Contact Name: James A. Cain

Company Name: Cotter Corporation

Mailing Address: P.O. Box 1750, Canon City, CO 81215-1750

Facility Name: Canon City Mill

Facility Location: 0502 County Rd 68, Canon City, CO

Date Sent: October 22, 2002

This Compliance Advisory provides notice related to information gained during the Air

shown. We advise you that the inspector(s) believes that the Deficiencies listed below are

violations of the Colorado Air Pollution Prevention and Control Act and implementing

regulations. Division personnel will review the facts established during this inspection and

this notice may be revised to include additions or clarifications as a result of that review.

Please be aware that you are responsible for complying with the State air pollution

regulations and that there are substantial administrative and civil penalties for failing to do

so. Section 25-7-115, C.R.S., provides that any person who violates the Colorado Air

Pollution Prevention and Control Act ("the Act") may be subject to an administrative penalty

of not more than $15,000 per day of violation (violations of the requirements to have and to

comply with an operating permit may subject the violator to $15,000 per violation per day).

The issuance of this Compliance Advisory does not limit or preclude the Division from

pursuing its enforcement options concerning this inspection including issuance of a

Compliance Order and assessment of penalties. Also, this Compliance Advisory does not

constitute a bar to enforcement action for conditions that the inspector did not observe or

evaluate, or conditions found during future inspections of your facility.

To close out this Compliance Advisory, we encourage you to contact the Compliance Officer

listed below at the above address, and where necessary, schedule a meeting:

A. To discuss the Compliance Advisory and answer any questions you may have;

B. To develop a schedule for correcting the Deficiencies and Potential Deficiencies; or

C. To submit information necessary to successfully show that the Deficiencies and

pollution laws.

Scott K. Mason , Compliance Officer (Telephone Number 303-692-3253 )

Failure to respond in a timely fashion to this Compliance Advisory will be considered in any

subsequent enforcement action and the assessment of penalties. The following is a list of

potential deficiencies:

1. Cotter is not tracking a rolling twelve-month total of criteria pollutants. Violation of

permit condition 13 which says in part…

"Compliance with the annual limits shall be determined on a rolling (12) month

total."

2. Cotter is not tracking monthly records of actual production. Violation of permit

condition 9 which says in part…

"Monthly records of the actual production rate shall be maintained by the

applicant and made available to the Division for inspection upon request."

3. Cotter has not demonstrated compliance within 180 days of commencement of

operation on several points. The reason Cotter has not completed this requirement

is a combination of the troubles encountered with starting a process that has never

been done before and the financial troubles with Cotter’s business partner. Cotter

cannot demonstrate compliance without the process operating. Because of these

troubles I recommend the Division not take an enforcement action on this specific

issue. However, a new date for demonstrating compliance should be established in

a Consent Decree.

4. Cotter removed the bags from the vanadium fusion furnace baghouse and continued

to operate the furnace without a permit modification. Violation of permit condition 9

which says in part…

"This facility’s throughput / consumption of materials shall be limited by the

emission limits specified in this permit, throughput / consumption of individual

equipment / activities as specified in Attachment A, and all other activities,

operational rates and numbers of equipment as stated in the application."

5. Cotter personnel documented a single six-minute Method 9 reading averaging

23.1%. Violation of permit condition 2 which says in part…

"Visible emissions shall not exceed twenty percent (20%) opacity during normal

operation of the source."

Cc: Harry Collier, APCD

Cindy Reynolds, R8 EPA

Casey Shpall, AGO

Phil Egidi, RAD