreement (as defined in the Loan
Agreement), including, without limitation, any security agreements securing the
Loan Agreement; and (c) all extensions, renewals and modifications of any of the
foregoing (individually and collectively, the "Obligations"), whether due or not
due, absolute or contingent, liquidated or unliquidated, legal or equitable,
whether Borrower is liable individually or jointly or with others, whether
incurred before, during or after any bankruptcy, reorganization, insolvency,
receivership or similar proceeding ("Insolvency Proceeding"), and whether
recovery thereof is or becomes barred by a statute of limitations or is or
becomes otherwise unenforceable, together with all expenses of, for and
incidental to collection, including reasonable attorneys' fees. This Guaranty is
in addition to any other guaranties of the Obligations. The maximum amount
payable by Guarantors to Bank hereunder shall be limited to the maximum amount
specified in Section 19, below. Capitalized terms used herein without definition
shall have the respective meanings ascribed thereto in the Loan Agreement.

2.   Reinstatement. All of Bank's rights pursuant to this Guaranty continue with
respect to amounts previously paid to Bank on account of any Obligations which
are thereafter restored or returned by Bank, whether in an Insolvency Proceeding
of Borrower or for any other reason, all as though such amounts had not been
paid to Bank, and each Guarantor's liability under this Guaranty (and all its
terms and provisions) shall be reinstated and revived as provided herein,
notwithstanding any surrender or cancellation of this Guaranty. Bank, in its
sole discretion, may determine whether any amount paid to it must be restored or
returned; provided, however, that if Bank elects to contest any claim for return
or restoration, each Guarantor agrees to indemnify and hold Bank harmless from
and against all costs and expenses, including reasonable attorneys' fees,
expended or incurred by Bank in connection with such contest. If any Insolvency
Proceeding is commenced by or against Borrower or any Guarantor, at Bank's
election, each Guarantor's

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obligations under this Guaranty shall immediately and without notice or demand
become due and payable, whether or not then otherwise due and payable.

3.   Authorization. Each Guarantor authorizes Bank, without notice and without
affecting such Guarantor's liability under this Guaranty, from time to time,
whether before or after any revocation of this Guaranty, to (a) renew,
compromise, extend, accelerate, release, subordinate, waive, amend and restate,
or otherwise amend or change, the interest rate, time or place for payment or
any other terms of all or any part of the Obligations; (b) accept delinquent or
partial payments on the Obligations; (c) take or not take security or other
credit support for this Guaranty or for all or any part of the Obligations, and
exchange, enforce, waive, release, subordinate, fail to enforce or perfect, sell
or otherwise dispose of any such security or credit support; (d) apply proceeds
of any such security or credit support and direct the order or manner of its
sale or enforcement as Bank, in its sole discretion, may determine; and (e)
release or substitute Borrower or any Guarantor or other person or entity liable
in respect of all or any part of the Obligations.

