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General Information on the American Smelting and Refining Company (ASARCO) Bankruptcy and Environmental Settlement Agreements
ASARCO Bankruptcy Settlement Resources
EPA, other federal agencies and states will receive over $1.79 billion to address contamination at over 80 sites in 20 states through resolution of the American Smelting and Refining Company (ASARCO) bankruptcy.
For EPA, which is receiving approximately $1 billion for future cleanup of Superfund sites, it is the largest bankruptcy settlement ever. The amount represent full payment of EPA’s claims, plus interest. Funds are being distributed pursuant to settlement agreements approved in 2007, 2008 and as most recently as June 2009. Of the almost $1 billion, $436 million was a cash payment toward future cleanup costs at the Bunker Hill & Metallurgical Complex site in Idaho, the largest "cashout" amount ever for the Superfund enforcement program.
The cost recovery settlement for the Omaha Lead site in Nebraska provides payment of $130.4 million for past costs incurred by the Agency, the largest cost recovery amount achieved by the Superfund enforcement program for a single site.
Five settlement agreements were approved by the Bankruptcy Court in June 2009, but the Bankruptcy and District Courts had to approve ASARCO's Plan of Reorganization before funds from all the settlement agreements could be distributed. Funds were distributed December 9, 2009.
ASARCO Company Information
Bankruptcy Milestones
Settlement Agreements with EPA
ASARCO Company Information
ASARCO is a fully integrated miner, smelter and refiner of copper in the United States. ASARCO's domestic mines annually produce approximately 350 - 400 million pounds of copper. Significant copper mines include the Mission, Silver Bell and the Ray open-pit mines, all three in Arizona.
ASARCO was originally organized in 1899 and has operated for over 100 years, first as a holding company for diverse smelting, refining, and mining operations throughout the United States and now as a Tucson-based integrated copper mining, smelting, and refining company.
ASARCO is a subsidiary of ASARCO Inc., itself a subsidiary of Americas Mining Corporation, which is owned by Grupo Mexico (collectively the "Parent").
Bankruptcy Milestones
- On August 9, 2005, ASARCO filed for reorganization under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas, Corpus Christi Division.
- On August 1, 2006, the United States filed a bankruptcy proof of claim on behalf of EPA with the United States Bankruptcy Court for the Southern District of Texas, Corpus Christi Division in the ASARCO Chapter 11 bankruptcy.
- In March 2008 the Bankruptcy Court approved the process by which ASARCO would pursue the selection of a plan sponsor and sale of its operating assets.
- After a bidding process for the purchase of ASARCO's assets, Sterlite (USA), Inc., a subsidiary of Vedanta Resources plc (an Indian corporation), on May 30, 2008, executed a purchase and sales agreement in the amount of $2.6 billion for ASARCO’s assets. After the purchase and sales agreement was executed, copper prices began to decline, and on October 14, 2008, Sterlite representatives informed the United States Bankruptcy Court that the company could not honor the contract.
- The Debtor and Sterlite, however, were able to execute another purchase and sales agreement in March 2009.
- On June 5, 2009, the Bankruptcy Court approved five settlement agreements which provided recovery on environmental claims at numerous Superfund sites throughout the country. See section on settlement agreements below
- ASARCO’s Parent submitted its own plan of reorganization to the Bankruptcy Court.
- On November 13, 2009, the District Court for the Southern District of Texas, Corpus Christi Division accepted the Bankruptcy Court's Recommendation to confirm the Parent Plan.
Settlement Agreements with EPA
Custodial Trust Settlement Agreement
Miscellaneous Federal and State Sites Settlement Agreement
Montana Sites Settlement Agreement
Residual Sites Settlement Agreement
Texas Sites Settlement Agreement
The Custodial Trust Settlement Agreement
The settlement resolves claims pertaining to past and potential future work performed at approximately 18 ASARCO-owned sites in 11 states by transferring to this custodial trust certain real property that ASARCO owns but is not operating, and funding the trust with over $70 million. The settlement agreement provides funding in the amount of $70,955,493 million to clean up the sites and to fund the administrative expenses associated with the custodial trust. [More information on the Custodial Trust settlement.]
The Miscellaneous Federal and State Sites Settlement Agreement
The settlement addresses 26 federal and state sites. It resolves claims filed against ASARCO by EPA, USDA's Forest Service (FS), the United States International Boundary Water Commission (IBWC), and four states. The settlement agreement provides funding in the amount of $104,814,679 to clean up the sites and to fund the administrative expenses associated with the trust. [More information on the Miscellaneous sites agreement.]
The Montana Sites Settlement Agreement
The settlement establishes a custodial trust for 5 ASARCO-owned sites in the State of Montana. The settlement agreement requires the creation of a trust, with separate accounts for each site, and provides funding in the amount of $138 million to oversee cleanup and redevelopment of the sites. [More information on the Montana sites agreement.]
The Residual Sites Settlement Agreement
The settlement resolves claims pertaining to past and future cleanup costs associated with the following three sites:
- The Coeur d’Alene Superfund Site, Northern Idaho ("Coeur d’Alene");
- The Omaha Lead Superfund Site, Omaha, Nebraska ("Omaha Lead"); and
- The Tacoma, Washington Environmental Site (a state site) ("Tacoma").
[More information on the Residual sites agreement.]
The Texas Sites Settlement Agreement
The settlement agreement sets up a trust for funds to cleanup the El Paso Smelter and the Amarillo Smelter. The State of Texas is overseeing this trust and receiving the funds. EPA is a signatory to this agreement. [More information on the Texas Sites Settlement Agreement.]