EXPANDING RESOURCES 

# "
- • Scope of RCRA Jurisdiction • Overview of Primary Mineral Processing Sector • EPA's Proposed "Legitimacy" Factors for Recycling • EPA's Proposed "Variance" Petition Procedure • Estimated Impacts on the Primary Mineral Processing Sector

- Estimated direct regulatory/compliance costs

- Impacts to feedstocks, current technologies, etc.

- Case Study: Primary Copper Smelter 

# • Options to Reduce Impacts • Conclusion
2EXPANDING RESOURCES 

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## • EPA does not have RCRA regulatory jurisdiction over in-process production materials. • Under RCRA, "hazardous wastes" must first qualify as "solid wastes"- this means "discarded."

- The goals of RCRA were to "Conserve" and "Recover" U.S. "Resources," not send those resources into landfills as "solid waste" or "hazardous waste."

- To qualify as a "hazardous waste," a material must first qualify as a "solid waste" under RCRA, which is "any garbage, refuse, sludge ... and other discarded material," by statute. 42 USC§ 6903(27).

- Accordingly: "Secondary materials destined for recycling are obviously not [discarded materials]. Rather than throwing these materials away, the producer saves them; rather than abandoning them, the producer reuses them." 

### Assoc. of Battery Recyclers v. EPA, 208 F.3d 1047, 1051 (D.C. Cir. 2000); 

### see also American Mining Congress v. EPA, 824 F.2d at 1177, 1190 (D.C. Cir. 1987). 3EXPANDING RESOURCES



## • Primary mineral processing sector overview:

- In business of "recovering" metals (concentrating/purifying) from natural ores;

- No single process step can turn ores, or even concentrated ores, into final metal products - the process necessarily is incremental, involving multiple steps;

- Technology limitations generate valuable intermediates, whose reprocessing is economically and operationally vital; and

- Processing natural ores for one target metal (e.g., Molybdenum) typ ically enables further production of others (e.g., Rhenium). 

## • Uniqueness of the primary mineral processing sector:

- Vast scale of operations (e.g., millions of tons in initial extraction);

- Use of large (hundreds of acres), state-permitted "active" land-based production units; and

- "Production" involves the "recovery" of target metals from natural ores (not "reclamation" from "waste''). 4EXPANDING RESOURCES



## • Example: The primary copper sector ensures maximum recovery of valuable metals from natural copper ores (with 

# 0.25°/o copper) by:

- Creating 99+ 0 

### /o pure copper starting with 

### 0.25°/o copper ore using various incremental recovery operations;

- Reprocessing valuable, concentrated, in-process generated materials on -site;

- Reprocessing materials generated by other primary metals industries; and

- Producing high -value feedstocks for other industries from other metals (e.g., Gold, Silver, Palladium, Tellurium) in natural ores. 

## • Materials generated and reprocessed in these incremental production processes are not "discarded" and, therefore, are not "solid waste."
5EXPANDING RESOURCES 

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### • EPA lacks jurisdiction under RCRA to impose "legitimacy" tests (e.g., requirements about how materials are stored or managed) on valuable in-process generated and reprocessed materials that are not "discarded" and thus not "solid waste." 

### • Even if EPA had such jurisdiction, its proposed rule will impose an undue burden on the primary mineral processing sector.

- The rule would make two factors mandatory: 

### (1) the "hazardous secondary material" in question "should be managed in a manner consistent with the management of the raw material" [however, where there is no "a nalogous" raw material, the "hazardous secondary material" should be "containea'1, and (2) "concentrations of the hazardous constituents found in the product" should not manifest added "taxies along for the ride" ("TARs'').

- EPA's proposed "contained" factor will impose an undue burden on the prima\Y. mineral processing sector: The uncertainties of what will qualify as being 'analogous," and wflat is required to achieve "containment," puts "active" land-based production units at risk of RCRA regulation .

- EPA's proposed "TARs" factor will also impose an undue burden on the primary mineral processing sector: ostensibly "toxic" metals (e.g., Silver) exist in natural ores. EPA already recognized that this factor is a poor fit across the mining and mineral processing industry. 

### See 73 Fed. Reg. 64,705 (2008). 6EXPANDING RESOURCES**~·** 

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## • Even if EPA had jurisdiction to impose "legitimacy" tests, the proposed "variance" petition process will not provide appropriate regulatory relief.