4.   Waivers. To the maximum extent permitted by law, each Guarantor waives (a)
all rights to require Bank to proceed against Borrower or proceed against,
enforce or exhaust any security for the Obligations or to marshal assets or to
pursue any other remedy in Bank's power whatsoever; (b) all defenses arising by
reason of: any disability or other defense of Borrower, the cessation for any
reason of the liability of Borrower, any defense that any other indemnity,
guaranty or security was to be obtained, any claim that Bank has made such
Guarantor's obligations more burdensome or more burdensome than Borrower's
obligations, and the use of any proceeds of the Obligations other than as
intended or understood by Bank or such Guarantor; (c) all presentments, demands
for performance, notices of nonperformance, protests, notices of protest,
notices of dishonor, notices of acceptance of this Guaranty, and all other
notices or demands to which such Guarantor might otherwise be entitled; (d) all
conditions precedent to the effectiveness of this Guaranty; (e) all rights to
file a claim in connection with the Obligations in an Insolvency Proceeding
filed by or against Borrower; (f) all rights to require Bank to enforce any of
its remedies and (g) until the Obligations are satisfied or fully paid, with
such payment not subject to return: (i) all rights of subrogation,
indemnification or reimbursement, (ii) all rights of recourse to any assets or
property of Borrower or to any collateral or credit support for the Obligations,
(iii) all rights to participate in or benefit from any security or credit
support Bank may have or acquire, and (iv) all rights, remedies and defenses
such Guarantor may have or acquire against Borrower; provided however that
                                                     -------- -------
anything in this Guaranty to the contrary notwithstanding, the Guarantors shall
only be required to waive and forebear the enforcement of any rights of
subrogation, indemnification or reimbursement against any person or entity so
long as such person or entity is in default in the payment of any obligation due
and owing to Bank; during the continuance of any such default all such rights of
subrogation, indemnification and reimbursement shall be subordinated as provided
in Section 6 below. Bank may foreclose, either by judicial foreclosure or by
exercise of power of sale, any deed of trust which secures any Obligations, and
even though such foreclosure or exercise may destroy or diminish the rights of
the Guarantors, or any of them, against Borrower, each Guarantor shall remain
liable for any part of the Obligations remaining unpaid after foreclosure. Each
Guarantor understands that if Bank forecloses by trustee's sale on a deed of
trust securing any of the Obligations, Guarantor would then have a defense
preventing Bank from thereafter enforcing Guarantor's liability for the unpaid

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balance of the secured Obligations. This defense arises because the trustee's
sale would eliminate Guarantor's right of subrogation, and therefore Guarantor
would be unable to obtain reimbursement from Borrower. Guarantor specifically
waives this defense and all rights and defenses that Guarantor may have because
the Obligations are secured by real property. This means, among other things:
(1) Bank may collect from Guarantor without first foreclosing on any real or
personal property collateral pledged by Borrower; and (2) if Bank forecloses on
any real property collateral pledged by Borrower: (A) the amount of the
Obligations may be reduced only by the price for which the collateral is sold at
the foreclosure sale, even if the collateral is worth more than the sale price;
and (B) Bank may collect from Guarantor even if Bank, by foreclosing on the real
property collateral, has destroyed any right Guarantor may have to collect from
Borrower. This is an unconditional and irrevocable waiver of any rights and
defenses Guarantor may have because the Obligations are secured by real
property. These rights and defenses include, but are not limited to, any rights
or defenses based upon Section 580a, 580b, 580d, or 726 of the California Code
of Civil Procedure. Each Guarantor agrees that such Guarantor shall remain
liable (subject to the limits set forth in Section 19, below) for any part of
the Obligations remaining unpaid after a trustee's sale, although such Guarantor
would not become subrogated to any part of the Obligations that such Guarantor
has paid and would therefore be unable to obtain reimbursement for those
payments from Borrower. Each Guarantor may therefore incur a partially or
totally unreimbursable liability under the Guaranty. Each Guarantor waives all
benefits under California Civil Code sections 2808, 2809, 2810, 2819, 2839,
2845, 2846, 2848, 2849, 2850, 2855, 2899 and 3433 and California Code of Civil
Procedure sections 580a, 580b, 580d and 726.

5.   Guarantor to Keep Informed. Each Guarantor warrants having established with
Borrower adequate means of obtaining, on an ongoing basis, such information as
such Guarantor may require concerning all matters bearing on the risk of
nonpayment or nonperformance of the Obligations. Each Guarantor assumes sole,
continuing responsibility for obtaining such information from sources other than
from Bank. Bank has no duty to provide any information to any Guarantor until
Bank receives such Guarantor's written request for specific information in
Bank's possession and Borrower has authorized Bank to disclose such information
to such Guarantor.

6.   Subordination. All liabilities and commitments of Borrower to any
Guarantor, and all liabilities and commitments of any guarantor of any of the
Obligations to any other Guarantor, which presently or in the future may exist
("Guarantor Claims") are hereby subordinated to the Obligations; provided
however that so long as the party against which such Guarantor Claims are
asserted is not in default in the payment of any obligations due and owing to
Bank, payments and distributions from Borrower to any Guarantor or among or
between any of the guarantors (including any Guarantor) of any of the
Obligations shall be permitted in the ordinary course of business. Whenever any
such default shall have occurred and be continuing, Guarantor Claims against
such party in default will be enforced, and performance thereon received by any
Guarantor only as a trustee for Bank, and each Guarantor will promptly pay over
to Bank upon demand all proceeds recovered for application to the Obligations
without reducing or affecting such Guarantor's liability under other provisions
of this Guaranty.

