NEW YORK Gerdau Long Steel North America is suing the previous owners of Tamco Steel Inc. for allegedly misrepresenting the status of the facilitys air quality permits and compliance with environmental law.
Gerdau is seeking to recoup an estimated $13 million in costs related to air quality permits and emissions fees, with further costs expected.
In an Oct. 10 filing in U.S. District Court in southern New York, the company alleged that the Rancho Cucamonga, Calif., facilitys former shareholders falsely claimed the mill had all the necessary permits and was running in accordance with environmental law.
Tampa, Fla.-based Gerdau claims in the lawsuit that when it took control of the mill in 2010 it found the facility wasnt in compliance with environmental regulations, and it was forced to cover the costs of air permits and pay emissions fees.
The mills former stakeholders were Pasadena, Calif.-based Ameron International Corp., Mitsui & Co. (USA) Inc., a subsidiary of Tokyo-based Mitsui & Co. Ltd., and Japans Tokyo Steel Manufacturing Co., whose shares were purchased for $165 million (amm.com, Sept. 15, 2010).
The companys costs will include emissions fees for sulfur oxides and nitrogen oxides, as well as permit fees for modifications the previous shareholders made to the mill, like increased burner input and increased ladle heat input.
Gerdau still faces "likely" fees related to environmental compliance at the mill, the company said. "It is likely that the (South Coast Air Quality Management District) will impose penalties on (the mill) as a result of the defendants failure to obtain necessary permits, under reporting and inaccurate calculation of air emissions, violation of permits and regulations, and improperly permitted emissions sources," according to the lawsuit.
Gerdau recently laid off a crew of workers at Rancho Cucamonga, citing import pressure and poor market conditions (amm.com, Oct. 7).
Gerdau declined to comment. Counsel for Ameron International couldnt be reached.