From: "Amy M. Lincoln" <ALincoln@bdlaw.com>

To: Conrad Chin/RTP/USEPA/US@EPA, Chuck French/RTP/USEPA/US@EPA Cc: <r.powell@optimaacq.com>, <JKonrady@fpiwv.com>, "Richard Lunn" <RLunn@fpiwv.com> Date: 07/10/2012 05:55 PM Subject: Felman Fugitive Emissions Control and Test Protocols

Conrad and Chuck:

Thanks again for making time last week to go over EMI’s fugitive emission source control plan and proposed HAP testing protocol and schedule. Attached are the com plementary materials for Felman. Specifically, attached are:

(1) A narrative description and engineering diagrams prepared by Felman’s consultants, Chu & Gassman, of a proposed fugitive emission control system for the Felman shop that we
conservati vely expect to eliminate 95% of the shop’s process fugitive emissions of particulate
matter, re

- routing these emissions to new and existing baghouses designed for 98% control efficiency; (2) The final test protocol for Felman’s planned July 2012 test ing for mercury, PAH, hydrochloric acid, and formaldehyde (i.e., the four pollutants EPA has proposed to add to the existing ferroalloy NESHAP); and (3) A proposed protocol for additional testing to be performed in the first quarter of 2013 and
whi ch would include testing for dioxin/furans and PCBs at furnace #2. The latter we are proposing in response to Chuck’s June 28th request for dioxin/furans and PCB data based on we understand to be concerns at EPA about the reliability and representativen ess of the dust analysis data Felman collected on these pollutants per EPA’s April 2010 ICR.

We provide the attached materials in follow up to and consistent with the written comments Felman submitted on the proposed rule and the various meetings and telephone conferences between EPA and the two companies, Felman and EMI, since that time. As we have repeatedly emphasized in our written comments and subsequent discussions, the proposed rule’s “total building enclosure” approach to emission control is infeasible and would very likely lead to the end of the U.S. ferroalloy production industry. Felman remains committed, however, to driving down its emissions of hazardous air pollutants; the attached p roposal demonstrates the significant emissions improvements that are possible with a control system targeting key processes and equipment. Please note that the control system described in Chu & Gassman’s report is, at this point, merely a proposed stra tegy for capturing fugitive emissions in a more cost

- effective manner than EPA’s “total building enclosure.” Felman has not obtained (or, indeed, even requested) management approval to implement the work laid out in the proposal (which we expect to cos t significantly more than EPA’s estimate of the cost of implementing its
total building enclosure strategy but below the true cost of implementing the proposed rule (as detailed in Felman’s submittal to the EPA on January 31, 2012). If EPA agrees with F elman that the roughly 95% total capture efficiency achieved by the proposed system satisfies the mandate of Section 112(f) of theClean Air Act, Felman will take the next steps forward in implementing the project, namely, seeking from

Chu & Gassman a d etailed cost estimate and approximate implementation timeline.

The test protocols, in turn, are designed to help the Agency fill in the numerous data gaps in the emissions profile for the industry that both Felman and EMI identified in their writte n comments (especially with respect to the wide variability in furnace operations) and which the Agency itself has noted with respect to Felman’s ICR data. As discussed in our telephone call on June 28th, it is not practical for Felman to incorporate t he requested dioxin/furans and PCB testing into its July protocol, but we are proposing to include those pollutants in the next scheduled stack testing. The next testing would be in the first quarter of 2013, likely in January or February. Again, as p reviously discussed, the purpose of conducting the testing in the first quarter is to gather emissions data in the winter months
when the HAP content of the ores is different and when the furnaces are running at a different temperature, both of which cou ld have an impact on emissions. Our proposal to conduct a second round of stack tests in early 2013 is also in recognition of the fact that EPA is under both a statutory and
a consent decree

- specified deadline to complete its risk and technology review of the current ferroalloy
NESHAP. We understand that, per agreement of the parties, that consent decree deadline is currently

set at September 14, 2012. Obviously the collection of data in the first q uarter of 2013 is conditioned upon an extension of that deadline; indeed, we would anticipate an extension to no sooner than July 15, 2013, which we estimate to be an appropriate amount of time for EPA to review and process the 1Q
2013 emissions data. Finally, similar to the fugitive emission control strategy, the 2013 testing is also subject to management approval.

We are next scheduled to meet and discuss the details of both EMI’s and Felman’s fugitive emissions control efforts on July 16th. We ’ve asked a representative from Chu & Gassman (Jack Wang, the primary author of the attached design narrative) to be available by phone on the 16th. But we are also happy to discuss any specific questions you may have on the control system design befor e then. Jack as well as the full Felman team are generally available this Friday, July 13th for a phone call. Please email me some available times if you’d like to talk that day. I appreciate your work on this and look forward to seeing you both on Ju ly 16th.

Amy

Amy M. Lincoln Principal Beveridge & Diamond, P.C. 456 Montgomery Street Suite 1800 San Francisco, CA 94104 T (415) 262

- 4029 ~ F (415) 262

- 4040 ALincoln@bdlaw.com

CONFIDENTIALITY STATEMENT: This electronic message contains information from the law firm of

B everidge & Diamond, P.C. and may be confidential or privileged. The information is intended solely forthe use of the individual(s) or entity(ies) named above. If you are not the intended recipient, be aware

that any disclosure, copying, distribution, or use of the contents of this message is prohibited. If you
have received this e

- mail in error, please notify us immediately by telephone at (202) 789

- 6000 or by e

mail reply and delete this message. Thank you.

IRS CIRCULAR 230 DISCLOSURE: To the extent that tax advice is contained in this correspondence or any
attachment hereto, you are advised that such tax advice is not intended to be used, an d cannot be used for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing or recommending to another party the tax advice contained herein.

Please consider the environment before printing this e

- mail.

(See attached file: Chu Gassman Felman

- Design Report 7

- 10

- 2012.PDF)(See attached file: Felman Stack Test Proposal for 1Q 2013 (071012).PDF)(See attached file: Felman stack te st Protocol for July 2012.PDF)