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7.   Representations and Warranties. The Guarantors represent and warrant to the
Bank as follows:

     (a) Corporate Existence and Power.  Each Guarantor (i) is a corporation
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duly organized, validly existing and in good standing under the laws of the
State of Delaware, (ii) is duly qualified or licensed as a foreign corporation
and is in good standing in the State of California and in each other
jurisdiction in which it owns or leases property or in which the conduct of its
business requires it to so qualify or be licensed and (iii) has all requisite
corporate power and authority to own or lease and operate its properties and to
carry on its business as now conducted and as proposed to be conducted.

     (b) Authorization.  The execution, delivery and performance by the
         -------------
Guarantors of this Guaranty, and the consummation of the transactions
contemplated hereby and thereby, are within each Guarantor's corporate powers,
have been duly authorized by all necessary corporate action of such Guarantor
and do not contravene such Guarantor's charter documents or bylaws.

     (c) Binding Effect.  This Guaranty has been duly executed and delivered by
         --------------
the Guarantors. This Guaranty is the legal, valid and binding obligation of each
Guarantor, enforceable against such Guarantor in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, reorganization or other similar laws affecting creditors' rights
generally.

     (d) Other Information.   To the knowledge of Guarantors, no information,
         -----------------
exhibit or report furnished by any Guarantor to Bank in connection with the Loan
Agreement or this Guaranty contains any material misstatement of fact or omits
to state a material fact or any fact necessary to make the statements contained
therein, in light of the circumstances in which made, not misleading.

     (e) Litigation.  Except as previously disclosed in writing to Bank, there
         ----------
is no action, suit, investigation, litigation or proceeding affecting the
Guarantors pending or, to the best knowledge of the Guarantors, threatened
before any court, governmental agency or arbitrator (a) that would be reasonably
likely to have a materially adverse effect on the business, condition (financial
or otherwise), operations, performance, properties or prospects of the
Guarantors or (b) that purports to affect the legality, validity or
enforceability of this Guaranty or the consummation of the transactions
contemplated hereby.

     (f) Financial Statements.  The audited consolidated balance sheet of Kaiser
         --------------------
Ventures Inc., a Delaware corporation ("KVI") and its Subsidiaries as of
December 31, 1999, and the related audited consolidated statements of income,
retained earnings and cash flows of KVI and its Subsidiaries for the fiscal year
then ended, fairly present the consolidated financial condition of KVI and its
Subsidiaries as of such date and the consolidated results of the operations of
KVI and its Subsidiaries for the fiscal year ended on such date, all in
accordance with generally accepted accounting principles applied on a consistent
basis. The unaudited consolidated balance sheet of KVI and its Subsidiaries as
of March 30, 2000, and the related unaudited consolidated statements of
operation, retained earnings and cash flows of KVI and its Subsidiaries for the
three-month

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period then ended, reviewed (subject to normal year-end audit adjustments) by
the chief financial officer or chief accounting officer of KVI as having been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis, fairly present the consolidated financial condition of KVI
and its Subsidiaries as of such date and the consolidated results of the
operations of KVI and its Subsidiaries for the three-month period ending on such
date. Since March 31, 2000 there has been no materially adverse change in the
business, condition (financial or otherwise), operations, performance,
properties or prospects of KVI or any of its Subsidiaries. KVI and its
Subsidiaries have no material contingent liabilities, except as disclosed in
such consolidated financial statements or the notes thereto, that would be
reasonably likely to have a materially adverse effect on the business, condition
(financial or otherwise), operations, performance, properties or prospects of
KVI or any of its Subsidiaries.

