EPA Announces Doe Run will pay $65 M on Lead-Related Violations

On a raw materials and risk management note...

Doe Run Resources Corp of St. Louis is North America’s largest lead producer.  EPA announced today that Doe Run will spend $65 Million for environmental violations at Doe Run's Missouri Facilities.

Doe Run CEO and chairman Ira Leon Rennert (born in Brooklyn, NY in 1934) is an American investor and businessman; he controls one of the nation’s largest privately held industrial empires in Doe Run Resources Corp, and his personal fortune is estimated to be $20.3 billion, which is currently a little less than half of Bill and Melinda Gates' $58 billion personal fortune.  (Well, for Melinda that's EBITDA or PNRA, pre-nup-related adjustments.)

Doe Run Resources Corp is wholly owned by the Renco Group which is in turn wholly owned by family trusts established by the company's Chairman and CEO, Ira Rennert.  Not to take away from the landmark environmental settlement, but it must be said that Rennert's house alone is worth an estimated $200 million, about 2.5x the EPA settlement dollar amount.)

The EPA-Doe Run settlement

It was actually three agencies together who today announced the violation settlements:
  1. The U.S. Environmental Protection Agency (EPA)
  2. U.S. Justice Department
  3. Missouri Department of Natural Resources
The money -- $65 million plus -- will be spent correcting violations of several environmental laws at 10 of Doe Run's lead mining, milling and smelting facilities in southeast Missouri. The settlement also requires the Doe Run to pay a $7 million civil penalty; surpassing a total of $72 million plus:
  • legal fees
  • brand reputation damage
  • customer concern
  • costs and risk usually absorbed by Operations, including:
  1. Sales teams having a more difficult time and requiring re-training
  2. Marketing and PR working overtime
  3. new internal process overhauls
  4. compliance procedures
All this will absolutely affect the bottom line.  But as it's a privately held company, we may never know.

The settlement is another indicator that today's industrial landscape is changing.  Industry is moving toward "corporate social responsibility through innovative, collaborative, rational raw materials handling, managing supply chain substance data, and streamlining material disclosure processes towards Six Sigma initiatives, mitigating risk and attaining corporate sustainability objectives," said Russell McCann, Actio CEO and industry insider, as quoted in Control Engineering magazine in December.

Doe Run Company message about lead

In a nicely wrought, you-can't-argue-with-that statement, Doe Run said:

"The Doe Run Company has reached a landmark environmental agreement local communities; school districts to benefit. ...  The Doe Run Company has agreed to spend up to $7.5 million on several environmental improvement projects. In addition, the agreement with the U.S. Environmental Protection Agency (EPA) outlines several major programs that will take place over the next three to five years, improving sites the company owns or operates, including its smelters, mines and mills in Missouri."  More here: http://classic.cnbc.com/id/39577294

Lead is a soft but dense, ductile, highly malleable metal that is bluish-white in color and has poor electrical conductivity when compared to most other metals (for further info see Wikipedia).  Because lead is indeed so malleable and in fact so corrosion-resistant, it is used heavily in building construction – a common example is the external coverings of roofing joints. Lead is considered a "stable" material: it has a half-life longer than the age of the universe.

Lead is certainly functional.  It is also toxic.  It is a substance that needs to be managed very carefully in order to avoid risks associated with overexposure, ill-managed processing, or un-intelligently handled waste streams.

Environmental regulation around lead and how to use it – and  how not-to-use-it – are proliferating globally.  Risk managers pay keen attention to all news about RoHS, RoHS exemptions, SVHCs, SIN list, China laws, and key regulations under TSCA in the USA.

More on the Doe Run settlement

“This settlement will reduce lead pollution in the town of Herculaneum and in other southeastern Missouri communities, as well as encourage the development of innovative technology and projects to improve the environment in impacted communities,” said Ignacia S. Moreno, Assistant Attorney General of the Justice Department's Environment and Natural Resource Division. “It should also send a message to all companies that handle hazardous waste, such as lead: You must comply with the laws that are intended to protect public health and the environment.” 

EPA reports:  instead of installing pollution control technologies to reduce sulfur dioxide and lead emissions at its aging Herculaneum lead smelter, Doe Run has made a business decision to comply with its Clean Air Act obligations and shut down of the smelter by Dec 31, 2013.  The company will also provide an initial $8.14 million in financial assurance to guarantee cleanup work at the Herculaneum facility.

The settlement also requires Doe Run to establish financial assurance trust funds, at an estimated cost of $28 million to $33 million, for the cleanup of Herculaneum and the following active or former mining and milling facilities: Brushy Creek, Buick, Fletcher, Sweetwater, Viburnum and West Fork.

Doe Run will also take steps to finalize and come into compliance with more stringent Clean Water Act permits at 10 of its facilities, including Herculaneum, Glover, Buick mill, Brushy Creek, Fletcher, Sweetwater, Viburnum, West Fork, Mine #35 (Casteel), and Buick Resource Recycling, and will spend an estimated $5.8 million on stream mitigation activities along 8.5 miles of Bee Fork Creek, an impaired waterway near Doe Run’s Fletcher mine and mill facility.

EPA is also issuing for public comment a modified May 2007 administrative order addressing issues related to the transportation of lead-bearing materials between Doe Run facilities. The modified order requires Doe Run to spend an estimated $3.2 million to improve the washing and inspection of its trucks, conduct additional sampling of soil from residential properties along the haul routes, provide independent auditing of its washing and inspection activities, and conduct a study to assess and improve its transportation and handling operations.

We all use lead - even if we don't know it - so this is not a good time to get on a soap box.  Unless, that is, there's a realistic alternative on the table. 


Doe Run has over 4,000 employees worldwide.  The company has proficiencies in many areas of metals production: mining; smelting and refining; and production of “fabricated products,” examples listed in their corporate materials highlight the company's softer side and include radiation shields for hospitals.

Doe Run's public documentation notes prominently that they also operate one of the leading lead recycling facilities in the United States; that facility processes lead and other elements of common products such as television picture tubes, computer monitors, and automobile batteries.  Cursory research could not immediately yield how big that facility is but their own statements say the division processes more than 13.5 million lead-acid batteries annually.

For more information on the settlement: http://www.epa.gov/compliance/resources/cases/civil/mm/doerun.html