[Federal Register Volume 67, Number 156 (Tuesday, August 13, 2002)]
[Rules and Regulations]
[Pages 52617-52626]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-20352]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 260

[FRL-7257-7]


Exclusion from the Definition of Solid Waste; Hazardous Waste 
Management System; Identification and Listing of Hazardous Waste

AGENCY: Environmental Protection Agency.

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is today granting a 
variance from EPA's hazardous waste requirements for certain materials 
reclaimed by the World Resources Company (WRC) from metal-bearing 
sludges. This action responds to a petition submitted by WRC requesting 
that the Agency exclude from the definition of solid waste under the 
Resource Conservation and Recovery Act (RCRA) its concentrate material 
that is partially reclaimed from metal-bearing sludges and sold to 
smelters. In response to the petition, EPA published a Federal Register 
notice proposing to grant the variance on December 9, 1999 (64 FR 
68968).

EFFECTIVE DATE: This variance is effective August 13, 2002.

ADDRESSES: Supporting materials for this variance are available for 
viewing in the RCRA Information Center (RIC), located at Crystal 
Gateway I, First Floor, 1235 Jefferson Davis Highway, Arlington, VA. 
The Docket Identification Number is F-2002-WRCF-FFFFF. The RIC is open 
from 9 a.m. to 4 p.m., Monday through Friday, excluding Federal 
holidays. To review docket materials, we recommend making an 
appointment by calling (703) 603-9230. The public may copy a maximum of 
100 pages from any regulatory docket without charge. Additional copies 
cost $0.15 per page. The docket index and some supporting materials are 
available electronically. For information on accessing them, see the 
beginning of the Supplementary Information section.

FOR FURTHER INFORMATION CONTACT: For general information, contact the 
RCRA/Superfund/EPCRA/UST Call Center at (800) 424-9346 (toll free) or 
TDD (800) 553-7672 (hearing impaired). In the Washington, D.C. 
metropolitan area, call (703) 412-9810 or TDD (703) 412-3323. For more 
detailed information on specific aspects of this rulemaking, contact 
Ms. Marilyn Goode, U.S. Environmental Protection Agency, MC 5304W, 1200 
Pennsylvania Avenue, NW., Washington, DC 20460, (703) 308-8800, 
electronic mail: [email protected].

SUPPLEMENTARY INFORMATION: The index to the docket record and some 
supporting documents for this proposal are available on the Internet. 
Follow these instructions to access the information electronically: 
http://www.epa.gov/epaoswer/hazwaste/id/index/htm.
    The official record for this action will be kept in paper form. The 
official record is the paper record maintained at the RCRA Information 
Center, also referred to as the Docket, at the address provided in the 
ADDRESSES section at the beginning of this document.

Table of Contents

I. Background
    A. Authority
    B. Summary of Petition
    1. Applicability of the Variance
    2. Description of WRC's Partial Reclamation Process
II. Summary of the Agency's Final Decision
III. Response to Public Comments on the Proposed Variance
IV. Final Variances
V. Effect of Variance in Arizona
VI. Administrative Requirements

I. Background

A. Authority

    Under 40 CFR 260.30(c), facilities may petition EPA to exclude from 
the definition of solid waste material that has been reclaimed but must 
be reclaimed further before recovery is complete. To qualify for the 
exclusion, the material resulting from initial reclamation must be 
commodity-like (even though it is not yet a commercial product, and has 
to be reclaimed further). Petitioners must provide sufficient 
information to EPA to allow the Agency to make a determination that the 
material is not a solid waste, pursuant to criteria set forth at 40 CFR 
260.31(c).

B. Summary of Petition

    Pursuant to 40 CFR 260.30(c), WRC submitted to EPA a petition for a 
variance from classification as solid waste for metal-rich concentrate 
material produced at its facility in Phoenix, Arizona. WRC produces the 
concentrate primarily from sludges generated by electroplating 
operations. The sludges are rich in metals, and are generally classifed 
as hazardous wastes. WRC then sells the partially reclaimed material to 
primary smelters for metals extraction. Currently, the partially 
reclaimed material produced at the Phoenix facility is fully regulated 
as hazardous waste, must be managed and sold as hazardous waste, and 
off-site shipments must be accompanied by a hazardous waste manifest. 
In support of its variance application, WRC provided data and 
information in its application about each of the factors listed in 40 
CFR 260.31(c).
1. Applicability of the Variance
    At its Phoenix facility, WRC principally reclaims wastewater 
treatment sludges (F006) received from generators who conduct 
electroplating and metal finishing operations. From

[[Page 52618]]

these sludges, WRC ``produces'' a metal-rich concentrate material. In 
addition, the facility also receives and partly reclaims hazardous 
wastes listed as F019 (wastewater treatment sludges from chemical 
conversion coating of aluminum) and D004 through D011 (characteristic 
hazardous wastes). WRC's petition, and the proposed exclusion addressed 
in this notice, pertain only to the metal-bearing sludges listed as 
hazardous wastes F006 and F019 and partially reclaimed at WRC's 
Phoenix, Arizona facility. Other hazardous wastes managed by WRC at its 
Arizona facility and all hazardous wastes managed at other WRC 
facilities are not addressed in this decision and must continue to be 
managed as solid and/or hazardous wastes in accordance with all 
applicable RCRA regulatory requirements.
    The Agency notes that sludges that are hazardous only because they 
exhibit a characteristic of hazardous waste that are reclaimed are 
currently excluded from classification as solid waste pursuant to 40 
CFR 261.2(c)(3). Therefore, sludges that are reclaimed by WRC and 
designated as hazardous wastes D004 through D011 are not solid wastes. 
In addition, if these characteristic sludges are mixed with the listed 
metal-bearing sludges covered by the variance prior to or during the 
reclamation process at WRC's Phoenix facility, the mixture will not be 
classified as a solid waste provided the mixture is sent off-site for 
further reclamation and is handled in accordance with all the 
conditions of this variance.
2. Description of WRC's Partial Reclamation Process
    Operations at WRC's Phoenix facility are governed by a Consent 
Agreement and Consent Order (CA/CO) executed by EPA Region IX, WRC, and 
the Arizona Department of Environmental Quality, hereafter referred to 
as ``ADEQ'' (see In the Matter of World Resources Company, EPA I.D. No. 
AZD980735500, United States Environmental Protection Agency, Region IX, 
September 3, 1996). The CA/CO includes a requirement to submit an 
application for a treatment and storage permit to ADEQ. At the Arizona 
facility, WRC accepts F006 raw material (as well as other metal-bearing 
sludges) that it judges to be acceptable for recycling based on 
laboratory and process testing of generated sludges. WRC prepares a 
waste profile for the wastestreams received from each generator, which 
includes physical descriptions and constituent content. The material is 
unloaded, examined, and sampled on receiving pads in a processing 
enclosure. WRC dries the received waste through evaporative processes. 
The material is spread out in a controlled area, mechanically furrowed, 
and periodically rotor-tilled to facilitate drying. The physical 
characteristics of the material changes from a wet cohesive nonfree-
flowing mass into a granular free-flowing form. The moisture content of 
the F006 received is reduced by one-half. The entire processing area is 
located on a concrete pad which covers several acres, with a compacted 
native soil and flexible membrane liner underneath the pad.
    The F006 is then blended by mechanical mixing with other waste 
streams received from various generators to achieve concentrates that 
meet the contractual specifications (e.g, recoverable metals contents) 
of its customers. Other than water, WRC neither adds any materials to, 
nor removes any materials from the F006 and F019 metal-bearing sludges 
that it receives from generators and processes. The resulting 
concentrate contains metal hydroxides and oxides of iron, aluminum and 
magnesium. WRC markets the concentrates as copper, nickel, and tin 
concentrates to smelters that recover various metals contained in these 
concentrates.