     (g) Burdensome Agreements.  Except as otherwise disclosed in writing,
         ---------------------
neither KVI nor any of its Subsidiaries is a party to any indenture, loan
agreement, credit agreement, lease or other agreement or instrument, or subject
to any charter or corporate restriction, that would be reasonably likely to have
a materially adverse effect on the business, condition (financial or otherwise),
operations, performance, properties or prospects of KVI or any of its
Subsidiaries or on the ability of KVI or any of its Subsidiaries to carry out
its obligations under this Guaranty.

     (h) Taxes.  KVI and its Subsidiaries have filed, or there has been filed on
         -----
their behalf, all tax returns (federal, state, local and foreign) required to be
filed before the date of the making of this representation and warranty, and KVI
and its Subsidiaries have paid all taxes shown thereon to be due, including
interest, additions to taxes and penalties, or have provided adequate reserves
for the payment thereof.

     (i) Title to Properties; Ownership.  KVI and its Subsidiaries have good and
         ------------------------------
marketable title to all material properties, real or personal, purported to be
owned thereby. KVI is the legal and beneficial owner of all of the outstanding
capital stock of Kaiser Recycling Corporation, a Delaware corporation, and such
stock is not subject to any lien or other encumbrance other than the lien of the
stock pledge agreement securing KVI's obligations under the KVI Performance
Guaranty.

     (j) Regulation.  Neither Guarantor is currently subject to financial,
         ----------
organizational or rate regulation (i) under the Public Utility Holding Company
Act of 1935, the Federal Power Act, the Interstate Commerce Act, the Investment
Company Act of 1940 or any Governmental Rule limiting its ability to incur Debt
or (ii) by the California Public Utilities Commission.

8.   Covenants.  The Guarantors covenant and agree that, unless Bank otherwise
consents in writing and so long the Obligations remain unpaid

     (a) Each of the Guarantors will, preserve, renew and keep in full force and
effect its corporate existence (in the jurisdiction thereof) and the material
rights, privileges, franchises and governmental approvals necessary or desirable
for the normal conduct of its business.

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     (b) Neither Guarantor will merge or consolidate with or into, or sell,
assign, lease or otherwise dispose of (whether in one transaction or in a series
of transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to any Person, unless, in the case of any merger or
consolidation, such Guarantor is the surviving entity; provided however that the
Guarantors shall be permitted, upon notice to the Bank, to transfer any or all
of the assets or capital stock of KRC to Burrtec Waste Industries, Inc. ("BWI")
or any wholly-owned subsidiary of BWI or KVI.

     (c) KVI will deliver the following to the Bank:

         (i)   as soon as available and in any event within 45 days after the
end of each of the first three quarters of each fiscal year of KVI, a copy of
the quarterly report on Form 10-Q filed by KVI with the SEC with respect to such
fiscal quarter;

         (ii)  as soon as available and in any event within 105 days after the
end of each fiscal year of KVI , a copy of the annual report on Form 10-K filed
by KVI with the SEC with respect to such fiscal year, in each case containing
financial statements audited by Ernst & Young or another "Big Six" accounting
firm, together with a certificate of such accounting firm stating that in the
course of the regular audit of the business of KVI and its Subsidiaries, which
audit was conducted by such accounting firm in accordance with generally
accepted auditing standards, such accounting firm has obtained no knowledge that
an Event of Default has occurred and is continuing or, if in the opinion of such
accounting firm an Event of Default has occurred and is continuing, a statement
as to the nature thereof.

         (iii) promptly upon the filing thereof, a copy of any report on Form 8-
K filed by KVI with the SEC;

         (iv)  as soon as available and in any event within 30 days after the
end of each fiscal year of KVI, a budget, an operating plan, and an operating-
profit and cash-flow projection for KVI for the then current fiscal year, as
prepared by KVI and approved by the Guarantor's board of directors;

         (v)   forthwith upon KVI's becoming aware of the occurrence of any
Event of Default relating to KVI, a certificate of the chief financial officer
or chief accounting officer of KVI setting forth the details thereof and the
action that KVI is taking or proposes to take with respect thereto;

         (vi)  promptly after the commencement thereof, notice of all material
actions, suits and proceedings before any Governmental Authority or arbitrator,
affecting KVI or any of its Subsidiaries, of the type described in Section 7(e),
above;

