February 27, 2006

Department of Environmental Quality Director Steven E. Chester today announced that the DEQ and Severstal North America, Inc. have arrived at a mutually agreeable settlement to resolve ongoing violations of state and federal air quality regulations at the company’s steel mill located in Dearborn. The agreement will create a reduction in air pollutants coming from the plant while at the same time allowing for increased steel production and further economic growth in the area.

“This settlement demonstrates Michigan's ability to have both a healthy environment and a healthy economy,” said Director Chester. “We are giving the company the ability to grow and create jobs in our state, while ensuring that they are living up to their obligations to Michigan's environment and the public health of their community.”

The agreement involves the issuance of a permit allowing the company to expand one blast furnace, but requiring the installation of baghouse controls on the furnace cast house and an additional baghouse to control emissions from the basic oxygen furnace. The cost of installation of the two baghouses is approximately $38 million.

The agreement also involves the entry of a consent order to bring air emissions from its facility into compliance with federal and state air regulations. The permit to install will be made enforceable through the consent order.

Severstal has agreed through the consent order to install, at additional expense, an additional baghouse control on a second blast furnace cast house or permanently shut down the furnace by July 2008. Upon completion of construction of the required baghouse controls, there will be an estimated reduction of 1.5 million pounds per year of fine particulate emissions at the facility.

The consent order also requires Severstal to pay a penalty of $900,000 for past violations of federal and state air regulations and stipulated fines of up to $5,000 per violation per day for any future violations of the settlement document.

The agreement was a result of an enforcement action taken by the DEQ for several ongoing violations of the federal Clean Air Act, Michigan’s Natural Resources and Environmental Protection Act, and the company’s DEQ-issued air pollution control permits. These violations involved excessive opacity and particulate emissions from the Severstal facility.

Severstal has agreed to comply with the newly issued air use permit, permanently cease torch cutting of scrap at the facility, implement a plan to abate emissions from on-site rail cars used for molten metal transport, install a digital camera system to monitor visible emissions from the basic oxygen furnace, and put in place several work practice changes leading to reduced opacity at the facility.

The company will also conduct two Supplemental Environmental Projects (SEPs) involving the voluntary expenditure of $200,000 for the retrofitting of on-site diesel equipment and diesel school buses in the south Dearborn area, reducing diesel exhaust emissions by up to 50 percent, and the expenditure of $200,000 for a project to plant trees within the south Dearborn area.

Editor’s note: DEQ news releases are available on the department’s Internet home page at www.michigan.gov/deq.

“Protecting Michigan’s Environment, Ensuring Michigan’s Future”

Revised February 27, 2006 by Pat Watson