ASARCO Agreement Funds Cleanup TrustPublished by MAC on 2003-02-03
ASARCO Agreement Funds Cleanup Trust
ENS - Washington, DC - February 3, 2003
An agreement between the federal government and ASARCO, one of the world's major producers of copper and other metals, will provide an environmental trust fund for remediation efforts.
The agreement will provide about $100 million for environmental cleanup at ASARCO managed sites.
As a result of the agreement, the Justice Department will withdraw a previously filed complaint seeking an order prohibiting ASARCO from selling its stock holding interest in the Southern Peru Copper Corporation (SPCC) to its parent company, American Mining Corporation (AMC).
The complaint filed by the United States last year alleged that the proposed transfer of SPCC stock was for less than "reasonably equivalent value" and would render the company unable to meet all of its environmental obligations because of its precarious financial condition. To assure that the transaction would not take place without court review, the United States sought a preliminary injunction and ASARCO agreed not to transfer the asset until a settlement was reached with the U.S.
The settlement announced last week requires AMC to pay about $765 million - more than $100 million more than had previously been proposed - for ASARCO's stock ownership interest in SPCC.
The settlement creates and funds an independent environmental trust that will be used over the next several years to pay for cleanup of environmental contamination at sites for which ASARCO is responsible. Initial funding of the trust is valued at about $100 million.
"This exceptional settlement will guarantee necessary remediation funds are available to protect human health and the environment," said Kelly Johnson, principal deputy assistant attorney general for the Justice Department's environment and natural resources division.
"This settlement is fair to all concerned, provides the resources needed to protect the public's health and the environment, and is of significant value to ASARCO," said John Peter Suarez, the U.S. Environmental Protection Agency's (EPA) assistant administrator for enforcement and compliance assurance. "This settlement will ensure that important environmental cleanup will occur."
The agreement also relieves ASARCO of paying EPA about $4.5 million in past cleanup costs, forgives certain past uncollected penalty claims, and caps ASARCO's cleanup responsibilities for three years, during which time much of ASARCO's environmental cleanup work will be funded by the trust. The environmental trust is guaranteed by the parent corporation of ASARCO, Grupo Mexico S.A. de C.V. of Mexico City, to assure the cleanup will occur.
All other ASARCO liabilities to the federal government, and all existing or future liabilities to state or tribal governments, are not affected by this agreement.