Gulf Chemical & Metallurgical Corporation (GCMC) on May 28 announced it reached an agreement with the Travis County District Attorney, resolving the district attorney’s and the Texas Commission on Environmental Quality’s (TCEQ) criminal investigation into the past operation of the company’s wastewater treatment system at its catalyst recycling facility in Freeport, Texas.

In the agreement, GCMC agreed to plead guilty to 11 felony violations of the Texas Water Code dating from June 2007 through January 2008 and to pay a fine of $2.75 million. As part of the agreement, GCMC also agreed to continue its commitment to upgrade the plant’s wastewater treatment system by implementing additional modifications (including design, operation and maintenance) recommended by a third party engineering consultant during GCMC’s internal investigation of the situation. The majority of this work has already been completed or is scheduled for completion in the near future. GCMC must also submit a report to the district attorney within one year of the date of the agreement confirming that the work has been completed.

“This situation has been embarrassing for our company, and we apologize to our employees, customers and the community for the concern it has caused. This does not represent the high standards we strive to meet every day,” said Dave Pacella, GCMC president. “By agreeing to this plea, we accept responsibility as a company for what happened in the past, and more importantly it allows us to move forward to implement measures to ensure that we are never in this position again. We look forward to earning back the trust of all of our stakeholders.”

GCMC learned of the potential violations in September 2009 and immediately launched a third-party investigation and audit of the facility’s wastewater system. After the violations were identified, GCMC engaged two environmental consulting firms to immediately design and implement changes to the plant’s wastewater system, and in December, voluntarily reported the violations to the TCEQ before learning of the criminal investigation.

“We moved quickly to correct the problems as soon as they were discovered,” Pacella said. “We will continue to work diligently every day to ensure our operations are safe and environmentally responsible.”

The plant has continued to operate on its regular schedule, 24 hours a day, seven days a week and will continue to do so in the wake of the agreement. Shipments from refinery customers are still being received and handled in compliance with applicable regulatory requirements, and shipments of product to downstream metal customers also are proceeding as scheduled. Moreover, the issues associated with the investigation and the plea agreement do not and have never subjected GCMC’s suppliers or customers to any associated liability.

“We believe this issue has made us a stronger and more responsible company,” Pacella said. “We are fully dedicated to the service of our customers and will continue to make improvements to our operations and processes so that we remain a trusted business partner to them.”

During the past 24 months, GCMC has undertaken a broad-reaching effort to bring environmental management best practices to the facility. Substantial investments have been made to address the plant’s air emissions as well as its wastewater system. The company began construction in April on a new state-of-the-art sulfur dioxide abatement system which will reduce SO2 emission by at least 95 percent and will dramatically reduce emissions of particulate matter. GCMC also is continuing with an aggressive implementation of its environmental management system with the goal of achieving ISO 14000 certification in the near future.

Achieving ISO 14000 certification signifies GCMC has established a framework for a holistic, strategic approach to the company's environmental policy, plans and actions. It also requires the company to comply with environmental regulations and legislation as well as commit to continued improvement to the company’s systems within the framework of an established and certified environmental management system.

About Gulf Chemical & Metallurgical Corporation
Gulf Chemical & Metallurgical Corporation, the world’s largest recycler of spent petroleum catalysts and a leading producer of ferroalloys, has been in business since 1946. The plant recovers molybdenum, vanadium, nickel, cobalt and various alumina products to be sold and reused in chemical and metallurgical applications. This reclaiming process reduces the need for mining, conserves natural resources and converts a waste material into a raw material. Its spent catalyst customers include every major refinery and its finished products are sold to all the major catalyst producers and steel manufacturers. Through its expertise, GCMC strives to strike a balance between industry and nature and is committed to sustainable development and product stewardship.