- Petitions may have to be filed for each and every "hazardous secondary material" that is reprocessed/ reused (i.e. , throughout the primary mineral processing sector) and that cannot satisfy all four "legitimacy" factors, creating an enormous and unnecessary paperwork burden for both industry and EPA.

- A single primary copper production facility could have more than 100 distinct streams requiring variance petitions. EPA could face thousands of petitions from the primary mineral processing sector alone.

- Until EPA makes decision (s) on applications, the primary mineral processing sec t or may need to halt beneficial use of in-process generated and reprocessed materials and solutions.

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## • EPA's historical track record in adjudicating variance petitions suggests that obtaining a variance for even one stream could take a year or longer.

- Example: World Resources Company petitioned for a "non-waste" variance under 40 C.F.R . 

### §§ 260.30 

### & .31 for reclaiming F006. 

### It took more than two years for EPA to process the petition formally 

### (see 67 Fed. Reg. 52,617 (Aug. 13, 2002); 64 Fed. Reg. 68,968 (Dec. 9, 1999)). Nearly seven years elapsed from the submittal of the petition (Nov. 10, 1995) to the grant of the variance (Aug. 13, 2002).

- Accumulating such in - process generated materials for more than one year could trigger EPA's existing "speculative accumulation" rule, deeming these valuable "hazardous secondary materials" to be "hazardous waste" by default, and requiring unprecedented RCRA treatment, storage, and/or disposal regulation, permitting, and logistical burdens for these feedstocks (as well as at affected "solid waste," "hazardous waste," and production-related units located at the same sites). 8EXPANDING RESOURCES 

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# Ill • Failure to recognize the realities and uniqueness of the primary mineral processing sector will have immediate, onerous consequences:

- Interdiction of production operations as "illegitimate recycling," potentially leading to production interruptions and subjecting cont1nued production operations to RCRA Subtitle C permitting and associated obligations (and violations).

- Furthermore, application of a RCRA Subtitle C permit also would subject all " so lid waste management umts" at sites that process primary m i nerals to Subtitle C requirements, such as corrective action and financial assurance requ irements (42 U.S.C. § 6924(u ); RCRA § 3004(u)). This would be unprecedented .

- Because of the significant costs of subjecting all "solid waste management units " at a site to RCRA Subtitle C, a facility may have no choice but to "d isca ra " in-process generated materials that would otherwise be reprocessed as valuable inputs . 

### • This result will violate the clear objectives of the Bevill Amendment, longstanding EPA policy and regulatory determinations, and clear federal court precedents that exclude primary mineral production and recycling processes from "waste" regulation under RCRA because in-process generated and reprocessed materials are not "discarded" and not subject to RCRA jurisdiction. • The proposed rule will result in increased paperwork and delays that could curtail a broad range of primary mineral processing operations. • This could limit or eliminate the continued production of some strategic metals in the United States (e.g., Rhenium or fire-refined Copper). 9EXPANDING RESOURCES 

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### • New Direct Costs that result from managing (i.e., treating or disposing) valuable in-process generated materials as "waste":

- Loss of metal and acid values from all in-process generated materials that are currently reprocessed (i.e., "recycled,'') but that EPA deems "solid" and "hazardous waste; En ineerin costs to design new management and/or "disposal" facilities for the allege "wastes;" New capital and O&M costs for such new facilities, and/or substantial modifications to existing production facilities; Production interruptions where the ostensible "wastes" are (1) the primary feedstock, 

### (2) the primary product, or (3) a vital economic or operational resource untif a RCRA Subtitle C variance or permit is obtained; and Subtitle C compliance costs to continue such production (e.g., "hazardous waste" permitting across entire sites; RCRA corrective action; financial assurance; "management" burdens)- if such production remains economically viable. 

### • The above costs were not identified or quantified by the Regulatory Impact Analysis.

- RIA anticipated: (1) The costs of in-house determinations for non-petition inErocess Qenerated materials; and (2) The cost of such determinations, plus a

test" or 'sam ple, " for in-process generated materials that require a "variance" petition. 10EXPANDING RESOURCES 

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## • Direct costs alone would make this rulemaking the most expensive in RCRA history: • Timing Issues

- Some new "management" facilities would require 2+ years to build.

- Currently unclear how long it would take to obtain a "va riance " by petition. 

