DERR-2024-011681

October 17, 2024
Ref: 8ORC
Rob Hartman Environmental Manager US Magnesium LLC [e-mail] Re: Follow-Up to Notice of Noncompliance US Magnesium LLC Consent Decree (Case No. 2:01cv0040B) Dear Mr. Hartman: This correspondence replies to US Magnesium LLC’s (USM’s) response, of September 16, 2024, to EPA’s Notice of Noncompliance, dated July 18, 2024, and is in regard to EPA’s continued concerns with USM’s material violation, or noncompliance, with the above-mentioned US Magnesium LLC Consent Decree (CD). Compliance with the CD is not excused or tolled by USM’s operational or financial status or world markets. No such clause is included in the language of the CD. Section XV of the CD includes the only provision allowing for delay of performance of CD obligations by USM, but it is contingent on a demonstration of force majeure. The CD states that force majeure does not include USM’s “financial inability to perform any obligation” and must, among other requirements, be an “event arising from causes beyond the control of Defendant USM.” Pursuant to the CD, any attempt to justify USM’s delayed performance of CD obligations must meet the criteria for force majeure and USM has not demonstrated as much. EPA also disagrees with USM’s characterization of the purpose of the financial assurance held in special accounts. The purpose of this financial assurance is to ensure that USM, and not public funding sources, bears the financial burden of completing required cleanup actions. EPA’s special accounts, or financial assurance, is intended to hold funds accounting for USM’s work obligations in case of USM insolvency or inability or unwillingness to comply with its environmental obligations. As noted in EPA’s Notice of Noncompliance, USM is required by Paragraph 47(a)(1) and Appendix 13 of the CD to appropriately adjust the amount of financial assurance for Closure and Post-Closure of the Retrofitted Waste Pond. USM’s obligation under the CD is to adjust the provided financial assurance to the amount of $11,829,513, intended to ensure that public funding is not
Re: Follow-Up to Notice of Noncompliance
US Magnesium LLC Consent Decree (Case No. 2:01cv0040B)

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necessary for eventual closure for the Retrofitted Waste Pond. And, as noted in previous EPA correspondence of May 11, 2023, and May 1, 2024, because USM is in material violation of the CD, EPA’s obligation to disburse funds from special accounts is terminated. Additionally, EPA will not agree to a disbursement of financial assurance that puts public funding sources at further risk of incurring the costs of USM’s environmental obligations. Lastly, your contention in the first paragraph that your response is made in the context of settlement negotiations is incorrect. The parties are not engaged in settlement negotiations at the present time. USM is currently in violation of the CD and has not invoked the force majeure provision or otherwise sought dispute resolution on these issues. EPA’s July 18, 2024, letter was a Notice of Noncompliance, seeking USM’s prompt action to return the facility to compliance with its terms. USM’s response to the notice attempting to explain or excuse its non-compliance does not constitute a settlement communication within the meaning of Rule 408 of the Federal Rule of Evidence. Accordingly, Rule 408 does not apply to this exchange. EPA urges USM to identify steps that can be taken to return to CD compliance as soon as possible, particularly regarding requirements for financial assurance, and welcomes discussion focused on this goal. If you have any questions regarding this letter, please contact Max Greenblum at [phone] or [e-mail] Sincerely, Suzanne J. Bohan, Director Enforcement and Compliance Assurance Division cc: Max Greenblum, EPA Annette Maxwell, EPA