NEW YORK Lead-acid battery maker Exide Technologies Inc. has been ordered to suspend operations at its Vernon, Calif., recycling facility following a company report that showed hazardous waste has degraded the facilitys underground pipes, releasing toxic metal-bearing water into the soil.
Californias Department of Toxic Substances Control (DTSC) ordered the suspension of operations April 24.
Protection of the communitys health and the environment are paramount, DTSC Debbie Raphael, director, said in a statement. This order stops releases and exposures that are completely unacceptable.
The South Coast Air Quality Management District, a government-run smog-control agency, had indicated in a statement that residents near the facility were facing elevated cancer risks due to alleged arsenic emissions.
This new information provides clear evidence that this suspension is necessary, Brian Johnson, head of the DTSCs Hazardous Waste Management Program, said in a statement. After the latest information came to light on the conditions of the underground pipes, coupled with the (air quality management districts) report, DTSC is convinced that the most responsible course of action is to suspend the facility operation.
Exide will be required to demonstrate that it can operate without posing a significant health risk and stop the ongoing release of hazardous waste before the suspension is lifted, the DTSC said.
Shares in Exide fell to $1.02 at the close of business April 25, down 23.8 percent from the previous close.
This is a serious blow to the company, William Bremer, senior industrial and infrastructure analyst at New York-based Maxim Group LLC, told AMM
. Given the many uncertainties concerning both the time and the financial resources required to solve these problems, we decided to move to the sidelines, downgrading Exide to a hold from a buy and removing our prior $5.50 (share) price target. I do believe, however, that in time the Vernon plant will reopen, as the facility is needed in the region.
The closure is the latest in a series of problems at the company in recent months. Exide is currently facing a class-action lawsuit filed in U.S. District Court in California in connection with alleged arsenic emissions at the Vernon facility (amm.com, April 17
Exide could not be reached for comment.