II. Summary of the Agency's Final Decision

    For the reasons described below in our response to public comments, 
the Agency is today conditionally granting the petitioner's (WRC's) 
request for a variance from classification as solid waste for the metal 
concentrate partially reclaimed from materials listed as hazardous 
waste F006 and F019 received at its Arizona facility, which are sold to 
metal smelters after being partially reclaimed by WRC. The variance is 
granted subject to conditions that are very similar to those proposed 
in the Federal Register on December 9, 1999 (64 FR 68968), namely:
    (1) Metal-bearing sludges F006 and F019 accepted by the facility 
from off-site and used in the production of the partially reclaimed 
concentrate materials must have a metals concentration level of no less 
than two percent on a dry weight basis, or an equivalent economic value 
in precious metals (e.g., gold, silver, platinum, or palladium). In 
addition, the facility may only process two shipments of listed sludge 
materials that do not meet the two percent metals concentration level 
from a single generator within a 14-day time period before taking 
action to ensure that subsequent shipments will meet the minimum metal 
content. Specifically, WRC may not accept more than one non-conforming 
shipment from a generator, unless the second non-conforming shipment is 
received within 14 days following the first event. Thereafter, WRC may 
not accept additional materials from that generator until WRC 
determines that the generator's subsequent sludge shipments will meet 
the minimum metal content requirements of this condition.
    (2) WRC shall provide to ADEQ an annual audit, performed by an 
independent third party mutually acceptable to WRC and ADEQ, to be 
completed within the six months following the end of each calendar 
year. The scope of the annual audit will cover WRC's concentrate 
shipments during the year to certify that all shipments were: (1) Made 
to metal smelting facilities; (2) documented and shipped in accordance 
with all applicable U.S. Department of Transportation regulations; and 
(3) documented to have reached the designated destination.
    (3) The partially reclaimed concentrate materials must have a 
concentration of no greater than 590 ppm total cyanide. Cyanide must be 
analyzed using method 9010 or 9012 found in ``Test Methods for 
Evaluating Solid Waste, Physical/Chemical Methods'', EPA Publication 
SW-846, as incorporated by reference in 40 CFR 260.11, with a sample 
size of 10 grams and a distillation time of one hour and 15 minutes.
    (4) WRC must send a one-time notification of the variance and its 
conditions to any foreign country where metal smelters accepting WRC 
concentrate are located. In addition, WRC must include on its Material 
Safety Data Sheet shipped with the concentrate a notification that the 
concentrate may contain up to 590 ppm cyanide and that low pH 
environments can result in the production of hydrogen cyanide gas.
    (5) To ensure that its customers handle the processed concentrates 
as valuable commodities in a manner that minimizes loss, WRC must place 
a provision stipulating no land placement of the materials in its 
contractual agreements with smelting facilities.
    (6) This conditional variance from classification as solid waste 
for the metal concentrate reclaimed from listed hazardous wastes F006 
and F019 at WRC's Phoenix, Arizona facility takes effect at the point 
at which the concentrate is loaded for shipment. This conditional 
variance does not affect the regulatory status of any other hazardous 
wastes handled by WRC at the Phoenix facility. In addition, the 
variance does

[[Page 52619]]

not apply to or affect the regulatory status of any wastes managed at 
any other WRC facility.

III. Response to Public Comments on the Proposed Variance

    40 CFR 260.30 provides that the EPA Administrator may grant a 
variance from the classification of solid waste, on a case-by-case 
basis, for materials that have been reclaimed but must be reclaimed 
further before recovery is completed. Such a variance generally is 
contingent upon the material resulting from the initial reclamation 
being ``commodity-like.'' When this variance is effective, the 
concentrates partially reclaimed from metal-bearing sludges F006 and 
F019 that are shipped to smelters may travel without a hazardous waste 
manifest and will not be subject to any RCRA controls other than the 
conditions of this variance (listed above in this notice). Incoming 
hazardous waste received by WRC at the Phoenix facility is not covered 
by the variance and must be manifested and managed as a hazardous waste 
until shipped to smelters for further reclamation.
    EPA's rules at 40 CFR 260.31(c) specifies five criteria for 
evaluating whether a specific material qualifies for a ``partially 
reclaimed material'' variance from the definition of solid waste. In 
addition, 40 CFR 260.31(c)(6) also allows EPA to consider ``other 
relevant factors'' when determining whether or not to grant a requested 
variance for materials that have been partially reclaimed. The criteria 
of 40 CFR 260.31(c) do not constitute separate legal thresholds, each 
of which must be met before EPA can grant a variance under this 
regulatory provision. Instead, EPA must consider all the criteria in 
their totality to determine whether the partially reclaimed concentrate 
is ``commodity-like''. A strong demonstration that several criteria 
have been met may outweigh the fact that an applicant is weak in 
another area. Weighing all of the factors together, EPA has concluded 
that WRC's processed concentrates are more commodity-like than waste-
like, and that it is reasonable to grant the variance.
    This section sets out EPA's findings, describes the principal 
comments concerning these findings, and gives EPA's responses to these 
comments. All other comments, and the Agency's responses, may be found 
in the record for this rulemaking (see RCRA Docket Number F-2002-WRCF-
FFFFF).

A. Degree of Processing

    The first evaluation criterion (40 CFR 260.31(c)(1)) is the degree 
of processing a material has undergone and the degree of further 
processing that is required for the material to be rendered 
``commodity-like.'' Materials that have undergone substantial 
processing to reclaim valuable or recyclable materials (but still must 
undergo a degree of further processing) generally satisfy this 
criterion. Materials that are still substantially ``waste-like'' and 
that need a significant degree of further processing or ``treatment'' 
to be rendered ``commodity-like'' may not satisfy the evaluation 
criterion.
    One commenter stated that the greater part of the processing is 
accomplished at the smelter rather than at the WRC facility and that 
WRC therefore does not meet the criteria for the variance. EPA agrees 
that this processing is not technically complicated. As discussed 
below, however, WRC has a sophisticated quality control program which 
allows it to blend sludges to meet smelter specifications. In fact, WRC 
has made a very strong showing that its processing adds substantial 
economic value to electroplating sludges. It takes in a material that 
has little or no market value (electroplaters pay WRC to take their 
sludges) and converts it into a material that smelters will buy (see 
the discussion of economic value in the following section of this 
notice). WRC also made a strong showing that it meets the fourth 
criterion, relating to a guaranteed end market for its reclaimed 
material. Weighing all the factors together, EPA has concluded that the 
amount of processing performed by WRC is sufficient to meet this 
criterion.
    Another commenter said that evaporation and blending represent the 
most minimal form of waste handling and should not be interpreted to 
constitute significant value-added processing. This commenter stated 
that any electroplater would be able to obtain a variance for hazardous 
waste that has been evaporated in a 90-day or other exempt unit, and 
any smelter would be able to accept it. Another commenter speculated 
that other 90-day generators would dewater other wastes and claim 
partially-reclaimed variances.
    EPA does not agree that any electroplater would be able to obtain a 
variance to dry sludges in onsite units. Although WRC's mechanical 
methods for sludge drying and blending may be technically simple, the 
company has a sophisticated quality control program used to ensure that 
the sludge from each generator meets contract specifications, and that 
the partially reclaimed material has also been formulated to meet 
purchaser specifications. The process involves a chemical analysis 
laboratory program and computer software programs which yield over 
200,000 test results yearly to provide needed operational information 
to control WRC's recycling activities. These specifications and 
analyses also played a role in EPA's decision that the sludges undergo 
meaningful processing at WRC. EPA would not be likely to grant 
variances to electroplaters or other waste generators who could not 
show similarly strong indicators that they engaged in significant 
processing to create ``commodities.''
    One commenter stated that using the value of services to generators 
as a measure for determining the degree of processing of a waste 
material does not appear in any regulation and is not discussed in any 
of the Agency's correspondence or guidance on this subject.
    EPA did not consider the value of services that WRC provides to 
generators in its evaluation of this criterion. Although WRC urged EPA 
to take into account the amount of money it spends to process each ton 
of sludge, and although it is true that WRC does derive some of its 
profit from fees paid by generators, EPA's decision is based on the 
fact that WRC's activities make its concentrate marketable to smelters 
as discussed elsewhere in this notice (see section B below).

