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FMRI (Fansteel), Inc.

1.0 Site Identification

2.0 Site Status Summary

The Muskogee site originally comprised about 52 hectares (110 acres) on the Arkansas River (Mile 395). It is about 4 kilometers (2.5 miles) east of the center of the City of Muskogee, between the river on the east, Highway US-62 on the south, and the Muskogee Turnpike on the west. In 1996, 14 ha (35 a) know as the Northwest Property was released from the license. The Muskogee plant, owned and operated by Fansteel Inc., produced tantalum and columbium metals from 1957 until it ceased operations in 1990. The raw materials used for tantalum and columbium production contained uranium and thorium as naturally occurring trace constituents. These radioactive species were present in the process raw materials at an approximate concentration of 0.1 percent uranium oxide and 0.25 percent thorium oxide. This concentration is sufficient to cause the ores and slags to be classified as source materials by the Atomic Energy Commission, that issued License No. SMB-911 in 1967. The radioactive residues from the process were placed in several sludge ponds north of the process building. Other liquid waste went to several ponds in the southern part of the site. Radioactive contaminants at the site include natural uranium, natural thorium, and decay products. Chemical contamination is also present as ammonia fluoride and methyl isobutyl ketonein, and in the form of metals including tantulum, niobium, chromium, antimony, tin, barium, arsenic. In 1993, the licensee performed a characterization survey to determine existing conditions site wide. Radiological survey activities were conducted over the interior and exterior of the site structures and the open land areas of the site. Buildings and equipment associated with the ore-processing activities include the Chemical "C" Building, the Chemical "A" Building, and the R&D Building. The Chemical "C" Building is contaminated throughout by radioactive ore residues. Isolated areas of radioactive contamination were also identified in some of the other site buildings. Further, the characterization surveys identified the highest concentrations of radiological contaminants in Pond Nos. 2 and 3, to the northeast of the "Chem C" building. The average concentration of radiological contaminants in Pond Nos. 2 and 3 ranges from 360 to 640 picocuries per gram (pCi/g) of U-238 and 360 to 440 pCi/g of Th-232. The surveys also determined that the average concentration of radiological contaminants in Pond Nos. 5 through 9, at the southern end of the site, ranges from 14 to 53 pCi/g of U-238 and 2 to 26 pCi/g of Th-232. Survey data indicate that the Th-232 and U-238 are present with their radioactive progeny in secular equilibrium. The U-235 decay series is also present, because U-235 constitutes 0.7 percent by weight (approximately 2.3 percent by radioactivity) of naturally occurring uranium.

Beginning in 1957, ores and slags used for tantalum and columbium production were digested in a hydrofluoric acid (HF) solution. The byproduct of the separation -- residues from the work in progress (WIP) -- was disposed in Pond Nos. 2, 3, and 5. The uranium and thorium in the raw materials were not extracted from the ores by the digestion process. Acidic and ammonia waters were stored in temporary holding Pond Nos. 1S and 1N respectively prior to treatment. These two ponds, located east of "Chem C", were closed in the 1980s. Water from the process and from the french drain that was constructed around Pond No.3 was collected and treated. It was then passed on to Pond Nos. 6, 7, 8, and 9 for solids precipitation prior to discharge through a National Pollutant Discharge Elimination System (NPDES) discharge outfall to the Arkansas River. In the 1990s, Fansteel constructed an interceptor trench along the entire east side of the site. It captures ground water from the entire site, that is then treated and discharged through the permitted outfall. On March 25, 1997, NRC granted Fansteel a license amendment to complete the reprocessing of ore residues (WIP), calcium fluoride residues, and wastewater treatment residues containing uranium and thorium, in various site impoundments. As part of its decommissioning, Fansteel also planned to place the residue of these operations into an on-site disposal cell in accordance with 10 CFR 20.1403. It provided about four million dollars in financial assurance for the on-site disposal. Following objections by the State of Oklahoma, and the inability to secure a long-term custodian for the site, Fansteel requested the staff to suspend review of the application, and this cell never received NRC approval. Because of process difficulties and reduction of the price in tantalum from record highs to near the historical average, in November, 2001, Fansteel suspended all operations at the Muskogee site. Following certain demands by its creditors, in January, 2002, Fansteel filed for bankruptcy protection under Chapter 11 (reorganization). Subsequently, NRC drew on the financial assurance instruments and that money is now in a standby trust. The NRC operating license expired in September, 2002. NRC denied a request for renewal because the licensee stated it had ceased operations and intended to remediate the site for unrestricted use. Operation of the facility is prohibited; other conditions of the license related to material control remain in effect in accordance with 10 CFR 40.42(c). In conjunction with the bankruptcy proceedings, in July, 2003, Fansteel submitted: i) its revised decommissioning plan (DP), ii) a request for exemption from financial assurance requirements, and iii) a request for authorization to transfer the site license to a subsidiary to be formed as part of the bankruptcy reorganization plan. In this DP, the licensee revised the cost estimate for decommissioning from the $57 million in the bankruptcy filing to approximately $42 million. On November 17, 2003, the bankruptcy court approved Fansteel's corporate reorganization plan. FMRI, a new subsidiary of Reorganized Fansteel, would become the licensee for the Muskogee site. On December 4, 2003, NRC approved the DP, the request for exemption to financial assurance requirements, and the license transfer authorization, subject to the bankruptcy reorganization plan becoming effective. The approved DP outlines a phased approach to remedial activities that focuses on the most risk-significant areas and accomplishes those activities first. The approval also authorized FMRI to draw up to $2 million from the standby trust for remediation activities if it has insufficient funds from Fansteel to continue the work. This agreement was subsequently revised to authorize FMRI to draw additional monies from the fund for waste disposal as part of Phase 1 activities. The reorganization plan and NRC's approvals became effective on January 23, 2004. On November 3, 2003, NRC granted a request for a hearing by the Oklahoma Attorney General for the DP approval (LBP-03-22). On May 26, 2004, the ASLB issued a decision to "uphold the NRC staff's issuance of the license amendment in question" (LBP-04-08). Following agreement between FMRI and the State, to conduct site characterization to define the chemical contamination the site, the State did not appeal the ASLB ruling. Phase 1 of the DP states that the WIP in Ponds 2 and 3 will be removed from the site and sent to the White Mesa facility that is operated by International Uranium Corp. (IUC) near Blanding, UT. Phase 1 was scheduled to commence in September, 2004. However, FMRI elected to wait for the final ruling on the above hearing, and did not commence remediation activities until about June, 2005. In order for IUC to receive the material it must have a license amendment approved by the State of Utah. IUC submitted the application about April 8, 2005. On November 3, 2005, Utah issued its notice of consideration stating it would accept comments until December 2, 2005. Utah also decided to hold a public meeting in early January, 2006, before issuing its decision. On June 13, 2006, Utah issued the amendment authorizing IUC to receive and process FMRI material. In May, 2005 FMRI began air drying and bagging the WIP from Pond 3 in preparation for shipment to IUC. The Sierra Club appealed the Utah DEQ amendment; the Utah Radiation Control Board scheduled hearings in January, Feb and March, 2007. On October 27, 2006, FMRI submitted its WIP transportation plan to NRC. On November 3, 2006, FRMI made the first shipment of material to the IUC White Mesa facility. The bags of WIP were placed in intermodal containers, and the filled intermodals were transported by truck to a local rail transfer station and loaded onto rail cars. The licensee planned to put 7 or 8 intermodals on a rail car, depending on the total weight of the intermodals. The loaded cars then moved by rail to Albuquerque, New Mexico, where the intermodals were unloaded and trucked to IUC in Utah. On February 6, 2007, FMRI submitted a revised transportation plan to allows for rail shipments through Albuquerque, NM or through Grand Junction, CO, with truck transport from the railheads to IUC by truck. FMRI planned to ship about 1000 tons in CY2006. Records from IUC indicate it had received about 1010 tons as of January 31, 2007.