         (vii) promptly after the occurrence thereof, notice of any event or
condition that constitutes or causes a materially adverse change in the
business, condition (financial or otherwise), operations, performance,
properties or prospects of KVI or any of its Subsidiaries, if

                                      -6-
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such event or condition could materially impair either Guarantor's ability to
perform its obligations under this Guaranty; and

          (viii)  promptly upon request, such other information respecting the
business, condition (financial or otherwise), operations, performance,
properties or prospects of either Guarantor as the Bank may from time to time
reasonably request. All non-public information will be treated confidentially by
the Bank and will not be distributed or otherwise made available by the Bank to
any person or entity, other than the Bank's employees, authorized agents or
representatives who need to review or be informed of such information in
connection with their employment by the Bank.

     (d)  KVI will maintain, and cause each of its Subsidiaries to maintain,
insurance with responsible and reputable insurance companies or associations
that have an A.M. Best Co. rating of at least B+:6 or a Solvency International
or equivalent rating as in effect on the Date of Issuance for such insurance
company or association, in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar properties
in the same general areas in which KVI or such Subsidiary operates provided,
                                                                   --------
however, that in the case of any liability insurance (excluding directors and
-------
officers liability insurance), such insurance shall name the Bank as an
additional insured and shall provide for at least 30 days' prior written notice
to the Bank of any amendment, nonrenewal or cancellation thereof (except that
only 10 days' notice need be provided for cancellation due to the Guarantor's
failure to pay thereunder).

     (e)  KVI will maintain its fiscal year and fiscal quarters so that they
correspond to the calendar year and calendar quarters.

9.   Assignments. Without notice to the Guarantors, Bank may assign the
Obligations and this Guaranty, in whole or in part, and may disclose to any
prospective or actual purchaser of all or part of the Obligations any and all
information Bank has or acquires concerning either Guarantor, this Guaranty and
any security for this Guaranty provided that each such prospective or actual
purchaser must agree to maintain the confidentiality of all such information.

10.  Counsel Fees and Costs. The prevailing party shall be entitled to
attorneys' fees (including a reasonable allocation for any appropriately
documented fees of Bank's internal counsel), and all other costs and expenses
which it may incur in connection with the enforcement or preservation of its
rights under, or defense of, this Guaranty or in connection with any other
dispute or proceeding relating to this Guaranty, whether or not incurred in an
Insolvency Proceeding, arbitration, litigation or other proceeding.

11.  [Intentionally omitted]

12.  Multiple Guarantors/Borrowers. When there is more than one Borrower named
herein, or when this Guaranty is executed by more than one Guarantor, then the
words "Borrower" and "Guarantor," respectively, shall mean all and any one or
more of them, and their respective successors and assigns, including debtors-in-
possession and bankruptcy trustees, and words used herein in the singular shall
be considered to have been used in the plural where the context and

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construction so requires in order to refer to more than one Borrower or
Guarantor, as the case may be. This Guaranty may be executed in any number of
counterparts and by different parties hereto on separate counterparts. Each
counterpart, when so executed and delivered, shall be deemed to be an original
and all counterparts, taken together, shall constitute but one and the same
Guaranty.

13.  Waiver of Jury Trial. EACH GUARANTOR AND BANK HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER THIS GUARANTY, ANY OF THE OBLIGATIONS, OR ANY
RELATED AGREEMENTS OR INSTRUMENTS, OR IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DISCUSSIONS, DEALINGS OR ACTIONS OF SUCH PARTIES OR ANY OF
THEM (WHETHER ORAL OR WRITTEN) WITH RESPECT THERETO, OR TO THE TRANSACTIONS
RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE. EACH PARTY HEREBY AGREES AND
CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED
IN ACCORDANCE WITH THE PROVISIONS OF THE ALTERNATIVE DISPUTE RESOLUTION
AGREEMENT REFERRED TO IN PARAGRAPH 18 BELOW. EACH GUARANTOR ACKNOWLEDGES AND
AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION
(AND EACH OTHER PROVISION OF EACH OTHER DOCUMENT TO WHICH IT IS A PARTY) AND
THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR BANK AGREEING TO THE CREDIT
EXTENSION REFERRED TO HEREIN.