B. Economic Value of Material That Has Been Reclaimed

    The second evaluation criterion (Sec. 260.31(c)(2)) requires an 
evaluation of the economic value of the material that has been 
reclaimed, but must be further reclaimed. This criterion is also useful 
in determining whether a material is indeed ``commodity-like.'' To 
satisfy this criterion, petitioners must demonstrate that the initial 
reclamation process increases or contributes to the value of the 
material and that there is a market for the reclaimed material. 
Petitioners generally can demonstrate that this factor is met by 
providing sales information, including quantities of the material sold, 
additional demand for the material (if any), and the price paid for the 
material by purchasers.
    In the proposal, EPA stated that the processed concentrate that WRC 
produces has positive economic value and is purchased by smelters. EPA 
based this conclusion primarily on sales data provided by WRC for 
January 1994-June 1995. EPA found that this data showed that WRC in 
fact sold its partially reclaimed material to smelters and received a 
positive economic value (taking into account average transportation 
costs).
    One commenter stated that WRC and EPA have mis-characterized the 
``economic value'' of the concentrate.

[[Page 52620]]

This commenter asserted that the true economic value of metal-bearing 
sludges is determined by the value of the metals in the material at a 
given time, not by how much is spent to process the material or how 
much the processor charges for the material. The commenter asserted 
that, on this basis, WRC's process adds no value, because the amount of 
the metals in the sludges does not change.
    EPA agrees that the presence of the valuable metals in metal-
bearing sludges is one factor to be used in determining whether WRC's 
partially reclaimed concentrate is commodity-like. However, EPA does 
not agree that WRC must increase the amount of metal to add value to 
the materials that it processes. There are other ways to make these 
metal-bearing materials more valuable. WRC's services in aggregating 
sludges into larger volumes which smelters are willing to accept and in 
custom-blending sludges to meet specific smelter specifications add 
significant value. The fact that WRC is able to sell processed 
concentrates to smelters (while few electroplaters are able to persuade 
smelters to accept unprocessed sludges, and most who do have to pay 
smelters to accept their sludges), demonstrates that WRC's services add 
value.
    One commenter questioned whether WRC would be able to claim 
positive economic value if it analyzed sales data for sludges that were 
reclaimed for common metals only. This commenter argued that the 
economic value would not be as high if only common metals were sold, 
instead of precious metals. Another commenter said that information in 
the record indicated that WRC's concentrate contained substantially 
lower levels of recoverable metals than virgin concentrates.
    In response to these comments, Agency points out that the 
regulatory criteria for granting a variance under 40 CFR 260.30(c) do 
not require the Agency to distinguish between the common metals and 
precious metals contained in WRC's partially reclaimed concentrate, if 
in fact the concentrate contains both kinds of metals. The Agency also 
disagrees that recoverable levels for many metals are lower in WRC's 
concentrate than those found in virgin concentrate. If in some cases 
the levels of metals are lower, smelters are nevertheless willing to 
pay for the concentrates, demonstrating that they have positive 
economic value.
    The commenter also pointed out that a significant portion of WRC's 
revenue comes from fees it charges generators, as opposed to the 
revenue received for selling its concentrate to smelters. The commenter 
believed that this fact is indicative of sham recycling. If the 
commenter means that WRC's operation is a ``sham'', the issue is not 
relevant to this variance. The sham recycling criteria help EPA 
distinguish facilities that engage in recycling that is not subject to 
RCRA regulation from facilities that engage in waste treatment that is 
subject to RCRA. WRC is not claiming that its operation is exempt from 
RCRA; therefore, the sham recycling criteria do not apply. Similarly, 
the commenter may be suggesting that smelters using WRC concentrates 
are engaged in waste treatment rather than recycling. EPA does not 
believe that the fees generators pay to WRC are relevant to the 
legitimacy of the smelters' processes. The argument might have 
relevance if WRC paid smelters to take its concentrates; however, the 
record shows that WRC sells its concentrates to smelters.
    Finally, the commenter may be suggesting that WRC's process adds so 
little value to the sludges that no variance is warranted, so that WRC 
concentrates should continue to be regulated as hazardous wastes during 
transportation and during storage at smelters. EPA disagrees. Data 
provided by WRC show that, during 1996-1999, WRC made more money from 
selling concentrates to smelters than from charging fees to generators. 
WRC received approximately $0.59 from generator fees for every $1.00 it 
received in metal sales (after adjusting generator fees to eliminate 
charges for optional transportation services).
    This commenter also stated that EPA should not have used 
``average'' transportation costs in assessing whether WRC received 
positive economic value for its concentrate. This commenter suggested 
that the Agency should require recordkeeping and auditing of WRC's 
records to ensure that each shipment generates a return. The commenter 
further suggested that EPA should assess the transportation cost of a 
single trip for each load, any administrative activities by the 
smelter, and smelter processing costs. These costs should then be 
compared to similar costs for ``as-generated'' sludges shipped directly 
to smelters. The commenter also stated that EPA should determine 
monetary value to smelters of reducing sludge moisture content and 
blending sludges to meet smelter specifications.
    In response to these comments, the Agency notes that it is not 
feasible to evaluate the profitability of each and every shipment made 
by WRC to smelters. Such profitability will depend on several factors, 
such as the concentration of metals in a particular shipment, the price 
of the metals at the time, and freight costs. We do not believe that 
the regulatory criteria at 40 CFR 260.31(c) require the Agency to 
examine all of these factors with respect to each shipment. For this 
reason, EPA instead assessed the average cost of transportation over 
the period covered by the variance application. We believe that such 
averaged costs are sufficient to help us assess the economic value of 
WRC's concentrate.
    EPA believes that the record shows that smelters value the 
reduction of moisture content and the blending of sludges. Smelters 
will pay more for WRC's concentrates, which have undergone these steps, 
than they will pay for sludges marketed by electroplaters which have 
not been dried and blended. Contrary to the commenter's assertion, EPA 
does not need to determine precise values for each of these activities 
to make a finding on this issue.
    One commenter also stated that EPA's assertion that smelters are 
reluctant to accept F006 sludges directly from generators is not 
supported in the rulemaking record, and that at least one smelter takes 
``as-generated'' sludges directly from electroplaters. In response, the 
Agency notes that we did not intend to imply that smelters refuse to 
take sludges directly from electroplaters. Rather, EPA meant that WRC's 
concentrates are more attractive to smelters than sludges shipped 
directly from electroplaters. EPA believes that the concentrates are 
more attractive for two reasons. First, WRC's shipments are much larger 
than typical shipments from electroplaters. For example, in 1995 the 
average amount of F006 generated from an individual electroplater was 
120 tons (see Regulatory Impact Analysis for the Final Rule for a 180-
Day Accumulation Time for F006 Wastewater Treatment Sludges, USEPA, 
Office Of Solid Waste, January 14, 2000). During the same year, WRC 
processed over 16,000 tons of F006 and related wastes for metal 
recovery (see Hazardous Waste Recycling in the United States: Summary 
Statistics and Trends for 1993-1997, USEPA, Office of Solid Waste, June 
7, 2001, p. 18). Larger shipments reduce transaction costs for 
smelters, and smelters will penalize for smaller lots (see Pollution 
Prevention and Control Technology for Plating Operations, George C. 
Cushnie Jr., 1994). They also allow for economies of scale in shipping 
and handling costs. Second, smelter personnel contacted by EPA 
indicated that they believe that WRC more consistently meets

[[Page 52621]]

specifications for metal content and impurities (see personal 
communication between Paul Borst, USEPA, Office of Solid Waste and Bob 
Sippel, Vice-President for Recycling, Noranda Minerals, Inc., July 22-
24, 1996).

