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 

2 
EXPANDING RESOURCES 

rill!. ll ..• ' . · .. - " : •' : . '\ ·._ : ~ 

D ' ' __ ., ; ·- ~ 

~ ~'ht....' '*·' . . ·~ .;r 

• 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). 

3 
EXPANDING 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) 

typically 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''). 

4 
EXPANDING 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." 

5 
EXPANDING 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 "analogous" 

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). 

6 
EXPANDING 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 

sector may need to halt beneficial use of in-process generated and 

reprocessed materials and solutions. 

7 
EXPANDING RESOURCES ~ ... · ·:~ 

. ~~.~~~ 

~•· :-:::~: \ .· .. • .. .,- : ' . ..-,.~ ·;; :_. .. i' .,.. ,.~ . 

Ci·l .......... . ...... . ~ . 

• 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). 

8 
EXPANDING RESOURCES II li 

lih 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 "solid waste 

management umts" at sites that process primary minerals to Subtitle C requirements, such 

as corrective action and financial assurance requirements (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 "discara" 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). 

9 
EXPANDING 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 'sample," for in-process generated materials that require a 

"variance" petition. 

10 
EXPANDING RESOURCES 

• t;:~ • 

Ill ... 

... 

~-··· ~ ":."'"'_. ..,; 1 -~ ~(.~";.4. 

• 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 "variance" by petition. 

• Feasibility Issues 

- Producing some final primary mineral products technologically requires 

reprocessing that likely cannot satisfy all four "legitimacy" 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. 

11 
EXPANDING 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." 

12 
EXPANDING RESOURCES 

.\ . ~ :-..:;: .... -·. .~ 

.. ' .. ~ .. : :'i ..,.- ;; . ,.. ~. 

) ·~~-: .... .( 

• Major Production Streams: When smelted, concentrated copper ore (i.e., the 

mam feedstock for a primary smelter) necessarily produces: 

- Revert1 : Partially fire-refined Copper (e.g., 50-95°/o) that still is "in-process"; 

- Anodes2 : Fully fire-refined Copper (for final refining elsewhere); 

- Sulfuric Acid3 : Commercial co-product of smelting sulfide ores; and 

- Weak Acid4 : 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 "slimes" (extremely valuable to refineries, but deemed "impurities" 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. Ex.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. 13 
EXPANDING RESOURCES 

• Examples of other key production streams: 

Volume Reprocessed Estimated 

Material Resource Disposal Costs (if per Year rule adopted) 

Flue Dusts1 Copper rvS,OOO,OOO lbs. (values for just one $3M/Y (18°/o) ($3.2M of copper) furnace provided here) 

Vanadium Pentoxide Silica I Flux rv250,000 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) ($755,000 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. Ex.1 at 9-10; Ex.2 at 3, 6-7; Ex.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. 

14 
EXPANDING 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 (like 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. 

15 
EXPANDING RESOURCES ."¥' .. --~~-

' itt. ·~-.~ · ·. t'l, '1 ,.. ;,~ 

~ . ..:.~:;.~- .. ' 

,. . . ... J '\ '~ - , ' _ ..,:- ::. _. .. - ,. . #.":7-.•. • 

~ 4 -: ...: .. ~ 

• 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.). 16 
EXPANDING RESOURCES .,. .. , : • r'~· 

·~ 

.. ~~ ~~· ~1 

· ·:.· ~ ~~· .. ·: ' .\ .. :. • , . ' .-..,.:1_ ·;:_ ••.. -: • r , ... _.,,, 

Gi- l -~·~<:..&1 

• 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;" 

- "Recirculated 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 

calculations." 

17 
EXPANDING RESOURCES .~· : ... -,,'::. 

~ 

. -.- \:?~~ 

\ .:;•''. ' \ . :_ 

• ' . ~~ ;,'•l 

.. ,. ''·"!J· ~ ch -~·.~;,; .... ~ 

• RCRA jurisdiction does not extend to in-process ~enerated and 

reprocessed materials that never are "discarded (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 thereby 

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 impacts will be severe if the rule becomes effective (e.g., far 

above $100M at individual primary mineral processing sites). 

• Straightforward options and alternatives are available to reduce impacts. 

18