## • Feasibility Issues

- Producing some final primary mineral products technologically requires reprocessing that likely cannot satisfy all four "l egitimacy" factors, deeming the resulting products "illegitimate" (e.g., Rhenium).

- Some processing facilities cannot be operated without materials currently obtained through reprocessing (e.g. , "cold dope" revert in primary copper smelting).

- Legally deeming these materials "hazardous waste " may jeopardize essential feedstocks.

11EXPANDING RESOURCES



## • Alleged "TARs" may affect essential feedstocks.

- Some "recycled" products are the sole product of distinct facilities (e.g., Nickel Carbonate made from refining Copper);

- Other purpose- built, innovative technologies use specific primary mineral processing-generated materials as a sole feedstock to make high-purity products (e.g., Electro-Metals Electro-Winning (''EMEW'));

- The above would be deemed "illegitimate" by EPA due to the presence of other naturally-occurring metals. 

## • Losing feedstocks may cut off "strategic" products.

- Some metals are made 

### solelyfrom reprocessed mineral streams (e.g., Rhenium is made from off-gases and solutions from "roasting" molybdenum minerals and is "strategic" (e.g., in jet engines)).

- Finalizing EPA's Proposed Rule may deem the initial feedstocks "hazardous waste."

12EXPANDING RESOURCES

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### • Major Production Streams: When smelted, concentrated copper ore 

### (i.e., the mam feedstock for a primary smelter) necessarily produces:



### - Revert 1 : Partially fire-refined Copper (e.g., 

### 50-95°/o) that still is "in - process";



### - Anodes 2 : Fully fire-refined Copper (for final refining elsewhere);



### - Sulfuric Acid 3 : Commercial co-product of smelting sulfide ores; and



### - Weak Acid 4 : Weaker version of sulfuric acid with residual Copper and water, used for leaching Copper ores (modern "hydrometallurgy'). 

### • Quantities: In 

### 2012, just one smelter produced/used:



### - 35 million pounds of revert; and



### - 185 million gallons of weak acid. 

### • Operational Issues:

- Revert required as "cold dope" to control smelter furnaces;

- Weak acid management plant would take 2+ years to build;

- Cannot refine anodes without concentrating other valuable metals like 

### 25°/o Silver "sl imes" (extremely valuable to refineries, but deemed "im purities" by EPA) ; and

- EPA's rulemaking would deem revert, weak acid, slimes, and many other lesser in -process generated and reprocessed materials "hazardous wastes" (triggering RCRA Subtitle C). Endnotes to Examples of EPA Findings (provided with this presentation; cited in our public comment): 1. Ex . 1 at 8-9; Ex.2 at 4-7; Ex.3 at 22-27; 2. E x . 1 at 8; Ex.2 at 4; Ex.3 at 16; 3 . Ex.1 at 16-17; Ex.2 at 12; Ex.3 at 6-7; 4. Ex.1 at 16-20; Ex.2 at 12- 17; Ex.3 at 7-10 . 13EXPANDING RESOURCES



## • Examples of other key production streams: Volume Reprocessed Estimated Material Resource Disposal Costs (if per Year rule adopted) Flue Dusts1 Coppe r rvS,OOO,OOO lbs. (values for just one $3M/Y (18°/o) ($3.2M of copper) furnace provided here) 

### Vanadium Pentoxide Silica 

## I Flux rv2 50,000 lbs. $ 150,000 /Y 

### Catalyst2 (up to 75°/o) 

### Smelter Sump Solids3 Copper rv600,000 lbs. $360,000/Y (15°/o) ($283,000 of copper) 

### Anode Sump Solids3 Copper rv1,600,000 lbs. $960,000/Y (two distinct sumps) (up to 29°/o) ($7 55,000 of copper) 

### Off-Site Metal Copper 

### Imposed on Electroplating4 0 lbs. 5 

### "generator" (11°/o - 16°/o) 

### Sludges (''F006'') 

### industry5 Endnotes to Examples of EPA Findings: 1. E x . 1 at 9-10; E x.2 at 3, 6- 7; E x . 3 at 13, 24-27; 2. Ex. 1 at 8, 10-13; Ex.2 at 8-11; Ex.3 at 19-21; 3. Ex.1 at 8, 10; Ex.2 at 5-7; Ex.3 at 24-27; 4. Ex.1 at 3-9; 5. In 2010, despite granting a variance to World Resources (76 Fed . Reg. 52,617), EPA effectively forced the Miami primary copper smelter to stop recycling F006. 14EXPANDING RESOURCES