3.0 Major Technical or Regulatory Issues

Fansteel has provided a total of about $4.5 million in financial assurance for FMRI to use to remediate the Muskogee site. The original cost estimate, by deposition to the Bankruptcy Court, that Fansteel provided to decommission the site was $57 million for off-site disposal of all wastes greater than 10 pCi/g total. The revised cost estimate in the DP is about $32 million for solid waste, based on dose criteria of 10 CFR 20.1402 using an industrial land use scenario with no drinking water pathway. Staff agrees with the industrial land use, but determined that the licensee has not yet submitted sufficient information to support no drinking water pathway. Fansteel estimated approximately $10 million additional for commitments for ground water remediation. Fansteel stated it is not able to provide additional financial assurance because of the bankruptcy proceeding. Instead, it signed unsecured promissory notes for the estimated costs. As of June, 2007, FMRI has made five withdrawals from the Trust and one deposit from an insurance settlement. It plans another withdrawal in November, 2007, to recover about one quarter million dollars in costs for WIP transport to and processing by IUC, as allowed by the Trust Agreement. The total value of withdrawals from Subaccount 2 of the fund as of the November withdrawal, is about $2 million. By terms of the Settlement Agreement, the limit of outstanding withdrawals is $2.5 million. License Condition 26 references the July 24, 2004 submittal that includes a schedule for completion of Phase 1 decommissioning by March 31, 2006. According to its January, 2007, letter, FMRI's current plan is to complete excavation and shipping of Pond 3 material in CY 2007 and postpone any action on Pond 2 until it has accumulated sufficient funds to complete all excavation and shipping. FMRI estimates Pond 2 remediation will begin about 2011. FMRI requested a license amendment to revise the existing WIP storage requirement. The proposal is to construct a temporary outdoor storage area lined and covered with high density plastic. Staff approved the amendment request in September, 2007. The Utah Radiation Control Board held hearings on the IUC request to process material received from Muskogee in January, Feb and March, 2007. It voted in favor of IUC in March; final approval is noted in the minutes of the Board meeting on May 04, 2007. FMRI is proceeding with remediation of Pond 3. However, it stated that it will stop pond remediation at the completion of Pond 3 and will not restart until it has accumulated enough money to complete Pond 2 uninterrupted. Assuming Pond 3 is completed in May 2008, it estimates Phase 1 decommissioning will restart about mid-2010. There is high public interest from the State of Oklahoma, the Cherokee Nation, and the Port of Muskogee.

4.0 Estimated Date For Closure

12/12/2023

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Monday, April 14, 2008