C. Degree to Which Reclaimed Material Resembles Analogous Raw Material

    The third evaluation criterion (40 CFR 260.31(c)(3)) is the degree 
to which the reclaimed material is like an analogous raw material. The 
partially reclaimed material should be similar to an analogous raw 
material or feedstock for which the material may be substituted in a 
production or reclamation process. In addition, the partially reclaimed 
material should not contain significant concentrations of hazardous 
constituents not found in an analogous raw material and that do not 
contribute to the value of the partially reclaimed material when used 
for its intended purpose.
    As explained in the proposal, EPA conducted an analysis comparing 
levels of the inorganic constituents and cyanide in the processed 
concentrates that WRC sells with levels of constituents in virgin ore 
concentrates. EPA found that, with the exception of cyanide, the levels 
of constituents in WRC's concentrates are generally comparable to the 
levels of constituents found in concentrates made from virgin ores. 
Also, EPA considered data showing that toxic organic constituents are 
not likely to be prevalent or present in more than trace amounts in 
F006 being recycled (see EPA's Metal Finishing F006 Benchmark Study, 
September 1998, p. 23, and letter (with attachment) from D. Daniel 
Chandler of Browning, Kaleczyc, Berry and Hoven to Paul Borst, USEPA, 
June 2, 1993)). To make WRC's concentrate more commodity-like, EPA 
decided to limit the levels of cyanide that could be allowed.
    The 590 ppm total cyanide limit that we proposed is the current 
Universal Treatment Standard (UTS) for land disposal at 40 CFR 268.48 
for total cyanide in hazardous wastes that are land disposed. This 
limit currently applies to any WRC concentrate that is stored on the 
land before smelting. In response to requests for clarification from 
two commenters, we are today stating that the limit refers to total 
cyanide, and we are adding the test method specified in 40 CFR 268.48.
    Some commenters did not believe that the limit set for cyanide in 
WRC's concentrate should be 590 ppm. One commenter argued that EPA 
should limit cyanides to the amount present in analogous ``virgin'' 
sources of metals. Another argued that the cyanide limit should be 
risk-based, and asserted that EPA's assessment of risks did not ensure 
protection of human health and the environment.
    This criterion is intended to help EPA distinguish materials that 
are waste-like from materials that are commodity-like. Where EPA finds 
a constituent at higher levels in the partially reclaimed, waste-
derived material, it does not have to conduct a risk assessment and 
impose a condition based on limiting risks to human health and the 
environment (as demonstrated through some type of risk assessment). 
Rather, EPA need only ensure that the constituent levels are commodity-
like.
    Limiting constituent levels in the partially reclaimed material to 
levels in analogous virgin raw materials, as one commenter suggested, 
is an acceptable way to accomplish this. It is not, however, the only 
way. In this case, the analogous raw materials appear to have extremely 
low levels of cyanide. EPA is concerned that WRC might not be able to 
reduce cyanide levels in electroplating sludges to this level. EPA, 
however, is confident that WRC can meet the land disposal restriction 
level for cyanide, which currently applies while WRC's concentrates are 
classified as hazardous wastes. As previously stated, WRC makes strong 
showings for the second and fourth criteria of the variance, causing 
EPA to conclude that its concentrates are commodity-like. Under these 
circumstances, EPA finds the 590 ppm limit to be sufficient to ensure 
that WRC's concentrates are more commodity-like than waste-like.
    In spite of the fact that it was not legally required, EPA 
conducted a screening analysis to determine whether land storage of 
concentrates with cyanides at this level would pose ground water risks. 
The analysis suggested that cyanide concentration would not exceed the 
federal drinking water standard for cyanide at a downgradient drinking 
water well if cyanide underwent hydrolysis. The screening analyis did 
show some potential for risk if cyanide did not hydrolize. One 
commenter challenged EPA's assumption that hydrolysis was likely to 
occur. The Agency made this assumption because the scientific 
literature shows that cyanide is often amenable to that process, since 
it tends to break down or dissociate if it comes in contact with water 
(see Kollig P. Heinz et. al, Environmental Fate Constants for Organic 
Chemicals Under Consideration for EPA's Hazardous Waste Identification 
Projects, Office of Research and Development, USEPA).
    Moreover, the screening analysis is likely to overestimate risks 
for several reasons. EPA conducted the screening assuming 200 to 300 
metric tons of electroplating sludge stored outdoors, even though such 
sludge is usually stored indoors, with reduced likelihood of releases 
to groundwater, and even though volumes of concentrate at a single 
smelter at any one time are likely to be smaller. In addition, 
information available to the Agency indicate that WRC's metal 
concentrate is unlikely to remain in storage at a smelter for a long 
period of time. First, the cost and efficiency of the smelting process 
itself are negatively affected by water content; therefore, any stored 
materials are used as soon as possible to avoid inadvertent moistening 
by rainfall. Second, under the purchasing agreement, the smelter must 
pay WRC by a specified time after the concentrate is received, often 
before the material is fully unloaded. This practice would lead the 
smelter to assume the risk of metal price changes if the material is 
not used promptly. Consequently, it is difficult to conclude that the 
concentrates would pose unacceptable ground water risk even if 
hydrolysis occurred slowly or did not occur at all.
    The Agency also notes that the other conditions of this variance 
will protect against air inhalation risks from cyanide. For example, a 
Material Safety Data Sheet must accompany the concentrate with a 
notification that the concentrate may contain up to 590 ppm cyanide and 
that low pH environments can result in the production of hydrogen 
cyanide gas. Moreover, Department of Transportation regulations for 
hazardous materials will continue to apply to WRC's processed 
concentrates even after the RCRA exemption takes effect. In addition, 
the Agency notes that WRC is not seeking a variance for its own 
operations. Hazardous waste regulations will continue to apply to 
processed concentrates held at WRC's facility.
    One commenter questioned the validity of EPA's assessment of 
groundwater risks for cyanide, noting that EPA decided not to propose 
an ``exit'' level for hazardous wastes containing cyanide in the 
proposed hazardous waste identification rule (HWIR) due to technical 
concerns with predicting the fate of cyanide in the environment. 
However, for this variance EPA did not need to conduct a risk 
assessment. Moreover, the technical difficulties are less important in 
a simple groundwater screening analysis than in the complex, 
multipathway analysis conducted for the HWIR rule.

