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                                                                 EXHIBIT 10.16.1

                               AMENDMENT NO. 1 TO
                        CASH COLLATERAL PLEDGE AGREEMENT


THE RENCO GROUP, INC.
30 Rockefeller Plaza
New York, New York 10112

                                                  as of August 1, 2000
Congress Financial Corporation,
  as Agent
1133 Avenue of the Americas
New York, New York 10036

Gentlemen:

         Lodestar Energy, Inc., a Delaware corporation ("Borrower"), has entered
into financing arrangements with Congress Financial Corporation, a Delaware
corporation in its capacity as Agent pursuant to the Loan Agreement (as
hereinafter defined) acting for and on behalf of the financial institutions
which are from time to time parties thereto as lenders (in such capacity,
"Agent"), The CIT Group/Business Credit, Inc. in its capacity as co-agent for
the financial institutions which are from time to time parties thereto as
lenders ("Co-Agent") and the financial institutions which are parties to the
Loan Agreement as lenders (individually, a "Lender", and collectively,
"Lenders") pursuant to which Agent and Lenders may make loans and advances and
provide other financial accommodations to Borrower as set forth in the Amended
and Restated Loan and Security Agreement, dated May 15, 1998, by and among
Borrower, Lodestar Holdings, Inc., a Delaware corporation ("Guarantor"), Agent,
Co-Agent and Lenders, as amended pursuant to Amendment No. 1 to Amended and
Restated Loan and Security Agreement, dated October 22, 1998, Amendment No. 2 to
Amended and Restated Loan and Security Agreement, dated December 21, 1998,
Amendment No. 3 to Amended and Restated Loan and Security Agreement, dated
January 15, 1999, Amendment No. 4 to Amended and Restated Loan and Security
Agreement, dated April 30, 1999, Amendment No. 5 to Amended and Restated Loan
and Security Agreement, dated July 16, 1999, Amendment No. 6 to Amended and
Restated Loan and Security Agreement, dated November 15, 1999, and Amendment No.
7 to Amended and Restated Loan and Security Agreement, dated March 10, 2000 (as
the same now exists or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced, the "Loan Agreement"), and other
agreements, documents and instruments referred to therein or at any time
executed and/or delivered in connection therewith or related thereto, including,
but not limited to, this letter agreement (all of the foregoing, together with
the Loan Agreement, as the same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced, being collectively
referred to herein as the "Financing Agreements"). All capitalized terms used
herein, unless otherwise defined herein, shall have the meanings given to such
terms in the Loan Agreement.

         The Renco Group., Inc., a New York corporation ("Renco Group") has
agreed to make subordinated loans from time to time upon the request of Agent
under certain circumstances as set forth in the letter agreement, dated November
15, 1999, by and among Renco Group, Agent, Co-Agent, Borrower and Guarantor, as
amended pursuant to Amendment No. 1 to Subordinated Loan Letter, dated March 10,
2000 (as the same has been amended and may hereafter be further amended,
modified, supplemented, extended, renewed, restated or replaced, the
"Subordinated Loan Letter").

         Renco Group has also agreed to provide cash collateral to Agent in
order to induce Lenders to make certain additional loans available to Borrower
as set forth in the Cash Collateral Pledge Agreement, dated March 10, 2000, by
Renco Group in favor of Agent (as the same is hereby amended and may hereafter
be further amended, modified, supplemented, extended, renewed, restated or
replaced, the "Renco Group Cash Collateral Agreement").

         Renco Group and Borrower have requested that Agent, Co-Agent and
Lenders agree to amend the Renco Group Cash Collateral Agreement in order to
permit Renco Group to remit an additional $1,000,000 in Renco Group Cash
Collateral to Agent on August 1, 2000. Agent, Co-Agent and Lenders are willing
to agree to such amendment, subject to the terms and conditions contained
herein.

         In consideration of the foregoing and the other terms and conditions
contained herein and in the other Financing Agreements, the parties hereto agree
as follows:

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         1. The reference to "four (4) months" in Section 1 of the Renco Group
Cash Collateral Agreement shall be deleted and replaced with "five (5) months"
and each reference to the figure "$5,000,000" in Section 1 of the Renco Group
Cash Collateral Agreement is hereby deleted and each such reference is hereby
replaced with the figure: "$6,000,000".

         2. Renco Group, Borrower and Guarantor represent and warrant to Agent
and Lenders that: (a) the execution, delivery and performance of this amendment
to the Renco Group Cash Collateral Agreement is within the corporate powers of
Renco Group, Borrower and Guarantor, has been duly authorized by all necessary
corporate action of Renco Group, Borrower and Guarantor, and does not contravene
any law, any provisions of the certificate of incorporation or the by-laws of
Renco Group, Borrower or Guarantor or any agreement to which Renco Group,
Borrower or Guarantor is a party or by which it or its properties are bound, and
(b) this amendment to the Renco Group Cash Collateral Agreement constitutes the
legal, valid and binding obligations of Renco Group, Borrower and Guarantor,
enforceable in accordance with its terms.

         3. The rights and obligations hereunder of each of the parties hereto
shall be governed by and interpreted and determined in accordance within the
laws of the State of New York (without giving effect to principles of conflict
of law).

          4. This amendment to the Renco Group Cash Collateral Agreement shall
be binding upon and inure to the benefit of each of the parties hereto and their
respective successors and assigns. All references to any party hereto shall be
deemed to include such party and its successors and assigns.

          5. This amendment to the Renco Group Cash Collateral Agreement may be
executed in any number of counterparts, but all of such counterparts shall
together constitute but one and the same agreement. In making proof of this
agreement it shall not be necessary to produce or to account for more than one
counterpart thereof signed by each of the parties hereto.

         Upon the execution of this amendment to the Renco Group Cash Collateral
Agreement by Agent, this amendment shall become a binding agreement by and among
Renco Group, Borrower and Agent.

                                      Very truly yours,

                                      THE RENCO GROUP, INC.

                                      By: /s/ John Siegel, Jr.
                                          ---------------------
                                      Title: /s/ Vice President
                                            --------------------
AGREED:
CONGRESS FINANCIAL CORPORATION,
  as Agent

By: /s/ Thomas Martin
    ------------------

Title: /s/ Assistant Vice President
       ----------------------------

THE CIT GROUP/BUSINESS CREDIT, INC.,
  as Co-Agent

By: /s/ Steve Schuit
    -----------------

Title: /s/ Assistant Vice President
       -----------------------------

<TABLE>
<S>                                     <C>
ACKNOWLEDGED AND AGREED:
LODESTAR ENERGY, INC.                   LODESTAR HOLDINGS, INC.

By: /s/ John Siegel, Jr.                By: /s/ John Siegel, Jr.
    --------------------                    ---------------------
Title: /s/ Vice President               Title: /s/ Vice President
       ------------------                      -------------------
</TABLE>


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