14.  Integration/Severability/Amendments. This Guaranty is intended by each of
the Guarantors and Bank as the complete, final expression of their agreement
concerning its subject matter. It supersedes all prior understandings or
agreements with respect thereto and may be changed only by a writing signed by
Bank and the Guarantor intended to be bound by such writing. No course of
dealing, or parol or extrinsic evidence shall be used to modify or supplement
the express terms of this Guaranty. If any provision of this Guaranty is found
to be illegal, invalid or unenforceable, such provision shall be enforced to the
maximum extent permitted, but if fully unenforceable, such provision shall be
severable, and this Guaranty shall be construed as if such provision had never
been a part of this Guaranty and the remaining provisions shall continue in full
force and effect.

15.  Joint and Several.  If more than one Guarantor signs this Guaranty, the
obligations of each Guarantor under this Guaranty are joint and several in
accordance with the terms of this Agreement, and independent of the Obligations
and of the liabilities and commitments of any other person or entity.  A
separate action or actions may be brought and prosecuted against any Guarantor,
whether action is brought against Borrower, any other Guarantor or any other
person or entity liable in respect of all or any part of the Obligations, and
whether Borrower or such others are joined in any such action.

                                      -8-
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16.  Notice. Any notice given by any party under this Guaranty shall be
effective only upon its receipt by the other party and only if (a) given in
writing and (b) personally delivered or sent by United States mail, postage
prepaid, and addressed to Bank or Guarantor at their respective addresses for
notices indicated below. Each Guarantor and Bank may change the place to which
notices, requests, and other communications are to be sent to them by giving
written notice of such change to the other.

17.  California Law. Subject to paragraph 13 of this Guaranty, this Guaranty
shall be governed by and construed according to the laws of California, and each
Guarantor submits to the nonexclusive jurisdiction of the state or federal
courts in California.

18.  Dispute Resolution. This Guaranty hereby incorporates any alternative
dispute resolution agreement previously, concurrently or hereafter executed
between any Guarantor and Bank.

19.  Limitation on Guarantor's Liability. Notwithstanding the provisions of
Section 1 hereof or anything else to the contrary in this Guaranty, Guarantor's
liability under this Guaranty for the Obligations shall not exceed the sum of
the following (collectively, the "Guaranteed Liability Amount"): (a) the lesser
of (i) ONE MILLION AND NO/100 DOLLARS ($1,000,000.00); or (ii) fifty percent
(50%) of all Obligations representing principal outstanding at the time of
demand by Bank under this Guaranty (the "Principal Amount") without reduction
for any payments with respect to the Obligations received by Bank after such
demand from any source other than a Guarantor hereunder including, without
limitation, any payments from Borrower or any other guarantor of the Obligations
or derived from any collateral securing the Obligations; (b) all interest, fees
and like charges owing and allocable to the Principal Amount as reasonably
determined by Bank; and (c) without allocation in respect of the Principal
Amount, all costs, attorneys' fees and expenses of Bank relating to or arising
out of the enforcement of the Obligations and all indemnity liabilities of
Guarantor under this Guaranty; provided however, that Guarantors' liability for
all costs, fees, expenses and indemnity liabilities specified in the preceding
clause (c) shall terminate upon receipt by Bank from Guarantors of the full
Guaranteed Liability Amount. The foregoing limitation applies only to
Guarantor's liability under this particular Guaranty. Unless Bank otherwise
agrees in writing, every other guaranty previously, concurrently or hereafter
given to Bank by Guarantor is independent of this Guaranty and of every other
such guaranty. Without notice to Guarantor, Bank may apply or reapply any
amounts received in respect of the Obligations from any source other than from
Guarantor to that portion of the Obligations not included with the Guaranteed
Liability Amount.