[[Page 52622]]

    Another commenter suggested that EPA should set a toxic-along-for-
the-ride limit for the cyanide in incoming sludges to WRC's facility, 
so that WRC would not be able to dilute high incoming cyanide 
concentrations to achieve specified concentration levels in the 
outgoing concentrate.
    RCRA regulations do not prohibit dilution during reclamation. While 
dilution is impermissible in the LDR program to avoid a treatment 
standard (see 40 CFR 268.3 generally), dilution is permissible when 
done to facilitate treatment (i.e, adding cement to stabilize waste). 
The type of dilution that may occur at WRC in drying and blending is 
analogous to that which takes place to facilitate treatment, since 
drying and blending makes metal concentrates smelter-ready and amenable 
for high temperature metal recovery. Whatever cyanide dilution takes 
place in WRC's blending process is incidental to the main purpose of 
the blending, which is to ensure that the concentrates contain 
sufficient metal content to assure high process efficiency and limit 
contaminant concentrations of tramp constituents that may interfere 
with the smelting process.
    One commenter thought the limit for total organic hazardous 
constituents, including cyanides, should be 500 ppm, apparently because 
other organic hazardous constituents may be present in sludges received 
by WRC and because this value is the cutoff point for determining 
whether a smelter is burning solely for metal recovery, and thus 
eligible for an exemption to the current permitting rules for boilers 
and industrial furnaces (BIFs) (see CFR 266.100(c)(2)(i)). Another 
commenter believed that even the 500 ppm limit was not sufficiently 
protective, because it could create health risks if burning were 
conducted improperly, and the limit was not intended for use in a 
delisting or a variance.
    EPA established a 500 ppm limit for total organic constituents in 
secondary materials burned at smelters to distinguish smelters engaged 
in metals recovery from smelters engaged in the treatment of hazardous 
organic constituents. The limit is not risk-based. Moreover, as stated 
earlier, EPA is not required to ensure that the concentrate will pose 
low risks before granting the variance. However, EPA has also found 
that unprocessed electoplating sludges typically contain very low 
levels of organics (except cyanide) that are well below the cutoff 
point for smelter metals recovery (see EPA's Metal Finishing F006 
Benchmark Study, September 1998, p. 23, and letter (with attachment) 
from D. Daniel Chandler of Browning, Kaleczyc, Berry and Hoven to Paul 
Borst, USEPA, June 2, 1993)). EPA is imposing a limit for cyanide.
    Two commenters stated that EPA should evaluate risks presented by 
all toxic constituents potentially present in the waste, just as it 
does when considering delisting requests. One of these commenters 
suggested that EPA should set a ``toxics-along-for-the-ride'' threshold 
level for each toxic constituent in each incoming load of sludge that 
WRC receives, and that any level set for toxic constituents, including 
cyanide, should be risk-based rather than technology-based.
    In response, EPA notes that we found no need for limits on any 
other constituents to demonstrate that the processed concentrates are 
commodity-like. The relevant test is the degree to which the 
concentrate resembles analogous raw materials. To determine whether 
WRC's concentrate is similar to analogous raw materials, we compared 
its inorganic constituents to inorganic constituents found in primary 
copper and nickel concentrates. We concluded that cyanide was the sole 
hazardous constituent that was not present in the analogous raw 
material that did not contribute to the value of the WRC concentrate 
when sent for metals recovery. Moreover, with the exception of cyanide, 
the Agency concluded that the Appendix VIII metals typically contained 
in WRC's concentrate are similar to those found in virgin ore 
concentrates. In addition, we note that commercial contracts under 
which smelters purchase WRC's concentrate typically specify limits on 
several such metals (such as lead or chromium) to ensure that levels do 
not interfere with the extraction process. As noted above, we also 
found that organic constituents are not found in significant amounts in 
unprocessed electroplating sludges. Therefore, EPA does not need to set 
limits for other constituents, either to ensure that WRC's concentrates 
are commodity-like or to ensure that WRC does not engage in sham 
recycling.
    Some commenters suggested that EPA should place limits on Appendix 
VIII metals in incoming sludges at the WRC facility, at least for those 
metals in high concentrations that are not recovered and have no ``ore 
equivalency'' levels, such as chromium, cadmium or zinc. One commenter 
argued that recoverable metals could also be toxics-along-for-the-ride 
if the receiving smelter does not in fact recover all of them.
    The Agency does not believe that such a limitation is necessary to 
ensure that WRC's concentrates resemble virgin ores. We did not find 
metals that are not present in virgin ores. We note that there are 
Appendix VIII metals at high concentrations in the analogous primary 
copper and nickel concentrates which are not recovered. Arsenic levels 
in primary copper concentrates are often present in levels as high as 
3000 ppm and are not recovered.

D. Extent to Which End Market Is Guaranteed

    Under the fourth evaluation criterion (40 CFR 260.31(c)(4)), 
petitioners must demonstrate that an end market for the partially 
reclaimed material is guaranteed. Petitioners must demonstrate that 
there is a secure demand and long-term market for the partially 
reclaimed material and that the chance of large quantities of the 
material being stockpiled due to insufficient demand is unlikely. If a 
petitioner cannot demonstrate that the material enjoys a consistent 
level of demand, with reasonable expectations for the same or greater 
level of demand once a variance is granted, there may be risk of the 
material being stockpiled or stored for a significant period of time in 
containers or other storage units that do not have to meet RCRA 
Subtitle C storage standards. Such situations may pose significant 
risks to human health or the environment.
    In the proposal, EPA found that WRC demonstrated that it has multi-
year contracts for the sale of its processed concentrates with at least 
four smelters, and that these smelters have excess capacity exceeding 
WRC's production capabilities. The record also shows that the smelters 
have been customers for significant periods of time; contracts with one 
smelter extend back to the 1970's. Even the most recent customers have 
had contracts since the middle 1990's. At the same time, however, to 
help ensure that concentrates meet their end market, EPA proposed to 
require that WRC ship concentrates only to metal smelting facilities, 
that WRC comply with DOT regulations regarding shipments of hazardous 
materials, and that WRC document that all shipments reached their 
designated destination. To assist in ensuring compliance with these 
shipping conditions, EPA also proposed to require WRC to provide an 
annual audit to the Arizona Department of Environmental Quality (ADEQ). 
The annual audit, conducted by an independent third party, must certify 
that all shipments of WRC's partially reclaimed concentrate were made 
to metal smelting facilities, were documented and shipped in accordance 
with all applicable U.S. Department of Transportation regulations, and 
were documented to have reached the

[[Page 52623]]

