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U.S. FILES SUIT AGAINST MAGNESIUM CORPORATION OF AMERICA

WASHINGTON, D.C. - The Department of Justice today filed suit against Magnesium Corporation of America, its parent corporation Renco Metals, and other related entities, charging that the mineral mining company is illegally handling hazardous waste at its magnesium production plant on the edge of the Great Salt Lake.

In a complaint filed in U.S. District Court in Salt Lake City, the government alleges that Magnesium Corporation (MagCorp) is illegally generating, storing and disposing of wastes that are toxic or corrosive. The Justice Department, which brought the lawsuit on behalf of the EPA, is asking the court to direct MagCorp to comply with federal and state environmental laws. The suit also asks the court to impose penalties on MagCorp under the Resource Conservation and Recovery Act, the federal hazardous waste statute.

MagCorp processes magnesium chloride salts taken from water of the Great Salt Lake at its Tooele County, Utah, plant, and this production of magnesium generates several kinds of hazardous waste. The plant discharges thousands of gallons per day of liquids and solids into several unlined ditches and into a 400-acre pond on plant's property. This 400-acre pond is located immediately adjacent to the Great Salt Lake.

The Resource Conservation and Recovery Act (RCRA) requires companies that produce, store and dispose of this kind of waste to manage the waste in accordance with regulatory requirements. However, MagCorp has failed to meet these requirements. For example, RCRA requires companies such as MagCorp to meet standards for treating, storing and disposing of wastes; minimize hazardous releases to the environment; establish training programs for employees; and protect groundwater.

For many years, MagCorp maintained that its waste was exempt from RCRA requirements because of an exclusion in the law for certain kinds of processes involving minerals. None of the waste addressed in today's lawsuit is covered by this exclusion, according to the lawsuit.

For many years, the MagCorp plant has ranked Number One on the EPA's toxic release inventory, based on its chlorine emissions. The facility is the third largest producer of magnesium in the world.

The federal hazardous waste law requires not only the operator of a facility, but also its owners, to comply with its requirements. The hazardous waste suit filed today names several defendants in addition to MagCorp: Renco Metals, Inc.; the Renco Group, Inc.; Mr. Ira Rennert; the Rennert Trusts; and unidentified trustees.

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In a separate action today, the United States moved to expand another lawsuit against MagCorp. In 1998, the United States sued MagCorp for trespass and conversion of minerals contained in brines located on and under federal lands in the West Desert of Utah, and for false claims relating to the alleged trespass and conversion. This suit seeks recovery of millions of dollars for the value of the minerals allegedly taken, mainly magnesium chloride.

The United States today filed a motion in U.S. District Court in Salt Lake City seeking to add new defendants in this case. The government determined that MagCorp may not have sufficient assets to pay any judgment that the United States may obtain, due to various financial transactions between MagCorp and its parent, Renco Metals Inc., and other controlling interests.

Therefore, the United States has determined it must take additional actions to secure its financial interests.

New parties named as defendants include Ira Rennert; Renco Metals Inc.; Renco Group Inc.; trusts established by Mr. Rennert that effectively own the Renco Group; Mr. Justin D'Atri and unidentified trustees and unidentified beneficiaries of those trusts; and KenMag, Inc., a Utah firm that is 50 percent owned by MagCorp. Mr. Rennert is Chairman of the Renco Group, Renco Metals and MagCorp, the sole director of Metals and Chief Executive Officer of Group and Metals.

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