Alcoa 2012 Annual Report Download - page 131

approved, a Remedial Options Pilot Study (ROPS) to gather this information. The scope of this study included
sediment removal and capping, the installation of an ice control structure, and significant monitoring.
From 2004 through 2008, Alcoa completed the work outlined in the ROPS. In November 2008, Alcoa submitted an
update to the EPA incorporating the new information obtained from the ROPS related to the feasibility and costs
associated with various capping and dredging alternatives, including options for ice control. As a result, Alcoa
increased the reserve associated with the Grasse River by $40 for the estimated costs of a proposed ice control remedy
and for partial settlement of potential damages of natural resources.
In late 2009, the EPA requested that Alcoa submit a complete revised Analysis of Alternatives Report in March 2010
to address questions and comments from the EPA and various stakeholders. On March 24, 2010, Alcoa submitted the
revised report, which included an expanded list of proposed remedial alternatives, as directed by the EPA. Alcoa
increased the reserve associated with the Grasse River by $17 to reflect an increase in the estimated costs of the
Company’s recommended capping alternative as a result of changes in scope that occurred due to the questions and
comments from the EPA and various stakeholders. While the EPA reviewed the revised report, Alcoa continued with
its on-going monitoring and field studies activities. In late 2010, Alcoa increased the reserve by $2 based on the then
most recent estimate of costs expected to be incurred for on-going monitoring and field studies activities. In late 2011,
the EPA and various stakeholders completed their review of the March 2010 revised report and submitted questions
and comments to Alcoa. As a result, Alcoa increased the reserve by $1 to reflect a revision in the estimate of costs
expected to be incurred for on-going monitoring and field studies activities.
In the first half of 2012, Alcoa received final questions and comments from the EPA and other stakeholders on the
revised Analysis of Alternatives Report submitted in March 2010, including a requirement that would increase the
scope of the recommended capping alternative. In June 2012, Alcoa submitted a revised Analysis of Alternatives
Report, which included four less alternatives than the previous report and addressed the final questions and comments
from all stakeholders. These final questions and comments resulted in a change to Alcoa’s recommended capping
alternative by increasing the area to be remediated. Consequently, Alcoa increased the reserve associated with the
Grasse River by $37 to reflect the changes to the recommended alternative.
In October 2012, the EPA selected a proposed remedy from the alternatives included in the June 2012 Analysis of
Alternatives Report and released a Proposed Remedial Action Plan (PRAP). The alternative selected by the EPA
recommends capping PCB contaminated sediments with concentration in excess of one part per million in the main
channel of the river and dredging PCB contaminated sediments in the near-shore areas where total PCBs exceed one
part per million. This alternative will result in additional estimated costs above that of the alternative recommended by
Alcoa in the June 2012 Analysis of Alternatives Report. As a result, Alcoa increased the reserve associated with the
Grasse River by $128 to reflect such additional estimated costs of the EPA’s proposed remedy. The PRAP was open
for public comment until November 29, 2012 (extended from November 15, 2012 due to the effects of Hurricane
Sandy). The EPA is in the process of reviewing the comments received and, at the conclusion of that review, will issue
a final Record of Decision (ROD), which may require Alcoa to record a subsequent reserve adjustment. Once a ROD is
issued, the planning and design phase is expected to take approximately two to three years, followed by the actual
remediation fieldwork that is expected to take approximately four years. The majority of the project funding is
expected to be spent between 2016 and 2020.
Sherwin, TX—In connection with the sale of the Sherwin alumina refinery, which was required to be divested as part
of the Reynolds merger in 2000, Alcoa agreed to retain responsibility for the remediation of the then existing
environmental conditions, as well as a pro rata share of the final closure of the active bauxite residue waste disposal
areas (known as the Copano facility). Alcoa’s share of the closure costs is proportional to the total period of operation
of the active waste disposal areas. Alcoa estimated its liability for the active waste disposal areas by making certain
assumptions about the period of operation, the amount of material placed in the area prior to closure, and the
appropriate technology, engineering, and regulatory status applicable to final closure. The most probable cost for
remediation was reserved.
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