designated destination. EPA is retaining these conditions for the final 
variance.
    One commenter thought that there was insufficient information in 
the proposal and in EPA's supporting analyses to fully evaluate the 
underlying economics of WRC's business. This commenter suggested that 
at a minimum (emphasis supplied in the original comments) EPA should 
conduct an analysis covering the entire 17 years of WRC's operations, 
reviewing all contracts over this time period, the primary and 
secondary metals market over the same period, and any other regulatory 
or enforcement actions EPA or authorized states have taken with respect 
to F006 and F019 recycling, including all prior interpretations of the 
legitimacy of F006 and F019 recycling activities. In particular, the 
commenter stated that EPA should analyze WRC's 17 year history to 
determine if there had ever been a period when metals prices were so 
low that the concentrate could not be sold. This commenter also felt 
that EPA's position was weakened by the fact that WRC has contracts 
with foreign smelters. Another commenter expressed similar concerns 
about fluctuations in metal prices, fearing bankruptcies, abandonments, 
and ``stockpiling'' when minerals become less valuable.
    In response, EPA notes that the considerable amount of data 
submitted by WRC and available to the Agency from other sources have 
provided an accurate view of the nature of F006 recycling in general 
and of WRC's operations in particular. This information has been 
sufficient to allow the Agency to evaluate whether WRC's concentrate 
meets the regulatory criteria of 40 CFR 260.31(c). The Agency also 
believes that the existence of past fluctuations in commodity prices 
should not be a decisive or even strong consideration in evaluating 
variance applications under 40 CFR 260.30(c), especially since price 
fluctuations for these materials tend to be the rule rather than the 
exception. In addition, as noted above, WRC has numerous multi-year, 
long-term contracts in place, indicating that WRC's processed sludges 
remain valuable to smelters over time, even with changes in the values 
of the metals they contain.
    Moreover, we note that the variance does not apply to materials 
held at WRC prior to shipment. Storage there must comply with Subtitle 
C requirements. These requirements adequately address threats posed by 
materials ``stockpiled'' at WRC. With regard to the risks that a 
smelter might accept a shipment, but stockpile it at the smelting 
facility during a ``down'' market, we note that these materials are 
blended to specific smelter specifications, and smelters pay to receive 
them (often before the materials are processed). It therefore seems 
more likely that smelters will use them rather than store them for 
extended periods of time. These considerations are true for both 
domestic and foreign smelters.
    The Agency notes that in the proposal, the introductory paragraph 
to the variance language included a reference to metal concentrate sold 
to ``smelters or other metal recovery facilities'', although the 
proposed numbered variance conditions referred only to ``smelters'' 
(see 64 FR 68968 at 68972). Today's final notice limits the variance to 
WRC's metal concentrate that is sold to smelters, since the available 
data submitted in support of the variance concerns sales to smelters 
rather than to other kinds of facilities.
    One commenter opposed the requirement for an independent annual 
audit as an unnecessary expense and believed a statement signed by WRC 
would suffice. Two commenters believed that the audit should contain 
additional requirements, such as recordkeeping and evaluations of the 
management of WRC's concentrate at smelters, and one commenter 
suggested an audit every four months during the first two years. Some 
commenters were concerned that an independent audit would replace the 
role of a regulatory agency inspection.
    In response to these comments, EPA notes that the conditions of all 
variances under 40 CFR 260.30 are site-specific in nature. This audit 
was proposed as a mutual agreement between ADEQ and WRC to satisfy both 
parties' concerns about compliance with the terms of the variance. An 
independent annual audit ensures an objective review of the company's 
operations, and provides information on how the material is handled 
after partial reclamation. However, the fact that an audit is required 
as a condition of this variance does not mean that similar audits would 
be considered appropriate for all such variances. The Agency does not 
believe that the additional requirements for increased recordkeeping, 
evaluation at smelters, and more frequent review suggested by some 
commenters are necessary to help regulators determine whether WRC has 
complied with these variance conditions. EPA also notes that nothing in 
this variance would legally affect or preclude inspections or review of 
WRC's operations by the regulatory authority. The State or EPA Region 
can conduct the number of inspections and reviews it believes necessary 
to ascertain compliance with conditions of the variance, as well as 
compliance with other RCRA requirements applicable to the facility.

E. Handling To Minimize Loss

    The fifth evaluation criterion (40 CFR 260.31(c)(5)) concerns the 
extent to which the partially reclaimed material is handled to minimize 
loss. Petitioners must demonstrate that the material is handled as if 
it were a valuable commodity and in a manner that is protective of 
human health and the environment.
    In the proposal, EPA stated that the value of the concentrates and 
the contracts between WRC and both generators and smelters provide 
incentives for WRC to manage both the unprocessed sludges and the 
processed concentrates to prevent loss. EPA also noted that the 
processed concentrates will remain subject to Subtitle C storage 
regulations while held at WRC prior to shipment, because the variance 
will not take effect until the concentrates are loaded for shipment. 
Even after the RCRA variance takes effect, the concentrates will remain 
subject to DOT regulations for hazardous substances during shipment to 
smelters. The smelters' payments for the concentrates show that the 
smelters value them and have incentives to manage them carefully. The 
custom blending for each shipment also makes it more likely that 
smelters will value the concentrates and handle them appropriately.
    EPA, however, also proposed to impose a condition that prohibits 
land placement of WRC's concentrates because land storage has a high 
potential for loss, and because EPA does not believe that analogous 
concentrates derived from virgin materials are stored on the land. EPA 
also proposed to ensure that smelters received notice of this 
limitation by requiring WRC to re-state the condition in all contracts 
with smelters. In our proposal, EPA described this limit in its 
discussion of the third criterion, the extent to which constituents in 
the partially reclaimed material resemble constituents in the analogous 
raw material. EPA is clarifying here that we are imposing this 
condition to ensure that WRC's customers handle the exempt material in 
a manner that will minimize loss.
    One commenter claimed that WRC's assertions that smelters handle 
concentrates to minimize loss are not a sufficient basis for EPA to 
make a conclusion about smelters' operations. EPA, however, is not 
basing its finding on this criterion on these assertions. Rather, EPA 
has independently evaluated the factors that would influence smelters' 
handling of these

[[Page 52624]]

materials, and concluded that the smelter payments, WRC's custom 
blending activities, and the risks to the smelters from prolonged 
storage make it likely that smelters will minimize losses. Moreover, 
the Agency is imposing a condition which provides that concentrates 
stored on the land will not be excluded under the variance.
    One commenter suggested that contracts between WRC and smelters 
could not be directly enforced by WRC, and that the Agency should 
therefore condition the variance on enforcement agreements between the 
smelters and ADEQ. EPA does not agree that enforcement agreements of 
the type suggested by the commenter are necessary to prevent land 
storage at smelters. The variance clearly makes land storage a 
violation of the variance conditions. Concentrates stored on the land 
would not be excluded from the definition of solid waste, and EPA and 
the State could take enforcement action if the storage did not comply 
with all applicable Subtitle C requirements. This commenter also 
suggested that EPA should promulgate a rule establishing management 
conditions at all metal recyclers and smelters. However, such a rule 
would far exceed the scope of our variance proposal.