## • Projected Costs for a Single Copper Smelter:

- Loss of value: $178M per year in lost copper and acid values from "hazardous secondary materials" ($165M of copper from revert, alone), 

### not counting metals not produced independently by the smelter from its anodes (l ike 

### 25°/o Sliver "slimes," which yield $12M 

### per month at the receiving refinery).



### - New construction: $30M new facility for managing weak acid.



### - New management: $2.8M per year O&M just for weak acid, plus**~72M** per x,ear for management/disposal of "hazardous secondary materials"eemed 'waste," unless coverage can be obtained for all feedstock variants through myriad "variances."



### - Time horizon: 2 years minimum for weak acid; unknown time for "variances" for many other in -process generated and reprocessed materials.



### - Feasibility concern: "Cold dope" (currently generated as intermediate) necessary for smelter operation.



### - Subtitle C permitting cost: Cost and timing unknown due to an absence of prior examples, but likely unprecedented in magnitude . 15EXPANDING RESOURCES ."¥' 

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## • Straightforward Options to Reduce Impacts:

- Specific exclusion(s) for primary mineral processing;



### - Incorporation of past findings of "legitimacy" by EPA and state regulators to avoid disrupting/aiscounting all prior findings (see, e.g., attached EPA Inspection Reports and prior FCX comments);



### - Presumptions or safe-harbors for specific materials (

### e.f)., that have documented commercial/market value; or past "legitimacy determinations by EPA or EPA-authorized states; or demonstrable, longstanding reprocessing value in large volumes);



### - Clarification of "TARs" measurement (e .g., only in "end products" entering the consumer market, or products sold off-site);



### - State program primacy over implementation schedules and "variances" if authorized by EPA to administer RCRA;



### - Deeming streams legitimate during continued reprocessing/recycling while "variance" petitions are filed and pending;



### - Adequate time to comply if any "variance" petitions are denied;



### - Case-by-case**challen~es** to "legitimacy" of specific activities or materials to trigger the proposed' variance" petition process; and



### - At a minimum, extended compliance period (e.g., 3 years to cover lengthy "petition" processes, process modifications, construction of new facilities, etc.). 16EXPANDING RESOURCES .,. 

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## • Alternative- Simple Exclusions for Specific Categories of Responsible Management:

- "Returned as a feedstock for the same contiguous production facility without intervening processing;"

- "Significant feedstock for a distinct production facility;"

- "Conveyed in enclosed piping (i.e., for liquids) or containers (i.e., for solids) to an upstream production facility;"

- "Reci rcu lated as a carrier stream (e.g., recirculated lixiviant, organic solvent, or stripper solutions) for connected production processes via hard piping (i.e., to convey valuable constituents to the next production facility);"

- "Reprocessed (i.e . , recycled) in a permitted land-based production unit, with no toxics along for the ride rTARs') that are different-in-kind from naturally occurring TARs in that unit;'

- "Purchased for value by a sophisticated, non-consumer customer for further use or processing;"

- " Smelted in a primary copper smeltin9 facility, with demonstrable values above raw ores or concentrates;" an

- "Demonstrably economical feedstock, based on mass balance and value calcu lations." 17EXPANDING RESOURCES**.~·** :...-,,'::.**~** 

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### • RCRA jurisdiction does 

## notextend to in-process**~enerated** 

### and reprocessed materials that never are "d iscarded (as was resolved by Congress and courts many years ago) . • Goals of RCRA are to "Conserve" and "Recover" "Resources" - Not to force facilities to dump those resources 

### en masse into "hazardous waste " landfills by deeming them "wastes" subject to Subtitle C, and the reby effectively prohibiting reuse/recycling (turning RCRA on its head). • Primary mineral processing operations are unique (e.g., use of permitted land - based production units; existence of "TARs" in naturally-occurring ores; incremental production; no "discard" of valuable in - process generated materials or metals (which are much purer than in natural ores); strategic needs for U.S. metal production). • Implementation will be difficult, if not impossible, at some primary**~ineral** 

### processing sites due to technological feasibility and timing ISSUeS . 

### • Economic i mpacts will be severe if the ru le becomes effective (e.g. , fa r above $100M at i ndividual primary mineral processing sites) . • Straightforward options and alternatives are available to reduce i mpacts. 18