20.  Events Of Default.  The occurrence of any of the following events shall be
an "Event of Default" hereunder:

     (a) The occurrence of an Event of Default (as defined in Section 6 of the
Loan Agreement); or

     (b) Any representation or warranty made any Guarantor hereunder or in any
statement, certificate or document delivered by such Guarantor in connection
with the this Guaranty shall prove to have been incorrect in any material
respect when made; or

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<PAGE>

     (c)  Either Guarantor shall fail to perform or observe any other material
term, covenant or agreement contained in this Guaranty and any such failure
shall be impossible for such Guarantor to remedy or which shall remain
unremedied for thirty (30) days after written notice thereof shall have been
given to such Guarantor by Bank; provided however any such failure which is not
impossible to cure but which is not reasonably susceptible of cure within a 30-
day period shall not constitute an Event of Default hereunder unless either (A)
the Guarantors shall fail to initiate and diligently pursue all action necessary
to remedy such failure; or (B) such failure is not remedied within sixty (60)
days after written notice to the Guarantors from the Bank; or

     (d)  Either Guarantor shall (i) fail to make any payment, equal to or
exceeding $100,000 of any principal of or interest or premium on any Debt (as
defined below) when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) and such failure shall continue after the
applicable grace period, if any, specified in the agreement or instrument
relating to such Debt, or (ii) fail to perform or observe any material term,
covenant or condition on its part to be performed or observed under any
agreement or instrument relating to any Debt when required to be performed or
observed, and such failure shall continue after the applicable grace period, if
any, specified in such agreement or instrument, if the effect of such failure to
perform or observe is to accelerate, or to permit the acceleration of, the
maturity of any Debt, the unpaid principal amount of which then equals or
exceeds $100,000. "Debt" of either Guarantor (which shall not include any
indebtedness hereunder) means (A) indebtedness for borrowed money or for the
deferred purchase price of property or services in respect of which either
Guarantor is liable, contingently or otherwise, as obligor, guarantor or
otherwise, or in respect of which any Guarantor otherwise assures a creditor
against loss and (B) obligations under leases which shall have been or should
be, in accordance with generally accepted accounting principles, recorded as
capital leases in respect of which obligations or such Guarantor is liable,
contingently or otherwise, as obligor, guarantor or otherwise, or in respect of
which obligations any Guarantor assures a creditor against loss.

21.  Remedies Upon Event of Default. Upon the occurrence and during the
continuance of an Event of Default hereunder, (but without limiting any other
rights or remedies available to Bank under the Loan Agreement and this Guaranty
or otherwise available under California law, all of which rights and remedies
are hereby expressly reserved) an amount equal to the Guaranteed Liability
Amount shall become immediately due and payable by the Guarantors to the Bank,
without presentment, demand, protest or other requirements of any kind, all of
which are hereby expressly waived by the Guarantors. Either of the following two
events shall constitute a "Payment Event of Default" hereunder: (1) any
intentional misrepresentation of a material fact by either Guarantor; or (2)
failure by the Guarantors to pay the Guaranteed Liability Amount to the Bank
within ninety (90) days after the occurrence of an Event of Default. Upon the
occurrence of a Payment Event of Default hereunder, the Bank shall have the
right, at its option, to declare an Event of Default under the Loan Agreement
and to exercise any and all rights and remedies provided thereunder.


                      [Agreement continues on next page]

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<PAGE>

22.  Termination. Subject to reinstatement pursuant to Paragraph 2 above, this
Guaranty and all of the rights of the Bank hereunder shall terminate upon the
earlier of (i) receipt by the Bank of the Guaranteed Liability Amount, or (ii)
the payment in full of all of the Obligations.

     Each Guarantor acknowledges having received a copy of this Guaranty and
having made each waiver contained in this Guaranty with full knowledge of its
consequences.

Dated as of May 1, 2000

                                   GUARANTORS


                                   KAISER VENTURES INC.,
                                   a Delaware corporation


                                   By:  /s/ James F. Verhey
                                        -------------------
                                        Name:   James F. Verhey
                                        Title: Executive Vice President - CFO


                                   KAISER RECYCLING CORPORATION,
                                   a Delaware corporation


                                   By:  /s/ Eric D. Herbert
                                        -------------------
                                        Name:   Eric D. Herbert
                                        Title: Vice President

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