F. Additional factors

    In addition to the five evaluation factors discussed above, EPA may 
consider other relevant factors in determining whether or not to grant 
a variance from the definition of solid waste for materials that have 
been reclaimed but must be reclaimed further before recovery is 
complete (40 CFR 260.31(c)(6)). These other factors may be raised by 
the petitioner, the Agency, or other interested parties. Such factors 
may be directly applicable to EPA's decision to grant a variance, or 
may be indirectly applicable, but relevant in assigning priorities for 
evaluating a particular petition.
1. Minimum Metals Content for Incoming Sludges
    In the proposal, EPA considered the possibility that WRC could 
engage in ``sham recycling'' by blending electroplating sludges with 
low metal concentrations into sludges with higher concentrations, and 
marketing the blended ``product'' to smelters. EPA was concerned that 
WRC's processing would be a form of treatment for sludges which would 
ultimately be disposed of in smelter wastes, without contributing any 
significant metal content to smelter products. To ensure that WRC would 
be engaged in legitimate recycling, the Agency proposed to require each 
incoming sludge to have a minimum content of either two percent of 
copper, nickel or tin (on a dry weight basis), or a precious metal 
content with monetary value equivalent to the copper, nickel or tin 
value.
    One commenter stated that no non-conforming shipments should be 
allowed, since this would be contrary to EPA's policy at other 
hazardous waste treatment, storage, and disposal facilities (TSDFs). In 
response, the Agency notes that our proposal to allow a certain number 
of non-conforming shipments does not affect the status of the incoming 
material as a hazardous waste. Such shipments would still be subject to 
all applicable Subtitle C requirements, as is the case with all other 
TSDFs. We are allowing WRC to accept a minimum number of shipments 
below the normal minimum metal content which will still be eligible for 
the variance because, as a practical matter, some shipments from 
generators will (albeit very infrequently) contain less than the 
desired metal content, and there is a possibility that this may not be 
discovered until processing of the shipment has begun.
    Some commenters questioned the use of a two percent dry weight 
limit for copper, nickel, or tin. One commenter stated that EPA should 
provide a broader discussion of the data which it used to require that 
the minimum copper, nickel, or tin content of a sludge arriving at WRC 
must be two percent dry weight in order for the dewatered sludge to be 
equivalent in quality to virgin ore feedstocks. This commenter appeared 
to believe that the levels of both base and precious metals in the 
incoming sludges should be the same as the levels found in virgin ore 
feedstocks sent to smelters.
    For example, this commenter questioned why economic value was used 
to determine equivalency of precious metals with base metals in 
incoming sludges, rather than expected virgin ore quality with respect 
to precious metals. The commenter stated that the value of gold per 
unit weight is approximately 5,000 times that of copper (based on 
current market prices). Therefore, the current economic equivalent of 
two percent copper (about 20,000 ppm) would be about 4 ppm gold, or 
about 0.09 troy ounce per ton. The commenter expressed doubt that ores 
containing such a low concentration of gold would be mined and smelted 
commercially. The commenter appeared to be suggesting that the required 
threshold level of precious metals in the incoming sludges be the same 
as the levels of such metals that smelters will accept in virgin ores. 
Two commenters stated that concentrate shipped by WRC to smelters can 
contain a significant moisture content (up to 50%). Therefore, 
according to these commenters, if the metal concentration in the 
incoming sludges were two percent on a dry weight basis, the actual 
concentration as shipped to the smelter would be below two percent. If 
feedstock equivalency required a copper concentration of at least 2.5 
percent, the dry weight concentration in the sludge that WRC received 
would need to be at least four percent copper.
    In response to this comment, EPA notes that we did not intend to 
require incoming sludges at the WRC facility to be equivalent to virgin 
ore feedstocks with respect to metal content. The purpose of this 
proposed requirement was to establish a minimum metal threshold below 
which little recovery of metals would occur. After reviewing available 
literature and discussing this issue with smelter representatives, the 
Agency concluded that the two percent limit appears to be a ``smelter 
cutoff,'' meaning the lowest concentration of metal that a given 
smelter will allow through the gate on a dry weight basis (see 
memorandum from Paul Borst titled ``Analysis of Minimum Metal Content 
of Secondary Feedstocks Destined for Primary Smelting Operations in 
North America,'' May 7, 1999).
    The minimum metal content ensures that at least one smelter in 
North America would be able to receive and process all incoming sludges 
to the WRC facility.This condition on the variance ensures that 
secondary materials which have little or no recoverable metal may not 
be blended in with metal-bearing secondary materials with higher metal 
content. The condition therefore prevents surrogate treatment and 
disposal of the secondary materials with little or no recoverable metal 
content. It is not necessary to require WRC's concentrates to contain 
as much metal as virgin ore concentrates. Similarly, with respect to 
the reduction of moisture content, even if significant moisture 
reduction of the incoming sludges occurs, WRC is still responsible for 
meeting the minimum metal content on a dry weight basis required under 
contract specifications for particular smelters. In addition, we note 
that moisture reduction tends to concentrate metals levels, rather than 
dilute them, as the commenter implied. It is therefore unnecessary to 
require higher metals levels in the incoming sludges to account for 
moisture reduction.
    Similarly, EPA is not aware of any smelters that refuse to give 
credit for precious metals in secondary materials

[[Page 52625]]

when their concentrations are lower than those considered acceptable 
for virgin ores, so long as the monetary values are equivalent. The 
Agency believes that it is reasonable to base minimum metal levels in 
the incoming sludges on smelter acceptance and pricing policies.
    Another commenter said that EPA's choice of a two percent minimum 
metal content level for incoming sludges or an equivalent value in 
precious metals to assure the ``legitimacy'' of WRC's operation is 
based on faulty and incomplete analysis. This commenter suggested that 
the required minimum metal content should account for transportation 
and storage costs incurred by smelters receiving WRC concentrate, as 
well as WRC's processing costs. The commenter also stated that the 
highest rather than the lowest smelter cutoff should be used in 
determining legitimate recovery of metals from incoming material to 
WRC.
    EPA does not agree that the highest smelter cutoff (i.e., the most 
stringent metal limit required by any smelter) is an appropriate number 
for the incoming limit on metals in the sludges. If other smelters are 
purchasing materials with lower metal concentrations and reclaiming 
metals from these materials, there appears no reason to conclude that 
this is not legitimate reclamation. Nor does the Agency agree that 
transportation and storage costs should affect which level of metals 
allows legitimate recycling to occur.
    Two commenters questioned how WRC would segregate its incoming 
loads into: (1) Sludges containing the required minimum levels of 
recoverable metals, and (2) sludges with lower levels of metals. EPA 
notes that the conditions of the variance do not absolutely prohibit 
WRC from receiving sludges with lower metal concentrations than those 
specified in the variance. However, listed sludges used in producing 
the concentrate that is eligible for the variance must conform to the 
minimum metals limit (except for two non-conforming loads). Sludges not 
used for this purpose need not contain minimum levels of metals. The 
Agency does not believe it is necessary to specify in the variance a 
particular method for segregating the two types of sludges. EPA notes 
that many facilities manage different wastestreams, some of which are 
regulated under RCRA and some of which are excluded. For purposes of 
retaining the regulatory exclusion, it often may be important to 
segregate wastestreams. However, EPA does not specify in its 
regulations a particular procedure for conducting such segregation.
    Another commenter feared that waste streams containing recyclable 
levels of one metal could be diluted down to non-recyclable levels when 
mixed with waste streams containing other metals. This commenter 
proposed an additional condition for the WRC variance that would be 
implemented according to the following example. The company receives a 
sludge that has three percent copper and five percent nickel, so that 
the sludge is above the two percent minimum metal threshold for both 
metals. Hypothetically, the company makes a business decision to blend 
this sludge with other nickel-bearing sludges and ship the blended 
mixture to a nickel smelter for reclamation. The commenter is concerned 
that the copper in the original incoming shipment has been diluted 
below two percent and is non-recoverable at the nickel smelter. The 
commenter believes that this procedure would constitute sham recycling. 
The condition that the commenter proposed would require that a nickel/
copper bearing sludge be only blended with other nickel/copper-bearing 
sludges and that the blend only be destined to a smelter or other 
recycling facility where both metals are recovered.
    EPA does not agree that recovering nickel values would constitute 
sham recycling merely because the copper in the sludge could be diluted 
and possibly not recovered. WRC's processing would make the concentrate 
marketable by increasing the nickel value. Without WRC's drying, 
blending, and consolidating operations, the electroplating sludge most 
likely would not go to a smelter for recovery for either copper or 
nickel. So long as WRC increased the concentration for one metal, EPA 
does not think the fact that it diluted a second metal shows that 
recycling is not legitimate. Moreover, EPA believes that many virgin 
ores contain multiple metals that smelters do not extract.
2. Exports and Imports
    One commenter noted that changing the regulatory status of the 
partially reclaimed material removes RCRA import and export 
requirements, thus taking away a safeguard designed to put foreign 
governments on notice that these materials are hazardous. This 
commenter suggested that if EPA grants the variance, it should continue 
to require compliance with these requirements. The same commenter was 
concerned that because WRC's facility is one of the top ten receivers 
of hazardous waste from Mexico, the granting of the variance may 
increase the flow of waste across the border, increasing the 
transportation risks inherent in long distance transport. The commenter 
believed that the variance could inadvertently discourage the 
development of much-needed hazardous waste disposal and recycling 
facilities in Mexico by creating an incentive for shipping exempted 
waste from Mexico into the U.S. Finally, the commenter stated that EPA 
should evaluate whether waste shipments from Mexico are compatible with 
Mexican and other applicable international or bilateral agreements 
concerning these wastes.
    The Agency believes that the conditions of this variance are 
adequate to provide notice to foreign governments. The variance 
contains a requirement that WRC must send a one-time notification of 
the variance and its conditions to any country where metal smelters 
accepting WRC concentrates are located. WRC is also required to submit 
a Material Safety Data Sheet shipped with the concentrate and a 
notification that the concentrate may contain up to 590 ppm cyanide and 
that low pH environments can result in the production of hydrogen 
cyanide gas. EPA believes that this is sufficient notice to inform 
foreign governments of the nature of WRC's concentrate, and of the 
Agency's decision to exclude WRC's concentrate from the definition of 
solid waste. In addition, the Agency believes that the RCRA 
notification and consent requirements for imports and exports of 
hazardous waste are not necessary for materials that have been 
determined to resemble commodities more than wastes. We note that these 
requirements do not apply to any materials that are excluded from the 
definition of solid waste.
    With respect to imports from Mexico, EPA believes that the 
commenter's concerns are speculative. The commenter gives no data or 
detailed theory to back up its concern that shipments from Mexico will 
increase or that Mexico will fail to develop needed waste management 
capacity. The status under RCRA of shipments of F006 imported from 
Mexico will not be affected by this variance. In addition, even though 
the Agency believes that RCRA export requirements should not apply to 
commodity-like materials, we note that this variance does not 
automatically affect the status of WRC's concentrate under foreign 
jurisdictions. If the concentrate is classified as a hazardous waste in 
a foreign jurisdiction, it would retain that status unless the 
appropriate regulatory authority in that jurisdiction decided to change 
the classification.

[[Page 52626]]

IV. Final Variance

    The Agency is today conditionally granting the petitioner's (WRC's) 
request for a variance from classification as solid waste for the metal 
concentrate partially reclaimed from materials listed as hazardous 
waste F006 and F019 received at its Arizona facility, which are sold to 
metal smelters after being partially reclaimed by WRC. The variance is 
granted subject to the following conditions:
    (1) Metal-bearing sludges F006 and F019 accepted by the facility 
from off-site and used in the production of the partially reclaimed 
concentrate materials must have a metals concentration level of no less 
than two percent on a dry weight basis, or an equivalent economic value 
in precious metals (e.g., gold, silver, platinum, or palladium). In 
addition, the facility may only process two shipments of listed sludge 
materials that do not meet the two percent metals concentration level 
from a single generator within a 14-day time period before taking 
action to ensure that subsequent shipments will meet the minimum metal 
content. Specifically, WRC may not accept more than one non-conforming 
shipment from a generator, unless the second non-conforming shipment is 
received within 14 days following the first event. Thereafter, WRC may 
not accept additional materials from that generator until WRC 
determines that the generator's subsequent sludge shipments will meet 
the minimum metal content requirements of this condition.
    (2) WRC shall provide to ADEQ an annual audit, performed by an 
independent third party mutually acceptable to WRC and ADEQ, to be 
completed within the six months following the end of each calendar 
year. The scope of the annual audit will cover WRC's concentrate 
shipments during the year to certify that all shipments were: (1) Made 
to metal smelting facilities; (2) documented and shipped in accordance 
with all applicable U.S. Department of Transportation regulations; and 
(3) documented to have reached the designated destination.
    (3) The partially reclaimed concentrate materials must have a 
cyanide concentration of no greater than 590 ppm and may not be placed 
on the land at metal smelting facilities. Cyanide must be analyzed 
using method 9010 or 9012 found in ``Test Methods for Evaluating Solid 
Waste, Physical/Chemical Methods'', EPA Publication SW-846, as 
incorporated by reference in 40 CFR 260.11, with a sample size of 10 
grams and a distillation time of one hour and five minutes.
    (4) WRC must send a one-time notification of the variance and its 
conditions to any foreign country where metal smelters accepting WRC 
concentrate are located. In addition, WRC must include on its Material 
Safety Data Sheet shipped with the concentrate a notification that the 
concentrate may contain up to 590 ppm cyanide and that low pH 
environments can result in the production of hydrogen cyanide gas.
    (5) To ensure that its customers handle the processed concentrates 
as valuable commodities in a manner that minimizes loss, WRC must place 
a provision stipulating no land placement of the materials in its 
contractual agreements with smelting facilities.
    (6) This conditional variance from classification as solid waste 
for the metal concentrate reclaimed from listed hazardous wastes F006 
and F019 at WRC's Phoenix, Arizona facility takes effect at the point 
at which the concentrate is loaded for shipment. This conditional 
variance does not affect the regulatory status of any other hazardous 
wastes handled by WRC at the Phoenix facility. In addition, the 
variance does not apply to or affect the regulatory status of any 
wastes managed at any other WRC facility.

V. Effect of Variance in Arizona

    EPA notes that Arizona is authorized to administer and enforce the 
RCRA hazardous waste program pursuant to section 3006 of RCRA. 
Generally, when EPA grants a variance under 40 CFR 260.30, the variance 
would be automatically effective only in unauthorized States. However, 
there are two circumstances that make this variance effective in the 
State of Arizona. First, WRC, EPA Region IX and the Arizona Department 
of Environmental Quality (ADEQ) executed a Consent Agreement and 
Consent Order (CA/CO) that finalized regulatory requirements for the 
WRC recycling facility at Phoenix. Under the CA/CO, if EPA makes a 
favorable decision regarding WRC's petition for a variance, Arizona is 
obligated to ``honor and give legal effect to the variance 
determination within the State of Arizona.'' Second, Arizona's 
regulations at A.A.C. R18-8-260(J)(Supp. 98-2) (which incorporates and 
modifies 40 CFR 260.30 entitled ``Variances from classification as a 
solid waste'') provides that ``any person wishing to submit a variance 
petition shall submit the petition, under this subsection, to EPA. 
Where the Administrator of EPA has granted a variance from 
classification as a solid waste under 40 CFR 260.30, 260.31, and 
260.33, the Director shall accept the determination, provided the 
Director determines that the action is consistent with the policies and 
purposes of the HWMA'' (the Hazardous Waste Management Act underlying 
Arizona's authorized status). Since the Director has made such a 
determination, no further action will be necessary before the variance 
takes effect under state law upon promulgation by EPA.

VI. Administrative Requirements

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), this 
action is not a rule of general applicability and therefore is not a 
``regulatory action'' subject to review by the Office of Management and 
Budget. Because this action is a rule of particular applicability 
relating to a facility, it is not subject to the regulatory flexibility 
provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), or 
to sections 202, 204 and 205 of the Unfunded Mandates Reform Act of 
1995 (UMRA) (Pub. L. 104-4). Because the rule will affect only one 
facility, it will not significantly or uniquely affect small 
governments, as specified in section 203 of UMRA, or communities of 
tribal governments, as specified in Executive Order 13175 (63 FR 27655, 
May 10, 1998). For the same reason, this rule will not have substantial 
direct effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government, as specified 
in Executive Order 13132 (64 FR 43255, August 10, 1999). This rule also 
is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), 
because it is not economically significant.
    This rule does not involve technical standards; thus, the 
requirements of section 12(c) of the National Technology Transfer and 
Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. This rule 
does not impose an information collection burden under the provisions 
of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).
    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, does not 
apply because this action is not a rule, for purposes of 5 U.S.C. 
804(3).

    Dated: August 6, 2002.
Christine Todd Whitman,
Administrator.
[FR Doc. 02-20352 Filed 8-12-02; 8:45 am]
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